Exhibit 99.1
FOR IMMEDIATE RELEASE Contact: Jeffrey J. Carfora, EVP, CFO
973-669-7366, ext. 202
PENNFED FINANCIAL SERVICES, INC. REPORTS
CONTINUED DOUBLE-DIGIT EARNINGS GROWTH
WEST ORANGE, NJ, July 26, 2000 - PennFed Financial Services, Inc.
(NASDQ:PFSB), the $1.7 billion holding company for the New Jersey-based Penn
Federal Savings Bank, today reported an 18% increase in earnings per share for
the fourth quarter of Fiscal Year 2000. Quarterly net income of $3.2 million
resulted in diluted earnings per share (EPS) of $0.39 per share versus $0.33 per
share for the three months ended June 30, 1999.
For the fiscal year ended June 30, 2000, net income of $12.9 million
produced diluted earnings of $1.50 per share versus $1.29 per share for the year
ended June 30, 1999, reflecting an increase of 16%. Return on average common
equity of 11.61% for the year ended June 30, 2000 compared to 11.03% for the
prior year.
Diluted cash EPS for the year ended June 30, 2000 was $1.90 per share. Cash
return on average common equity was 14.68% for the year ended June 30, 2000.
Total assets of $1.7 billion represents an increase of 11% from June 30,
1999. The Company continued to focus on growth in checking, with those balances
increasing $17 million, or 18%, for Fiscal 2000. Other deposits were relatively
unchanged.
"Commercial and consumer loan originations totaled $96 million - a 27%
increase from the prior year," said Joseph L. LaMonica, President and Chief
Executive Officer. "This origination level resulted in 25% growth in the
consumer and commercial loan portfolio balances from the prior year."
PennFed's one- to four-family mortgage loan production of $278 million for
the year was down slightly from Fiscal 1999, a year that included a period of
high refinancing
- more -
<PAGE>
PennFed 4Q-2000
Page 2 of 3
activity. For the year ended June 30, 2000, the Company had approximately 70% of
one- to four-family mortgage loan production in adjustable rate product in
contrast to 16% for the prior fiscal year.
Superior asset quality continued with the Company's non-performing assets
declining to 0.18% of total assets at June 30, 2000 - from 0.30% at June 30,
1999.
Net interest margin for Fiscal 2000 of 2.38% compared favorably to 2.24%
for the June 1999 fiscal year. Net interest margin of 2.26% for the fourth
quarter of Fiscal 2000 reflects a decline from 2.37% in the March 2000 quarter.
This margin compression was due not only to the rising interest rate
environment, the flattened yield curve and strong competition in the New Jersey
marketplace, but was also a result of a high concentration of loan production in
adjustable rate products.
Non-interest expense and efficiency ratios remained favorable at 1.20% and
43.40%, respectively, for the year ended June 30, 2000.
PennFed opened a new branch in Roseland on July 22, 2000. The Company
continues to evaluate other sites for new branch locations that will enhance its
franchise value.
PennFed stockholders of record as of August 11, 2000 will be paid a cash
dividend of $0.04 per share on August 25, 2000. PennFed's Annual Meeting of
Stockholders will be held at 10 a.m. on Wednesday, October 25, 2000 at the
Radisson Hotel in Fairfield, New Jersey. Stockholders of record on September 8,
2000 are entitled to vote at the meeting.
During Fiscal 2000, the Company repurchased 492,000 shares under Stock
Repurchase Programs, including 112,000 shares repurchased in the fourth quarter
of the fiscal year. Under the repurchase program, previously announced on April
26, 2000, the Company is authorized to repurchase an additional 357,500 shares
over the next 15 months, subject to market conditions.
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
-more-
<PAGE>
PennFed 4Q-2000
Page 3 of 3
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.
###
NOTE: SEE FINANCIAL TABLES ATTACHED
<PAGE>
PennFed Financial Services, Inc.
(Holding Company for Penn Federal Savings Bank)
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
June 30, June 30,
2000 1999
------------- --------------
Selected Financial Condition Data:
<S> <C> <C>
Cash and Federal funds sold $13,866 $9,900
Investments, net and FHLB stock 325,321 309,905
Mortgage-backed securities, net 87,561 127,983
Loans held for sale 0 5,180
Loans receivable:
One- to four-family mortgage loans 1,070,048 910,064
Commercial and multi-family real estate loans 86,257 74,613
Consumer loans 97,587(a) 72,572(a)
Allowance for loan losses (3,983) (3,209)
Other, net 9,339 7,391
------------- --------------
Loans receivable, net 1,259,248 1,061,431
Goodwill and other intangible assets 8,996 11,118
Other assets 34,227 33,246
------------- --------------
Total assets $1,729,219 $1,558,763
============= ==============
Deposits $1,080,350 $1,063,600
FHLB advances 364,465 244,465
Other borrowings 112,175 88,738
Other liabilities 25,443 21,717
Preferred securities of Trust, net 32,805 32,743
Stockholders' equity 113,981(b) 107,500
------------- --------------
Total liabilities and stockholders' equity $1,729,219 $1,558,763
============= ==============
Book value per share (c) $14.37 $13.03
Tangible book value per share (c) $13.24 $11.68
Equity to assets 6.59% 6.90%
Tangible equity to tangible assets 6.10% 6.23%
Asset Quality Data:
Non-performing loans $2,715 $3,670
Real estate owned, net 334 936
------------- --------------
Total non-performing assets $3,049 $4,606
============= ==============
Non-performing loans to total loans 0.21% 0.34%
Non-performing assets to total assets 0.18% 0.30%
Allowance for loan losses to non-performing loans 146.70% 87.44%
Regulatory Capital Ratios (of the Bank):
Tangible capital ratio (requirement - 1.50%) 7.76% 7.88%
Core capital ratio (requirement - 4.00%) 7.76% 7.88%
Risk-based capital ratio (requirement - 8.00%) 15.50% 16.29%
</TABLE>
(a) Consumer loans primarily include second mortgages and home equity lines of
credit.
(b) Common shares outstanding as of June 30, 2000 totaled 8,396,019 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. Based upon the inclusion of all shares
issued to the ESOP, at June 30, 2000 book value per share and tangible book
value per share would be $13.58 and $12.50, respectively.
<PAGE>
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 For the year ended
June 30, June 30,
------------------------ ------------------------
2000 1999 2000 1999
--------- --------- --------- ---------
Selected Operating Data:
<S> <C> <C> <C> <C>
Interest and dividend income $29,281 $25,695 $111,763 $105,557
Interest expense 19,993 17,080 74,333 71,918
--------- --------- --------- ---------
Net interest and dividend income 9,288 8,615 37,430 33,639
Provision for loan losses 230 210 860 780
--------- --------- --------- ---------
Net interest and dividend income
after provision for loan losses 9,058 8,405 36,570 32,859
Non-interest income:
Service charges 531 554 2,172 2,113
Net gain (loss) from real estate
operations 31 (21) 114 31
Net gain (loss) on sales of loans 0 (103) 36 860
Other 129 194 625 542
--------- --------- --------- ---------
Total non-interest income 691 624 2,947 3,546
Non-interest expenses:
Compensation & employee benefits 2,469 2,252 9,843 8,961
Net occupancy expense 376 343 1,663 1,333
Equipment 428 398 1,763 1,642
Advertising 118 117 393 359
Amortization of intangibles 515 584 2,121 2,363
Federal deposit insurance premium 55 150 429 627
Other 811 794 3,384 3,359
--------- --------- --------- ---------
Total non-interest expenses 4,772 4,638 19,596 18,644
--------- --------- --------- ---------
Income before income taxes 4,977 4,391 19,921 17,761
Income tax expense 1,736 1,511 7,051 6,304
--------- --------- --------- ---------
Net income $3,241 $2,880 $12,870 $11,457
========= ========= ========= =========
Earnings per common share (d):
Basic $0.41 $0.35 $1.58 $1.36
Diluted $0.39 $0.33 $1.50 $1.29
Cash earnings per common share (d)(e):
Basic $0.50 $0.46 $2.00 $1.83
Diluted $0.48 $0.43 $1.90 $1.74
Return on average common equity 11.47% 10.89% 11.61% 11.03%
Cash return on average common equity 14.26% 14.37% 14.68% 14.85%
Return on average assets 0.76% 0.75% 0.79% 0.74%
Yield on average interest-earning assets 7.12% 6.96% 7.07% 7.03%
Cost of average interest-bearing
liabilities 5.11% 4.88% 4.95% 5.02%
--------- --------- --------- ---------
Net interest rate spread 2.01% 2.08% 2.12% 2.01%
========= ========= ========= =========
Net interest margin 2.26% 2.33% 2.37% 2.24%
Non-interest exp. as a % of avg. assets 1.12% 1.21% 1.20% 1.20%
Efficiency ratio 42.79%(f) 43.78%(f) 43.40%(f) 43.82%(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 42.79%, 43.30%, 43.44% and 44.86%, respectively.
