SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
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[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-24040
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PENN FEDERAL SAVINGS BANK 401(k) PLAN
PennFed Financial Services, Inc.
622 Eagle Rock Avenue
West Orange, New Jersey 07052-2989
PENN FEDERAL SAVINGS BANK 401(k) PLAN
TABLE OF CONTENTS
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Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF JUNE 30, 2000 AND
1999 AND FOR THE YEAR ENDED JUNE 30, 2000:
Statements of Net Assets Available for Benefits 2
Statement of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-7
SUPPLEMENTAL SCHEDULE
Schedule of Assets Held for Investment Purposes at End of Year 8
Supplemental Schedules not included herein are omitted due to the absence of
conditions under which they are required.
INDEPENDENT AUDITORS' REPORT
Penn Federal Savings Bank
401(k) Plan Trustees
West Orange, New Jersey
We have audited the accompanying statements of net assets available for benefits
of Penn Federal Savings Bank 401(k) Plan (the "Plan") as of June 30, 2000 and
1999, and the related statement of changes in net assets available for benefits
for the year ended June 30, 2000. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of June 30, 2000
and 1999, and the changes in net assets available for benefits for the year
ended June 30, 2000 in conformity with accounting principles generally accepted
in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of Assets Held
for Investment Purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This schedule is the responsibility of Plan management. Such schedule has
been subjected to the auditing procedures applied in our audit of the basic 2000
financial statements and, in our opinion, is fairly stated in all material
respects when considered in relation to the basic financial statements taken as
a whole.
December 20, 2000
PENN FEDERAL SAVINGS BANK 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
JUNE 30, 2000 AND 1999
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2000 1999
ASSETS:
Investments, at fair value $4,445,614 $4,086,655
Participant loans receivable 68,266 75,773
Contributions receivable:
Employer contribution 103,572 --
Participant contributions 53,172 --
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Total contributions receivable 156,744 --
Other accrued income 75 41
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NET ASSETS AVAILABLE FOR BENEFITS $4,670,699 $4,162,469
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The accompanying notes are an integral part of these financial statements.
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PENN FEDERAL SAVINGS BANK 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED JUNE 30, 2000
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NET INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS:
Additions to fund:
Employer's contributions $ 103,572
Participants' contributions 442,929
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Total contributions 546,501
Interest income 6,146
Investment income 272,666
Net depreciation in fair value of investments (18,816)
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Total additions 806,497
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Deductions from fund:
Payments to participants (298,267)
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Total deductions (298,267)
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NET INCREASE 508,230
NET ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR 4,162,469
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NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR $ 4,670,699
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PENN FEDERAL SAVINGS BANK 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
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A. PLAN DESCRIPTION
The following description of the Penn Federal Savings Bank 401(k) Plan
(the "Plan") provides only general information. Participants should refer
to the Plan document for a more complete description of the Plan's
provisions.
1. Plan Agreement - The Plan was established January 1, 1990 as a
defined contribution plan. Employees become eligible to participate
in the Plan on January 1, April 1, July 1, or October 1,
immediately after obtaining age twenty and one-half and completing
three months of service, working 1,000 hours at Penn Federal
Savings Bank (the "Bank").
2. Contributions
(a) Salary Deferral Contributions - An eligible employee may
elect to have a percentage of compensation contributed to
this Plan on a pre-tax salary reduction basis. A
participant may elect to defer between 1% and 15% of their
compensation under a Salary Reduction Agreement to the
Plan. Additionally, participants may contribute an amount
not to exceed 10% of compensation on an after tax basis and
may allocate their contributions to eight different
investment funds and to the common stock of PennFed
Financial Services, Inc. In no event can the total amount
deferred exceed $10,000 (adjusted annually).
(b) Matching Employer Contributions - Pursuant to an amendment
approved by the Bank's Board of Directors, the employer
matching contribution is a discretionary matching
contribution that varies between 25% and 100% of the
participant's contribution (subject to certain limitations)
depending on the Bank's financial performance.
(c) Vesting - Participants are always vested with respect to
their contributions plus actual earnings thereon. Vesting
with respect to the Bank's contributions is 20% per year of
service and 100% vesting after 5 years.
Effective October 1, 1991, a resolution of the Board of Directors was
passed allowing nondiscriminatory participant loans from the Plan. Loans
are made for hardship situations only. Each loan must be adequately
secured and the loan repayment must be made before any distribution of
retirement benefits.
B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The financial statements of the Plan are
presented on the accrual basis of accounting.
Investment Valuation and Income Recognition - Investments in mutual funds
consisting of the Basic Value Fund, Capital Fund, CMA Money Fund,
Corporate Intermediate Bond Fund, Global Allocation Fund, Growth Fund for
Investment and Retirement and Ready Asset Trust Fund were managed by
Merrill Lynch. Investments in mutual funds consisting of the MFS Emerging
Growth Fund and Massachusetts Investors Trust Fund were managed by
Massachusetts Financial Services Company ("MFS"). Investments in PennFed
Financial Services, Inc. common stock are recorded at market value as
determined by quoted market prices.
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Purchases and sales of securities are recorded as of the settlement date.
There were no material unsettled trades at June 30, 2000 or 1999.
Interest income is recorded on the accrual basis. Participant loans
receivable are valued at cost which approximates fair value.
Participant Accounts - Under the trusteeship of Merrill Lynch Trust
Company participants may designate their contributions to be invested in
any of the following eight funds and common stock:
1. Basic Value Fund - The investment objective of the Fund is to seek
capital appreciation and, secondarily, income by investing
primarily in equity securities.
2. Capital Fund - The investment objective of the Fund is to maximize
total investment return by shifting emphasis among equity, debt and
convertible securities.
3. Corporate Intermediate Bond Fund - The investment objective of the
Fund is to seek current income. The Fund anticipates that under
normal circumstances, the majority of its assets will be invested
in fixed-income securities, including convertible and
nonconvertible debt securities and preferred stock.
4. Global Allocation Fund - The investment objective of the Fund is to
seek a high total investment return utilizing United States and
foreign equity, debt and money market securities; the combination
of which will vary from time to time both with respect to types of
securities and markets in response to changing market and economic
trends.
5. Growth Fund for Investment and Retirement - The investment
objectives of the Fund are to seek growth of capital and,
secondarily, income by investing in a diversified portfolio of
equity securities.
6. Ready Assets Trust Fund - The investment objectives of the Fund are
to seek preservation of capital, liquidity and current income by
investing in a diversified portfolio of short-term money market
securities.
7. MFS Emerging Growth Fund - The investment objective of the Fund is
to seek long-term growth of capital by investing primarily in
common stock (available to participants as of September 22, 1998).
8. Massachusetts Investors Trust Fund -The investment objective of the
Fund is to seek current income and long-term growth of capital and
income by investing primarily in common stock and convertibles
(available to participants as of September 22, 1998).
9. PennFed Financial Services, Inc. Common Stock - Allows the
participants in the Plan to direct the investment of all or a
portion of the assets in their Plan accounts to the common stock of
PennFed Financial Services, Inc. (the holding company for Penn
Federal Savings Bank).
Benefit Payments - Participants or their designated beneficiary, may
elect to receive benefit distributions in either one lump-sum payment; or
equal monthly, quarterly, or semi-annual installments, equal to the total
value of their separate accounts upon termination of employment,
disability or death. If the election is in installments, the account will
either be segregated and separately invested by the trustees, or invested
in a nontransferable annuity policy.
During employment and in the event of financial hardship, participants
may request payments of their account value; however, this distribution
cannot exceed the amount required to relieve the hardship. Such payment
is subject to approval by the Plan administrator.
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Benefits Payable - Net assets available for benefits included benefits of
$440,352 and $574,655 due to participants who have withdrawn from
participation in the Plan, but were not yet paid as of June 30, 2000 and
1999, respectively.
Administrative Expenses - The Bank has elected to pay administrative
expenses on behalf of the Plan.
Forfeitures - Forfeitures (the portions of terminated participants'
accounts in which they did not have a vested interest) are used to reduce
future Bank contributions.
C. INVESTMENTS
The Plan's investments are held in a trust fund. The following table
presents investments. Investments that represent 5 percent or more of the
Plan's net assets are separately identified.
June 30
2000 1999
Investments at Fair Value as Determined
by Quoted Market Price:
Growth Fund for Investment and Retirement $1,144,551 $ 811,473
Global Allocation Fund 789,836 737,335
Basic Value Fund 921,025 1,018,547
Capital Fund 543,548 587,642
Corporate Intermediate Bond Fund 303,695 311,025
Ready Asset Trust Fund 279,718 283,243
PennFed Financial Services, Inc. Stock 290,092 282,225
Other Mutual Funds 173,149 55,165
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Total investments $4,445,614 $4,086,655
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During the year ended June 30, 2000, the Plan's investments (including
investments bought, sold, and held during the year) depreciated in
value by $18,816 as follows:
Investments at Fair Value as Determined by
Quoted Market Price:
Mutual funds $ 9,033
Common stock (27,849)
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Net change in fair value $ (18,816)
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D. PLAN TERMINATION
Although it has not expressed any intention to do so, the Bank has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. If the Plan is
terminated, all participants automatically become 100% vested in their
accounts.
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E. INVESTMENT INCOME
The Plan is valued at least quarterly and participants' accounts are
credited with a proportional share of investment income. Additionally,
investments are priced daily.
F. TAX STATUS
The sponsor adopted a non-standardized prototype plan which received an
Internal Revenue Service opinion letter dated June 29, 1993 and the
Internal Revenue Service has determined and informed the Company by
letter dated December 7, 1995 that the Plan, as adopted, and related
trust are designed in accordance with applicable sections of the Internal
Revenue Code ("the Code"). The Plan has since been amended, however, the
Plan Administrator believes that the Plan is currently being operated in
compliance with the applicable requirements of the Internal Revenue Code.
Therefore, no provision for income taxes has been included in the Plan's
financial statements.
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PENN FEDERAL SAVINGS BANK 401(k) PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT END OF YEAR
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Number Current
Description of Units Value
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Investments managed by Merrill Lynch Trust Company:
Mutual Funds and Equity:
MFS Emerging Growth Fund 2,084.955 $ 144,320
MFS Massachusetts Investors Trust Fund 1,376.728 28,829
Merrill Lynch Growth Fund for Investment and Retirement 40,131.514 1,144,551
Merrill Lynch Global Allocation Fund 54,546.679 789,836
Merrill Lynch Basic Value Fund 24,899.298 921,025
Merrill Lynch Capital Fund 16,948.810 543,548
Merrill Lynch Corporate Intermediate Bond Fund 28,145.944 303,695
Merrill Lynch Ready Asset Trust Fund 279,718.060 279,718
PennFed Financial Services, Inc. Stock 20,537.458 290,092
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4,445,614
Personal loans with interest rates of
9 3/4% to 11%, with due dates ranging from
2000 to 2026 68,266
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$4,513,880
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EXHIBIT INDEX
Exhibit
Number
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23 Consent of Deloitte & Touche LLP