EXHIBIT 99.1
FOR IMMEDIATE RELEASE Contact: Claire M. Chadwick, CFO
973-669-7366, ext. 267
PENNFED FINANCIAL SERVICES, INC. REPORTS
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INCREASED FIRST QUARTER EARNINGS
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WEST ORANGE, NJ, October 27, 2004 - PennFed Financial Services, Inc.
(NASDQ:PFSB), the nearly $2 billion holding company for New Jersey-based Penn
Federal Savings Bank, announced earnings of 27 cents per diluted share for its
first fiscal quarter ended September 30, 2004. Earnings represented a 17%
increase over the 23 cents per diluted share reported for the comparable prior
year quarter. Earnings per share have been adjusted to reflect the two-for-one
stock split in the form of a 100% stock dividend announced on September 29,
2004.
Return on average common equity was 12.63% for the three months ended
September 30, 2004 compared to 11.47% for the comparable prior year quarter.
PennFed's net interest margin also showed improvement. For the current
quarter, the margin was 2.38%, representing a 15 basis point increase from the
June 2004 quarter and a significant increase from 2.11% for the same period last
year. "A slowdown in loan prepayments, growth in the loan portfolio and the
repricing of certain deposits and other borrowings contributed to the increase,"
said Joseph L. LaMonica, PennFed's President and Chief Executive Officer.
Total assets at September 30, 2004 of $1.962 billion reflected growth of
3%, or 13% annualized, from June 30, 2004. Growth in net loans receivable was
over 5%, or 21% annualized. Total loan production of $147 million for the
September 2004 quarter
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PennFed 1Q-2005
Page 2
was strong. The decline from the June 2004 quarter production level primarily
reflects the slowdown in refinance activity.
As a means of managing interest rate risk, the Company returned to its loan
sale strategy at the beginning of the current quarter after a temporary six
month suspension. Under the current loan sale strategy, the Company is again
selling predominately conforming, long-term fixed rate one- to four-family loan
production. For the quarter ended September 30, 2004, PennFed recorded $24,000
of gains from loan sales.
During the first quarter, the Company continued its trend of superior asset
quality. As of September 30, 2004, non-performing assets totaled only $2.1
million, or 0.11% of total assets.
The Company's current quarter expense ratio was also strong at 1.26%. While
current expense levels reflect the end of costs associated with funding the
Company's Employee Stock Ownership Plan, expenses include a replacement benefit
plan for the ESOP as well as costs associated with the three branches opened
since September 2003.
PennFed continues to employ stock repurchases as a means of utilizing
capital. Since the beginning of the fiscal year, the Company repurchased 177,800
shares (split adjusted), or over 1% of shares outstanding, for a total cost of
$2.7 million.
PennFed stockholders of record as of November 12, 2004 will be paid a
split-adjusted cash dividend of $0.05 per share on November 26, 2004. The
Company's dividend policy will continue to be reviewed on a regular basis.
Penn Federal Savings Bank maintains 24 New Jersey branch offices. The
Bank's deposits are insured by the Federal Deposit Insurance Corporation.
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PennFed 1Q-2005
Page 3
This release contains forward-looking statements that are intended to
identify "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are subject to
certain risks and uncertainties, including, among other things, changes in
economic conditions in the Company's market area, changes in policies by
regulatory agencies, fluctuations in interest rates and demand for loans in the
Company's market area, the relationship of short-term interest rates to
long-term interest rates, competition and terrorist acts that could cause actual
results to differ materially from historical earnings and those presently
anticipated or projected. The Company wishes to caution readers not to place
undue reliance on any forward-looking statements, which speak only as of the
date made. The Company wishes to advise readers that the factors listed above,
as well as other factors, could affect the Company's financial performance and
could cause the Company's actual results for future periods to differ materially
from any opinions or statements expressed with respect to future periods in any
current statements.
###
NOTE: SEE FINANCIAL TABLES
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,
2004 2004 2003
----------- ----------- -----------
Selected Financial Condition Data:
Cash and cash equivalents $ 13,390 $ 14,859 $ 80,655
Investments, net 425,086 424,980 354,184
Mortgage-backed securities, net 93,025 100,079 82,548
Loans held for sale 0 0 11,530
Loans receivable:
One- to four-family mortgage loans 1,065,001 996,659 895,274
Commercial and multi-family real estate loans 170,566 172,244 164,269
Consumer loans 119,272 117,688 115,305
Allowance for loan losses (6,070) (6,249) (6,279)
Other, net 7,812 7,131 6,300
----------- ----------- -----------
Loans receivable, net 1,356,581 1,287,473 1,174,869
FHLB stock 22,123 23,773 25,223
Other intangible assets 907 1,361 2,721
Other assets 51,140 49,761 46,439
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Total assets $ 1,962,252 $ 1,902,286 $ 1,778,169
=========== =========== ===========
Deposits:
Checking and money market $ 167,624 $ 169,609 $ 169,710
Savings 433,382 418,678 371,672
Certificates of deposit and accrued interest 635,224 599,813 539,472
----------- ----------- -----------
Total deposits 1,236,230 1,188,100 1,080,854
FHLB advances 425,465 475,465 495,465
Other borrowings 121,747 59,346 24,390
Junior subordinated debentures 42,048 42,037 42,003
Other liabilities 13,914 18,939 15,902
Stockholders' equity 122,848 (a) 118,399 119,555
----------- ----------- -----------
Total liabilities and stockholders' equity $ 1,962,252 $ 1,902,286 $ 1,778,169
=========== =========== ===========
Book value per share $ 8.92 $ 8.72 $ 8.83
Tangible book value per share $ 8.85 $ 8.62 $ 8.63
Equity to assets 6.26% 6.22% 6.72%
Tangible equity to tangible assets 6.22% 6.16% 6.58%
Asset Quality Data:
Non-performing loans $ 1,659 $ 2,182 $ 2,164
Real estate owned, net 473 0 28
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Total non-performing assets $ 2,132 $ 2,182 $ 2,192
=========== =========== ===========
Non-performing loans to total loans 0.12% 0.17% 0.18%
Non-performing assets to total assets 0.11% 0.11% 0.12%
Allowance for loan losses to non-performing loans 365.88% 286.39% 290.16%
Allowance for loan losses to total gross loans 0.45% 0.48% 0.53%
Regulatory Capital Ratios (of the Bank):
Tangible capital ratio (requirement - 1.50%) 8.58% 8.61% 8.97%
Core capital ratio (requirement - 4.00%) 8.58% 8.61% 8.97%
Risk-based capital ratio (requirement - 8.00%) 16.75% 16.86% 17.57%
(a) Common shares outstanding as of September 30, 2004 totaled 13,778,400
shares.
Amounts have been restated for the effects of a 2 for 1
stock split in the form of a 100% stock dividend
announced on September 29, 2004
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,
--------------------------
2004 2003
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Selected Operating Data:
Interest and dividend income $ 25,805 $ 23,741
Interest expense 14,734 14,804
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Net interest and dividend income 11,071 8,937
Provision for loan losses 0 0
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Net interest and dividend income
after provision for loan losses 11,071 8,937
Non-interest income:
Service charges 726 1,303
Net gain (loss) from real estate operations 0 0
Net gain on sales of loans 24 334
Other 350 373
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Total non-interest income 1,100 2,010
Non-interest expenses:
Compensation & employee benefits 3,193 3,324
Net occupancy expense 539 423
Equipment 535 486
Advertising 167 56
Amortization of intangibles 453 455
Federal deposit insurance premium 41 44
Other 1,191 911
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Total non-interest expenses 6,119 5,699
----------- -----------
Income before income taxes 6,052 5,248
Income tax expense 2,264 1,875
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Net income $ 3,788 $ 3,373
=========== ===========
Weighted avg. no. of diluted common shares 14,195,722 14,467,554
Diluted earnings per common share $ 0.27 $ 0.23
Return on average common equity 12.63% 11.47%
Return on average assets 0.78% 0.76%
Average earning assets $ 1,881,110 $ 1,715,887
Yield on average interest-earning assets 5.47% 5.51%
Cost of average interest-bearing liabilities 3.22% 3.55%
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Net interest rate spread 2.25% 1.96%
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Net interest margin 2.38% 2.11%
Non-interest exp. as a % of avg. assets 1.26% 1.28%
Efficiency ratio 46.55% 47.90%
Loan originations and purchases:
One- to four-family mortgage loans $ 123,244 $ 178,333
Commercial and multi-family real estate loans 5,815 9,072
Consumer loans 17,705 22,732
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Total loan originations and purchases $ 146,764 $ 210,137
=========== ===========
Amounts have been restated for the effects of a 2 for 1
stock split in the form of a 100% stock dividend
announced on September 29, 2004
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
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Sep. 30, Jun. 30, Mar.31, Dec. 31, Sep. 30,
2004 2004 2004 2003 2003
----------- ----------- ----------- ----------- -----------
Selected Operating Data:
Interest and dividend income $ 25,805 $ 24,551 $ 24,326 $ 23,658 $ 23,741
Interest expense 14,734 14,652 14,598 14,620 14,804
----------- ----------- ----------- ----------- -----------
Net interest and dividend income 11,071 9,899 9,728 9,038 8,937
Provision for loan losses 0 0 0 0 0
----------- ----------- ----------- ----------- -----------
Net interest and dividend income
after provision for loan losses 11,071 9,899 9,728 9,038 8,937
Non-interest income:
Service charges 726 1,044 957 871 1,303
Net gain from real estate operations 0 57 0 1 0
Net gain on sales of loans 24 5 57 363 334
Other 350 375 360 329 373
----------- ----------- ----------- ----------- -----------
Total non-interest income 1,100 1,481 1,374 1,564 2,010
Non-interest expenses:
Compensation & employee benefits 3,193 3,752 3,901 3,616 3,324
Net occupancy expense 539 477 514 480 423
Equipment 535 537 536 498 486
Advertising 167 154 102 78 56
Amortization of intangibles 453 454 453 454 455
Federal deposit insurance premium 41 42 41 41 44
Other 1,191 1,421 1,090 1,090 911
----------- ----------- ----------- ----------- -----------
Total non-interest expenses 6,119 6,837 6,637 6,257 5,699
----------- ----------- ----------- ----------- -----------
Income before income taxes 6,052 4,543 4,465 4,345 5,248
Income tax expense 2,264 1,705 1,499 1,464 1,875
----------- ----------- ----------- ----------- -----------
Net income $ 3,788 $ 2,838 $ 2,966 $ 2,881 $ 3,373
=========== =========== =========== =========== ===========
Weighted avg. no. of diluted common shares 14,195,722 14,205,944 14,385,896 14,487,888 14,467,554
Diluted earnings per common share $ 0.27 $ 0.20 $ 0.21 $ 0.20 $ 0.23
Return on average common equity 12.63% 9.69% 9.98% 9.65% 11.47%
Return on average assets 0.78% 0.61% 0.66% 0.65% 0.76%
Average earning assets $ 1,881,110 $ 1,782,562 $ 1,741,017 $ 1,715,792 $ 1,715,887
Yield on average interest-earning assets 5.47% 5.51% 5.59% 5.50% 5.51%
Cost of average interest-bearing liabilities 3.22% 3.41% 3.48% 3.50% 3.55%
----------- ----------- ----------- ----------- -----------
Net interest rate spread 2.25% 2.10% 2.11% 2.00% 1.96%
=========== =========== =========== =========== ===========
Net interest margin 2.38% 2.23% 2.24% 2.14% 2.11%
Non-interest exp. as a % of avg. assets 1.26% 1.48% 1.47% 1.40% 1.28%
Efficiency ratio 46.55% 56.37% 55.70% 54.74% 47.90%
Loan originations and purchases:
One- to four-family mortgage loans $ 123,244 $ 143,758 $ 79,438 $ 61,304 $ 178,333
Commercial and multi-family real estate loans 5,815 15,863 10,143 8,144 9,072
Consumer loans 17,705 19,581 17,248 15,441 22,732
----------- ----------- ----------- ----------- -----------
Total loan originations and purchases $ 146,764 $ 179,202 $ 106,829 $ 84,889 $ 210,137
=========== =========== =========== =========== ===========
Amounts have been restated for the effects of a 2
for 1 stock split in the form of a 100%
stock dividend announced on September 29, 2004
PennFed Financial Services, Inc.
(Holding Company for Penn Federal Savings Bank)
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
CALCULATION OF NET INCOME ADJUSTED FOR NON-RECURRING CHARGES
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For the three months ended
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Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,
2004 2004 2004 2003 2003
------------ ------------ ------------ ------------ ------------
Reported net income $ 3,788 $ 2,838 $ 2,966 $ 2,881 $ 3,373
Non-recurring charges:
Additional environmental accrual 0 298 0 0 0
Tax effect 0 (110) 0 0 0
------------ ------------ ------------ ------------ ------------
Non-recurring charges, net of taxes 0 188 0 0 0
------------ ------------ ------------ ------------ ------------
"Adjusted" net income $ 3,788 $ 3,026 $ 2,966 $ 2,881 $ 3,373
============ ============ ============ ============ ============
Weighted avg. no. of diluted common shares 14,195,722 14,205,944 14,385,896 14,487,888 14,467,554
Diluted earnings per common share $ 0.27 $ 0.21 $ 0.21 $ 0.20 $ 0.23
Return on average common equity 12.63% 10.33% 9.98% 9.65% 11.47%
Return on average assets 0.78% 0.66% 0.66% 0.65% 0.76%
Non-interest exp. as a % of avg. assets 1.26% 1.42% 1.47% 1.40% 1.28%
Efficiency ratio 46.55% 53.74% 55.70% 54.74% 47.90%
Amounts have been restated for the effects of a 2
for 1 stock split in the form of a 100%
stock dividend announced on September 29, 2004