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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33% INCREASE IN THIRD QUARTER EARNINGS PER SHARE
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AND A 40% INCREASE IN THE DIVIDEND
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WEST ORANGE, NJ, April 27, 2005 - PennFed Financial Services, Inc.
(NASDQ:PFSB), the holding company for New Jersey-based Penn Federal Savings
Bank, reported earnings of 28 cents per diluted share for the third fiscal
quarter ended March 31, 2005. This compared to 21 cents per diluted share for
the quarter ended March 31, 2004, representing growth of 33%.
For the first nine months of fiscal 2005, PennFed reported earnings of
$0.82 per diluted share, compared to $0.64 per diluted share for the nine months
ended March 31, 2004. Return on equity for the nine months ended March 31, 2005
was 12.68% compared to 10.36% for the comparable prior year period. Joseph L.
LaMonica, President and Chief Executive Officer stated, "We were pleased with
results as they represented core earnings, with no significant gains from loan
and securities sales or other non-recurring revenue items."
The Company also reported that its Board of Directors approved a two cents
increase in the quarterly cash dividend. PennFed stockholders of record as of
May 13, 2005 will be paid a cash dividend of $0.07 per share on May 27, 2005.
The level of the Company's dividend will continue to be reviewed on a quarterly
basis.
At March 31, 2005, total assets of $1.996 billion represented annualized
growth of 6.6% since June 30, 2004. During the first nine months of fiscal 2005,
net loans receivable
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PennFed 3Q-2005
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grew over 8%. Total loan production was $95 million and $334 million for the
three and nine months ended March 31, 2005, respectively. While a reduction in
refinance activity since the beginning of the fiscal year and the resulting
slowdown in loan production has occurred, the Company has also benefited from a
slowdown in accelerated prepayments on loans.
"Growth in deposits has funded the growth in loans," LaMonica commented.
Since June 30, 2004, total deposits have increased $96 million, with core
deposits (checking, money market and savings accounts) increasing $41 million,
or 7.0%.
During the current fiscal year, the Company again demonstrated its
commitment to expanding its retail franchise with a February 2005 opening of its
25th branch - located in Aberdeen, New Jersey. Over the last year, three
branches have been opened. The Company continues to evaluate additional
locations that would complement or expand the franchise.
PennFed's net interest margin reflected compression. For the current
quarter, the margin of 2.26% reflected a 7 basis point contraction from the
December 2004 quarter. LaMonica noted, "PennFed's cost of funds is increasing at
a slightly faster pace than our yield on assets, similar to what other
traditional thrifts are experiencing. In the current and projected interest rate
environment, with short term rates rising and a flattening yield curve,
continued pressure on net interest margin is expected."
LaMonica stated, "Our low-risk, low-cost reputation remains intact. Asset
quality is exceptional." Non-performing assets totaled $1.6 million and
represented only 0.08% of total assets at March 31, 2005.
The Company's expense and efficiency ratios also remained strong at 1.24%
and 46.97%, respectively, for the current quarter versus 1.47% and 55.70% for
the prior year quarter. 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
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PennFed 3Q-2005
Page 3
for the ESOP as well as costs associated with new branches opened in the last
two years. In addition, costs associated with regulatory burden, especially
compliance with Sarbanes-Oxley Section 404, have required, and are expected to
continue to require, significant additional expenditures.
The Company continues to be successful employing stock repurchases as a
means of utilizing capital. During the March 2005 quarter, 150,900 shares of the
Company's outstanding stock were repurchased at prices ranging from $15.05 to
$16.15, for a total cost of $2.4 million. Subject to availability and liquidity,
the Company intends to continue to repurchase stock given current trading and
price levels.
With its February 2005 opening of a branch in Aberdeen, New Jersey, Penn
Federal Savings Bank now maintains 25 New Jersey branch offices. The Bank's
deposits are insured by the Federal Deposit Insurance Corporation.
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)
March 31, December 31, June 30, March 31,
2005 2004 2004 2004
----------- ----------- ----------- -----------
Selected Financial Condition Data:
Cash and cash equivalents $ 12,757 $ 14,829 $ 14,859 $ 18,897
Investments, net 424,491 422,159 424,980 425,103
Mortgage-backed securities, net 83,079 87,879 100,079 99,487
Loans held for sale 0 2,580 0 0
Loans receivable:
One- to four-family mortgage loans 1,093,072 1,075,831 996,659 917,374
Commercial and multi-family real estate loans 167,783 168,092 172,244 164,200
Consumer loans 132,543 124,402 117,688 115,875
Allowance for loan losses (6,054) (6,064) (6,249) (6,252)
Other, net 8,101 7,931 7,131 6,533
----------- ----------- ----------- -----------
Loans receivable, net 1,395,445 1,370,192 1,287,473 1,197,730
FHLB stock 21,733 22,102 23,773 24,273
Other intangible assets 0 454 1,361 1,814
Other assets 58,859 59,293 49,761 49,109
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Total assets $ 1,996,364 $ 1,979,488 $ 1,902,286 $ 1,816,413
=========== =========== =========== ===========
Deposits:
Checking and money market $ 210,327 $ 199,297 $ 169,609 $ 163,893
Savings 419,112 430,203 418,678 406,830
Certificates of deposit and accrued interest 655,028 623,954 599,813 558,814
----------- ----------- ----------- -----------
Total deposits 1,284,467 1,253,454 1,188,100 1,129,537
FHLB advances 425,465 425,465 475,465 485,465
Other borrowings 103,059 122,624 59,346 27,046
Junior subordinated debentures 42,070 42,059 42,037 42,026
Other liabilities 17,074 12,551 18,939 14,759
Stockholders' equity 124,229(a) 123,335 118,399 117,580
----------- ----------- ----------- -----------
Total liabilities and stockholders' equity $ 1,996,364 $ 1,979,488 $ 1,902,286 $ 1,816,413
=========== =========== =========== ===========
Book value per share $ 9.20 $ 9.04 $ 8.72 $ 8.82
Equity to assets 6.22% 6.23% 6.22% 6.47%
Asset Quality Data:
Non-performing loans $ 1,611 $ 1,776 $ 2,182 $ 2,900
Real estate owned, net 0 0 0 28
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Total non-performing assets $ 1,611 $ 1,776 $ 2,182 $ 2,928
=========== =========== =========== ===========
Non-performing loans to total loans 0.11% 0.13% 0.17% 0.24%
Non-performing assets to total assets 0.08% 0.09% 0.11% 0.16%
Allowance for loan losses to non-performing loans 375.79% 341.44% 286.39% 215.59%
Allowance for loan losses to total gross loans 0.43% 0.44% 0.48% 0.52%
Regulatory Capital Ratios (of the Bank):
Tangible capital ratio (requirement - 1.50%) 8.51% 8.56% 8.61% 8.86%
Core capital ratio (requirement - 4.00%) 8.51% 8.56% 8.61% 8.86%
Risk-based capital ratio (requirement - 8.00%) 16.43% 16.58% 16.86% 17.48%
(a) Common shares outstanding as of March 31, 2005 totaled 13,499,078 shares.
Amounts have been restated for the effects of a 2 for 1 stock split in the
form of a 100% stock dividend paid on October 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 For the nine months ended
March 31, March 31,
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2005 2004 2005 2004
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Selected Operating Data:
Interest and dividend income $ 26,167 $ 24,326 $ 77,971 $ 71,725
Interest expense 15,300 14,598 45,094 44,022
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Net interest and dividend income 10,867 9,728 32,877 27,703
Provision for loan losses 0 0 0 0
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Net interest and dividend income
after provision for loan losses 10,867 9,728 32,877 27,703
Non-interest income:
Service charges 703 957 2,296 3,131
Net gain from real estate operations 0 0 157 1
Net gain on sales of loans 172 57 266 754
Other 369 360 980 1,062
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Total non-interest income 1,244 1,374 3,699 4,948
Non-interest expenses:
Compensation & employee benefits 3,135 3,901 9,407 10,841
Net occupancy expense 643 514 1,741 1,417
Equipment 516 536 1,594 1,520
Advertising 155 102 549 236
Amortization of intangibles 454 453 1,361 1,362
Federal deposit insurance premium 44 41 128 126
Other 1,196 1,090 3,663 3,091
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Total non-interest expenses 6,143 6,637 18,443 18,593
----------- ----------- ----------- -----------
Income before income taxes 5,968 4,465 18,133 14,058
Income tax expense 2,114 1,499 6,511 4,838
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Net income $ 3,854 $ 2,966 $ 11,622 $ 9,220
=========== =========== =========== ===========
Weighted avg. no. of diluted common shares 13,959,738 14,385,896 14,099,360 14,455,810
Diluted earnings per common share $ 0.28 $ 0.21 $ 0.82 $ 0.64
Return on average common equity 12.44% 9.98% 12.68% 10.36%
Return on average assets 0.78% 0.66% 0.79% 0.69%
Average earning assets $ 1,913,274 $ 1,741,017 $ 1,898,462 $ 1,724,232
Yield on average interest-earning assets 5.48% 5.59% 5.47% 5.53%
Cost of average interest-bearing liabilities 3.34% 3.48% 3.27% 3.51%
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Net interest rate spread 2.14% 2.11% 2.20% 2.02%
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Net interest margin 2.26% 2.24% 2.32% 2.16%
Non-interest exp. as a % of avg. assets 1.24% 1.47% 1.25% 1.39%
Efficiency ratio 46.97% 55.70% 46.90% 52.77%
Loan originations and purchases:
One- to four-family mortgage loans $ 63,610 $ 79,438 $ 242,753 $ 319,075
Commercial and multi-family real estate
loans 8,110 10,143 30,142 27,359
Consumer loans 23,681 17,248 61,507 55,421
----------- ----------- ----------- -----------
Total loan originations and purchases $ 95,401 $ 106,829 $ 334,402 $ 401,855
=========== =========== =========== ===========
Amounts have been restated for the effects of a 2 for 1 stock split in the
form of a 100% stock dividend paid on October 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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Mar. 31, Dec. 31, Sep. 30, Jun. 30, Mar. 31,
2005 2004 2004 2004 2004
----------- ----------- ----------- ----------- -----------
Selected Operating Data:
Interest and dividend income $ 26,167 $ 25,999 $ 25,805 $ 24,551 $ 24,326
Interest expense 15,300 15,060 14,734 14,652 14,598
----------- ----------- ----------- ----------- -----------
Net interest and dividend income 10,867 10,939 11,071 9,899 9,728
Provision for loan losses 0 0 0 0 0
----------- ----------- ----------- ----------- -----------
Net interest and dividend income
after provision for loan losses 10,867 10,939 11,071 9,899 9,728
Non-interest income:
Service charges 703 867 726 1,044 957
Net gain from real estate operations 0 157 0 57 0
Net gain on sales of loans 172 70 24 5 57
Other 369 261 350 375 360
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Total non-interest income 1,244 1,355 1,100 1,481 1,374
Non-interest expenses:
Compensation & employee benefits 3,135 3,079 3,193 3,752 3,901
Net occupancy expense 643 559 539 477 514
Equipment 516 543 535 537 536
Advertising 155 227 167 154 102
Amortization of intangibles 454 454 453 454 453
Federal deposit insurance premium 44 43 41 42 41
Other 1,196 1,276 1,191 1,421 1,090
----------- ----------- ----------- ----------- -----------
Total non-interest expenses 6,143 6,181 6,119 6,837 6,637
----------- ----------- ----------- ----------- -----------
Income before income taxes 5,968 6,113 6,052 4,543 4,465
Income tax expense 2,114 2,133 2,264 1,705 1,499
----------- ----------- ----------- ----------- -----------
Net income $ 3,854 $ 3,980 $ 3,788 $ 2,838 $ 2,966
=========== =========== =========== =========== ===========
Weighted avg. no. of diluted common shares 13,959,738 14,114,728 14,195,722 14,205,944 14,385,896
Diluted earnings per common share $ 0.28 $ 0.28 $ 0.27 $ 0.20 $ 0.21
Return on average common equity 12.44% 12.97% 12.63% 9.69% 9.98%
Return on average assets 0.78% 0.81% 0.78% 0.61% 0.66%
Average earning assets $ 1,913,274 $ 1,901,002 $ 1,881,110 $ 1,782,562 $ 1,741,017
Yield on average interest-earning assets 5.48% 5.45% 5.47% 5.51% 5.59%
Cost of average interest-bearing liabilities 3.34% 3.25% 3.22% 3.41% 3.48%
----------- ----------- ----------- ----------- -----------
Net interest rate spread 2.14% 2.20% 2.25% 2.10% 2.11%
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Net interest margin 2.26% 2.33% 2.38% 2.23% 2.24%
Non-interest exp. as a % of avg. assets 1.24% 1.26% 1.26% 1.48% 1.47%
Efficiency ratio 46.97% 47.19% 46.55% 56.37% 55.70%
Loan originations and purchases:
One- to four-family mortgage loans $ 63,610 $ 55,899 $ 123,244 $ 143,758 $ 79,438
Commercial and multi-family real estate loans 8,110 16,217 5,815 15,863 10,143
Consumer loans 23,681 20,121 17,705 19,581 17,248
----------- ----------- ----------- ----------- -----------
Total loan originations and purchases $ 95,401 $ 92,237 $ 146,764 $ 179,202 $ 106,829
=========== =========== =========== =========== ===========
Amounts have been restated for the effects of a 2 for 1 stock split in the
form of a 100% stock dividend paid on October 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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Mar. 31, Dec. 31, Sep. 30, Jun. 30, Mar. 31,
2005 2004 2004 2004 2004
------------ ------------ ------------ ------------ ------------
Reported net income $ 3,854 $ 3,980 $ 3,788 $ 2,838 $ 2,966
Non-recurring charges:
Additional environmental accrual 0 0 0 298 0
Tax effect 0 0 0 (110) 0
------------ ------------ ------------ ------------ ------------
Non-recurring charges, net of taxes 0 0 0 188 0
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"Adjusted" net income $ 3,854 $ 3,980 $ 3,788 $ 3,026 $ 2,966
============ ============ ============ ============ ============
Weighted avg. no. of diluted common shares 13,959,738 14,114,728 14,195,722 14,205,944 14,385,896
Diluted earnings per common share $ 0.28 $ 0.28 $ 0.27 $ 0.21 $ 0.21
Return on average common equity 12.44% 12.97% 12.63% 10.33% 9.98%
Return on average assets 0.78% 0.81% 0.78% 0.66% 0.66%
Non-interest exp. as a % of avg. assets 1.24% 1.26% 1.26% 1.42% 1.47%
Efficiency ratio 46.97% 47.19% 46.55% 53.74% 55.70%
Amounts have been restated for the effects of a 2 for 1 stock split in the
form of a 100% stock dividend paid on October 29, 2004.