EXHIBIT 99.1
FOR IMMEDIATE RELEASE Contact: Claire M. Chadwick, CFO
973-669-7366, ext. 267
PENNFED FINANCIAL SERVICES, INC. REPORTS
----------------------------------------
THIRD QUARTER EARNINGS
----------------------
WEST ORANGE, NJ, April 26, 2006 - PennFed Financial Services, Inc.
(NASDQ:PFSB), the $2.2 billion holding company for New Jersey-based Penn Federal
Savings Bank, reported earnings for its third fiscal quarter ended March 31,
2006 of 23 cents per diluted share compared to 28 cents per diluted share for
the comparable prior year quarter.
For the first nine months ended March 31, 2006, PennFed reported earnings
of 79 cents per diluted share, compared to 82 cents per diluted share for the
comparable nine-month period of fiscal 2005.
Joseph L. LaMonica, PennFed's President and Chief Executive Officer
commented, "We continue to experience net interest margin compression due to the
flat yield curve and the extremely competitive New Jersey deposit market." Net
interest margin contracted to 1.74% for the current quarter from 1.89% last
quarter and 2.26% for the quarter a year ago as a result of the continuing rise
in short term rates and the further flattening of the yield curve. While the
challenging operating environment and flat yield curve will likely improve at
some point in the future, the expectation is that the improvement will be slow
and the current environment will remain for the near term.
"Given this difficult operating environment, PennFed is even more focused
on productivity and efficiency," LaMonica stated.
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PennFed 3Q-2006
Page 2
Total assets at March 31, 2006 of $2.237 billion reflected growth of
approximately 12% on an annualized basis from June 30, 2005. Loans receivable
showed 14% growth annualized.
Total loan production was $108 million for the March 2006 quarter. "Focus
continues to be placed on loan production, with a particular emphasis on the
origination of home equity loans in addition to one- to four-family mortgage
loans and commercial real estate loans," said LaMonica. Reaching a record level,
consumer loan originations totaled $36.8 million for the current quarter - a 55%
increase from the prior year quarter.
The Company continues to experience strong competition for deposits.
Furthermore, a shift in the mix of deposits continues as savings account
customers move "parked" funds to other higher yielding alternatives. Checking
and money market balances have increased by over 27% since June 30, 2005. With
the pricing on retail deposits driven increasingly higher by competition,
wholesale borrowings have been and will continue to be periodically used as a
lower costing alternative source of funds. Nevertheless, the rate paid on
interest bearing liabilities increased 20 basis points over the linked quarter
due to the continued rise in short term rates and very strong competitive
deposit pricing.
On February 27, 2006, the Company notified customers of its planned May
31, 2006 closing of its branch located at 493 Bloomfield Avenue in Montclair,
New Jersey. The decision to close the branch was principally due to economies of
scale. Deposits will be transferred to a branch located less than two miles from
the branch to be closed.
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PennFed 3Q-2006
Page 3
Asset quality has been and continues to be a priority for PennFed.
Underwriting standards are strong and the relaxing of such standards for the
sake of improving margin is not an option. The Company closely monitors
non-performing assets and charge-offs continue to be minimal.
The Company is recognized as an efficient and low cost provider of
financial services. For the current quarter, the non-interest expense ratio of
just 1.04% continued to be very strong and reflects an improvement from 1.24%
for the three months ended March 31, 2005.
PennFed continues to employ stock repurchases as a means of managing
capital. During the March 2006 quarter, the Company repurchased 163,100 shares
for a total cost of $3.0 million.
PennFed stockholders of record as of May 12, 2006 will be paid a cash
dividend of $0.07 per share on May 26, 2006. The Company's dividend policy will
continue to be reviewed on a regular basis.
Penn Federal Savings Bank maintains 25 New Jersey branch offices. The
Bank's deposits are insured by the Federal Deposit Insurance Corporation.
This release contains words or phrases, such as "will," "expect,"
"anticipate," "continue" and similar expressions, 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 and
competitive 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.
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PennFed 3Q-2006
Page 4
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,
2006 2005 2005 2005
----------- ----------- ----------- -----------
Selected Financial Condition Data:
Cash and cash equivalents $ 17,393 $ 17,988 $ 15,220 $ 12,757
Investments, net 445,332 425,405 410,509 424,491
Mortgage-backed securities, net 65,749 68,978 78,201 83,079
Loans held for sale 520 242 4,826 0
Loans receivable:
One- to four-family mortgage loans 1,256,817 1,222,023 1,143,663 1,093,072
Commercial and multi-family real estate loans 166,321 170,653 169,765 167,783
Consumer loans 186,124 166,723 144,423 132,543
Allowance for loan losses (5,898) (5,913) (6,050) (6,054)
Other, net 9,972 9,592 8,853 8,101
----------- ----------- ----------- -----------
Loans receivable, net 1,613,336 1,563,078 1,460,654 1,395,445
FHLB stock 26,261 25,028 22,391 21,733
Other assets 68,755 60,546 58,750 58,859
----------- ----------- ----------- -----------
Total assets $ 2,237,346 $ 2,161,265 $ 2,050,551 $ 1,996,364
=========== =========== =========== ===========
Deposits:
Checking and money market $ 289,638 $ 266,674 $ 227,031 $ 210,327
Savings 318,834 335,367 385,360 419,112
Certificates of deposit and accrued interest 763,687 784,334 727,100 655,028
----------- ----------- ----------- -----------
Total deposits 1,372,159 1,386,375 1,339,491 1,284,467
FHLB advances 465,465 450,465 415,465 425,465
Other borrowings 214,334 141,770 107,952 103,059
Junior subordinated debentures 42,115 42,104 42,082 42,070
Other liabilities 19,688 16,379 21,507 17,074
Stockholders' equity 123,585 (a) 124,172 124,054 124,229
----------- ----------- ----------- -----------
Total liabilities and stockholders' equity $ 2,237,346 $ 2,161,265 $ 2,050,551 $ 1,996,364
=========== =========== =========== ===========
Book value per share $ 9.59 $ 9.54 $ 9.34 $ 9.20
Equity to assets 5.52% 5.75% 6.05% 6.22%
Asset Quality Data:
Non-performing loans $ 2,611 $ 2,718 $ 2,619 $ 1,611
Real estate owned, net 0 502 0 0
----------- ----------- ----------- -----------
Total non-performing assets $ 2,611 $ 3,220 $ 2,619 $ 1,611
=========== =========== =========== ===========
Non-performing loans to total loans 0.16% 0.17% 0.18% 0.11%
Non-performing assets to total assets 0.12% 0.15% 0.13% 0.08%
Allowance for loan losses to non-performing loans 225.89% 217.55% 231.00% 375.79%
Allowance for loan losses to total gross loans 0.36% 0.38% 0.41% 0.43%
Regulatory Capital Ratios (of the Bank):
Tangible capital ratio (requirement - 1.50%) 7.57% 7.80% 8.28% 8.51%
Core capital ratio (requirement - 4.00%) 7.57% 7.80% 8.28% 8.51%
Risk-based capital ratio (requirement - 8.00%) 14.39% 14.89% 15.84% 16.43%
(a) Common shares outstanding as of March 31, 2006 totaled 12,891,478 shares.
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,
----------------------------- -----------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
Selected Operating Data:
Interest and dividend income $ 28,973 $ 26,167 $ 85,006 $ 77,971
Interest expense 19,762 15,300 55,968 45,094
------------ ------------ ------------ ------------
Net interest and dividend income 9,211 10,867 29,038 32,877
Provision for loan losses 0 0 0 0
------------ ------------ ------------ ------------
Net interest and dividend income
after provision for loan losses 9,211 10,867 29,038 32,877
Non-interest income:
Service charges 778 703 4,952 2,296
Net gain (loss) from real estate operations (3) 0 (4) 157
Net gain on sales of loans 0 172 143 266
Income on BOLI 239 217 674 466
Other 201 152 535 514
------------ ------------ ------------ ------------
Total non-interest income 1,215 1,244 6,300 3,699
Non-interest expenses:
Compensation & employee benefits 3,134 3,135 9,460 9,407
Net occupancy expense 664 643 1,843 1,741
Equipment 530 516 2,039 1,594
Advertising 168 155 467 549
Amortization of intangible assets 0 454 0 1,361
Federal deposit insurance premium 45 44 132 128
Extinguishment of debt 0 0 1,351 0
Other 1,119 1,196 3,509 3,663
------------ ------------ ------------ ------------
Total non-interest expenses 5,660 6,143 18,801 18,443
------------ ------------ ------------ ------------
Income before income taxes 4,766 5,968 16,537 18,133
Income tax expense 1,717 2,114 5,902 6,511
------------ ------------ ------------ ------------
Net income $ 3,049 $ 3,854 $ 10,635 $ 11,622
============ ============ ============ ============
Weighted avg. no. of diluted common shares 13,349,234 13,959,738 13,520,805 14,099,360
Diluted earnings per common share $ 0.23 $ 0.28 $ 0.79 $ 0.82
Return on average common equity 9.87% 12.44% 11.37% 12.68%
Return on average assets 0.56% 0.78% 0.66% 0.79%
Average total assets $ 2,184,365 $ 1,985,274 $ 2,136,358 $ 1,965,031
Average earning assets $ 2,111,183 $ 1,913,274 $ 2,065,194 $ 1,898,462
Yield on average interest-earning assets 5.51% 5.48% 5.48% 5.47%
Cost of average interest-bearing liabilities 3.90% 3.34% 3.72% 3.27%
------------ ------------ ------------ ------------
Net interest rate spread 1.61% 2.14% 1.76% 2.20%
============ ============ ============ ============
Net interest margin 1.74% 2.26% 1.89% 2.32%
Non-interest exp. as a % of avg. assets 1.04% 1.24% 1.17% 1.25%
Efficiency ratio 54.27% 46.97% 53.20% 46.90%
Loan originations and purchases:
One- to four-family mortgage loans $ 64,637 $ 63,610 $ 255,927 $ 242,753
Commercial and multi-family real estate loans 7,005 8,110 29,707 30,142
Consumer loans 36,791 23,681 95,257 61,507
------------ ------------ ------------ ------------
Total loan originations and purchases $ 108,433 $ 95,401 $ 380,891 $ 334,402
============ ============ ============ ============
PennFed Financial Services, Inc.
(Holding Company for Penn Federal Savings Bank)
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
CALCULATION OF ADJUSTED NET INCOME
----------------------------------
For the three months ended For the nine months ended
March 31, March 31,
---------------------------- -----------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
Reported net income $ 3,049 $ 3,854 $ 10,635 $ 11,622
Adjustments:
Commercial loan prepayment
premium 0 0 (2,688) 0
Prepayment penalty on FHLB
advances 0 0 1,351 0
Acceleration of depreciation on branch
automation system software 0 0 372 0
Increase in obligation under certain
long-term benefit plans 0 0 259 0
Net tax effect 0 0 247 0
------------ ------------ ------------ ------------
Adjustments, net of taxes 0 0 (459) 0
------------ ------------ ------------ ------------
"Adjusted" net income $ 3,049 $ 3,854 $ 10,176 $ 11,622
============ ============ ============ ============
Weighted avg. no. of diluted common shares 13,349,234 13,959,738 13,520,805 14,099,360
Diluted earnings per common share $ 0.23 $ 0.28 $ 0.75 $ 0.82
Return on average common equity 9.87% 12.44% 10.88% 12.68%
Return on average assets 0.56% 0.78% 0.64% 0.79%
Non-interest exp. as a % of avg. assets 1.04% 1.24% 1.05% 1.25%
Efficiency ratio 54.27% 46.97% 51.51% 46.90%
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
---------------------------------------------------------------------------
Mar. 31, Dec. 31, Sep. 30, Jun. 30, Mar. 31,
2006 2005 2005 2005 2005
------------ ------------ ------------ ------------ ------------
Selected Operating Data:
Interest and dividend income $ 28,973 $ 28,350 $ 27,683 $ 26,751 $ 26,167
Interest expense 19,762 18,715 17,491 16,290 15,300
------------ ------------ ------------ ------------ ------------
Net interest and dividend income 9,211 9,635 10,192 10,461 10,867
Provision for loan losses 0 0 0 0 0
------------ ------------ ------------ ------------ ------------
Net interest and dividend income
after provision for loan losses 9,211 9,635 10,192 10,461 10,867
Non-interest income:
Service charges 778 704 3,470 800 703
Net gain (loss) from real estate operations (3) 2 (3) (1) 0
Net gain on sales of loans 0 21 122 128 172
Income on BOLI 239 219 216 224 217
Other 201 153 181 146 152
------------ ------------ ------------ ------------ ------------
Total non-interest income 1,215 1,099 3,986 1,297 1,244
Non-interest expenses:
Compensation & employee benefits 3,134 3,067 3,259 2,856 3,135
Net occupancy expense 664 594 585 578 643
Equipment 530 538 971 546 516
Advertising 168 165 134 170 155
Amortization of intangible assets 0 0 0 0 454
Federal deposit insurance premium 45 45 42 44 44
Extinguishment of debt 0 0 1,351 0 0
Other 1,119 979 1,411 1,534 1,196
------------ ------------ ------------ ------------ ------------
Total non-interest expenses 5,660 5,388 7,753 5,728 6,143
------------ ------------ ------------ ------------ ------------
Income before income taxes 4,766 5,346 6,425 6,030 5,968
Income tax expense 1,717 1,892 2,293 2,158 2,114
------------ ------------ ------------ ------------ ------------
Net income $ 3,049 $ 3,454 $ 4,132 $ 3,872 $ 3,854
============ ============ ============ ============ ============
Weighted avg. no. of diluted common shares 13,349,234 13,509,140 13,700,349 13,742,337 13,959,738
Diluted earnings per common share $ 0.23 $ 0.26 $ 0.30 $ 0.28 $ 0.28
Return on average common equity 9.87% 11.09% 13.12% 12.50% 12.44%
Return on average assets 0.56% 0.65% 0.79% 0.76% 0.78%
Average total assets $ 2,184,365 $ 2,137,449 $ 2,087,261 $ 2,029,268 $ 1,985,274
Average earning assets $ 2,111,183 $ 2,066,915 $ 2,017,484 $ 1,959,481 $ 1,913,274
Yield on average interest-earning assets 5.51% 5.46% 5.47% 5.46% 5.48%
Cost of average interest-bearing liabilities 3.90% 3.70% 3.55% 3.44% 3.34%
------------ ------------ ------------ ------------ ------------
Net interest rate spread 1.61% 1.76% 1.92% 2.02% 2.14%
============ ============ ============ ============ ============
Net interest margin 1.74% 1.89% 2.05% 2.14% 2.26%
Non-interest exp. as a % of avg. assets 1.04% 1.01% 1.49% 1.13% 1.24%
Efficiency ratio 54.27% 50.20% 54.67% 48.71% 46.97%
Loan originations and purchases:
One- to four-family mortgage loans $ 64,637 $ 73,061 $ 118,229 $ 107,521 $ 63,610
Commercial and multi-family real estate loans 7,005 14,387 8,315 8,470 8,110
Consumer loans 36,791 27,996 30,470 29,301 23,681
------------ ------------ ------------ ------------ ------------
Total loan originations and purchases $ 108,433 $ 115,444 $ 157,014 $ 145,292 $ 95,401
============ ============ ============ ============ ============
PennFed Financial Services, Inc.
(Holding Company for Penn Federal Savings Bank)
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
CALCULATION OF ADJUSTED NET INCOME
----------------------------------
For the three months ended
------------------------------------------------------------------------------
Mar. 31, Dec. 31, Sep. 30, Jun. 30, Mar. 31,
2006 2005 2005 2005 2005
------------ ------------ ------------ ------------ ------------
Reported net income $ 3,049 $ 3,454 $ 4,132 $ 3,872 $ 3,854
Adjustments:
Commercial loan prepayment
premium 0 0 (2,688) 0 0
Prepayment penalty on FHLB
advances 0 0 1,351 0 0
Acceleration of depreciation on branch
automation system software 0 0 372 0 0
Increase in obligation under certain
long-term benefit plans 0 0 259 0 0
Additional Sarbanes Oxley
compliance costs 0 0 0 208 0
Net tax effect 0 0 247 (73) 0
------------ ------------ ------------ ------------ ------------
Adjustments, net of taxes 0 0 (459) 135 0
------------ ------------ ------------ ------------ ------------
"Adjusted" net income $ 3,049 $ 3,454 $ 3,673 $ 4,007 $ 3,854
============ ============ ============ ============ ============
Weighted avg. no. of diluted common shares 13,349,234 13,509,140 13,700,349 13,742,337 13,959,738
Diluted earnings per common share $ 0.23 $ 0.26 $ 0.27 $ 0.29 $ 0.28
Return on average common equity 9.87% 11.09% 11.66% 12.93% 12.44%
Return on average assets 0.56% 0.65% 0.70% 0.79% 0.78%
Non-interest exp. as a % of avg. assets 1.04% 1.01% 1.11% 1.09% 1.24%
Efficiency ratio 54.27% 50.20% 50.21% 46.94% 46.97%