EXHIBIT 99.1
FOR IMMEDIATE RELEASE Contact: Claire M. Chadwick, CFO
973-669-7366, ext. 267
PENNFED FINANCIAL SERVICES, INC. REPORTS
----------------------------------------
SECOND QUARTER EARNINGS
-----------------------
WEST ORANGE, NJ, February 9, 2007 - PennFed Financial Services, Inc.
(NASDQ:PFSB), the $2.3 billion holding company for New Jersey-based Penn Federal
Savings Bank, announced a loss of 12 cents per share for its second fiscal
quarter ended December 31, 2006. The loss was attributable to merger-related
expenses. Earnings for the comparable prior year quarter were 26 cents per
diluted share.
For the first six months of fiscal 2007, PennFed reported earnings of 6
cents per diluted share, compared to 56 cents per diluted share for the
comparable six months ended December 31, 2005.
On November 2, 2006, the Company announced the signing of a definitive
agreement pursuant to which PennFed will merge with and into New York Community
Bancorp, Inc. PennFed shareholders will receive 1.222 shares of New York
Community Bancorp common stock in a tax-free exchange for each share of PennFed
common stock held at the closing date. The transaction is expected to be
completed on or about March 31, 2007, pending the approval of PennFed's
stockholders and the approval of state and federal regulatory agencies. Included
in the Company's results is $4.6 million of merger-related expenses,
representing attorney fees, investment banking fees and compensation payments
made under the merger agreement. The merger-related expenses had the effect of
reducing earnings per share by $0.27 and $0.26 per share for the three months
and six months ended December 31, 2006, respectively, net of related tax.
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PennFed 2Q-2007
Page 2
Certain information provided in this press release excludes income and
expense items which management believes should be excluded in order to provide
investors with a clear understanding of the results of the Company's normal
business operations. These items, which are included in the financial results
prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP)
but which are excluded from adjusted results, are described in a reconciliation
table following this press release.
PennFed's net interest margin of 1.34% for the quarter ended December
31, 2006 reflects 4 basis points of compression from the September 2006 quarter.
"We had anticipated some margin pressure, but now feel that stabilization of net
interest margin has begun," said Joseph L. LaMonica, PennFed's President and
Chief Executive Officer.
"While non-performing assets showed a slight increase in the quarter,
the Company's asset quality remains stellar," LaMonica stated. Non-performing
assets of $2.5 million represented just 0.10% of total assets at December 31,
2006. Actual chargeoffs continue to be minimal.
The reported non-interest expense ratio was 1.78% for the December 2006
quarter. However, excluding merger-related expenses, the Company continued to
maintain a ratio of non-interest expenses to average assets of approximately 1%
for the fifth consecutive quarter.
Total assets at December 31, 2006 of $2.339 billion reflected growth of
just over 1% since June 30, 2006. Total loan production was $72 million for the
December 2006 quarter. Demand for one- to four-family loans continued to be
weak. "Therefore, the Company continues to focus on the origination of home
equity loans in addition to one-
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PennFed 2Q-2007
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to four-family mortgage loans and commercial real estate loans," said LaMonica.
Although slightly below the pace of the previous few quarters, PennFed's
consumer loan originations totaled $32.1 million - a 15% increase over the
December 31, 2005 quarter.
Deposits grew $132.2 million, or over 9%, to $1.547 billion at December
31, 2006 compared to $1.415 billion at June 30, 2006. While the New Jersey
deposit market remains highly competitive, checking and money market balances
increased $11 million, or 4%, since June 30, 2006. The Company continued to
experience a shift in deposit mix as savings account customers moved funds to
other higher yielding alternatives. Growth in CDs was primarily due to increased
municipal deposit relationships as well as the shift of funds into higher
interest-bearing products. The Company continues to monitor alternative
wholesale funding sources and remains committed to utilize such funding when
appropriate.
PennFed stockholders of record as of February 9, 2007 will be paid a
cash dividend of 7 cents per share on February 23, 2007.
Penn Federal Savings Bank maintains 24 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
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PennFed 2Q-2007
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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
<page>
<table>
<caption>
PennFed Financial Services, Inc.
(Holding Company for Penn Federal Savings Bank)
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
December 31, September 30, June 30, December 31,
2006 2006 2006 2005
------------- ------------- ------------- -------------
<s> <c> <c> <c> <c>
Selected Financial Condition Data:
Cash and cash equivalents $ 18,252 $ 18,645 $ 16,614 $ 17,988
Investments, net 440,723 445,442 445,296 425,405
Mortgage-backed securities, net 57,703 60,293 62,963 68,978
Loans held for sale 0 285 217 242
Loans receivable:
One- to four-family mortgage loans 1,314,723 1,317,415 1,302,230 1,222,023
Commercial and multi-family real estate loans 170,544 170,807 172,600 170,653
Consumer loans 234,598 219,840 204,446 166,723
Allowance for loan losses (5,859) (5,865) (5,888) (5,913)
Other, net 10,755 10,804 10,619 9,592
------------- ------------- ------------- -------------
Loans receivable, net 1,724,761 1,713,001 1,684,007 1,563,078
FHLB stock 25,971 26,511 27,714 25,028
Other assets 71,137 70,085 69,699 60,546
------------- ------------- ------------- -------------
Total assets $ 2,338,547 $ 2,334,262 $ 2,306,510 $ 2,161,265
============= ============= ============= =============
Deposits:
Checking and money market $ 323,565 $ 315,103 $ 312,489 $ 266,674
Savings 268,100 280,052 300,247 335,367
Certificates of deposit and accrued interest 955,091 906,651 801,852 784,334
------------- ------------- ------------- -------------
Total deposits 1,546,756 1,501,806 1,414,588 1,386,375
FHLB advances 480,000 465,000 465,465 450,465
Other borrowings 124,801 179,164 240,193 141,770
Junior subordinated debentures 42,148 42,138 42,126 42,104
Other liabilities 21,452 21,772 20,717 16,379
Stockholders' equity 123,390(a) 124,382 123,421 124,172
------------- ------------- ------------- -------------
Total liabilities and stockholders' equity $ 2,338,547 $ 2,334,262 $ 2,306,510 $ 2,161,265
============= ============= ============= =============
Book value per share $ 9.52 $ 9.69 $ 9.59 $ 9.54
Equity to assets 5.28% 5.33% 5.35% 5.75%
Asset Quality Data:
Non-performing loans $ 2,455 $ 2,140 $ 1,780 $ 2,718
Real estate owned, net 0 0 0 502
------------- ------------- ------------- -------------
Total non-performing assets $ 2,455 $ 2,140 $ 1,780 $ 3,220
============= ============= ============= =============
Non-performing loans to total loans 0.14% 0.12% 0.11% 0.17%
Non-performing assets to total assets 0.10% 0.09% 0.08% 0.15%
Allowance for loan losses to non-performing loans 238.66% 274.07% 330.79% 217.55%
Allowance for loan losses to total gross loans 0.34% 0.34% 0.35% 0.38%
Regulatory Capital Ratios (of the Bank):
Tangible capital ratio (requirement - 1.50%) 7.20% 7.17% 7.33% 7.80%
Core capital ratio (requirement - 4.00%) 7.20% 7.17% 7.33% 7.80%
Risk-based capital ratio (requirement - 8.00%) 13.38% 13.43% 13.81% 14.89%
</table>
(a) Common shares outstanding as of December 31, 2006 totaled 12,963,201 shares.
<page>
<table>
<caption>
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 six months ended
December 31, December 31,
----------------------------- ----------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
<s> <c> <c> <c> <c>
Selected Operating Data:
Interest and dividend income $ 31,703 $ 28,350 $ 62,946 $ 56,033
Interest expense 24,337 18,715 48,052 36,206
------------ ------------ ------------ ------------
Net interest and dividend income 7,366 9,635 14,894 19,827
Provision for loan losses 0 0 0 0
------------ ------------ ------------ ------------
Net interest and dividend income
after provision for loan losses 7,366 9,635 14,894 19,827
Non-interest income:
Fees and service charges 778 704 1,503 4,174
Net gain (loss) from real estate owned 0 2 22 (1)
Net gain on sales of loans 70 21 79 143
Income on Bank Owned Life Insurance 318 219 616 435
Other 231 153 649 334
------------ ------------ ------------ ------------
Total non-interest income 1,397 1,099 2,869 5,085
Non-interest expenses:
Compensation & employee benefits 3,365 3,067 6,355 6,326
Net occupancy expense 571 594 1,158 1,179
Equipment 548 538 1,141 1,509
Advertising 143 165 263 299
Federal deposit insurance premium 44 45 87 87
Extinguishment of debt 0 0 0 1,351
Merger-related expense 4,576 0 4,576 0
Other 1,152 979 2,404 2,390
------------ ------------ ------------ ------------
Total non-interest expenses 10,399 5,388 15,984 13,141
------------ ------------ ------------ ------------
Income (loss) before income taxes (1,636) 5,346 1,779 11,771
Income tax expense (benefit) (144) 1,892 1,007 4,185
------------ ------------ ------------ ------------
Net income (loss) $ (1,492) $ 3,454 $ 772 $ 7,586
============ ============ ============ ============
Weighted avg. no. of basic common shares 12,878,599 13,086,856 12,870,294 13,175,181
Weighted avg. no. of diluted common shares 12,878,599 13,509,140 13,185,641 13,604,862
Basic earnings (loss) per common share $ (0.12) $ 0.26 $ 0.06 $ 0.58
Diluted earnings (loss) per common share $ (0.12) $ 0.26 $ 0.06 $ 0.56
Return on average common equity (a) -4.81% 11.09% 1.25% 12.11%
Return on average assets (a) -0.26% 0.65% 0.07% 0.72%
Average total assets $ 2,330,958 $ 2,137,449 $ 2,323,633 $ 2,112,355
Average earning assets $ 2,249,829 $ 2,066,915 $ 2,243,732 $ 2,042,199
Yield on average interest-earning assets 5.61% 5.46% 5.59% 5.47%
Cost of average deposits and borrowings 4.40% 3.70% 4.36% 3.63%
------------ ------------ ------------ ------------
Net interest rate spread 1.21% 1.76% 1.23% 1.84%
============ ============ ============ ============
Net interest margin 1.34% 1.89% 1.36% 1.97%
Non-interest exp. as a % of avg. assets (a) 1.78% 1.01% 1.38% 1.24%
Efficiency ratio 118.67% 50.20% 90.10% 52.75%
Loan originations and purchases:
One- to four-family mortgage loans $ 34,004 $ 73,061 $ 87,632 $ 191,290
Commercial and multi-family real estate loans 5,434 14,387 8,622 22,702
Consumer loans 32,074 27,996 65,345 58,466
------------ ------------ ------------ ------------
Total loan originations and purchases $ 71,512 $ 115,444 $ 161,599 $ 272,458
============ ============ ============ ============
</table>
(a) - Annualized.
<page>
<table>
<caption>
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 six months ended
December 31, December 31,
----------------------------- -----------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
<s> <c> <c> <c> <c>
Reported net income (loss) $ (1,492) $ 3,454 $ 772 $ 7,586
Adjustments:
Merger-related expense 4,576 0 4,576 0
Commercial loan prepayment
premium 0 0 0 (2,688)
Prepayment penalty on FHLB
advances 0 0 0 1,351
Acceleration of depreciation on branch
automation system software 0 0 0 372
Increase in obligation under certain
long-term benefit plans 0 0 0 259
Net tax effect (1,130) 0 (1,130) 247
------------ ------------ ------------ ------------
Adjustments, net of taxes 3,446 0 3,446 (459)
------------ ------------ ------------ ------------
"Adjusted" net income $ 1,954 $ 3,454 $ 4,218 $ 7,127
============ ============ ============ ============
Weighted avg. no. of basic common shares 12,878,599 13,086,856 12,870,294 13,175,181
Weighted avg. no. of diluted common shares 13,192,798 13,509,140 13,185,641 13,604,862
Basic earnings per common share $ 0.15 $ 0.26 $ 0.33 $ 0.54
Diluted earnings per common share $ 0.15 $ 0.26 $ 0.32 $ 0.52
Return on average common equity (a) 6.30% 11.09% 6.81% 11.38%
Return on average assets (a) 0.34% 0.65% 0.36% 0.67%
Non-interest exp. as a % of avg. assets (a) 1.00% 1.01% 0.98% 1.06%
Efficiency ratio 66.45% 50.20% 64.30% 50.21%
</table>
(a) - Annualized.
<page>
<table>
<caption>
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
--------------------------------------------------------------------------
Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,
2006 2006 2006 2006 2005
----------- ----------- ------------ ----------- ----------
<s> <c> <c> <c> <c> <c>
Selected Operating Data:
Interest and dividend income $ 31,703 $ 31,243 $ 30,270 $ 28,973 $ 28,350
Interest expense 24,337 23,715 21,814 19,762 18,715
----------- ----------- ------------ ----------- ----------
Net interest and dividend income 7,366 7,528 8,456 9,211 9,635
Provision for loan losses 0 0 0 0 0
----------- ----------- ------------ ----------- ----------
Net interest and dividend income
after provision for loan losses 7,366 7,528 8,456 9,211 9,635
Non-interest income:
Fees and service charges 778 725 718 778 704
Net gain (loss) from real estate owned 0 22 (2) (3) 2
Net gain on sales of loans 70 9 0 0 21
Income on Bank Owned Life Insurance 318 298 293 239 219
Other 231 418 204 201 153
----------- ----------- ------------ ----------- ----------
Total non-interest income 1,397 1,472 1,213 1,215 1,099
Non-interest expenses:
Compensation & employee benefits 3,365 2,990 2,742 3,134 3,067
Net occupancy expense 571 587 583 664 594
Equipment 548 593 534 530 538
Advertising 143 120 170 168 165
Federal deposit insurance premium 44 43 43 45 45
Extinguishment of debt 0 0 0 0 0
Merger-related expense 4,576 0 0 0 0
Other 1,152 1,252 1,325 1,119 979
----------- ----------- ------------ ----------- ----------
Total non-interest expenses 10,399 5,585 5,397 5,660 5,388
----------- ----------- ------------ ----------- ----------
Income (loss) before income taxes (1,636) 3,415 4,272 4,766 5,346
Income tax expense (benefit) (144) 1,151 1,509 1,717 1,892
----------- ----------- ------------ ----------- ----------
Net income (loss) $ (1,492) $ 2,264 $ 2,763 $ 3,049 $ 3,454
=========== =========== ============ =========== ==========
Weighted avg. no. of basic common shares 12,878,599 12,861,988 12,894,870 12,966,518 13,086,856
Weighted avg. no. of diluted common shares 12,878,599 13,177,415 13,241,182 13,349,234 13,509,140
Basic earnings (loss) per common share $ (0.12) $ 0.18 $ 0.21 $ 0.24 $ 0.26
Diluted earnings (loss) per common share $ (0.12) $ 0.17 $ 0.21 $ 0.23 $ 0.26
Return on average common equity (a) -4.81% 7.32% 8.97% 9.87% 11.09%
Return on average assets (a) -0.26% 0.39% 0.49% 0.56% 0.65%
Average total assets $ 2,330,958 $ 2,316,308 $ 2,267,507 $ 2,184,365 $2,137,449
Average earning assets $ 2,249,829 $ 2,237,635 $ 2,188,499 $ 2,111,183 $2,066,915
Yield on average interest-earning assets 5.61% 5.56% 5.53% 5.51% 5.46%
Cost of average deposits and borrowings 4.40% 4.31% 4.09% 3.90% 3.70%
----------- ----------- ------------ ----------- ----------
Net interest rate spread 1.21% 1.25% 1.44% 1.61% 1.76%
=========== =========== ============ =========== ==========
Net interest margin 1.34% 1.38% 1.56% 1.74% 1.89%
Non-interest exp. as a % of avg. assets (a) 1.78% 0.96% 0.95% 1.04% 1.01%
Efficiency ratio 118.67% 62.21% 55.81% 54.27% 50.20%
Loan originations and purchases:
One- to four-family mortgage loans $ 34,004 $ 53,628 $ 84,925 $ 64,637 $ 73,061
Commercial and multi-family real estate loans 5,434 3,188 12,353 7,005 14,387
Consumer loans 32,074 33,271 36,472 36,791 27,996
----------- ----------- ------------ ----------- ----------
Total loan originations and purchases $ 71,512 $ 90,087 $ 133,750 $ 108,433 $ 115,444
=========== =========== ============ =========== ==========
</table>
(a) - Annualized.
<page>
<table>
<caption>
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
-----------------------------------------------------------------------------
Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,
2006 2006 2006 2006 2005
------------ ------------ ------------ ------------ ------------
<s> <c> <c> <c> <c> <c>
Reported net income (loss) $ (1,492) $ 2,264 $ 2,763 $ 3,049 $ 3,454
Adjustments:
Merger-related expense 4,576 0 0 0 0
Commercial loan prepayment
premium 0 0 0 0 0
Prepayment penalty on FHLB
advances 0 0 0 0 0
Acceleration of depreciation on branch
automation system software 0 0 0 0 0
Increase in obligation under certain
long-term benefit plans 0 0 0 0 0
Net tax effect (1,130) 0 0 0 0
------------ ------------ ------------ ------------ ------------
Adjustments, net of taxes 3,446 0 0 0 0
------------ ------------ ------------ ------------ ------------
"Adjusted" net income $ 1,954 $ 2,264 $ 2,763 $ 3,049 $ 3,454
============ ============ ============ ============ ============
Weighted avg. no. of basic common shares 12,878,599 12,861,988 12,894,870 12,966,518 13,086,856
Weighted avg. no. of diluted common shares 13,192,798 13,177,415 13,241,182 13,349,234 13,509,140
Basic earnings per common share $ 0.15 $ 0.18 $ 0.21 $ 0.24 $ 0.26
Diluted earnings per common share $ 0.15 $ 0.17 $ 0.21 $ 0.23 $ 0.26
Return on average common equity (a) 6.30% 7.32% 8.97% 9.87% 11.09%
Return on average assets (a) 0.34% 0.39% 0.49% 0.56% 0.65%
Non-interest exp. as a % of avg. assets (a) 1.00% 0.96% 0.95% 1.04% 1.01%
Efficiency ratio 66.45% 62.21% 55.81% 54.27% 50.20%
</table>
(a) - Annualized.