WEST ORANGE, N.J., Feb. 9, 2007 (PRIME NEWSWIRE) -- PennFed Financial Services, Inc. (Nasdaq: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 are $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.
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-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 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)
Dec. 31, Sept. 30, June 30, Dec. 31,
2006 2006 2006 2005
---------- ---------- ---------- ----------
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%
(a) Common shares outstanding as of December 31, 2006 totaled
12,963,201 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 For the six months
ended ended
December 31, December 31,
---------------------- ----------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
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% .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
========== ========== ========== ==========
(a) - Annualized.
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 For the six months
ended ended
December 31, December 31,
---------------------- ----------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
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%
(a) - Annualized.
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
----------- ----------- ----------- ----------- -----------
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
=========== =========== =========== =========== ===========
(a) - Annualized
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
----------- ----------- ----------- ----------- -----------
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%
(a) - Annualized.