PennFed Financial Services, Inc. Reports Third Quarter Earnings and an Increased Dividend

Apr 25, 2001, 01:00 ET from PennFed Financial Services, Inc.

    WEST ORANGE, N.J., April 25 /PRNewswire Interactive News Release/ --
 PennFed Financial Services, Inc. (Nasdq: PFSB), the $1.7 billion holding
 company for the New Jersey-based Penn Federal Savings Bank, announced earnings
 of $0.38 per diluted share for the quarter ended March 31, 2001.  The Company
 also reported an increase in its quarterly cash dividend and continued
 improvement in its net interest margin.
     For the third quarter of fiscal 2001, net income of $3.0 million resulted
 in $0.38 per diluted share.  Current quarter earnings per share equal the
 $0.38 per share reported for both the three months ended December 31, 2000 and
 March 31, 2000.  Diluted cash earnings for the current quarter of $0.49 per
 share reflect an increase over the $0.48 and $0.47 per share reported for the
 three months ended December 31, 2000 and March 31, 2000, respectively.
     Return on average common equity was 10.60% for the three months ended
 March 31, 2001.  Cash return on average common equity was 13.97% for the
 current quarter.
     Increased non-interest expense in the current quarter impacted earnings
 per share by $0.03 when compared to the December 2000 quarter.  Factors
 contributing to the increase include:
 
     -- The significant rise in the Company's stock price during the March 2001
        quarter resulted in additional "non-cash" expense related to the
        Employee Stock Ownership Plan.
     -- An increase in the Company's occupancy expense was attributable to
        harsh winter weather.
     -- Compensation and other expenses include costs for the Bank's new
        Business Development department that was fully staffed during the
        current quarter.  Benefits from this new department are just beginning
        to emerge.
     -- Additional expenses were incurred related to the expansion of network
        system communication capacity and the Company's Internet presence.  The
        Bank's new on-line banking capability will be introduced in the June
        2001 quarter.
 
     The Company also reported that its Board of Directors approved a one-cent
 increase in the quarterly cash dividend.  PennFed stockholders of record as of
 May 11, 2001 will be paid a cash dividend of $0.05 per share on May 25, 2001.
 The level of the Company's dividend will continue to be reviewed on a
 quarterly basis.
     PennFed's net interest margin of 2.46% for the current quarter reflects
 improvement from 2.40% for the December 2000 quarter.  A decline in short-term
 interest rates coupled with growth in the Company's checking, money market and
 savings core deposit accounts contributed to the improvement.  Core deposits
 grew 6% from December 31, 2000 and in excess of 9% since June 30, 2000.
 Balances in certificates of deposits, a higher costing category of deposits,
 were basically unchanged from the last three quarters.
     The net interest margin also benefited from the continued growth in
 PennFed's commercial and consumer loan portfolios.  At March 31, 2001 these
 loan portfolios totaled $216 million, reflecting a 4% increase since December
 31, 2000 and nearly 18% since June 30, 2000.  The Company's one- to four-
 family residential loan portfolio grew less than 2% in the March 2001 quarter
 but has actually declined 6% since June 30, 2000.
     The net interest margin improved while the Company continued stock
 repurchases.  Joseph L. LaMonica, President and Chief Executive Officer,
 stated that, "The repurchase of our own stock has continued to be an
 attractive investment opportunity, even as its price appreciates."  Since the
 announcement in October 2000 of a 5% Stock Repurchase Program, the Company has
 repurchased 235,000 shares of the 400,000 shares authorized for repurchase, at
 a total cost of $4.2 million.
     The Company's commitment to strong asset quality continues to be evident
 as PennFed's non-performing assets were just 0.17% of total assets at March
 31, 2001.
     As previously announced, the Company issued $12 million of Trust Preferred
 securities in late March.  Distributions payable on these securities, as well
 as the distributions payable on the $34.5 million of Trust Preferred
 securities issued in October 1997, are included as a component of non-interest
 expense.  Such distributions were previously classified as interest expense.
 As a result, the net interest margin and the non-interest expense and
 efficiency ratios for prior periods have been recalculated to conform with
 this reclassification.
     The Company's non-interest expense and efficiency ratios were 1.48% and
 52.22%, respectively, for the three months ended March 31, 2001.
     For the first nine months of Fiscal 2001, PennFed reported net income of
 $9.2 million, resulting in diluted earnings of $1.14 per share and a return on
 average equity of 10.81%. Diluted cash earnings and cash return on average
 equity were $1.47 per share and 13.94%, respectively, for the nine months
 ended March 31, 2001.
 
     Penn Federal Savings Bank, headquartered in New Jersey, maintains
 21 branch offices in Bayville, Brick, Caldwell, East Newark, Fairfield,
 Farmingdale, Harrison, Livingston, Marlboro, Montclair (2), Newark (3), Old
 Bridge, Roseland, Sayreville, Toms River, Upper Montclair, Verona, and West
 Orange.  The Bank's deposits are insured by the Federal Deposit Insurance
 Corporation.
 
     This release contains forward-looking statements that are subject to risk
 and uncertainties, including, but not limited to, changes in economic
 conditions in the Company's market areas, changes in policies by regulatory
 agencies, the impact of competitive loan products, loan demand risks,
 fluctuations in interest rates and operating results and other risks detailed
 from time to time in the Company's filings with the Securities and Exchange
 Commission.  The Company cautions readers not to place undue reliance on any
 forward-looking statements.  The Company does not undertake and specifically
 disclaims any obligation to revise any forward-looking statements to reflect
 the occurrence of anticipated or unanticipated events or circumstances after
 the date of such statements.  These risks could cause the Company's future to
 differ materially from those expressed in any forward-looking statements by,
 or on behalf of, the Company.
 
                          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,
                              2001         2000          2000         2000
 
     Selected Financial Condition Data:
     Cash and Federal
      funds sold            $22,840       $11,773      $13,866       $13,596
     Investments, net
      and FHLB stock        306,478       325,477      325,321       322,733
     Mortgage-backed
      securities, net       121,531       117,275       87,561        96,823
     Loans held for sale      2,357         2,961            0             0
     Loans receivable:
      One- to four-family
       mortgage loans     1,006,975       987,912    1,070,048     1,016,804
      Commercial and
       multi-family
       real estate loans    104,681        99,577       86,257        84,329
      Consumer loans        111,564       108,200       97,587        87,356
      Allowance for
      loan losses           (4,143)       (4,065)      (3,983)       (3,777)
      Other, net              9,083         8,924        9,339         8,646
     Loans receivable,
      net                 1,228,160     1,200,548    1,259,248     1,193,358
 
     Goodwill and other
      intangible assets       7,479         7,981        8,996         9,512
     Other assets            35,708        37,007       34,227        35,486
     Total assets        $1,724,553    $1,703,022   $1,729,219    $1,671,508
 
     Deposits:
      Checking and
       money market        $134,818      $126,380     $124,448      $121,521
      Savings               168,883       159,241      153,679       159,381
      Certificates of deposit
      and accrued interest  802,367       800,318      802,223       785,013
     Total deposits       1,106,068     1,085,939    1,080,350     1,065,915
 
     FHLB advances          414,465       404,465      364,465       344,465
     Other borrowings        19,400        40,775      112,175        91,975
     Other liabilities       25,180        24,445       25,443        24,387
     Preferred securities
      of Trust, net          44,469        32,836       32,805        32,790
     Stockholders'
      equity             114,971(a)       114,562      113,981       111,976
     Total liabilities
      and stockholders'
      equity             $1,724,553    $1,703,022   $1,729,219    $1,671,508
 
     Book value per share(b) $15.35        $15.10       $14.37        $14.03
     Tangible book
      value per share(b)     $14.35        $14.05       $13.24        $12.84
 
     Equity to assets         6.67%         6.73%        6.59%         6.70%
     Tangible equity to
      tangible assets         6.26%         6.29%        6.10%         6.17%
 
     Asset Quality Data:
      Non-performing loans   $2,009        $2,091       $2,715        $3,354
      Real estate owned, net    840           824          334           345
      Total non-performing
      assets                 $2,849        $2,915       $3,049        $3,699
 
     Non-performing loans
      to total loans          0.16%         0.17%        0.21%         0.28%
     Non-performing assets
      to total assets         0.17%         0.17%        0.18%         0.22%
     Allowance for loan
      losses to non-performing
      loans                 206.22%       194.40%      146.70%       112.61%
     Allowance for loan
      losses to total
      gross loans             0.34%         0.34%        0.32%         0.32%
 
     Regulatory Capital Ratios (of the Bank):
      Tangible capital ratio
       (requirement - 1.50%)  8.37%         8.20%        7.76%         7.86%
      Core capital ratio
       (requirement - 4.00%)  8.37%         8.20%        7.76%         7.86%
      Risk-based capital ratio
       (requirement - 8.00%) 16.43%        16.23%       15.50%        15.88%
 
     (a) Common shares outstanding as of March 31, 2001 totaled 7,877,462
         shares.
     (b) In accordance with SOP 93-6, the calculation of book value per share
         only includes ESOP shares to the extent that they are released or
         committed to be released during the fiscal year.Based upon the
         inclusion of all shares issued to the ESOP, at March 31, 2001 book
         value per share and tangible book value per share would be $14.59 and
         $13.65, respectively.
 
                          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,
                               2001        2000          2001          2000
 
     Selected Operating Data:
     Interest and
      dividend income       $29,657       $28,205      $90,113       $82,482
     Interest expense        19,364        17,965       60,225        51,990
      Net interest and
       dividend income       10,293        10,240       29,888        30,492
     Provision for loan losses  125           210          450           630
      Net interest and dividend
      income after provision
      for loan losses        10,168        10,030       29,438        29,862
     Non-interest income:
      Service charges           617           521        1,811         1,641
      Net gain (loss) from
       real estate operations   (3)             2          (7)            83
      Net gain on
       sales of loans            89             3          648            36
      Other                     130           155          415           496
      Total non-interest
      income                    833           681        2,867         2,256
     Non-interest expenses:
      Compensation &
      employee benefits       2,988         2,476        8,413         7,374
      Net occupancy expense     471           477        1,253         1,287
      Equipment                 479           442        1,394         1,335
      Advertising               113           113          325           275
      Amortization of
       intangibles              501           519        1,517         1,606
      Federal deposit
       insurance premium         55            56          165           374
      *Preferred securities
       expense                  794           784        2,360         2,350
      Other                     912           843        2,596         2,573
      Total non-interest
       expenses               6,313         5,710       18,023        17,174
     Income before
      income taxes            4,688         5,001       14,282        14,944
     Income tax expense       1,649         1,777        5,034         5,315
     Net income              $3,039        $3,224       $9,248        $9,629
 
     Weighted avg. no. of
      diluted common
      shares (c)          8,096,493     8,540,618    8,137,440     8,683,856
 
     Diluted earnings
      per common share (c)    $0.38         $0.38        $1.14         $1.11
 
     Diluted cash earnings per
      common share (c) (d)    $0.49         $0.47        $1.47         $1.41
 
     Return on average
      common equity          10.60%        11.62%       10.81%        11.65%
     Cash return on average
      common equity (d)      13.97%        14.49%       13.94%        14.83%
 
     Return on average
      assets                  0.71%         0.78%        0.72%         0.80%
 
     Average earning
      assets             $1,652,555    $1,595,858   $1,665,051    $1,559,383
 
     Yield on average
      interest-earning assets 7.19%         7.07%        7.21%         7.04%
     Cost of average
      interest-bearing
      liabilities             5.09%         4.84%        5.16%         4.76%
     Net interest rate spread 2.10%         2.23%        2.05%         2.28%
 
     Net interest margin      2.46%         2.57%        2.41%         2.62%
 
     Non-interest exp.
      as a % of avg. assets   1.48%         1.38%        1.40%         1.42%
 
     Efficiency ratio     52.22%(e)     47.54%(e)    50.38%(e)     47.66%(e)
 
     (c) In accordance with SOP 93-6, the calculation of EPS only includes ESOP
         shares to the extent that they are released or committed to be
         released during the fiscal year.
     (d) Cash earnings are reported earnings excluding the non-cash expenses
         associated with the amortization of intangibles and employee stock
         plans.
     (e) The efficiency ratio includes the benefit from the net gains on sales
         of loans.Excluding the net gains on sales of loans, the efficiency
         ratio would have been 52.64%, 47.55%, 51.40% and 47.71%, respectively.
 
     * - Preferred securities expense has been reclassified from interest
         expense to non-interest expense.
 
                          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,
                    2001          2000         2000         2000         2000
 
     Selected Operating Data:
     Interest and dividend
      income       $29,657      $30,020      $30,436      $29,281     $28,205
     Interest
      expense       19,364       20,280       20,581       19,211      17,965
      Net interest
       and dividend
       income       10,293        9,740        9,855       10,070      10,240
     Provision for
      loan losses      125          125          200          230         210
     Net interest and
      dividend income
      after provision for
      loan losses   10,168        9,615        9,655        9,840      10,030
     Non-interest income:
      Service charges  617          617          577          531         521
      Net gain (loss)
       from real
       estate ops.     (3)          (4)            0           31           2
      Net gain on
       sales of loans   89          245          314            0           3
      Other            130          117          168          129         155
      Total non-interest
       income          833          975        1,059          691         681
     Non-interest expenses:
      Compensation & employee
       benefits      2,988        2,759        2,666        2,469       2,476
      Net occupancy
       expense         471          387          395          376         477
      Equipment        479          467          448          428         442
      Advertising      113           94          118          118         113
      Amortization of
       intangibles     501          506          510          515         519
      Federal deposit
       insurance
       premium          55           55           55           55          56
      *Preferred securities
       expense         794          783          783          782         784
      Other            912          855          829          811         843
      Total non-interest
      expenses       6,313        5,906        5,804        5,554       5,710
     Income before
      income taxes   4,688        4,684        4,910        4,977       5,001
     Income tax
      expense        1,649        1,651        1,734        1,736       1,777
     Net income     $3,039       $3,033       $3,176       $3,241      $3,224
 
     Wght. avg. no.
      of diluted common
      shrs.(f)   8,096,493    8,086,854    8,242,969    8,408,451   8,540,618
 
     Diluted earnings
      per common
      share (f)      $0.38        $0.38        $0.39        $0.39       $0.38
 
     Diluted cash
      earn. per common
      shr. (f) (g)   $0.49        $0.48        $0.49        $0.48       $0.47
 
 
     Return on average
      common equity 10.60%       10.66%       11.18%       11.47%      11.62%
     Cash return on
      avg. common
      equity (g)    13.97%       13.70%       14.15%       14.26%      14.49%
 
     Return on average
      assets         0.71%        0.71%        0.73%        0.76%       0.78%
 
     Average earning
      assets    $1,652,555   $1,652,486   $1,690,110   $1,644,472  $1,595,858
 
     Yield on average
      interest-earning
      assets         7.19%        7.25%        7.18%        7.12%       7.07%
     Cost of average
      interest-bearing
      liab.          5.09%        5.22%        5.17%        5.01%       4.84%
     Net interest
      rate spread    2.10%        2.03%        2.01%        2.11%       2.23%
 
     Net interest
      margin         2.46%        2.40%        2.37%        2.45%       2.57%
 
     Non-interest exp.
      as a % of
      avg. assets    1.48%        1.38%        1.33%        1.30%       1.38%
 
     Efficiency
      ratio      52.22%(h)    50.38%(h)    48.51%(h)    46.96%(h)   47.54%(h)
 
     (f) In accordance with SOP 93-6, the calculation of EPS only includes ESOP
         shares to the extent that they are released or committed to be
         released during the fiscal year.
     (g) Cash earnings are reported earnings excluding the non-cash expenses
         associated with the amortization of intangibles and employee stock
         plans.
     (h) The efficiency ratio includes the benefit from the net gains on sales
         of loans.Excluding the net gains on sales of loans, the efficiency
         ratio would have been 52.64%, 51.56%, 49.94%, 46.96% and 47.55%,
         respectively.
 
     * - Preferred securities expense has been reclassified from interest
         expense to non-interest expense.
 
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SOURCE PennFed Financial Services, Inc.
    WEST ORANGE, N.J., April 25 /PRNewswire Interactive News Release/ --
 PennFed Financial Services, Inc. (Nasdq: PFSB), the $1.7 billion holding
 company for the New Jersey-based Penn Federal Savings Bank, announced earnings
 of $0.38 per diluted share for the quarter ended March 31, 2001.  The Company
 also reported an increase in its quarterly cash dividend and continued
 improvement in its net interest margin.
     For the third quarter of fiscal 2001, net income of $3.0 million resulted
 in $0.38 per diluted share.  Current quarter earnings per share equal the
 $0.38 per share reported for both the three months ended December 31, 2000 and
 March 31, 2000.  Diluted cash earnings for the current quarter of $0.49 per
 share reflect an increase over the $0.48 and $0.47 per share reported for the
 three months ended December 31, 2000 and March 31, 2000, respectively.
     Return on average common equity was 10.60% for the three months ended
 March 31, 2001.  Cash return on average common equity was 13.97% for the
 current quarter.
     Increased non-interest expense in the current quarter impacted earnings
 per share by $0.03 when compared to the December 2000 quarter.  Factors
 contributing to the increase include:
 
     -- The significant rise in the Company's stock price during the March 2001
        quarter resulted in additional "non-cash" expense related to the
        Employee Stock Ownership Plan.
     -- An increase in the Company's occupancy expense was attributable to
        harsh winter weather.
     -- Compensation and other expenses include costs for the Bank's new
        Business Development department that was fully staffed during the
        current quarter.  Benefits from this new department are just beginning
        to emerge.
     -- Additional expenses were incurred related to the expansion of network
        system communication capacity and the Company's Internet presence.  The
        Bank's new on-line banking capability will be introduced in the June
        2001 quarter.
 
     The Company also reported that its Board of Directors approved a one-cent
 increase in the quarterly cash dividend.  PennFed stockholders of record as of
 May 11, 2001 will be paid a cash dividend of $0.05 per share on May 25, 2001.
 The level of the Company's dividend will continue to be reviewed on a
 quarterly basis.
     PennFed's net interest margin of 2.46% for the current quarter reflects
 improvement from 2.40% for the December 2000 quarter.  A decline in short-term
 interest rates coupled with growth in the Company's checking, money market and
 savings core deposit accounts contributed to the improvement.  Core deposits
 grew 6% from December 31, 2000 and in excess of 9% since June 30, 2000.
 Balances in certificates of deposits, a higher costing category of deposits,
 were basically unchanged from the last three quarters.
     The net interest margin also benefited from the continued growth in
 PennFed's commercial and consumer loan portfolios.  At March 31, 2001 these
 loan portfolios totaled $216 million, reflecting a 4% increase since December
 31, 2000 and nearly 18% since June 30, 2000.  The Company's one- to four-
 family residential loan portfolio grew less than 2% in the March 2001 quarter
 but has actually declined 6% since June 30, 2000.
     The net interest margin improved while the Company continued stock
 repurchases.  Joseph L. LaMonica, President and Chief Executive Officer,
 stated that, "The repurchase of our own stock has continued to be an
 attractive investment opportunity, even as its price appreciates."  Since the
 announcement in October 2000 of a 5% Stock Repurchase Program, the Company has
 repurchased 235,000 shares of the 400,000 shares authorized for repurchase, at
 a total cost of $4.2 million.
     The Company's commitment to strong asset quality continues to be evident
 as PennFed's non-performing assets were just 0.17% of total assets at March
 31, 2001.
     As previously announced, the Company issued $12 million of Trust Preferred
 securities in late March.  Distributions payable on these securities, as well
 as the distributions payable on the $34.5 million of Trust Preferred
 securities issued in October 1997, are included as a component of non-interest
 expense.  Such distributions were previously classified as interest expense.
 As a result, the net interest margin and the non-interest expense and
 efficiency ratios for prior periods have been recalculated to conform with
 this reclassification.
     The Company's non-interest expense and efficiency ratios were 1.48% and
 52.22%, respectively, for the three months ended March 31, 2001.
     For the first nine months of Fiscal 2001, PennFed reported net income of
 $9.2 million, resulting in diluted earnings of $1.14 per share and a return on
 average equity of 10.81%. Diluted cash earnings and cash return on average
 equity were $1.47 per share and 13.94%, respectively, for the nine months
 ended March 31, 2001.
 
     Penn Federal Savings Bank, headquartered in New Jersey, maintains
 21 branch offices in Bayville, Brick, Caldwell, East Newark, Fairfield,
 Farmingdale, Harrison, Livingston, Marlboro, Montclair (2), Newark (3), Old
 Bridge, Roseland, Sayreville, Toms River, Upper Montclair, Verona, and West
 Orange.  The Bank's deposits are insured by the Federal Deposit Insurance
 Corporation.
 
     This release contains forward-looking statements that are subject to risk
 and uncertainties, including, but not limited to, changes in economic
 conditions in the Company's market areas, changes in policies by regulatory
 agencies, the impact of competitive loan products, loan demand risks,
 fluctuations in interest rates and operating results and other risks detailed
 from time to time in the Company's filings with the Securities and Exchange
 Commission.  The Company cautions readers not to place undue reliance on any
 forward-looking statements.  The Company does not undertake and specifically
 disclaims any obligation to revise any forward-looking statements to reflect
 the occurrence of anticipated or unanticipated events or circumstances after
 the date of such statements.  These risks could cause the Company's future to
 differ materially from those expressed in any forward-looking statements by,
 or on behalf of, the Company.
 
                          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,
                              2001         2000          2000         2000
 
     Selected Financial Condition Data:
     Cash and Federal
      funds sold            $22,840       $11,773      $13,866       $13,596
     Investments, net
      and FHLB stock        306,478       325,477      325,321       322,733
     Mortgage-backed
      securities, net       121,531       117,275       87,561        96,823
     Loans held for sale      2,357         2,961            0             0
     Loans receivable:
      One- to four-family
       mortgage loans     1,006,975       987,912    1,070,048     1,016,804
      Commercial and
       multi-family
       real estate loans    104,681        99,577       86,257        84,329
      Consumer loans        111,564       108,200       97,587        87,356
      Allowance for
      loan losses           (4,143)       (4,065)      (3,983)       (3,777)
      Other, net              9,083         8,924        9,339         8,646
     Loans receivable,
      net                 1,228,160     1,200,548    1,259,248     1,193,358
 
     Goodwill and other
      intangible assets       7,479         7,981        8,996         9,512
     Other assets            35,708        37,007       34,227        35,486
     Total assets        $1,724,553    $1,703,022   $1,729,219    $1,671,508
 
     Deposits:
      Checking and
       money market        $134,818      $126,380     $124,448      $121,521
      Savings               168,883       159,241      153,679       159,381
      Certificates of deposit
      and accrued interest  802,367       800,318      802,223       785,013
     Total deposits       1,106,068     1,085,939    1,080,350     1,065,915
 
     FHLB advances          414,465       404,465      364,465       344,465
     Other borrowings        19,400        40,775      112,175        91,975
     Other liabilities       25,180        24,445       25,443        24,387
     Preferred securities
      of Trust, net          44,469        32,836       32,805        32,790
     Stockholders'
      equity             114,971(a)       114,562      113,981       111,976
     Total liabilities
      and stockholders'
      equity             $1,724,553    $1,703,022   $1,729,219    $1,671,508
 
     Book value per share(b) $15.35        $15.10       $14.37        $14.03
     Tangible book
      value per share(b)     $14.35        $14.05       $13.24        $12.84
 
     Equity to assets         6.67%         6.73%        6.59%         6.70%
     Tangible equity to
      tangible assets         6.26%         6.29%        6.10%         6.17%
 
     Asset Quality Data:
      Non-performing loans   $2,009        $2,091       $2,715        $3,354
      Real estate owned, net    840           824          334           345
      Total non-performing
      assets                 $2,849        $2,915       $3,049        $3,699
 
     Non-performing loans
      to total loans          0.16%         0.17%        0.21%         0.28%
     Non-performing assets
      to total assets         0.17%         0.17%        0.18%         0.22%
     Allowance for loan
      losses to non-performing
      loans                 206.22%       194.40%      146.70%       112.61%
     Allowance for loan
      losses to total
      gross loans             0.34%         0.34%        0.32%         0.32%
 
     Regulatory Capital Ratios (of the Bank):
      Tangible capital ratio
       (requirement - 1.50%)  8.37%         8.20%        7.76%         7.86%
      Core capital ratio
       (requirement - 4.00%)  8.37%         8.20%        7.76%         7.86%
      Risk-based capital ratio
       (requirement - 8.00%) 16.43%        16.23%       15.50%        15.88%
 
     (a) Common shares outstanding as of March 31, 2001 totaled 7,877,462
         shares.
     (b) In accordance with SOP 93-6, the calculation of book value per share
         only includes ESOP shares to the extent that they are released or
         committed to be released during the fiscal year.Based upon the
         inclusion of all shares issued to the ESOP, at March 31, 2001 book
         value per share and tangible book value per share would be $14.59 and
         $13.65, respectively.
 
                          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,
                               2001        2000          2001          2000
 
     Selected Operating Data:
     Interest and
      dividend income       $29,657       $28,205      $90,113       $82,482
     Interest expense        19,364        17,965       60,225        51,990
      Net interest and
       dividend income       10,293        10,240       29,888        30,492
     Provision for loan losses  125           210          450           630
      Net interest and dividend
      income after provision
      for loan losses        10,168        10,030       29,438        29,862
     Non-interest income:
      Service charges           617           521        1,811         1,641
      Net gain (loss) from
       real estate operations   (3)             2          (7)            83
      Net gain on
       sales of loans            89             3          648            36
      Other                     130           155          415           496
      Total non-interest
      income                    833           681        2,867         2,256
     Non-interest expenses:
      Compensation &
      employee benefits       2,988         2,476        8,413         7,374
      Net occupancy expense     471           477        1,253         1,287
      Equipment                 479           442        1,394         1,335
      Advertising               113           113          325           275
      Amortization of
       intangibles              501           519        1,517         1,606
      Federal deposit
       insurance premium         55            56          165           374
      *Preferred securities
       expense                  794           784        2,360         2,350
      Other                     912           843        2,596         2,573
      Total non-interest
       expenses               6,313         5,710       18,023        17,174
     Income before
      income taxes            4,688         5,001       14,282        14,944
     Income tax expense       1,649         1,777        5,034         5,315
     Net income              $3,039        $3,224       $9,248        $9,629
 
     Weighted avg. no. of
      diluted common
      shares (c)          8,096,493     8,540,618    8,137,440     8,683,856
 
     Diluted earnings
      per common share (c)    $0.38         $0.38        $1.14         $1.11
 
     Diluted cash earnings per
      common share (c) (d)    $0.49         $0.47        $1.47         $1.41
 
     Return on average
      common equity          10.60%        11.62%       10.81%        11.65%
     Cash return on average
      common equity (d)      13.97%        14.49%       13.94%        14.83%
 
     Return on average
      assets                  0.71%         0.78%        0.72%         0.80%
 
     Average earning
      assets             $1,652,555    $1,595,858   $1,665,051    $1,559,383
 
     Yield on average
      interest-earning assets 7.19%         7.07%        7.21%         7.04%
     Cost of average
      interest-bearing
      liabilities             5.09%         4.84%        5.16%         4.76%
     Net interest rate spread 2.10%         2.23%        2.05%         2.28%
 
     Net interest margin      2.46%         2.57%        2.41%         2.62%
 
     Non-interest exp.
      as a % of avg. assets   1.48%         1.38%        1.40%         1.42%
 
     Efficiency ratio     52.22%(e)     47.54%(e)    50.38%(e)     47.66%(e)
 
     (c) In accordance with SOP 93-6, the calculation of EPS only includes ESOP
         shares to the extent that they are released or committed to be
         released during the fiscal year.
     (d) Cash earnings are reported earnings excluding the non-cash expenses
         associated with the amortization of intangibles and employee stock
         plans.
     (e) The efficiency ratio includes the benefit from the net gains on sales
         of loans.Excluding the net gains on sales of loans, the efficiency
         ratio would have been 52.64%, 47.55%, 51.40% and 47.71%, respectively.
 
     * - Preferred securities expense has been reclassified from interest
         expense to non-interest expense.
 
                          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,
                    2001          2000         2000         2000         2000
 
     Selected Operating Data:
     Interest and dividend
      income       $29,657      $30,020      $30,436      $29,281     $28,205
     Interest
      expense       19,364       20,280       20,581       19,211      17,965
      Net interest
       and dividend
       income       10,293        9,740        9,855       10,070      10,240
     Provision for
      loan losses      125          125          200          230         210
     Net interest and
      dividend income
      after provision for
      loan losses   10,168        9,615        9,655        9,840      10,030
     Non-interest income:
      Service charges  617          617          577          531         521
      Net gain (loss)
       from real
       estate ops.     (3)          (4)            0           31           2
      Net gain on
       sales of loans   89          245          314            0           3
      Other            130          117          168          129         155
      Total non-interest
       income          833          975        1,059          691         681
     Non-interest expenses:
      Compensation & employee
       benefits      2,988        2,759        2,666        2,469       2,476
      Net occupancy
       expense         471          387          395          376         477
      Equipment        479          467          448          428         442
      Advertising      113           94          118          118         113
      Amortization of
       intangibles     501          506          510          515         519
      Federal deposit
       insurance
       premium          55           55           55           55          56
      *Preferred securities
       expense         794          783          783          782         784
      Other            912          855          829          811         843
      Total non-interest
      expenses       6,313        5,906        5,804        5,554       5,710
     Income before
      income taxes   4,688        4,684        4,910        4,977       5,001
     Income tax
      expense        1,649        1,651        1,734        1,736       1,777
     Net income     $3,039       $3,033       $3,176       $3,241      $3,224
 
     Wght. avg. no.
      of diluted common
      shrs.(f)   8,096,493    8,086,854    8,242,969    8,408,451   8,540,618
 
     Diluted earnings
      per common
      share (f)      $0.38        $0.38        $0.39        $0.39       $0.38
 
     Diluted cash
      earn. per common
      shr. (f) (g)   $0.49        $0.48        $0.49        $0.48       $0.47
 
 
     Return on average
      common equity 10.60%       10.66%       11.18%       11.47%      11.62%
     Cash return on
      avg. common
      equity (g)    13.97%       13.70%       14.15%       14.26%      14.49%
 
     Return on average
      assets         0.71%        0.71%        0.73%        0.76%       0.78%
 
     Average earning
      assets    $1,652,555   $1,652,486   $1,690,110   $1,644,472  $1,595,858
 
     Yield on average
      interest-earning
      assets         7.19%        7.25%        7.18%        7.12%       7.07%
     Cost of average
      interest-bearing
      liab.          5.09%        5.22%        5.17%        5.01%       4.84%
     Net interest
      rate spread    2.10%        2.03%        2.01%        2.11%       2.23%
 
     Net interest
      margin         2.46%        2.40%        2.37%        2.45%       2.57%
 
     Non-interest exp.
      as a % of
      avg. assets    1.48%        1.38%        1.33%        1.30%       1.38%
 
     Efficiency
      ratio      52.22%(h)    50.38%(h)    48.51%(h)    46.96%(h)   47.54%(h)
 
     (f) In accordance with SOP 93-6, the calculation of EPS only includes ESOP
         shares to the extent that they are released or committed to be
         released during the fiscal year.
     (g) Cash earnings are reported earnings excluding the non-cash expenses
         associated with the amortization of intangibles and employee stock
         plans.
     (h) The efficiency ratio includes the benefit from the net gains on sales
         of loans.Excluding the net gains on sales of loans, the efficiency
         ratio would have been 52.64%, 51.56%, 49.94%, 46.96% and 47.55%,
         respectively.
 
     * - Preferred securities expense has been reclassified from interest
         expense to non-interest expense.
 
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 SOURCE  PennFed Financial Services, Inc.