New York Community Bancorp, Inc. to Acquire PennFed Financial Services, Inc

Business Wire, Nov 2, 2006

Transaction Highlights

* Immediately accretive to NYB's GAAP and cash earnings

* Adds 24 branches and deposits of $1.5 billion to NYB's New Jersey franchise

* Boosts NYB's market position from 26th to seventh in Essex County and strengthens its share of market in Hudson and Union Counties

* Attractive transaction metrics, with a core deposit premium of 10.8%

* Significant opportunities for cost savings and profitable deployment of post-merger cash flows into multi-family and other higher-yielding loans

* Consistent with NYB's growth-through-acquisition strategy

WESTBURY, N.Y. and WEST ORANGE, N.J. -- New York Community Bancorp, Inc. (NYSE: NYB), the $28.9 billion holding company for New York Community Bank and New York Commercial Bank, and PennFed Financial Services, Inc. (NASDAQ/Global Market: PFSB) ("PennFed"), the $2.3 billion holding company for Penn Federal Savings Bank, today announced the signing of a definitive agreement pursuant to which PennFed will merge with and into New York Community Bancorp.

The proposed transaction will add 24 branches and $1.5 billion of deposits to the New York Community Bank franchise in New Jersey, increasing its market share in Essex, Hudson, and Union counties, where it currently has eight branches, and expanding its footprint into the central New Jersey counties of Ocean, Monmouth, and Middlesex. On a pro forma basis, the addition of PennFed's 13 branches in Essex County will boost New York Community's share of deposits in that county from 0.4% to 6.1%, and its market position from 26th to seventh.

Under the terms of the agreement, which has been unanimously approved by the Boards of Directors of both companies, 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. Based on New York Community Bancorp's closing price of $15.96 on November 2, 2006, the transaction values each share of PennFed at $19.50. The transaction has an approximate value of $260 million, representing approximately two times PennFed's tangible stockholders' equity, a 21.7 multiple of its trailing twelve-month operating earnings, and a 10.8% core deposit premium at September 30, 2006.

Consistent with New York Community Bancorp's history of accretive transactions, the acquisition is expected to be immediately accretive to its diluted GAAP and cash earnings per share. The transaction is expected to be completed on or about March 31, 2007, pending the approval of PennFed's shareholders and the approval of state and federal regulatory agencies.

In connection with their approval of the definitive agreement, the directors and executive officers of PennFed, who collectively own approximately 16% of its shares outstanding, have each entered into a voting agreement in favor of the transaction.

PennFed was advised by Sandler O'Neill & Partners, L.P. in the transaction, and legal counsel was provided by Silver, Freedman & Taff, L.L.P. Bear, Stearns & Co. Inc. served as an advisor to New York Community Bancorp and Muldoon Murphy & Aguggia LLP served as legal counsel.

Commenting on the transaction, Joseph R. Ficalora, President and Chief Executive Officer of New York Community Bancorp, stated, "We are very pleased to announce this latest addition to our growing banking family. PennFed is a well regarded institution, with an attractive mix of deposits and a $1.7 billion loan portfolio that is notable for its exceptional quality. With the addition of PennFed's branches, we will substantially strengthen our market in Essex, Union, and Hudson counties, while establishing a presence in the central and southern part of the state.

"The acquisition of PennFed is consistent with the five merger transactions we've completed since November 2000, and is a very good example of our growth-through-acquisition strategy. In addition to providing us with additional funding in the form of deposits, the transaction will enable us to enhance our earnings through the repositioning of the post-merger balance sheet. The sale of one-to-four family loans and securities is expected to provide us with cash flows for deployment into multi-family and other higher-yielding loans," Mr. Ficalora said.

Joseph L. LaMonica, President and Chief Executive Officer of PennFed, stated, "Inasmuch as we have always been a community-oriented institution, we are excited to partner with New York Community Bancorp, a company that shares that same community focus, and will continue our tradition of premier customer service to the communities we now serve. We believe that the merger will maximize the value we have created for our shareholders, who we expect will benefit from enhanced financial metrics as well as a substantial increase in their cash dividend as shareholders of New York Community."

Conference Call Set for 9:30 a.m. on November 3rd

New York Community Bancorp has posted to its web site an investor presentation regarding the proposed acquisition, and will host a conference call to discuss the expected benefits of the transaction at 9:30 a.m. Eastern Time on November 3rd. The conference call may be accessed by dialing 800-946-0715 (for domestic calls) or 719-457-2643 (for international calls) and providing the following access code: 7101400. A replay of the conference call will be available approximately two hours following completion of the call through midnight on November 10th, and may be accessed by calling 888-203-1112 (domestic) or 719-457-0820 (international) and providing the same access code. The conference call will also be web cast, and may be accessed by visiting New York Community Bancorp's web site, www.myNYCB.com, clicking on "Investor Relations," and following the prompts. The web cast will be archived through 5:00 p.m. on November 10, 2006.