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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
FORM 10-K
_________________
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM____ TO ____
Commission File number 1-10518
INTERCHANGE FINANCIAL SERVICES CORPORATION
(Exact name of registrant as specified in its charter)
New Jersey 22-2553159
_______________________________ ___________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Park 80 West/Plaza Two, Saddle Brook, NJ 07663
_________________________________________ _____
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 703-2265
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Title of Class
______________
Common Stock (no par value)
Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes X No ____
The aggregate market value of registrant's voting stock held by
non-affiliates of the registrant computed June 30, 2003 based on the average bid
and asked price for such stock on that date was approximately $248,631,000.
The number of outstanding shares of the Registrant's common stock, no par
value per share, as of February 27, 2004, was as follows:
Class Number of Outstanding Shares
_____ ____________________________
Common Stock
(No par value) 12,735,206
Documents incorporated by reference:
Portions of registrant's definitive Proxy Statement for the 2004 Annual Meeting
of Shareholders (the "2004 annual Meeting Proxy Statement") to be filed on or
before March 25, 2004 are incorporated by reference to Part III of this Annual
Report on Form 10-K.
Portions of registrant's Annual Report to Shareholders for the fiscal year ended
December 31, 2003 (the "2003 Annual Report to Shareholders") are incorporated by
reference to Parts II and IV of this Annual Report on Form 10-K.
With the exception of information specifically incorporated by reference, the
2004 Annual Meeting Proxy Statement and the 2003 Annual Report to Shareholders
are not deemed to be part of the report.
INTERCHANGE FINANCIAL SERVICES CORPORATION
INDEX TO ANNUAL REPORT
ON FORM 10-K
PART I PAGE
Item 1. Business.................................................... 1
Item 2. Properties.................................................. 11
Item 3. Legal Proceedings........................................... 11
Item 4. Submission of Matters to a Vote of Security Holders......... 11
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters.................................................. 12
Item 6. Selected Financial Data.................................. 13
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations................... 15
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.. 15
Item 8. Financial Statements and Supplementary Data.......... 15
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure........... 15
PART III
Item 10. Directors and Executive Officers of the Registrant... 16
Item 11. Executive Compensation............................... 17
Item 12. Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters... 18
Item 13. Certain Relationships and Related Transactions....... 19
Item 14. Principal Accounting Fees and Services............... 19
PART IV
Item 15. Exhibits, Financial Statement Schedules
and Reports on Form 8-K.......................... 20
Exhibit Index ..................................................... 21
Signatures ..................................................... 22
PART I
Item 1. Business
General
Interchange Financial Services Corporation (the "Company"), a New Jersey
business corporation, is a bank holding company registered with the Board of
Governors of the Federal Reserve System under the Bank Holding Company Act of
1956, as amended. The Company was incorporated in the State of New Jersey on
October 15, 1984. It acquired all of the outstanding stock of Interchange Bank
(formerly known as Interchange State Bank), a New Jersey state chartered bank
(the "Bank" or "Interchange"), in 1986. The Bank is the Company's principal
operating subsidiary. In addition to the Bank, the Company owns all of the
outstanding capital stock of Clover Leaf Mortgage Company, a New Jersey
Corporation established in 1988, which is not currently engaged in any business
activity.
The Company's principal executive office is located at Park 80 West/ Plaza
Two, Saddle Brook, New Jersey 07663, and the telephone number is (201) 703-2265.
As of December 31, 2003, the Company had consolidated assets of
approximately $1.4 billion, deposits of approximately $1.2 billion and
shareholders' equity of approximately $143.2 million.
As a holding company, the Company provides support services to its direct
and indirect subsidiaries. These include executive management, personnel and
benefits, risk management, data processing, strategic planning, legal, and
accounting and treasury.
Banking Subsidiary
___________________
The Bank established in 1969, is a full-service New Jersey-chartered
commercial bank headquartered in Saddle Brook, New Jersey. The Bank is a member
of the Federal Reserve System and its deposits are insured by the Federal
Deposit Insurance Corporation (the "FDIC"). It offers banking services for
individuals and businesses through twenty-nine (29) banking offices and one (1)
supermarket mini-branch in Bergen County, New Jersey. The Bank maintains
thirty-four (34) automated teller machines (operating within the StarTM ,
PlusTM, CIRRUSTM, VISATM, NYCETM, and MasterCardTM networks), which are located
at seventeen of the banking offices, a supermarket, a college and the Bank's
operations center.
Subsidiaries of the Bank include: Clover Leaf Investment Corporation,
established in 1988 to engage in the business of an investment company pursuant
to New Jersey law; Clover Leaf Insurance Agency, Inc., established in 1990 to
engage in sales of tax-deferred annuities; Clover Leaf Management Realty
Corporation, established in 1998 as a Real Estate Investment Trust ("REIT")
which manages certain real estate assets of the Company; Bridge View Investment
Company, an investment company operating pursuant to New Jersey law; and
Interchange Capital Company, L.L.C., established in 1999 to engage in equipment
lease financing. All of
1
the Bank's subsidiaries are organized under New Jerseylaw and are 100% owned by
the Bank, except for the REIT which is 99% owned by the Bank. Bridge View
Investment Company has one wholly owned subsidiary, Bridge View Delaware, Inc.
("BVDI"). BVDI is an investment company operating pursuant to Delaware law.
Growth of the Company and the Bank
__________________________________
On April 30, 2003, the Company completed its acquisition of Bridge View
Bancorp ("Bridge View"), a bank holding company headquartered in Englewood
Cliffs, New Jersey for approximately $33.5 million in cash and 2.9 million in
shares with an approximate value of $85.7 million. Bridge View's primary asset
was Bridge View Bank which operated eleven branches in Bergen County, New
Jersey. As of the acquisition date Bridge View had approximately $291 million in
total assets, $184 million in loans and $259 million in deposits without giving
effect to any purchase accounting adjustments. The transaction was accounted for
as a purchase and the assets and liabilities of former Bridge View were recorded
at their respective fair values as of April 30, 2003. Based on the fair values,
the Company recorded purchase accounting adjustments related to: loans of $1.6
million; securities of $376 thousand; other assets of $1.9 million; other
liabilities of $3.7 million; core deposit intangibles of $4.3 million and
goodwill of $54.4 million.
On January 16, 2002, the Company acquired certain assets and assumed
certain liabilities of Monarch Capital Corporation ("Monarch"). In this asset
purchase transaction, the Company acquired certain loans and leases valued at
approximately $12.8 million. In addition, the Company assumed certain
liabilities (borrowings) of Monarch, valued at approximately $12.7 million,
which had been used to fund the loans and leases. The purchase price of $1.6
million was paid in cash and shares of Company common stock, subject to certain
adjustments.
On May 31, 1998, the Company completed its acquisition of Jersey Bank for
Savings. At that date, Jersey Bank had total assets of approximately $78.6
million and total deposits of approximately $69.8 million. The transaction was
accounted for as a pooling of interests. In the transaction, each share of stock
of Jersey Bank for Savings, including shares of common stock that had been
converted from shares of preferred stock, was converted into 1.5 shares of the
Company's common stock. The Company issued 780,198 shares of its common stock in
the transaction.
Description of Banking and Related Operations
_____________________________________________
Through the Bank, the Company offers a wide range of consumer banking
products and services, including checking and savings accounts, money-market
accounts, certificates of deposit, individual retirement accounts, residential
mortgages, home equity lines of credit and other second mortgage loans, home
2
improvement loans, automobile loans, personal loans and overdraft protection.
The Bank also offers a VISATM credit card and several convenience products,
including the Interchange Check Card, which permits customers to access their
checking accounts by using the card when making purchases. The Interchange Check
Card can also be used as an ATM card to perform basic banking transactions.
Another service offered to customers is Interchange Bank-Line Telephone
Banking, which permits customers to perform basic banking transactions,
including, transfer money between accounts and make loan payments from any
phone, at any time of the day or night by calling a toll-free number. The Bank
also offers the Interchange Bank-Line Center, which is an inbound calling
facility providing enhanced customer service via access to a single source for
account and product information, opening accounts or even applying for a
consumer loan. The Interchange Bank-Line Center also serves as an outbound
telemarketing resource, contacting prospective and current customers for new
accounts.
The Bank also offers online banking through InterBank. InterBank, which is
accessed through the Bank's web site at www.interchangebank.com, allows
customers to access account information, process transfers between accounts,
generate an account statement, pay bills electronically and more. As discussed
herein, additional products and services may be accessed through the Bank's web
site.
The Bank also is engaged in the financing of local business and industry,
providing credit facilities and related services for smaller businesses,
typically those with $1 million to $5 million in annual sales. Commercial loan
customers of the Bank are businesses ranging from light manufacturing and local
wholesale and distribution companies to medium-sized service firms and local
retail businesses. Most types of commercial loan products are offered, including
working capital lines of credit, small business administration loans, term loans
for fixed asset acquisitions, commercial mortgages, equipment lease financing
and other forms of asset-based financing.
In addition to its origination activities, the Bank purchases packages of
loans. These loans are subjected to the Bank's independent credit analysis prior
to purchase. The Bank has experienced opportunities to sell its other products
and services to the borrowers whose loans are purchased and believes that
purchasing loans will continue to be a desirable way to augment its portfolios
as opportunities arise.
The Bank also engages in mutual fund and annuities sales and brokerage
services. An Investment Services Program is offered through an alliance between
the Bank and ICBA Financial Services Corporation ("ICBA"), under which mutual
funds and annuities offered by ICBA are made available to the Bank's customers.
The Bank has also expanded its product offerings by entering into an agreement
with a third party provider to offer discount brokerage services to its
customers. The Bank offers securities trading through its web site, which is
hyperlinked to FISERV Securities, Inc., member NASD/SIPC, so that customers can
access their brokerage
3
accounts via the Internet. There is also a direct link
from the Company's web site to the Nasdaq National Market to allow investors to
keep informed of the daily quotes and market activity for the Company's common
stock.
Additional information about the Bank and the Company may be found on our
web site at www.interchangebank.com. Information contained on our Internet web
site is not part of this Annual Report on Form 10-K and is not being
incorporated by reference into this report.
Market Areas
____________
The Company's principal market for its deposit gathering and loan
origination activities covers major portions of Bergen County in the
northeastern corner of New Jersey adjacent to New York City. Bergen County has a
relatively large affluent base for the Company's services. The principal service
areas of the Company represent a diversified mix of stable residential
neighborhoods with a wide range of per household income levels; offices, service
industries and light industrial facilities; and large shopping malls and small
retail outlets.
Competition
___________
Competition in the banking and financial services industry within the
Company's primary market area is strong. The Bank actively competes with
national and state-chartered commercial banks, operating on a local and national
scale, and other financial institutions, including savings and loan
associations, mutual savings banks, and credit unions. In addition, the Bank
faces competition from less heavily regulated entities such as brokerage
institutions, money management firms, consumer finance and credit card companies
and various other types of financial services companies. Many of these
institutions are larger than the Bank, some are better capitalized, and a number
pursue community banking strategies similar to those of the Bank.
The Bank believes that opportunities continue to exist to satisfy the
deposit and borrowing needs of small and middle market businesses. Larger banks
continued to show an appetite for only the largest loans, finding themselves
challenged to administer smaller loans profitably. Interchange has the desire
and the ability to give smaller and mid-sized businesses the service they
require. Many small businesses eventually become midsize businesses, with a
corresponding change in their financial requirements. By designing programs to
accommodate the changing needs of growing businesses, Interchange is extending
the longevity of valuable customer relationships. For example, through our
subsidiary, Interchange Capital Company, L.L.C., we are able to extend
cost-effective equipment leasing solutions for a variety of expansion and
upgrading projects. The Bank believes that it is able to maintain its
relationship with these growing businesses because of its ability to be
responsive to both small and midsize business constituencies.
4
Personnel
_________
The Company had 319 full-time-equivalent employees at year-end 2003. The
Company believes its relationship with employees to be good.
Regulation and Supervision
__________________________
Banking is a complex, highly regulated industry. The primary goals of the
bank regulatory structure are to maintain a safe and sound banking system and to
facilitate the conduct of sound monetary policy. In furtherance of those goals,
Congress has created several largely autonomous regulatory agencies and enacted
myriad legislation that governs banks, bank holding companies and the banking
industry. Descriptions and references to the statutes and regulations below are
brief summaries thereof and do not purport to be complete. The descriptions are
qualified in their entirety by reference to the specific statutes and
regulations discussed.
The Company
The Company is a registered bank holding company under the Bank Holding
Company Act of 1956, as amended (the "BHCA"), and as such, is subject to
supervision and regulation by the Board of Governors of the Federal Reserve
System (the "Federal Reserve"). As a bank holding company, the Company is
required to file an annual report with the Federal Reserve and such additional
information as the Federal Reserve may require pursuant to the BHCA and Federal
Regulation Y. The Federal Reserve may conduct examinations of the Company or any
of its subsidiaries.
The BHCA requires every bank holding company to obtain the prior approval
of the Federal Reserve before it may acquire all or substantially all of the
assets of any bank (although the Federal Reserve may not assert jurisdiction in
certain bank mergers that are regulated under the Bank Merger Act), or ownership
or control of any voting shares of any bank if after such acquisition it would
own or control directly or indirectly more than 5% of the voting shares of such
bank.
The BHCA also provides that, with certain limited exceptions, a bank
holding company may not (i) engage in any activities other than those of banking
or managing or controlling banks and other authorized subsidiaries or (ii) own
or control more than five percent (5%) of the voting shares of any company that
is not a bank, including any foreign company. A bank holding company is
permitted, however, to acquire shares of any company the activities of which the
Federal Reserve, after due notice and opportunity for hearing, has determined to
be so closely related to banking or managing or controlling banks as to be a
proper incident thereto. The Federal Reserve has issued regulations setting
forth specific activities that are permissible under the exception. A bank
holding company and its subsidiaries are also prohibited from engaging in
certain tie-in arrangements in connection with any extension of credit, lease or
sale of property or furnishing of services.
5
Under certain circumstances, prior approval of the Federal Reserve is
required under the BHCA before a bank holding company may purchase or redeem any
of its equity securities.
Traditionally, the activities of bank holding companies have been limited
to the business of banking and activities closely related or incidental to
banking. The Gramm-Leach-Bliley Financial Services Modernization Act of 1999
(the "Modernization Act"), enacted on November 11, 1999, with an effective date
of March 11, 2000, expanded the types of activities in which a bank holding
company may engage. Subject to various limitations, the Modernization Act
generally permits a bank holding company to elect to become a "financial holding
company." A financial holding company may affiliate with securities firms and
insurance companies and engage in other activities that are "financial in
nature." Among the activities that are deemed "financial in nature" are, in
addition to traditional lending activities, securities underwriting, dealing in
or making a market in securities, sponsoring mutual funds and investment
companies, insurance underwriting and agency activities, certain merchant
banking activities, and activities that the Federal Reserve considers to be
closely related to banking.
A bank holding company may become a financial holding company under the
Modernization Act if each of its subsidiary banks is "well capitalized" under
the Federal Reserve guidelines (See "Capital Adequacy Guidelines" below), is
well managed and has at least a satisfactory rating under the Community
Reinvestment Act. In addition, the bank holding company must file a declaration
with the Federal Reserve that the bank holding company wishes to become a
financial holding company. A bank holding company that falls out of compliance
with such requirements may be required to cease engaging in certain activities
permitted only for financial holding companies. Any bank holding company that
does not elect to become a financial holding company remains subject to the
current restrictions of the BHCA.
Under the Modernization Act, the Federal Reserve serves as the primary
"umbrella" regulator of financial holding companies, with supervisory authority
over each parent company and limited authority over its subsidiaries. Expanded
financial activities of financial holding companies will generally be regulated
according to the type of such financial activity: banking activities by banking
regulators, securities activities by securities regulators, and insurance
activities by insurance regulators. The Modernization Act also imposes
additional restrictions and heightened disclosure requirements regarding private
information collected by financial institutions.
Presently, the Company has not chosen to become a financial holding company.
6
Monetary Policy
The banking industry is affected by the monetary and fiscal policies of the
Federal Reserve. An important function of the Federal Reserve is to regulate the
national supply of bank credit to moderate recessions and to curb inflation.
Among the instruments of monetary policy used by the Federal Reserve to
implement its objectives are: open-market operations in U. S. government
securities, changes in the discount rate and the federal funds rate (which is
the rate banks charge each other for overnight borrowings), and changes in
reserve requirements on bank deposits.
Sarbanes-Oxley Act
On July 30, 2002, the Sarbanes-Oxley Act of 2002 was signed into law. The
Act addresses many aspects of financial accounting, corporate governance and
public company disclosure. Among other things, it establishes a comprehensive
framework for the oversight of public company auditing and for strengthening the
independence of auditors and audit committees. Under the Act, audit committees
are responsible for the appointment, compensation and oversight of the work of
the auditors. The non-audit services that can be provided to a company by its
auditor are limited. Audit committee members are subject to new rules addressing
their independence. The Act also requires enhanced and accelerated financial
disclosures, and it establishes various responsibility measures (including, for
example, requiring the chief executive officer and chief financial officer to
certify to the quality of a company's financial reporting). The Act imposes new
restrictions on and accelerated reporting requirements for certain insider
trading activities. It imposes a variety of new penalties for fraud and other
violations and creates a new federal felony for securities fraud. Various
sections of the Act are applicable to the Company. Portions of the Act were
effective immediately; others became effective or are in the process of becoming
effective through rulings by the Securities and Exchange Commission, based on
timelines set forth in the law.
Capital Adequacy Guidelines
The Federal Reserve issued guidelines establishing risk-based capital
requirements for bank holding companies having more than $150 million in assets
and member banks of the Federal Reserve System. The guidelines established a
risk-based capital framework consisting of (1) a definition of capital and (2) a
system for assigning risk weights. Capital consists of Tier 1 capital, which
includes common shareholders' equity less certain intangibles and a
supplementary component called Tier 2, which includes a portion of the
allowance for loan losses. Effective October 1, 1998, the Federal Reserve
adopted an amendment to its risk-based capital guidelines that permits insured
depository institutions to include in their Tier 2 capital up to 45% of the
pre-tax net unrealized gains on certain available for sale equity securities.
All assets and off-balance-sheet items are
7
assigned to one of four weighted risk categories ranging from 0% to 100%. Higher
levels of capital are required for the categories perceived as representing the
greater risks. The Federal Reserve established a minimum risk-based capital
ratio of 8% (of which at least 4% must be Tier 1). An institution's risk-based
capital ratio is determined by dividing its qualifying capital by its
risk-weighted assets. The guidelines make regulatory capital requirements more
sensitive to differences in risk profiles among banking institutions, take
off-balance sheet items into account in assessing capital adequacy, and minimize
disincentives to holding liquid, low-risk assets. Banking organizations are
generally expected to operate with capital positions well above the minimum
rates. Institutions with higher levels of risk, or which experience or
anticipate significant growth, are also expected to operate well above minimum
capital standards. In addition to the risk-based guidelines discussed above, the
Federal Reserve requires that a bank holding company and bank which meet the
regulator's highest performance and operational standards and which are not
contemplating or experiencing significant growth maintain a minimum leverage
ratio (Tier 1 capital as a percent of quarterly average adjusted assets) of 3%.
For those financial institutions with higher levels of risk or that are
experiencing or anticipating significant growth, the minimum leverage ratio will
be increased. At December 31, 2003, the Company and the Bank satisfied these
ratios and have been categorized as "well-capitalized" institutions, which in
the regulatory framework for prompt corrective action imposes the lowest level
of supervisory restraints.
Capital adequacy guidelines focus principally on broad categories of credit
risk although the framework for assigning assets and off-balance sheet items to
risk categories does incorporate elements of transfer risk. The risk-based
capital ratio does not, however, incorporate other factors that may affect a
company's financial condition, such as overall interest rate exposure,
liquidity, funding and market risks, the quality and level of earnings,
investment or loan concentrations, the quality of loans and investments, the
effectiveness of loan and investment policies and management's ability to
monitor and control financial and operating risks.
The Federal Reserve is vested with broad enforcement powers over bank
holding companies to forestall activities that represent unsafe or unsound
practices or constitute violations of law. These powers may be exercised through
the issuance of cease and desist orders or other actions. The Federal Reserve is
also empowered to assess civil money penalties against companies or individuals
that violate the BHCA, to order termination of non-banking activities of
non-banking subsidiaries of bank holding companies and to order termination of
ownership and control of non-banking subsidiaries by bank holding companies.
Neither the Company nor any of its affiliates has ever been the subject of any
such actions by the Federal Reserve.
8
The Bank
As a New Jersey state-chartered bank, the Bank's operations are subject to
various requirements and restrictions of state law pertaining to, among other
things, lending limits, reserves, interest rates payable on deposits, loans,
investments, mergers and acquisitions, borrowings, dividends, locations of
branch offices and capital adequacy. The Bank is subject to primary supervision,
periodic examination and regulation by the New Jersey Department of Banking and
Insurance ("NJDBI"). If, as a result of an examination of a bank, the NJDBI
determines that the financial condition, capital resources, asset quality,
earnings prospects, management, liquidity, or other aspects of the bank's
operations are unsatisfactory or that the bank or its management is violating or
has violated any law or regulation, various remedies are available to the NJDBI.
Such remedies include the power to enjoin "unsafe and unsound" practices, to
require affirmative action to correct any conditions resulting from any
violation or practice, to issue an administrative order that can be judicially
enforced, to, among other things, direct an increase in capital, to restrict the
growth of the Bank, to assess civil penalties and to remove officers and
directors. The Bank has never been the subject of any administrative orders,
memoranda of understanding or any other regulatory action by the NJDBI. The Bank
also is a member of the Federal Reserve System and therefore subject to
supervisory examination by and regulations of the Federal Reserve Bank of New
York.
The Bank's deposits are insured by the Bank Insurance Fund ("BIF")
administered by the FDIC up to a maximum of $100,000 per depositor. For this
protection, the Bank pays a quarterly statutory deposit insurance assessment to,
and is subject to the rules and regulations of, the FDIC.
The Bank's ability to pay dividends is subject to certain statutory and
regulatory restrictions. The New Jersey Banking Act of 1948, as amended,
provides that no state-chartered bank may pay a dividend on its capital stock
unless, following the payment of each such dividend, the capital stock of the
bank will be unimpaired, and the bank will have a surplus of not less than 50%
of its capital, or, if not, the payment of such dividend will not reduce the
surplus of the bank. In addition, the payment of dividends is limited by the
requirement to meet the risk-based capital guidelines issued by the Federal
Reserve Board and other regulations.
To the extent that the foregoing information describes statutory and
regulatory provisions, it is qualified in its entirety by reference to the full
text of those provisions. Also, as such statutes, regulations and policies are
continually under review by Congress and state legislature and federal and state
regulatory agencies. A change in statutes, regulations or regulatory policies
applicable to the Company or the Bank could have a material effect on the
business of the Company.
9
Available Information
_____________________
The Company's annual reports on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K and all amendments to those reports filed or
furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available
free of charge through the Company's web site as soon as reasonably practicable
after such material is electronically filed or furnished to the Securities and
Exchange Commission. The Company's web site address is www.interchangebank.com.
Forward Looking Statements
__________________________
In addition to discussing historical information, certain statements
included in or incorporated into this report relating to the financial
condition, results of operations and business of the Company which are not
historical facts may be deemed "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. When used herein, the
words "anticipate", "intends", "believe", "estimate," "expect," "will" and other
similar expressions (including when preceded or followed by the word "not") are
generally intended to identify such forward-looking statements. Such statements
are intended to be covered by the safe harbor provisions for forward-looking
statements contained in such Act, and we are including this statement for
purposes of invoking these safe harbor provisions. Such forward-looking
statements include, but are not limited to, statements about the operations of
the Company, the adequacy of the Company's allowance for losses associated with
the loan portfolio, the prospects of continued loan and deposit growth, and
improved credit quality.
The forward-looking statements in this report involve certain estimates or
assumptions, known and unknown risks and uncertainties, many of which are beyond
the control of the Company, and reflect what we currently anticipate will happen
in each case. What actually happens could differ materially from what we
currently anticipate will happen due to a variety of factors, including, among
others, (i) increased competitive pressures among financial services companies;
(ii) changes in the interest rate environment, reducing interest margins or
increasing interest rate risk; (iii) deterioration in general economic
conditions, internationally, nationally, or in the State of New Jersey; (iv) the
occurrence of acts of terrorism, such as the events of September 11, 2001, or
acts of war; (v) legislation or regulatory requirements or changes adversely
affecting the business of the Company; (vi) losses in the Company's leasing
subsidiary exceeding management's expectations; (vii) expected revenue synergies
from the Company's acquisition of Bridge View may not be fully realized or
realized within the expected time frame; (viii) revenues following the Company's
acquisition of Bridge View may be lower than expected; (ix) deposit attrition,
operating costs, customer loss and business disruption following the Company's
acquisition of Bridge View, including, without limitation, difficulties in
10
maintaining relationships with employees, may be greater than expected and (x)
other risks detailed in reports filed by the Company with the Securities and
Exchange Commission. Readers should not place undue expectations on any
forward-looking statements. We are not promising to make any public announcement
when we consider forward-looking statements in this document to be no longer
accurate, whether as a result of new information, what actually happens in the
future or for any other reason.
Item 2. Properties
The Company leases nineteen banking offices, one mini-branch within a
supermarket, one operations/support facility and one administrative/executive
facility. It also leases two locations for the sole purpose of operating
Automated Teller Machines. It owns eight banking offices and leases land on
which it owns two bank buildings. All of the facilities are located in Bergen
County, New Jersey, which constitutes the Company's primary market area.
In the opinion of management, the physical properties of the Company and
its subsidiaries are suitable and adequate.
Item 3. Legal Proceedings
In the ordinary course of business, the Company and its subsidiaries are
involved in routine litigation involving various aspects of its business, none
of which, individually or in the aggregate, in the opinion of management and its
legal counsel, is expected to have a material adverse impact on the consolidated
financial condition, results of operations or liquidity of the Company.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the Company's security holders
through the solicitation of proxies or otherwise during the three months ended
December 31, 2003.
11
Part II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters
The Company's common stock is presently listed for quotation on the Nasdaq
National Market System under the symbol "IFCJ". At February 27, 2004, there were
approximately 1,386 shareholders of record. A portion of the Company's common
stock is held in "street name" by nominees for beneficial owners, so the actual
number of shareholders is probably higher. The following table sets forth, for
the periods indicated, the reported high and low sales prices by quarter:
- ----------------------------------------------------------------------------------------------------------------
Quarterly Common Stock Price Range
- -----------------------------------
for the years ended December 31,
- ----------------------------------------------------------------------------------------------------------------
High Low Cash
Sales Sales Dividends
Price Price Declared
------------ ------------ ------------
2002
First quarter . . . . . $ 16.23 $ 12.47 $ 0.10
Second quarter . . . . . 19.27 16.23 0.10
Third quarter . . . . . 18.67 15.70 0.10
Fourth quarter . . . . . 19.10 15.95 0.14
2003
First quarter . . . . . $ 18.03 $ 16.10 $ 0.11
Second quarter . . . . . 22.50 17.20 0.11
Third quarter . . . . . 22.52 19.34 0.11
Fourth quarter . . . . . 26.68 20.45 0.11
- --------------------------------------------------------------------------------------------------------
All per share data was restated to reflect a 3-for-2 stock split declared on May 23, 2002 and paid on July 12, 2002.
A cash dividend of $0.10 and $0.11 was declared on each common share
outstanding in each quarter during 2002 and 2003, respectively. The Company
declared a special cash dividend of $0.04 per common share in the fourth quarter
of 2002, which was paid in the first quarter of 2003.
The Company intends, subject to its financial results, contractual, legal,
and regulatory restrictions, and other factors that its Board of Directors may
deem relevant, to declare and pay a quarterly cash dividend on its common stock
in the future. The principal source of the funds to pay any dividends on the
Company's common stock is dividends received from the Bank. Certain federal and
state regulators impose restrictions on the payment of dividends by banks. See
"Business - Regulation and Supervision" for a discussion of these restrictions.
See Note 18 of Notes to Consolidated Financial Statement for additional
information.
12
Item 6. Selected Financial Data
The following selected financial data are derived from the Company's
audited Consolidated Financial Statements. The information set forth below
should be read in conjunction with the Consolidated Financial Statements and the
Notes thereto and "Management's Discussion and Analysis of Financial Condition
and Results of Operations." The Consolidated Statements of Financial Condition
as of December 31, 2003 and 2002, and the Consolidated Statements of Income,
Changes in Stockholders' Equity and Cash Flows for each of the years in the
three-year period ended December 31, 2003 and the report thereon of Deloitte &
Touche LLP are included on pages 13 through 52 of the Company's 2003 Annual
Report to Shareholders filed as Exhibit 13 hereto, which pages are incorporated
herein by reference.
CONSOLIDATED FINANCIAL HIGHLIGHTS
Years Ended December 31,
2003 (1) 2002 2001 2000 1999
Income Statement Data (in thousands)
Interest income $ 60,267 $ 56,500 $ 57,402 $ 55,621 $ 49,054
Interest expense 13,874 17,478 23,444 24,227 18,783
---------- --------- ---------- ---------- ----------
Net interest income 46,393 39,022 33,958 31,394 30,271
Provision for loan losses 1,815 1,500 1,075 750 1,200
---------- --------- ---------- ---------- ----------
Net interest income after provision for loan losses 44,578 37,522 32,883 30,644 29,071
Non-interest income 10,645 6,514 5,578 4,381 5,586
Non-interest expenses 31,239 25,063 22,873 21,177 20,063
---------- --------- ---------- ---------- ----------
Income before income taxes 23,984 18,973 15,588 13,848 14,594
Income Taxes 7,618 6,096 5,048 4,592 4,959
---------- --------- ---------- ---------- ----------
Net income $ 16,366 $ 12,877 $ 10,540 $ 9,256 $ 9,635
========== ========= ========== ========= ==========
Per Share Data (2)
Basic earnings per common share $ 1.39 $ 1.31 $ 1.08 $ 0.94 $ 0.91
Diluted earnings per common share 1.36 1.30 1.07 0.94 0.91
Cash dividends declared 0.44 0.40 0.36 0.33 0.32
Special Cash Dividend - 0.04 - - -
Book value 11.18 8.22 7.04 6.33 5.77
Tangible book value (3) 6.59 8.05 7.04 6.32 5.73
Weighted average shares outstanding (in thousands)
Basic 11,816 9,809 9,779 9,810 10,547
Diluted 11,991 9,933 9,824 9,838 10,593
Balance Sheet Data--end of year (in thousands)
Total assets $1,385,872 $ 936,332 $ 830,949 $ 770,244 $ 706,125
Securities held-to-maturity and securities available-for-sale 452,060 252,512 193,902 161,354 161,889
Loans and leases 796,581 615,641 581,323 560,879 511,976
Allowance for loan and lease losses 9,641 7,207 6,569 6,154 5,476
Total deposits 1,156,798 815,672 726,483 668,860 598,992
Securities sold under agreements to repurchase 15,618 17,390 6,700 18,500 16,431
Short-term borrowings 46,491 - 18,100 13,000 13,975
Long-term borrowings 10,000 10,000 - - 13,000
Total stockholders' equity $ 143,193 $ 80,680 $ 68,233 $ 61,984 $ 58,276
Selected Performance Ratios
Return on average total assets 1.35 % 1.43 % 1.31 % 1.24 % 1.39 %
Return on average total stockholders' equity 13.54 17.35 16.06 16.18 15.52
Dividend Payout 30.37 33.56 33.37 35.24 35.04
Average total stockholders' equity to average total assets 9.95 8.27 8.13 7.64 8.99
Net yield on interest earning assets (taxable equivalent) (4) 4.29 4.68 4.49 4.41 4.61
Non-interest income to average total assets 0.88 0.73 0.69 0.59 0.81
Non-interest expense to average total assets 2.57 2.79 2.83 2.83 2.90
Asset Quality--end of year
Nonaccrual loans and leases to total loans and leases 1.08 % 0.97 % 0.37 % 0.25 % 0.22 %
Nonperforming assets to total assets 0.63 0.66 0.34 0.21 0.22
Allowance for loan and lease losses to nonaccrual
loans and leases 112.50 120.86 304.12 441.15 491.12
Allowance for loan and lease losses to total loans and leases 1.21 1.17 1.13 1.10 1.07
Net charge-offs to average loans and leases 0.18 0.14 0.11 0.01 0.28
Liquidity and Capital
Average loans and leases to average deposits 69.39 % 78.21 % 81.77 % 82.81 % 81.79 %
Total stockholders' equity to total assets 10.33 8.62 8.21 8.05 8.25
Tier 1 capital to risk weighted assets 9.34 12.16 11.74 11.75 12.72
Total capital to risk weighted assets 10.46 13.33 12.89 12.92 13.91
Tier 1 capital to average assets 6.24 8.12 8.09 8.02 8.32
13
All per share data and average shares were restated to reflect a 3-for-2 stock
split declared on May 23, 2002 and paid on July 12, 2002.
(1) On April 30, 2003, the Company completed its acquisition of Bridge View
Bancorp ("Bridge View"). Bridge View's primary asset was Bridge View Bank
which operated eleven branches in Bergen County, New Jersey. At acquisition
date Bridge View had approximately $291 million in total assets, $184
million in loans and $259 million in deposits without giving effect to any
purchase accounting adjustments. The Company's results of operations
include Bridge View from acquisition date. The transaction was accounted
for as a purchase and the assets and liabilities of former Bridge View were
recorded at their respective fair values as of April 30, 2003. Based on the
fair values, the Company recorded purchase accounting adjustments related
to: loans of $1.6 million; securities of $376 thousand; other assets of
$1.9 million; other liabilities of $2.5 million; core deposit intangibles
of $4.3 million and goodwill of $54.4 million.
(2) All per share data and average shares have been restated to reflect a 3 for
2 stock split declared on May 23, 2002 and paid on July 12, 2002.
(3) Tangible book value is calculated by tangible capital (total stockholders'
equity less goodwill and other intangible assets) by total shares issued.
This measure represents a non-GAAP measurement and may not be consistently
calculated throughout the industry. Management believes that this non-GAAP
measurement provides a meaningful way to analyze the Company's tangible
book value year over year and versus the industry.
2003 (1) 2002 2001 2000 1999
---------- ------- ------- ------- -------
Total stockholders' equity $ 143,193 $80,680 $68,233 $61,984 $58,276
Less: goodwill and other intangible assets 58,826 1,678 - 81 394
---------- ------- ------- ------- -------
Total tangible capital $ 84,367 $79,002 $68,233 $61,903 $57,882
========== ======= ======= ======= =======
Total shares issued (2) 12,810 9,815 9,691 9,796 10,092
Tangible book value per share (2) $6.59 $8.05 $7.04 $6.32 $5.73
(4) Net yield on interest earning assets (taxable equivalent) is
calculated by dividing net interest income (on a fully taxable
equivalent basis utilizing a 34% effective tax rate) by average
interest earning assets. This measure represents a non-GAAP
measurement and may not be consistently calculated throughout the
industry. Management believes that this non-GAAP measurement provides
a meaningful way to analyze the Company's net interest income year
over year and versus the industry.
2003 (1) 2002 2001 2000 1999
-------- -------- --------- -------- --------
Net interest income $ 46,393 $ 39,022 $ 33,958 $ 31,394 $ 30,271
Tax-equivalent basis adjustment 533 376 324 158 158
-------- -------- -------- -------- --------
Net interest income (on a fully taxable equivalent basis) $ 46,926 $ 39,398 $ 34,282 $ 31,552 $ 30,429
======== ======== ======== ======== ========
Average interest earning assets $1,093,373 $842,191 $764,218 $715,113 $660,528
Net yield on interest earning assets (taxable equivalent) 4.29 % 4.68 % 4.49 % 4.41 % 4.61 %
14
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The information contained in the section entitled "Management's Discussion
and Analysis of Financial Condition and Results of Operations" on pages 13
through 30 of the Company's 2003 Annual Report to Shareholders filed as Exhibit
13 hereto is incorporated herein by reference.
Item 7A. Quantitative and Qualitative Disclosure about Market Risk
The information regarding the market risk of the Company's financial
instruments, contained in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" on page 25 of the Company's 2003 Annual
Report to Shareholders filed as Exhibit 13 hereto is incorporated herein by
reference.
Item 8. Financial Statements and Supplemental Data
The financial statements required by this Item are included in the
Company's 2003 Annual Report to Shareholders on pages 31 through 52, filed as
Exhibit 13 hereto and incorporated herein by reference. Page of Annual
Report to
Shareholders
-------------------
Report of Independent Public Auditors ......................... 31
Interchange Financial Services Corporation and Subsidiaries
Consolidated Balance Sheets .............................. 32
Consolidated Statements of Income ........................ 33
Consolidated Statements of Changes in Stockholders' Equity 34
Consolidated Statements of Cash Flows .................... 35
Notes to Consolidated Financial Statements (Notes 1 - 22) 36 - 52
No supplementary data is included in this report as it is inapplicable, not
required, or the information is included elsewhere in the financial statements
or notes thereto.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
There were no changes in or disagreements with accountants on accounting
and financial disclosure as defined by item 304 of Regulation S-K.
Item 9a. Controls and Procedures
Within the end of the period covering this report, the Company carried out
an evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(e) and
15d-15(e), as of December 31, 2003. Based upon that evaluation, the Chief
Executive Officer and current and former Chief Financial Officers concluded that
the Company's disclosure controls and procedures are effective in timely
alerting them to material information relating to the Company (including its
consolidated subsidiaries) required to be included in the Company's periodic
filings with the Securities and Exchange Commission. There were no significant
changes in our internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation.
15
PART III
Item 10. Directors and Executive Officers
a. Directors
The information contained in the section entitled "INTERCHANGE
PROPOSAL NO. 1 - ELECTION OF DIRECTORS - Nominees and Directors" in
the Company's 2003 Annual Meeting Proxy Statement to be filed on or
before March 25, 2004 is incorporated herein by reference in response
to this item.
b. Executive Officers
The following table sets forth the names, ages, and present
positions of the Company's and the Bank's principal executive
officers:
Name Age Positions Held with the Company
------- -------- --------------------------------
ANTHONY S. ABBATE . . .64 President and Chief Executive Officer
ANTHONY J. LABOZZETTA .40 Executive Vice President and
Chief Operating Officer
PATRICIA D. ARNOLD . .45 Senior Vice President-
Chief Credit Officer
ALBERT F. BUZZETTI . ..64 Senior Vice President
CHARLES T. FIELD . . ..39 Senior Vice President-
Chief Financial Officer
FRANK R. GIANCOLA . . .50 Senior Vice President-Operations
Business Experience
ANTHONY S. ABBATE, President and Chief Executive Officer of the Bank since
1981; Senior Vice President and Controller from October 1980 to 1981. Engaged in
the banking industry since 1959.
ANTHONY J. LABOZZETTA, Executive Vice President and Chief Operating Officer
since February 2003; Executive Vice President and Chief Financial Officer from
September 1997 to February 2003; Senior Vice President and Treasurer from 1995
to 1997. Engaged in the banking industry since 1989. Formerly a senior manager
with an international accounting firm, specializing in the financial services
industry.
PATRICIA D. ARNOLD, Senior Vice President - Chief Credit Officer since
August 1997; First Vice President from 1995 to 1997; Department Head Vice
President from 1986 to 1995; Assistant Vice President from 1985 to 1986;
Commercial Loan Officer-Assistant Treasurer from 1983 to 1985. Engaged in the
banking industry since 1981.
ALBERT F. BUZZETTI, Senior Vice President since May 2003. Formerly
President, Chief Executive Officer and Director of Bridge View Bancorp and
Bridge View Bank from 1988 to 2003.
16
CHARLES T. FIELD, Senior Vice President and Chief Financial Officer since
February 2003. Formerly Vice President Finance and Treasurer of Viatel, Inc.
from 1999 to 2002 and Treasurer from 1998 to 1999, Corporate Controller of
Horsehead Industries, Inc. from 1995 to 1998 and a manager specializing in
financial institutions at an international accounting firm from 1987 to 1995.
FRANK R. GIANCOLA, Senior Vice President - Operations since September 1997;
Senior Vice President-Retail Banking from 1993 to 1997; Senior Vice
President-Operations of the Bank from 1984 to 1993; Senior Operations Officer
from 1982 to 1984; Vice President/Branch Administrator from 1981 to 1982.
Engaged in the banking industry since 1971.
Officers are elected annually by the Board of Directors and serve at the
discretion of the Board of Directors. Management is not aware of any family
relationship between any director or executive officer. No executive officer was
selected to his or her position pursuant to any arrangement or understanding
with any other person.
c. Compliance with Section 16(a)
Information contained in the section entitled "PRINCIPAL SHAREHOLDERS AND
HOLDINGS OF MANAGEMENT OF INTERCHANGE - Section 16(a) Beneficial Ownership
Reporting Compliance" in the Company's 2004 Annual Meeting Proxy Statement to be
filed on or before March 25, 2004 is incorporated herein by reference in
response to this item.
d. Code of Ethics
We have adopted Codes of Ethics for our Board of Directors and employees.
The Code of Ethics is available free of charge by contacting the Company.
Item 11. Executive Compensation
Information contained in the section entitled "INTERCHANGE EXECUTIVE
COMPENSATION AND OTHER INTERCHANGE INFORMATION - Executive Compensation" in the
Company's 2004 Annual Meeting Proxy Statement to be filed on or before March 25,
2004 is incorporated herein by reference in response to this item.
17
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
The information contained in the section entitled "Principal Shareholders
and Holdings of Management of Interchange" in the Company's 2004 Annual Meeting
Proxy Statement to be filed on or before March 25, 2004 is incorporated herein
by reference in response to this item.
Equity Compensation Plan Information
The table below summarizes information about our common stock that may be issued upon the exercise of options, warrants and rights
under all of our existing equity compensation plans as of December 31, 2003.
Plan category Number of
securities remaining
Number of securities Weighted-average available for future
to be issued exercise price issuance under equity
upon exercise of of outstandings compensation plans
outstanding options options, warrants (excluding securities
warrants and rights and rights reflected in column (a))
-------------------- ----------------- ------------------------
(a) (b) (c)
Equity compensation plans approved by security holders 614,720 $13.85 460,885
Equity compensation plans not approved by security holders - - -
------- ------ -------
Total 614,720 $13.85 460,885
======= ====== =======
The Outside Director Incentive Compensation Plan
The Outside Director Incentive Compensation Plan is designed to attract
qualified personnel to accept positions of responsibility as outside directors
with Interchange and to provide incentives for persons to remain on the board,
as outside directors. The Compensation/Stock Option Committee administers the
Outside Director Incentive Compensation Plan, reviews the awards and submits
recommendations to the full board of directors for action. Options to acquire
1,500 shares of Interchange common stock are granted to each outside director of
Interchange each year on the anniversary date of the initial grant. Each option
represents the right to purchase, upon exercise, one share of Interchange common
stock at an exercise price equal to the price of a share of stock at the close
of business on the date of the grant as reported by the NASDAQ National Market.
Stock options may be exercisable between one and ten years from the date
granted. All options granted under the Outside Director Incentive Compensation
Plan are non-qualified stock options and are not entitled to special tax
treatment under the Internal Revenue Code of 1986, as amended.
Stock Option and Incentive Plan
The Stock Option and Incentive Plan of 1997, as amended, is designed to
align shareholders' and executive officers' interests. The Compensation/Stock
Option Committee administers the plan, reviews the awards and submits
recommendations to the full board of directors for action. Stock options are
granted on a discretionary basis with an exercise price equal to the price of a
share of stock at the close of business on the date of the grant as reported by
the NASDAQ National Market. Stock options may be exercisable between one and ten
years from the date granted. Such stock options provide a retention and
motivational program for executives and an incentive for the creation of
shareholder value over the long-term since their full benefit cannot be realized
unless an appreciation in the price of the common stock occurs over a specified
number of years.
The Stock Option and Incentive Plan also provides for the issuance of
incentive stock awards as determined by the board of directors of Interchange.
Certain key executives may be awarded incentive compensation in the form of
3-year restricted stock, which is forfeitable upon termination of employment
during that time period. Key employees may also use their cash bonus to purchase
two-year restricted stock at a twenty-five percent discount. All amounts in
excess of the purchase price of this stock are forfeitable should they terminate
their employment during that time period. Incentive stock awards are an
important factor in attracting and motivating key executives who will dedicate
their maximum efforts toward the advancement of the Company.
18
Item 13. Certain Relationships and Related Transactions
The information contained in the section entitled "Certain Relationships
and Related Party Transactions of Interchange" in the Company's 2004 Annual
Meeting Proxy Statement to be filed on or before March 25, 2004 is incorporated
herein by reference in response to this item.
Item 14. Principal Accounting Fees and Services
The items required by Part III, Item 14 are incorporated herein by
reference from the Registrant's Proxy Statement for its 2004 Annual Meeting of
Stockholders to be filed on or before March 25, 2004.
19
PART IV
Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) The following documents are filed as part of this Report:
1. Financial Statements: The Financial Statements listed under Item 8 to
this Report are set forth at pages 32 through 35, and the Notes to
Consolidated Financial Statements are set forth at pages 36 through 52, of
the 2003 Annual Report to Shareholders (See Exhibit 13 under paragraph (a)3
of this Item 14).
2.Financial Statement Schedules: All required schedules for the
Company and its subsidiaries have been included in the Consolidated
Financial Statements or related Notes thereto.
3.Exhibits: Exhibits followed by a parenthetical reference are
incorporated by reference herein from the document described in such
parenthetical reference.
Exhibit 2.1 Agreement and Plan of Merger, dated as of November 18,
2002, by and between Registrant and Bridge View Bancorp (Incorporated
by reference to Exhibit 2.1 to Registrant's Form S-4, filed February
14, 2003, Registration Statement No. 333-103256)
Exhibit 3(a) Restated Certificate of Incorporation of Registrant
(Incorporated by reference to Exhibit 3.1 to Registrant's Form S-4,
filed February 14, 2003, Registration Statement No. 333-103256)
Exhibit 3(b) Amended and Restated Bylaws of Registrant, dated October
24, 2002(Incorporated by reference to Exhibit 4(b) to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30,
2002)
* Exhibit 10(a)Agreement for legal services between Andora and Romano
and Registrant, dated April 24, 2003.
(1) Exhibit 10(b) Outside Director Incentive Compensation Plan
(Incorporated by reference to Exhibit 4(a) to Registrant's Form S-8,
filed June 26, 2000, Registration Statement No. 33-40098)
(1) Exhibit 10(c)Stock Option and Incentive Plan of 1997, as Amended
(Incorporated by reference to Exhibit 4(a) to Registrant's Form S-8,
filed August 26, 2002, Registration Statement No. 33-98705)
* Exhibit 10(d)Directors' Retirement Plan, as Amended 2003
(Incorporated by reference to Exhibit 10(d) to Annual Report on Form
10-K for fiscal year ended December 31, 2003)NOT YET FILED
(1) Exhibit 10(e) Executives' Supplemental Pension Plan
(1) Exhibit 10(f) Change-in-Control Agreements for the Registrant's
principal executive officers, and Amendment dated June 14, 2001
* Exhibit 11 Statement regarding computation of per share earnings *
* Exhibit 13 Portion of the Annual Report to Shareholders for the year
ended December 31, 2003
* Exhibit 21 Subsidiaries of Registrant
20
* Exhibit 31.1 Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
* Exhibit 31.2 Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
* Exhibit 32 Certification Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K during the quarter ended December 31, 2003:
Form 8-K filed October 24, 2003, reporting earnings for the
third quarter period ending September 30, 2003.
________________________________________________________________________________
(1) Pursuant to Item 14(a) - 3 of Form 10-K, this exhibit represents a
management contract or compensatory plan or arrangement required to be filed as
an exhibit to this Form 10-K pursuant to Item 14(c) of this item.
* Filed herewith
21
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized. Interchange Financial
Services Corporation
By: /s/ Anthony S. Abbate By: /s/ Charles T. Field
------------------------------------- -----------------------------
Anthony S. Abbate Charles T. Field
President and Chief Executive Officer Senior Vice President
(principal executive officer) and Chief Fiancial Officer
(principal financial and
accounting officer)
March 15, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the Company
and in the capacities and on the dates indicated:
/s/Anthony S. Abbate /s/Charles T. Field
- --------------------------------------- ---------------------------------------
Anthony S. Abbate March 15, 2004 Charles T. Field March 15, 2004
Director Senior Vice President
President and and Chief Financial Officer
Chief Executive Officer
/s/Anthony D. Andora /s/Nicholas R. Marcalus
- --------------------------------------- ---------------------------------------
Anthony D. Andora March 15, 2004 Nicholas R. Marcalus March 15, 2004
Director Director
Chairman of the Board
/s/Gerald A. Calabrese, Jr /s/Eleanore S. Nissley
- --------------------------------------- ---------------------------------------
Gerald A. Calabrese, Jr. March 15, 2004 Eleanore S. Nissley March 15, 2004
Director Director
/s/Donald L. Correll /s/Jeremiah F. O'Connor, Sr.
- --------------------------------------- ---------------------------------------
Donald L. Correll March 15,2004 Jeremiah F. O'Connor,Sr. March 15, 2004
Director Director
/s/Anthony R. Coscia /s/Joseph C. Parisi, Sr.
- --------------------------------------- ---------------------------------------
Anthony R. Coscia March 15, 2004 Joseph C. Parisi, Sr. March 15, 2004
Director Director
/s/John J. Eccleston /s/Robert P. Rittereiser
- --------------------------------------- ---------------------------------------
John J. Eccleston March 15, 2004 Robert P. Rittereiser March 15, 2004
Director Director
/s/David R. Ficca /s/Benjamin Rosenzweig
- --------------------------------------- ---------------------------------------
David R. Ficca March 15,2004 Benjamin Rosenzweig March 15, 2004
Director Director
/s/James E. Healey /s/ John A. Schepisi
- --------------------------------------- ---------------------------------------
James E. Healey March 15, 2004 John A. Schepisi March 15, 2004
Director Director
22