-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U/Rb2XxJ6CIbAB716X0DXL5MiMDrz7egM/vpbSF8LoEb22lNnYqLo9zfanx/lHz9 TK/nbgrv9TPvO9C5pzchtw== 0000755933-97-000016.txt : 19970520 0000755933-97-000016.hdr.sgml : 19970520 ACCESSION NUMBER: 0000755933-97-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERCHANGE FINANCIAL SERVICES CORP /NJ/ CENTRAL INDEX KEY: 0000755933 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 222553159 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10518 FILM NUMBER: 97606401 BUSINESS ADDRESS: STREET 1: PARK 80 WEST PLAZA TWO STREET 2: ATTN INTERCHANGE STATE BANK CITY: SADDLE BROOK STATE: NJ ZIP: 07662 BUSINESS PHONE: 2017032265 MAIL ADDRESS: STREET 1: PARK 80 WEST STREET 2: PLAZE II CITY: SADDLE BROOK STATE: NJ ZIP: 07663 FORMER COMPANY: FORMER CONFORMED NAME: INTERCHANGER STATE BANK DATE OF NAME CHANGE: 19870416 FORMER COMPANY: FORMER CONFORMED NAME: INTERCHANGE FINANCIAL SERVICES CORP DATE OF NAME CHANGE: 19861209 10-Q 1 FORM 10-Q 1ST QTR INTERCHANGE FINANCIAL SERVICES CORPORATION CONSOLIDATED BALANCE SHEETS (in thousands)
MARCH 31, December 31, 1997 1996 ------------- ----------- ASSETS Cash and due from banks .................................................... $ 27,555 $ 24,322 Federal funds sold ......................................................... 13,900 -- -------- -------- Total cash and cash equivalents ............................................ 41,455 24,322 -------- -------- Investment securities at amortized cost (approximate market value of $46,383 and $63,619) .................................. 46,574 63,376 -------- -------- Securities available for sale at estimated market value (amortized cost of $56,578 and $54,871) ............................... 56,606 55,252 -------- -------- Loans ...................................................................... 356,650 351,793 Less: Allowance for loan losses ........................................... 3,965 3,653 -------- -------- Net loans .................................................................. 352,685 348,140 -------- -------- Premises and equipment, net ................................................ 5,504 5,151 Foreclosed real estate ..................................................... 282 610 Accrued interest receivable and other assets ............................... 7,870 7,838 -------- -------- TOTAL ASSETS ............................................................... $510,976 $504,689 ======== ======== LIABILITIES Deposits Noninterest bearing ................................................... $ 77,428 $ 76,340 Interest bearing ...................................................... 360,710 353,673 -------- -------- Total deposits ............................................................. 438,138 430,013 Securities sold under agreements to repurchase ............................. 11,700 11,050 Short-term borrowings ...................................................... -- 5,200 Accrued interest payable and other liabilities ............................. 5,418 4,082 Long-term borrowings. ...................................................... 9,958 9,983 -------- -------- TOTAL LIABILITIES .......................................................... 465,214 460,328 -------- -------- COMMITMENTS AND CONTINGENT LIABILITIES STOCKHOLDERS' EQUITY Common stock ............................................................... 4,762 4,733 Capital surplus ............................................................ 15,233 14,931 Retained earnings .......................................................... 25,908 24,429 Unrealized gain - securities available for sale, net of taxes .............. 22 268 -------- -------- 45,925 44,361 Less: Treasury Stock (5,422 common shares) ............................... 163 -- -------- -------- Total stockholders' equity ............................................ 45,762 44,361 -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ................................. $510,976 $504,689 ======== ======== - -------------------------------------------------------------------------------- See notes to consolidated financial statements
INTERCHANGE FINANCIAL SERVICES CORPORATION CONSOLIDATED STATEMENTS OF INCOME (in thousands except per share data)
Three months ended March 31, -------------------- 1997 1996 ---- ---- INTEREST INCOME Interest and fees on loans .......................................... $7,812 $7,066 Interest on federal funds sold ...................................... 34 228 Interest and dividends on securities Taxable interest income ....................................... 1,702 1,861 Interest income exempt from federal income taxes .............. 15 14 Dividends ..................................................... 53 38 ------ ------ TOTAL INTEREST INCOME ............................................... 9,616 9,207 ------ ------ INTEREST EXPENSE Interest on deposits ................................................ 3,292 3,598 Interest on short-term borrowings ................................... 197 150 Interest on long-term borrowings .................................... 149 -- ------ ------ TOTAL INTEREST EXPENSE .............................................. 3,638 3,748 ------ ------ NET INTEREST INCOME ................................................. 5,978 5,459 Provision for loan losses ........................................... 610 250 ------ ------ NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES .................................................... 5,368 5,209 ------ ------ NONINTEREST INCOME Service fees on deposit accounts .................................... 428 369 Net gain on sale of loans ........................................... 1,067 -- Net gain on sale of securities available for sale ................... -- 235 Accretion of discount in connection with acquisition ................ -- 190 Other ............................................................... 212 426 ------ ------ TOTAL NONINTEREST INCOME ............................................ 1,707 1,220 ------ ------ NONINTEREST EXPENSES Salaries and benefits ............................................... 2,011 1,902 Net occupancy ....................................................... 486 545 Furniture and equipment ............................................. 168 178 Advertising and promotion ........................................... 152 158 Other ............................................................... 1,098 1,166 ------ ------ TOTAL NONINTEREST EXPENSES .......................................... 3,915 3,949 ------ ------ Income before income taxes ......................................... 3,160 2,480 Income taxes ........................................................ 1,106 868 ------ ------ NET INCOME .......................................................... $2,054 $1,612 ====== ====== NET INCOME PER COMMON SHARE ......................................... $ 0.48 $ 0.38 ====== ====== - -------------------------------------------------------------------------------- See notes to consolidated financial statements
INTERCHANGE STATE BANK CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (in thousands)
Unrealized Gain/(Loss) on Securities Common Capital Retained Available Treasury Stock Surplus Earnings for Sale Stock Total ----- ------- -------- -------- ----- ----- Balance at January 1, 1996 ............................... $4,495 $12,110 $22,990 $ 646 $ -- $40,241 Net income ............................................... 1,612 1,612 Dividends on common stock at $0.117 per share (1) ........ (500) (500) 5% common stock dividend ................................. 225 2,678 (2,903) -- Issued 7,498 shares of common stock in connection with incentive plan .................................. 13 148 161 Increase in market valuation-securities available for sale, net of taxes ................................... 63 63 -------- -------- -------- -------- --------- -------- Balance at March 31, 1996 ................................ 4,733 14,936 21,199 709 -- 41,577 Net Income ............................................... 4,807 4,807 Dividends on common stock at $0.487 per share (1) ........ (1,577) (1,577) Fractional shares of 5% common stock dividend ............ (5) (5) Decrease in market valuation-securities available for sale, net of taxes ................................... (441) (441) -------- -------- -------- -------- --------- -------- Balance at December 31, 1996 ............................. 4,733 14,931 24,429 268 -- 44,361 Net income ............................................... 2,054 2,054 Dividends on common stock at $0.135 per share (1) ........ (575) (575) Issued 5,701 shares of common stock in connection with incentive plans ................................. 9 159 168 Exercise of 12,086 option shares ......................... 20 143 163 Retirement of 5,422 shares in exchange for option shares . (163) (163) Decrease in market valuation - securities available for sale, net of taxes ............................... (246) (246) -------- -------- -------- -------- --------- -------- Balance at March 31, 1997 ................................ $4,762 $15,233 $25,908 $ 22 $ (163) $45,762 ======== ======== ======== ======== ========= ======== - -------------------------------------------------------------------------------- (1) Adjusted for the effects of the 3 for 2 stock split to be issued on April 17, 1997 to shareholders of record on March 20, 1997. See notes to consolidated financial statements.
INTERCHANGE FINANCIAL SERVICES CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
For the Three Months Ended -------------------------- March 31, -------------------------- 1997 1996 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net income ..................................................................................... $ 2,054 $ 1,612 Non-cash items included in earnings Depreciation and amortization of fixed assets ............................................. 227 254 Amortization of securities premiums ....................................................... 202 285 Accretion of securities discounts ......................................................... (17) (12) Amortization of premiums in connection with acquisition ................................... 111 111 Accretion of discount in connection with acquisition ...................................... -- (190) Provision for loan losses ................................................................. 610 250 Net gain on sale of securities available for sale ......................................... -- (235) Net gain on sale of loans ................................................................ (1,067) -- Net gain on sale of foreclosed real estate ................................................ (3) (17) Decrease in carrying value of loans available for sale .................................... 26 23 (Increase) decrease in operating assets Net origination of loans available for sale ............................................... 6 (119) Accrued interest receivable ............................................................... 364 408 Other ..................................................................................... (367) 374 Increase in operating liabilities Accrued interest payable .................................................................. 67 107 Other ..................................................................................... 1,269 592 -------- -------- CASH PROVIDED BY OPERATING ACTIVITIES .......................................................... 3,482 3,443 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from (payments for) Net (originations) repayment of loans ..................................................... (10,065) (4,378) Purchase of loans ......................................................................... -- (870) Sale of loans ............................................................................. 5,945 -- Purchase of securities available for sale ................................................. (1,985) (8,087) Maturities of securities available for sale ............................................... 221 195 Sale of securities available for sale ..................................................... -- 38,349 Sale of foreclosed real estate ............................................................ 329 78 Purchase of investment securities ......................................................... -- (4,563) Maturities of investment securities ....................................................... 16,672 6,000 Net payments on foreclosed real estate .................................................... 2 7 Purchase of fixed assets .................................................................. (624) (135) Sale of fixed assets ...................................................................... 13 -- -------- -------- CASH PROVIDED BY INVESTING ACTIVITIES .......................................................... 10,508 26,596 -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from (payments for) Deposits more (less) than withdrawals ..................................................... 8,125 (3,214) Securities sold under agreements to repurchase ............................................ 1,650 5,778 Other borrowings .......................................................................... (5,225) (4,200) Retirement of securities sold under agreement to repurchase ............................... (1,000) (1,250) Dividends ................................................................................. (575) (500) Common stock issued ....................................................................... 168 161 Exercise of option shares ................................................................. 163 -- Treasury stock ............................................................................ (163) -- -------- -------- CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES ............................................... 3,143 (3,225) -------- -------- INCREASE IN CASH AND CASH EQUIVALENTS .......................................................... 17,133 26,814 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR ................................................... 24,322 25,151 -------- -------- CASH AND CASH EQUIVALENTS, END OF PERIOD ....................................................... $ 41,455 $ 51,965 ======== ======== Supplemental disclosure of cash flow information: Cash paid for: Interest ............................................................................. $ 3,571 $ 3,641 Income taxes ......................................................................... 110 208 Supplemental disclosure of non-cash investing activities: Loans transferred to foreclosed real estate .......................................... $ -- $ 179 Decrease (increase) - market valuation of securities available for sale .............. 353 (102) Amortization of valuation allowance-securities transferred from available to sale to held to maturity .............................................. 2 4 - -------------------------------------------------------------------------------- See notes to consolidated financial statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 1997 1. FINANCIAL STATEMENTS The consolidated financial statements should be read in conjunction with the financial statements and schedules as presented in the Annual Report on Form 10-K of Interchange Financial Services Corporation (the "Company") for the year ended December 31, 1996. Consolidated financial data for the three months ended March 31, 1997 and 1996, are unaudited but reflect all adjustments consisting of only normal recurring adjustments which are, in the opinion of management, considered necessary for a fair presentation of the financial condition and results of operations for the interim periods. Results for interim periods are not necessarily indicative of results to be expected for any other period or the full year. 2. LEGAL PROCEEDINGS The Company is a party to routine litigation involving various aspects of its business, none of which, 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. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion is an analysis of the consolidated financial condition and results of operations of the Company for the three months ended March 31, 1997 and 1996, and should be read in conjunction with the consolidated financial statements and notes thereto included in Item 1 hereof. RESULTS OF OPERATIONS EARNINGS SUMMARY For the first quarter of 1997, the Company reported net income of $2.1 million or $0.48 per share, as compared with $1.6 million or $0.38 per share for the comparable 1996 period, an increase of $442 thousand or $0.10 per share. The growth in earnings was a product of a strong net interest margin that had a positive influence on net interest income and increased noninterest income. Net interest income increased $519 thousand or 9.5% largely because of a $16.5 million increase in interest earning assets and an improved net interest margin. The greatest growth in interest earning assets occurred in loans; specifically commercial loans which generally carry higher yields. For the first quarter of 1997, loans on average increased $42.5 million or 13.7% as compared to the same period a year ago. The loan growth was internally generated. Such assets were funded mostly with demand and savings deposits which typically carry lower yields, thereby having a positive effect on the net interest margin. The net interest margin for the first quarter 1997 was 5.11% as compared to 4.84% for the prior year. Noninterest income increased $487 or 39.9% for the first quarter of 1997, as compared to the same period in 1996. The increase was the result of a $1.1 million gain from the sale of two commercial mortgage loans with a book value of $4.8 million. These loans were part of a commercial loan package acquired in 1994 at a discount. The sale was consummated based upon management's assessment of the risk associated with such loans as they neared their maturity. However, the benefit resulting from the gain was partly offset by $621 thousand in gains and discount accretion that was realized in the first quarter of 1996 and did not reoccur in 1997. The gain was also partly offset by an increase in the provision for loan losses described below. NONPERFORMING ASSETS Nonperforming assets, consisting of nonaccrual loans, restructured loans and foreclosed real estate, decreased $2.9 million from $5.8 million at March 31, 1996, to $2.9 million at March 31, 1997. The decrease in nonperforming assets is partly attributable to the sale of $1.4 million in nonperforming loans in the third quarter of 1996. During the past 12 months, $1.1 million of real estate owned was sold and further contributed to the decrease. For the first quarter 1997, nonperforming assets decreased $529 thousand from $3.4 million for the quarter ended December 31, 1996. The ratio of nonperforming assets to total loans and foreclosed real estate decreased from 1.8% at March 31, 1996, to .8% at March 31, 1997. The ratio at March 31, 1997, decreased by .2% as compared to 1.0% at December 31, 1996. PROVISION FOR LOAN LOSSES AND LOAN LOSS EXPERIENCE The provision for loan losses represents management's determination of the amount necessary to bring the allowance for loan losses to a level that management considers adequate to reflect the risk of future losses inherent in the Company's loan portfolio. In its evaluation of the adequacy of the allowance for loan losses, management considers past loan loss experience, changes in the composition of performing and nonperforming loans, the condition of borrowers facing financial pressure, the relationship of the current level of the allowance to the credit portfolio and to nonperforming loans and existing economic conditions. However, the process of determining the adequacy of the allowance is necessarily judgmental and subject to changes in external conditions. Accordingly, there can be no assurance that existing levels of the allowance will ultimately prove adequate to cover actual loan losses. The allowance for loan losses was $4.0 million at March 31, 1997, and $3.7 million at December 31, 1996, representing 143.7% and 130.0% of nonperforming loans at those dates, respectively. In the first quarter of 1997, the Bank's provision for loan losses was $610 thousand, an increase of $360 thousand from the same period a year ago. The increase in the provision for loan losses was necessitated based upon certain changes in the characteristics of the Bank's loan portfolio. The Bank's lending focus and growth continue to be largely in its commercial and commercial mortgage loan portfolio. As a result, the Bank has modified its method of computing the allowance for loan losses to capture the potential increase in inherent credit risk associated with the increased concentration in commercial and commercial mortgage loans. SECURITIES Investment securities and securities available for sale consist of the following: (in thousands)
March 31, 1997 ------------------------------------------------------ Gross Gross Amortized Unrealized Unrealized Market Cost Gains Losses Value ---- ----- ------ ----- INVESTMENT SECURITIES OBLIGATIONS OF U.S. TREASURY ................................. $ 30,396 $ 46 $ 17 $ 30,425 OBLIGATIONS OF U.S. AGENCIES ................................. 11,069 -- 104 10,965 OBLIGATIONS OF STATE AND POLITICAL SUBDIVISION ............... 180 -- 9 171 OTHER DEBT SECURITIES ........................................ 4,929 -- 107 4,822 -------- -------- -------- -------- 46,574 46 237 46,383 -------- -------- -------- -------- SECURITIES AVAILABLE FOR SALE OBLIGATIONS OF U.S. TREASURY ................................. 33,581 311 444 33,448 OBLIGATIONS OF U.S. AGENCIES ................................. 17,199 -- 241 16,958 OTHER DEBT SECURITIES ........................................ 1,886 -- 10 1,876 EQUITY SECURITIES ............................................ 3,912 412 -- 4,324 -------- -------- -------- -------- 56,578 723 695 56,606 -------- -------- -------- -------- TOTAL SECURITIES ........................................ $103,152 $ 769 $ 932 $102,989 ======== ======== ======== ======== December 31, 1996 ------------------------------------------------------ Gross Gross Estimated Amortized Unrealized Unrealized Market Cost Gains Losses Value ---- ----- ------ ----- Investment securities Obligations of U.S. Treasury ................................. $ 43,517 $ 248 -- $ 43,765 Obligations of U.S. agencies ................................. 11,077 74 $ 22 11,129 Obligations of states & political subdivisions ............... 3,581 1 9 3,573 Other debt securities ........................................ 5,201 -- 49 5,152 -------- -------- -------- -------- 63,376 323 80 63,619 -------- -------- -------- -------- Securities available for sale Obligations of U.S. Treasury ................................. 31,640 453 246 31,847 Obligations of U.S. agencies ................................. 17,321 124 12 17,433 Other debt securities ........................................ 1,998 11 -- 2,009 Equity securities ............................................ 3,912 51 -- 3,963 -------- -------- -------- -------- 54,871 639 258 55,252 -------- -------- -------- -------- Total securities ........................................ $118,247 $ 962 $ 338 $118,871 ======== ======== ======== ========
At March 31, 1997, the contractual maturities of investment securities and securities available for sale are as follows: (in thousands)
SECURITIES INVESTMENT SECURITIES AVAILABLE FOR SALE --------------------------- ---------------------- AMORTIZED MARKET AMORTIZED MARKET COST VALUE COST VALUE --------------------------- ---------------------- WITHIN 1 YEAR .......................................... $18,163 $18,193 -- -- AFTER 1 BUT WITHIN 5 YEARS ............................. 18,346 18,277 $37,526 $37,358 AFTER 5 BUT WITHIN 10 YEARS ............................ 4,182 4,157 7,665 7,515 AFTER 10 YEARS ......................................... 5,883 5,756 7,475 7,409 EQUITY SECURITIES ...................................... -- -- 3,912 4,324 ------- ------- ------- ------- TOTAL .......................... $46,574 $46,383 $56,578 $56,606 ======= ======= ======= =======
CAPITAL ADEQUACY The Company's and the Bank's capital amounts and ratios are as follows: (dollars in thousands)
To Be Well Capitalized Under For Capital Prompt Corrective Actual Adequacy Purposes Action Provisions ---------------- ----------------- ----------------- Amount Ratio Amount Ratio Amount Ratio ------ ----- ------ ----- ------ ----- AS OF MARCH 31, 1997: TOTAL CAPITAL (TO RISK WEIGHTED ASSETS): THE COMPANY ..................................... $48,740 14.76% $26,411 8.00% N/A N/A THE BANK ........................................ 47,402 14.42 26,304 8.00 $32,880 10.00% TIER 1 CAPITAL (TO RISK WEIGHTED ASSETS): THE COMPANY ..................................... 44,775 13.56 13,205 4.00 N/A N/A THE BANK ........................................ 43,437 13.21 13,152 4.00 19,728 6.00 TIER 1 CAPITAL (TO AVERAGE ASSETS): THE COMPANY ..................................... 44,775 8.94 15,032 3.00 N/A N/A THE BANK ........................................ 43,437 8.69 14,991 3.00 24,985 5.00 As of December 31, 1996: Total Capital (to Risk Weighted Assets): The Company ..................................... $46,720 14.42% $25,918 8.00% N/A N/A The Bank ........................................ 45,391 14.07 25,813 8.00 $32,266 10.00% Tier 1 Capital (to Risk Weighted Assets): The Company ..................................... 43,067 13.29 12,959 4.00 N/A N/A The Bank ........................................ 41,738 12.94 12,906 4.00 19,359 6.00 Tier 1 Capital (to Average Assets): The Company ..................................... 43,067 8.66 14,925 3.00 N/A N/A The Bank ........................................ 41,738 8.39 14,925 3.00 24,875 5.00
LIQUIDITY Liquidity is the ability to provide sufficient resources to meet all financial obligations and finance prospective business opportunities. Liquidity levels over any given period of time are a product of the Company's operating, financing and investing activities. The extent of such activities are often shaped by such external factors as competition for deposits and demand for loans. Financing for the Company's loans and investments is derived primarily from deposits, along with interest and principal payments on loans and investments. At March 31, 1997, total deposits amounted to $438.1 million, an increase of $8.1 million or 1.9% from December 31, 1996. The Company continues to supplement the more traditional funding sources with borrowings from the Federal Home Loan Bank of New York ("FHLB") and with securities sold under agreements to repurchase ("REPOS"). At March 31, 1997, advances from the FHLB and REPOS amounted to $10.0 million and $11.7 million, respectively, as compared to $15.2 million and $11.1 million, respectively, at December 31, 1996. In the first quarter of 1997, loan production continued to be the Company's principal investing activity. Net loans at March 31, 1997 amounted to $352.7 million, compared to $348.1 million at the end of 1996, an increase of $4.6 million or 1.32%. The Company's most liquid assets are cash and due from banks and federal funds sold. At March 31, 1997, the total of such assets amounted to $41.5 million or 8.1% of total assets, compared to $24.3 million or 4.8% of total assets at year-end 1996. Another significant liquidity source is the Company's available-for-sale ("AFS") securities. At March 31, 1997, AFS securities amounted to $56.6 million or 54.9% of total securities. compared to $55.3 million or 46.6% of total securities at year-end 1996. In addition to the aforementioned sources of liquidity, the Company has available various other sources of liquidity, including federal funds purchased from other banks and the Federal Reserve discount window. The Bank also has a $49.1 million line of credit available through its membership in the Federal Home Loan Bank of New York. Management believes that the Company's sources of funds are sufficient to meet its funding requirements. PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Reference is made to Form 10-K filed for the year ended December 31, 1996. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) The following exhibits are furnished herewith: EXHIBIT NO. 10 (a) Change in Control Agreement for Anthony Labozzetta dated January 2, 1997 (b) Separation Agreement for Robert N. Harris dated January 2, 1997 11 Statement Re: Computation of Per Share Earnings (b) Form 8-K filed January 22, 1997 announcing the retirement of Robert N. Harris and the promotion to Senior Vice President and Treasurer of Anthony Labozzetta. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. INTERCHANGE FINANCIAL SERVICES CORPORATION by: /S/ANTHONY LABOZZETTA Anthony Labozzetta Senior Vice President & Treasurer EX-10 2 CHANGE IN CONTROL January 1, 1997 Mr. Anthony Labozzetta 144 Summit Street Englewood, NJ 07631 Dear Mr. Labozzetta: Interchange Financial Services Corporation, a New Jersey Bank Holding Company (the "Company"), considers the maintenance of a sound and vital executive team to be essential to protecting and enhancing the best interests of the Company and its stockholders. In this connection, the Company recognizes that the possibility of a change in control presently exists and may exist in the future, and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of executives to the detriment of the Company and its stockholders. Accordingly, the Board of Directors of the Company (the "Board") has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company's executive team. This letter agreement sets forth the severance benefits which the Company agrees will be provided to you in the event your employment with the Company is terminated subsequent to a "change in control of the Company" (as defined in Section 2 hereof) under the circumstances described below. 1. COMPANY'S RIGHT TO TERMINATE During the term of this Agreement, you agree that you will not voluntarily leave the employ of the Company except as may be permitted hereunder, and will continue to perform your regular duties as Senior Vice President and Treasurer of the Company. Notwithstanding the foregoing, the Company may terminate your employment at any time, subject to providing the benefits hereinafter specified in accordance with the terms hereof. 2. CHANGE IN CONTROL No benefits shall be payable hereunder unless there shall have been a change in control of the Company, as set forth below, and your employment by the Company shall thereafter have been terminated in accordance with Section 3 below. For purposes of this Agreement, a "change in control of the Company" shall mean, unless the Board otherwise directs resolution approved by unanimous vote of the entire membership thereof adopted prior thereto, a change in control of a nature that would be required to be reported in response to Item 5(f) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended ("Exchange Act"); provided that, without limitation, such a change in control shall be deemed to have occurred if (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 25% control of the combined voting power of the Company's then outstanding securities; or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority thereof unless the election, or the nomination for election by the Company's stockholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. 3. TERMINATION FOLLOWING CHANGE IN CONTROL If any of the events described in Section 2 hereof constituting a change in control of the Company shall have occurred, you shall be entitled to the benefits provided in Section 4 hereof upon your subsequent termination, so long as such termination occurs within two (2) years after a change in control of the Company, unless such termination is (A) because of your death or Retirement, (B) by the Company for Cause or Disability or (c) by you other than for Good Reason. (i) Disability; Retirement (A) Termination by the Company of your employment based on "Disability" shall mean termination because of your absence from your duties with the Company on a full-time basis for 130 consecutive business days, as a result of your incapacity due to physical or mental illness, unless within thirty (30) days after Notice of Termination (as hereinafter defined) is given following such absence, you shall have returned to the full time performance of your duties; or (B) Termination by the Company or you of your employment based on "Retirement" shall mean your voluntary termination in accordance with the Company's retirement policy, including early retirement, generally applicable to its salaried employees. (ii) Cause Termination by the Company of your employment for Cause shall mean your termination on account of: (A) Your willful commission of an act that causes or is reasonably likely to cause substantial damage to the Company; (B) Your commission of an act of fraud in the performance of your duties on behalf of the Company; (C) Your conviction for commission of a felony or other crime punishable by confinement for a period in excess of one (1) year in connection with the performance of your duties on behalf of the Company; or (D) The order of a federal or state bank regulatory agency or a court of competent jurisdiction requiring the termination of your employment. (iii) Good Reason Termination by you of your employment for "Good Reason" shall mean termination based on: (A) Subsequent to a change in control of the Company, and without your express written consent, the assignment to you of any duties inconsistent with your positions, duties, responsibilities and status with the Company immediately prior to a change in control, or a change in your reporting responsibilities, titles or offices as in effect immediately prior to a change in control, or any removal of you from or any failure to re-elect you to any of such positions, except in connection with the termination of your employment for Cause, Disability or Retirement or as a result of your death or by you other than for Good Reason; (B) Subsequent to a change in control of the Company, a reduction by the Company in your base salary as in effect on the date hereof or as the same may be increased from time to time; (C) Subsequent to a change in control of the Company, a failure by the Company to continue any bonus plans in which you are presently entitled to participate (the "Bonus Plans") as the same may be modified from time to time but substantially in the forms currently in effect, or a failure by the Company to continue you as a participant in the Bonus Plans on at least the same basis as you presently participate in accordance with the Bonus Plans; (D) Subsequent to a change in control of the Company and without your express written consent, the Company's requiring you to be based anywhere other than within thirty (30) miles of your present office location, except for required travel on the Company's business to an extent substantially consistent with your present business travel obligations; (E) Subsequent to change in control of the Company, the failure by the Company to continue in effect any benefit or compensation plan, stock ownership plan, stock purchase plan, stock option plan, life insurance plan, health-and-accident plan or disability plan in which you are participating at the time of a change in control of the Company (or plans providing you with substantially similar benefits), the taking of any action by the Company which would adversely affect your participation in or materially reduce your benefits under any of such plans or deprive you of any material fringe benefit enjoyed by you at the time of the change in control, or the failure by the Company to provide you with the number of paid vacation days to which you are then entitled in accordance with the company's normal vacation policy in effect on the date hereof; (F) Subsequent to a change in control of the Company, the failure by the Company to obtain the assumption of the agreement to perform this Agreement by any successor as contemplated in Section 6 hereof; or (G) Subsequent to a change in control of the Company, any purported termination of your employment which is not effected pursuant to a Notice of Termination satisfying the requirements of paragraph (iv) below (and, if applicable, paragraph (ii) above); and for purposes of this Agreement, no such purported termination shall be effective. (iv) Notice of Termination Any purported termination by the Company pursuant to paragraph (i) or (ii) above or by you pursuant to subparagraph (B) of paragraph (i) or paragraph (iii) above shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated. (v) Date of Termination "Date of Termination" shall mean (A) if your employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that you shall not have returned to the performance of your duties on a full-time basis during such thirty (30) day period), (B) if your employment is terminated pursuant to paragraph (ii) above, the date specified in the Notice of Termination, and (C) if your employment is terminated for any other reason, the date on which a Notice of Termination is given; provided that if within thirty (30) days after any Notice of Termination is given the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally determined, either by mutual written agreement of the parties, by a binding and final arbitration award or by a final judgment, order or decree of a court of competent jurisdiction entered upon such arbitration award (the time of appeal therefrom having expired and no appeal having been perfected). 4. Certain Benefits Upon Termination If, after a change in control of the Company shall have occurred, as defined in Section 2 above, your employment by the Company shall be terminated (A) by the Company other than for Cause, Disability or Retirement or (B) by you for Good Reason, then you shall be entitled to the benefits provided below: (i) The Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given plus credit for any vacation earned but not taken and the amount, if any, of any bonus for a past fiscal year and the portion of the current fiscal year ending on the Date of Termination which has not yet been awarded or paid to you under the Bonus Plans; (ii) In lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you on the fifth day following the Date of Termination a lump sum amount equal to two (2) times your annual base salary at the highest rate in effect during the twelve (12) months immediately preceding the Date of Termination; (iii)The Company shall also pay to you all legal fees and expenses incurred by you as a result of such termination (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement); (iv) The Company shall maintain in full force and effect, for your continued benefit until the earlier of (A) two (2) years after the Date of Termination or (B) your commencement of full time employment with a new employer, all life insurance, medical, health and accident, and disability plans, programs or arrangements in which you were entitled to participate immediately prior to the Date of Termination, provided that your continued participation is possible under the general terms and provisions of such plans and programs. In the event that your participation in any such plan or program is barred, the Company shall arrange to provide you with benefits substantially similar to those which you are entitled to receive under such plans and programs. In addition, the Company shall pay you a lump sum amount of equivalent actuarial value to the additional pension benefit you would have earned under the Company's Pension Plan as in effect on the date the change of control occurs, but disregarding any Internal Revenue Code limitations pertaining to qualified plans, if you were granted at the time of your termination of employment two (2) additional years of Credited Service and deemed 2 years older under the Plan. In determining the equivalent actuarial value of the additional pension granted under this Section 4, an interest rate of 5% and the mortality table under the Company's Pension Plan shall be used to determine the lump sum amount. You shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer after the Date of Termination or otherwise. 5. CERTAIN FURTHER PAYMENTS BY THE CORPORATION In the event that any amount or benefit paid or distributed to you pursuant to this Agreement, taken with any amounts or benefits otherwise paid or distributed to you by the Company or any affiliated company (collectively the "Covered Payments"), are or become subject to the tax (the "Excise Tax") imposed under Section 4999 of the Code or any similar tax that may hereafter be imposed, the Company shall pay to you at the time specified below an additional amount (the "Tax Reimbursement Payment") such that the net amount retained by you with respect to such Covered Payments, after deduction of any Excise Tax on the Covered Payments and any Federal, state and local income tax and Excise Tax on the Tax Reimbursement Payment provided for by this Section 5, but before deduction for any Federal, state or local income or employment tax withholding on such Covered Payments, shall be equal to the amount of the Covered Payments. (i) For purposes of determining whether any of the Covered Payments will be subject to the Excise Tax and the amount of such Excise Tax, (A) Such Covered Payments will be treated as "parachute payments" within the meaning of Section 280G of the Code, and all "parachute payments" in excess of the "base amount" (as defined under Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the opinion of the Company's independent certified public accountants appointed prior to the date the Change of Control occurs or tax counsel selected by such accountants (the "Accountants"), such Covered Payments (in whole or in part) either do not constitute parachute payments or represent reasonable compensation for services actually rendered (within the meaning of Section 280G(b)(4) of the Code) in excess of the "base amount", or such parachute payments are otherwise not subject to such Excise Tax, and (B) The value of any non-cash benefits or any deferred payment or benefit shall be determined by the Accountants in accordance with the principles of Section 280G of the Code. (ii) For purposes of determining the amount of the Tax Reimbursement Payment, you shall be deemed to pay: (A) Federal income taxes at the highest applicable marginal rate of Federal income taxation for the calendar year in which the Tax Reimbursement Payment is to be made, and (B) Any applicable state and local income taxes at the highest applicable marginal rate of taxation for the calendar year in which the Tax Reimbursement Payment is to be made, net of the maximum reduction in Federal income taxes which could be obtained from the deduction of such state or local taxes if paid in such year. (iii)In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder in calculating the Tax Reimbursement Payment made, you shall repay to the Company, at the time that the amount of such reduction in the Excise Tax is finally determined, the portion of such prior Tax Reimbursement Payment that would not have been paid if such Excise Tax had been applied in initially calculating such Tax Reimbursement Payment, plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is later determined to exceed the amount taken into account hereunder at the time the Tax Reimbursement Payment is made (including, but not limited to, by reason of any payment the existence or amount of which cannot be determined at the time of the Tax Reimbursement Payment), the Company shall make an additional Tax Reimbursement Payment in respect of such excess (plus any interest or penalty payment with respect to such excess) at the time that the amount of such excess is finally determined. (iv) The Tax Reimbursement Payment (or portion thereof) provided for in this Section 5 shall be paid to you not later than ten (10) business days following the payment of the Covered Payments; provided, however, that if the amount of such Tax Reimbursement Payment (or portion thereof) cannot be finally determined on or before the date on which payment is due, the Company shall pay to you by such date an amount estimated in good faith by the Accountants to be the minimum amount of such Tax Reimbursement Payment and shall pay the remainder of such Tax Reimbursement Payment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined, but in no event later than 45 calendar days after payment of the related Covered Payment. In the event that the amount of the estimated Tax Reimbursement Payment exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Corporation to you, payable on the fifth business day after written demand by the Company for payment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code). 6. TERM OF AGREEMENT This Agreement shall continue in effect so long as you are employed by the Company provided that, if a change of control of the Company, as defined in Section 2 hereof, shall have occurred during the term of this Agreement, this Agreement shall continue in effect for a period of thirty-six (36) months beyond the month in which such change in control occurred. 7. SUCCESSOR; BINDING AGREEMENT (i) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to you, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle you to compensation from the Company in the same amount and on the same terms as you would be entitled hereunder if you terminated your employment for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section 7 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. (ii) This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If you should die while any amount would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee or other designee or, if there be no such designee, to your estate. 8. NOTICE For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth on the first page of this Agreement, provided that all notices to the Company shall be directed to the attention of the President of the Company with a copy to the Secretary of the Company, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt. 9. MISCELLANEOUS No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by you and such officer as may be specifically designated by the Board of Directors of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, expressed or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement; provided, however, that this Agreement shall not supersede or in any way limit the rights, duties or obligations you may have under any other written agreement with the Company. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New Jersey. 10. VALIDITY The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 11. TAX WITHHOLDING The Company may withhold from any amounts payable under this Agreement such federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation. 12. COUNTERPARTS This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 13. ARBITRATION Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction. If this letter correctly sets forth our agreement on the subject matter hereof, kindly sign and return to the Company the enclosed copy of this letter which will then constitute our agreement on this subject. Sincerely, THE COMPANY By /S/ ANTHONY D. ANDORA ------------------------------------- Name: Anthony D. Andora Title: Chairman of the Board Agreed to this 2ND day of JANUARY , 1997. /S/ANTHONY LABOZZETTA - --------------------- Anthony Labozzetta, Sr. Vice President & Treasurer Attest by: /S/ BENJAMIN ROSENZWEIG - ---------- ----------------------- Benjamin Rosenzweig EX-10 3 SEPARATION AGREEMENT IN THE MATTER OF : : ROBERT N. HARRIS : : and : AGREEMENT : INTERCHANGE STATE BANK and : INTERCHANGE FINANCIAL : SERVICES CORP. : : : This Agreement is entered into this 2nd day of January, 1997, by and between Interchange State Bank and Interchange Financial Services Corp. (collectively the "Bank"), a corporation located at Park 80 West/Plaza 2, Saddle Brook, New Jersey 07663, and Robert N. Harris ("Harris"), who now resides at 7 Brocken Drive, Mendham, New Jersey 07945. IN CONSIDERATION OF THE MUTUAL PROMISES CONTAINED IN THIS AGREEMENT, IT IS AGREED that: 1. Robert N. Harris, who now holds the position of Executive Vice President and Chief Financial Officer with the Bank, has requested and been granted separation and will, pursuant to that choice, retire effective on or before December 31, 1996. Harris waives any and all entitlement to future employment by the Bank, or any of its present or future affiliates, in any capacity whatsoever. 2. Upon his retirement, Harris will receive severance pay (which shall be deemed to include all accrued vacation pay) until he shall have attained the age of sixty-five as of July 31, 1997, in the amount of $87,370 (less normal payroll deductions), payable on a bi-weekly basis over a twelve-month period beginning January 1, 1997 (i.e., 26 payments of $3,360.38 every two weeks). 3. In lieu of continued medical and dental insurance coverage during the period beginning with his separation and ending on July 31, 1997, the Bank will pay Harris an amount equal to the cost of premium payments that it would make on his behalf for such coverage had he remained with the Bank until July 31, 1997. Such payments shall be on a bi-weekly basis (i.e., 15 payments of $92.94). All benefits shall cease effective upon the date of Harris's retirement. 4. The Bank will credit Harris with 1,000 hours' service under its pension plan for the year 1997. 5. Harris shall be permitted to purchase the Bank vehicle being used by him at the Bank's depreciated carrying value which, as of December 31, 1996, is $13,035.28. 6. Harris hereby waives any and all rights which he may have to an incentive bonus for the year 1997. Disposition of Harris's stock options shall be determined under the terms of the Bank's Stock Option Plan of 1989. Any restricted stock currently held by Harris, including stock he may receive as a 1996 bonus, shall be deemed non-forfeitable despite any provision of the plan to the contrary. Harris's entitlements under the Interchange Deferred Compensation Plan for Robert N. Harris shall be determined under the provisions of that plan, except that he shall also receive a contribution to the Plan of $10,000 for the year 1997. All rights and obligations arising from a "change in control" agreement entered into between Harris and Interchange Financial Services Corporation dated June 8, 1995, shall terminate upon his retirement, and such agreement shall upon that date become null and void and unenforceable. However, in the event that in the calendar year of 1997 the corporation enters into a definitive agreement to be acquired, that upon the effective date of acquisition, Harris will be entitled to an additional payment of $147,000 which equals one year full salary. 7. Harris agrees forthwith to: (a) sign the attached Release, by which he waives and releases the Bank and the others identified therein from all claims relating to or arising out of his employment with the Bank, particularly any and all claims of employment discrimination under the Age Discrimination in Employment Act, Title VII of the Civil Rights and/or the New Jersey Law Against Discrimination, the Americans With Disabilities Act, the Conscientious Employee Act, all claims of wrongful or unlawful termination, claims of breach of contract, express or implied, all claims growing out of any restriction upon the Bank to terminate the employment relationship, and such other claims cited therein which he may have against the Bank or such other persons or entities recited therein. He expressly agrees and acknowledges that this Agreement and the Release contemplate the extinguishment of all such claims. (b) If Harris executes this Agreement at any time prior to the end of the twenty-one (21) day period that Interchange gives Harris in which to consider this Agreement, such early execution is a knowing and voluntary waiver of Harris's right to consider this Agreement for at least twenty-one (21) days, and is due to Harris's belief that Harris had ample time in which to consider and understand this Agreement, and in which to review this Agreement with an attorney. 8. The parties expressly agree that execution of this Agreement shall constitute an absolute bar to any legal action in any forum, judicial, administrative or arbitral, by Harris against the Bank or any of its present or future affiliates, or any other party identified as a releasee in the Release relating to any matter covered by the terms of the Release. 9. Harris (and his attorneys if he consults counsel in connection with this Agreement) agree that Harris will keep confidential and not disclose to any person or entity (except Harris's spouse and children) the facts and terms of this Agreement or the content of discussions leading to this Agreement except to the extent necessary to comply with state or federal laws and that he will not issue, or cooperate with or permit the issuance of, any public release concerning this Agreement or discussions regarding this Agreement. It is expressly agreed and understood that any violation of this paragraph, including disclosure by Harris's spouse, children or attorney of the matters covered herein, shall be a material breach of the parties' agreement. 10. Harris also agrees that all confidential information which he acquired in his capacity as Executive Vice President and Chief Financial Officer of the Bank, and which has not become public knowledge, is considered by the parties hereto to be confidential business information and may not be disclosed, discussed or utilized by Harris in any manner without the prior written permission of the Bank. Harris agrees to cooperate fully with the Bank's management in the handling of all business for which Harris had responsibility or has relevant information. 11. Harris also agrees that he will not, except as may be compelled by judicial process, cooperate in any manner or supply information of any kind in any proceeding, investigation or inquiry related in any way to the employment practices or procedures of the Bank. 12. In the event of a breach of this Agreement by Harris, the Bank shall be relieved of its obligations hereunder and shall be entitled to repayment of all monies paid to Harris pursuant to this agreement. 13. It is agreed further that should a breach of any provision of this Agreement occur, the non-breaching party shall be entitled by court of competent jurisdiction to all available remedies which apply to violations hereof. 14. In the event that the Bank or Harris is required to commence an action, in law or equity, to enforce rights under any provision of this Agreement, the nonprevailing party shall be liable for the reasonable attorney's fees and costs incurred by the other in connection with such action. 15. It is agreed and understood that neither the execution of this Agreement nor any other action taken by the Bank in connection with this Agreement constitutes an admission by the Bank, or any of its directors, officers, agents, employees or representatives, of any acts of discrimination whatsoever against Harris, or of any violation of any law, duty or obligation, and the Bank specifically disclaims any liability to or discrimination against Harris, on the part of itself, its directors, officers, agents, employees or representatives. The parties have entered into this Agreement voluntarily and solely to effectuate Harris's decision to retire from the Bank. 16. This Agreement contains the entire Agreement of the parties and cannot be altered or amended except in writing duly executed by the parties or their authorized representatives. 17. This Agreement shall be interpreted and enforced in accordance with the laws and in the courts of the State of New Jersey. If any part of this Agreement shall be ruled unenforceable, it is understood that the surviving portions of this Agreement shall remain binding on the parties. 18. This Agreement shall be binding upon the parties, their heirs, successors and assigns. The Bank shall require the assumption of this Agreement by any purchaser of the Bank during its term. The foregoing terms and provisions are hereby agreed to and accepted: Dated: 1/24/97 s/s Robert N. Harris -------------- - -------------------- Robert N. Harris Sworn and subscribed to before me this 24 day of January, 1997. s/s Carmella Tucci - ------------------ Notary Public For Interchange State Bank By: s/s Anthony S. Abbate Dated: 1/27/97 --------------------- --------------- Title: President & CEO [SEAL] For Interchange Financial Services Corp. By: s/s Anthony S. Abbate Dated: 1/27/97 --------------------- -------------- Title: President & Ceo [SEAL] GENERAL RELEASE AND WAIVER In consideration of the special severance payments and benefits by Interchange State Bank, which payment/benefits are over and above those payments and/or benefits to which I am otherwise entitled under Interchange State Bank and Interchange Finanical Service Corp.'s regular policies and programs, I release and discharge Interchange State Bank, Interchange Financial Services Corp. and all their present or future affiliated, related and subsidiary corporations and their present, former and future directors, officers, employees and representatives and the estates and/or heirs thereof from any and all claims which I, my estate and/or heirs may have against any of them. This releases all claims, known and unknown, which were or could have been asserted, resulting from anything which has happened up to now, including claims for attorney's fees. I hereby promise not to commence or pursue, or authorize anyone to commence or pursue on my behalf, any action, legal or administrative, or otherwise seek to recover any damages, remedy or relief of any kind from any releasee based upon any claim covered by this General Release and Waiver. Without limiting the scope of the foregoing provisions in any way, I specifically release all claims relating to or arising out of any aspect of my employment with Interchange State Bank and/or Interchange Financial Services Corp. or the termination thereof including, but not limited to, all claims under common law; the Age Discrimination in Employment Act and specifically 29 U.S.C. ss.626; Title VII of the Civil Rights Act of 1964, as amended; 42 U.S.C. ss.1981, as amended by the Civil Rights Act of 1991; the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. 1001, et seq.; the National Labor Relations Act, 29 U.S.C. 151 et seq.; the Americans With Disabilities Act of 1990, 29 U.S.C. 706 et seq.; the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq.; the New Jersey Conscientious Employee Protection Act, N.J.S.A. 34:19-1 et seq.; any contract of employment, express or implied; any provision of the Constitutions of the United States or the State of New Jersey; and any other law, common or statutory, of the United States or the State of New Jersey or any other State; and all claims growing out of any legal restrictions on the Interchange State Bank's right to terminate its employees. s/s Robert N. Harris Dated: 1/27/97 -------------------------- Signature Robert N. Harris - ------------------------------ Name (Please Print) ACKNOWLEDGMENT I HAVE CAREFULLY READ AND FULLY UNDERSTAND THE TERMS AND CONDITIONS OF THIS RELEASE. I ACKNOWLEDGE THAT THIS RELEASE WAS AVAILABLE TO ME FOR REVIEW FOR 21 DAYS BEGINNING DECEMBER 16, 1996. I ACKNOWLEDGE THAT I HAD THE OPPORTUNITY AND WAS ADVISED BY INTERCHANGE STATE BANK AND INTERCHANGE FINANCIAL SERVICES CORP. TO REVIEW THIS RELEASE WITH MY ATTORNEY AND/OR ANYONE ELSE OF MY CHOOSING, AND TO DISCUSS WITH SUCH PERSON THE TERMS AND CONDITIONS OF THIS RELEASE AND MY RIGHTS UPON EXECUTION. I AGREE AND ACKNOWLEDGE THAT NEITHER INTERCHANGE STATE BANK NOR INTERCHANGE FINANCIAL SERVICES CORP. NOR THEIR REPRESENTATIVES MADE ANY REPRESENTATIONS CONCERNING THE TERMS OR EFFECT OF THIS RELEASE OTHER THAN AS SET FORTH IN THE DOCUMENT, AND THAT I HAVE VOLUNTARILY SIGNED THIS RELEASE AS MY OWN FREE ACT WITH FULL KNOWLEDGE OF ITS TERMS AND CONDITIONS, WHICH ARE FINAL AND BINDING UPON ME. I UNDERSTAND THAT FOR A PERIOD OF 7 DAYS FOLLOWING THE SIGNING OF THIS RELEASE I MAY REVOKE THE RELEASE, AND THAT THIS RELEASE WILL NOT BE EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED. Dated: 1/24/97 s/s Robert N. Harris - ---------------- ------------------------------- Signature Robert N. Harris --------------------------------- Name (Please Print) STATE OF NEW JERSEY : SS.: COUNTY OF BERGEN : I CERTIFY THAT on January 24, 1997, Robert N. Harris personally came before me and acknowledged under oath, to my satisfaction, that he is named in and personally signed this document. s/s Carmella Tucci --------------------------------- Notary Public EX-11 4 STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS EXHIBIT 11 COMPUTATION OF PER SHARE EARNINGS (IN THOUSANDS, EXCEPT PER SHARE DATA)
Three months ended March 31, ----------------------- 1997 1996 ---- ---- Net income ......................................... $2,054 $1,612 Weighted average common shares outstanding ......... 4,262 4,251 ------ ------ NET INCOME PER COMMON SHARE ........................ $ 0.48 $ 0.38 ====== ======
EX-27 5
9 1,000 3-Mos Dec-31-1997 Mar-31-1997 27,555 0 13,900 0 56,606 46,574 46,383 356,650 3,965 510,976 438,138 11,700 5,418 9,958 4,762 0 0 41,000 510,976 7,812 1,770 34 9,616 3,292 3,638 5,978 610 0 3,915 3,160 3,160 0 0 2,054 0.48 0.48 5.05 2,035 42 573 0 3,653 309 11 3,965 3,965 0 378
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