SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D.C. 20549

                                   -----------
                                    FORM 8-K



                                 CURRENT REPORT


         PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


                           DATE OF REPORT: December 28, 2001



                         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, N.J.             07663
- ------------------------------------------           ---------
(Address of principal executive offices)             (Zip Code)

       Registrant's telephone number, including area code: (201) 703-2265

- --------------------------------------------------------------------------------

                                      None
           Former name or former address, if changed since last report






Item 5.  Other Events

     On December 20, 2001,  the  registrant  issued the following  press release
announcing  that it has  signed a  definitive  agreement  with  Monarch  Capital
Corporation  ("Monarch"),  to purchase substantially all of Monarch's assets and
liabilities.

     Saddle  Brook,  NJ (December  20, 2001) - Anthony S. Abbate,  President and
Chief  Executive   Officer  of  Interchange   Financial   Services   Corporation
("Interchange")  (NASDAQ:  IFCJ), whose principal subsidiary is Interchange Bank
("Bank"),  reported today that the Interchange has signed a definitive agreement
with Monarch Capital Corporation  ("Monarch"),  to purchase substantially all of
Monarch's assets and liabilities.

     Monarch is a leasing and financing  company  located in West Caldwell,  New
Jersey,  which was formed in 1986 by its sole shareholder  James Jenco.  Monarch
provides leasing and financing of capital equipment principally to middle market
companies.  As part of the  transaction,  James Jenco will join  Interchange  as
President  of the  Bank's  equipment  lease  financing  subsidiary,  Interchange
Capital Company,  L.L.C.  ("ICC").  In addition,  Monarch's  employees,  who are
instrumental to the success of Monarch,  will also join ICC. "James Jenco brings
with him over 23 years of  leasing  experience  and along  with his  staff  will
assist  Interchange's  leasing unit (ICC) to more rapidly  achieve its strategic
objectives",  said Mr. Abbate.  The aggregate lease portfolio to be purchased is
approximately $15 million and is scheduled to close in January 2002.

     The Company is a $812 million-asset  commercial bank holding company, whose
principal   subsidiary  is   Interchange   Bank.  The  Company  is  a  financial
intermediary  that,  along with  traditional  banking,  offers a broad  range of
services including 24-hour, 7-day-a-week online banking and bill paying services
through InterBank.  Customers can also do their stock trading,  obtain insurance
services  and apply for a loan  through  the Bank's web site.  Mutual  Funds and
Annuities are offered through the Company's  Investment  Services  Program.  The
Interchange  Bank-Line Call Center  enables  customers to open new accounts over
the  telephone;  and  customers  can do  basic  banking  transactions  over  the
telephone with Interchange Bank-Line.  The Business Class Banking Account offers
checking with a variety of extra services including Interbanking - a proprietary
product, which allows the business customer to do routine business banking right
from their office PC. And 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 is  headquartered  in Saddle  Brook,  New Jersey and has 17 branch
offices located in Elmwood Park,  Franklin Lakes,  Garfield,  Hillsdale,  Little
Ferry,  Lodi,  Montvale,  Oakland,  Paramus,  Park  Ridge,  Ramsey,  River Edge,
Rochelle Park, Saddle Brook (2), Waldwick and Washington Township.


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     Further  information  about the Bank,  its core  values and focus,  and its
products and  services can be found on our web site at  www.interchangebank.com.
Our web site also has a direct link to the NASDAQ  Stock Market that enables you
to keep  informed  of the daily  quotes and market  activity  for the  Company's
stock, which trades under the symbol IFCJ.

     This release contains certain forward-looking statements within the meaning
of the  Private  Securities  Litigation  Reform  Act of  1995.  In  addition  to
discussing   historical   information,   certain   statements   included  in  or
incorporated  into this report  relate to the  financial  condition,  results of
operations and business of the Company which are not historical facts, but which
are  "forward-looking  statements"  within the meaning of the Private Securities
Litigation  Reform  Act of 1995.  When  used  herein,  the  words  "anticipate,"
"believe,"  "estimate,"  "expect,"  "will"  and other  similar  expressions  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.  These  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, and (vi) 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.


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                                    SIGNATURE

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned  hereunto  duly  authorized.

Dated:  December 28, 2001          Interchange Financial Services Corporation


                         By:      /s/ Anthony Labozzetta
                                  --------------------------------------------
                                  Anthony Labozzetta
                                  Executive Vice President & CFO































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