8-K

              UNITED STATES 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 (date of earliest event reported): July 14, 2005


                  INTERCHANGE FINANCIAL SERVICES CORPORATION
            _____________________________________________________
            (Exact name of registrant as specified in its charter)


                                   New Jersey
                                  ____________
                 (State or other Jurisdiction of Incorporation)

          1-10518                                      22-2553159
 ________________________                  __________________________________
 (Commission File Number)                 (I.R.S. Employer Identification No.)

             Park 80 West/Plaza Two, Saddle Brook, N.J.    07663
             ____________________________________________________
              (Address of principal executive offices) (Zip Code)

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

                                   Not Applicable
______________________________________________________________________________
            (Former name or former address, if changed since last report.)

Check the  appropriate  box below if the Form 8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

  [X ]  Written communications pursuant to Rule 425 under the Securities Act
        (17 CFR 230.425)

  [  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act
        (17 CFR 240.14a-12)

  [  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the
        Exchange Act (17 CFR 240.14d-2(b))

  [  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the
        Exchange Act (17 CFR 240.13e-4(c))




Item 8.01.  Other Events

     On July 14, 2005,  Franklin Bank  ("Franklin")  sent to the shareholders of
Franklin a letter  announcing  that on June 23,  2005 they have  entered  into a
definitive   agreement   with   Interchange   Financial   Services   Corporation
("Interchange")  that  provides  for  the  merger  of  Franklin  with  and  into
Interchange Bank, a wholly-owned subsidiary of Interchange.

     A copy of the Letter to  Shareholders  announcing the definitive  agreement
between Interchange and Franklin is attached hereto as Exhibit 99.1.


Item 9.01.  Financial Statement and Exhibits

(c)    Exhibits

99.1   Letter to Shareholders dated July 14, 2005.





                                    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.

Date: July 14, 2005               Interchange Financial Services Corporation


                                  By:   /s/ Charles T. Field
                                        _________________________
                                  Name: Charles T. Field
                                  Title:SVP & Chief Financial Officer




                                 EXHIBIT INDEX


EXHIBIT NUMBER     DESCRIPTION

99.1               Letter to Shareholders dated July 14, 2005.

EX-99

                           [FRANKLIN BANK LETTERHEAD]


                                    July 14, 2005

Dear Shareholder:

     In case  you  have not seen the  news,  we  wanted  to share  with you some
exciting developments regarding your Bank. On Thursday, June 23, we entered into
a definitive agreement with Interchange Financial Services Corporation of Saddle
Brook, New Jersey,  pursuant to which Interchange Financial Services Corporation
will acquire  Franklin Bank and merge Franklin Bank into  Interchange  Bank, the
banking subsidiary of Interchange Financial Services Corporation . A copy of the
press release issued Friday, June 24 is attached for your review.

     We are very  enthusiastic  about  this  opportunity  for our  shareholders,
employees  and  customers.  Your board of directors  believes  that joining with
Interchange  will provide  competitive  value for our  shareholders  and greater
convenience and flexibility for our customers with service  provided by familiar
faces.

     Our shareholders will be asked to approve the definitive agreement. In this
regard, we will be sending to you a proxy  statement-prospectus  containing more
detailed information about the proposed transaction after it has been filed with
and declared effective by the SEC. We urge you to carefully read the information
provided in the proxy statement-prospectus promptly upon receiving your package.

     We thank you for your support, and look forward to continuing to serve you.


                                                Very truly yours,


                  /s/ Salvatore Cocco, Jr.           /s/ Thomas Lupo
                  Salvatore Cocco, Jr.               Thomas Lupo
                  Chairman of the Board              President and CEO




                        ****************************

Forward Looking Statements:  This document contains forward-looking  statements.
Such  statements,  which  are based on the  currents  assumptions,  beliefs  and
expectations   of  management   and  describe   future  plans,   strategies  and
expectations,  are generally identified by words such as "believes',  "expects",
"anticipates",  "estimates", "intends", "plans", "targets", "projects" and other
similar  expressions.  Management's  ability  to  predict  results or the actual
effect of plans and strategies is inherently  uncertain,  and actual results may
differ from those set forth in the forward looking statements.

Additional Information and Where to Find It:  The proposed  transaction  will be
submitted  to  Franklin  Bank's  Shareholders  for  their   consideration,   and
Interchange Financial Services Corporation will file with the SEC a registration
statement on Form S-4, which will include a proxy statement of Franklin Bank and
a prospectus of Interchange  Financial  Services  Corporation , as well as other
relevant documents concerning the proposed  transaction.  Shareholders are urged
to read the registration statement and the proxy statement-prospectus  regarding
the  proposed  transaction  when it  becomes  available  and any other  relevant
documents  filed with the SEC, as well as any amendments or supplements to those
documents,  because they will contain important information. You will be able to
obtain a free copy of the proxy  statement-prospectus,  as well as other filings
containing information about Interchange Financial Services Corporation,  at the
SEC's    Internet    site    (http://www.sec.gov).    Copies    of   the   proxy
statement-prospectus  and the SEC filings that will be incorporated by reference
in the proxy  statement-prospectus  can also be obtained,  without charge,  from
Franklin Bank by directing a request to:  Franklin  Bank,  277 Franklin  Avenue,
Nutley, New Jersey 07110,  Attention:  Corporate Secretary,  (973-667-9595);  or
from Interchange  Financial  Services  Corporation by directing such request to:
Interchange  Financial  Services  Corporation,  Park 80 West,  Plaza II,  Saddle
Brook, New Jersey 07663, Attention: Georgianna Hutter (201-703-2265).

EX-99

Business Wire
June 24, 2005 08:50 AM US Eastern Timezone

Interchange Financial Services Corporation and Franklin Bank Announce Merger
Agreement

SADDLE BROOK, N.J.--(BUSINESS WIRE)--June 24, 2005--Interchange Financial
Services Corporation (NASDAQ:IFCJ) and Franklin Bank announced today that they
have entered into a definitive agreement in which Interchange Financial Services
Corporation ("Interchange") will acquire Franklin Bank ("Franklin") in a
transaction valued at $24.8 million based on Interchange's closing stock price
as of June 23, 2005. The acquisition of Franklin will be accomplished through a
merger of Franklin with and into Interchange Bank, a wholly-owned subsidiary of
Interchange. Interchange's acquisition of Franklin represents Interchange's
first expansion into counties contiguous with Bergen County, Interchange's
primary market area, and is intended to further enhance Interchange's presence
in northern New Jersey.

"Franklin allows us to spring-board into Essex County and provides us with a
loyal customer and employee base," stated Anthony Abbate, president and CEO of
Interchange. "Just as important, four directors have agreed to serve on the
Essex County Advisory Board which we will establish to assist in growing our
franchise in the adjacent markets."

"This acquisition fits neatly into our strategic plan and we believe it will
allow us, with the assistance of the Essex County Advisory Board, to replicate
our Bergen County success," Abbate added, "Franklin Bank began operations in
2000 and was profitable by 2003 due to its sound banking fundamentals and
dedication to providing exceptional customer service."

"Interchange is an outstanding business partner for Franklin Bank," explained
Salvatore Cocco Jr., Chairman of the Board of Franklin Bank. "It was important
for us not only to provide competitive value for our shareholders, but also to
affiliate with a community bank that believes in the same standards of service
excellence that we have delivered. This transaction will provide our customers
with greater flexibility and more banking locations to service their business."
President & CEO Tom Lupo added, "We believe our combination with Interchange
will only enhance future prospects for our current and future customers and the
communities we serve."

Under the terms of the agreement, the total consideration to be received by
Franklin shareholders in the merger is fixed at 1,323,575 shares of the common
stock of Interchange. Based on the price of $17.80 for Interchange common stock
prior to today's announcement, the transaction represents total consideration of
approximately $24.8 million, including approximately $1.2 million for the cash
payment for option holders. The definitive agreement provides each Franklin
shareholder will receive 1.2264 Interchange shares for each Franklin share,
subject to adjustments, equating to approximately $21.83 for each share of
Franklin common stock held at closing, based upon the closing price of June 23,
2005. The total consideration value at closing may increase or decrease
depending upon the average per share price of Interchange common stock for a
ten-day period prior to closing.

Interchange expects to realize cost savings equal to approximately 35% of
Franklin's annual non-interest expenses in the first full year of combined
operations. The transaction is expected to be accretive to Interchange's
earnings in the first year of combined operations. The transaction has been
approved by the Board of Directors of both companies and is expected to be
completed before the end of the year. The consummation of the acquisition is
conditioned upon, among other things, the receipt of all necessary regulatory
approvals and the approval of



Franklin's  shareholders.  Each of the  directors of  Franklin,  who hold in the
aggregate  approximately  37.6% of the  fully-diluted  outstanding  shares,  has
agreed to vote in favor of the acquisition.

About Interchange Bank

Headquartered in Saddle Brook, NJ, Interchange Bank is one of Bergen County's
largest independent commercial banks and a wholly owned subsidiary of
Interchange Financial Services Corporation (NASDAQ:IFCJ). A thought leader in
the industry, the Bank was among the first to implement a broad range of
innovative services, including 24-hour, 7-day-a-week online banking and bill
paying services, online stock trading, and the ability to apply for a loan
online with an instant credit decision. Mutual funds and annuities are offered
by ICBA Financial Services, through the Bank's investment department. With $1.5
billion in assets and 29 branches, the Bank focuses its efforts on the local
communities from which it derives deposits and generates loans. Through
Interchange Bank's subsidiary, Interchange Capital Company, L.L.C., cost
effective equipment leasing solutions are available to small-and-middle market
companies. For additional information, please visit the company's Web site at
www.interchangebank.com.

About Franklin Bank

Franklin is a New Jersey state bank which conducts traditional commercial
banking business, accepting deposits from the general public, including
individuals, businesses, non-profit organizations and governmental units.
Franklin originates commercial loans, consumer loans and both residential and
commercial real estate loans. As of March 31, 2005, Franklin Bank had total
assets of approximately $81.0 million. Franklin is headquartered in Nutley,
Essex County, New Jersey.

Forward Looking Statements

This document contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements include, but
are not limited to, (i) statements about the benefits of the acquisition of
Franklin by Interchange, including future financial and operating results, cost
savings, enhanced revenues, and accretion to reported earnings that may be
realized from the merger; (ii) statements with respect to Interchange's and
Franklin's plans, objectives, expectations and intentions and other statements
that are not historical facts; and (iii) other statements identified by words
such as "believes," "expects," "anticipates," "estimates," "intends," "plans,"
"targets," "projects" and similar expressions. These statements are based upon
the current beliefs and expectations of Interchange's and Franklin's management
and are subject to significant risks and uncertainties. Actual results may
differ from those set forth in the forward-looking statements.

The following factors, among others, could cause actual results to differ
materially from the anticipated results or other expectations expressed in the
forward-looking statements: (1) the risk that the businesses of Interchange and
Franklin will not be integrated successfully or such integration may be more
difficult, time-consuming or costly than expected; (2) expected revenue
synergies and cost savings from the merger may not be fully realized or realized
within the expected time frame; (3) revenues following the merger may be lower
than expected; (4) deposit attrition, operating costs, customer loss and
business disruption following the merger, including, without limitation,
difficulties in maintaining relationships with employees, may be greater than
expected; (5) the ability to obtain governmental approvals of the merger on the
proposed terms and schedule; (6) the failure of Franklin's stockholders to
approve the transaction; (7) competitive pressures among depository and other
financial institutions may increase significantly and have an effect on pricing,
spending, third-party relationships and revenues; (8) the strength of the United
States economy in general and the strength of the local economies in which the
combined company will conduct operations may be different than



expected  resulting in, among other things, a deterioration in credit quality or
a reduced  demand for credit,  including  the  resultant  effect on the combined
company's loan portfolio and allowance for loan losses;  (9) changes in the U.S.
and foreign legal and regulatory  framework;  and (10) adverse conditions in the
stock  market,  the public  debt  market and other  capital  markets  (including
changes in interest rate  conditions)  and the impact of such  conditions on the
combined company's capital markets and asset management  activities.  Additional
factors that could cause  Interchange's  results to differ materially from those
described in the forward-looking  statements can be found in Interchange's (such
as Annual  Reports on Form  10-K,  Quarterly  Reports  on Form 10-Q and  Current
Reports on Form 8-K) filed  with the  Securities  and  Exchange  Commission  and
available  at the  SEC's  Internet  site  (http://www.sec.gov).  All  subsequent
written and oral forward-looking  statements concerning the proposed transaction
or other matters attributable to Interchange or Franklin or any person acting on
their  behalf  are  expressly  qualified  in their  entirety  by the  cautionary
statements  above.  Interchange  and Franklin do not undertake any obligation to
update any  forward-looking  statement to reflect  circumstances  or events that
occur after the date the forward-looking statements are made.

The proposed transaction will be submitted to Franklin's stockholders for their
consideration, and Interchange will file with the SEC a registration statement
on form S-4, which will include a proxy statement of Franklin and a prospectus
of Interchange, as well as other relevant documents concerning the proposed
transaction. Stockholders are urged to read the registration statement and the
proxy statement/prospectus regarding the proposed transaction when it becomes
available and any other relevant documents filed with the SEC, as well as any
amendments or supplements to those documents, because they will contain
important information. You will be able to obtain a free copy of the proxy
statement/prospectus, as well as other filings containing information about
Interchange and Franklin, at the SEC's Internet site (http://www.sec.gov).
Copies of the proxy statement/prospectus and the SEC filings that will be
incorporated by reference in the proxy statement/prospectus can also be
obtained, without charge, by directing a request to Franklin Bank, Corporate
Secretary, 277 Franklin Avenue, Nutley, New Jersey 07110 (973-667-9595).

Interchange and Franklin, and their respective directors and executive officers,
may be deemed to be participants in the solicitation of proxies from the
stockholders of Franklin in connection with the merger. Information about the
directors and executive officers of Interchange and their ownership of
Interchange common stock is set forth in the proxy statement, dated March 30,
2005, for Interchange's 2005 annual meeting of stockholders, as filed with the
SEC on a Schedule 14A. Additional information regarding the interests of those
participants may be obtained by reading the proxy statement/prospectus regarding
the proposed transaction when it becomes available.


Keating & Co.
Vicki Banner, 973-666-1100
vbanner@keating.com