-----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, BVQdobAsDvFE4I0nNjWSK93j2yw3GZiRMg4RIqGrBmYVaKxmkALVyLaDMSzeHBWS NOPRQN6rCy/VTvDteEa3PA== 0000891092-04-001878.txt : 20040423 0000891092-04-001878.hdr.sgml : 20040423 20040423114038 ACCESSION NUMBER: 0000891092-04-001878 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040423 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040423 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10518 FILM NUMBER: 04749891 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: PLAZA 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 8-K 1 e17599_8k.txt FORM 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): April 23, 2004 INTERCHANGE FINANCIAL SERVICES CORPORATION (Exact name of registrant as specified in its charter) New Jersey 1-10518 22-2553159 - ------------------------------- ---------------------- ---------------- (State or other jurisdiction of (Commission File Number) (I.R.S. Employer incorporation or organization) notification 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 Not Applicable - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report.) Item 5. Other Events On April 21, 2004, Interchange Financial Services Corporation issued a press release reporting earnings for the first quarter period ending March 31, 2004. A copy of that release is furnished as Exhibit 99.1 to this Report. Item 7. Financial Statement and Exhibits (c) Exhibits 99.1 Press Release dated April 21, 2004 of the Registrant. SIGNATURES 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: April 23, 2004 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 Press Release, dated April 21, 2004, of the Registrant EX-99.1 3 e17599ex99_1.txt PRESS RELEASE Exhibit 99.1 Business Wire April 21, 2004 04:01 PM US Eastern Timezone Interchange Financial Services Corporation Reports 19% Increase in Net Income in first quarter for 2004 SADDLE BROOK, N.J.--(BUSINESS WIRE)--April 21, 2004--Interchange Financial Services Corporation (the "Company") (Nasdaq:IFCJ), holding company of Bergen County's fast growing community bank, Interchange Bank (the "Bank"), today reported first quarter 2004 net income of approximately $4.0 million, up 18.8% from $3.4 million for the same period in 2003. For the quarter, average diluted shares outstanding increased approximately 30.7% as compared to the same period in 2003; diluted earnings per share were $0.31, a decline of 8.8% as compared to $0.34 for the same period in 2003. The decline in earnings per share was a result of a compression in net interest margin from the first quarter 2003 and an increase in diluted shares outstanding as a result of the Bridge View Bancorp ("Bridge View") acquisition. "2004 will be a challenging year for the community banking industry due to the escalation in bank mergers and the resultant competition. Through our aggressive marketing campaign in Bergen County, we will increase our level of relationship building with our customers which will, in turn, increase our position in the marketplace. We are well situated to stay ahead of the competition. Our success in providing value to our customers through our diverse product offerings will assist us in enhancing our shareholders investment," stated Anthony Abbate, President and Chief Executive Officer. Commenting further on the Company's performance, Mr. Abbate stated, "Although on a year over year basis the Company experienced compression in net interest margin, on a linked quarter basis we began to see improvement in our net interest margin. The improvement in net interest margin was the result of a change in our asset mix through an increase in loans. We believe that this trend provides us with the foundation to meet the high goals and expectations we have set for our employees and the Company." The first quarter 2004 results include Bridge View's operations which was acquired on April 30, 2003. At that time, Bridge View had total assets of approximately $291 million, $184 million of loans and $259 million of deposits. The Company declared a quarterly cash dividend of $0.125 per common share, for the second quarter of 2004. This dividend represents $0.50 per share on an annualized basis and an increase of 14% over the prior year. Return on Average Assets and Equity The Company generated a 1.16% return on average assets ("ROA") and an 11.13% return on average stockholders' equity ("ROE") for the first quarter 2004 versus 1.42% and 16.38%, respectively, for the same period in 2003. The change in ROA for the quarter was a result of a decline in net interest margin. ROE declined principally due to an increase in equity as a result of the acquisition of Bridge View and, to a lesser extent, compression in net interest margin. Net Interest Income For the first quarter, net interest income, on a taxable equivalent basis, increased $2.7 million, or 27.4% from the same period in 2003. The growth for the quarter as compared to 2003 was attributed to an increase in average interest earning assets of $353 million primarily attributed to the Bridge View acquisition. The improvement in net interest income for the quarter was tempered by a decline in the Company's net interest margin. Non-Interest Income For the first quarter, non-interest income was $2.5 million representing an increase of $671 thousand or 36% as compared to the same period in 2003. Excluding net gains on sales of securities, non-interest income increased $157 thousand or 8.5% for the quarter. The improvement as compared to the same period last year was largely attributable to growth in service charges on deposits. Net gains on sale of securities were approximately $514 thousand for the quarter, there were no such gains in the same period in the prior year. The gains on sale of securities were a result of securities being sold to fund loan growth. Non-Interest Expense Non-interest expense for the quarter amounted to $8.9 million, an increase of $2.4 million, or 37%, as compared to the same quarter in 2003. The increase for the reporting period was due largely to the additional operating costs resulting from the merger with Bridge View. Also contributing to non-interest expense growth for the quarter as compared to the same period in 2003, were normal increases related to salaries, benefits and occupancy expenses. Total Loans As of March 31, 2004, total loans were approximately $831.3 million, an increase of $34.7 million, or 4.4%, as compared to December 31, 2003. The Company's non-performing assets were $8.7 million at March 31, 2004 as compared to $8.8 million at December 31, 2003. Non-performing assets represented 1.04% and 1.10%, of the total loans and foreclosed assets outstanding at the end of the respective periods. The Allowance for Loan and Lease Losses totaled $9.6 million at March 31, 2004, and represented 113.8% of non-performing loans and leases and 1.16% of total loans and leases. Post-Earnings Conference Call The Bank will hold a conference call on Thursday, April 22, 2004, at 10 a.m. (Eastern Time) to discuss the financial results for its first quarter ending March 31, 2004. This web-cast can be accessed through the Bank's website, www.interchangebank.com on the investor relations page, as well as the web address www.companyboardroom.com. The replay will begin shortly after the completion of the live call and will be available for approximately two weeks. About Interchange Bank Headquartered in Saddle Brook, NJ, Interchange Bank is one of Bergen County's largest independent commercial bank 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 through the Bank's investment services. With $1.4 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. 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) losses in the Company's leasing subsidiary exceeding management's expectations, (vii) expected revenue synergies from the Company's acquisition of Bridge View may not be fully realized or realized within the expected time frame; (viii) revenues following the Company's acquisition of Bridge View may be lower than expected; (ix) deposit attrition, operating costs, customer loss and business disruption following the Company's acquisition of Bridge View, including, without limitation, difficulties in maintaining relationships with employees, may be greater than expected and (x) other risks detailed in reports filed by the Company with the Securities and Exchange Commission. Readers should not place undue expectations on any forward-looking statements. We are not promising to make any public announcement when we consider forward-looking statements in this document to be no longer accurate, whether as a result of new information, what actually happens in the future or for any other reason. INTERCHANGE FINANCIAL SERVICES CORPORATION CONSOLIDATED FINANCIAL HIGHLIGHTS CONSOLIDATED BALANCE SHEETS (dollars in thousands) March 31, December 31, 2004 2003 Change ----------- ----------- ------ (unaudited) Assets Cash and due from banks $ 35,488 $ 31,423 12.9% Interest earning deposits 11 12 (8.3) Federal funds sold 20,700 -- -- Securities 388,155 452,060 (14.1) Loans and leases Commercial 519,962 510,667 1.8 Commercial Lease Financing 29,737 28,427 4.6 Consumer 281,587 257,487 9.4 ----------- ----------- ----- 831,286 796,581 4.4 Allowance for loan and lease losses (9,635) (9,641) (0.1) ----------- ----------- ----- Net loans 821,651 786,940 4.4 Premises and equipment, net 20,217 20,343 (0.6) Foreclosed real estate and other repossesed assets 219 230 (4.8) Bank Owned Life Insurance 22,114 21,853 1.2 Goodwill and other intangible assets 59,991 60,089 (0.2) Accrued interest receivable and other assets 10,219 12,922 (20.9) ----------- ----------- ----- Total assets $ 1,378,765 $ 1,385,872 (0.5) =========== =========== ===== Liabilities Deposits $ 1,166,126 $ 1,156,798 0.8 Borrowings 53,242 72,109 (26.2) Accrued interest payable and other liabilities 14,579 13,772 5.9 ----------- ----------- ----- Total liabilities 1,233,947 1,242,679 (0.7) ----------- ----------- ----- Total stockholders' equity 144,818 143,193 1.1 ----------- ----------- ----- Total liabilities and stockholders' equity $ 1,378,765 $ 1,385,872 (0.5)% =========== =========== ===== Consolidated Income Statements (dollars in thousands) Three Months Ended March 31, ------------------------------ 2004 2003 Change ------- ------- ------ (unaudited) (unaudited) Interest income: Interest and fees on loans $12,707 $10,857 17.0% Interest on federal funds sold 6 63 (90.5) Interest on interest earning deposits -- 12 (100.0) Interest and dividends on securities: Taxable interest income 2,650 2,283 16.1 Interest income exempt from federal income taxes 269 179 50.3 Dividends 39 56 (30.4) ------- ------- ----- Total interest income 15,671 13,450 16.5 ------- ------- ----- Interest expense: Interest on deposits 2,827 3,407 (17.0) Interest on borrowings 310 191 62.3 ------- ------- ----- Total interest expense 3,137 3,598 (12.8) ------- ------- ----- Net interest income 12,534 9,852 27.2 Provision for loan and lease losses 375 265 41.5 ------- ------- ----- Net interest income after provision for loan & lease losses 12,159 9,587 26.8 ------- ------- ----- Non-interest income: Service fees on deposit accounts 842 653 28.9 Net gain on sale of securities 514 -- -- Other 1,159 1,191 (2.7) ------- ------- ----- Total non-interest income 2,515 1,844 36.4 ------- ------- ----- Non-interest expense: Salaries and benefits 4,848 3,628 33.6 Net occupancy 1,365 928 47.1 Furniture and equipment 334 253 32.0 Advertising and promotion 393 315 24.8 Other 1,977 1,403 40.9 ------- ------- ----- Total non-interest expense 8,917 6,527 36.6 ------- ------- ----- Income before income taxes 5,757 4,904 17.4 Income taxes 1,771 1,548 14.4 ------- ------- ----- Net income $ 3,986 $ 3,356 18.8% ======= ======= ===== Basic earnings per common share $ 0.31 $ 0.34 (8.8)% Diluted earnings per common share $ 0.31 $ 0.34 (8.8)% Analysis of Net Interest Income for the quarter ended March 31, (dollars in thousands) 2004 -------------------------------- (unaudited) Average Average Balance Interest Rate ---------- -------- ------- Assets Interest earning assets: Loans (1) $ 806,387 $ 12,748 6.32% Taxable securities (4) 397,591 2,689 2.71 Tax-exempt securities (2) (4) 28,898 388 5.37 Interest earning deposits 12 -- -- Federal funds sold 2,507 6 0.96 ----------- -------- ---- Total interest-earning assets 1,235,395 15,831 5.13 -------- Non-interest earning assets: Cash and due from banks 35,547 Allowance for loan and lease losses (9,636) Other assets 118,933 ----------- Total assets $ 1,380,239 =========== Liabilities and stockholders' equity Interest-bearing liabilities Interest bearing deposits $ 933,522 2,827 1.21 Borrowings 65,364 310 1.90 ----------- -------- ---- Total interest-bearing liabilities 998,886 3,137 1.26 -------- Non-interest bearing liabilities Demand deposits 224,100 Other liabilities 14,013 ----------- Total liabilities (3) 1,236,999 Stockholders' equity 143,240 ----------- Total liabilities and stockholders' equity $ 1,380,239 =========== Net interest income (tax-equivalent basis) 12,694 3.87 Tax-equivalent basis adjustment (160) -------- Net interest income $ 12,534 ======== Net interest income as a percent of interest-earning assets (tax-equivalent basis) 4.11% Analysis of Net Interest Income for the quarter ended March 31, (dollars in thousands) 2003 -------------------------------- (unaudited) Average Average Balance Interest Rate ---------- -------- ------- Assets Interest earning assets: Loans (1) $ 614,301 $ 10,897 7.10% Taxable securities (4) 221,386 2,339 4.23 Tax-exempt securities (2)(4) 20,940 247 4.72 Interest earning deposits 4,333 12 1.11 Federal funds sold 21,585 63 1.17 --------- -------- ---- Total interest-earning assets 882,545 13,558 6.14 -------- Non-interest earning assets: Cash and due from banks 22,167 Allowance for loan and lease losses (7,207) Other assets 47,958 --------- Total assets $ 945,463 ========= Liabilities and stockholders' equity Interest-bearing liabilities Interest bearing deposits $ 705,960 3,407 1.93 Borrowings 26,229 191 2.90 --------- -------- ---- Total interest-bearing liabilities 732,189 3,598 1.97 -------- Non-interest bearing liabilities Demand deposits 118,779 Other liabilities 12,521 --------- Total liabilities (3) 863,489 Stockholders' equity 81,974 --------- Total liabilities and stockholders' equity $ 945,463 ========= Net interest income (tax-equivalent basis) 9,960 4.17 Tax-equivalent basis adjustment (108) -------- Net interest income $ 9,852 ======== Net interest income as a percent of interest-earning assets (tax-equivalent basis) 4.51% (1) Nonaccrual loans and any related interest recorded have been included in computing the average rate earned on the loan portfolio. When applicable, tax exempt loans are computed on a fully taxable equivalent basis using the corporate federal tax rate of 34%. (2) Computed on a fully taxable equivalent basis using the corporate federal tax rate of 34%. (3) All deposits are in domestic bank offices. (4) The average balances are based on historical cost and do not reflect unrealized gains or losses. STATEMENT OF CONDITION - SELECTED DATA (Period Ending) March 31, December 31, 3 month March 31, 12 month 2004 2003 Change 2003 Change ---------- ---------- -------- ---------- -------- (unaudited) (unaudited) Loans $ 831,286 $ 796,581 4.36% $ 606,739 37.01% Securities 388,155 452,060 (14.14) 249,813 55.38 Earning assets 1,240,152 1,248,653 (0.68) 903,352 37.28 Total Assets 1,378,765 1,385,872 (0.51) 962,867 43.19 Deposits 1,166,126 1,156,798 0.81 840,915 38.67 Borrowings 53,242 72,109 (26.16) 25,956 105.12 Shareholders' equity 144,818 143,193 1.13 83,442 73.56 Leverage ratio 6.21% 6.24% 8.30% Risk weighted ratios: Tier 1 9.23 9.34 12.32 Total 10.32 10.46 13.64 Asset quality Quarter ended ----------------------------------------------------------- Net charge offs $ 381 $ 249 53% $ 246 55% Loan loss allowance (9,635) (9,641) (0) (7,226) 33 Nonperforming loans 8,465 8,570 (1) 5,013 69 Restructured Loans -- -- -- -- -- Foreclosed real estate & other repossessed assets 219 230 (5) 197 11 ---------- ---------- ----- ---------- ------ Total Nonperforming assets ("NPA") $ 8,684 $ 8,800 (1.3) $ 5,210 66.7 ========== ========== ===== ========== ====== Ratio's - ------- Net charge offs as% of average loans (annualized) 0.19% 0.13% 0.16% Loan loss allowance as% of period-end loans 1.16 1.21 1.19 Loan loss allowance as% of nonperforming loans 113.82 112.50 144.15 NPA's as a percent of loans + foreclosed assets 1.04 1.10 0.86 PROFITABILITY (dollars in thousands, except per share data) Quarter ended ----------------------------------------------------------- March 31, December 31, 3 month March 31, 12 month 2004 2003 Change 2003 Change ---------- ---------- -------- ---------- -------- (unaudited) (unaudited) (unaudited) Net interest income (taxable equivalent) $ 12,694 $ 12,499 1.56% $ 9,960 27.45% Provision for loan and lease losses 375 535 (29.91) 265 41.51 Net gain on sale of securities 514 273 88.28 -- -- Non-interest income, excluding net gain on sale of securities 2,001 2,549 (21.50) 1,844 8.51 Non-interest expense 8,917 8,259 7.97 6,527 36.62 Net income 3,986 4,312 (7.56) 3,356 18.77 Basic earnings per common share 0.31 0.34 (8.82)% 0.34 (8.82)% Diluted earnings per common share 0.31 0.33 (6.06) 0.34 (8.82) Dividends declared per common share 0.13 0.11 13.64 0.11 13.64 Special dividends declared per common share -- -- -- -- -- Book value per common share - end of period $ 11.37 $ 11.18 1.70 $ 8.48 34.08 Shares outstanding - end of period 12,740 12,811 (0.55) 9,840 29.47 Weighted average shares outstanding Basic 12,767 12,804 (0.29) 9,829 29.89 Diluted 13,028 13,043 (0.12) 9,968 30.70 Return on average assets 1.16% 1.26% 1.42% Return on average equity 11.13 12.16 16.38 Net interest margin 4.11 4.07 4.51 Contacts: Keating & Co. Vicki Banner/Lauren Mackiel 973-966-1100 vbanner@keatingco.com lmackiel@keatingco.com -----END PRIVACY-ENHANCED MESSAGE-----