UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003______________
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission file number 0-14294
Greater Community Bancorp
(Exact name of Registrant as specified in its charter)
NEW JERSEY 22-2545165
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
55 Union Boulevard, Totowa, New Jersey 07512
(Address of principal executive offices)
(973) 942-1111
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES |X| NO |_|
Indicate by check mark whether registrant is an accelerated filer (as defined by
Rule 12b-2 of the Exchange Act. YES |X| NO |_|
Indicate the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: Common stock $0.50 par value -
7,031,245 shares at May 7, 2003.
Page 1
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
INDEX
PAGE
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Consolidated Balance Sheet at
March 31, 2003 (Unaudited) and December 31, 2002 ............ 3
Consolidated Statements of Income (Unaudited)
Three months ended
March 31, 2003 and 2002 ..................................... 4
Consolidated Statements of Changes in Shareholders'
Equity (Unaudited)
Three Months ended March 31, 2003 and 2002 .................. 5
Consolidated Statements of Cash Flows (Unaudited)
Three months ended March 31, 2003 and 2002 .................. 6
Notes to Consolidated Financial Statements (unaudited) ......... 7
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations ......................... 10
Item 3 - Quantitative and Qualitative Changes Regarding Market Risk ..... 19
Item 4 - Controls and Procedures ........................................ 19
PART II - OTHER INFORMATION
Items 1 through 6 ....................................................... 20
Signatures .............................................................. 22
Certifications .......................................................... 23
Exhibit Index ........................................................... E-1
Page 2
PART 1 - FINANCIAL INFORMATION
Item 1 - Financial Statements
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in thousands, except share data)
March 31, December 31,
2003 2002
--------- ---------
ASSETS (Unaudited)
CASH AND DUE FROM BANKS-Non-interest-bearing $ 24,051 $ 19,433
FEDERAL FUNDS SOLD 21,650 17,700
--------- ---------
Total cash and cash equivalents 45,701 37,133
DUE FROM BANKS - Interest-bearing 12,088 9,439
INVESTMENT SECURITIES:
Available-for-sale, at fair value 195,631 186,875
Held-to-maturity, at amortized cost
(Fair values $5,209 and $5,327) 5,208 5,320
--------- ---------
200,839 192,195
LOANS 439,603 444,095
Less - Allowance for loan and lease losses (7,599) (7,298)
Unearned income (757) (753)
--------- ---------
Net loans 431,247 436,044
PREMISES AND EQUIPMENT, net 7,751 7,850
ACCRUED INTEREST RECEIVABLE 3,390 3,131
BANK OWNED LIFE INSURANCE 12,601 12,448
GOODWILL AND INTANGIBLE ASSETS 11,574 11,574
OTHER ASSETS 10,982 10,053
--------- ---------
Total assets $ 736,173 $ 719,867
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
DEPOSITS:
Non-interest-bearing $ 142,519 $ 138,679
Interest-bearing 149,225 150,600
Savings 106,987 96,034
Time Deposits less than $100 124,027 121,539
Time Deposits $100 and over 37,177 37,191
--------- ---------
Total deposits 559,935 544,043
FHLB ADVANCES 80,000 80,000
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE 11,295 11,728
ACCRUED INTEREST PAYABLE 1,834 1,877
OTHER LIABILITIES 7,633 6,721
GUARANTEED PREFERRED BENEFICIAL INTEREST
IN THE COMPANY'S SUBORDINATED DEBT 24,000 24,000
--------- ---------
Total liabilities 684,697 668,369
--------- ---------
SHAREHOLDERS' EQUITY
Common Stock, par value $0.50 per share:
20,000,000 shares authorized, 7,028,817
and 7,021,102 shares outstanding 3,514 3,511
Additional paid-in capital 42,588 42,856
Retained earnings 2,655 1,721
Accumulated other comprehensive income 2,719 3,410
--------- ---------
Total shareholders' equity 51,476 51,498
--------- ---------
Total liabilities and shareholders' equity $ 736,173 $ 719,867
========= =========
(See notes to Condensed Consolidated Financial Statements)
Page 3
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(Unaudited)
Three Months
Ended March 31,
---------------
2003 2002
---- ----
INTEREST INCOME
Loans and leases, including fees $7,859 $7,897
Securities 1,826 1,965
Federal Funds sold and deposits with banks 139 257
------ --------
Total interest income 9,824 10,119
------ --------
INTEREST EXPENSE
Deposits 1,652 2,172
Short-term borrowings 1,113 1,110
Long-term borrowings 510 575
------ --------
Total interest expense 3,275 3,857
------ --------
NET INTEREST INCOME 6,549 6,262
PROVISION FOR LOAN AND LEASE LOSSES 316 221
------ --------
Net interest income after provision
for loan and lease losses 6,233 6,041
OTHER INCOME
Service charges on deposit accounts 620 624
Other commission and fees 154 154
Fee income on mortgage loans sold 138 --
Gains on sale of investment securities - AFS 289 319
Trading losses -- (9)
Gain on sale of leases 3 348
Gain on sale of assets -- 123
Bank owned life insurance 153 157
All other income 243 248
------ --------
Total other income 1,600 1,964
OTHER EXPENSES
Salaries and employee benefits 2,961 2,666
Occupancy and equipment 862 789
Regulatory, professional and other fees 565 458
Computer services 109 92
Office expense 302 315
Other operating expenses 691 645
------ --------
Total other expenses 5,490 4,965
------ --------
Income before provision for income taxes 2,343 3,040
------ --------
PROVISION FOR INCOME TAXES 704 946
------ --------
NET INCOME $1,639 $ 2,094
====== ========
WEIGHTED AVERAGE SHARES OUTSTANDING - Basic 7,037 7,038
====== ========
WEIGHTED AVERAGE SHARES OUTSTANDING - Diluted 7,477 7,403
====== ========
NET INCOME PER SHARE - Basic $ 0.23 $ 0.30
====== ========
NET INCOME PER SHARE - Diluted $ 0.22 $ 0.28
====== ========
(See notes to Condensed Consolidated Financial Statements)
Page 4
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS'
EQUITY AND COMPREHENSIVE INCOME
(in thousands, Unaudited)
Three Months ended March 31, 2003
Accumulated
Additional Other Total
Common Paid-in Retained Comprehensive Shareholders' Comprehensive
Stock Capital Earnings Income Equity Income
----------------------------------------------------------------------------------------------
Balance, January 1, 2003 $ 3,511 $ 42,856 $ 1,721 $3,410 $51,498
Net income 1,639 1,639 $ 1,639
Exercise of stock options 23 392 415
Cash dividends (705) (705)
Other comprehensive loss,
net of reclassification,
adjustments and taxes (691) (691) (691)
--------
Total Comprehensive income $ 948
========
Purchase and retirement of
treasury stock (20) (660) (680)
----------------------------------------------------------------------------
Balance, March 31, 2003 $ 3,514 $ 42,588 $ 2,655 $2,719 $51,476
============================================================================
Three Months ended March 31, 2002
Accumulated
Additional Other Total
Common Paid-in Retained Comprehensive Shareholders' Comprehensive
Stock Capital Earnings Income Equity Income
----------------------------------------------------------------------------------------------
Balance, January 1, 2002 $ 3,354 $ 38,040 $ 2,321 $2,397 $46,112
Net income 2,094 2,094 $ 2,094
Exercise of stock options 9 199 208
Cash dividends (563) (563)
Other comprehensive loss,
net of reclassification,
adjustments and taxes (211) (211) (211)
--------
Total Comprehensive income $ 1,883
========
Purchase and retirement of
treasury stock (11) (144) (155)
----------------------------------------------------------------------------
Balance, March 31, 2002 $ 3,352 $ 38,095 $ 3,852 $2,186 $47,485
============================================================================
(See notes to Consolidated Financial Statements)
Page 5
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Three Months Ended
March 31,
--------------------------------
2003 2002
--------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income 1,639 2,094
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 322 315
Amortization of discount on securities, net 726 205
Gains on sale of investment securities - AFS (289) (319)
Losses on sale of investment securities - trading account -- 9
Gain on sale of assets -- (123)
Provision for loan and lease losses 316 221
Increase in accrued interest receivable (259) (165)
Increase in other assets (1,082) (2,375)
Increase in accrued expenses and other liabilities 869 1,742
--------------------------------
Net cash provided by operating activities 2,242 1,604
--------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Available-for-sale securities
Purchases (47,359) (34,219)
Sales 209 9,094
Maturities and princial paydowns 36,941 17,991
Held-to-maturity securities
Maturities and principal paydowns 113 294
Net increase in interest bearing deposits with banks (2,649) (3,197)
Net decrease in loans 4,812 8,561
Capital expenditures, net (223) (674)
--------------------------------
Net cash used in investing activities (8,156) (2,150)
--------------------------------
CASH FLOW FROM FINANCING ACTIVITIES:
Net increase in deposit accounts 15,892 6,459
Decrease in repurchase agreements (433) (529)
Dividends paid (705) (563)
Proceeds from exercise of options 415 208
Purchase of treasury stock (680) (155)
Other, net (7) --
--------------------------------
Net cash provided by financing activities 14,482 5,420
--------------------------------
NET INCREASE IN CASH AND CASH EQUIVALENTS $ 8,568 $ 4,874
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 37,133 $ 46,997
--------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 45,701 $ 51,871
================================
(See notes to Condensed Consolidated Financial Statements)
Page 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
In the opinion of management, these unaudited condensed financial
statements contain all disclosures which are necessary to present fairly the
Company's consolidated financial position at March 31, 2003, the consolidated
results of operations for three months ended March 31, 2003 and 2002 and cash
flows for three months ended March 31, 2003 and 2002. The financial statements
reflect all adjustments (consisting solely of normal recurring adjustments)
which in the opinion of management are necessary in order to present fairly the
financial position and results of operations for the interim periods. Certain
information and footnote disclosure normally included in financial statements
under generally accepted accounting principles have been condensed or omitted
pursuant to the Securities and Exchange Commission rules and regulations. These
financial statements should be read in conjunction with the annual financial
statements and notes thereto included in Form 10-K for the fiscal year ended
December 31, 2002.
DIVIDEND
On March 18, 2003, the Company's Board of Directors declared a cash dividend of
10.0 cents ($.10) per share, payable on April 30, 2003 to shareholders of record
on April 15, 2003.
EARNINGS PER SHARE COMPUTATION
The Company's calculation of earnings per share in accordance with SFAS No. 128,
"Earnings Per Share", is as follows:
For the Quarter Ended March 31, 2003
-----------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
(In Thousands, except for per share data)
Basic EPS
Net income available to common stockholders ................... $1,639 7,037 $ 0.23
Effect of Dilutive Securities
Options ....................................................... -- 440 (0.01)
------ ----- ------
Diluted EPS
Net income available to common stockholders plus
assumed conversions ........................................... $1,639 7,477 $ 0.22
====== ===== ======
For the Quarter Ended March 31, 2002
-----------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
Basic EPS
Net income available to common stockholders ................... $2,094 7,038 $ 0.30
Effect of Dilutive Securities
Options ....................................................... -- 365 (0.02)
------ ----- ------
Diluted EPS
Net income available to common stockholders plus
assumed conversions ........................................... $2,094 7,403 $ 0.28
====== ===== ======
LOANS
The following table presents information related to loans which are on a
nonaccrual basis, loans which have been renegotiated to provide a reduction or
deferral of interest or principal for reasons related to the debtor's financial
difficulties and loans contractually past due ninety days or more as to interest
or principal payments.
Page 7
March 31, December 31,
2003 2002
--------- ------------
Nonaccrual loans and leases .......................................................... $3,012 $2,767
Renegotiated loans 284 295
------ ------
Total nonperforming loans and leases ............................................... $3,296 $3,062
====== ======
Loans past due 90 days and accruing .................................................. $ -- $ 587
====== ======
Gross interest income which would have been recorded under
original terms ....................................................................... $ 56 $ 135
====== ======
The balance of impaired loans was $2.7 and $2.5 million at March 31, 2003 and
December 31, 2002, respectively. The Bank Subsidiaries have identified a loan as
impaired when it is probable that interest and principal will not be collected
according to the contractual terms of the loan agreements. The allowance for
loan and lease losses associated with impaired loans was $1.1 million for both
dates.
STOCK OPTIONS
At March 31, 2003, the Company has four stock-based employee and director
compensation plans. The Company accounts for these plans under the recognition
and measurement principles of APB No. 25, "Accounting for Stock Issued to
Employees", and related interpretations. Stock-based employee and director
compensation costs are not reflected in net income, as all options granted under
these plans had an exercise price equal to the market value of the underlying
common stock on the date of grant. The following table illustrates the effect on
net income and earnings per share if the Company had applied the fair value
recognition provisions of SFAS No. 123 to stock-based employee and director
compensation.
Three Months Ended March 31,
---------------------------------
2003 2002
--------- ---------
Net income .................................... As reported $ 1,639 $ 2,094
Less: stock-based compensation costs determined
Under fair value-based method for all awards (64) (61)
--------- ---------
Pro forma $ 1,575 $ 2,033
========= =========
Earnings per share of common stock - basic As reported $ 0.23 $ 0.30
Pro forma $ 0.22 $ 0.29
Earnings per share of common stock-diluted As reported $ 0.22 $ 0.28
Pro forma $ 0.21 $ 0.27
The fair value of each option grant is estimated on the date of grant using the
Black-Scholes options-pricing model with the following weighted-average
assumptions used for grants in 2002: dividend yields of 2.5%; expected
volatility of 34%; risk-free interest rates of 5.82%; and expected lives of five
and ten years. The Company did not grant options during the three month period
ended March 31, 2003.
NEW ACCOUNTING PRONOUNCEMENTS
Off Balance Sheet Guarantees
The Company adopted FASB Interpretation 45 (FIN 45), Guarantor's Accounting and
Disclosure Requirements for Guarantees, including Indirect Guarantees of
Indebtedness of Others, on January 1, 2003. FIN 45 requires a guarantor entity,
at the inception of a guarantee covered by the measurement provisions of the
interpretation, to record a liability for the fair value of the obligation
undertaken in issuing the guarantee. The Company has issued financial and
performance letters of credit. Financial letters of credit require the Company
to make payment if the customer's financial condition deteriorates, as defined
in the agreements. Performance letters of credit require the Company to make
payments if the customer fails to perform certain non-financial contractual
obligations. The Company previously did not record a liability when guaranteeing
obligations unless it became probable that the Company would have to perform
Page 8
under the guarantee. FIN 45 applies prospectively to guarantees the Company
issues or modifies subsequent to December 31, 2002.
The Company defines the initial fair value of these letters of credit as the fee
received from the customer. The maximum potential undiscounted amount of
potential future payments of these letters of credit as of March 31, 2003 is
$2.9 million. Generally these letters of credit are good for a term of one year
at which time they are automatically renewed for the same term. Amounts due
under these letters of credit would be reduced by any proceeds that the Company
would be able to obtain in liquidating the collateral for the loans, which
varies depending on the customer.
Variable Interest Entities
In January 2003, the FASB issued FASB Interpretation 46 (FIN 46), Consolidation
of Variable Interest Entities. FIN 46 clarifies the application of Accounting
Research Bulletin 51, Consolidated Financial Statements, for certain entities
that do not have sufficient equity at risk for the entity to finance its
activities without additional subordinated financial support from other parties
or in which equity investors do not have the characteristics of a controlling
financial interest ("variable interest entities"). Variable interest entities
within the scope of FIN 46 will be required to be consolidated by their primary
beneficiary. The primary beneficiary of a variable interest entity is determined
to be the party that absorbs a majority of the entity's expected losses,
receives a majority of its expected returns, or both. FIN 46 applies immediately
to variable interest entities created after January 31, 2003, and to variable
interest entities in which an enterprise obtains an interest after that date. It
applies in the first fiscal year or interim period beginning after June 15,
2003, to variable interest entities in which an enterprise holds a variable
interest that it acquired before February 1, 2003. The Company is in the process
of determining what impact, if any, the adoption of the provisions of FIN 46 on
entities owned prior to the issuance of FIN 46 will have upon its financial
condition or results of operations. As of March 31, 2003, the Company has not
acquired any new variable interest entities. The Company does not anticipate FIN
46 to have a material impact on its consolidated financial position or results
of operations.
Page 9
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following discussion and analysis of the Company's consolidated financial
condition as of March 31, 2003 and the results of operations for the three-month
periods ended March 31, 2003 and 2002 should be read in conjunction with the
consolidated financial statements, including notes thereto, included in the
Company's latest annual report on Form 10-K for the fiscal year ended December
31, 2002, and the other information herein. The consolidated statement of
condition as of March 31, 2003 and the statements of operations and cash flows
for the three months ended March 31, 2003 and 2002 are unaudited but include, in
the opinion of management, all adjustments considered necessary for a fair
presentation of such data. As used herein, the term "Company" refers to Greater
Community Bancorp and subsidiaries, the term "Subsidiary Banks" refers to
Greater Community Bank (GCB), Bergen Commercial Bank (BCB) and Rock Community
Bank (RCB) and the term "Trust" refers to GCB Capital Trust. Unless otherwise
indicated, data is presented for the Company and its Subsidiaries in the
aggregate. Unless otherwise indicated, all dollar figures in the tables below,
except for per share data, are set forth in thousands.
PURPOSE OF DISCUSSION AND ANALYSIS
The purpose of this analysis is to provide you with information relevant to
understanding and assessing the Company's financial condition and results of
operations for the three months ended March 31, 2003. In order to appreciate
this analysis more fully you are encouraged to review the consolidated financial
statements and statistical data presented in this report and in the MD&A section
of the Company's Form 10-K for the year ended December 31, 2002.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This Form 10-Q, both in this MD&A section and elsewhere, includes
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements are not historical facts. They
include expressions about management's confidence and strategies and its
expectations about new and existing programs and products, relationships,
opportunities, technology and market conditions. These statements may be
identified by an asterisk (*) or such forward-looking terminology as "expect",
"look", "believe", "anticipate", "may", "will" or similar statements or
variations of such terms. Such forward-looking statements involve certain risks
and uncertainties. These include, but are not limited to, the ability of the
Company's Subsidiary Banks to generate deposits, loans and leases and attract
qualified employees, the direction of interest rates, continued levels of loan
and lease quality and origination volume, continued relationships with major
customers including sources for loans and leases, as well as the effects of
economic conditions, legal and regulatory barriers and structure, and
competition. Actual results may differ materially from such forward-looking
statements. The Company assumes no obligation for updating any such
forward-looking statement at any time.
CRITICAL ACCOUNTING POLICIES, JUDGMENTS AND ESTIMATES
The accounting and reporting policies of the Company conform with accounting
principles generally accepted in the United States of America and general
practices within the financial services industry. The preparation of financial
statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and the
assumptions that affect the amounts reported in the financial statements and the
accompanying notes. Actual results could differ from those estimates.
The Company considers that the determination of the allowance for loan and lease
losses involves a higher degree of judgment and complexity than its other
Page 10
significant accounting policies. The allowance for loan losses is calculated
with the objective of maintaining a reserve level believed by management to be
sufficient to absorb estimated credit losses. Management's determination of the
adequacy of the allowance is based on periodic evaluations of the loan and lease
portfolios and other relevant factors. However, this evaluation is inherently
subjective as it requires material estimates, including, among others, expected
default probabilities, loss given default, expected commitment usage, the
amounts and timing of expected future cash flows on impaired loans, mortgages,
and general amounts for historical loss experience. The process also considers
economic conditions, uncertainties in estimating losses and inherent risks in
the loan portfolio. All of these factors may be susceptible to significant
change. To the extent actual outcomes differ from management estimates,
additional provisions for loan and lease losses may be required that would
adversely impact earnings in future periods.
The Company recognizes deferred tax assets and liabilities for the future tax
effects of temporary differences, net operating loss carryforwards and tax
credits. Deferred tax assets are subject to management's judgment based upon
available evidence that future realization is more likely than not. If
management determines that the Company may be unable to realize all or part of
net deferred tax assets in the future, a direct charge to income tax expense may
be required to reduce the recorded value of the net deferred tax asset to the
expected realizable amount.
The Company adopted SFAS No. 142, Goodwill and Intangible Assets, on January 1,
2002. This SFAS modifies the accounting for all purchased goodwill and
intangible assets. SFAS No. 142 includes requirements to test goodwill and
indefinite lived intangible assets for impairment rather than amortize them. On
January 1, 2002, the Company stopped amortizing goodwill, which approximated
$800,000 annually. The Company did not identify any impairment of goodwill
during its transitional testing of its outstanding goodwill.
Page 11
Business Overview
The Company is registered with the Federal Reserve Board as a bank holding
company and has filed a declaration to be designated as a "financial holding
company." Its primary business is banking, which it conducts in northern New
Jersey through its three wholly-owned New Jersey Subsidiary Banks.
The Company is a diversified financial services company operating retail
banking, securities brokerage, and equipment leasing businesses that provide
products and services in the Company's primary geographic markets in northern
counties of New Jersey and expanding. Through Highland Capital Corp., one of the
Company's wholly-owned nonbank subsidiaries, the Company is also engaged in the
business of leasing equipment to small and mid-size businesses. Another
wholly-owned nonbank subsidiary, Greater Community Financial, L.L.C., engages in
the business of securities broker-dealer.
Financial services providers as of late are challenged by intense competition,
changing customer demands, increased pricing pressures and the ongoing impact of
deregulation. This is more so for traditional loan and deposit services due to
continuous competitive pressures as both banks and non-banks compete for
customers with a broad array of banking, investments and capital market
products. Despite this protracted period of economic stagnation, our key
strengths of service and local delivery continue to attract high-quality
business to our Company.
The Company has made an effort to meet these challenges by providing highly
focused personalized customer service, which provides a basis for
differentiation in today's environment where banks and other financial service
providers target the same customer. To leverage new technology, the Company
responded with the formation of e-commerce services through the World Wide Web.
As a result, an internet banking product was introduced for retail customers.
The Company launched a cash management product through its internet banking for
its commercial customers as well.
The Company's expansion of its branch network into Morris County, New Jersey
early in 2002 was well-received and encourages its further expansion into that
county. The Company's funding strategy, based on remixing of deposits toward
lower cost core deposits, has been equally successful.
EARNINGS SUMMARY
Net income for the first three months of 2003 was $1.6 million or $0.22 per
diluted share, compared to $2.1 million or $0.28 per diluted share earned in the
first three months of 2002.
The decrease in net income for the most recent three-month period primarily
reflects a significant decrease in gain made on sale of leases coupled with
increased total other expenses and provision for loan and lease losses.
Net Interest Income
Net interest income (before income tax effect) for the three months ended March
31, 2003 increased to $6.5 million (4.6%) from the level reported at March 31,
2002. Although the interest income on investment securities and federal funds
sold and deposits with other banks decreased by $139,000 (7.1%) and $118,000
(45.9%), the most important component of the increase in net interest income was
the decrease of $582,000 (15.1%) in interest paid on deposits and borrowings, to
$3.3 million. The majority of such increase in net interest income is
attributable to the effects of declining interest rates on deposits and the
refinancing in mid 2002 of the 1997 issue of trust preferred securities.
Other Income
Non-interest income continues to represent a considerable source of income for
the Company, constituting an amount equal to 24% of net interest income for the
three months ended March 31, 2003. Non-interest income decreased by $364,000 for
the
Page 12
period ended March 31, 2003 compared to the same period in the prior year. Of
the total decrease in non-interest income, $345,000 and $123,000 is attributable
to decreases in gain made on sale of leases and gain on sale of assets
(liquidation of credit card portfolio), respectively. These decreases were
partially offset by $138,000 in fee income on mortgage loans sold. Included in
total other income is $289,000 in gain on sale of investment securities
available for sale, compared to $319,000 in the first quarter of 2002.
Non-Interest Expense
Total other expense increased by $525,000 to $5.5 million for the three months
ended March 31, 2003 compared to the same period in 2002. The largest component
of other expense, salaries and employee benefits, accounted for most of the
increase. It rose 11% to $3.0 million for the three months ended March 31, 2003
over the comparable period in 2002. The increase is attributable to increase in
staff, annual salary increases and an approximate increase of 25% in health care
costs.
The second largest component of other expense, occupancy and equipment expense,
increased by $73,000 (9.3%) for the three months ended March 31, 2003 over the
comparable period in 2002, while regulatory, professional and other fees
increased by $107,000. The increase in such expenses is related to the overall
growth of the Company.
Provision for Loan and Lease Losses
The provision for loan and lease losses for the three months ended March 31,
2003 increased by $95,000 to $316,000 compared to the same period in 2002. Such
increase is primarily due to the increase in average loan and lease portfolio
compared to the same period in 2002.
Provision for Income Taxes
The provision for income taxes for the three months ended March 31, 2003 was
$704,000, or an effective rate of 30.1%, compared to $946,000, or an effective
rate of 31.1%, for the three months ended March 31, 2002. The decrease in the
effective rate is a direct result of tax planning strategies.
FINANCIAL CONDITION
ASSETS
Between December 31, 2002 and March 31, 2003 total assets increased by $16.3
million to $736.2 million. The increase is primarily attributable to the growth
in core deposits of the Subsidiary Banks.
Loans -- Asset Quality and Allowance for Loan and Lease Losses
Gross loans totaled $439.6 million at March 31, 2003, a decrease of $4.5 million
compared to the amount reported at December 31, 2002. Such decrease resulted
primarily from maturities or runoff of loans secured by residential properties.
The following table reflects the composition of the gross loan portfolio as of
March 31, 2003 and December 31, 2002.
March 31, 2003 December 31, 2002
-------------- -----------------
Loans secured by Residential Properties
Secured by one-to-four family $134,564 $142,677
Secured by multifamily 12,735 12,861
Loans secured by nonresidential properties 202,696 203,501
Loans to individuals 6,687 8,843
Commercial loans 33,723 33,859
Construction loans 28,934 24,339
Lease financing receivables 19,765 17,058
Other loans 499 957
-------- --------
Total gross loans $439,603 $444,095
======== ========
Page 13
Nonperforming Assets
Nonperforming assets include nonaccruing loans and leases and other real estate
owned (OREO). At March 31, 2003, total nonperforming loans totaled $3.3 million
or 0.75% of total loans, an increase of 6 basis points from the levels reported
at December 31, 2002. Of the total nonperforming loans, nonaccruing loans
accounted for $3.0 million or 0.68% of total loans, as compared to $2.8 million
or 0.62% of total loans at December 31, 2002. Loans past due 90 days or more and
still accruing at March 31, 2003 decreased by $587,000 compared to December 31,
2002, primarily as a result of such loans becoming current in payment.
Management has noted that the asset quality within the past year has shown some
deterioration in lease financing receivables portfolio. However, the Company
maintains more than adequate reserves and believes that additional reserves are
not required. Management will continue to monitor both portfolios closely.
The following table sets forth the composition of the Company's nonperforming
assets and related asset quality ratios as of the dates indicated. All of such
assets were domestic assets since the Company had no foreign loans.
March 31, December 31,
2003 2002
--------- ------------
Nonaccruing loans $ 3,012 $2,767
Renegotiated loans 284 295
------- ------
Total nonperforming loans 3,296 3,062
------- ------
Loans past due 90 days and accruing -- 587
Other real estate -- --
------- ------
Total nonperforming assets $ 3,296 $3,649
======= ======
Asset Quality Ratios
Nonperforming loans to total gross loans 0.75% 0.69%
Nonperforming assets to total gross loans 0.75% 0.82%
Nonperforming assets to total assets 0.45% 0.51%
Allowance for loan and lease
losses to nonperforming loans 230.55% 238.34%
During the three months ended March 31, 2003, gross interest income of $56,000
would have been recorded on loans accounted for on a nonaccruing basis if the
loans had been current throughout the period.
Impaired Loans - In accordance with SFAS No. 114, the Company utilizes the
following information when measuring its allowance for loan losses. A loan is
considered impaired when it is probable that the Company will be unable to
collect all amounts due according to the contractual terms of the loan
agreement. These loans consist primarily of nonaccruing loans where situations
exist which have reduced the probability of collection in accordance with
contractual terms.
Page 14
As of the dates indicated, the Company's recorded investment in impaired loans
and the related valuation allowance calculated under SFAS No. 114 are as
follows:
March 31, December 31,
2003 2002
--------- ------------
Impaired loans -
Recorded investment $2,740 $2,517
Valuation allowance 1,101 1,081
This valuation allowance is included in the allowance for loan losses on the
Company's consolidated balance sheet.
The average recorded investment in impaired loans for the three-month period
ended March 31, 2003 remained unchanged at $2.5 million compared to December 31,
2002.
Interest payments received on impaired loans are recorded as interest income
unless collection of the remaining recorded investment is doubtful, in which
event payments received are recorded as reductions of principal. The Company
recognized interest income on impaired loans of $79,000 for the three-month
period ended March 31, 2003.
Analysis of the Allowance for Loan and Lease Losses
Between December 31, 2002 and March 31, 2003, the allowance for loan and lease
losses increased moderately. The allowance constituted 1.73% of gross loans at
March 31, 2003, an increase of $301,000 compared to the allowance at December
31, 2002. The provision for loan and lease losses added $316,000 for the
three-month period. Management believes the allowance for loan and lease losses
at March 31, 2003 of $7.6 million, or 230.55% of nonperforming assets, is
adequate.
The Company maintains an allowance for loan and lease losses in an amount
considered adequate by management to provide for potential credit losses based
upon periodic evaluation of the risk characteristics of the loan portfolio.
Management reviews the adequacy of the allowance on a monthly basis. In doing
so, it takes into consideration factors such as actual versus estimated losses,
regional and national economic conditions, portfolio concentration and the
impact of government regulations. The Company makes specific allocations to
impaired loans and for doubtful or watch list loans, an allocated reserve based
on historical trends and an unallocated portion. The Company consistently
applies the following comprehensive methodology.
The first category of reserves consists of specific allocation of the allowance
for doubtful or watch list loans, which is established for specific commercial
and industrial loans, real estate development loans, and construction loans
which have been identified by bank management as being high risk loan assets.
Each of these is assigned a doubtful risk rating grade solely on its
nonperformance according to its payment terms if there is reason to believe that
repayment of the loan principal is unlikely in whole or part. The specific
allocation of the allowance is the total amount of potential unconfirmed losses
for these individual doubtful or watch list loans. To assist in determining the
fair value of loan collateral, the Company often utilizes independent third
party qualified appraisal firms which in turn employ their own criteria and
assumptions that may include occupancy rates, rental rates, and property
expenses, among others.
The second category of reserves consists of the allocated portion of the
allowance. This is determined by taking the loan portfolios outstanding and
creating individual loan pools for commercial loans, real estate loans and
construction loans and various types of loans to individuals that have similar
characteristics and applying historical loss experience for each pool. This
estimate represents the potential unconfirmed losses within the portfolio. The
historical estimation for each loan pool is then adjusted to account for current
conditions, current loan portfolio performance, loan policy or management
changes or any other factor that may cause future losses to deviate from
historical levels.
The following table represents transactions affecting the allowance for loan and
lease losses during the three-month periods ended March 31, 2003 and 2002.
Page 15
2003 2002
---- ----
Balance at beginning of period, January 1, $7,298 $6,320
Charge-offs:
Commercial, financial and agricultural 7 164
Lease financing receivables 81 --
Real estate--mortgage -- 47
Installment loans to individuals 3 --
Credit cards and related plans -- 25
------ ------
91 236
Recoveries:
Commercial, financial and agricultural 34 27
Lease financing receivables -- --
Real estate--mortgage 38 --
Installment loans to individuals -- 2
Credit cards and related plans 4 2
------ ------
76 31
------ ------
Net charge-offs 15 205
Provision charged to operations
during the three-month period 316 221
------ ------
Balance at end of period, March 31, $7,599 $6,336
====== ======
Ratio of net charge-offs during
the three-month period to average loans
outstanding during the period .00% .00%
Page 16
Investment Securities
At March 31, 2003, securities totaled $200.8 million, an increase of $8.6
million compared to December 31, 2002. The increase resulted from $47.4 million
of purchases of additional securities in the available for sale portfolio
partially offset by $37.2 million in maturities, sales and principal paydowns
during the three-month period. Of the total increase, securities available for
sale increased by $8.7 million and securities held to maturity decreased by
$112,000 due to principal paydowns.
Cash
Cash and cash equivalents increased by $8.6 million to $45.7 million. Federal
funds sold increased by $4.0 million (22%) to $21.7 million while cash and due
from banks increased by $4.6 million (24%) to $24.1 million. These increases are
partly due to the increase in deposits.
Deposits
Total deposits increased by $15.9 million (3%) to $559.9 million. Such increase
is primarily attributable to the continued offering of competitive deposit
products.
Of the total increase, non-interest-bearing and savings deposits increased by
$3.8 million and $11.1 million, respectively. Time deposits increased by $2.5
million, while savings deposits decreased by $1.4 million. The aforementioned
changes in the deposit mix relates to the unsettled market conditions resulting
in consumers keeping funds liquid.
Liquidity
The Company actively manages its liquidity under the direction of the
Asset/Liability Management Committees of the Bank Subsidiaries. During the last
two years the Company has been highly liquid and its liquid funds have been more
than sufficient to meet future loan demand or the possible outflow of deposits
in addition to being able to adapt to changing interest rate conditions.
Sources of liquidity at March 31, 2003 totaled $258.6 million or 35% of total
assets, consisting of investment securities, cash and cash equivalents and
interest-bearing due from banks.
As of March 31, 2003, the contractual obligations and other commitments
requiring potential cash outflows has not changed materially compared to the
amounts reported in SEC Form 10-K for the year ended December 31, 2002.
CAPITAL ADEQUACY, REGULATORY CAPITAL RATIOS AND DIVIDENDS
The Company is subject to regulation by the Board of Governors of the Federal
Reserve System (Federal Reserve Board). The Subsidiary Banks are subject to
regulation by both the Federal Deposit Insurance Corporation (FDIC) and the New
Jersey Department of Banking and Insurance (Department). Such regulators have
promulgated risk-based capital guidelines which require the Company and the
Subsidiary Banks to maintain certain minimum capital as a percentage of their
assets and certain off-balance sheet items adjusted for predefined credit risk
factors (risk-adjusted assets).
Total shareholders' equity of $51.5 million at March 31, 2003 was 7.0% of total
assets, almost unchanged compared with $51.5 million or 7.2% of total assets at
December 31, 2002. The Company and the Subsidiary Banks remain well-capitalized
for regulatory purposes and management believes present capital is adequate to
support contemplated future internal growth.
Page 17
The following table sets forth selected regulatory capital ratios for the
Company and the Subsidiary Banks and the required minimum regulatory ratios at
March 31, 2003:
To Be Well-Capitalized
Under Prompt
For Capital Corrective Action
Actual Adequacy Purposes Provision
----------------------------------------------------------------------
Amount Ratio Amount Ratio Amount Ratio
----------------------------------------------------------------------
Total capital (to risk weighted assets)
Greater Community Bancorp $68,997 13.54% $40,778 8.00% N/A N/A
Greater Community Bank 33,406 10.68% 25,015 8.00% 31,269 10.00%
Bergen Commercial Bank 15,580 10.04% 12,415 8.00% 15,519 10.00%
Rock Community Bank 5,412 18.82% 2,300 8.00% 2,875 10.00%
Tier 1 Capital (to risk weighted assets)
Greater Community Bancorp 53,435 10.48% 20,389 4.00% N/A N/A
Greater Community Bank 29,474 9.43% 12,508 4.00% 18,762 6.00%
Bergen Commercial Bank 13,637 8.79% 6,207 4.00% 9,311 6.00%
Rock Community Bank 5,052 17.57% 1,150 4.00% 1,725 6.00%
Tier 1 Capital (to average assets)
Greater Community Bancorp 53,435 7.51% 28,477 4.00% N/A N/A
Greater Community Bank 29,474 6.54% 18,037 4.00% 22,546 5.00%
Bergen Commercial Bank 13,637 6.61% 8,250 4.00% 10,313 5.00%
Rock Community Bank 5,052 12.49% 1,618 4.00% 2,022 5.00%
During the last quarter of 2002 and the first quarter of 2003 the Company
declared cash dividends at the rate of $0.10 per share, or an annual rate of
$0.40 per share. The Company's Board of Directors continues to believe that cash
dividends are an important component of shareholder value and that at its
current level of performance and capital, the Company will be able to continue
its current dividend policy of a quarterly distribution of cash dividends to its
shareholders.
Some Specific Factors Affecting Future Results of Operations
Future movement of interest rates cannot be predicted with certainty. However,
in all of year 2002 the Company, along with other financial institutions, felt
the effect of a weakening economy coupled with several reductions in short-term
interest rates. As of late, a record level of prepayments with respect to
mortgage-related loans and mortgaged-backed securities coupled with intense
competition for good quality loans have contributed to a compression of net
interest margin. The Company's recent decision to restructure Highland Capital
Corp., its small-ticket, equipment leasing and financing subsidiary, is having a
negative impact on current earnings but the impact should be favorable over the
longer term. Because overall future performance is dependent on many other
factors, past performance is not necessarily an indication of future results and
there can be no guarantee regarding future overall results of operations.
As part of the restructuring of our leasing subsidiary, there is a new lease
management team in place, focusing on high quality, vendor driven programs.
Going forward the Company intends to hold all leases originated in its lease
receivable portfolio, rather than selling in the secondary market. This will
result in loss of gain on sale income while the Company's net interest margin
should strengthen with these high-yield receivables as the lease portfolio
builds over time.
Page 18
In addition, the Company has decided to change the method of delivery of
brokerage services to the customers of Greater Community Financial, the
Company's broker-dealer subsidiary. Recently, management has signed an agreement
with a third party provider to function as the registered broker-dealer for
Greater Community Financial. Once this becomes fully operational, it is expected
to enhance the Company's earnings over time. The expected date of conversion is
late second quarter 2003.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There has been no material change in the Company's assessment of its sensitivity
to market risk since its presentation in its 2002 Form 10-K filed with the
Securities and Exchange Commission.
Item 4. Controls and Procedures.
(a) Evaluation of disclosure controls and procedures.
The management of the Company, including the Chief Executive Officer and
the Chief Financial Officer, has conducted an evaluation of the effectiveness of
the Company's disclosure controls and procedures pursuant to Rule 13a-14 under
the Securities Exchange Act of 1934 as of a date (the "Evaluation Date") within
90 days prior to the filing date of this report. Based on that evaluation, the
Chief Executive Officer and the Chief Financial Officer concluded that, as of
the Evaluation Date, the Company's disclosure controls and procedures were
effective in ensuring that all material information relating to the Company,
including its consolidated subsidiaries, required to be filed in this quarterly
report has been made known to them in a timely manner.
(b) Changes in internal controls.
There have been no significant changes made in the Company's internal
controls or in other factors that could significantly affect internal controls
subsequent to the Evaluation Date.
Page 19
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
The Company and its subsidiaries are parties in the ordinary course of
business to litigation involving collection matters, contract claims and
other miscellaneous causes of action arising from their business.
Management does not consider that any such proceedings depart from usual
routine litigation, and in its judgement neither the Company's
consolidated financial position nor its results of operations will be
affected materially by any present proceedings.
Item 2 - Changes in Securities and Use of Proceeds
During the period covered by this report, namely, the fiscal quarter ended
March 31, 2003, the Company issued the shares of its Common Stock, $0.50
par value per share, described in this Item 2, that were not registered
under the Securities Act of 1933 ("1933 Act").
The sales did not involve any underwriter, and no underwriting discounts,
selling commissions or similar discounts or selling expenses were
involved. The Company issued all of such shares to employees or directors
of the Company pursuant to their exercise of stock options held under the
Company's shareholder-approved 2001 stock option plans. The Company sold
all of such shares for cash.
Date of Sale Number of Shares Sold Aggregate Offering Price
------------ --------------------- ------------------------
01-13-2003 882 $ 8,000
01-15-2003 441 4,000
01-15-2003 1,050 13,598
01-31-2003 441 4,000
02-27-2003 420 5,439
In issuing such shares, the Company relied upon Section 4(2) of the 1933
Act, relating to transactions by an issuer not involving any public
offering. The purchasers are knowledgeable about the Company and
understand the shares are "restricted stock." The certificates for the
shares so issued bear restrictive legends and the Company has given stop
transfer instructions to its transfer agent with respect to such shares.
The Company used the proceeds of sale of such shares for general corporate
purposes.
Item 3 - Defaults Upon Senior Securities
None.
Item 4 - Submission of Matters to a Vote of Security Holders
The Company held its annual meeting of stockholders for 2003 (the "2003
Annual Meeting") on April 15, 2003. The only business before the 2003
Annual Meeting was the election of Directors.
In accordance with the nominations described in the Company's definitive
2003 Proxy Statement filed with the Securities and Exchange Commission,
all three nominees were elected as directors for three-year terms expiring
in 2006 and until the election and qualification of their respective
successors. The voting was as follows:
Page 20
Name of Nominee Votes for Votes Withheld
--------------- --------- --------------
M. A. Bramante 5,505,731 32,640
William T. Ferguson 5,521,959 16,412
David Waldman 5,527,843 10,528
The names of the Company's other Directors whose terms of office as
Director continued after the 2003 Annual Meeting (and the year in which
their respective terms will expire) are as follows: Anthony M. Bruno, Jr.
(2004); George E. Irwin (2004); Alfred R. Urbano (2004); C. Mark Campbell
(2005); Joseph A. Lobosco (2005); Robert C. Soldoveri (2005); and Charles
J. Volpe (2005).
Item 5 - Other information
None.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits.
An exhibit index has been filed as part of this report on page
E-1 and is incorporated by reference.
(b) Reports on Form 8-K.
On March 25, 2003, the Company filed a Form 8-K with the
Securities and Exchange Commission reporting the $0.10 per
share cash dividend.
On April 17, 2003, the Company filed a Form 8-K with the
Securities and Exchange Commission reporting the first quarter
2003 earnings.
Page 21
SIGNATURES
In accordance with 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 thereunto duly authorized.
GREATER COMMUNITY BANCORP
(Registrant)
Date: May 14, 2003 By: /s/ Naqi A. Naqvi
------------ ---------------------------------
Naqi A. Naqvi, Treasurer & CFO
(Duly Authorized Officer and
Principal Financial Officer)
CERTIFICATION
I, George E. Irwin, Chief Executive Officer of the Company, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Greater Community
Bancorp;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in the Report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period for which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to date of their evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
DATE: May 14, 2003
/s/ George E. Irwin
- -------------------------------------
President and Chief Executive Officer
CERTIFICATION
I, Naqi A. Naqvi, Chief Financial Officer of the Company, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Greater Community
Bancorp;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in the Report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period for which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to date of their evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
DATE: May 14, 2003
/s/ Naqi A. Naqvi
- -----------------------------
Vice President, Treasurer and
Chief Financial Officer
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
TO
FORM 10-Q
For the quarter ended March 31, 2003
Commission File No. 0-14294
Greater Community Bancorp
- --------------------------------------------------------------------------------
Exhibit Index
Certain of the following exhibits, as indicated parenthetically, were previously
filed as exhibits to registration statements filed by Greater Community Bancorp
under the Securities Act of 1933, as amended, or to reports or registration
statements filed by Greater Community Bancorp under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), respectively, and are hereby
incorporated by reference to such statements or reports. Greater Community
Bancorp's Exchange Act filing number is 0-14294.
Exhibit
No. Description
3.1 Restated Certificate of Incorporation of the Company (incorporated
by reference to Exhibit 3.4 to Form 10-QSB for the quarter ended
June 30, 1998, filed on August 14, 1998).
3.2 Bylaws of the Company as amended and restated effective December
16, 1997 (incorporated by reference to Exhibit 3 to Form 10-KSB
for the year ended December 31, 1997, filed on March 23, 1998).
4.1 Junior Subordinated Indenture between the Company and Deutsche
Bank Trust Company Americas as Trustee, dated June 28, 2002
(incorporated by reference to Exhibit 4.1 of Exhibits to Form S-3
Registration Statement filed by GCB Capital Trust II and Greater
Community Bancorp under the Securities Act of 1933, Registration
Nos. 333-89050, 333-89050-01, filed May 24, 2002).
4.4 Amended and Restated Trust among Greater Community Bancorp as
Depositor, Deutsche Bank Trust Company Americas as Property
Trustee, and Deutsche Bank Trust Company (Delaware) as Delaware
Trustee, dated May 24, 2002 (incorporated by reference to Exhibit
4.4 of Exhibits on Form S-3 Registration Statement filed by GCB
Capital Trust II and Greater Community Bancorp under the
Securities Act of 1933, Registration Nos. 333-89050, 333-89050-01,
filed May 24, 2002).
4.6 Guarantee Agreement between Greater Community Bancorp (as
Guarantor) and Deutsche Bank Trust Company Americas (as Trustee)
dated June 28, 2002 (incorporated by reference to Exhibit 4.6 of
Exhibits to Form S-3 Registration Statement filed by GCB Capital
Trust II and Greater Community Bancorp under the Securities Act of
1933, Registration Nos. 333-89050, 333-89050-01, filed May 24,
2002).
10.1 Employment Agreement of George E. Irwin dated July 31, 1998
(incorporated by reference to Exhibit 10.1 to Form 10-KSB for the
year ended December 31, 1998, filed on March 17, 1999).
10.2 Employment Agreement of C. Mark Campbell dated July 31, 1998
(incorporated by reference to Exhibit 10.2 to Form 10-KSB for the
year ended December 31, 1998, filed on March 17, 1999).
10.3 Employment Agreement of Erwin D. Knauer dated July 1, 1999
(incorporated by reference to Exhibit 10.3 to Form 10-Q for
quarter ended September 30, 1999).
10.4 Executive Supplemental Retirement Income Agreement for George E.
Irwin dated as of January 1, 1999 among Great Falls Bank, George
E. Irwin and Greater Community Bancorp (as guarantor)
(incorporated by reference to Exhibit 10.4 to Form 10-K for the
year ended December 31, 1999).
10.5 Executive Supplemental Retirement Income Agreement for C. Mark
Campbell dated as of January 1, 1999 among Bergen Commercial Bank,
C. Mark Campbell and Greater Community Bancorp (as guarantor)
(incorporated by reference to Exhibit 10.5 to Form 10-K for the
year ended December 31, 1999)
10.6 Greater Community Bancorp 2001 Employee Stock Option Plan Adopted
February 20, 2001 (incorporated by reference to Exhibit 10.6 to
Form 10-K for the year ended December 31, 2000).
10.7 Greater Community Bancorp 2001 Stock Option Plan for Nonemployee
Directors Adopted February 20, 2001 (incorporated by reference to
Exhibit 10.7 to Form 10-K for the year ended December 31, 2000).
E-1