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FORM 10-Q
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2003
OR
|_| 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 stock, as of the latest practicable date: Common stock $0.50 par
value - 7,206,768 shares at July 31, 2003.
1
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
INDEX
PAGE
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Consolidated Balance Sheet at
June 30, 2003 (unaudited) and December 31, 2002 ................. 3
Consolidated Statements of Income (unaudited)
Three and Six months ended
June 30, 2003 and 2002 .......................................... 4
Consolidated Statements of Changes in Shareholders'
Equity (unaudited)
Six Months ended June 30, 2003 and 2002 ......................... 5
Consolidated Statements of Cash Flows (unaudited)
Six months ended June 30, 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 ........................... 11
Item 3 - Quantitative and Qualitative Changes About Market Risk .......... 21
Item 4 - Controls and Procedures ......................................... 21
PART II - OTHER INFORMATION
Items 1 through 6 ........................................................ 22
Signatures ............................................................... 23
Exhibit Index ............................................................ E-1
2
PART 1 - FINANCIAL INFORMATION
Item 1 - Financial Statements
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in thousands, except share data)
June 30, December 31,
2003 2002
----------- ------------
ASSETS-- (Unaudited)
CASH AND DUE FROM BANKS-Non-interest-bearing $ 29,921 $ 19,433
FEDERAL FUNDS SOLD 16,225 17,700
--------- ---------
Total cash and cash equivalents 46,146 37,133
DUE FROM BANKS - Interest-bearing 12,520 9,439
SECURITIES:
Available-for-sale, at fair value 195,043 186,875
Held-to-maturity, at amortized cost
(Fair values $3,096 and $5,327) 3,096 5,320
--------- ---------
198,139 192,195
LOANS 460,151 444,095
Less - Allowance for loan losses (7,456) (7,298)
Unearned income (675) (753)
--------- ---------
Net loans 452,020 436,044
PREMISES AND EQUIPMENT, net 7,793 7,850
ACCRUED INTEREST RECEIVABLE 2,991 3,131
BANK OWNED LIFE INSURANCE 12,752 12,448
GOODWILL 11,574 11,574
OTHER ASSETS 9,956 10,053
--------- ---------
Total assets $ 753,891 $ 719,867
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
DEPOSITS:
Non-interest-bearing $ 152,308 $ 138,679
Interest-bearing 160,141 150,600
Savings 102,739 96,034
Time Deposits less than $100 119,053 121,539
Time Deposits $100 and over 37,177 37,191
--------- ---------
Total deposits 571,418 544,043
FHLB ADVANCES 85,000 80,000
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE 13,647 11,728
ACCRUED INTEREST PAYABLE 1,808 1,877
OTHER LIABILITIES 4,898 6,721
GUARANTEED PREFERRED BENEFICIAL INTEREST
IN THE COMPANY'S SUBORDINATED DEBT 24,000 24,000
--------- ---------
Total Liabilities 700,771 668,369
--------- ---------
SHAREHOLDERS' EQUITY
Common Stock, par value $0.50 per share:
20,000,000 shares authorized, 7,206,768
and 7,021,102 shares outstanding 3,603 3,511
Additional paid-in capital 45,198 42,856
Retained earnings 716 1,721
Accumulated other comprehensive income 3,603 3,410
--------- ---------
Total shareholders' equity 53,120 51,498
--------- ---------
Total liabilities and shareholders' equity $ 753,891 $ 719,867
========= =========
(See notes to Consolidated Financial statements)
3
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
-------------- --------------
2003 2002 2003 2002
------ ------- ------- --------
INTEREST INCOME
Loans, including fees $7,715 $ 8,002 $15,574 $ 15,899
Securities 1,611 2,123 3,437 4,088
Federal Funds sold and deposits with banks 114 257 253 514
------ ------- ------- --------
Total interest income 9,440 10,382 19,264 20,501
------ ------- ------- --------
INTEREST EXPENSE
Deposits 1,476 2,028 3,128 4,200
Short-term borrowings 1,122 1,065 2,235 2,175
Long-term borrowings 507 575 1,017 1,150
------ ------- ------- --------
Total interest expense 3,105 3,668 6,380 7,525
------ ------- ------- --------
NET INTEREST INCOME 6,335 6,714 12,884 12,976
PROVISION FOR LOAN LOSSES 138 217 454 438
------ ------- ------- --------
Net interest income after
provision for loan losses 6,197 6,497 12,430 12,538
OTHER INCOME
Service charges on deposit accounts 702 577 1,322 1,201
Other commissions and fees 147 253 301 407
Fee income on mortgage loans sold 131 -- 269 --
Gains on sales of securities 212 126 501 445
Trading revenues -- -- -- (9)
Gains on sale of lease financing receivable 75 421 78 769
Gain on sale of assets -- -- -- 123
Bank-owned life insurance 151 152 304 309
All other income 221 217 464 465
------ ------- ------- --------
1,639 1,746 3,239 3,710
OTHER EXPENSES
Salaries and employee benefits 3,044 2,784 6,005 5,450
Occupancy and equipment 810 797 1,672 1,586
Regulatory, professional and other fees 615 507 1,180 965
Computer services 129 105 238 197
Office expense 326 315 628 630
All other operating expenses 734 778 1,425 1,423
------ ------- ------- --------
Total other expenses 5,658 5,286 11,148 10,251
------ ------- ------- --------
Income before income taxes 2,178 2,957 4,521 5,997
PROVISION FOR INCOME TAXES 641 918 1,345 1,864
------ ------- ------- --------
NET INCOME $1,537 $ 2,039 $ 3,176 $ 4,133
====== ======= ======= ========
WEIGHTED AVERAGE SHARES OUTSTANDING - Basic 7,207 7,215 7,210 7,214
====== ======= ======= ========
WEIGHTED AVERAGE SHARES OUTSTANDING - Diluted 7,669 7,664 7,660 7,626
====== ======= ======= ========
NET INCOME PER SHARE - Basic $ 0.21 $ 0.28 $ 0.44 $ 0.57
====== ======= ======= ========
NET INCOME PER SHARE - Diluted $ 0.20 $ 0.27 $ 0.41 $ 0.54
====== ======= ======= ========
(See notes to Consolidated Financial Statements)
4
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(in thousands, Unaudited)
Six Months ended June 30, 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 3,176 3,176 $3,176
2.5% stock dividend 88 2,591 (2,679) --
Exercise of stock options 24 411 435
Cash dividends (1,502) (1,502)
Other comprehensive income,
net of reclassification,
adjustments and taxes 193 193 193
------
Total Comprehensive income $3,369
======
Purchase and retirement of
treasury stock (20) (660) (680)
---------------------------------------------------------------------------
Balance, June 30, 2003 $ 3,603 $ 45,198 $ 716 $3,603 $ 53,120
===========================================================================
Six Months ended June 30, 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 4,133 4,133 $4,133
5% stock dividend 168 5,266 (5,434) --
Exercise of stock options 16 311 327
Cash dividends (1,276) (1,276)
Other comprehensive income,
net of reclassification,
adjustments and taxes 544 544 544
------
Total Comprehensive income $4,677
======
Purchase and retirement of
treasury stock (21) (442) (463)
---------------------------------------------------------------------------
Balance, June 30, 2002 $ 3,517 $ 43,175 $ (256) $2,941 $ 49,377
===========================================================================
(See notes to Consolidated Financial Statements)
5
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Six Months Ended
June 30,
2003 2002
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 3,176 $ 4,133
Adjustments to reconcile net income to net
cash provided by (used by) operating activities:
Depreciation and amortization 508 625
Accretion of discount on securities, net 1,552 426
Gains on sales of investment securities, net (501) (445)
Trading assets -- 9
Gain on sale of assets -- (124)
Provision for loan losses 454 438
(Increase) decrease in accrued interest receivable 140 (160)
(Increase) in other assets (207) (3,586)
Decrease in accrued interest payable
and other liabilities (1,897) (4,295)
-------- --------
Net cash (used in) provided by operating activities 3,225 (2,979)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Available-for-sale securities -
Purchases (86,181) (76,152)
Sales 4,830 14,742
Maturities and principal paydowns 71,575 39,011
Held-to-maturity securities -
Purchases -- (2,099)
Maturities 2,225 390
Net decrease (increase) in interest-bearing deposits
with banks (3,081) 155
Net increase in loans (15,680) (12,376)
Capital expenditure (451) (1,037)
-------- --------
Net cash used in investing activities (26,763) (37,366)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposit accounts 27,375 43,474
(Decrease) increase in repurchase agreements 1,919 (5,224)
Proceeds from issuance of FHLB advances 5,000 --
Proceeds from issuance of subordinated debt -- 23,000
Dividends paid (1,498) (1,276)
Proceeds from exercise of stock options 435 327
Redemption of stock (680) (463)
-------- --------
Net cash provided by financing activities 32,551 59,838
-------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS 9,013 19,493
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 37,133 46,997
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 46,146 $ 66,490
======== ========
(See notes to Consolidated Financial Statements)
6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
In the opinion of management, these unaudited financial statements contain
all disclosures which are necessary to present fairly the Company's consolidated
financial position at June 30, 2003, the consolidated results of operations for
three months and six months ended June 30, 2003 and 2002 and cash flows for six
months ended June 30, 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 June 18, 2003, the Company's Board of Directors declared a 2.5% stock
dividend and a cash dividend of 11.0 cents ($.11) per share on the Company's
common stock. The record date of the dividend was July 15, 2003 and the issue
date was July 31, 2003. Accordingly, on July 31, 2003, the Company issued
175,523 shares of common stock, increasing the number of shares outstanding to
7,206,768. The financial information in this Form 10-Q has been restated
retroactively to reflect the 2.5% stock dividend.
EARNINGS PER SHARE COMPUTATION
The Company's reported diluted earnings per share of $0.41 and $0.54 for the
six-month periods and $0.20 and $0.27 for the three-month periods ended June 30,
2003 and 2002, respectively, both take into consideration the dilutive effects
of the Company's outstanding common stock equivalents, namely stock options.
For the Six Months Ended June 30, 2003
------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
(In thousands, except for per share data)
Basic EPS
Net income available to common stockholders ......... $3,176 7,210 $0.44
Effect of Dilutive Securities
Options ............................................. -- 450 (0.03)
------ ----- -----
Diluted EPS
Net income available to common stockholders plus
assumed conversions ................................. $3,176 7,660 $0.41
====== ===== =====
For the Six Months Ended June 30, 2002
------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
Basic EPS
Net income available to common stockholders ......... $4,133 7,214 $0.57
Effect of Dilutive Securities
Options ............................................. -- 412 (0.03)
------ ----- -----
Diluted EPS
Net income available to common stockholders plus
assumed conversions ................................. $4,133 7,626 $0.54
====== ===== =====
LOANS
The following table presents information related to loans which are on a
7
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.
June 30, December 31,
2003 2002
-------- ------------
Nonaccrual loans and leases ................................... $2,627 $2,767
Renegotiated loans ............................................ 274 295
------ ------
Total nonperforming loans and leases ........................ $2,901 $3,062
====== ======
Loans past due 90 days and accruing ........................... $ 474 $ 587
====== ======
Gross interest income which would have been recorded under
original terms ................................................ $ 96 $ 135
====== ======
The balance of impaired loans was $2.7 and $2.5 million at June 30, 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 $754,000 and $1.1
million for the two periods respectively.
STOCK OPTIONS
At June 30, 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.
Six Months Ended June 30,
2003 2002
--------- ---------
Net income ......................................... As reported $ 3,176 $ 4,133
Less: stock-based compensation costs determined
Under fair value-based method for all awards ....... (64) (61)
--------- ---------
Pro forma $ 3,112 $ 4,072
========= =========
Earnings per share of common stock - basic ......... As reported $ 0.44 $ 0.57
Pro forma $ 0.43 $ 0.56
Earnings per share of common stock-diluted ......... As reported $ 0.41 $ 0.54
Pro forma $ 0.40 $ 0.53
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 six month period
ended June 30, 2003.
8
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
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 June 30, 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. As of June 30, 2003, the
Company has not acquired any new variable interest entities.
The Company has also evaluated the impact of FIN 46 on variable interest
entities consolidated by the Company prior to the issuance of FIN 46. Management
has determined that GCB Capital Trust II qualifies as a variable interest entity
under FIN 46. In 2002, GCB Capital Trust II issued mandatorily redeemable
preferred stock to investors and loaned the proceeds to the Company. GCB Capital
Trust II holds, as its sole asset, subordinated debentures issued by the Company
in 2002. The timing and amount of payments on the subordinated debentures are
the same as the timing and amount of payments by GCB Capital Trust II on the
mandatorily redeemable preferred stock. GCB Capital Trust II is currently
included in the Company's consolidated balance sheet and statements of income.
Management believes that GCB Capital Trust II should continue to be included in
the Company's consolidated financial statements after the effective date of FIN
46. However, as additional interpretations related to entities similar to GCB
Capital Trust II become available, management will reevaluate its conclusion
that GCB Capital Trust II should be included in the consolidated financial
statements and its potential impact to its Tier I capital calculation under
9
such interpretations.
Derivative Instruments
The Company adopted Statement of Financial Accounting Standard 149 (SFAS No.
149), Amendment of Statement 133 on Derivative Instruments and Hedging
Activities, on July 1, 2003. SFAS No. 149 clarifies and amends SFAS No. 133 for
implementation issues raised by constituents or includes the conclusions reached
by the FASB on certain FASB Staff Implementation Issues. Statement 149 also
amends SFAS No. 133 to require a lender to account for loan commitments related
to mortgage loans that will be held for sale as derivatives. SFAS No. 149 is
effective for contracts entered into or modified after June 30, 2003. The
Company periodically enters into commitments with its customers which it intends
to sell in the future. Management does not anticipate the adoption of SFAS No.
149 to have a material impact on the Company's financial position or results of
operations.
Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity
The FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity, on May 15, 2003. SFAS No. 150
changes the classification in the statement of financial position of certain
common financial instruments from either equity or mezzanine presentation to
liabilities and requires an issuer of those financial statements to recognize
changes in fair value or redemption amount, as applicable, in earnings. SFAS No.
150 is effective for public companies for financial instruments entered into or
modified after May 31, 2003 and is effective at the beginning of the first
interim period beginning after June 15, 2003. Management has not entered into
any financial instruments that would qualify under SFAS No. 150 after May 31,
2003. The Company currently classifies its Guaranteed Preferred Beneficial
Interest in the Company's Subordinated Debt as a liability. As a result,
management does not anticipate the adoption of SFAS No. 150 to have a material
impact on the Company's financial position or results of operations.
10
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 June 30, 2003 and the results of operations for the three- and
six-month periods ended June 30, 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 therein. The consolidated balance
sheet as of June 30, 2003 and the statements of operations and cash flows for
the six months ended June 30, 2003 and 2002 are unaudited but include, in the
opinion of the 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 and GCB Capital
Trust II. 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 and six months ended June 30, 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 and loans and attract qualified
employees, the direction of interest rates, continued levels of loan quality and
origination volume, continued relationships with major customers including
sources for loans, 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
11
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
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 carry forwards 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 had previously
approximated $800,000 annually. The Company did not identify any impairment of
goodwill during its transitional testing of its outstanding goodwill.
12
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.
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.
On July 30, 2003 the Company announced several important changes in the
Company's senior management. The changes will become effective on September 1,
2003. George E. Irwin resigned as president, chief executive officer and
director of the Company and Greater Community Bank, the Company's largest bank
subsidiary. Anthony M. Bruno, Jr., the Company's chairman, will become the
Company's chief executive officer as well as president and chief executive
officer of Greater Community Bank. C. Mark Campbell, currently the Company's
executive vice president, will become president and chief operating officer of
the Company while retaining his positions as president and chief executive
officer of Bergen Commercial Bank, the Company's second largest bank subsidiary.
The Company's press release relating to these management changes was attached as
Exhibit 99.1 to the Company's Form 8-K filed with the SEC on August 1, 2003, and
a copy of the Amended Employment Agreement of George E. Irwin dated as of August
1, 2003 was attached as Exhibit 10.8 to such Form 8-K.
Earnings Summary
Net income for the first six months of 2003 was $3.2 million or $0.41 per
diluted share, a 23.2% decrease from $4.1 million or $0.54 per diluted share
earned in the first six months of 2002.
Net Income for the second quarter of 2003 was $1.5 million or $0.20 per diluted
share, a 24.6% decrease from $2.0 million or $0.27 per diluted share earned in
the second quarter of 2002.
The decreases in net income for the six- and three-month periods ending June 30,
2003, were in large part due to decreasing yields on earning assets. The
13
Company has been experiencing loan runoff due to a high level of refinancing
activity.
The annualized returns on average equity (ROE) and average assets (ROA) for the
first six months of 2003 were 12.2% and 0.87%, respectively, compared with 17.1%
and 1.21% for the same period in prior year. For the second quarter of 2003, the
ROE and ROA were 11.8% and 0.84%, respectively, compared with 16.8% and 1.20%
for the prior year second quarter.
Net Interest Income
Six-Month Comparison: Net interest income is the largest source of the Company's
operating income. Net interest income (before income tax effect) for the six
months ended June 30, 2003 declined moderately compared to the same period in
the prior year. In spite of the increase in average earning assets, total
interest income decreased 6.0% to $19.3 million, while total interest expense
decreased 15.2% to $6.4 million. Interest income on loans, investment securities
and federal funds sold and deposits with other banks decreased by $325,000,
$651,000 and $261,000, respectively, due to declining yields, In addition, the
high level of refinancing activity not only replaced higher interest yielding
loans with lower interest yielding loans but it also accelerated the principal
pay downs on mortgage backed investment securities.
Three Month Comparison: Net interest income for the three months ended June 30,
2003 decreased by $379,000 (5.6%) to $6.3 million compared to the three months
ended June 30, 2002. Total interest income for the period decreased by $942,000
to $9.4 million. Such decrease was only partially offset by a decrease of
$563,000 (15.3%) in interest paid on interest bearing liabilities. Among the
earning assets, the largest impact was on interest income on investment
securities which declined by $512,000 while the interest income on loans and on
federal funds sold and deposits with other banks decreased by $287,000 and
$143,000, respectively, due to declining yields.
The Company's net interest margin decreased by 54 basis points to 3.70%,
compared with 4.24% in the same period of the prior year. This was a result of
margin compression felt throughout the industry due to the lower interest rate
environment.
Other Income
Non-interest income continues to represent a considerable source of income for
the Company. Excluding the gain on sale of securities, total non-interest income
decreased by $527,000 to $2.7 million for the six months ended June 30, 2003,
compared to the same period in 2002. The decrease for the second quarter of 2003
(also excluding the gain on sale of investment securities) was $193,000 to $1.4
million, compared to the second quarter of 2002. The decreases primarily
resulted from lower gain on sale of leases due to the Company's strategic
decision to retain the leases in the portfolio, partially offset by a strong
growth in service charges on deposit accounts as well as from mortgage banking
activities.
Other Expenses
Total other expenses increased by $897,000 (8.8%) to $11.1 million for the six
months ended June 30, 2003 compared to the same period in 2002. Total other
expenses increased by $372,000 (7.0%) to $5.7 million for the three months ended
June 30, 2003 compared to the same period in 2002.
The largest component of other expenses, salaries and employee benefits,
increased by $260,000 (9.3%) to $3.0 million, and by $555,000 (10.2%) to $6.0
million, for the three months and six months ended June 30, 2003,
14
respectively, over the comparable 2002 periods. These increases represent
commissions paid on mortgage banking activity, the opportunistic addition of an
experienced lending team, as well as general salary increases and increases in
health benefits costs.
Apart from the salaries and employee benefits, all other expenses increased
moderately due to the overall growth of the Company.
Provision for Loan Losses
The provision for loan losses increased moderately for the six-month period, but
decreased $79,000 for the three-month period, ended June 30, 2003, relative to
the same periods of 2002. The decrease for the second quarter is based upon
management's periodic evaluation of the loan portfolio and the related allowance
for loan and lease losses to evaluate the adequacy of the allowance for loan and
lease losses.
Provision for Income Taxes
The provisions for income taxes for the three and six months ended June 30, 2003
were $641,000 and $1.3 million, a 30% effective tax rate, compared to $918,000
and $1.9 million, a 31% effective tax rate, for the same periods in 2002.
The decrease in the effective tax rate for the three- and six-month periods is a
direct result of tax planning strategies.
15
FINANCIAL CONDITION
ASSETS
Between December 31, 2002 and June 30, 2003 total assets increased by $34.0
million to $753.9 million. Although the majority of the increase is attributable
to the growth of the Company, particularly in loans, cash and cash equivalents,
and investment securities. Much of the increase was fueled by growth in core
deposits.
Loans -- Asset Quality and Allowance for Loan and Lease Losses
Gross loans increased from December 31, 2002 to June 30, 2003 by $16.1 million
to $460.2 million. Such increase resulted primarily from internal growth
particularly in residential and nonresidential real estate, construction loans
and lease financing receivables.
The following table reflects the composition of the gross loan portfolio as of
June 30, 2003 and December 31, 2002.
June 30, 2003 December 31, 2002
------------- -----------------
Loans secured by Residential Properties
One-to-four family $147,767 $142,677
Multifamily 12,319 12,861
Loans secured by nonresidential properties 208,575 203,501
Loans to individuals 6,566 8,843
Commercial loans 35,972 33,859
Construction loans 28,222 24,339
Lease financing receivable 20,290 17,058
Other loans 440 957
-------- --------
Total gross loans $460,151 $444,095
======== ========
Nonperforming Assets
Nonperforming assets include nonaccrual loans and leases and other real estate
owned (OREO). At June 30, 2003, total nonperforming loans totaled $2.9 million
or 0.63% of total gross loans, a decrease of 6 basis points from the level
reported at December 31, 2002. Of the total nonperforming loans, nonaccruing
loans accounted for $2.6 million or 0.57% 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 June 30, 2003 decreased to $474,000 compared to
$587,000 at 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 the loan and lease portfolios
closely.
16
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.
June 30, December 31,
2003 2002
-------- ------------
Nonaccruing loans $2,627 $2,767
Renegotiated loans 274 295
------ ------
Total nonperforming loans 2,901 3,062
------ ------
Loans past due 90 days and accruing 474 587
Other real estate -- --
------ ------
Total nonperforming assets $3,375 $3,649
====== ======
Asset Quality Ratios
Nonperforming loans to total gross loans 0.63% 0.69%
Nonperforming assets to total gross loans 0.73% 0.82%
Nonperforming assets to total assets 0.45% 0.51%
Allowance for loan losses to
nonperforming loans 257.01% 238.34%
During the six months ended June 30, 2003 and 2002, gross interest income of
$96,000 and $20,000, respectively, would have been recorded on loans accounted
for on a nonaccrual 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.
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:
June 30, December 31,
2003 2002
-------- ------------
Impaired loans -
Recorded investment $2,710 $2,517
Valuation allowance $ 754 $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 six-month period ended
June 30, 2003 was $2.6 million compared to $2.5 million at 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 $88,000 for the six-month period
ended June 30, 2003.
17
Analysis of the Allowance for Loan Losses
Between December 31, 2002 and June 30, 2003, the allowance for loan losses
increased by $158,000 (2.2%) to $7.5 million. The allowance constituted 1.62%
and 1.64% of gross loans on June 30, 2003 and December 31, 2002, respectively.
The provision for loan losses added $454,000 for the six-month period, while the
net chargeoffs were $297,000. Management believes the allowance for loan losses
at June 30, 2003 of $7.5 million or 220.91% of nonperforming assets, is
adequate.
The following table represents transactions affecting the allowance for loan
losses during the six-month periods ended June 30, 2003 and 2002.
2003 2002
------ ------
Balance at beginning of period, January 1, $7,298 $6,320
Charge-offs:
Commercial, financial and agricultural 7 159
Lease financing receivables 372 11
Real estate--mortgage 0 47
Installment loans to individuals 3 0
Credit cards and related plans 1 28
------ ------
383 245
Recoveries:
Commercial, financial and agricultural 34 34
Lease financing receivables 7 0
Real estate--mortgage 39 0
Installment loans to individuals 1 7
Credit cards and related plans 6 3
------ ------
87 44
------ ------
Net charge-offs 296 201
Provision charged to operations
during the six-month period 454 438
------ ------
Balance at end of period, June 30, $7,456 $6,557
====== ======
Ratio of net charge-offs during
the three-month period to average loans
outstanding during the period .07% .05%
Investment Securities
Securities increased by a net amount of $5.9 million from December 31, 2002 to
June 30, 2003. The increase resulted from $86.2 million of purchases of
additional securities offset by $80.3 million in maturities and sales during the
first six months. The net increase represents the difference between the $8.1
million increase in securities available for sale and the $2.2 million decrease
in securities held to maturity.
Cash
Cash and cash equivalents increased by $9.0 million (24.3%) to $46.1 million
between December 31, 2002 and June 30, 2003. Almost all of such increase is
attributable to cash and due from banks, primarily due to exceptional outgoing
clearings to other banks.
LIABILITIES
Between December 31, 2002 and June 30, 2003, total liabilities increased by
$32.4 million to $700.8 million. The increase is primarily attributable to a
18
$27.4 million increase in total deposits coupled with a $5.0 million increase in
FHLB advances.
Deposits
Total deposits increased by $27.4 million to $571.4 million. Such increase is
primarily attributable to a new marketing initiative to increase non-interest
bearing demand deposits.
Of the total increase, non-interest-bearing deposits, interest-bearing deposits
and savings deposits increased by $13.6 million, $9.5 million and $6.7 million,
respectively. Such increases were partially offset by a $2.5 million decrease in
time deposits.
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 June 30, 2003 totaled $256.8 million or 34% of total
assets, consisting of investment securities, cash and cash equivalents and
interest-bearing due from banks.
As of June 30, 2003, the aggregate amount of contractual obligations and other
commitments requiring potential cash outflows has not changed materially
compared to the amounts reported at 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 that 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 $53.1 million at June 30, 2003 was 7.0% of total
assets, an increase of $1.6 million 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.
The following table sets forth selected regulatory capital ratios for the
Company and the Subsidiary Banks and the required minimum regulatory ratios at
June 30, 2003:
19
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 two quarters 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. During the second quarter of 2003 the Company increased the
declared quarterly dividend by 10.0% to $0.11 per share, or an annual dividend
rate of $0.44 per share. The Company's payment of a 2.5% stock dividend during
the second quarter of 2003 had the effect of further increasing the annual
dividend rate by 2.5% to a total of 12.5%. 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 expects to continue its current dividend policy of quarterly cash
dividends to its shareholders.
Under the Amended Employment Agreement between George E. Irwin and the Company
dated August 1, 2003 (a copy of which was attached as Exhibit 10.8 to the
Company's Form 8-K filed on that date), the Company agreed to redeem 239,095
shares of its common stock beneficially owned by Mr. Irwin. The predetermined
purchase price, $16.00 per share (a total of $3,825,520), did not exceed the
stock's market price either when the Agreement was signed or on August 1, 2003.
The Company's payment of the stock redemption price will reduce shareholders'
equity during the third quarter of 2003 but will not be a charge against
earnings. The Company believes that the redemption of shares from Mr. Irwin will
have no significant impact on the Company's liquidity, that the Company will
remain well-capitalized for regulatory purposes after the redemption, and that
the redemption will be slightly accretive to basic earnings per share.
Some Specific Factors Affecting Future Results of Operations
Future movement of interest rates cannot be predicted with certainty. However,
in all of the year 2002 the Company, along with other financial institutions,
felt the effect of a weakening economy coupled with many 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 retain the leases in the
portfolio at 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
20
there can be no guarantee regarding future overall results of operations.
The Company has a new management team in place at our leasing subsidiary,
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 the loss of gain on
sale income but the Company's net interest margin should strengthen with these
high-yield receivables as the lease portfolio builds over time.
In addition, the Company has decided to change its method of delivering
brokerage services to the customers of Greater Community Financial, the
Company's broker-dealer subsidiary. In May 2003, management executed an
agreement with Raymond James Financial Services, Inc. to function as the
registered broker-dealer for Greater Community Financial. The transition started
in late June and is expected to be completed by the middle of August. Once this
becomes fully operational, it is expected to enhance the Company's earnings over
time.
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
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.
21
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
None.
Item 3 - Defaults Upon Senior Securities
None.
Item 4 - Submission of Matters to a Vote of Security Holders
See Item 4, Part II, of Form 10-Q for the quarter ended March 31, 2003,
with respect to the Annual Meeting of Stockholders held on April 16, 2003.
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 April 17, 2003, the Company filed a Form 8-K with the
Securities and Exchange Commission reporting the first quarter
2003 earnings.
On June 19, 2003, the Company filed a Form 8-K with the
Securities and Exchange Commission reporting the 2.5% stock
dividend and $0.11 per share cash dividend.
On July 16, 2003, the Company filed a Form 8-K with the
Securities and Exchange Commission reporting the second
quarter 2003 earnings.
On August 1, 2003, the Company Filed a Form 8-K with
Securities and Exchange Commission reporting the resignation
of the President & CEO of Greater Community Bancorp.
22
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 thereunto duly authorized.
GREATER COMMUNITY BANCORP
(Registrant)
Date: August 14, 2003 By: /s/Naqi A. Naqvi
-------------------------------------
Naqi A. Naqvi, Treasurer & CFO
(Duly Authorized Officer and
Principal Financial Officer)
23
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
TO
FORM 10-Q
For the quarter ended June 30, 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, 2003
(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,
2003).
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, 2003 (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, 2003).
4.6 Guarantee Agreement between Greater Community Bancorp (as
Guarantor) and Deutsche Bank Trust Company Americas (as
Trustee) dated June 28, 2003 (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, 2003).
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 2002 Employee Stock Option Plan
Adopted February 20, 2002 (incorporated by reference to
Exhibit 10.6 to Form 10-K for the year ended December 31,
2000).
10.7 Greater Community Bancorp 2002 Stock Option Plan for
Nonemployee Directors Adopted February 20, 2002 (incorporated
by reference to Exhibit 10.7 to Form 10-K for the year ended
December 31, 2000).
10.8 Amended Employment Agreement of George E. Irwin dated August
1, 2003 (incorporated by reference to Exhibit 10.8 to Form 8-K
filed on August 1, 2003).
31.1 Certification of President and Chief Executive Officer dated
August 14, 2003.
31.2 Certification of Chief Financial Officer dated August 14,
2003.
32.1 Certification of Officers pursuant to 18 U.S.C. SECss.1350
dated August 14, 2003.