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, 2004
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 (I.R.S. Employer
incorporation or organization) Identification No.)
55 Union Boulevard, Totowa, New Jersey 07512
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (973) 942-1111
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 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 the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act.)
YES |X| NO |_|
Indicate the number of shares outstanding of each of the issuer's class of
common stock, as of the latest practicable date: Common Stock $0.50 par value -
7,164,065 shares at April 22, 2004.
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
INDEX
PAGE
----
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Consolidated Balance Sheets at March 31, 2004 (unaudited)
and December 31, 2003 ............................................. 1
Consolidated Statements of Income (unaudited)
Three months ended March 31, 2004 and 2003 ........................ 2
Consolidated Statements of Changes in Shareholders' Equity (unaudited)
Three months ended March 31, 2004 and 2003 ........................ 3
Consolidated Statements of Cash Flows (unaudited)
Three months ended March 31, 2004 and 2003 ........................ 4
Notes to Consolidated Financial Statements (unaudited) ................. 5
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations ............................... 8
Item 3 - Quantitative and Qualitative Disclosures About Market Risk .... 14
Item 4 - Controls and Procedures ....................................... 14
PART II - OTHER INFORMATION
Items 1 through 6 ...................................................... 15
Signatures ............................................................. 16
Exhibit Index .......................................................... E-1
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data, unaudited)
March 31, December 31,
--------- ------------
ASSETS 2004 2003
--------- ------------
CASH AND DUE FROM BANKS - Non interest-bearing $ 21,949 $ 19,233
FEDERAL FUNDS SOLD 48,300 10,000
--------- ---------
Total cash and cash equivalents 70,249 29,233
DUE FROM BANKS - Interest-bearing 7,419 7,539
INVESTMENT SECURITIES - Available-for-sale 144,328 152,513
INVESTMENT SECURITIES - Held-to-maturity (aggregate fair values of
$3,665 and $2,712 as of March 31, 2004 and December 31, 2003, respectively) 3,635 2,726
--------- ---------
147,963 155,239
LOANS and LEASES 528,338 524,546
Less: Allowance for loan and lease losses (8,574) (8,142)
Unearned income (786) (747)
--------- ---------
Net loans and leases 518,978 515,657
PREMISES AND EQUIPMENT, net 7,399 7,545
ACCRUED INTEREST RECEIVABLE 3,002 2,635
OTHER REAL ESTATE OWNED 825 824
BANK-OWNED LIFE INSURANCE 13,152 13,026
GOODWILL 11,574 11,574
OTHER ASSETS 11,444 9,853
--------- ---------
TOTAL ASSETS $ 792,005 $ 753,125
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
DEPOSITS:
Non interest-bearing $ 153,861 $ 154,462
Interest-bearing 160,266 158,719
Savings 101,684 102,152
Time Deposits less than $100 150,920 110,243
Time Deposits $100 and over 45,302 35,137
--------- ---------
Total deposits 612,033 560,713
FHLB ADVANCES 85,000 85,000
FEDERAL FUNDS PURCHASED -- 15,700
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE 7,921 10,047
ACCRUED INTEREST PAYABLE 1,455 1,475
OTHER LIABILITIES 7,792 5,620
GUARANTEED PREFERRED BENEFICIAL INTEREST IN THE COMPANY'S
SUBORDINATED DEBT 24,000 24,000
--------- ---------
TOTAL LIABILITIES $ 738,201 $ 702,555
--------- ---------
SHAREHOLDERS' EQUITY:
Common stock, par value $0.50 per share: 20,000,000 shares authorized, 7,153,260 and
7,004,966 shares issued and outstanding at March 31, 2004 and December 31, 2003, respectively 3,577 3,502
Additional paid-in capital 43,154 41,788
Retained earnings 3,765 2,735
Accumulated other comprehensive income 3,308 2,545
--------- ---------
Total shareholders' equity 53,804 50,570
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 792,005 $ 753,125
========= =========
(See notes to Consolidated Financial Statements)
1
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data, unaudited)
Three Months
Ending March 31,
------------------
2004 2003
------ ------
INTEREST INCOME:
Loans and leases, including fees $8,367 $7,859
Investment securities 1,486 1,826
Federal funds sold and deposits with banks 100 139
------ ------
Total interest income 9,953 9,824
------ ------
INTEREST EXPENSE:
Deposits 1,325 1,652
Short-term borrowings 1,150 1,113
Long-term borrowings 507 510
------ ------
Total interest expense 2,982 3,275
------ ------
NET INTEREST INCOME 6,971 6,549
PROVISION FOR LOAN AND LEASE LOSSES 361 316
------ ------
Net interest income after provision for loan
and lease losses 6,610 6,233
NON-INTEREST INCOME:
Service charges on deposit accounts 704 620
Other commission and fees 225 154
Fee income on mortgage loans sold 11 138
Gain on sale of investment securities 289 289
Gain on sale of leases 1 3
Bank owned life insurance 126 153
All other income 204 243
------ ------
Total non-interest income 1,560 1,600
NON-INTEREST EXPENSES:
Salaries and employee benefits 3,153 2,961
Occupancy and equipment 889 862
Regulatory, professional and other fees 506 565
Computer services 142 109
Office expenses 301 302
Other operating expenses 579 691
------ ------
Total non-interest expenses 5,570 5,490
------ ------
INCOME BEFORE PROVISION FOR INCOME TAXES 2,600 2,343
------ ------
PROVISION FOR INCOME TAXES 781 704
------ ------
NET INCOME $1,819 $1,639
====== ======
Weighted Average Shares outstanding - Basic 7,046 7,213
====== ======
Weighted Average Shares outstanding - Diluted 7,397 7,664
====== ======
Net income per share - Basic $ 0.26 $ 0.23
====== ======
Net income per share - Diluted $ 0.25 $ 0.21
====== ======
(See notes to Consolidated Financial Statements)
2
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(in thousands, unaudited)
Three months ended March 31, 2004
Accumulated
Additional Other Total
Common Paid-in Retained Comprehensive Shareholders' Comprehensive
Stock Capital Earnings Income Equity Income
----------------------------------------------------------------------------------------
Balance, January 1, 2004 $ 3,502 $41,788 $ 2,735 $ 2,545 $50,570 --
Net income 1,819 1,819 $ 1,819
Exercise of stock options 75 1,366 1,441
Cash dividends of $0.11 per share (789) (789)
Other comprehensive income,
net of reclassification
adjustments and taxes 763 763 763
-------
Total comprehensive income $ 2.582
-------
Retirement of treasury stock -- -- -- -- --
------- ------- ------- ------- -------
Balance, March 31, 2004 $ 3,577 $43.154 $ 3,765 $ 3.308 $53,804
------- ------- ------- ------- -------
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 of $0.10 per share (705) (705)
Other comprehensive loss, net of
reclassification adjustments
and taxes (691) (691) (691)
-------
Total comprehensive income $ 948
-------
Retirement of treasury stock (20) (660) -- -- (680)
------- ------- ------- ------- -------
Balance, March 31, 2003 $ 3.514 $42.588 $ 2,655 $ 2.719 $51,476
------- ------- ------- ------- -------
(See notes to Consolidated Financial Statements)
3
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
Three months ended
March 31,
--------------------
2004 2003
--------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,819 $ 1,639
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 314 322
Amortization of premium on securities, net 245 726
Gains on sales of leases (1) --
Gains on sales of securities, net (289) (289)
Provision for loan and lease losses 361 316
Increase in accrued interest receivable (367) (259)
Increase in Bank owned life insurance and other assets (1,717) (1,082)
Increase in accrued interest and other liabilities 2,152 869
-------- --------
Net cash provided by operating activities 2,517 2,242
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Available-for-sale investment securities
Purchases (5,580) (47,359)
Sales 759 209
Maturities 13,453 36,941
Held-to-maturity investment securities
Purchases (912) --
Maturities and principal paydowns 3 113
Net decrease (increase) in interest-bearing deposits with banks 120 (2,649)
Net decrease (increase) in loans (3,321) 4,812
Capital expenditures, net (168) (223)
(Increase) decrease in Real Estate Owned (1) --
-------- --------
Net cash provided by (used in) investing activities 4,353 (8,156)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposit accounts 51,320 15,892
(Decrease) in federal funds purchased and securities sold under
agreement to repurchase (17,826) (433)
Dividends paid (789) (705)
Proceeds from exercise of stock options 1,441 415
Purchase of treasury stock -- (680)
Other, net -- (7)
-------- --------
Net cash provided by financing activities 34,146 14,482
-------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS $ 41,016 $ 8,568
-------- --------
CASH AND CASH EQUIVALENTS, beginning of the period $ 29,233 $ 37,133
-------- --------
CASH AND CASH EQUIVALENTS, end of the period $ 70,249 $ 45,701
======== ========
(See notes to Consolidated Financial Statements)
4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
In the opinion of management, these unaudited financial statements contain all
disclosures necessary to present fairly the Company's consolidated financial
position at March 31, 2004, the consolidated results of operations for the three
months ended March 31, 2004 and 2003 and cash flows for the three months ended
March 31, 2004 and 2003. The financial statements reflect all adjustments
(consisting solely of normal recurring adjustments) that in the opinion of
management are necessary 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, 2003. Unless
otherwise indicated, all dollar figures in the tables below, except for per
share data, are set forth in thousands.
DIVIDEND
On March 16, 2004, the Company's Board of Directors declared a cash dividend of
11.0 cents ($0.11) per share on the Company's common stock. The record date of
the dividend was April 15, 2004 and the payment date was April 30, 2004.
EARNINGS PER SHARE COMPUTATION
The Company's reported diluted earnings per share of $0.25 and $0.21 for the
three-month periods ended March 31, 2004 and 2003, respectively, both take into
consideration the dilutive effects of the Company's outstanding common stock
equivalents, namely, stock options.
For the Quarter Ended March 31, 2004
-------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ----------
Basic EPS
Net income available to common stockholders $1,819 7,046 $ 0.26
Effect of Dilutive Securities
Stock options -- 351 (0.01)
------ ------ ------
Diluted EPS
Net income available to common stockholders plus assumed conversions $1,819 7,397 $ 0.25
====== ====== ======
For the Quarter Ended March 31, 2003
-------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ----------
Basic EPS
Net income available to common stockholders $1,639 7,213 $ 0.23
Effect of Dilutive Securities
Stock options -- 451 (0.02)
------ ------ ------
Diluted EPS
Net income available to common stockholders plus assumed conversions $1,639 7,664 $ 0.21
====== ====== ======
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.
March 31, December 31,
2004 2003
--------- ------------
Nonaccrual loans and leases $2,262 $2,010
Renegotiated loans 240 252
------ ------
Total nonperforming loans and leases $2,502 $2,262
====== ======
Loans past due 90 days and accruing $ 537 $ 313
====== ======
Gross interest income which would have been recorded under original terms $ 80 $ 104
====== ======
5
The balance of impaired loans was $2.4 million and $2.1 million at March 31,
2004 and December 31, 2003, respectively. The Company's banking 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 $456,000 and $455,000 for the two periods respectively.
STOCK OPTIONS
At March 31, 2004, 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. Accordingly, no compensation has been
recognized for the plans in 2004 and 2003. In addition, 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, no stock-based employee and
director compensation cost is included in determining net income. 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, Accounting
for Stock-Based Compensation, to stock-based employee and director compensation.
Three Months Ended March 31,
----------------------------
2004 2003
-------------- ----------
Net income As reported $ 1,819 $ 1,639
Less: stock-based compensation costs determined
under fair value-based method for all awards (61) (64)
------- -------
Pro forma $ 1,758 $ 1,575
======= =======
Earnings per share of common stock - basic As reported $ 0.26 $ 0.23
Pro forma $ 0.25 $ 0.22
Earnings per share of common stock-diluted As reported $ 0.25 $ 0.22
Pro forma $ 0.24 $ 0.21
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 2003 and 2004: 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 granted 10,000 stock options during the three-month
period ended March 31, 2004.
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, 2003.
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, 2004 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
6
holds a variable interest that it acquired before February 1, 2003. As of March
31, 2004, 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 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. The adoption of SFAS No. 149 did not 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 September15, 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.
Accounting for Loans or Certain Debt Securities Acquired in a Transfer
In October 2003, the AICPA issued SOP 03-3 Accounting for Loans or Certain Debt
Securities Acquired in a Transfer. SOP 03-3 applies to a loan with the evidence
of deterioration of credit quality since origination acquired by completion of a
transfer for which it is probable at acquisition, that the Company will be
unable to collect all contractually required payments receivable. SOP 03-3
requires that the Company recognize the excess of all cash flows expected at
acquisition over the investor's initial investment in the loan as interest
income on a level-yield basis over the life of the loan as the accretable yield.
The loan's contractual required payments receivable in excess of the amount of
its cash flows accepted at acquisition (nonaccretable difference) should not be
recognized as an adjustment to yield, a loss accrual or a valuation allowance
for credit risk. SOP 03-3 is effective for loans acquired in fiscal years
beginning after December 31, 2004. Early adoption is permitted. Management is
currently evaluating the provisions of SOP 03-3.
7
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION (continued)
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, 2004 and the results of operations for the three-month
periods ended March 31, 2004 and 2003 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, 2003, and the other information therein. The consolidated balance sheet as
of March 31, 2004 and the statements of operations and cash flows for the
three-month periods ended March 31, 2004 and 2003 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 ended March 31, 2004. 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, 2003.
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 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 and lease 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 in the event of
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 and lease portfolios. 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.
8
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.
Business Overview
The Company is registered with the Federal Reserve Board as a bank holding
company. At the end of 2001 it 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 commercial and
retail banking, brokerage services, and equipment leasing businesses that
provide products and services primarily in the Company's geographic markets in
northern counties of New Jersey. Through Highland Capital Corp., one of the
Company's wholly-owned non-bank subsidiaries, the Company is also engaged in the
business of leasing equipment to small and mid-size businesses on a national
basis.
Financial services providers 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 the challenges and competition, our key strengths of service
and local delivery continue to attract high-quality business to our Company.
The Company continues 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. The Company is enthusiastic about future business opportunities
with its business model introduced in 2003 - one highly focused on building
relationships and strengthening its asset position in the commercial market. The
Company's funding strategy, based on remixing of deposits toward lower cost core
deposits, continues to be successful.
The Company's expansion of its branch network into Morris County, New Jersey was
well received and encourages its further expansion into that county. The Company
will continue to seek additional opportunities for expansion into other North
Jersey communities.
Earnings Summary
Net income for the first three months of 2004 was $1.8 million or $0.25 per
diluted share, a 19.0% increase in net income per diluted share from $1.6
million or $0.21 per diluted share earned in the first three months of 2003.
The increase in net income for the most recent three-month period primarily
reflects an increase in interest income on loans and leases relating to a
prepayment penalty recorded during the quarter.
Net Interest Income
Net interest income for the three months ended March 31, 2004 increased by
$422,000 or 6.4% to $7.0 million compared to the three months ended March 31,
2003. Total interest income for the period increased by $129,000 to $10.0
million while the total interest expense decreased by $293,000 to $3.0 million.
Among the earning assets, interest on loans and leases increased by $508,000 due
to an increase in the average loans and leases outstanding for the period
coupled with receipt of a prepayment penalty of $200,000. Interest income on
investment securities decreased by $340,000 largely due to a decline in average
investment securities during this period compared to the same period in the
prior year. Interest on federal funds sold and deposits with other banks
decreased by $39,000 primarily due to a decline in deposits with other banks.
Interest paid on deposits for the three months ended March 31, 2004 declined by
$327,000 due to declining yields when compared to the same period in the prior
year. Interest paid on short-term borrowings increased moderately.
The Company's net interest margin for the three-month period ended March 31,
2004, was almost unchanged compared to the same period in the prior year.
However, the margin improved by 11 basis points when compared to the fourth
quarter of 2003.
9
The following table reflects the components of net interest income for the three
months ended March 31, 2004 and 2003.
For the Quarters Ended March 31,
-------------------------------------------------------------------------
2004 2003
----------------------------------- ----------------------------------
Average Interest Average Average Interest Average
Balance Earned/Paid Yield/Rate Balance Earned/Paid Yield/Rate
--------- ----------- ---------- ------- ----------- ----------
ASSETS
Earning Assets:
Investment securities $153,303 $ 1,486 3.93% $197,759 $ 1,826 3.74%
Due from banks - interest-bearing 7,640 49 2.60% 10,555 68 2.61%
Federal funds sold 20,713 51 0.98% 22,542 71 1.26%
Loans 532,258 8,367 6.38% 443,103 7,859 7.19%
-------- -------- -------- --------
Total earning assets 713,914 9,953 5.58% 673,959 9,824 5.86%
Less: Allowance for loan and lease losses (8,349) -- (7,461) --
Unearned income - loans (4,560) -- (746) --
All other assets 66,938 -- 61,402 --
-------- -------- -------- --------
Total assets $767,943 $ 9,953 $723,492 $ 9,824
======== ======== ======== ========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Interest-bearing Liabilities:
Savings and interest-bearing deposits $256,845 $ 312 0.49% $251,155 $ 618 1.00%
Time deposits 170,703 1,013 2.41% 159,290 1,034 2.63%
Federal funds and short-term borrowings 104,910 1,150 4.45% 93,181 1,113 4.84%
Trust preferred securities 24,000 507 8.45% 24,000 510 8.50%
-------- -------- -------- --------
Total interest-bearing liabilities 556,457 2,982 2.17% 527,626 3,275 2.52%
Non interest-bearing deposits 152,001 -- 136,675 --
Other liabilities 7,123 -- 7,338 --
Shareholders' equity 52,361 -- 51,853 --
-------- -------- -------- --------
Total liabilities and shareholders' equity $767,943 $ 2,982 $723,492 $ 3,275
======== ======== ======== ========
NET INTEREST INCOME $ 6,971 $ 6,549
======== ========
NET INTEREST MARGIN 3.91% 3.89%
======== ========
Other Income
Non-interest income continues to represent a considerable source of income for
the Company, constituting 22% of net interest income for the three months ended
March 31, 2004. Non-interest income decreased by $40,000 for the period ended
March 31, 2004 compared to the same period in the prior year. Service charges on
deposits and other commission and fees showed strong growth compared to the same
period in 2003, increasing by $84,000 and $71,000 respectively, while fee income
on mortgages sold decreased by $127,000 primarily as a result of a decline in
mortgage refinancing activity.
Other Expenses
Total other expenses totaled $5.6 million, reflecting a moderate increase of
$80,000 for the three months ended March 31, 2004 compared to the same period in
2003. The largest component of other expenses, salaries and employee benefits,
accounted for an increase of $192,000 or 6.5% reflecting rising health care
costs coupled with annual compensation adjustments. Regulatory, professional and
other fees declined moderately. Other operational expenses decreased $112,000 as
the Company continues to monitor and control its spending.
Provision for Loan and Lease Losses
The provision for loan and lease losses for the three months ended March 31,
2004 increased by $45,000 to $361,000 compared to the same period in 2003. The
increase is primarily due to the increase in average loan and lease portfolio
compared to the same period in 2003.
Provision for Income Taxes
The provision for income taxes for the three months ended March 31, 2004 was
$781,000, or an effective rate of 30.0%, an increase of $77,000 over the three
months ended March 31, 2003.
10
FINANCIAL CONDITION
ASSETS
Between December 31, 2003 and March 31, 2004 total assets increased by $38.9
million to $792.0 million. The increase is primarily attributable to growth in
time deposits of the Subsidiary Banks.
Loans and Leases, Asset Quality and Allowance for Loan and Lease Losses
Gross Loans and Leases
Gross loans and leases increased from December 31, 2003 to March 31, 2004 by
$4.0 million to $528.3 million. The increase resulted primarily from internal
growth particularly in nonresidential real estate, construction loans and lease
financing receivables.
The following table reflects the composition of the gross loan portfolio as of
March 31, 2004 and December 31, 2003:
March 31, 2004 December 31, 2003
-------------- -----------------
Loans secured by one-to-four-family residential properties $145,459 $148,121
Loans secured by multi-family residential properties 10,638 11,619
Loans secured by nonresidential properties 260,470 260,318
Loans to individuals 5,940 5,686
Commercial loans 38,967 37,532
Construction loans 38,301 37,640
Lease financing receivables 27,919 23,181
Other loans 644 449
Total gross loans and leases -------- --------
$528,338 $524,546
======== ========
Nonperforming Assets
Nonperforming assets include nonaccrual loans and leases, loans past due 90 days
and accruing and other real estate owned (OREO). At March 31, 2004,
nonperforming loans totaled $2.5 million or 0.47% of total gross loans, an
increase of 4 basis points from the level reported at December 31, 2003. Of the
total nonperforming loans, nonaccruing loans accounted for $2.3 million or 0.43%
of total loans, as compared to $2.0 million or 0.38% of total loans at December
31, 2003. Loans past due 90 days or more and still accruing at March 31, 2004
increased $224,000 to $537,000 compared to $313,000 at December 31, 2003.
Management believes the asset quality remains sound, although non-performing
assets have increased moderately, keeping pace with the overall growth in the
loan and lease portfolio. However, the Company maintains adequate reserves and
believes that additional reserves are not required. Management will continue to
monitor the loan and lease 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, 2004 December 31, 2003
-------------- -----------------
Nonaccruing loans and leases $2,262 $2,010
Renegotiated loans 240 252
------ ------
Total nonperforming loans and leases 2,502 2,262
Loans past due 90 days and accruing 537 313
Other real estate owned 825 824
------ ------
Total nonperforming assets $3,864 $3,399
====== ======
Nonperforming loans and leases to total gross loans 0.47% 0.43%
Nonperforming assets to total gross loans and other
real estate owned 0.58% 0.49%
Nonperforming assets to total assets 0.49% 0.45%
Allowance for loan and lease losses to nonperformingloans 342.69% 359.95%
For the quarters ended March 31, 2004 and 2003, gross interest income of
$126,000 and $56,000, respectively, would have been recorded on loans accounted
for on a nonaccrual basis if the loans had been current throughout the periods.
11
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:
March 31, December 31,
2004 2003
--------- ------------
Impaired loans
Recorded investment $2,364 $2,100
Valuation allowance 456 455
This valuation allowance is included in the allowance for loan losses on the
Company's Consolidated Balance Sheets.
The average recorded investment in impaired loans for the three-month period
ended March 31, 2004 was $1.9 million compared to $2.5 million at December 31,
2003.
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 $114,000 for the three-month
period ended March 31, 2004.
Analysis of the Allowance for Loan and Lease Losses
Between December 31, 2003 and March 31, 2004, the allowance for loan and lease
losses increased $432,000 to $8.6 million. The allowance constituted 1.63% and
1.55% of gross loans on March 31, 2004 and December 31, 2003, respectively. The
provision for loan and lease losses added $361,000 for the three-month period,
while net recoveries were $72,000. Management believes the allowance for loan
losses at March 31, 2004 of $8.6 million or 282% of nonperforming assets is
adequate.
The following table represents transactions affecting the allowance for loan and
lease losses during the three-month periods ended March 31, 2004 and 2003.
2004 2003
------- ------
Balance at beginning of year $ 8,142 $7,298
Charge-offs:
Commercial -- 7
Lease financing receivables 65 81
Installment loans to individuals -- 3
Credit cards and related plans 4 --
------- ------
69 91
Recoveries:
Commercial 114 34
Lease financing receivables 18 --
Installment loans to individuals 2 38
Credit cards and related plans 6 4
------- ------
140 76
------- ------
Net charge-offs (recoveries) (71) 15
Provision charged to operations 361 316
------- ------
Balance at end of period, March 31 $ 8,574 $7,599
======= ======
Ratio of net (recoveries) charge-offs during the three-
month period to average loans and leases
outstanding during the period (0.01%) 0.00%
Investment Securities
Securities decreased by a net amount of $7.3 million from December 31, 2003 to
March 31, 2004. The decrease resulted primarily from $6.5 million of purchases
of additional securities being more than offset by $14.2 million in prepayments,
maturities and sales during the three-month period. The decrease reflects an
$8.3 million decrease in securities available for sale partially offset by a
$1.0 million increase in securities held to maturity.
12
Cash
Cash and cash equivalents increased by $41.0 million (143%) to $70.2 million
between December 31, 2003 and March 31, 2004. Such increase is a result of an
increase of $51.3 million in total deposits partially offset by a decrease in
federal funds purchased.
LIABILITIES
Between December 31, 2003 and March 31, 2004, total liabilities increased by
$35.6 million to $738.2 million. The increase is primarily attributable to a
$51.3 million increase in total deposits coupled with a $15.7 million decrease
in federal funds purchased.
Deposits
Total deposits increased by $51.3 million to $612.0 million. Such increase is
primarily attributable to a deposit promotion initiative to raise time deposits
with varying maturities.
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 liquid and its liquidity has been sufficient to
meet loan demand and the possible outflow of deposits.
Sources of liquidity at March 31, 2004 totaled $225.6 million or 28% of total
assets, consisting of investment securities, cash and cash equivalents and
interest-bearing due from banks.
As of March 31, 2004, 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, 2003.
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 meet those guidelines that involve quantitative measures of
assets and certain off-balance sheet items as calculated under regulatory
accounting practices (risk-adjusted assets).
Total shareholders' equity of $53.8 million at March 31, 2004 was 6.8% of total
assets, an increase of $3.2 million compared with $50.6 million or 6.7% of total
assets at December 31, 2003. Such increase is primarily attributable to an
increase in retained earnings and issuance of stock during the three-month
period. 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
March 31, 2004:
To Be Well-Capitalized
Under Prompt
For Capital Corrective Action
Actual Adequacy Purposes Provisions
-------------------- -------------------- ----------------------
Amount Ratio Amount Ratio Amount Ratio
-------- -------- -------- -------- ----------- ----------
Total capital (to risk-weighted assets)
Greater Community Bancorp $ 72,041 12.11% $ 47,581 8.00% N/A N/A
Greater Community Bank 37,136 10.26 28,949 8.00 $ 36,187 10.00%
Bergen Commercial Bank 19,823 10.00 15,852 8.00 19,815 10.00
Rock Community Bank 5,612 19.17 2,342 8.00 2,928 10.00
Tier 1 capital (to risk-weighted assets)
Greater Community Bancorp 55,754 9.37 23,790 4.00 N/A N/A
Greater Community Bank 32,597 9.01 14,475 4.00 21,712 6.00
Bergen Commercial Bank 17,346 8.75 7,926 4.00 11,889 6.00
Rock Community Bank 5,244 17.91 1,171 4.00 1,757 6.00
Tier 1 capital (to average assets)
Greater Community Bancorp 55,754 7.37 30,255 4.00 N/A N/A
Greater Community Bank 32,597 6.81 19,139 4.00 23,924 5.00
Bergen Commercial Bank 17,346 7.39 9,384 4.00 11,730 5.00
Rock Community Bank 5,244 14.43 1,454 4.00 1,817 5.00
13
For the last two quarters of 2003 and the first quarter of 2004 the Company
declared cash dividends at the rate of $0.11 per share, or an annual rate of
$0.44 per share. The Company's Board of Directors believes that cash dividends
are an important component of shareholder value and that at its current level of
performance and capital, the Company will continue its current dividend policy
of quarterly 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 the year 2003 and during the first part of 2004, the Company, along
with other financial institutions, has experienced a stable rate environment.
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 there can be no guarantee regarding future overall results of
operations.
The Company's interest rate risk profile is positioned in such a way that a
possible increase in interest rates will positively impact the results of
operations.
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 2003 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
14
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, Use of Proceeds and Issuer Purchases of Equity
Securities
None.
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 2004 (the "2004
Annual Meeting") on April 20, 2004. The only business before the 2004
Annual Meeting was the election of Directors.
In accordance with the nominations described in the Company's definitive
2004 Proxy Statement filed with the Securities and Exchange Commission,
both of the nominees were elected as directors for three-year terms
expiring in 2007 and until the election and qualification of their
respective successors. The voting was as follows:
Name of Nominee Votes for Votes Withheld
--------------- --------- --------------
Anthony M. Bruno, Jr. 5,414,790 70,091
Alfred R. Urbano 5,417,810 67,071
The names of the Company's other Directors whose terms of office as
Director continued after the 2004 Annual Meeting (and the year in which
their respective terms will expire) are as follows: C. Mark Campbell
(2005), Joseph A. Lobosco (2005); Robert C. Soldoveri (2005); Charles J.
Volpe (2005); M.A. Bramante (2006); William T. Ferguson (2006); and David
Waldman (2006).
Item 5 - Other information
Executive Supplemental Retirement Income Plan. During the first quarter of
2004 the Company's principal bank subsidiary, Greater Community Bank (GCB),
entered into an agreement captioned "Executive Supplemental Retirement
Income Agreement" ("ESRIA") with Anthony M. Bruno, Jr. The Company joined
in the ESRIA as a guarantor of GCB's obligations to Mr. Bruno. The ESRIA is
effective as of February 1, 2004.
The ESRIA is a non-qualified retirement plan designed to provide Mr. Bruno
with various benefits. The primary benefit is an annual retirement benefit
that has been actuarially determined, for purposes of funding the plan, to
be $111,989 for 15 years commencing at age 65. In the event of Mr. Bruno's
death before attaining age 65, his beneficiary will receive a death benefit
commencing thirty days after his death. In the event of Mr. Bruno's death
after payments have commenced, his beneficiary will continue to receive
benefits for the remainder of the 15-year period. If a change in control
occurs, Mr. Bruno will be entitled to his full benefit commencing at his
normal benefit age. The ESRIA also provides pre-retirement benefits and
disability benefits.
Mr. Bruno's benefits under the ESRIA are partially offset by the benefits
already payable to him under a Directors Emeritus Plan implemented by
Bergen Commercial Bank in February of 1999.
The plan is considered an unfunded plan for tax and ERISA purposes. A
secular trust, of which Mr. Bruno is the grantor, was implemented in
conjunction with the ESRIA. GCB makes annual contributions to Mr. Bruno's
trust equal to the required GAAP expense accrual from GCB's general assets.
For the year ended December 31, 2004, GCB's incremental expense under the
ESRIA is approximately $68,660 to fund the difference between Mr. Bruno's
total ESRIA benefits and the benefits funded by Bergen Commercial Bank
under its Directors Emeritus Plan.
A conformed copy of the ESRIA with Mr. Bruno is being filed with this
quarterly report as Exhibit 10.9.
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 January 23, 2004, the Company filed a Form 8-K with the
Securities and Exchange Commission reporting the earnings for
the fourth quarter and for the year 2003.
On March 19, 2004, the Company Filed a Form 8-K with the
Securities and Exchange Commission reporting the announcement
of 11.0 cents per share cash dividend.
On March 23, 2004, the Company Filed a Form 8-K with the
Securities and Exchange Commission reporting the change in the
external accountants.
On April 23, 2004, the Company Filed a Form 8-K with the
Securities and Exchange Commission reporting the earnings for
the first quarter ending March 31, 2004.
15
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: May 7, 2004 BY: /s/ Naqi A. Naqvi
----------------------------------------
Naqi A. Naqvi
Senior Vice President, Treasurer & CFO
(Duly Authorized Officer and Principal
Financial Officer)
16
-------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
TO
FORM 10-Q
For the quarter ended March 31, 2004
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
("registrant") under the Securities Act of 1933, as amended, or to reports or
registration statements filed by registrant under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), respectively, and are hereby incorporated
by reference to such statements or reports.
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 May 15, 2001
(incorporated by reference to Exhibit 3.2 to Form 8-K filed on June 18,
2001)
4.1 Junior Subordinated Indenture between the Company and Deutsche Bank
Trust Company Americas as Trustee, dated May 24, 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 (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 May 24,
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)
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)
10.9 Executive Supplemental Retirement Income Agreement for Anthony M.
Bruno dated as of February 1, 2004 among Greater Community Bank,
Anthony M. Bruno and Greater Community Bancorp (as guarantor).
31.1 Certification of Chief Executive Officer dated May 7, 2004
31.2 Certification of Chief Financial Officer dated May 7, 2004
32.1 Certification of Officers pursuant to 18 U.S.C. Section 1350 dated May
7, 2004
E-1