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, 2005
----------------------------------------
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 -
7,610,507 shares at April 27, 2005.
GREATER COMMUNITY BANCORP
Index to Form 10-Q for March 31, 2005
-------------------------------------
PAGE
----
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Consolidated Balance Sheets at March 31, 2005 (unaudited)
and December 31, 2004................................................... 1
Consolidated Statements of Income (unaudited)
Three months ended March 31, 2005 and 2004.............................. 2
Consolidated Statements of Changes in Shareholders' Equity (unaudited)
Three months ended March 31, 2005 and 2004.............................. 3
Consolidated Statements of Cash Flows (unaudited)
Three months ended March 31, 2005 and 2004.............................. 4
Notes to Consolidated Financial Statements (unaudited)....................... 5
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations..................................... 7
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
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
March 31, December 31,
2005 2004
----------- ------------
ASSETS
CASH AND DUE FROM BANKS - Non interest-bearing $ 17,605 $ 22,952
FEDERAL FUNDS SOLD 20,575 9,370
----------- -----------
Total cash and cash equivalents 38,180 32,322
DUE FROM BANKS - Interest-bearing 5,850 7,806
INVESTMENT SECURITIES - Available-for-sale 101,526 111,840
INVESTMENT SECURITIES - Held-to-maturity (aggregate fair values of
$38,916 and $20,104 at March 31, 2005 and December 31, 2004, respectively) 37,445 20,205
----------- -----------
Total investment securities 138,971 132,045
LOANS AND LEASES, net of unearned income 625,493 611,192
Less: Allowance for loan and lease losses (9,106) (8,918)
----------- -----------
Net loans and leases 616,387 602,274
PREMISES AND EQUIPMENT, net 9,795 10,023
ACCRUED INTEREST RECEIVABLE 3,360 2,835
OTHER REAL ESTATE OWNED 849 849
BANK-OWNED LIFE INSURANCE 14,630 14,503
GOODWILL 11,574 11,574
OTHER ASSETS 12,524 11,132
----------- -----------
TOTAL ASSETS $ 852,120 $ 825,363
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
DEPOSITS:
Non interest-bearing $ 171,010 $ 167,850
Interest-bearing checking 198,963 170,343
Savings 91,520 93,844
Time deposits less than $100 146,972 136,144
Time deposits $100 and over 55,184 35,770
----------- -----------
Total deposits 663,649 603,951
FHLB ADVANCES 85,000 85,000
FEDERAL FUNDS PURCHASED 4,000 40,000
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE 6,281 5,771
ACCRUED INTEREST PAYABLE 1,690 1,637
OTHER LIABILITIES 7,566 5,646
SUBORDINATED DEBT 24,743 24,743
----------- -----------
Total liabilities 792,929 766,748
SHAREHOLDERS' EQUITY:
Common stock, par value $0.50 per share: 20,000,000 shares authorized,
7,610,507 and 7,570,278 shares outstanding at March 31, 2005 and
December 31, 2004, respectively 3,805 3,785
Additional paid-in capital 48,907 48,538
Retained earnings 5,725 4,475
Accumulated other comprehensive income 754 1,817
----------- -----------
Total shareholders' equity 59,191 58,615
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 852,120 $ 825,363
=========== ===========
The accompanying notes to consolidated financial statements are an
integral part of these statements.
1
GREATER COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data, unaudited)
Three Months Ended
March 31,
----------------------------
2005 2004
----------- -----------
INTEREST INCOME:
Loans and leases $ 9,639 $ 8,367
Investment securities 1,298 1,486
Federal funds sold and deposits with banks 93 100
----------- -----------
Total interest income 11,030 9,953
----------- -----------
INTEREST EXPENSE:
Deposits 1,853 1,325
Short-term borrowings 1,191 1,150
Long-term borrowings 507 507
----------- -----------
Total interest expense 3,551 2,982
----------- -----------
NET INTEREST INCOME 7,479 6,971
PROVISION FOR LOAN AND LEASE LOSSES 211 361
----------- -----------
Net interest income after provision for loan and lease losses 7,268 6,610
----------- -----------
NON-INTEREST INCOME:
Service charges on deposit accounts 730 704
Other commission and fees 158 225
Loan fee income 96 11
Gain on sale of investment securities 440 289
Gain on sale of leases -- 1
Bank-owned life insurance 127 126
All other income 235 204
----------- -----------
Total non-interest income 1,786 1,560
----------- -----------
NON-INTEREST EXPENSE:
Salaries and employee benefits 3,363 3,153
Occupancy and equipment 950 889
Regulatory, professional and other fees 517 506
Computer services 150 142
Office expenses 306 301
Other operating expenses 568 579
----------- -----------
Total non-interest expense 5,854 5,570
----------- -----------
INCOME BEFORE PROVISION FOR INCOME TAXES 3,200 2,600
PROVISION FOR INCOME TAXES 1,037 781
----------- -----------
NET INCOME $ 2,163 $ 1,819
=========== ===========
Weighted average shares outstanding - Basic 7,586 7,221
Weighted average shares outstanding - Diluted 7,818 7,581
Earnings per share - Basic $ 0.29 $ 0.25
Earnings per share - Diluted $ 0.28 $ 0.24
The accompanying notes to consolidated financial statements are an
integral part of these statements.
2
GREATER COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(in thousands, unaudited)
Three Months Ended March 31, 2005
Accumulated
Additional Other Total
Common Paid-in Retained Comprehensive Comprehensive Shareholders'
Stock Capital Earnings Income Income Equity
--------- ---------- ---------- ------------- ------------- -------------
BALANCE: January 1, 2005 $ 3,785 $ 48,538 $ 4,475 $ 1,817 $ 58,615
Net income -- -- 2,163 -- $ 2,163 2,163
Exercise of stock options 13 158 -- -- 171
Issuance of common stock 7 211 -- -- 218
Cash dividends of $0.12 per share -- -- (913) -- (913)
Other comprehensive income,
net of reclassification
adjustments and taxes -- -- -- (1,063) (1,063) (1,063)
--------
Total comprehensive income $ 1,100
-------- -------- -------- -------- ======== --------
BALANCE: March 31, 2005 $ 3,805 $ 48,907 $ 5,725 $ 754 $ 59,191
======== ======== ======== ======== ========
Three Months Ended March 31, 2004
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
Issuance of common stock -- -- -- -- --
Cash dividends of $o.11 per share -- -- (789) -- (789)
Other comprehensive income,
net of reclassification
adjustments and taxes -- -- -- 763 763 763
--------
Total comprehensive income $ 2,582
-------- -------- -------- -------- ======== --------
BALANCE: March 31, 2004 $ 3,577 $ 43,154 $ 3,765 $ 3,308 $ 53,804
======== ======== ======== ======== ========
The accompanying notes to consolidated financial statements are an
integral part of these statements.
3
GREATER COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
Three Months Ended
March 31,
-------------------------------
2005 2004
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,163 $ 1,819
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 319 314
Amortization of premium and accretion of discount on securities, net 63 245
Provision for loan and lease losses 211 361
(Gains) on sales of leases -- (1)
(Gains) on sales of securities, net (440) (289)
(Increase) in accrued interest receivable (525) (367)
(Increase) in bank-owned life insurance and other assets (582) (1,717)
Increase (decrease) in accrued expenses and other liabilities (327) 2,152
------------ ------------
Net cash provided by operating activities 882 2,517
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Available-for-sale investment securities
Purchases -- (5,580)
Sales 1,888 759
Maturities and principal paydowns 6,790 13,453
Held-to-maturity investment securities
Purchases (15,898) (912)
Maturities and principal paydowns 971 3
Net decrease in interest-bearing deposits with banks 1,956 120
Net (increase) in loans (14,324) (3,321)
Capital expenditures (91) (168)
(Increase) in other real estate owned -- (1)
------------ ------------
Net cash (used in) provided by investing activities (18,708) 4,353
------------ ------------
CASH FLOW FROM FINANCING ACTIVITIES:
Net increase in deposit accounts 59,698 51,320
(Decrease) in federal funds purchased and securities sold under
agreement to repurchase (35,490) (17,826)
Dividends paid to common shareholders (913) (789)
Proceeds from exercise of stock options 171 1,441
Proceeds from issuance of common stock 218 --
------------ ------------
Net cash provided by financing activities 23,684 34,146
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS $ 5,858 $ 41,016
CASH AND CASH EQUIVALENTS, beginning of period 32,322 29,233
------------ ------------
CASH AND CASH EQUIVALENTS, end of period $ 38,180 $ 70,249
============ ============
The accompanying notes to consolidated financial statements are an
integral part of these statements.
4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
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, 2005, the consolidated results of operations for the three
months ended March 31, 2005 and 2004 and cash flows for the three months ended
March 31, 2005 and 2004. 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, 2004. Certain prior
period amounts have been reclassified to conform to the current year's
presentation.
2. Dividends
On March 22, 2005, the Company's Board of Directors declared a cash
dividend of 12.0 cents ($0.12) per share on the Company's common stock. The
record date of the dividend was April 15, 2005 and the payment date was April
29, 2005.
3. Earnings Per Share (EPS)
The Company's reported diluted earnings per share of $0.28 and $0.24 for
the three-month periods ended March 31, 2005 and 2004, respectively, take into
consideration the dilutive effects of the Company's outstanding common stock
equivalents, namely, stock options.
Three Months Ended March 31, 2005
------------------------------------------------
Weighted
Income Average Shares Per Share
(in thousands, except per share data) (Numerator) (Denominator) Amount
------------ -------------- ------------
Basic EPS
Net income available to common stockholders $ 2,163 7,586 $ 0.29
Effect of Dilutive Securities
Stock options -- 232 (0.01)
------------ ------------ ------------
Diluted EPS
Net income available to common stockholders plus assumed conversions $ 2,163 7,818 $ 0.28
============ ============ ============
Three Months Ended March 31, 2004
------------------------------------------------
Weighted
Income Average Shares Per Share
(in thousands, except per share data) (Numerator) (Denominator) Amount
------------ -------------- ------------
Basic EPS
Net income available to common stockholders $ 1,819 7,221 $ 0.25
Effect of Dilutive Securities
Stock options -- 360 (0.01)
------------ ------------ ------------
Diluted EPS
Net income available to common stockholders plus assumed conversions $ 1,819 7,581 $ 0.24
============ ============ ============
5
4. Stock Options
At March 31, 2005, the Company had four stock-based employee and director
compensation plans. The Company presently accounts for these plans under the
recognition and measurement principles of APB No. 25, Accounting for Stock
Issued to Employees, and related interpretations. Accordingly, since 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 has been recognized for the plans in 2005 and 2004.
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,
----------------------------
(in thousands, except per share data) 2005 2004
---- ----
Net income As reported $ 2,163 $ 1,819
Less: stock-based compensation costs determined
under fair value-based method for all grants, net of tax (75) (61)
--------- ---------
Pro forma $ 2,088 $ 1,758
========= =========
Earnings per share of common stock - basic As reported $ 0.29 $ 0.25
Pro forma 0.28 0.24
Earnings per share of common stock - diluted As reported 0.28 0.24
Pro forma 0.27 0.23
The Company granted 20,000 stock options during the three-month period
ended March 31, 2005. 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 2005 and 2004: dividend yields
of 3.0% and 2.5%; expected volatility of 17% and 34%; risk-free interest rates
of 4.14% and 5.82%; and expected lives of ten years.
5. Business Segments
The Company applies the aggregation criteria set forth under SFAS No.131
to create reportable business segments. There has been no change in the basis of
segmentation or in the basis of measurement of segment profit or loss since its
presentation in the Company's 2004 Form 10-K filed with Securities and Exchange
Commission.
The following tables present total revenue and net income for the
three-month periods ending March 31, 2005 and 2004 and total assets at March 31,
2005 and 2004 for the Company's business segments. All significant intersegment
accounts and transactions have been eliminated.
At and for the Three Months Ended March 31, 2005
------------------------------------------------------
Corporate
Total Community and Other
(in thousands) Company Banking Leasing (2)
-------- --------- -------- ---------
Net interest income $ 7,479 $ 6,949 $ 530 $ --
Non-interest income (1) 1,346 1,309 52 (15)
-------- -------- -------- --------
Total revenue 8,825 8,258 582 (15)
Provision for loan and lease losses 211 165 46 --
Gain on sale of investment securities 440 440 -- --
Non-interest expense 5,854 5,435 434 (15)
-------- -------- -------- --------
Income before provision for income taxes 3,200 3,098 102 --
Provision for income taxes 1,037 1,002 35 --
-------- -------- -------- --------
Net income $ 2,163 $ 2,096 $ 67 $ --
======== ======== ======== ========
Period-end total assets $852,120 $847,560 $ 39,817 $(35,257)
6
At and for the Three Months Ended March 31, 2004
-----------------------------------------------------------
Total Community Corporate
Company Banking Leasing and Other (2)
---------- ---------- ---------- -------------
Net interest income $ 6,971 $ 6,543 $ 428 $ --
Non-interest income (1) 1,270 1,229 56 (15)
---------- ---------- ---------- ----------
Total revenue 8,241 7,772 484 (15)
Provision for loan and lease losses 361 240 121 --
Gain on sale of investment securities 289 289 -- --
Gain on sale of leases 1 -- 1 --
Non-interest expense 5,570 5,122 463 (15)
---------- ---------- ---------- ----------
Income before provision for income
taxes 2,600 2,699 (99) --
Provision for income taxes (recovery) 781 814 (33) --
---------- ---------- ---------- ----------
Net income (loss) $ 1,819 $ 1,885 $ (66) $ --
========== ========== ========== ==========
Period-end total assets $ 792,005 $ 791,825 $ 27,959 $ (27,779)
(1) Excludes non-recurring gains which are reported separately.
(2) Includes intersegment eliminations.
6. Directors' Retirement Plan
In 1999, the Company established a noncontributory nonqualified directors'
retirement plan for substantially all of the nonemployee directors of the
Company, GCB and BCB. The directors' retirement plan is designed to provide
retirement benefits to those nonemployee directors who, at retirement age, will
have a minimum of 15 years of service on their respective Board(s).
The components of net periodic plan costs for the directors' retirement
plan are as follows:
Three Months Ended
March 31,
----------------------
(in thousands) 2005 2004
---- ----
Service cost $ 14 $ 19
Interest cost 7 7
-------- --------
Net periodic benefit expense $ 21 $ 26
======== ========
The Company currently expects to contribute approximately $71,000 to the
directors' retirement plan in 2005. The Company made contributions of $21,000 to
the plan in the three months ended March 31, 2005.
7. New Accounting Pronouncements
Accounting for Loans or Certain Debt Securities Acquired in a Transfer
In December 2003, the AICPA issued SOP 03-3 Accounting for Loans or
Certain Debt Securities Acquired in a Transfer ("SOP 03-3"). 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 all contractually required payments receivable will not be collected. SOP
03-3 requires recognition of 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 by completion of a
transfer in fiscal years beginning after December 31, 2004. Application of SOP
03-3 to the Company did not have a material effect on the consolidated financial
statements.
7
The Meaning of Other-Than-Temporary Impairment and Its Application to Certain
Investments
In March 2004, the Financial Accounting Standards Board (FASB) released
EITF Issue 03-1, The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments ("Issue 03-1"). It provides guidance for
determining when an investment is impaired and whether the impairment is other
than temporary. In September 2004, the FASB approved for issuance a FASB Staff
Position on Issue 03-1. This Position delays the effective date, originally set
for periods beginning after June 15, 2004, for the measurement and recognition
guidance contained in paragraph 10-20 of Issue 03-1. However, it does not
suspend the requirements to recognize other-than-temporary impairments as
required by existing authoritative literature. Management will continue to
monitor the impact of Issue 03-1 on the Company's financial statements as the
FASB issues additional guidance.
Exchange of Nonmonetary Assets
In December 2004, the FASB issued SFAS No. 153, Exchange of Nonmonetary
Assets-an amendment of APB Opinion No. 29 ("SFAS No. 153"), addressing the
measurement of exchanges of nonmonetary assets. SFAS No. 153 eliminates the
exception from fair value measurements for nonmonetary exchanges of similar
production assets in APB Opinion No. 29, Accounting for Nonmonetary Exchanges,
and replaces it with an exception for exchanges that do not have commercial
substance. SFAS No. 153 is effective for nonmonetary asset exchanges occurring
in fiscal periods beginning after June 15, 2005 with earlier application
permitted. The Company does not expect application of the provisions of SFAS No.
153 to have a material impact on the consolidated financial statements.
Share-Based Payment
In December 2004, the FASB issued SFAS No. 123 (Revised), Share-Based
Payment ("SFAS No. 123(R)"), establishing accounting standards for transactions
in which an entity exchanges its equity instruments for goods or services. SFAS
No. 123(R) also addresses transactions in which an entity incurs liabilities in
exchange for goods or services that are based on the fair value of the entity's
equity instruments. SFAS No. 123(R) covers a wide range of share-based
compensation arrangements including stock options, restricted stock plans,
performance-based stock awards, stock appreciation rights, and employee stock
purchase plans. SFAS No. 123(R) replaces existing requirements under SFAS No.
123, Accounting for Stock-Based Compensation, and eliminates the ability to
account for share-based compensation transactions using APB Opinion No. 25. The
provisions of SFAS No. 123(R) will become effective for the Company on January
1, 2006. The Company is currently assessing the financial statement impact of
adopting SFAS No. 123(R).
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, 2005 and the results of operations for the
three-month periods ended March 31, 2005 and 2004 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, 2004, and the other information therein. The consolidated balance
sheet as of March 31, 2005 and the statements of operations and cash flows for
the three-month periods ended March 31, 2005 and 2004 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 and the term "Bank Subsidiaries"
refers to Greater Community Bank (GCB), Bergen Commercial Bank (BCB) and Rock
Community Bank (RCB). Unless otherwise indicated, data is presented for the
Company and its subsidiaries in the aggregate.
Purpose of Discussion and Analysis
The purpose of this analysis is to provide the reader with information
relevant to understanding and assessing the Company's financial condition and
results of operations for the three months ended March 31, 2005. In order to
appreciate this analysis more fully the reader is 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, 2004.
Statements Regarding Forward-Looking Information
The information disclosed in this document, both in this MD&A section and
elsewhere, includes forward-looking statements that are made in reliance upon
the safe harbor provisions 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",
8
"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 Bank Subsidiaries
to generate deposits, loans and leases and attract qualified employees, the
direction of interest rates, continued levels of loan and lease quality and
origination volume, continued relationships with major customers including
sources for loans and leases, as well as the effects of economic conditions,
legal and regulatory barriers and structure, and competition. Actual results may
differ materially from such forward-looking statements. The Company is not
obligated to update and does not undertake to update any such forward-looking
statement made herein.
Significant Accounting Policies, Judgments and Estimates
The accounting and reporting policies of the Company conform to 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. 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, 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.
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 accounts for its purchased goodwill in accordance with SFAS
No. 142, Goodwill and Intangible Assets, which includes a requirement to test
goodwill and indefinite lived intangible assets for impairment. The Company did
not identify any impairment of its recorded goodwill during its transitional
testing and continues to evaluate goodwill for impairment annually.
Business Overview
The Company is registered with the Federal Reserve Board as a bank holding
company and is designated by the Federal Reserve Board as a financial holding
company. Its primary business is banking, which it conducts in northern New
Jersey through its three wholly-owned New Jersey Bank Subsidiaries. The Company
offers commercial and retail banking products and services, and securities
brokerage services through a third party provider. Highland Capital Corp., a
wholly-owned leasing subsidiary of one of the Bank Subsidiaries, is engaged in
the business of leasing equipment to small and mid-sized 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 nonbanks compete for
customers with a broad array of banking, investment and capital market products.
Despite the challenges and competition, key strengths of personalized service
and local delivery continue to attract high-quality business to the Company.
Highly focused personalized customer service 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 its
business opportunities due to its focus on building relationships and delivering
quality service to the community banking market.
The Company's expansion of its branch network in Morris County, New Jersey
in late 2004 was well received and encourages its further expansion into that
county. The Company will continue to seek additional opportunities for expansion
into other northern New Jersey communities.
9
Earnings Summary
Net income for the first three months of 2005 was $2.2 million or $0.28
per diluted share, an 18.9% increase in net income from $1.8 million or $0.24
per diluted share earned in the first three months of 2004.
The increase in net income for the most recent three-month period
primarily reflects an increase in interest income on loans and leases related to
volume growth.
Net Interest Income
Net interest income for the three months ended March 31, 2005 increased
$508,000, or 7.3%, to $7.5 million compared to the three months ended March 31,
2004. Total interest income for the period increased $1.1 million to $11.0
million while total interest expense increased $569,000 to $3.6 million.
Interest on loans and leases increased $1.3 million due to an increase in
average volume partially offset by a decline in yield of 5 basis points.
Interest income on investment securities decreased by $188,000 largely due to a
decline in average investment securities during the period compared to the same
period in the prior year. Interest on federal funds sold and deposits with banks
decreased a nominal $7,000 as average volume decreased from the prior period.
Interest paid on deposits for the three months ended March 31, 2005 increased
$528,000 due to increasing rates and increases in average deposits compared to
the same period in the prior year. Interest paid on federal funds and other
borrowings increased $41,000 primarily due to higher rates in the period
compared to the prior year period.
The Company's net interest margin on a tax equivalent basis was 4.00% for
the three-month period ended March 31, 2005, compared to 3.99% for the same
period in the prior year.
The following table reflects the components of net interest income for the
periods indicated.
Three Months Ended March 31,
-----------------------------------------------------------------------
(dollars in thousands) 2005 2004
---------------------------------- ---------------------------------
Average Interest Yield/ Average Interest Yield/
ASSETS Balance Earned/Paid Rate Balance Earned/Paid Rate
--------- ----------- ------ --------- ----------- ------
Earning Assets:
Investment securities (tax equivalent basis) $ 132,592 $ 1,364 4.17% $ 153,303 $ 1,553 4.07%
Due from banks - interest-bearing 6,591 44 2.71% 7,640 49 2.58%
Federal funds sold 8,058 49 2.47% 20,713 51 0.99%
Loans and leases, net unearned income (1) 617,872 9,639 6.33% 527,698 8,367 6.38%
--------- --------- ---- --------- --------- ----
Total earning assets 765,113 11,096 5.88% 709,354 10,020 5.68%
--------- ---- --------- ----
Less: Allowance for loan and lease losses (9,155) (8,349)
All other assets 73,030 66,938
--------- ---------
Total assets $ 828,988 $ 767,943
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing Liabilities:
Savings and interest-bearing checking $ 275,584 $ 678 1.00% $ 256,845 $ 312 0.49%
Time deposits 192,334 1,175 2.48% 170,703 1,013 2.39%
Federal funds and other borrowings (2) 103,546 1,191 4.66% 104,910 1,150 4.41%
Subordinated debt 24,743 507 8.31% 24,000 507 8.50%
--------- --------- ---- --------- --------- ----
Total interest-bearing liabilities 596,207 3,551 2.42% 556,457 2,982 2.16%
--------- ---- --------- ----
Non interest-bearing deposits 165,414 152,001
Other liabilities 7,992 7,123
Shareholders' equity 59,375 52,361
--------- ---------
Total liabilities and shareholders' equity $ 828,988 $ 767,943
========= =========
Net interest income (tax equivalent basis) 7,545 7,038
Less: Tax equivalent basis adjustment (66) (67)
--------- ---------
Net interest income $ 7,611 $ 7,105
========= =========
Net interest margin (3) 4.00% 3.99%
==== ====
(1) Includes nonaccrual loans, the effect of which is to reduce the yield
earned on loans.
(2) Includes federal funds purchased, securities sold under agreements to
purchase, and FHLB advances.
(3) Net interest income (tax equivalent basis) divided by total earning
assets.
10
Non-Interest Income
Non-interest income continues to represent a considerable source of income
for the Company, constituting 19% of total revenue (net interest income plus
non-interest income) for the three months ended March 31, 2005. Non-interest
income increased $226,000 or 14.5% for the period ended March 31, 2005 compared
to the same period in the prior year. Gains on sale of investment securities
constituted $151,000 of the increase. Growth in loan fee income of $85,000 for
the period was related to an increase in loan and lease volume and was partially
offset by a decline in other commissions and fees of $67,000.
Non-Interest Expense
Total non-interest expense totaled $5.9 million, reflecting an increase of
$284,000 or 5.1% for the three months ended March 31, 2005 compared to the same
period in 2004. The largest component of non-interest expense, salaries and
employee benefits, accounted for an increase of $210,000, or 6.7%, primarily
reflecting compensation adjustments and rising health care costs.
Provision for Loan and Lease Losses
The provision for loan and lease losses for the three months ended March
31, 2005 decreased $150,000 to $211,000 compared to the same period in 2004. The
decrease was primarily due to and consistent with a trend of improving asset
quality in the loan and lease portfolio. Management is continuing to evaluate
the rate of provisioning relative to the soundness of asset quality and
performance trends of the loan and lease portfolios.
Provision for Income Taxes
The provision for income taxes for the three months ended March 31, 2005
increased $256,000 to $1.0 million compared to March 31, 2004, reflecting an
effective tax rate of 32.4% and 30.0% for the comparable periods. The increase
was primarily due to earnings growth and the result of a shift in pre-tax income
to subsidiaries which are subject to higher state income taxes.
FINANCIAL CONDITION
ASSETS
Between December 31, 2004 and March 31, 2005 total assets increased by
$26.8 million to $852.1 million. The increase was attributable to growth in
loans and leases, complemented by growth in investment securities and cash and
cash equivalents. Asset growth was funded by growth in deposits net of a
decrease in short-term borrowings.
Loans and Leases
Total loans and leases increased from December 31, 2004 to March 31, 2005
by $14.4 million to $626.0 million. The increase resulted primarily from growth
in real estate loans, construction loans and lease financing receivables.
The following table reflects the composition of the loan and lease
portfolio for the periods indicated. Certain loans were reclassified in the
March 31, 2005 period to reflect appropriate categorization of security held as
collateral.
(in thousands) March 31, 2005 December 31, 2004
-------------- -----------------
Loans secured by one-to-four-family residential properties $ 153,972 $ 147,557
Loans secured by multi-family residential properties 29,618 10,349
Loans secured by nonresidential properties 299,688 311,568
Loans to individuals 3,840 5,872
Commercial loans 45,983 52,973
Construction loans 51,001 44,687
Lease financing receivables, net 41,236 37,826
Other loans 670 754
--------- ---------
Total loans and leases 626,008 611,586
Less: Unearned income (515) (394)
--------- ---------
Loans and leases, net of unearned income $ 625,493 $ 611,192
========= =========
Nonperforming Assets
Nonperforming assets include nonaccruing loans and leases, renegotiated
loans, loans and leases past due 90 days and accruing and other real estate
owned. At March 31, 2005, nonperforming loans and leases totaled $1.8 million or
0.29% of total loans and
11
leases, decreasing 15 basis points from the level reported at December 31, 2004.
Of the nonperforming loans and leases, nonaccruing loans accounted for $1.6
million or 0.26% of total loans, compared to $2.5 million or 0.41% of total
loans at December 31, 2004. There were no loans and leases past due 90 days or
more and accruing at March 31, 2005 or at December 31, 2004.
Management believes asset quality remains sound as nonperforming assets
have trended lower. The Company believes it is maintaining adequate reserves and
continues to monitor the loan and lease portfolios closely.
The following table reflects the composition of the Company's
nonperforming assets for the periods indicated.
(dollars in thousands) March 31, 2005 December 31, 2004
--------------- -----------------
Nonaccruing loans and leases $1,609 $2,511
Renegotiated loans 192 205
------ ------
Total nonperforming loans and leases 1,801 2,716
Loans past due 90 days and accruing -- --
Other real estate owned 849 849
------ ------
Total nonperforming assets $2,650 $3,565
====== ======
Nonperforming loans and leases to total loans and leases 0.29% 0.44%
Nonperforming assets to total loans and leases and
other real estate owned 0.42% 0.58%
Nonperforming assets to total assets 0.31% 0.43%
For the three-month periods ended March 31, 2005 and 2004, interest income
of $40,000 and $80,000, respectively, would have been recorded on loans
accounted for on a nonaccrual basis if the loans had been current throughout the
periods.
Impaired Loans
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. Impaired 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 are as follows (in thousands):
March 31, December 31,
2005 2004
--------- ------------
Impaired loans:
Recorded investment $1,609 $2,568
Valuation allowance 385 394
The average recorded investment in impaired loans for the three-month
period ended March 31, 2005 was $1.8 million, compared to $1.7 million at
December 31, 2004.
The valuation allowance is included in the allowance for loan and lease
losses on the Company's consolidated balance sheets.
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 $61,000 for the three-month
period ended March 31, 2005, compared with $10,000 for the prior year
three-month period.
Allowance for Loan and Lease Losses
Between December 31, 2004 and March 31, 2005, the allowance for loan and
lease losses increased $188,000 to $9.1 million. The allowance constituted 1.45%
and 1.46% of total loans and leases on March 31, 2005 and December 31, 2004,
respectively. The provision for loan and lease losses added $211,000 for the
three-month period, while net charge-offs were $23,000.
The allowance for loan and lease losses is maintained at a level estimated
to absorb probable losses in the loan and lease portfolio. The methodology for
evaluating the adequacy of the allowance consist of several significant
criteria, which include a specific allowance for identified impaired and
classified loans and leases and a general allowance allocated to homogeneous
categories of loans and leases. Management believes the allowance for loan and
lease losses at March 31, 2005 is adequate, and
12
continues to evaluate the rate of provisioning relative to the sound asset
quality and performance trends of the loan and lease portfolio.
The following table reflects transactions affecting the allowance for loan
and lease losses for the periods indicated.
(dollars in thousands) 2005 2004
------- -------
Balance at beginning of year $ 8,918 $ 8,142
Charge-offs:
Lease financing receivables 41 65
Credit cards and related plans 5 4
------- -------
46 69
------- -------
Recoveries:
Commercial 14 114
Lease financing receivables 5 18
Installment loans to individuals 4 2
Credit cards and related plans -- 6
------- -------
23 140
------- -------
Net charge-offs (recoveries) 23 (71)
Provision charged to operations 211 361
------- -------
Balance at March 31 $ 9,106 $ 8,574
======= =======
Net charge-offs (recoveries) for the period to
average loans and leases during the period 0.00% (0.01%)
Investment Securities
At March 31, 2005, investment securities totaling $139.0 million increased
$6.9 million from December 31, 2004. The increase resulted primarily from $15.9
million in purchases of securities less $9.2 million in prepayments, maturities
and sales during the three-month period. The net volume increase includes a
$17.2 million increase in securities held-to-maturity offset by a $10.3 million
decrease in securities available-for-sale.
Cash and Cash Equivalents
Cash and cash equivalents increased $5.9 million to $38.2 million between
December 31, 2004 and March 31, 2005. The increase was primarily due to an
increase in total deposits, net of a decrease in federal funds purchased and net
of loan growth. The increase was utilized for short-term liquidity and operating
needs.
LIABILITIES
Between December 31, 2004 and March 31, 2005, total liabilities increased
$26.2 million to $792.9 million. The increase was primarily attributable to a
$59.7 million increase in total deposits partially offset by a $36.0 million
decrease in federal funds purchased.
Deposits
Total deposits increased $59.7 million to $663.6 million for the
three-month period ended March 31, 2005. Primary growth of $30.2 million and
$28.6 million occurred in time deposits and interest-bearing checking,
respectively. Deposits generated from a new branch which opened in November 2004
and the introduction of a new deposit product contributed to much of this
growth.
Liquidity
The Company actively manages its liquidity under the direction of the
Asset/Liability Management Committees of the Bank Subsidiaries. The Company`s
liquidity has been sufficient to meet loan demand, the possible outflow of
deposits and other obligations. Sources of liquidity at March 31, 2005 totaled
$145.6 million or 17% of total assets, consisting of investment securities
available-for-sale, cash and cash equivalents and interest-bearing due from
banks.
13
As of March 31, 2005, 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, 2004.
Capital Adequacy, Regulatory Capital Ratios and Dividends
Total shareholders' equity of $59.2 million at March 31, 2005 was 6.9% of
total assets, increasing $576,000, compared with $58.6 million or 7.1% of total
assets at December 31, 2004. The increase was largely attributable to an
increase of $1.3 million in retained earnings offset by $1.1 million decrease in
other comprehensive income during the three-month period. The Company and the
Bank Subsidiaries remain well-capitalized for regulatory purposes and management
believes present capital is adequate to support contemplated future internal
growth. The Company reviews expansion strategies and related capital
alternatives on an ongoing basis.
The Company is subject to regulation by the Board of Governors of the
Federal Reserve System (Federal Reserve Board). The Bank Subsidiaries are
subject to regulation by both the Federal Deposit Insurance Corporation and the
New Jersey Department of Banking and Insurance. Such regulators have promulgated
risk-based capital guidelines that require the Company and the Bank Subsidiaries
to meet those guidelines that involve quantitative measures of assets, and
certain off-balance sheet items, calculated as risk-adjusted assets under
regulatory accounting practices.
The following table provides selected regulatory capital ratios for the
Company and the Bank Subsidiaries and the required minimum regulatory capital
ratios at March 31, 2005.
To Be Well-Capitalized
Under Prompt
For Capital Corrective Action
Actual Adequacy Purposes Provisions
------------------- -------------------- ------------------
(dollars in thousands) Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
Total capital to risk-weighted assets
Greater Community Bancorp $81,162 11.91% $54,517 8.00% n/a n/a
Greater Community Bank 42,947 10.27 33,454 8.00 $41,817 10.00%
Bergen Commercial Bank 25,863 11.15 18,556 8.00 23,196 10.00
Rock Community Bank 5,955 20.51 2,323 8.00 2,904 10.00
Tier 1 capital to risk-weighted assets
Greater Community Bancorp 55,110 8.09 27,248 4.00 n/a n/a
Greater Community Bank 37,714 9.02 16,725 4.00 25,087 6.00
Bergen Commercial Bank 23,104 9.96 9,279 4.00 13,918 6.00
Rock Community Bank 5,590 19.26 1,161 4.00 1,741 6.00
Tier 1 capital to average assets
Greater Community Bancorp 55,110 6.74 32,706 4.00 n/a n/a
Greater Community Bank 37,714 7.38 20,441 4.00 25,551 5.00
Bergen Commercial Bank 23,104 8.56 10,796 4.00 13,495 5.00
Rock Community Bank 5,590 16.16 1,384 4.00 1,730 5.00
n/a = not applicable
In the last two quarters of 2004 and the first quarter of 2005 the Company
declared cash dividends at the rate of $0.12 per share, or an annual rate of
$0.48 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 a 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 2004 and during the first part of 2005, the Company, along with
other financial institutions, has experienced an increasing interest rate
environment. The Company's interest rate risk profile is positioned in such a
way that moderate increases in interest rates will likely have a positive impact
on the results of operations. However, because overall future performance is
dependent on many other factors, past performance is not necessarily an
indication of future results.
14
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
----------------------------------------------------------
The Company manages interest rate risk and market risk by identifying
interest rate risk exposures using simulation analysis, economic value at risk
and gap analysis models. There has been no material change in the Company's
assessment of its sensitivity to market risk since its presentation in its 2004
Form 10-K filed with Securities and Exchange Commission.
Item 4 - Controls and Procedures
-----------------------
(a) Disclosure Controls and Procedures.
Management of the Company evaluated the Company's disclosure controls and
procedures required by paragraph (b) of Rule 13a-15 under the Securities
Exchange Act of 1934 ("1934 Act") as of the end of the period covered by this
report. Based on such evaluation, the Company's Chief Executive Officer and
Chief Financial Officer concluded that, as of the end of such period, the
Company's disclosure controls and procedures were effective in ensuring that all
information required to be disclosed by the Company in reports that it files or
submits under the 1934 Act is recorded, processed, summarized and reported,
within the time periods specified in the Commission's rules and forms.
(b) Changes in internal controls.
No significant change in the Company's internal control over financial
reporting has occurred during the quarter ended March 31, 2005 that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.
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 judgment neither the Company's consolidated financial position nor its
results of operations will be affected materially by any present proceedings.
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
-----------------------------------------------------------
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 2005 (the "2005
Annual Meeting") on April 19, 2005. The only business before the 2005 Annual
Meeting was the election of Directors.
In accordance with the nominations described in the Company's definitive
2005 Proxy Statement filed with the Securities and Exchange Commission, the
three nominees were elected as directors for three-year terms expiring in 2008
and until the election and qualification of their respective successors. The
voting was as follows:
Name of Nominee Votes for Votes Withheld
--------------- --------- --------------
C. Mark Campbell 5,972,650 4,715
Robert C. Soldoveri 5,970,475 6,890
Charles J. Volpe 5,968,490 8,875
15
The names of the Company's other Directors whose terms of office as
Director continued after the 2005 Annual Meeting (and the year in which their
respective terms will expire) are as follows: M.A. Bramante (2006), William T.
Ferguson (2006), David Waldman (2006), Anthony M. Bruno, Jr. (2007), and Alfred
R. Urbano (2007).
Item 5 - Other Information
-----------------
The Company entered into a separation and release agreement on
December 31, 2004 with Erwin D. Knauer, a former executive employee of the
Company. The separation and release agreement is herewith attached as exhibit
10.13 as part of this report.
Item 6 - Exhibits
--------
An exhibit index has been filed as part of this report on page E-1 and is
incorporated by reference.
16
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
Date: May 9, 2005 By: /s/ Naqi A. Naqvi
--------------
Naqi A. Naqvi
Senior Vice President and Chief Financial
Officer
17
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
--------
TO
FORM 10-Q
For the quarter ended March 31, 2005
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)
10.3 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, Jr. dated as of February 1, 2004 among Greater
Community Bank, Anthony M. Bruno, Jr. and Greater Community
Bancorp (as guarantor) (incorporated by reference to Exhibit
10.9 to Form 10-Q filed on May 10, 2004)
10.10 Amended Employment and Waiver Agreement of George E. Irwin
dated December 20, 2004 (incorporated by reference to Exhibit
10.10 to Form 8-K filed on December 22, 2004)
10.11 Employment Agreement of Anthony M. Bruno, Jr. dated March 2,
2005 (incorporated by reference to Exhibit 10.11 to Form 8-K
filed on March 8, 2005)
10.12 Employment Agreement of C. Mark Campbell dated March 2, 2005
(incorporated by reference to Exhibit 10.12 to Form 8-K filed
on March 8, 2005)
10.13 Separation and Release Agreement of Erwin D. Knauer dated
December 31, 2004 (incorporated by reference to Exhibit 10.13
to Form 10-Q filed on May 9, 2005)
31.1 Certification of Chief Executive Officer dated May 9, 2005
31.2 Certification of Chief Financial Officer dated May 9, 2005
32.1 Certification of Officers pursuant to 18 U.S.C. Section 1350
dated May 9, 2005
E-1