U.S. 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, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-14294
Greater Community Bancorp
(Exact name of Registrant as specified in its charter)
NEW JERSEY 22-2545165
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
55 Union Boulevard, Totowa, New Jersey 07512
(Address of principal executive offices)
(973) 942-1111
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
Indicate the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: Common stock $0.50 par value -
6,039,825 shares at May 5, 2000.
<PAGE>
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
INDEX
PAGE
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Consolidated Balance Sheet at
March 31, 2000 (Unaudited) and December 31, 1999................. 3
Consolidated Statements of Income (Unaudited)
Three months ended
March 31, 2000 and 1999 ..........................................4
Consolidated Statements of Changes in Shareholders'
Equity and Comprehensive Income (Unaudited)
Three Months ended March 31, 2000 and 1999........................5
Consolidated Statements of Cash Flows (Unaudited)
Three months ended March 31, 2000 and 1999........................6
Notes to Consolidated Financial Statements(unaudited)................7
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations...........................9
Item 3 - Quantitative and Qualitative Changes Regarding Market Risk..20
PART II - OTHER INFORMATION
Items 1 through 6.........................................................16
Signatures...................................................................18
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1- Financial Statements
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in thousands, except share data)
March 31, December 31,
2000 1999
ASSETS (Unaudited)
CASH AND DUE FROM BANKS-Non-interest-bearing $ 19,160 $ 16,850
FEDERAL FUNDS SOLD 7,400 2,350
Total cash and cash equivalents 26,560 19,200
DUE FROM BANKS - Interest-bearing 10,702 10,675
SECURITIES:
Available-for-sale, at fair value 141,911 142,236
Held-to-maturity, at amortized cost
(Fair values $6,787 and $8,506) 7,209 8,955
149,120 151,191
LOANS 357,254 346,935
Less - Allowance for possible loan losses 5,087 4,953
Unearned income 1,397 1,419
Net loans 350,770 340,563
PREMISES AND EQUIPMENT, net 7,652 7,840
ACCRUED INTEREST RECEIVABLE 3,910 3,825
BANK OWNED LIFE INSURANCE 10,830 10,690
INTANGIBLE ASSETS 12,934 13,128
OTHER ASSETS 11,833 10,341
Total assets $584,311 $567,453
LIABILITIES AND SHAREHOLDERS' EQUITY
DEPOSITS:
Non-interest-bearing $ 96,900 $ 93,968
Interest-bearing 75,524 70,356
Savings 57,743 60,635
Time Deposits less than $100 194,970 198,523
Time Deposits $100 and over 51,009 37,152
Total deposits 476,146 460,634
FHLB ADVANCES 25,000 25,000
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE 14,607 16,403
ACCRUED INTEREST PAYABLE 4,237 3,022
OTHER LIABILITIES 5,712 3,992
GUARANTEED PREFERRED BENEFICIAL INTEREST
IN THE COMPANY'S SUBORDINATED DEBT 23,000 23,000
Total Liabilities 548,702 532,051
SHAREHOLDERS' EQUITY
Common Stock, par value $0.50 per share:
20,000,000 shares authorized, 6,034,505
and 6,031,994 shares outstanding 3,017 2,665
Additional paid-in capital 31,911 25,460
Retained earnings 2,269 1,932
Accumulated other comprehensive income (loss) (1,588) (1,141)
Total shareholders' equity 35,609 35,402
Total liabilities and shareholders' equity $584,311 $567,453
(See notes to Condensed Consolidated Financial statements)
<PAGE>
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(Unaudited)
Three Months
Ended March 31,
2000 1999
INTEREST INCOME
Loans, including fees $7,449 $4,306
Securities 2,372 1,458
Federal Funds sold and deposits with banks 325 307
Total interest income 10,146 6,072
INTEREST EXPENSE
Deposits 3,906 1,879
Short-term borrowings 584 246
Long-term borrowings 575 575
Total interest expense 5,065 2,700
NET INTEREST INCOME 5,081 3,372
PROVISION FOR POSSIBLE LOAN LOSSES 156 111
Net interest income after
provision for possible loan losses 4,925 3,261
OTHER INCOME
Service charges on deposit accounts 475 460
Other commission and fees 410 376
Gain on sale of securities 10 200
All other income 504 347
Total other income 1,399 1,383
OTHER EXPENSES
Salaries and employee benefits 2,303 1,562
Occupancy and equipment 846 600
Regulatory, professional and other fees 300 238
Computer services 102 74
Amortization of intangible assets 194 27
Office expense 248 176
Other operating expenses 639 565
Total other expenses 4,632 3,242
Income before provision for income taxes 1,692 1,402
PROVISION FOR INCOME TAXES 636 515
NET INCOME $1,056 $ 887
WEIGHTED AVERAGE SHARES OUTSTANDING - Basic 6,034 5,607
WEIGHTED AVERAGE SHARES OUTSTANDING - Diluted 6,133 5,807
NET INCOME PER SHARE - Basic $ 0.17 $ 0.16
NET INCOME PER SHARE - Diluted $ 0.17 $ 0.15
(See notes to Condensed Consolidated Financial Statements)
<PAGE>
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS'
EQUITY AND COMPREHENSIVE INCOME
(in thousands, Unaudited)
Three Months ended March 31, 2000
<TABLE>
<S> <C> <C> <C> <C> <C>
Accumulated
Additional Other Total
Common Paid in Retained Comprehensive Shareholders' Comprehensive
Stock Capital Earnings Income Equity Income
Balance January 1, 2000 $3,016 $31,891 $1,636 $(1,141) $35,402 -
Net Income 1,056 1,056 $ 1,056
Exercise of stock options 4 47 51
Issuance of common 6 104 110
Stock for dividend
Reinvestment plan
Cash dividends (423) (423)
Other comprehensive income, net
of reclassification, taxes and
adjustments (447) (447) (447)
Total comprehensive income $609
Retirement of treasury stock
(9) (131) (140)
Balance, March 31, 2000 $3,017 $31,911 $2,269 $(1,588) $35,609
Three Months ended March 31, 1999
Accumulated
Additional Other Total
Common Paid in Retained Comprehensive Shareholders' Comprehensive
Stock Capital Earnings Income Equity Income
Balance January 1, 1999 $2,665 $25,460 1,932 $2,252 $32,309 -
Net Income 887 887 $887
Exercise of stock options 8 97 - - 105
Cash dividends (336) (336)
Other comprehensive income, net
of reclassification, taxes and
adjustments (304) (304) (304)
Total comprehensive income $584
Retirement of treasury stock
(3) (66) (69)
Balance, March 31, 1999 $2,670 $25,491 $2,483 $1,948 $32,592
</TABLE>
(See notes to Consolidated Financial Statements)
<PAGE>
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
<TABLE>
Three Months Ended
March 31,
<S> <C> <C>
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,056 $ 887
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 592 305
Accretion of discount on securities, net (11) 23
Gain on sale of securities, net (10) (200)
Provision for possible loan losses 156 111
Increase in accrued interest receivable (85) (92)
Increase in other assets (1,438) (3,853)
Increase accrued expenses and other liabilities 2,935 9
Net cash (used in)provided by operating activities 3,195 (2,810)
CASH FLOWS FROM INVESTING ACTIVITIES
Available-for-sale securities -
Purchases (7,291) (9,812)
Sales 20 4,670
Maturities and principal paydowns 6,821 12,892
Held-to-maturity securities -
Purchases - (670)
Maturities 1,746 4,216
Net decrease (increase) in interest-bearing deposits
with banks (27) (21,693)
Net increase in loans (10,207) (876)
Capital expenditure (210) (422)
Decrease in other real estate - 24
Net cash used in investing activities (9,148) (11,671)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposit accounts 15,512 (11,955)
Increase (decrease) in repurchase agreements (1,796) 25,253
Dividends paid (423) (336)
Proceeds from issuance of stock 160 105
Purchase of treasury stock (140) (69)
Other, net - (1)
Net cash provided by financing activities 13,313 8,997
NET INCREASE IN CASH AND CASH EQUIVALENTS 7,360 (5,484)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 19,200 23,640
CASH AND CASH EQUIVALENTS, END OF PERIOD $26,560 $18,156
</TABLE>
(See notes to Condensed Consolidated Financial Statements)
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
In the opinion of management, these unaudited condensed financial
statements contain all disclosures which are necessary to present fairly the
Company's consolidated financial position at March 31, 2000, the consolidated
results of operations for three months ended March 31, 2000 and 1999 and cash
flows for three months ended March 31, 2000 and 1999. The financial statements
reflect all adjustments (consisting solely of normal recurring adjustments)
which in the opinion of management are necessary in order to present fairly the
financial position and results of operations for the interim periods. Certain
information and footnote disclosure normally included in financial statements
under generally accepted accounting principles have been condensed or omitted
pursuant to the Securities and Exchange Commission rules and regulations. These
financial statements should be read in conjunction with the annual financial
statements and notes thereto included in Form 10-K for the fiscal year ended
December 31, 1999. Dividend
On March 21, 2000, the Company's Board of Directors declared a cash
dividend of 7 cents ($.07) per share, payable on April 28, 2000 to shareholders
of record on April 14, 2000. The financial information in this report has been
adjusted to reflect the dividend as of March 31, 2000.
On April 18, 1999, the Company's Board of Directors declared a 5% stock
dividend on the Company's common stock. The record date of the dividend is July
14, 2000 and the issue date will be July 31, 2000. Since the number of
shareholders and the price of the common stock at the record date are unknown as
of this date, the financial information and per share information in this report
have not been adjusted to reflect the 5% stock dividend.
EARNINGS PER SHARE COMPUTATION
The Company reported diluted earnings per share of $0.17 and $0.15 per
share for the three-month periods ended March 31, 2000 and 1999, respectively.
Such diluted earnings take into consideration the dilutive effects of the
Company's outstanding common stock equivalents, namely stock options. Prior
period per share amounts have been restated to reflect adoption of SFAS 128.
ACQUISITION DURING 1999
On April 1, 1999, the Company consummated a merger with First Savings
Bancorp of Little Falls, Inc. ("FSB"), parent of First Savings Bank of Little
Falls located in Little Falls, New Jersey. As the date of the acquisition, FSB
had total assets of $193 million, total loans of $109 million and total deposits
of $184 million, with 3 banking offices. The transaction was accounted for using
the purchase method of accounting. The Company paid a total of $23.0 million for
the stock FSB.
<PAGE>
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion and analysis of the Company's consolidated
financial condition as of March 31, 2000 and the results of operations for the
three-month periods ended March 31, 2000 and 1999 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, 1999, and the other information herein. The consolidated statement
of condition as of March 31, 2000 and the statements of operations and cash
flows for the three months ended March 31, 2000 and 1999 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 Great Falls Bank (GFB), Bergen Commercial Bank (BCB) and Rock
Community Bank (RCB) and the term "Trust" refers to GCB Capital Trust. Unless
otherwise indicated, data is presented for the Company and its Subsidiaries in
the aggregate. Unless otherwise indicated, all dollar figures in the tables
below, except for per share data, are set forth in thousands.
PURPOSE OF DISCUSSION AND ANALYSIS
The purpose of this analysis is to provide you with information relevant to
understanding and assessing the Company's financial condition and results of
operations for the three months ended March 31, 2000. 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, 1999.
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 Subidiary 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.
<PAGE>
Business Overview
The Company is registered with the Federal Reserve Board as a bank holding
company. Its primary business is banking, which it conducts in northern New
Jersey through its three wholly-owned New Jersey Subsidiary Banks.
The Company is a diversified financial services company operating retail
banking, brokerage, and equipment leasing businesses that provide products and
services in the Company's primary geographic markets in northern counties of New
Jersey and expanding. Through Highland Capital Corp., one of the Company's
wholly-owned nonbank subsidiaries, the Company is also engaged in the business
of leasing equipment to small and mid-size businesses in New Jersey and
contiguous states. The Company also has a wholly-owned nonbank subsidiary,
Greater Community Financial, L.L.C., which engages in the business of securities
broker-dealer.
Financial services providers as of late are challenged by intense
competition, changing customer demands, increased pricing pressures and the
ongoing impact of deregulation. This is more so for traditional loan and deposit
services due to continuous competitive pressures as both banks and non-banks
compete for customers with a broad array of banking, investments and capital
market products.
The Company has made an effort to meet these challenges by providing highly
focused personalized customer service, which provides a basis for differential
in today's environment where banks and other financial service providers target
the same customer. To leverage new technology, the Company responded with the
formation of e-commerce services through the World Wide Web. As a result, an
Internet banking product for retail customers was introduced in mid-1999. The
Company launched a cash management product through Internet banking for its
commercial customers in the beginning of 2000.
EARNINGS SUMMARY
The results of operations for the three months ended March 31, 2000
relative to 1999 were significantly affected by the purchase of First Savings on
April 1, 1999.
Net income for the first three months of 2000 was $1.1 million or $0.17 per
diluted share, a 19% increase over $887,000 or $0.15 per diluted share earned in
the first three months of 1999.
Cash earnings (earnings before amortization of intangible assets) per
diluted share were $0.20 for the first quarter 2000 compared to $0.16 per
diluted share in the same period of 1999.
The increase in net income for the most recent three-month period primarily
reflects higher net interest income partially offset by reduced gains on sale of
securities coupled with higher salaries and employee benefits, all other
expenses (including amortization of intangible assets), and higher provisions
for possible loan losses and income taxes.
<PAGE>
Net Interest Income
Net interest income (before income tax effect) for the three months ended
March 31, 2000 increased by $1.7 million (51%) to $5.1 million compared to the
three months ended March 31, 1999. The most important components of the increase
were increases of $3.1 million (73%) and $914,000 (63%) in net interest from
loans and investment securities securities, to $7.4 million and $2.4 million,
respectively, only partially offset by an increase of $2.0 million (108%) in
interest paid on deposits, to $3.9 million. The Majority of such increase in net
interest income is primarily attributable to the purchase of First Savings which
increased average loans, investments and deposits by approximately $109.0
million, $59.0 million and $172.0 million.
Other Income
Non-interest income continues to represent a considerable source of income
for the Company, constituting an amount equal to 28% of net interest income for
the three months ended March 31, 2000. Non-interest income increased moderately
for the period ended March 31, 2000 compared to the same period in prior year.
Gains on sale of securities declined by $190,000, which was offset by increases
in other commission and fees and all other income. Those increases are in part
attributable to the purchase of First Savings.
Non-Interest Expense
Total other expense increased by $1.4 million (43%) to $4.6 million for the
three months ended March 31, 2000 compared to the same period in 1999. Those
increases are primarily attributable to the purchase of First Savings.
The largest component of other expense, salaries and employee benefits,
increased by $741,000 (47%) to $2.3 million for the three months ended March 31,
2000 over the comparable period in 1999. The increase is attributable in part to
the purchase of First Savings which added 37 employees and in part to annual
increases in salaries and benefits.
The second largest component of other expense, occupancy and equipment
expense, also rose, by $246,000 (41%) for the three months ended March 31, 2000
over the comparable period in 1999. The increases are primarily attributable to
the purchase of First Savings and the addition of 3 new branches to the
Company's branch network Other operating expenses, the third largest
component of other expense, increased $74,000 (13%) for the three months ended
March 31, 2000 over the same period in 1999. The majority of such increase is
related to the purchase of First Savings.
Amortization of intangible increased by $167,000 (619%) for the first
quarter of 2000 compared to the same period in 1999. The increase reflects the
amortization of goodwill resulting from the purchase of First Savings. Such
amortization commenced at the beginning of the second quarter of 1999 at the
rate of $168,000 per quarter and will continue for 20 years.
<PAGE>
Provision for Possible Loan Losses
The provision for possible loan losses for the three months ended March 31,
2000 increased by $45,000 (41%) to $156,000 compared to the same period in 1999.
Such increase is primarily due to the increase in total loans resulting from the
purchase of First Savings.
Provision for Income Taxes
The provision for income taxes for the three months ended March 31, 2000
was $636,000, or an effective rate of 37.6% compared to $515,000, or an
effective rate of 36.7%.
The increase in the percentage of income provided for income taxes for the
most recent three-month period is attributable to the increase in amortization
expense on intangible assets which does not qualify as a tax deductible expense.
FINANCIAL CONDITION
ASSETS
Between December 31, 1999 and March 31, 2000 total assets increased by
$16.9 million (3%) to $584.3 million. The increase is primarily attributable to
the overall growth in total assets of the Subsidiary Banks.
Loans -- Asset Quality and Allowance for Possible Loan Losses
Gross loans totaled $357.3 million at March 31, 2000, an increase of $10.3
million compared to the amount reported at December 31, 1999. Such increase
resulted primarily from internal growth.
The following table reflects the composition of the gross loan portfolio as
of March 31, 2000 and December 31, 1999.
March 31, December 31,
2000 1999
Loans secured by one- to - four-family
Residential properties $155,721 $ 154,485
Loans secured by nonresidential properties. 144,414 140,200
Loans to individuals 8,850 9,405
Loans to depository institutions - -
Commercial loans 33,780 30,702
Construction loans 12,995 10,024
Other loans 1,494 1,782
Total gross loans $357,254 $346,935
Nonperforming Assets
Nonperforming assets include nonaccruing loans and other real estate owned
(OREO). At March 31, 2000, total nonperforming assets totaled $3.0 million 0.85%
of total loans, almost unchanged from December 31, 1999. Nonaccruing loans were
$1.9 million or 0.53% of total loans, as compared to $1.7 million or 0.49% of
total loans at December 31, 1999. Loans past due 90 days or more and still
accruing at March 31, 2000 decreased to $81,000 compared to $248,000 at December
31, 1999.
<PAGE>
Other real estate owned was $452,000 at March 31, 2000 compared to $467,000
at December 31, 1999.
The following table sets forth the composition of the Company's
non-performing assets and related asset quality ratios as of the dates
indicated. All of such assets were domestic assets since the Company had no
foreign loans.
March 31, December 31,
2000 1999
Nonaccruing loans $1,859 $1,678
Renegotiated loans 601 606
Total nonperforming loans 2,460 2,284
Loans past due 90 days and accruing 81 248
Other real estate 452 467
Total nonperforming assets $2,993 $2,999
Asset Quality Ratios
Nonperforming loans to total gross loans 0.69% .66%
Nonperforming assets to total gross loans .84% .86%
Nonperforming assets to total assets 0.52% .53%
Allowance for possible loan losses to
nonperforming loans 206.79% 216.86%
During the three months ended March 31, 2000, gross interest income of
$15,000 would have been recorded on loans accounted for on a nonaccruing basis
if the loans had been current throughout the period.
Impaired Loans - In accordance with SFAS No. 114, the Company utilizes the
following information when measuring its allowance for possible 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 March 31, 2000 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,
2000 1999
Impaired loans -
Recorded investment $ 1,568 $ 1,232
Valuation allowance 275 186
<PAGE>
This valuation allowance is included in the allowance for possible loan
losses on the Company's consolidated balance sheet.
The average recorded investment in impaired loans for the three-month
period ended March 31, 2000 was $1.6 million compared to $1.2 million at
December 31, 1999.
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 $38,000 for the
three-month period ended March 31, 2000.
Analysis of the Allowance for Possible Loan Losses
Between December 31, 1999 and March 31, 2000, the allowance for possible
loan losses increased by $134,000 (3%) to $5.1 million, which constituted 1.42%
of gross loans at March 31, 2000 which is unchanged compared to at December 31,
1999. The provision for possible loan losses added $156,000 for the three-month
period. Management believes the allowance for possible loan losses at March 31,
2000 of $5.1 million or 206.79% of nonperforming assets, is adequate.
The following table represents transactions affecting the allowance for
possible loan losses during the three-month period ended March 31, 2000 and
1999.
2000 1999
Balance at beginning of period, January 1, $4,953 $3,525
Charge-offs:
Commercial, financial and agricultural 7 -
Real estate--mortgage 15 -
Installment loans to individuals 2 13
Credit cards and related plans 7 34
31 47
Recoveries:
Commercial, financial and agricultural 3 2
Real estate--mortgage 0 13
Installment loans to individuals 1 1
Credit cards and related plans 5 1
9 17
Net charge-offs recoveries 22 30
Provision charged to operations
during the three-month period 156 111
Balance at end of period, March 31, $5,087 $3,606
Ratio of net charge-offs during the
three-month period to average loans
outstanding during that period .02% .01%
Investment Securities
At March 31, 2000, securities totaled $149.1 million, a decrease of $2.1
million compared to December 31, 1999, primarily as a result of maturities and
or principal paydowns.
<PAGE>
Cash
Cash and cash equivalents increased by $7.4 million (38%) to $26.6 million.
Federal funds sold increased by $5.0 million (215%) to $7.4 million while cash
and due from banks increased 14% to $19.2 million. These increases are in part
due to increase in deposits.
Intangible Assets
Intangible assets represents 2% of total assets or $13.0 million at March
31, 2000. Substantially all of this item represents the unamortized portion of
the goodwill intangible asset arising from the acquisition of First Savings. The
total premium was $13.3 million, which is being amortized at the rate of
$168,000 per quarter over a 20-year period.
Deposits
Total deposits increased by $15.5 million (3%) to $476.1 million. Such
increase is primarily attributable to the growth of the Subsidiary Banks.
Of the total increase, time deposits $100M and over increased by $13.8
million (37%), interest bearing demand deposits increased by $5.2 million (7%)
and non-interest bearing demand deposits increased by $3.0 million (3%). The
aforementioned increases in various components of deposits were partially offset
by decreases in time deposits less than $100M by $3.6 million (2%) and in
savings deposits by $3.0 million (5%).
CAPITAL ADEQUACY, REGULATORY CAPITAL RATIOS AND DIVIDENDS
The Company is subject to regulation by the Board of Governors of the
Federal Reserve System (Federal Reserve Board). The Subsidiary Banks are subject
to regulation by both the Federal Deposit Insurance Corporation (FDIC) and the
New Jersey Department of Banking and Insurance (Department). Such regulators
have promulgated risk-based capital guidelines which require the Company and the
Subsidiary Banks to maintain certain minimum capital as a percentage of their
assets and certain off-balance sheet items adjusted for predefined credit risk
factors (risk-adjusted assets).
Total shareholders' equity of $35.6 million at March 31, 2000 was 6.1% of
total assets, a moderate increase compared with $35.4 million or 6.2% of total
assets at December 31, 1999. For purposes of computing regulatory capital of the
Company, which includes the Company and the subsidiary banks, governmental
regulations require that the goodwill intangible asset be ignored. The Company's
and the Subsidiary Banks' regulatory capital ratios decreased at March 31, 2000
compared to the end of 1999. Despite the decrease the Company and the Subsidiary
Bank's remain well-capitalized for regulatory purposes and management believes
present capital is adequate to support contemplated future internal growth.
<PAGE>
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, 2000:
<TABLE>
To Be Well Capitalized
For Capital Adequacy under Prompt
Purposes Corrective
Actual Action Provision
Amount Ratio Amount Ratio Amount Ratio
<S> <C> <C> <C> <C> <C> <C>
Total capital (to risk weighted assets)
Greater Community Bancorp $ 51,826 13.26% $ 31,258 8.00% $ - -
Great Falls Bank 27,774 11.17% 19,887 8.00% 24,859 10.00%
Bergen Commercial Bank 10,399 10.06% 8,266 8.00% 10,333 10.00%
Rock Community Bank 4,727 47.93% 789 8.00% 986 10.00%
Tier 1 Capital (to risk weighted assets)
Greater Community Bancorp 36,663 9.38% 15,629 4.00% - -
Great Falls Bank 24,667 9.92% 9,944 4.00% - -
Bergen Commercial Bank 9,350 9.05% 4,133 4.00%
Rock Community Bank 4,630 46.95% 394
Tier 1 Capital (to average assets)
Greater Community Bancorp 36,663 6.33% 23,167
Great Falls Bank 24,667 6.42% 15,357
Bergen Commercial Bank 9,350 6.27% 5,665 19,197
Rock Community Bank 4,630 46.95% 394 4.00% 7,456 5.00%
</TABLE>
During the last quarter of 1999 and the first quarter of 2000 the Company
declared cash dividends at the rate of $0.07 per share, or an annual rate of
$0.28 per share. The Company's Board of Directors continues to believe that cash
dividends are an important component of shareholder value and that at its
current level of performance and capital, the Company expects to continue its
current dividend policy of a quarterly distribution of cash dividends to its
shareholders.
Some Specific Factors Affecting Future Results of Operations
Although future movement of interest rates cannot be predicted with
certainty, the interest rate sensitivity of the Company's assets and liabilities
are such that a decline in interest rates during the next few months would have
a favorable impact on the Company's results of operations. However, 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.
Item 3 Quantitative and Qualitative Disclosures About Market Risk
There has been no material changes in Company's assessment of its
sensitivity to market risk since its presentation in 1999 Annual Report to
Shareholders and its 1999 Form 10-K filed with Securities and Exchange
Commission.
<PAGE>
GREATER COMMUNITY BANCORP AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
The Company and its subsidiaries are parties in the ordinary course of
business to litigation involving collection matters, contract claims and other
miscellaneous causes of action arising from their business. Management does not
consider that any such proceedings depart from usual routine litigation, and in
its judgement neither the Company's consolidated financial position nor its
results of operations will be affected materially by any present proceedings.
Item 2 - Changes in Securities
None.
Item 3 - Defaults Upon Senior Securities
None.
Item 4 - Submission of Matters to a Vote of Security Holders
The Company's annual meeting of stockholders (the 2000 Annual Meeting) was
held on April 18, 2000. The only business before the 2000 Annual Meeting was the
election of directors. In accordance with the nominations described in the
Company's Proxy Statement dated March 17, 2000 (the 2000 Proxy Statement),
previously filed with the Commission, all three of the nominees, M. A. Bramante,
William T. Ferguson and David Waldman were elected as directors for three-year
terms expiring in 2003 and until the election and qualification of their
respective successors. The voting was as follows:
<TABLE>
<S> <C> <C> <C>
Name of Nominee Votes for Votes Against Votes Withheld
M. A. Bramante 4,662,880 - 20,034
William T. Ferguson 4,666,052 - 16,862
David Waldman 4,666,052 - 16,862
</TABLE>
The names of the other Directors of the Company whose terms of office as
Director continued after the 2000 Annual Meeting (and the year in which their
respective terms expire) are as follows: Anthony M. Bruno, Jr. (2001); George E.
Irwin (2001); Alfred R. Urbano (2001); C. Mark Campbell (2002); John L.
Soldoveri (2002); Charles J. Volpe (2002); Joseph A. Lobosco (2002).
Item 5 - Other information
None.
<PAGE>
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits. The following exhibits are filed with this Report.
Exhibit No. Description
3.1 Restated Certificate of Incorporation of the Company (incorporated by
reference to Exhibit 3.4 to Form 10-QSB for the quarter ended June 30, 1998)
filed on August 14, 1998.
3.2 Bylaws of the Company as amended and restated effective December 16,
1997 (incorporated by reference to Exhibit 3 to Form 10-KSB for the year ended
December 31, 1997, filed on March 23, 1998).
4.1 Junior Subordinated Indenture between the Company and Bankers Trust
Company as Trustee, dated May 1997 (incorporated by reference to Exhibit 4.1 of
Exhibits to Form S-2/A Registration Statement filed by GCB Capital Trust and
Greater Community Bancorp under the Securities Act of 1933, Registration Nos.
333-26453-01, 333-26453, filed May 9, 1997).
4.2 Form of Junior Subordinated Debenture Certificates for junior
subordinated debentures due May, 2007 (incorporated by reference to Exhibit 4.2
of Exhibits to Form S-2/A Registration Statement filed by GCB Capital Trust and
Greater Community Bancorp under the Securities Act of 1933, Registration Nos.
333-26453-01, 333-26453, filed May 9, 1997).
4.4 Amended and Restated Trust among Greater Community Bancorp as
Depositor, Bankers Trust Company as Property Trustee, and Bankers Trust
(Delaware) as Delaware Trustee, dated May 1997 (incorporated by reference to
Exhibit 4.4 of Exhibits on Form S-2/A Registration Statement filed by GCB
Capital Trust and Greater Community Bancorp under the Securities Act of 1933,
Registration Nos. 333-26453-01, 333-26453, filed May 9, 1997).
4.6 Guarantee Agreement between Greater Community Bancorp (as Guarantor)
and Bankers Trust Company (as Trustee) dated May 1997 (incorporated by reference
to Exhibit 4.6 of Exhibits to Form S-2/A Registration Statement filed by GCB
Capital Trust and Greater Community Bancorp under the Securities Act of 1933,
Registration Nos. 333-26453-01, 333-26453, filed May 9, 1997).
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).
<PAGE>
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 (incorporated by reference to Exhibit 10.4 to Form
10-K for the year ended December 31, 1999, filed on March 28, 2000) among Great
Falls Bank, George E. Irwin and Greater Community Bancorp (as guarantor).
10.5 Executive Supplemental Retirement Income Agreement for C. Mark
Campbell dated as of January 1, 1999 (incorporated by reference to Exhibit 10.5
to Form 10-K for the year ended December 31, 1999, filed on March 28, 2000)
among Bergen Commercial Bank, C. Mark Campbell and Greater Community Bancorp (as
guarantor).
27 Financial Data Schedule
(b) Reports on Form 8-K.
On April 11, 2000, the Company filed a Form 8-K with the Securities and
Exchange Commission reporting the appointment of William Olb as Senior Vice
President and Senior Loan Officer of Great Falls Bank.
On April 21, 2000, the Company filed a Form 8-K with the Securities and
Exchange Commission reporting the first quarter earnings and the declaration of
a 5% stock dividend on the Company's common stock.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
GREATER COMMUNITY BANCORP
(Registrant)
Date: May 12, 2000 By:/s/Naqi A. Naqvi
Naqi A. Naqvi, Treasurer & CFO
(Duly Authorized Officer and
Principal Financial Officer)
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
EXHIBIT 27-4
FINANCIAL DATA SCHEDULE
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 19,160
<INT-BEARING-DEPOSITS> 10,702
<FED-FUNDS-SOLD> 7,400
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 141,911
<INVESTMENTS-CARRYING> 7,209
<INVESTMENTS-MARKET> 6,787
<LOANS> 355,857
<ALLOWANCE> 5,087
<TOTAL-ASSETS> 584,311
<DEPOSITS> 476,146
<SHORT-TERM> 14,607
<LIABILITIES-OTHER> 9,949
<LONG-TERM> 48,000
<COMMON> 3,017
0
0
<OTHER-SE> 32,592
<TOTAL-LIABILITIES-AND-EQUITY> 584,311
<INTEREST-LOAN> 7,449
<INTEREST-INVEST> 2,372
<INTEREST-OTHER> 325
<INTEREST-TOTAL> 10,146
<INTEREST-DEPOSIT> 3,906
<INTEREST-EXPENSE> 5,065
<INTEREST-INCOME-NET> 5,081
<LOAN-LOSSES> 156
<SECURITIES-GAINS> 10
<EXPENSE-OTHER> 4,632
<INCOME-PRETAX> 1,692
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,056
<EPS-BASIC> 0.17
<EPS-DILUTED> 0.17
<YIELD-ACTUAL> 0
<LOANS-NON> 1,859
<LOANS-PAST> 81
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 4,953
<CHARGE-OFFS> 31
<RECOVERIES> 9
<ALLOWANCE-CLOSE> 5,087
<ALLOWANCE-DOMESTIC> 5,087
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 604
</TABLE>
