IBS FINANCIAL CORP, PRER14A, 1997-04-18

IBS FINANCIAL CORP
PRER14A, 1997-04-18
SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED

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<PAGE> 1

SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. 2)

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
[ ] Definitive Proxy Statement Rule 14a-6(e)(2))

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

IBS Financial Corp.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.

(1) Title of each class of securities to which transaction applies:
---------

(2) Aggregate number of securities to which transaction applies:
------------

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
--------------

(4) Proposed maximum aggregate value of transaction:
------------------------

(5) Total fee paid:
---------------------------------------------------------

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.

(1) Amount previously paid:
-------------------------------------------------

(2) Form, schedule or registration statement no.:
---------------------------

(3) Filing party:
-----------------------------------------------------------

(4) Date filed:
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<PAGE> 2
[IBSF LETTERHEAD]

__________ __, 1997

Dear Stockholder:

The Annual Meeting of Stockholders of IBS Financial Corp. (the
"Company") will be held at the Four Points Hotel (Sheraton), 1450 Route 70
East, Cherry Hill, New Jersey 08034, on ______, ______ __, 1997 at 9:30 a.m.,
Eastern Time. As more fully described in the accompanying materials, the
purpose of the meeting is to elect one director (and, depending upon the
outcome of pending litigation, possibly a second director) and to ratify the
appointment of independent auditors. We strongly urge you to support your
Company's nominees and to sign, date and return the enclosed BLUE proxy card
today. Your vote is important, even if you only hold a few shares.

Unfortunately, Mr. Lawrence B. Seidman and his group are once again
conducting a proxy contest this year. Last year, Mr. Seidman's two nominees
each lost by more than a two-to-one margin. Mr. Seidman's group, under the name
"Committee to Maximize Shareholder Value," is soliciting white proxy cards for
its nominees. Please DO NOT return any white proxy cards sent to you by Mr.
Seidman's group. If you have already done so, you may revoke the white proxy
card by signing, dating and returning the enclosed BLUE proxy card. Remember,
your last dated proxy card is the only one that counts.

For the reasons set forth below, we urge you to support your Board of
Directors and vote the enclosed BLUE proxy card in favor of Messrs. Auchter and
Abramowitz.

YOUR BOARD OF DIRECTORS BELIEVES IN STOCKHOLDER REPRESENTATION

Each member of your current Board of Directors (other than Mr.
Lockhart, who is retiring) has purchased with his own personal funds more
shares of the Company's common stock than Messrs. Seidman and Whitman combined.
Each member of your current Board of Directors has invested between $100,000
and $1.5 million of his own funds into the Company's common stock, for an
aggregate cash investment by your Board of $3.0 million. By contrast, Messrs.
Seidman and Whitman have used other people's money to accumulate the positions
held by their respective companies. See "Beneficial Ownership of Common Stock
by Certain Beneficial Owners and Management" in the attached Proxy Statement.

Your Board of Directors has a substantial investment in the Company
and represents all stockholders, not just a small group.

MR. SEIDMAN AND HIS GROUP ARE NOT SATISFIED WITH ONE BOARD SEAT

In an attempt to avoid an expensive proxy contest this year, and in
response to a letter from Mr. Whitman, on November 1, 1996 your Board of
Directors was willing to

<PAGE> 3

support the nomination of a person that would be mutually agreeable to the
Company and Messrs. Seidman and Whitman, provided that Mr. Seidman agree to
dismiss his libel suit against your Board with prejudice and without
reimbursement of any expenses by the Company (the court subsequently granted
the Company's motion for summary judgment because Seidman failed to state a
claim) and that Messrs. Seidman and Whitman agree to support the Board's
nominees next year. No agreement could be reached because Messrs. Seidman and
Whitman insisted that they be able to wage or support yet another proxy contest
at next year's annual meeting. Your Board does not believe that Messrs. Seidman
and Whitman should be entitled to multiple Board representation, and your Board
does not believe that expensive and disruptive proxy contests each year are in
the best interests of stockholders.

In two other companies in which Mr. Seidman conducted a proxy contest,
he subsequently purchased a controlling interest in such companies through open
market purchases, without paying any control premium to existing stockholders.
------------------------------------------------------------

Your Board of Directors does not believe it is in the best interests
of the Company and all stockholders for a small group to continually seek
multiple representation on the Board or, as Mr. Seidman has done in the past in
other companies, to purchase a controlling interest without paying an
appropriate control premium to all stockholders.

YOUR BOARD OF DIRECTORS DOES NOT TRUST MR. SEIDMAN

As you may recall from last year's proxy contest, on November 8, 1995
the Office of Thrift Supervision ("OTS"), our primary federal regulator, issued
a cease and desist order against Mr. Seidman in which the OTS found Mr. Seidman
violated an OTS regulation and recklessly engaged in unsafe and unsound
practices when he was at another savings institution in New Jersey. THE OTS
FURTHER FOUND THAT MR. SEIDMAN DEMONSTRATED BOTH PERSONAL DISHONESTY AND A
FLAGRANT DISREGARD OF HIS DUTIES AND THAT HE ENGAGED IN A PATTERN OF
MISCONDUCT.

This year, Mr. Seidman and his group refused the Company's request to
disclose various agreements and the identities of their financial backers. As a
result, on November 12, 1996 the Company sued Mr. Seidman and his group. See
"Litigation Against the Seidman Group" in the attached Proxy Statement.

Six days after the Company's lawsuit was filed, Mr. Seidman's group
amended its Schedule 13D to disclose for the first time an 18 month old
agreement involving 83,500 shares of the Company's common stock. Your Board of
Directors believes, based upon the advice of its counsel, that the failure by
Mr. Seidman's group to previously disclose this agreement in its Schedule 13D
constituted a violation of the federal securities laws.
- -------------------------------------------------------

After a preliminary litigation conference on December 2, 1996, Mr.
Seidman's group further amended its Schedule 13D a mere four days later to
publicly disclose for the first

<PAGE> 4

time various limited partnership and operating agreements and the identities of
the persons who had invested in the four members of the group formed directly
or indirectly by Mr. Seidman. Your Board of Directors believes, based upon the
advice of its counsel, that the failure by Mr. Seidman's group to previously
provide such disclosure in its Schedule 13D constituted a violation of the
------------------------------
federal securities laws.
- ------------------------

On January 23, 1997, the district court judge rendered a decision in
which he stated that "(a)n amendment which cures a violation of the Exchange
Act moots a claim that arises from the failure to file a proper Schedule 13D."
The court held that the additional Schedule 13D amendments filed by Mr.
Seidman's group after the litigation was commenced mooted the Company's claims
regarding the deficient disclosures initially provided by Mr. Seidman's group
and that the amended Schedule 13Ds were adequate, and the court declined to
enforce the disclosure requirements in the Company's Certificate of
Incorporation. The district court also held that the Company had failed to meet
its burden of proof in demonstrating that entities or persons which held
majority interests in the limited liability companies formed by Mr. Seidman
either controlled such companies, had arranged for financing, or are
participants in the Seidman group's proxy solicitation. In addition, the court
indicated that because the nominating materials were similar to those received
by the Company the prior year and because the court believed the Company was
not prejudiced by the failure of the Seidman group to provide proper
disclosures in a timely manner, the Company could not reject the defendants'
nominations as deficient or untimely and the defendants could receive a
stockholder list. The Company believes that the Seidman group's disclosures are
still inadequate and has taken an appeal to the United States Court of Appeals
for the Third Circuit.

Your Board of Directors believes that a savings and loan holding
company, which is entrusted with the funds deposited by depositors and the
moneys invested by stockholders, is no place for a person who has violated
federal banking and securities laws - or for his nominees.

YOUR BOARD OF DIRECTORS HAS TAKEN STEPS TO ENHANCE STOCKHOLDER VALUE

During fiscal 1996, your Company completed three separate stock
repurchase programs of 5% each, which is three times the amount permitted by
OTS regulations under normal circumstances. Stock repurchases reduce our excess
capital and will help improve the Company's return on equity and earnings per
share in the long run. In the short run the stock repurchases reduce our
interest-earning assets and interest income, as well as depress our book value
per share (because our market price per share exceeds our book value per
share). Despite the short-term effects, however, we note that even Mr. Seidman
and his group are able to agree with us that continuing stock repurchases are
in the best interests of our stockholders.

In December 1996, your Board of Directors declared a special cash
dividend of $.25 per share, which was paid to stockholders on January 3, 1997.
This special dividend is in

<PAGE> 5

addition to the 10% stock dividend paid in March 1996, the 15% stock dividend
payable on May 6, 1997 and our regular quarterly cash dividends. As a result of
our stock dividends and increased cash dividends, our most recent cash dividend
of $.08 per share represents an increase of over 100% in our quarterly dividend
rate since fiscal 1995.

During fiscal 1996, your Board of Directors terminated a defined
benefit pension plan and a related supplemental agreement. As a result, the
costs associated with these plans, which amounted to $1.1 million in fiscal
1996 as a result of the termination, will not be incurred in periods subsequent
to September 30, 1996.

The Company's subsidiary recently opened two new branches in Camden
County, New Jersey, thus expanding our presence in this market area.

MANAGEMENT'S COMPENSATION IS ALIGNED WITH THE COMPANY'S PERFORMANCE

In fiscal 1996, the Company eliminated all bonuses to senior
management in light of the decline in the Company's net income from fiscal 1995
to fiscal 1996. See "Executive Compensation - Report of the Compensation Review
Committee." In addition, in fiscal 1996 the Board of Directors adopted a
resolution expressing its intent to not grant further stock options or
restricted share awards to those executive officers who received grants when
the plans were approved by stockholders in January 1995. The aggregate of base
salary, bonus and fees for Messrs. Ochman and Sharp decreased by 9.2% and 9.3%,
respectively, from fiscal 1995 to fiscal 1996.

YOUR VOTE IS IMPORTANT!

Your Board believes the best way to discourage the Seidman group from
further harassment of your Company through a steady stream of costly and
needless proxy contests is to elect the Board's nominees. It is very important
that you be represented at the Annual Meeting regardless of the number of
shares you own or whether you are able to attend the meeting in person. We urge
you to mark, sign, and date your BLUE proxy card today and return it in the
envelope provided, even if you plan to attend the Annual Meeting. Please do not
sign any white proxy card sent to you by the Seidman group.

Your continued support of and interest in IBS Financial Corp. are
sincerely appreciated.

Sincerely,

Joseph M. Ochman, Sr.
Chairman of the Board, President and
Chief Executive Officer

<PAGE> 6

IBS FINANCIAL CORP.
1909 ROUTE 70 EAST
CHERRY HILL, NEW JERSEY 08003
(609) 424-1000

---------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON _____ __, 1997

---------------

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders
("Annual Meeting") of IBS Financial Corp. (the "Company") will be held at the
Four Points Hotel (Sheraton), 1450 Route 70 East, Cherry Hill, New Jersey, on
______, _____ __, 1997 at 9:30 a.m., Eastern Time, for the following purposes,
all of which are more completely set forth in the accompanying Proxy Statement:

(1) To elect one director and, depending upon the outcome of
pending litigation, possibly a second director, in each case for a
four-year term or until a successor is elected and qualified;

(2) To ratify the appointment by the Board of Directors of
Deloitte & Touche L.L.P. as the Company's independent auditors for the
fiscal year ending September 30, 1997; and

(3) To transact such other business as may properly come before
the meeting or any adjournment thereof. Management is not aware of any
other such business.

The Board of Directors has fixed May 28, 1997 as the voting record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting. Only those stockholders of record as of the close of
business on that date will be entitled to vote at the Annual Meeting.

BY ORDER OF THE BOARD OF DIRECTORS

Chiara Eisennagel
Corporate Secretary
Cherry Hill, New Jersey
_____ __, 1997

- -------------------------------------------------------------------------------
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU PLAN
TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE
ENCLOSED BLUE PROXY PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THE
----
MEETING, YOU MAY VOTE EITHER IN PERSON OR BY PROXY. ANY PROXY GIVEN MAY BE
REVOKED BY YOU IN WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE
THEREOF.
- -------------------------------------------------------------------------------

<PAGE> 7

IBS FINANCIAL CORP.

---------------

PROXY STATEMENT

---------------

ANNUAL MEETING OF STOCKHOLDERS

_____ __, 1997

This Proxy Statement and BLUE proxy card are being furnished to
holders of common stock, $.01 par value per share ("Common Stock"), of IBS
Financial Corp. ("IBSF" or the "Company"). BLUE proxies are being solicited on
behalf of your Board of Directors to be used at the Annual Meeting of
Stockholders ("Annual Meeting") to be held at the Four Points Hotel (Sheraton),
1450 Route 70 East, Cherry Hill, New Jersey, on ______, _____ __, 1997 at 9:30
a.m., Eastern Time, for the purposes set forth in the Notice of Annual Meeting
of Stockholders. This Proxy Statement is first being mailed to stockholders on
or about _____ __, 1997.

LITIGATION AGAINST THE SEIDMAN GROUP

In October 1996, Mr. Seidman's group nominated two director candidates
and provided certain information to the Company pursuant to the Company's
Certificate of Incorporation. In July 1996, the Board of Directors had approved
a reduction in the size of the Board when a director tendered his resignation
in July 1996, and as a result of this reduction, the Company initially informed
Mr. Seidman's group by letter dated October 16, 1996 that only one director was
to be elected at the annual meeting. Mr. Seidman's group then indicated by
letter dated October 21, 1996 who its one nominee would be. The Company
provided Mr. Seidman's group with a letter dated October 31, 1996 specifying in
detail the numerous deficiencies in the group's nominating materials. On
November 1, 1996, the Company granted in full the request made by Messrs.
Seidman and Whitman for an extension of the time period given to them to cure
their deficiencies.

On November 8, 1996, Mr. Seidman's group cured some of the
deficiencies but refused to provide the identities of the various persons or
entities who (1) assisted in organizing the limited liability companies and
limited partnerships used to purchase IBSF's Common Stock, (2) provided the
funds used by members of Mr. Seidman's group to purchase IBSF's Common Stock,
or (3) are otherwise deemed by the federal securities laws, in the opinion of
the Company, to be "participants" in the proxy contest then being threatened by
Mr. Seidman's group. Mr. Seidman's group also failed to amend its Schedule 13D
to include the various limited partnership agreements and operating agreements
as exhibits or to provide a description of such agreements.

- 2 -

<PAGE> 8

In light of the positions taken by Mr. Seidman's group, on November
12, 1996 the Company sued each of the members of Mr. Seidman's group in the
United States District Court for the District of New Jersey. The Company sought
a declaratory judgment that each member of Mr. Seidman's group is required
under the federal securities laws to disclose the identities of its investors,
limited partners, members and other participants and to describe the contracts,
understandings and arrangements between members of the group and such
undisclosed persons and entities. The Company also sought a declaratory
judgment that, because of the deficiencies in the nominating materials
submitted by Mr. Seidman's group, the Company could reject the nominations made
by Mr. Seidman's group and the group's request for a stockholder list. In
addition, the Company sought to enjoin Mr. Seidman's group from further
violations of the federal securities laws and from purchasing additional shares
or soliciting proxies until it complied with such laws. Some of the members of
Mr. Seidman's group counterclaimed, challenging the action of the Company's
Board, in July 1996, to reduce the number of directors from seven to six, which
was first disclosed to the group in October 1996.

A mere six days after the Company's lawsuit was filed, Mr. Seidman's
group amended its Schedule 13D to disclose for the first time an 18 month old
agreement involving 83,500 shares of IBSF's Common Stock. The amended Schedule
13D also corrected some of the deficiencies noted in the Company's lawsuit, but
still did not include the limited partnership and operating agreements or
disclose the names of the investors in such companies.

After a preliminary litigation conference on December 2, 1996, Mr.
Seidman's group further amended its Schedule 13D a mere four days later to
publicly disclose for the first time various limited partnership and operating
agreements, to disclose for the first time the identities of the persons or
entities who had invested in the four members of the group formed directly or
indirectly by Mr. Seidman, and to disclose for the first time the identities of
five individuals who had entered into agreements with Mr. Seidman regarding the
voting of their shares.

As a result of the expedited discovery conducted by IBSF and the
amended Schedule 13Ds filed by the Seidman group, IBSF discovered that Seidcal
Associates, L.L.C. ("Seidcal") owns 71.4% of Seidman and Associates, L.L.C.
("SAL") and 75.0% of Seidman and Associates II, L.L.C. ("SAL II"). IBSF also
discovered for the first time that Charisma Partners, L.P. ("Partners") owns
54.5% of Federal Holdings L.L.C. ("Holdings"), that 8th Floor Realty Corp.
("Realty Corp.") is the sole general partner of Partners, and that Kevin Moore
is a Vice President of Realty Corp., the organizer of Holdings and the
Administrative Manager of Holdings. To date, no information regarding the
members of Seidcal, the directors and executive officers of Realty Corp., or
the business, source of funds or controlling persons of Seidcal, Partners or
Realty Corp. has been publicly disclosed by the Seidman group.

On January 23, 1997, the district court judge rendered a decision in
which he stated that "(a)n amendment which cures a violation of the Exchange
Act moots a claim that arises

- 3 -

<PAGE> 9

from the failure to file a proper Schedule 13D." The court held that the
additional Schedule 13D amendments filed by Mr. Seidman's group after the
litigation was commenced mooted the Company's claims regarding the deficient
disclosures initially provided by Mr. Seidman's group and that the amended
Schedule 13Ds were adequate, and the court declined to enforce the disclosure
requirements in the Company's Certificate of Incorporation. The district court
also held that the Company had failed to meet its burden of proof in
demonstrating (1) Seidcal's control over SAL and SAL II, (2) the control of
Partners, Realty Corp. and Kevin Moore over Holdings, (3) that Seidcal,
Partners and Realty Corp. had arranged for financing, or (4) that Seidcal,
Partners and Realty Corp. are participants in the Seidman group's proxy
solicitation. In addition, the court indicated that because the nominating
materials were similar to those received by the Company the prior year and
because the court believed the Company was not prejudiced by the failure of the
Seidman group to provide proper disclosures in a timely manner, the Company
could not reject the defendants' nominations as deficient or untimely and the
defendants could receive a stockholder list. Furthermore, the court set aside
the July 1996 reduction in the size of the Board when Mr. Lockhart tendered his
resignation in July 1996, even though such reduction occurred prior to the
submission of nominees by the Seidman group (although the reduction was first
disclosed to the Seidman group in October 1996).

On January 31, 1997, the Company filed an appeal of the district
court's decision with the United States Court of Appeals for the Third Circuit,
and the Company requested that the Third Circuit review the appeal on an
expedited basis. On February 7, 1997, Mr. Seidman's group opposed the request
---------------------------------------
for an expedited appeal.
- ------------------------

Rather than trying to get the appeal decided expeditiously, Mr.
Seidman asked the Superior Court of New Jersey Chancery Division: Passaic
County to set the annual meeting date. On February 24, 1997, the Passaic County
judge orally ordered that the Annual Meeting be held on April 18, 1997, and the
Company promptly set the voting record date. The Passaic County judge stayed
his order after the Court of Appeals granted the Company's motion for an
expedited appeal as set forth below.

On February 28, 1997, the United States Court of Appeals for the Third
Circuit granted the Company's motion for an expedited appeal, despite the
attempt by Mr. Seidman's group to delay the appeal being considered. For
reasons known only to the Seidman group and its counsel, they have resisted all
attempts to expedite the appeal. The Company's brief was filed on March 24,
1997, and Mr. Seidman's reply brief is due April 23, 1997. The Company's reply
brief will be filed by April 30, 1997, and the Third Circuit ordered that the
appeal be listed for disposition on the merits during the week of May 19, 1997.
Your Board of Directors looks forward to a prompt decision from the Court of
Appeals.

The Company believes that there are still legitimate issues with
respect to the timeliness, accuracy and completeness of the disclosures
provided by Mr. Seidman's group and the validity of such group's nominations.
Your Board of Directors believes, based upon

- 4 -

<PAGE> 10

the advice of its counsel, that the failure by Mr. Seidman's group to
previously disclose the various agreements and to name the parties thereto in
the group's Schedule 13Ds constituted a violation of the federal securities
laws. Since the Company's lawsuit was first commenced, Mr. Seidman's group has
amended its Schedule 13D three separate times, and each time has provided a
little bit more of the disclosures that the Company has claimed should have
been provided no later than October 1996. The Company believes that the Seidman
group's disclosures are still inadequate, particularly since his Schedule 13Ds
fail to provide any disclosure regarding persons or entities who control in
excess of 50% of one or more of the limited liability companies formed by Mr.
Seidman. Even though these persons or entities generally "have full, exclusive
and complete discretion with respect [to all] decisions, consents,
authorizations and rights in connection with the business and affairs" of the
limited liability company, other than the daily affairs of the company and
investment decisions, Mr. Seidman has argued that these majority holders are
not control persons. As a result, this issue has been appealed to the Third
Circuit. Your Board regrets the need for the lawsuit, but believes that it had
no other choice in order to ensure compliance with the federal securities laws
by Mr. Seidman and his group and to inform the Company's stockholders of the
identities of Mr. Seidman's secret backers.

VOTING

Only stockholders of record at the close of business on May 28, 1997
("Voting Record Date") will be entitled to vote at the Annual Meeting. On the
Voting Record Date, there were 9,576,130 shares of Common Stock outstanding and
the Company had no other class of equity securities outstanding. All references
in this Proxy Statement to share amounts, prices per share and other per share
figures have been adjusted for the 10% stock dividend paid by the Company to
all of its stockholders in March 1996.

The BLUE proxy solicited hereby, if properly signed and returned to
the Company and not revoked prior to its use, will be voted in accordance with
the instructions contained therein. If no contrary instructions are given, each
proxy received will be voted FOR the nominees for director described herein,
FOR ratification of the appointment of Deloitte & Touche L.L.P. for fiscal 1997
and, upon the transaction of such other business as may properly come before
the meeting, in accordance with the best judgment of the persons appointed as
proxies. Any stockholder giving a proxy has the power to revoke it at any time
before it is exercised by (i) filing with the Secretary of the Company written
notice thereof (Chiara Eisennagel, Secretary, IBS Financial Corp.); (ii)
submitting a duly executed proxy bearing a later date; or (iii) appearing at
the Annual Meeting and giving the Secretary notice of his or her intention to
vote in person. Proxies solicited hereby may be exercised only at the Annual
Meeting and any adjournment thereof and will not be used for any other meeting.

Each share of Common Stock is entitled to one vote at the Annual
Meeting on all matters properly presented at the meeting. Directors are elected
by a plurality of the votes

- 5 -

<PAGE> 11

cast with a quorum present. A quorum consists of stockholders representing,
either in person or by proxy, a majority of the outstanding Common Stock
entitled to vote at the meeting. Abstentions are considered in determining the
presence of a quorum but will not affect the plurality vote required for the
election of directors.

The number of directors to be elected and the validity of the
nominations submitted by Mr. Seidman's group are dependent upon the outcome of
pending litigation. Because one director will definitely be elected, the person
who receives the greatest number of votes of the holders of Common Stock
represented in person or by proxy at the Annual Meeting will be elected a
director of the Company, if such person was validly nominated. Since the
pending litigation as to whether a second director is to be elected will not be
decided as of the date of the Annual Meeting, the Company reserves the right to
not seat the nominee with the second highest number of votes until the appeal
has been decided.

The affirmative vote of the holders of a majority of the total votes
present in person or by proxy is required to ratify the appointment of the
independent auditors. Under rules applicable to broker-dealers, the proposal
for ratification of the auditors, unless contested by the Seidman group, is
considered a "discretionary" item upon which brokerage firms may vote in their
discretion on behalf of their clients if such clients have not furnished voting
instructions and for which there will not be "broker non-votes." Because of the
solicitation in opposition to the election of the Company's nominees, the
election of directors will be considered a "non-discretionary" item and there
will be broker non-votes at the meeting. However, broker non-votes will have no
effect on the voting of the election of directors.

- 6 -

<PAGE> 12

INFORMATION WITH RESPECT TO THE NOMINEE FOR DIRECTOR,
DIRECTORS WHOSE TERM CONTINUES
AND EXECUTIVE OFFICERS

ELECTION OF DIRECTORS

The Certificate of Incorporation of the Company provides that the
Board of Directors of the Company shall be divided into four classes which are
as equal in number as possible, and that members of each class of directors are
to be elected for a term of four years. One class is to be elected annually.
Stockholders of the Company are not permitted to cumulate their votes for the
election of directors. When Frank G. Lockhart, a director of the Company,
tendered his resignation from the Board of Directors of the Company on July 19,
1996 for personal reasons, effective as of the day prior to the Annual Meeting,
the Board of Directors reduced the number of authorized directors from seven to
six, also effective as of the day prior to the Annual Meeting. If the reduction
in Board size is permitted, only one director will be elected this year. The
actual number of directors to be elected - one or two - is dependent upon the
outcome of the appeal to the United States Court of Appeals for the Third
Circuit. See "Litigation Against the Seidman Group" and "Voting."

No director, director nominee or executive officer of the Company is
related to any other director, director nominee or executive officer of the
Company by blood, marriage or adoption.

Unless otherwise directed, each proxy executed and returned by a
stockholder will be voted for the election of the nominees for director listed
below. If any person named as a nominee should be unable or unwilling to stand
for election at the time of the Annual Meeting, the proxies will nominate and
vote for a replacement nominee recommended by the Board of Directors. At this
time, the Board of Directors knows of no reason why either of the nominees
listed below may not be able to serve as a director if elected, other than that
the number of directors to be elected is dependent upon the outcome of pending
litigation.

The following tables present information concerning the nominees for
director of the Company and each director whose term continues, including
tenure as a director of the Company's subsidiary, Inter-Boro Savings and Loan
Association (the "Association").

- 7 -

<PAGE> 13

NOMINEES FOR DIRECTOR FOR FOUR-YEAR TERM EXPIRING IN 2001

<TABLE>
<CAPTION>
Principal Occupation During Director
Name Age(1) the Past Five Years Since
- ----------------------------- ----------- ----------------------------------------- -------------------

<S> <C> <C> <C>
Thomas J. Auchter 70 Director; President of 1967
Investment 2010, a private
investment company, since
1991. Formerly Director of
Finance and Treasurer,
Delaware River Port
Authority, Camden, New
Jersey, from 1960 to 1991.

Arthur J. Abramowitz 49 Stockholder and director in --
Davis, Reberkenny &
Abramowitz, P.C., a law
firm located in Cherry
Hill, New Jersey.
</TABLE>

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF
THE ABOVE NOMINEES FOR DIRECTOR.

MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE

DIRECTORS WHOSE TERMS EXPIRE IN 1998

<TABLE>
<CAPTION>
Principal Occupation During Director
Name Age(1) the Past Five Years Since
- ------------------------------- ----------- ----------------------------------------- -------------------

<S> <C> <C> <C>
John A. Borden 78 Director; engaged in real 1966
estate related activities since
1937 and independent real
estate appraiser since 1953.

Joseph M. Ochman, Sr. 66 Chairman of the Board of the 1971
Association since 1976 and of
the Company since 1994;
President and Chief Executive
Officer of the Association since
1971 and of the Company since
1994.
</TABLE>

- 8 -

<PAGE> 14

DIRECTOR WHOSE TERM EXPIRES IN 1999

<TABLE>
<CAPTION>
Principal Occupation During Director
Name Age(1) the Past Five Years Since
- ----------------------------- ----------- ----------------------------------------- -------------------

<S> <C> <C> <C>
Paul W. Gleason 77 Director; currently retired. 1976
Formerly Chairman of the
Board and principal
stockholder of Formigli
Corporation, a concrete
business, Berlin, New Jersey.
</TABLE>

DIRECTORS WHOSE TERMS EXPIRE IN 2000

<S> <C> <C> <C>
Francis X. Lorbecki, Jr. 74 Director; currently retired. 1968
Formerly Senior Vice
President and loan officer of
the Association until 1981.

Albert D. Stiles, Jr. 69 Director; founder and Presi- 1977
dent of Wills and Stiles, Inc.,
an electrical contractor,
Medford, New Jersey; self-
employed builder and
developer of residential and
commercial properties in the
South Jersey area.
</TABLE>

- ------------------

(1) As of March 31, 1997.

- 9 -

<PAGE> 15

STOCKHOLDER NOMINATIONS

Article 9.3 of the Company's Certificate of Incorporation governs
nominations for election to the Board of Directors and requires all such
nominations, other than those made by the Board, to be made at a meeting of
stockholders called for the election of directors, and only by a stockholder
who has complied with the notice provisions in that section. Stockholder
nominations must be made pursuant to timely notice in writing to the Secretary
of the Company. To be timely, a stockholder's notice must be delivered to, or
mailed and received at, the principal executive offices of the Company not
later than 60 days prior to the anniversary date of the immediately preceding
annual meeting.

Each written notice of a stockholder nomination shall set forth (a) as
to each person whom the stockholder proposes to nominate for election or
re-election as a director and as to the stockholder giving the notice (i) the
name, age, business address and residence address of such person, (ii) the
principal occupation or employment of such person, (iii) the class and number
of shares of Company stock which are beneficially owned by such person on the
date of such stockholder notice, and (iv) any other information relating to
such person that is required to be disclosed in solicitations of proxies with
respect to nominees for election as directors, pursuant to the proxy rules
under the Securities Exchange Act of 1934, as amended (the "1934 Act"); and (b)
as to the stockholder giving the notice (i) the name and address, as they
appear on the Company's books, of such stockholder and any other stockholders
known by such stockholder to be supporting such nominees and (ii) the class and
number of shares of Company stock which are beneficially owned by such
stockholder on the date of such stockholder notice and, to the extent known, by
any other stockholders known by such stockholder to be supporting such nominees
on the date of such stockholder notice. The presiding officer of the meeting
may refuse to acknowledge the nomination of any person not made in compliance
with the foregoing procedures. For a description of pending litigation with
respect to the validity of the nominations by Mr. Seidman's group, see
"Litigation Against the Seidman Group."

COMMITTEES AND MEETINGS OF THE BOARD OF THE COMPANY AND THE ASSOCIATION

The Board of Directors of the Company currently meets on a quarterly
basis and may have additional special meetings upon the request of the
President or a majority of the Directors. During the fiscal year ended
September 30, 1996, the Board of Directors of the Company met 13 times. No
director attended fewer than 75% of the total number of Board meetings and
meetings of committees on which he served that were held during this period.
The Board of Directors of the Company has established the following committees:

Executive Committee. The Executive Committee consists of Messrs.
Ochman (Chairman), Auchter, Borden and Lockhart. Additional members of the
Board also serve as alternates. The Committee has the authority to act on
general matters between Board meetings. The Executive Committee met once during
fiscal 1996.

- 10 -

<PAGE> 16

Audit and Examination Committee. The Audit and Examination Committee
consists of Messrs. Stiles (Chairman), Gleason and Lorbecki. The Audit and
Examination Committee recommends engagement of the Company's independent
auditors and reviews their audit reports. The Audit and Examination Committee
met once during fiscal 1996.

Nominating Committee. The Nominating Committee consists of Messrs.
Stiles (Chairman), Borden and Lorbecki. The Nominating Committee, which makes
director nominations for service on the Board of Directors, met once in fiscal
1996.

The Board of Directors of the Association met 12 times during fiscal
1996. In addition, the Board of Directors of the Association has established
the following committees:

General Loan Committee. The General Loan Committee consists of Messrs.
Ochman (Chairman), Borden and Lorbecki. Additional senior officers of the
Association also alternate on the Committee. The Committee has the authority to
approve loans up to $1.0 million. The Committee met 24 times during fiscal
1996.

Compensation Review Committee. The Compensation Review Committee
consists of Messrs. Borden (Chairman), Gleason and Stiles. The Compensation
Review Committee, which reviews and recommends compensation and benefits for
the Association's employees, met once in fiscal 1996.

In addition to the committees described above, the Association has
also established other committees which consist of members of the Board and
which meet as required. These committees include, among others: a Nominating
Committee, an Advertising Committee, an Investment Committee, a Site Committee,
a Pension Committee and an Asset/Liability Management Committee.

EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS

Set forth below is information with respect to the principal
occupations during the last five years for the six executive officers of the
Company and the Association who do not serve as directors.

Richard G. Sharp. Mr. Sharp has served as Executive Vice President and
Chief Financial Officer of the Association since 1984 and of the Company since
1994, and has been employed in various capacities at the Association since
1972. Mr. Sharp is a past President of the Philadelphia Chapter of the
Financial Managers Society and a past District Director of the Financial
Managers Society's national organization. Mr. Sharp is currently

- 11 -

<PAGE> 17

a member of the Pennsylvania Institute of Certified Public Accountants, the
American Institute of Certified Public Accountants and the Financial Managers
Society. Mr. Sharp is 62 years old as of March 31, 1997.

Anthony C. Chigounis. Mr. Chigounis has served as Senior Vice
President, Operations and Administration of the Association since 1984, and has
been employed in various capacities at the Association since 1971. Mr.
Chigounis has been active in a number of civic organizations, including the
United Way of both Burlington and Camden County, New Jersey. Mr. Chigounis
served as President of the Camden County Council of Boy Scouts of America and
is currently a member of the Executive Council. Mr. Chigounis is 60 years old
as of March 31, 1997.

Andrew A. Cosenza. Mr. Cosenza has served as Senior Vice President,
Savings Officer of the Association since 1984, and has been employed in various
capacities at the Association since 1970. Mr. Cosenza is a member and past
Director of the Philadelphia Chapter of the Financial Managers Society, and a
member of the Delaware Valley Chapter of the Institute for Financial Education.
Mr. Cosenza has also been affiliated with the United Way of Camden County since
1980. Mr. Cosenza is 55 years old as of March 31, 1997.

Lorraine H. O'Hara. Ms. O'Hara has served as Senior Vice President,
Human Resources of the Association since 1987, and has served in various
capacities at the Association since 1966. Ms. O'Hara is a member and past
President of the Philadelphia Chapter of the Financial Managers Society and is
a member of the New Jersey State League Human Resource Committee and the South
Jersey Human Resources Group. Ms. O'Hara has also been active in several United
Way annual campaigns. Ms. O'Hara is 71 years old as of March 31, 1997.

Matthew J. Kennedy. Mr. Kennedy has served as Executive Vice President
and Treasurer of the Company and the Association since April 1996 and prior
thereto as Senior Vice President and Assistant Treasurer since September 1995.
He joined the Association in February 1995 as a Vice President. Mr. Kennedy was
previously employed by Valley Federal Savings and Loan Association, Easton,
Pennsylvania, where he served as Executive Vice President and Chief Financial
Officer from 1985 to November 1993. Prior thereto, Mr. Kennedy served as Vice
President and Controller of Valley Federal from 1977 to 1985. Mr. Kennedy is 52
years old as of March 31, 1997.

Chiara Eisennagel. Ms. Eisennagel has served as Corporate Secretary of
the Association since 1993 and of the Company since 1994. From October 1992 to
December 1992, Ms. Eisennagel served as Assistant Secretary of the Association,
and she has been employed at the Association since 1990. Ms. Eisennagel was
previously employed by Amstar Corporation, Philadelphia, Pennsylvania, where
she served as Employee Benefits Administrator and Human Resources Professional
from 1974 to 1982. She also served in similar capacities with Westinghouse
Electric Company and General Accident Insurance Company. Ms. Eisennagel is 49
years old as of March 31, 1997.

- 12 -

<PAGE> 18

BENEFICIAL OWNERSHIP OF COMMON STOCK
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of the Voting Record Date, certain
information as to the Common Stock beneficially owned by (i) each person or
entity, including any "group" as that term is used in Section 13(d)(3) of the
1934 Act, who or which was known to the Company to be the beneficial owner of
more than 5% of the issued and outstanding Common Stock, (ii) the directors and
director nominees of the Company, (iii) certain executive officers of the
Company, and (iv) all directors and executive officers of the Company and the
Association as a group.

<TABLE>
<CAPTION>
Common Stock
Beneficially Owned as of
May 28, 1997(1)(2)
----------------------------------------

Name of Beneficial Owner No. %
- ------------------------ ----------------- ---------------

<S> <C> <C>
IBS Financial Corp. Employee 1,056,079(3) 11.0%
Stock Ownership Plan Trust
1909 E. Route 70
Cherry Hill, New Jersey 08003

Lawrence B. Seidman, Richard Whitman, and their 855,246(4) 8.9%
companies, investors and clients
1235A Route 23 South
Wayne, New Jersey 07470

Directors:
Thomas J. Auchter 138,284(3)(5)(6) 1.4%
John A. Borden 102,954(3)(5)(7) 1.1%
Paul W. Gleason 96,104(5) 1.0%
Frank G. Lockhart 87,585(5)(8) .9%
Francis X. Lorbecki, Jr. 95,659(5)(9) 1.0%
Joseph M. Ochman, Sr. 370,792(3)(10) 3.8%
Albert D. Stiles, Jr. 168,299(5)(11) 1.7%

Director nominee:
Arthur J. Abramowitz 500 *

Certain other executive officers:
Richard G. Sharp 123,512(12) 1.3%

All directors, nominees and executive officers
of the Company and the Association as a group
(14 persons) 1,400,331(3)(13) 13.8%
</TABLE>

(Footnotes on following pages)

- 13 -

<PAGE> 19

- ---------------

* Represents less than .5% of the outstanding Common Stock.

(1) For purposes of this table, pursuant to rules promulgated under the
1934 Act, an individual is considered to beneficially own shares of
Common Stock if he or she directly or indirectly has or shares (1)
voting power, which includes the power to vote or to direct the voting
of the shares; or (2) investment power, which includes the power to
dispose or direct the disposition of the shares. Unless otherwise
indicated, an individual has sole voting power and sole investment
power with respect to the indicated shares.

(2) Under applicable regulations, a person is deemed to have beneficial
ownership of any shares of Common Stock which may be acquired within
60 days of the Voting Record Date pursuant to the exercise of
outstanding stock options. Shares of Common Stock which are subject to
stock options are deemed to be outstanding for the purpose of
computing the percentage of outstanding Common Stock owned by such
person or group but not deemed outstanding for the purpose of
computing the percentage of Common Stock owned by any other person or
group.

(3) The IBS Financial Corp. Employee Stock Ownership Plan Trust ("Trust")
was established pursuant to the IBS Financial Corp. Employee Stock
Ownership Plan ("ESOP") by an agreement between the Company and
Messrs. Ochman, Auchter and Borden, who act as trustees of the plan
("Trustees"). As of the Voting Record Date, [918,441] shares of Common
Stock held in the Trust were unallocated and [137,638] shares had been
allocated to the accounts of participating employees. Under the terms
of the ESOP, the Trustees must vote the allocated shares held in the
ESOP in accordance with the instructions of the participating
employees. Unallocated shares held in the ESOP will be voted by the
ESOP Trustees in the same proportion for and against proposals to
stockholders as the ESOP participants and beneficiaries actually vote
shares of Common Stock allocated to their individual accounts. Any
allocated shares which either abstain on the proposal or are not voted
will be disregarded in determining the percentage of stock voted for
and against each proposal by the participants and beneficiaries. The
amount of Common Stock beneficially owned by directors who serve as
trustees of the ESOP and by all directors and executive officers as a
group does not include the unallocated shares held by the Trust.

(4) Based on a Schedule 13D filed pursuant to the 1934 Act by Lawrence B.
Seidman, SAL, SAL II, Holdings, Seidman Investment Partnership, L.P.
("SIP"), The Benchmark Company, Inc. ("TBCI"), Benchmark Partners, LP
("Partners"), Richard Whitman, Lorraine Di Paolo, Dennis Pollack, and
Ernest Beier, Jr. (collectively, the "Reporting Persons"), which have
formed a "group" pursuant to Rule 13d-5 under the 1934 Act. Mr.
Seidman beneficially owns and has the right to vote and dispose of
3,580 shares of Common Stock owned by his retirement account, and he
has sole investment discretion and voting authority with respect to
83,500 shares of Common Stock which Mr. Seidman purchased in the name
of Michael J. Mandelbaum pursuant to an April 24, 1995 agreement. Mr.
Seidman also claims sole investment discretion and voting authority
over an additional 7,806 shares of Common Stock

- 14 -

<PAGE> 20

held by Jeffrey Greenberg (2,700 shares), Steven Greenberg (2,700
shares), Richard Baer (635 shares), Brent Wolmer (600 shares) and
Sonia Seidman (1,171 shares). The Schedule 13D filed by Mr. Seidman's
group indicates that these last five individuals have agreed to sell
and vote their shares as directed by Mr. Seidman. In addition, Mr.
Seidman, in his capacity as the President of Veteri Place Corporation,
the sole general partner of SIP, which is an investment partnership,
and a manager of SAL, SAL II and Holdings, companies organized to
invest in securities, may be deemed to beneficially own 364,065 shares
of Common Stock owned beneficially by such companies. Mr. Whitman and
Ms. Di Paolo, the President and Executive Vice President,
respectively, of TBCI, a broker-dealer and investment advisor, and
each a general partner of Partners, an investment partnership, have
sole dispositive and voting power as to 3,080 shares and 28,415
shares, respectively, of Common Stock. In addition, Mr. Whitman and
Ms. DiPaolo may be deemed to have shared dispositive and voting power
as to the 217,830 shares and the 125,000 shares of Common Stock held
by TBCI and Partners, respectively, except that one or both of these
companies sold an aggregate of 2,500 shares since the last Schedule
13D amendment dated January 23, 1997. Messrs. Pollack and Beier own
11,375 shares and 13,000 shares, respectively, of Common Stock. The
above amounts exclude shares held by relatives of Messrs. Pollack and
Beier, as to which shares they disclaim beneficial ownership.

(5) Includes 16,474 unvested shares granted to each non-employee director
pursuant to the Company's Recognition and Retention Plan and Trust
("Recognition Plan"), which shares may be voted by each director, and
59,063 shares (54,063 shares for Mr. Gleason) which may be acquired
upon the exercise of stock options exercisable within 60 days of the
Voting Record Date.

(6) Includes 27,500 shares held by Mr. Auchter's wife.

(7) Includes 1,650 shares held by Mr. Borden's wife.

(8) Includes 935 shares held jointly with Mr. Lockhart's wife and 2,046
shares held by Mr. Lockhart's wife.

(9) Includes 55 shares held by Mr. Lorbecki's wife.

(10) Includes 91,300 shares held jointly with Mr. Ochman's wife, 76,623
unvested shares granted to Mr. Ochman pursuant to the Company's
Recognition Plan which may be voted by Mr. Ochman, 6,527 shares
allocated to Mr. Ochman pursuant to the Company's ESOP, 5,500 shares
held by Mr. Ochman's wife, 2,810 shares held in trust for the benefit
of Mr. Ochman's grandchildren and 76,504 shares which may be acquired
upon the exercise of stock options exercisable within 60 days of the
Voting Record Date.

(11) Includes 8,800 shares held by Mr. Stiles' wife.

- 15 -

<PAGE> 21

(12) Includes 11,000 shares held jointly with Mr. Sharp's wife, 7,073
shares held by Mr. Sharp's wife, 30,648 unvested shares granted to Mr.
Sharp pursuant to the Company's Recognition Plan which may be voted by
Mr. Sharp, 6,778 shares allocated to Mr. Sharp pursuant to the
Company's ESOP and 51,470 shares which may be acquired upon the
exercise of stock options exercisable within 60 days of the Voting
Record Date.

(13) Includes 26,965 shares allocated to all executive officers as a group
pursuant to the Company's ESOP, 255,390 unvested shares granted to all
executive officers and directors as a group pursuant to the Company's
Recognition Plan which may be voted by such persons, and 563,178
shares which may be acquired by all executive officers and directors
as a group upon the exercise of stock options exercisable within 60
days of the Voting Record Date.

ADDITIONAL INFORMATION WITH RESPECT TO THE COMPANY'S DIRECTORS, DIRECTOR
NOMINEES AND EXECUTIVE OFFICERS

The following table sets forth information with respect to those
directors, nominees for director and executive officers of the Company who have
purchased Common Stock of the Company in the two years preceding the date of
this Proxy Statement. The table below does not include information with respect
to stock grants made under the Company's Recognition Plan nor shares that have
been allocated under the Company's ESOP, which information is set forth in the
preceding table.

<TABLE>
<CAPTION>
Name Date Purchased Amount Purchased
- -------------------------------- ---------------------- ---------------------------

<S> <C> <C>
Joseph M. Ochman, Sr. 3/29/95 5,500
3/31/95 3,300
10/25/95 11,000
4/26/96 4,000
6/28/96 5,000
12/10/96 500
1/6/97 240
3/11/97 51,204(1)
Thomas J. Auchter 4/17/95 16,500
John A. Borden 2/26/96 220
Matthew J. Kennedy 4/25/95 220
6/21/96 1,000
Albert D. Stiles 9/20/95 2,200
11/3/95 13,200
1/29/96 22,000
Arthur J. Abramowitz 5/21/96 500
</TABLE>

- ----------------

(1) Represents the exercise of stock options.

- 16 -

<PAGE> 22

None of the holdings of the directors, director nominees and executive
officers of the Company set forth herein are held of record but not
beneficially, nor are any of such securities owned beneficially by associates
of such persons, except as set forth herein. As of the date of this Proxy
Statement, no director, director nominee or executive officer of the Company
has purchased the Company's Common Stock with funds that were borrowed or
otherwise obtained for the purpose of acquiring such shares of Common Stock.
However, Mr. Lockhart (who is retiring) holds his shares in a brokerage account
which had an outstanding margin balance of $19,203 as of February 28, 1997. As
of the date hereof, no director, director nominee or executive officer of the
Company has sold any shares of the Company's Common Stock in the two years
preceding the date of this Proxy Statement, except that Lorraine O'Hara and
Richard G. Sharp sold 1,992 and 3,984 shares, respectively, on January 22,
1996, and 1,992 and 3,985 shares, respectively, on February 20, 1997. The sales
by Ms. O'Hara and Mr. Sharp were made to fund certain tax withholding
obligations owed by them. In addition, on November 15, 1995 Mr. Abramowitz sold
2,520 shares and on September 12, 1996 Paul W. Gleason exercised a stock option
for 5,000 shares and sold such shares.

In addition, no director, director nominee or executive officer of the
Company is or was during the past year a party to any contracts, arrangements
or understandings with any person with respect to the Common Stock of the
Company other than in connection with the Company's stock benefit plans, and no
director, director nominee or executive officer of the Company beneficially
owns, directly or indirectly, any securities of the Association, the Company's
wholly-owned subsidiary. Other than as set forth herein, no director, director
nominee or executive officer of the Company or any associates thereof has any
arrangement or understanding with any person: (i) with respect to any future
employment by the Company or its affiliates; or (ii) with respect to any future
transactions to which the Company or any of its affiliates will or may be a
party. Finally, no director, director nominee or executive officer has, during
the past 10 years, been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).

For purposes of the solicitation of proxies by the Company's Board of
Directors, the business address of each of the Company's directors, director
nominees and executive officers is IBS Financial Corp., 1909 Route 70 East,
Cherry Hill, New Jersey 08003.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth a summary of certain information
concerning the compensation paid by the Company and the Association for
services rendered in all capacities during the three years ended September 30,
1996 to the President and Chief Executive Officer of the Company and the
Association and each other executive officer of

- 17 -

<PAGE> 23

the Company and its subsidiaries whose total compensation during the fiscal
year exceeded $100,000.

<TABLE>
<CAPTION>
===================================================================================================================================
Annual Compensation Long Term Compensation
-----------------------------------------------------------------------------------------------
Awards Payouts All Other
Name and Fiscal Other Annual Compensation
Principal Position Year Salary(1) Bonus(2) Compensation(3)
------------------------------------
Stock Number of LTIP
Grants(4) Options(5) Payouts
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Joseph M. Ochman, Sr. 1996 $ 523,882 $ -- $ -- -- -- -- $311,338(6)
President and Chief 1995 482,750 90,000 -- $1,204,506 319,267 -- 86,896
Executive Officer 1994 453,875 89,000 -- -- -- -- 46,885
- -----------------------------------------------------------------------------------------------------------------------------------
Richard G. Sharp 1996 $ 119,060 $ -- $ -- -- -- -- $ 65,682(6)
Executive Vice 1995 113,295 18,000 -- $ 481,794 128,669 -- 10,676
President and CFO 1994 107,809 17,200 -- -- -- -- --
===================================================================================================================================
</TABLE>

(1) Includes $16,000, $62,500 and $57,000 accrued on behalf of Mr. Ochman
pursuant to a deferred compensation plan in fiscal 1996, 1995 and
1994, respectively.

(2) The Company did not pay its senior executive officers a bonus for
fiscal 1996. The fiscal 1995 bonus was paid in September 1995 for
services rendered in fiscal 1995. The fiscal 1994 bonus was paid in
September 1994 for services rendered in fiscal 1994.

(3) Does not include amounts attributable to miscellaneous benefits
received by the named executive officers. In the opinion of management
of the Association, the costs to the Association of providing such
benefits to each named executive officer during the year ended
September 30, 1996 did not exceed the lesser of $50,000 or 10% of the
total of annual salary and bonus reported for the individual.

(4) Represents the grant of 127,707 and 51,082 shares of restricted Common
Stock to Messrs. Ochman and Sharp, respectively, pursuant to the
Company's Recognition Plan, which were deemed to have had the
indicated value at the date of grant. The restricted Common Stock
awarded to Messrs. Ochman and Sharp which had not yet vested as of
September 30, 1996 had a fair market value of $1.5 million and
$608,000 at September 30, 1996, respectively, based on the $14.875 per
share closing market price on such date. The awards vest 20% each year
beginning January 19, 1996, and dividends are paid on the restricted
shares.

(5) Consists of stock options granted pursuant to the Company's 1995 Stock
Option Plan which are exercisable at the rate of 20% each year
beginning January 19, 1996.

(6) Includes $27,000 for fees paid for service as Chairman of the Board of
Directors, $9,510 in premiums paid on certain life insurance policies,
$205,007 of stock units allocated to Mr. Ochman's account under the
Company's Excess Benefit Plan, $1,900 for fees paid for service as
trustee of the Association's pension plan to Mr. Ochman in fiscal
1996, and an $1,800 annual retainer for service as a director of the
Company. Also includes $66,121 and $65,682 for 4,514 shares and 4,484
shares

- 18 -

<PAGE> 24

allocated on behalf of Messrs. Ochman and Sharp, respectively, in
fiscal 1996 under the Company's ESOP.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Review Committee of the Board of Directors recommends
compensation for the Association's employees, which is then ratified by the
full Board of Directors. During the fiscal year ended September 30, 1996, the
members of the Committee were Messrs. Borden (Chairman), Gleason and Stiles.
During fiscal 1996, no member of the Compensation Review Committee was a former
or current full-time officer or employee of the Company or the Association. The
report of the Compensation Review Committee with respect to compensation for
the Chief Executive Officer and all other executive officers for the fiscal
year ended September 30, 1996 is set forth below.

REPORT OF THE COMPENSATION REVIEW COMMITTEE

The goals of the Committee are to assist the Company and its
subsidiary in attracting and retaining qualified management, motivating
executives to achieve performance goals established by the Board of Directors,
and to ensure that the financial interests of the Company's management and
shareholders are closely aligned. The financial results of the Company are a
direct function of the achievement of the goals set forth in the Company's
long-term strategic plan. The executive officers are compensated for their
contribution to the achievement of these goals, which benefits the Company's
stockholders, customers and employees as well as the communities in which the
Association operates.

Prior to fiscal 1995, the compensation of the executive officers
consisted primarily of salary, bonus and deferred compensation. When the
Association was a mutual institution, the most effective way of rewarding the
executive officers for the Association's success was through the payment of
bonuses. Following the successful completion of the Association's conversion
from mutual to stock form in October 1994 (the "Conversion"), the Company
adopted an ESOP for the benefit of all full-time employees and a Stock Option
Plan and a Recognition Plan for the benefit of directors, officers and key
employees. During fiscal 1995, the Committee used these stock benefit plans to
supplement cash compensation and provide appropriate incentives to the
executive officers and other key employees. The Committee further believes that
these stock-based incentives cause the interests of the executive officers to
be more closely aligned with those of the stockholders of the Company. The
Stock Option Plan and the Recognition Plan were approved by the Company's
stockholders at the 1995 annual meeting, and stock options and Recognition Plan
awards were granted to Mr. Ochman and other executive officers in January 1995
in the amounts disclosed to stockholders in the proxy statement for the 1995
annual meeting.

The Committee meets near the end of each fiscal year to determine
whether any bonuses or other incentive compensation should be paid for that
year and to set the base salaries for the following fiscal year. In making such
determinations, the Committee reviews the most recent operating results then
available (generally through the June 30 immediately preceding the meeting) and
other data as of the latest available date. The Committee considered the
following factors in setting the bonuses of the Chief Executive Officer and

- 19 -

<PAGE> 25

the other executive officers of the Company for fiscal 1995 and the base
salaries of such persons for fiscal 1996:

(1) The overall performance of the Company for the 12 months ended
June 30, 1995. The Company's accomplishments are best illustrated by comparing
it with other thrifts of similar or comparable size in the general MidAtlantic
- - New England area on the basis of the following factors:

<TABLE>
<CAPTION>
The Company Peer Group
---------------------- ------------------------
<S> <C> <C>
Ratio of compensation and benefits
expense to total revenue 26.38% 30.73%
Return on average assets 1.28% .78%
Return on average equity 6.72% 8.83%
Non-interest expense to average assets 1.55% 2.28%

Source: SNL Securities, L.P.
</TABLE>

(2) The individual performance appraisals of the officers and
their contributions toward the Company's overall profitability;

(3) The compensation paid to executive officers at other financial
institutions comparable in size in the Company's general market area, as shown
by compensation surveys; and

(4) The performance of the Company's Common Stock from the completion
of its initial public offering in mid-October 1994, as shown in the performance
graph included in this Proxy Statement.

The Company's net income increased by $4.4 million or 89.9% from the
12 months ended June 30, 1994 to the 12 months ended June 30, 1995, and the
market value of the Company's Common Stock increased by over 38.5% on a per
share basis (including cash dividends) from the Association's Conversion in
October 1994 through June 30, 1995. Based on the Company's record performance
and the Company's favorable comparison to the peer group on three of the four
ratios set forth in the table in clause (1) above, the Committee believed it
was appropriate to pay a bonus to Mr. Ochman for fiscal 1995 and to increase
his salary by 4.3% for fiscal 1996 to a base amount of $509,620, effective
October 1995.

In fiscal 1996, the Company eliminated all bonuses to senior
management, including Messrs. Ochman and Sharp). This action was taken in light
of the decline in the Company's net income from fiscal 1995 to fiscal 1996. In
addition, in the third quarter of fiscal 1996 the Board of Directors of the
Company determined that the fees paid to Mr. Ochman as Chairman of the Board
were

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<PAGE> 26

in effect an integral part of his salary, and the Board decided to eliminate
these fees and to increase Mr. Ochman's base salary by a comparable amount,
which increased the base amount to $548,000. Also in the third quarter, the
Board split Mr. Ochman's employment agreement with both the Company and the
Association into two separate agreements - one with the Company and one with
the Association. The main reason for the change was to have the new agreement
with the Company provide that Mr. Ochman would receive the full benefit of his
stock options and Recognition Plan awards in the event a change in control
occurred prior to such options and awards becoming fully vested. See "-
Employment Agreements." In the following quarter, the Board of Directors of the
Company adopted a resolution expressing its intent to not grant further stock
options or Recognition Plan shares to those executive officers (including
Messrs. Ochman and Sharp) who received grants when the Company's Stock Option
Plan and Recognition Plan were approved by stockholders in January 1995. In
this regard, the Committee notes that the stock options and Recognition Plan
shares granted in fiscal 1995 vest over a five-year period. As an additional
cost savings measure and in light of the Company's ESOP, in fiscal 1996 the
Association terminated its Retirement Plan for employees and the related
agreement for Mr. Ochman.

At the end of fiscal 1996, the Committee set the base salaries of the
executive officers for fiscal 1997 and overall provided nominal increases. Mr.
Ochman received no increase, Mr. Sharp received a 2.1% increase, and all seven
executive officers as a group received an aggregate increase of $20,852 or
2.1%. The Committee reviewed the same factors as it had the prior year and
noted the decline in the Company's net income in fiscal 1996. In addition, for
the 12 months ended June 30, 1996, the Company compared favorably to the peer
group on two of the four ratios set forth in the following table, as compared
to three of the four ratios the preceding year:

The Company Peer Group
------------------------ -------------------------
<S> <C> <C>
Ratio of compensation and benefits expense
to total revenue 33.43% 31.37%
Return on average assets 1.05% .97%
Return on average equity 4.99% 10.48%
Non-interest expense to average assets 1.82% 2.21%

Source: SNL Securities, L.P.
</TABLE>

In reviewing Mr. Ochman's compensation compared to the compensation of
other chief executive officers, the committee reviewed several surveys and
determined that the most relevant comparison was with financial institutions in
New Jersey with assets of $500 million or more. The 1995 survey showed an
average base salary and bonus of $345,500, with a high of $666,600. The average
base salary and bonus increased to $384,147 in the 1996 survey, with a high of
$599,000. As noted above, Mr. Ochman did not receive a bonus in fiscal 1996. In
placing Mr. Ochman's compensation in both fiscal 1995 and 1996 in between the
average and the high amounts, the committee recognized Mr. Ochman's

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<PAGE> 27

outstanding service and performance to the Company for a quarter of a century
during a most difficult period for financial institutions and recognized the
leadership qualities and expertise provided by him as President and Chief
Executive Officer since 1971.

As a result of the above actions, Mr. Ochman's combined salary, bonus
and fees decreased by $56,000 or 9.2% from fiscal 1995 to fiscal 1996 and Mr.
Ochman received no long-term compensation in fiscal 1996, as compared to
319,267 stock options and 127,707 restricted Recognition Plan shares in fiscal
1995. The Committee believes that the decline in Mr. Ochman's total
compensation in fiscal 1996 is substantially greater than the decline in the
Company's performance in fiscal 1996, and the Committee notes that fiscal 1995
was a record year for the Company in terms of net income.

Based on the first half of fiscal 1997, the Company currently does not
anticipate paying any bonuses to Mr. Ochman or the other executive officers for
fiscal 1997, and as of March 31, 1997 no amount has been accrued for bonuses to
executive officers. In the absence of any subsequent increase or bonus payment
for fiscal 1997, neither of which is presently anticipated, Mr. Ochman's
combined salary, bonus and fees will decrease by $4,700 or .8% in fiscal 1997,
which will be the second consecutive year of a decrease in Mr.
Ochman's cash compensation.

As noted above, several stock benefit plans were implemented in fiscal
1995. The allocation of stock under the ESOP to the Chief Executive Officer's
account as well as to the accounts of all employees was calculated in
accordance with the Employee Retirement Income Security Act of 1974, and such
allocations will continue on an annual basis. The stock allocated to these
accounts will only be distributed upon the employees' retirement, death or
disability. The stock options granted to Mr. Ochman, as with all employees,
become exercisable at the rate of 20% per year commencing on the first annual
anniversary of the date of grant. Because the stock options become valuable
only as the per share price of the Company's Common Stock appreciates in value,
they are designed to cause Mr. Ochman's interests (and those of all employees)
in the future performance and success of the Company to be aligned closely with
the interests of the Company's stockholders. The Recognition Plan shares
granted to Mr. Ochman are primarily in recognition for his past performance and
service to the Association since 1971, and these shares as well as the
Recognition Plan shares granted to all other persons also vest at the rate of
20% per year commencing on the first annual anniversary of the date of grant.
Because the Recognition Plan shares also increase in value as the per share
price of the Company's Common Stock increases, this grant was also designed to
cause Mr. Ochman's interests (and those of all other recipients) in the future
performance of the Company to be aligned closely with the interests of the
Company's stockholders.

The Committee considered the stock-based benefits allocated or granted
in fiscal 1995 to be appropriate in light of the Company's increase in
stockholder value. The market value of the Common Stock increased by over 75%
on a per share basis (including cash dividends) from the Association's
conversion from mutual to stock form in October 1994 through September 30,
1996. This performance is further highlighted on the following

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<PAGE> 28

Performance Graph, which compares the Company's stock performance with the
stock performance of other companies as measured by broad indices.

Following review and approval by the Committee, all issues pertaining
to executive compensation are submitted to the full Board of Directors for
their approval. Mr. Ochman does not participate in the review of his
compensation.

John A. Borden, Chairman
Paul W. Gleason
Albert D. Stiles, Jr.

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<PAGE> 29

PERFORMANCE GRAPH

The following graph demonstrates comparison of the cumulative total
returns for the Common Stock of the Company, the SNL Securities $500 million to
$1 Billion Thrift Asset Size Index, the SNL Thrift Index and the Nasdaq Stock
Market Index since the Company's initial public offering in October 1994.

<TABLE>
<CAPTION>
10/31/94 03/31/95 09/30/95 03/31/96 09/30/96
-------- -------- -------- -------- --------

<S> <C> <C> <C> <C> <C>
IBS Financial Crp. NJ 100.00 123.07 172.06 161.23 169.23
Nasdaq Total Return 100.00 107.23 137.43 145.60 163.08
SNL Thrift Index 100.00 102.77 134.83 143.74 163.23
SNL $500M-$1B Thrift 100.00 106.38 134.03 140.51 157.87
</TABLE>

The above graph represents $100 invested in the Company's initial
public offering of Common Stock on October 13, 1994 at $10.00 per share. The
Common Stock commenced trading on the Nasdaq National Market on October 13,
1994. The cumulative total returns include the payment of cash dividends by the
Company.

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<PAGE> 30

STOCK OPTIONS

The following table discloses certain information regarding the
options held at September 30, 1996 by the Chief Executive Officer and each
other named executive officer. No options were exercised by such persons during
the year ended September 30, 1996.

<TABLE>
<CAPTION>
Number of Options at Value of Options at
September 30, 1996 September 30, 1996
---------------------------------------- ---------------------------------------

Name Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------------- ----------------- --------------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Joseph M. Ochman, Sr. 63,853 255,414 $347,680 $1,390,729
Richard G. Sharp 25,734 102,935 140,122 560,481
</TABLE>

- -------------------------

(1) Based on a per share market price of $14.875 at September 30, 1996.

DIRECTORS' FEES

Directors of the Company received an annual fee of $2,400 from the
Company during fiscal 1996. Directors of the Association are paid a monthly fee
for attendance at each Board of Directors' meeting. The amount of the fee was
$1,325 during fiscal 1996. Two paid absences are permitted. For service on the
Executive Committee, which generally meets once a month, directors received
fees of $575 per meeting attended in fiscal 1996. For service on the General
Loan Committee, which generally meets twice each month, directors received fees
of $500 per meeting attended in fiscal 1996. For all other meetings of
committees, which meet as needed, directors received fees of $475 per meeting
attended during fiscal 1996. Those directors who serve as trustees of the
Association's Retirement Plan receive a fee, which amounted to $475 per quarter
during fiscal 1996. In lieu of receiving other directors' fees, the Chairman of
the Board of Directors received a fee for service as Chairman, which amounted
to $9,000 per quarter through June 30, 1996, at which time such fee was
terminated.

EMPLOYMENT AGREEMENTS

The Company and the Association (the "Employers") during October 1994
entered into employment agreements with each of Messrs. Ochman, Sharp,
Chigounis, Cosenza and Ms. O'Hara. The Employers agreed to employ Messrs.
Ochman and Sharp for a term of three years and the other officers for a term of
two years, in each case in their current respective positions. The agreements
with Messrs. Chigounis and Cosenza and Ms. O'Hara expired in October 1996. On
April 22, 1996, Mr. Ochman's joint agreement with both the Company and the
Association was replaced by two separate three-year employment

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<PAGE> 31
agreements - one with the Company and one with the Association. Mr. Ochman's
new agreements are substantially similar to his prior agreement, except that
his agreement with the Company includes different provisions regarding Section
280G of the Internal Revenue Code of 1986 (the "Code") as described below. The
compensation and expenses of Messrs. Ochman and Sharp (the "Executives") are
paid by the Company and the Association in the same proportion as the time and
services actually expended by the Executives on behalf of each respective
Employer. The term of Mr. Ochman's employment agreements with the Company and
the Association shall be extended each year for a successive additional
one-year period upon approval of the respective Board of Directors unless Mr.
Ochman elects, not less than 30 days prior to the annual anniversary date, not
to extend the employment term.

The Executives' employment agreements are terminable with or without
cause by the respective Employer(s). The Executive has no right to compensation
or other benefits pursuant to the employment agreement for any period after
voluntary termination or termination by the respective Employer(s) for cause,
disability, retirement or death, provided, however, that (i) in the event that
(a) the Executive terminates his employment because of failure of the
respective Employer(s) to comply with any material provision of the employment
agreement or the respective Employer(s) change the Executive's title or duties,
or (b) the employment agreement is terminated by the respective Employer(s)
other than for cause, disability, retirement or death or by the Executive as a
result of certain adverse actions which are taken with respect to the
Executive's employment following a Change in Control of the Company, as
defined, the Executive will be entitled to a cash severance amount equal to
three times the Executive's base salary, and (ii) Mr. Ochman's employment
agreements provide for certain death, disability and medical benefits as set
forth below. In addition, Mr. Ochman will be entitled to a continuation of
benefits similar to those he is receiving at the time of such termination for
the remaining term of the agreement or until he obtains full-time employment
with another employer.

A Change in Control is generally defined in the employment agreements
to include any change in control of the Company required to be reported under
the federal securities laws, as well as (i) the acquisition by any person of
25% or more of the Company's outstanding voting securities and (ii) a change in
a majority of the directors of the Company during any two-year period without
the approval of at least two-thirds of the persons who were directors of the
Company at the beginning of such period.

Each employment agreement with the Association provides that if the
payments and benefits to be provided thereunder or otherwise upon termination
of employment are deemed to constitute a "parachute payment" within the meaning
of Section 280G of the Code, then such payments and benefits payable thereunder
shall be reduced, in the manner determined by the Executive, by the amount, if
any, which is the minimum necessary to result in no portion of the payments and
benefits being non-deductible by the Employers for federal income tax purposes.
Parachute payments generally are payments in excess of three times the base
amount, which is defined to mean the recipient's average annual

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<PAGE> 32

compensation from the employer includible in the recipient's gross income
during the most recent five taxable years ending before the date on which a
change in control of the employer occurred. Recipients of parachute payments
are subject to a 20% excise tax on the amount by which such payments exceed the
base amount, in addition to regular income taxes, and payments in excess of the
base amount are not deductible by the employer as compensation expense for
federal income tax purposes. Under Mr. Ochman's employment agreement with the
Company, Mr. Ochman could receive payments and benefits that constitute a
parachute payment, in which event the Company has agreed to pay the 20% excise
tax that would otherwise be owed by Mr. Ochman and such additional amounts as
may be necessary to reimburse Mr. Ochman for the state and federal income and
excise taxes on such amounts. Because the amount of the payments and benefits
that could constitute a parachute payment is dependent upon the timing, price
and structure of any change in control that may occur in the future, it is not
possible at this time to quantify the dollar impact of this change in Mr.
Ochman's employment agreement.

Consistent with past practice, Mr. Ochman is provided with the use of
an automobile and the Employers pay the annual membership dues at two clubs.
Under Mr. Ochman's employment agreements, the Employers will provide coverage
for Mr. Ochman and his spouse under the Employers' health insurance plan until
Mr. Ochman attains age 70. In the event of Mr. Ochman's death or disability
during the term of the agreements, his spouse, estate, legal representative or
named beneficiaries will receive payments equal to the balance due to Mr.
Ochman for the remaining term of the agreements and Mr. Ochman's spouse will
continue to be covered under the Employers' health insurance plan for three
years.

Although the above-described employment agreements could increase the
cost of any acquisition of control of the Company, management of the Company
does not believe that the terms thereof would have a significant anti-takeover
effect.

BENEFITS

Retirement Plan. The Association previously maintained a defined
benefit pension plan ("Retirement Plan") for all full time employees who had
attained the age of 21 years and had completed one year of service with the
Association. In general, the Retirement Plan provided for annual benefits
payable monthly upon retirement at age 65 in an amount equal to between 1.35%
and 2.00% of an employee's average earnings, which was the average compensation
paid to him or her over the five consecutive years of service which produced
the highest average during the 10 years preceding the participant's retirement
or termination of employment, excluding overtime, commissions and bonuses,
multiplied by his or her years of service (to a maximum of 35 years). Under the
Retirement Plan, an employee's benefits were fully vested after five years of
service. During the year ended September 30, 1996, the Association's pension
expense under the Retirement Plan amounted to $291,000.

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<PAGE> 33

At September 30, 1996, Messrs. Ochman and Sharp had 27 and 24 years,
respectively, of credited service under the Retirement Plan. The Association
terminated the Retirement Plan effective September 1, 1996 and provided the
participants with their benefits in March 1997. Messrs. Ochman and Sharp will
receive cumulative benefits under the Retirement Plan in lump sum distributions
estimated to be approximately $1.1 million and $543,000, respectively, which
cumulative benefits reflect 27 and 24 years, respectively, of credited service.

Supplemental Executive Retirement Agreement. In September 1987, the
Association entered into a Supplemental Executive Retirement Agreement ("SERP")
with Mr. Ochman in order to supplement the retirement benefits to be received
by him pursuant to the Association's Retirement Plan. Under the SERP, upon
retirement from the Association after attaining age 65, Mr. Ochman shall be
entitled to receive an annual supplemental retirement benefit equal to 1.35% of
his final average earnings, as defined in the Retirement Plan, up to the social
security covered compensation, plus 2% of final average earnings in excess of
such amount multiplied by Mr. Ochman's years of service (to a maximum of 35
years), and reduced by the benefit payable under the Retirement Plan. The
obligation to make payments pursuant to the SERP is unfunded, and the
Association annually credits to an account an amount which is projected to be
sufficient to defray the Association's obligation under the SERP. During the
year ended September 30, 1996, the Association recognized an expense of
$824,000 in connection with the SERP. The Association has terminated the SERP
effective September 1, 1996 and provided cumulative SERP benefits of
approximately $1.7 million to Mr. Ochman in March 1997. This amount represents
cumulative benefits, including the earnings thereon, since 1987.

Deferred Compensation Agreement. In January 1977, the Association and
Mr. Ochman entered into a deferred compensation agreement which was restated as
of December 1988 (the "Agreement"), pursuant to which Mr. Ochman is permitted
to defer a discretionary percentage of the total compensation otherwise payable
to him. The payment of deferred compensation pursuant to the Agreement is
unfunded, and the Association credits to a deferred compensation account the
amounts of compensation deferred by Mr. Ochman. Amounts held pursuant to the
Agreement are required to be paid to Mr. Ochman within 60 days following the
date of the termination of his employment with the Association, or as may be
permitted at an earlier date by the Board of Directors with Mr. Ochman
abstaining from voting. Mr. Ochman deferred $16,000 of compensation during
fiscal 1996. The Association and Mr. Ochman terminated the agreement in January
1996, at which time the remaining cumulative deferred amount of $202,000 was
distributed to Mr. Ochman.

Life Insurance Arrangements. In October 1981, the Association and Mr.
Ochman entered into a supplemental deferred compensation agreement (the
"Supplemental Agreement") pursuant to which the Association agreed to maintain
certain life insurance policies on Mr. Ochman's life with an aggregate face
amount of approximately $389,600 until Mr. Ochman's retirement after having
attained the age of 65. Life insurance policies that were previously owned by
the Association's Retirement Plan were purchased from the

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<PAGE> 34

Retirement Plan by the Association pursuant to the Supplemental Agreement for
an amount equal to their then cash value. The policies were amended to provide
that the beneficiary of the policies shall be Mr. Ochman's spouse and her
heirs, and the Association agreed to continue to pay the required premium
payments. During the year ended September 30, 1996, the Association paid total
premiums of $9,510 with respect to these insurance contracts. The Supplemental
Agreement provides that, following Mr. Ochman's retirement or disability, the
Association will commence payment to Mr. Ochman of the cash value of the
insurance contracts in monthly installments over a period of ten years.

Employee Stock Ownership Plan and Trust. The Company has established
the ESOP for employees of the Company and the Association. Full-time employees
of the Company and the Association who have been credited with at least 1,000
hours of service during a twelve month period and who have attained at least
age 21 are eligible to participate in the ESOP.

In connection with the mutual to stock conversion of the Association,
the ESOP borrowed funds from the Company to purchase 8% of the Common Stock
issued in the conversion. The loan to the ESOP is being repaid principally from
the Company's and the Association's contributions to the ESOP over a period of
10 years, and the collateral for the loan is the Common Stock purchased by the
ESOP. The Company may, in any plan year, make additional discretionary
contributions for the benefit of plan participants in either cash or shares of
Common Stock, which may be acquired through the purchase of outstanding shares
in the market or from individual stockholders, upon the original issuance of
additional shares by the Company or upon the sale of treasury shares by the
Company. Such purchases, if made, would be funded through additional borrowings
by the ESOP or additional contributions from the Company. The timing, amount
and manner of future contributions to the ESOP will be affected by various
factors, including prevailing regulatory policies, the requirements of
applicable laws and regulations, and market conditions.

Shares purchased by the ESOP with the proceeds of the loan are held in
a suspense account and released on a pro rata basis as debt service payments
are made. Discretionary contributions to the ESOP and shares released from the
suspense account are allocated among participants on the basis of compensation.
Forfeitures are reallocated among remaining participating employees and may
reduce any amount the Company might otherwise have contributed to the ESOP.
Participants will vest in their right to receive their account balances within
the ESOP at the rate of 20% per year, starting with completion of their third
year of service. In the case of a "change in control," as defined, however,
participants will become immediately fully vested in their account balances.
Benefits may be payable upon retirement, early retirement, disability or
separation from service. The Company's contributions to the ESOP are not fixed,
so benefits payable under the ESOP cannot be estimated. Messrs. Ochman, Auchter
and Borden serve as trustees of the ESOP.

The Board of Directors of the Company has authorized an excess benefit
plan ("EBP") to provide certain additional retirement benefits to Mr. Ochman.
The EBP

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<PAGE> 35

provides that Mr. Ochman shall receive an annual allocation of stock units
representing shares of Common Stock of the Company. The number of stock units
allocable to his benefit each year shall be equal to the difference between the
annual allocation of shares that would have been made to him in the ESOP,
without regard to the $150,000 limitation as set forth in Section 401(a)(17) of
the Code, minus the number of shares actually allocated to his ESOP account in
a particular year. The Company allocated 13,782 stock units having an aggregate
value of $205,007 as of September 30, 1996 to the EBP in fiscal 1996.

TRANSACTIONS WITH CERTAIN RELATED PERSONS

The Association's policy provides that all loans made by the
Association to its directors and officers are made in the ordinary course of
business, are made on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions
with other persons and do not involve more than the normal risk of
collectability or present other unfavorable features. During the fiscal year
ended September 30, 1996, none of the Association's directors and executive
officers had aggregate loan balances in excess of $60,000, and no such
individual had engaged in any transaction with the Association with a value in
excess of $60,000.

Arthur J. Abramowitz, a director nominee, is a stockholder and
director in Davis, Reberkenny & Abramowitz, P.C., which serves as general
counsel to the Association. The amount of fees paid by the Association to the
law firm were less than 5% of the law firm's gross revenues for the firm's last
full fiscal year.

RATIFICATION OF APPOINTMENT OF AUDITORS

The Board of Directors of the Company has appointed Deloitte & Touche
L.L.P., independent certified public accountants, to perform the audit of the
Company's financial statements for the year ending September 30, 1997, and
further directed that the selection of auditors be submitted for ratification
by the stockholders at the Annual Meeting.

The Company has been advised by Deloitte & Touche L.L.P. that neither
that firm nor any of its associates has any relationship with the Company or
its subsidiaries other than the usual relationship that exists between
independent certified public accountants and clients. Deloitte & Touche L.L.P.
will have one or more representatives at the Annual Meeting who will have an
opportunity to make a statement, if they so desire, and who will be available
to respond to appropriate questions.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION
OF THE APPOINTMENT OF DELOITTE & TOUCHE L.L.P. AS INDEPENDENT AUDITORS FOR THE
FISCAL YEAR ENDING SEPTEMBER 30, 1997.

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<PAGE> 36

STOCKHOLDER PROPOSALS

Any proposal which a stockholder wishes to have included in the proxy
materials of the Company relating to the next annual meeting of stockholders of
the Company, which is expected to be held on or about _____ __, 1998, must be
received at the principal executive offices of the Company, 1909 East Route 70,
Cherry Hill, New Jersey 08003, Attention: Chiara Eisennagel, Corporate
Secretary, no later than ______ __, 1997. If such proposal is in compliance
with all of the requirements of Rule 14a-8 under the 1934 Act, it will be
included in the proxy statement and set forth on the form of proxy issued for
such annual meeting of stockholders. It is urged that any such proposals be
sent by certified mail, return receipt requested.

Stockholder proposals which are not submitted for inclusion in the
Company's proxy materials pursuant to Rule 14a-8 under the 1934 Act may be
brought before an annual meeting pursuant to Article 9.4 of the Company's
Certificate of Incorporation, which provides that business at an annual meeting
of stockholders must be (a) properly brought before the meeting by or at the
direction of the Board of Directors, or (b) otherwise properly brought before
the meeting by a stockholder. For business to be properly brought before an
annual meeting by a stockholder, the stockholder must have given timely notice
thereof in writing to the Secretary of the Company. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the Company not later than 60 days prior to the
anniversary date of the immediately preceding annual meeting. A stockholder's
notice must set forth as to each matter the stockholder proposes to bring
before an annual meeting (a) a brief description of the business desired to be
brought before the annual meeting, (b) the name and address, as they appear on
the Company's books, of the stockholder proposing such business and, to the
extent known, any other stockholders known by such stockholder to be supporting
such proposal, (c) the class and number of shares of Common Stock of the
Company which are beneficially owned by the stockholder and, to the extent
known, by any other stockholders known by such stockholder to be supporting
such proposal, and (d) any financial interest of the stockholder in such
business.

ANNUAL REPORTS

A copy of the Company's Annual Report to Stockholders for the year
ended September 30, 1996 either preceded or accompanies this Proxy Statement.
Such annual report is not part of the proxy solicitation materials.

UPON RECEIPT OF A WRITTEN REQUEST, THE COMPANY WILL FURNISH TO ANY
STOCKHOLDER WITHOUT CHARGE A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED SEPTEMBER 30, 1996 AND A LIST OF THE EXHIBITS THERETO
REQUIRED TO BE FILED UNDER THE 1934 ACT. SUCH WRITTEN REQUESTS SHOULD BE
DIRECTED TO CHIARA EISENNAGEL, CORPORATE SECRETARY, IBS FINANCIAL CORP., 1909
EAST ROUTE 70, CHERRY HILL, NEW JERSEY 08003. THE FORM 10-K IS NOT PART OF THE
PROXY SOLICITATION MATERIALS.

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<PAGE> 37

OTHER MATTERS

Each proxy solicited hereby also confers discretionary authority on
the Board of Directors of the Company to vote the proxy with respect to the
approval of the minutes of the last meeting of stockholders, the election of
any person as a director if the nominee is unable to serve or for good cause
will not serve, matters incident to the conduct of the meeting, and upon such
other matters as may properly come before the Annual Meeting. Management is not
aware of any business that may properly come before the Annual Meeting other
than the matters described above in this Proxy Statement. However, if any other
matters should properly come before the meeting, it is intended that the
proxies solicited hereby will be voted with respect to those other matters in
accordance with the judgment of the persons voting the proxies.

The Company may solicit proxies by mail, advertisement, telephone,
facsimile, telegraph and personal solicitation. Directors and executive
officers of the Company and the Association may solicit proxies personally or
by telephone without additional compensation. The Company will reimburse banks,
brokerage firms and other custodians, nominees and fiduciaries for reasonable
expenses incurred by them in sending proxy solicitation materials to the
beneficial owners of the Company's Common Stock.

The Company has retained D.F. King & Co., Inc., 77 Water Street, New
York, New York 10005, a professional proxy solicitation firm, to assist in the
solicitation of proxies and for related services. The Company will pay D.F.
King & Co., Inc. a fee of $30,000 and has agreed to reimburse it for its
reasonable out-of-pocket expenses. The Company has agreed to indemnify D.F.
King & Co., Inc. and its controlling persons, officers, directors, employees
and agents from and against any and all losses, claims, damages, liabilities
and expenses relating to its engagement, including liabilities and expenses
under the federal securities laws, but excluding matters relating to the
indemnified person's negligence, bad faith or willful misconduct. Approximately
50 persons will be used by D.F. King & Co., Inc. in its solicitation efforts.

The Company will bear the cost of soliciting proxies on behalf of the
Board of Directors of the Company. The cost of such solicitation, which
includes the fees of the Company's attorneys, solicitors, advertising, printing
and mailing and other costs incidental to the solicitation, including
litigation fees and expenses, cannot be stated with precision at this time.
However, after excluding the normal costs of solicitation for an election of
directors in the absence of a proxy contest, the Company estimates that the
total expenditures relating to this proxy solicitation will be approximately
$________, of which approximately $________ has been incurred as of April 30,
1997. Of the total estimate, approximately $____ relates to fees and expenses
necessitated by the refusal of Mr. Seidman and his group to disclose the
identities of their investors and provide other information, which disclosure
was not provided until the Company was forced to sue Mr. Seidman and the other
members of his group. See "Litigation Against the Seidman Group."

- 32 -

<PAGE> 38

YOUR VOTE IS IMPORTANT! WE URGE YOU TO SIGN AND DATE THE ENCLOSED
BLUE PROXY CARD AND RETURN IT TODAY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
- ----

-33-

<PAGE> 39

- -------------------------------------------------------------------------------

IMPORTANT

Your vote is important. Regardless of the number of shares of
IBS Financial common stock you own, please vote as recommended by your Board of
Directors by taking these two simple steps:

1. PLEASE SIGN, DATE AND PROMPTLY MAIL THE ENCLOSED BLUE PROXY
CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.

2. PLEASE DO NOT RETURN ANY WHITE PROXY CARDS SENT TO YOU BY
SEIDMAN.

IF YOU VOTED SEIDMAN'S PROXY CARD BEFORE RECEIVING YOUR IBS
FINANCIAL BLUE PROXY CARD, YOU HAVE EVERY RIGHT TO CHANGE YOUR VOTE SIMPLY BY
SIGNING, DATING AND MAILING THE ENCLOSED BLUE PROXY CARD. THIS WILL CANCEL YOUR
EARLIER VOTE SINCE ONLY YOUR LATEST DATED PROXY CARD WILL COUNT AT THE ANNUAL
MEETING.

If you own shares in the name of a brokerage firm, only your
broker can vote your shares on your behalf and only after receiving your
specific instructions. Please call your broker and instruct him/her to execute
a BLUE card on your behalf. You should also promptly sign, date and mail your
BLUE card when you receive it from your broker. Please do so for each separate
account you maintain.

You should return your BLUE proxy card at once to ensure that
your vote is counted. This will not prevent you from voting in person at the
meeting should you attend.

IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE IN VOTING YOUR
SHARES, PLEASE CALL D.F. KING & Co., Inc., which is assisting us, toll-free at
1-800-714-3306.

- -------------------------------------------------------------------------------

<PAGE> 40

REVOCABLE PROXY

IBS FINANCIAL CORP.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF IBS
FINANCIAL CORP. ("COMPANY") FOR USE AT THE ANNUAL MEETING OF STOCKHOLDERS TO BE
HELD ON _____ __, 1997 AND AT ANY ADJOURNMENT THEREOF.

The undersigned, being a stockholder of the Company as of May __, 1997,
hereby authorizes the Board of Directors of the Company or any successors
thereto as proxies with full powers of substitution, to represent the
undersigned at the Annual Meeting of Stockholders of the Company to be held at
the Four Points Hotel (Sheraton), 1450 Route 70 East, Cherry Hill, New Jersey,
on ______, _____ __, 1997 at 9:30 a.m., Eastern Time, and at any adjournment of
said meeting, and thereat to act with respect to all votes that the undersigned
would be entitled to cast, if then personally present, as follows:

1. ELECTION OF DIRECTOR

[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY
below (except as marked for all nominees listed
to the contrary below) below

Nominees for a four-year term: Thomas J. Auchter and Arthur J. Abramowitz

(INSTRUCTION: To withhold authority to vote for only one of the nominees, write
the name of the nominee in the space provided.)
-------------------------------

2. PROPOSAL to ratify the appointment of Deloitte & Touche L.L.P. as the
Company's independent auditors for the fiscal year ending September
30, 1997.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

In their discretion, the proxies are authorized to vote with respect
to approval of the minutes of the last meeting of stockholders, the election of
any person as a director if a nominee is unable to serve or for good cause will
not serve, matters incident to the conduct of the meeting, and upon such other
matters as may properly come before the meeting.

The Board of Directors recommends that you vote FOR the Board of
Directors' nominees listed above and FOR Proposal 2. Shares of common stock of
the Company will be voted as specified. IF NO SPECIFICATION IS MADE, SHARES
WILL BE VOTED FOR THE ELECTION OF THE BOARD OF DIRECTORS' NOMINEES TO THE BOARD
OF DIRECTORS, FOR PROPOSAL 2, AND OTHERWISE

<PAGE> 41

AT THE DISCRETION OF THE PROXIES. This proxy may not be voted for any person
who is not a nominee of the Board of Directors of the Company. THIS PROXY MAY
BE REVOKED AT ANY TIME BEFORE IT IS VOTED AT THE ANNUAL MEETING.

The undersigned hereby acknowledges receipt of a Notice of Annual
Meeting of the Stockholders of the Company called for _____ __, 1997, a Proxy
Statement for the Annual Meeting and the 1996 Annual Report to Stockholders
(which may have been previously mailed).

Dated: , 1997
-----------------------

-----------------------------------

-----------------------------------
Signature(s)

PLEASE SIGN THIS EXACTLY AS YOUR NAME(S)
APPEAR(S) ON THIS PROXY. WHEN SIGNING IN A
REPRESENTATIVE CAPACITY, PLEASE GIVE
TITLE. WHEN SHARES ARE HELD JOINTLY, ONLY
ONE HOLDER NEED SIGN.

PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.