IBS FINANCIAL CORP, PRE 14A, 1997-03-03

IBS FINANCIAL CORP
PRE 14A, 1997-03-03
SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED

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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. )

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 Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / 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)(1)
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:

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(4) Date filed:

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<PAGE>

[IBSF letterhead]

March ___, 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 Friday, April 18, 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. DO NOT return any white proxy cards sent to you by
Mr. Seidman's gorup. 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 ______________________.

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 substantial funds of his own
into the Company's common stock. By contrast, Messrs. Seidman and Whitman
have used other people's money to accumulate the positions held by their
respective companies.

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, on November
1, 1996 your Board of Directors offered to support the nomination of a person
that would be mutually agreeable to the Company and Messrs. Seidman and
Whitman, subject to certain standard conditions, including a one-year
standstill agreement. No agreement could be

<PAGE>

reached because Messrs. Seidman and Whitman insisted that they be able to
wage or support yet another expensive and disruptive proxy contest at next
year's annual meeting.

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 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 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.

2
<PAGE>

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 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 addition to the 10% stock dividend paid in
March 1996 and to our regular quarterly cash dividends, which were increased
by 33% in the fourth quarter of calendar 1996 to a rate of $.32 per share per
annum.

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 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
and eliminated fees paid to the Chairman of the Board. These actions were
taken in light of the decline in the Company's net income from fiscal 1995 to
fiscal 1996. In addition, in fiscal 1996 the Board of Directors adopted a

<PAGE>

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.

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. Do not sign any white proxy card sent to you by the Seidman group,
even as a vote of protest.

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>

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 April 18, 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
Friday, April 18, 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 March 24, 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
March __, 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>

IBS FINANCIAL CORP.
___________________

PROXY STATEMENT
___________________

ANNUAL MEETING OF STOCKHOLDERS

APRIL 18, 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. (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 Friday, April 18, 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
on or about March _, 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, and as a result of this reduction, the Company 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>

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 judgement 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 judgement 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.

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.

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. As a result, the court held that the Company
could not reject the defendants' nominations as deficient or untimely and
that the defendants cold receive a stockholder list. In addition, the court
set aside the reduction in the size of the Board in July 1996 when Mr.
Lockhart tendered his resignation, even though such reduction occurred prior
to the submission of nominees by Mr. Seidman's group.

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.

- 3 -
<PAGE>

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
ordered that the Annual Meeting be held on April 18, 1997, and the Company
promptly set the voting record date.

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. The
Company's brief will be filed by March 24, 1997. Unfortunately, the Seidman
group indicated that it could not file its reply brief until April 23, 1997,
which is shortly following the date of the Annual Meeting. For reasons known
only to the Seidman group and its counsel, they have resisted all attempts to
expedite the appeal. 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 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. 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 March 24, 1997
("Voting Record Date") will be entitled to vote at the Annual Meeting. On
the Voting Record Date, there were 9,521,969 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

- 4 -

<PAGE>

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 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.

- 5 -
<PAGE>

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").

-6-
<PAGE>

NOMINEES FOR DIRECTOR FOR FOUR-YEAR TERM EXPIRING IN 2001

Principal Occupation During Director
Name Age(1) the Past Five Years Since
- - - ----------------- ----- --------------------------- --------
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.

[second nominee to be inserted]

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

Principal Occupation During Director
Name Age(1) the Past Five Years Since
- - - --------------------- ----- --------------------------- --------
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. 65 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.

-7-

<PAGE>

Director Whose Term Expires in 1999

Principal Occupation During Director
Name Age(1) the Past Five Years Since
---- ------ --------------------------- --------

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.

Directors Whose Terms Expire in 2000

Principal Occupation During Director
Name Age(1) the Past Five Years Since
---- ------ --------------------------- --------

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.

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

(1) As of September 30, 1996.

<PAGE>

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.

- 9 -
<PAGE>

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

-10-

<PAGE>

Director of the Financial Managers Society's national organization. Mr. Sharp
is currently 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 September 30,
1996.

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 59 years old as
of September 30, 1996.

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 54 years old as of September 30, 1996.

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
September 30, 1996.

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 September 30, 1996.

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 48 years old as of September 30, 1996.

-11-
<PAGE>

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
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.

Common Stock
Beneficially Owned as of
March 24, 1997(1)(2)
-------------------------

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

IBS Financial Corp. Employee 1,051,079(3) 11.0%
Stock Ownership Plan Trust
1909 E. Route 70
Cherry Hill, New Jersey 08003

Lawrence B. Seidman, et al. 855,651(4) 9.0%
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) 1.8%

[Add second nominee]

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
(13 persons) 1,399,831(3)(13) 13.8%

(Footnotes on following pages)

- 12 -

<PAGE>

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

(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,
[913,441] 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, Seidman and Associates, L.L.C. ("SAL"),
Seidman and Associates II, L.L.C. ("SAL II"), Federal Holdings,
L.L.C. ("Holdings"), Seidman Investment Partnership, L.P.
("SIP"), The Benchmark Company, Inc. ("TBCI"), Benchmark Partners,
LP ("Partners"), Richard Whitman, Lorraine DiPaolo, 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 right to
vote and dispose of 2,580 shares of Common Stock owned by his
retirement account,

- 13 -
<PAGE>

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 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. 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 127,708 shares which may be acquired upon the exercise of stock options
exercisable within 60 days of the Voting Record Date.

-14-

<PAGE>

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

(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 613,982 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.

Name Date Purchased Amount Purchased
---- -------------- ----------------

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

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

-15-
<PAGE>

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

- 16 -

__________________________________________________________________________________________________________________________________
| | 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 | |
_______________________|________|___________|__________|_______________|____________|___________|_________|______________________|
Joseph M. Ochman, Sr. | 1996 | $ 523,882 | $ -- | $ -- | -- | -- | -- | $309,538(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, and $1,900 for fees paid
for service as trustee of the Association's pension plan to
Mr. Ochman in fiscal 1996. Also includes $66,121 and $65,682 for
4,514 shares and 4,484 shares allocated on behalf of Messrs. Ochman
and Sharp, respectively, in fiscal 1996 under the Company's ESOP.

- 17 -
<PAGE>

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.

The Committee considered the following factors in setting the compensation
of the Chief Executive Officer and the other executive officers of the
Company in fiscal 1996:

(1) The overall performance of the Company during the fiscal year ended
September 30, 1996. The Committee believes that 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 (exclusive of the effects of the special
SAIF assessment):

<TABLE>

The Company Peer Group
----------- ----------

Ratio of compensation and benefits
expense to total revenue 33.43% 31.42%
Return on average assets 1.05% .91%
Return on average equity 4.99% 9.72%
Non-interest expense to average assets 1.82% 2.18%

</TABLE>

Source: SNL Securities, L.P.

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

<PAGE>

(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 through September 30,
1996, as shown in the performance graph included in this Proxy Statement.

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 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.

In fiscal 1996, the Company eliminated all bonuses to senior management
(including Messrs. Ochman and Sharp) and eliminated the fees paid to the
Chairman of the Board. These actions were taken in light of the decline in
the Company's net income from fiscal 1995 to fiscal 1996. In addition, in
fiscal 1996 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.

As a result of the above actions, Mr. Ochman's combined salary and bonus
decreased by $49,000 or 8.5% 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.

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

<PAGE>

the accounts of all employees was done 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 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.

<PAGE>

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.

PERIOD ENDING

IBS Financial Crp. NJ............. 100.00 123.07 172.06 161.23 168.23
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.

-21-

<PAGE>

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.

Number of Options at Value of Options at
September 30, 1996 September 30, 1996
-------------------------- ------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- - - ---------------------- ----------- ------------- ----------- -------------
Joseph M. Ochman, Sr. 63,853 255,414 $347,680 $1,390,729
Richard G. Sharp 25,734 102,935 140,122 560,481

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

(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 until 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 agreements - one with the Company and one with the Association.
The compensation and

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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 Executive's 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 Internal Revenue Code of 1986 (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 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,

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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.

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.

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 will provide
the participants with their benefits in the first half of 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
$400,000, respectively.

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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 will
provide cumulative SERP benefits of approximately $1.3 million to Mr. Ochman
in early 1997.

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
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.

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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 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.

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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.

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.

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 April 17, 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 November 25, 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

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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 the 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.

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.

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<PAGE>

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 $ ________ 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 ___ 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 to date. 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."

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.

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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. 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>

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 APRIL 18, 1997 AND AT ANY ADJOURNMENT THEREOF.

The undersigned, being a stockholder of the Company as of March 24, 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 Friday, April 18, 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
---------------------

(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>

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 April 18, 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.