[IBSF LETTERHEAD]
July 22, 1997
Dear Stockholder:
Your Board of Directors has taken a number of actions to enhance
stockholder value and to increase the franchise value of IBS Financial. We
believe our stockholders have been and will continue to be rewarded by our
efforts. Our record is highlighted below.
CASH DIVIDENDS UP BY 150% IN LESS THAN 3 YEARS
- Our most recently declared quarterly cash dividend of $.10 per
share represents an increase of 150% since our first dividend paid
less than three years ago (as adjusted for stock dividends).
- In addition, the 150% increase does not include our special
dividend of $.22 per share paid earlier this year (as adjusted for
our 15% stock dividend).
STOCK PRICE UP OVER 130% IN LESS THAN 3 YEARS
- Our original stockholders have seen the price of their stock
increase by over 130% in less than three years. This increase
excludes the above cash dividends.
- Our stock price increased by over 60% in the 12 months ended
June 30, 1997.
- Our stock was recently added to the Russell 2000 Index.
AGGRESSIVE STOCK REPURCHASES
- We have nearly completed six separate stock repurchases since
May 1995 at an aggregate cost of $47.6 million, including in
fiscal 1996 three times the normal amount permitted by federal
regulations. However, despite Mr. Beier's assertion, our last
repurchase occurred over five months ago.
- While the stock repurchases reduce our interest-earnings
assets and interest income in the short term, in the long run they
increase our return on equity and earnings per share for our
remaining stockholders.
- Our stock repurchases and cash dividends have enabled us to
reduce our excess capital by over 35% as of March 31, 1997, thus
improving the returns to existing stockholders and the franchise
value of IBS Financial.
<PAGE>
LOAN PORTFOLIO UP OVER 40%
- From December 31, 1994 to March 31, 1997, the Company's net
loan portfolio increased by over 40%.
- We also have originated more profitable types of loans, such as
commercial real estate loans which more than doubled in this period.
SUPERIOR ASSET QUALITY AND LOW COST STRUCTURE
- Our nonperforming assets at March 31, 1997 are only 0.15% of total
assets, which is the best ratio of any thrift institution in New
Jersey.
- For the 12 months ended March 31, 1997, our total non-interest
expense (which includes compensation) was only 1.88% of average
assets, which is substantially better than the average of 2.15%
for our peer group.
INCREASED FRANCHISE VALUE
- We believe that our strong market share in Camden, Burlington
and Gloucester Counties, as well as our superior asset quality,
low cost structure and aggressive stock repurchases, have
increased your Company's franchise value.
- We intend to continue to take steps to enhance stockholder value.
WE BELIEVE THE SEIDMAN GROUP IS ATTEMPTING TO ACQUIRE CONTROL
- In a document Seidman gave to his investors in January 1995,
which was kept confidential until we were forced to sue him,
Seidman stated that his partnership
"may take concentrated positions in those companies
where it believes extraordinary capital gain potential
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exists. ... The Partnership may attempt to acquire
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control of such companies which may require the
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Partnership's involvement in a proxy contest or other
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take-over litigation" (emphasis added).
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- Less than two months later, Seidman's companies started buying our
stock.
- While we congratulate Seidman on recognizing our extraordinary
capital gain potential, we believe it would be a mistake to let
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Seidman acquire control of your Company, especially in light of
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his track record of acquiring control of other companies without
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paying any control premium to existing stockholders.
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<PAGE>
- If the Seidman group's nominees win, we suspect that the
Seidman group will subsequently file an application under the
federal change in control regulations as Seidman has now done in
three other companies and then acquire a controlling interest as
cheaply as possible, with no control premium paid to our
stockholders.
OUR NOMINEES ARE WELL QUALIFIED
- - Arthur Abramowitz, who is a well respected and proven leader, is a
part owner and director of a major Cherry Hill law firm and a former
President of both the Camden County Bar and the Federal Bar
Association of New Jersey.
- - Thomas Auchter, who has strong entrepreneurial and financial
skills, is President of a private investment company and the former
Director of Finance and Treasurer of the Delaware River Port
Authority.
YOUR BOARD REPRESENTS ALL STOCKHOLDERS, NOT JUST A SMALL GROUP
We urge you to support us by signing and dating the enclosed BLUE
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proxy card FOR our nominees and returning it in the enclosed postage-paid
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envelope. In return, we pledge to continue to enhance the value of IBS
Financial for ALL stockholders.
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We thank you for your support.
Thomas J. Auchter, Director and Frank G. Lockhart, Retiring Director
Nominee
John A. Borden, Director Francis X. Lorbecki, Jr., Director
Paul W. Gleason, Director Albert D. Stiles, Jr., Director
Joseph M. Ochman, Sr., Chairman,
President and CEO
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<PAGE>
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.
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