-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G6winiQYxl7KGBpjr4z/A84whdXr1GwoNJUG3eK+braAp4JATV6ivRSMoE7Tc49H sOtyEqpzGEduJkAhuJwgvQ== 0001133796-05-000215.txt : 20051114 0001133796-05-000215.hdr.sgml : 20051111 20051114120223 ACCESSION NUMBER: 0001133796-05-000215 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20051114 DATE AS OF CHANGE: 20051114 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SEIDMAN LAWRENCE B CENTRAL INDEX KEY: 0001026081 STATE OF INCORPORATION: NJ FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: BUSINESS PHONE: 2015601400 MAIL ADDRESS: STREET 1: LANIDEX CENTER STREET 2: 100 MISTY LANE P O BOX 5430 CITY: PARSIPPANY STATE: NJ ZIP: 07054 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: INTERCHANGE FINANCIAL SERVICES CORP /NJ/ CENTRAL INDEX KEY: 0000755933 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 222553159 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1205 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-43955 FILM NUMBER: 051197997 BUSINESS ADDRESS: STREET 1: PARK 80 WEST PLAZA TWO STREET 2: ATTN INTERCHANGE STATE BANK CITY: SADDLE BROOK STATE: NJ ZIP: 07662 BUSINESS PHONE: 2017032265 MAIL ADDRESS: STREET 1: PARK 80 WEST STREET 2: PLAZA II CITY: SADDLE BROOK STATE: NJ ZIP: 07663 FORMER COMPANY: FORMER CONFORMED NAME: INTERCHANGER STATE BANK DATE OF NAME CHANGE: 19870416 FORMER COMPANY: FORMER CONFORMED NAME: INTERCHANGE FINANCIAL SERVICES CORP DATE OF NAME CHANGE: 19861209 SC 13D/A 1 if51125.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities and Exchange Act of 1934 (Amendment No.3)* Interchange Financial Services Corporation --------------------------------------------------------- Common Stock, no par value --------------------------------------------------------- 458447109 --------------------------------------------------------- (CUSIP Number) Lawrence B. Seidman, 100 Misty Lane, Parsippany, NJ 07054 (973) 560-1400, Ext.108 --------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) November 11, 2005 --------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). This statement on Schedule 13 D which was filed on April 13, 2005, Amendment No.1 was filed on June 29, 2005, and Amendment No.2 was filed on August 23, 2005 on behalf of Seidman and Associates, L.L.C ("SAL"), Seidman Investment Partnership, L.P. ("SIP"), Seidman Investment Partnership II, L.P. ("SIPII"), Kerrimatt, L.P. ("Kerrimatt"), Broad Park Investors, L.L.C ("Broad Park"), Federal Holdings, L.L.C. ("Federal"), Pollack Investment Partnership, L.P. ("PIP"), Lawrence Seidman ("Seidman"), and Dennis Pollack ("Pollack") collectively, the ("Reporting Persons") with respect to the Reporting Persons' beneficial ownership of shares of Common stock ("the Shares") of Interchange Financial Services Corporation, a New Jersey corporation, is hereby amended as set forth below: Such statement on Schedule 13D is hereinafter referred to as the "Schedule 13D". Terms used herein which are defined in the Schedule 13D shall have their respective meanings set forth in the Schedule 13D. 4. Purpose of Transaction Attached hereto as an exhibit and included herein in its entirety is a copy of a letter, dated November 11, 2005 from Lawrence B. Seidman, to Mr. Anthony Abbate, President & Chief Executive Officer of Interchange Financial Services Corporation. After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. November 11, 2005 /s/ Lawrence B. Seidman ----------------- -------------------------- Date Lawrence B. Seidman Power of Attorney pursuant to Joint Agreement dated July 26, 2004 LAWRENCE B. SEIDMAN 100 Misty Lane Parsippany, NJ 07054 (973) 560-1400, Ext. 108 lbseidman@msn.com November 11, 2005 Mr. Anthony Abbate, President & Chief Executive Officer Park 80 West/Plaza II Saddle Brook, NJ 07663 Re: Interchange Financial Services Corp. Dear Mr. Abbate: As the largest shareholder of Interchange Financial Services Corp. (IFCJ), I am deeply troubled by your inability or unwillingness to maximize shareholder value. Since I filed a Schedule 13-D on April 13, 2005, the stock price change of IFCJ has badly lagged that of its peer group. With respect to earnings, IFCJ has hit a wall, showing virtually no core earnings growth in three years. In addition, return on average tangible equity and net interest margin are on a downward trend. Clearly, IFCJ still has a valuable franchise, but it is just as clear that the franchise has peaked and would be better off as part of another institution. We both know that there are a handful of companies willing to pay a significant premium to IFCJ's trading price of $17.71 on Nov. 8. Not only that, some of these companies are likely to be acquired within the next two to three years, providing shareholders an opportunity for a second acquisition premium, or a "double dip." Alternatively, IFCJ could pursue a merger with a converting mutual or a mutual holding company. Due to the mathematics, this scenario likely would result in an even higher initial premium. The double dip feature would be extended further into the future, but the second premium could be even greater. At the Ryan Beck 2005 Financial Institutions Investor Conference in New York on November 2, Bridgeport, CT-based People's Bank (MHC) CFO Philip Sherringham said that one of the geographic markets the company would consider for acquisitions is northern New Jersey. He also noted, "We've identified a certain number of companies that we'd like to partner with, if you will, or acquire. As you might imagine, most of the companies are currently not for sale." It seems like IFCJ fits this general profile. Instead EXHIBIT A of closing off possibilities, you should be jumping at the chance to discuss a potential partnership with People's Bank, as well as New Jersey-based MHCs like Clifton Savings Bancorp Inc. (MHC), Kearny Financial Corp. (MHC) and Investors Bancorp Inc. (MHC). Why are you steadfastly opposed to doing the right thing for shareholders? Is it the perks and privileges of being a CEO? Have the spoils of power clouded your judgment to such an extent that you're unable to put the interests of shareholders above your own? Whatever the reason, this blatant disregard for your fiduciary duty must, and will, change. Let's take a look at the stock price of IFCJ. From April 13, 2005 to Nov. 8, 2005, the stock is up a scant 1.6%, versus a 10.4% gain for the SNL Bank $1B - $5B Index, which is a market-cap weighted index of all exchange-traded banks with between $1 billion and $5 billion in total assets. As to third-quarter earnings, once again, the results were unsatisfactory. The diluted EPS was 24 cents, up a penny from the second quarter but flat with the year-ago quarter. Even that tiny linked-quarter increase was almost entirely due to the volatile and unreliable gain on sale of loans and securities. Further, stripping out the gain on sale items, EPS was only half a penny higher compared to the third quarter of 2002. Many of the underlying financial trends were negative. For example, return on average tangible equity was 19.66% in the third quarter, down from 19.71% in the second quarter and 22.40% in the year-ago quarter. The net interest margin continued to decline, falling three basis points from the second quarter and 22 basis points from the third quarter a year ago. There was positive growth in commercial loans, but that growth was largely funded from borrowings, rather than low-cost deposits. From my analysis, I cannot see how earnings will materially improve at IFCJ under your leadership. All I have heard from you are complaints about the difficult operating environment and ridiculous statements concerning IFCJ's market and financial performance. I do congratulate you on the October 27 announcement that IFCJ is freezing all future benefit accruals under the bank's pension plan. I also read in the third-quarter 2005 10-Q filed on November 9 that you streamlined staffing levels in October, which should result in additional cost saves. Is it a coincidence that these actions follow my criticisms of your leadership? Do you finally realize that the current earnings trajectory is unacceptable? I am sure that I, or one of my representatives, could identify other methods to increase earnings, as well as the quality of the franchise. I would like to see you take several specific actions to improve shareholder value, most notably in the realm of corporate governance. My first request is to simply return my phone calls. It is common courtesy to return a phone call from any shareholder, let EXHIBIT A alone the largest shareholder in the company. To completely ignore my last two phone calls is outrageous. Next, open up earnings conference calls so that any shareholder can ask questions. Currently, all shareholders are prohibited from asking you questions in this forum. And finally, hire an investment bank to evaluate strategic alternatives. Very truly yours, /s/ Lawrence B. Seidman ----------------------- LAWRENCE B. SEIDMAN cc: Anthony D. Andora Gerald A. Calabrese, Jr. Donald L. Correll Anthony R. Coscia John J. Eccleston David R. Ficca James E. Healey Nicolas R. Marcalus Eleanore S. Nissley Jeremiah F. O'Connor Robert P.Rittereiser John A. Schepisi William Schuber Morris Yamner Esquire Banc Funds Co. Barclays Bank Plc Dimensional Fund Advisors Inc. Goldman, Sachs & Co. Eugene Kasanoff Mendon Capital Advisors Corp. Millennium Partners LC State Street Corp. EXHIBIT A -----END PRIVACY-ENHANCED MESSAGE-----