UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------
                                    FORM 10-K
                                   ----------

[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
      ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004

                                       or

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM____ TO ____

                         Commission File number 1-10518

                   INTERCHANGE FINANCIAL SERVICES CORPORATION
             (Exact name of registrant as specified in its charter)

       New Jersey                                              22-2553159
-------------------------------                            -------------------
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                             Identification No.)

Park 80 West/Plaza Two, Saddle Brook, NJ                         07663
----------------------------------------                         -----
(Address of principal executive offices)                       (Zip Code)

       Registrant's telephone number, including area code: (201) 703-2265

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:

                                 Title of Class
                                 --------------
                           Common Stock (no par value)

      Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes  _X_   No ___

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

      Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).

Yes  _X_   No ___

      The aggregate market value of registrant's voting stock held by
non-affiliates of the registrant computed June 30, 2004 based on the average bid
and asked price for such stock on that date was approximately $315,241,000.

         The number of outstanding  shares of the Registrant's  common stock, no
par value per share, as of February 28, 2005, was as follows:

    Class                                         Number of Outstanding Shares
    -----                                         ----------------------------
Common Stock
(No par value)                                              19,126,446

Documents incorporated by reference:

Portions of registrant's definitive Proxy Statement for the 2005 Annual Meeting
of Shareholders (the "2005 annual Meeting Proxy Statement") to be filed on or
about March 30, 2005 are incorporated by reference to Part III of this Annual
Report on Form 10-K.

Portions of registrant's Annual Report to Shareholders for the fiscal year ended
December 31, 2004 (the "2004 Annual Report to Shareholders") are incorporated by
reference to Parts II and IV of this Annual Report on Form 10-K.

With the exception of information specifically incorporated by reference, the
2005 Annual Meeting Proxy Statement and the 2004 Annual Report to Shareholders
are not deemed to be part of the report.
<PAGE>

                   INTERCHANGE FINANCIAL SERVICES CORPORATION
                             INDEX TO ANNUAL REPORT
                                  ON FORM 10-K

PART I                                                                      PAGE
Item 1.         Business...................................................    1
Item 2.         Properties.................................................   11
Item 3.         Legal Proceedings..........................................   11
Item 4.         Submission of Matters to a Vote of Security Holders........   11

PART II
Item 5.         Market for Registrant's Common Equity and Related
                    Stockholder Matters....................................   12
Item 6.         Selected Financial Data....................................   13
Item 7.         Management's Discussion and Analysis of Financial
                    Condition and Results of Operations....................   15
Item 7A.        Quantitative and Qualitative Disclosures About
                    Market Risk............................................   15
Item 8.         Financial Statements and Supplementary Data................   15
Item 9.         Changes in and Disagreements with Accountants
                    on Accounting and Financial Disclosure.................   15
Item 9A         Controls and Procedures....................................   15
Item 9B         Other Information..........................................   18

PART III
Item 10.        Directors and Executive Officers...........................   18
Item 11.        Executive Compensation.....................................   19
Item 12.        Security Ownership of Certain Beneficial Owners
                    and Management and Related Stockholder Matters.........   20
Item 13.        Certain Relationships and Related Transactions.............   21
Item 14.        Principal Accounting Fees and Services.....................   21

PART IV
Item 15.        Exhibits, Financial Statement Schedules
                    and Reports on Form 8-K................................   22
Exhibit Index   ...........................................................   22
Signatures      ...........................................................   24

<PAGE>

                                     PART I

Item 1. Business

   General
   _______

      Interchange  Financial Services Corporation (the "Company"),  a New Jersey
business  corporation,  is a bank holding  company  registered with the Board of
Governors of the Federal  Reserve  System under the Bank Holding  Company Act of
1956,  as amended.  The Company was  incorporated  in the State of New Jersey on
October 15, 1984. It acquired all of the outstanding  stock of Interchange  Bank
(formerly  known as Interchange  State Bank), a New Jersey state  chartered bank
(the "Bank" or  "Interchange"),  in 1986.  The Bank is the  Company's  principal
operating  subsidiary.  In  addition to the Bank,  the  Company  owns all of the
outstanding  capital  stock  of  Clover  Leaf  Mortgage  Company,  a New  Jersey
Corporation  established in 1988, which is not currently engaged in any business
activity.

      The Company's principal executive office is located at Park 80 West/ Plaza
Two, Saddle Brook, New Jersey 07663, and the telephone number is (201) 703-2265.

      As  of  December  31,  2004,  the  Company  had  consolidated   assets  of
approximately   $1.5  billion,   deposits  of  approximately  $1.2  billion  and
shareholders' equity of approximately $150.2 million.

      As a holding company,  the Company provides support services to its direct
and indirect  subsidiaries.  These include executive  management,  personnel and
benefits,  risk management,  data  processing,  strategic  planning,  legal, and
accounting and treasury.

   Banking Subsidiary
   __________________

      The Bank,  established  in 1969, is a  full-service  New  Jersey-chartered
commercial bank  headquartered in Saddle Brook, New Jersey. The Bank is a member
of the  Federal  Reserve  System and its  deposits  are  insured by the  Federal
Deposit  Insurance  Corporation  (the "FDIC").  It offers  banking  services for
individuals and businesses through  twenty-nine (29) banking offices and one (1)
supermarket  mini-branch  in  Bergen  County,  New  Jersey.  The Bank  maintains
thirty-two  (32)  automated  teller  machines  (operating  within the  Star(TM),
Plus(TM),  CIRRUS(TM),  VISA(TM),  NYCE(TM), and MasterCard(TM) networks), which
are located at twenty-nine of the banking offices, a supermarket, and the Bank's
operations center.

      Subsidiaries  of the Bank  include:  Clover Leaf  Investment  Corporation,
established in 1988 to engage in the business of an investment  company pursuant
to New Jersey law; Clover Leaf Insurance  Agency,  Inc.,  established in 1990 to
engage  in  sales of  tax-deferred  annuities;  Clover  Leaf  Management  Realty
Corporation,  established  in 1998 as a Real Estate  Investment  Trust  ("REIT")
which manages certain real estate assets of the Company;  Bridge View Investment
Company,  an  investment  company  operating  pursuant  to New Jersey  law;  and
Interchange Capital Company, L.L.C.,  established in 1999 to engage in equipment
lease financing. All of the


                                       1
<PAGE>

Bank's subsidiaries are organized under New Jersey law and are 100% owned by the
Bank, except for the REIT which is 99% owned by the Bank. Bridge View Investment
Company has one wholly owned subsidiary,  Bridge View Delaware,  Inc.  ("BVDI").
BVDI is an investment company operating pursuant to Delaware law.

   Growth of the Company and the Bank
   __________________________________

      On April 30, 2003,  the Company  completed its  acquisition of Bridge View
Bancorp  ("Bridge  View"),  a bank holding  company  headquartered  in Englewood
Cliffs,  New Jersey for  approximately  $33.5 million in cash and 2.9 million in
shares with an approximate  value of $85.7 million.  Bridge View's primary asset
was Bridge  View Bank which  operated  eleven  branches  in Bergen  County,  New
Jersey. As of the acquisition date Bridge View had approximately $291 million in
total assets,  $184 million in loans and $259 million in deposits without giving
effect to any purchase accounting adjustments. The transaction was accounted for
as a purchase and the assets and liabilities of former Bridge View were recorded
at their  respective fair values as of April 30, 2003. Based on the fair values,
the Company recorded purchase  accounting  adjustments related to: loans of $1.6
million;  securities  of $376  thousand;  other  assets of $1.9  million;  other
liabilities  of $3.7  million;  core  deposit  intangibles  of $4.3  million and
goodwill of $54.4 million.

      On January 16,  2002,  the  Company  acquired  certain  assets and assumed
certain  liabilities of Monarch Capital Corporation  ("Monarch").  In this asset
purchase  transaction,  the Company  acquired certain loans and leases valued at
approximately   $12.8  million.   In  addition,   the  Company  assumed  certain
liabilities  (borrowings)  of Monarch,  valued at  approximately  $12.7 million,
which had been used to fund the loans and  leases.  The  purchase  price of $1.6
million was paid in cash and shares of Company common stock,  subject to certain
adjustments.

      On May 31, 1998, the Company  completed its acquisition of Jersey Bank for
Savings.  At that date,  Jersey  Bank had total  assets of  approximately  $78.6
million and total deposits of approximately  $69.8 million.  The transaction was
accounted for as a pooling of interests. In the transaction, each share of stock
of Jersey  Bank for  Savings,  including  shares of common  stock  that had been
converted from shares of preferred  stock,  was converted into 1.5 shares of the
Company's common stock. The Company issued 780,198 shares of its common stock in
the transaction.

   Description of Banking and Related Operations
   _____________________________________________

      Through  the Bank,  the Company  offers a wide range of  consumer  banking
products and services  including  checking  and savings  accounts,  money market
accounts,  certificates of deposit, individual retirement accounts,  residential
mortgages, home equity loans and lines of credit, home improvement loans and


                                       2
<PAGE>

automobile  loans.  The Bank  also  offers a VISA  Credit  Card and  convenience
services; such as, the Interchange Debit Card which allows our customers to make
purchases  wherever  the Visa Debit Card is accepted  and is also used as an ATM
card to perform basic banking transactions.

      Other services that the Bank offers are  InterBank(SM)  online banking and
Bill Paying.  InterBank(SM)  allows our customers to access account information,
process transfers between accounts, view paid check images, place a stop payment
and much more.  The  InterBank(SM)  Bill Paying service lets customers pay bills
online - controlling which merchants they pay, the amount they pay and when they
pay all with safety,  speed,  simplicity and confidence.  When customers are not
able to get to a branch or do their  banking  online,  they can be in touch with
their  accounts  by  phone  24  hours  a day,  7 days  a week  with  Interchange
Bank-Line.

      The Bank's online services can be accessed  through the Bank's web site at
www.interchangebank.com.  As discussed herein,  additional products and services
may be accessed through the Bank's web site.

      The Bank also is engaged in the financing of local  business and industry,
providing  credit  facilities  and  related  services  for  smaller  businesses,
typically  those with $1 million to $5 million in annual sales.  Commercial loan
customers of the Bank are businesses ranging from light  manufacturing and local
wholesale and  distribution  companies to  medium-sized  service firms and local
retail businesses. Most types of commercial loan products are offered, including
working capital lines of credit, small business administration loans, term loans
for fixed asset acquisitions,  commercial  mortgages,  equipment lease financing
and other forms of asset-based  financing.  In addition,  the Bank offers a full
line of cash management  services for the corporate  customer,  including online
banking  through  Interbanking(SM),  Business  Check  Card,  Merchant  Services,
Lockbox and Escrow Management. The Bank also specializes in developing corporate
retirement  plans for it's  customers  through  the Bank's  Investment  Services
Department.

      In addition to its origination activities,  the Bank purchases packages of
loans. These loans are subjected to the Bank's independent credit analysis prior
to purchase.  The Bank has experienced  opportunities to sell its other products
and  services to the  borrowers  whose loans are  purchased  and  believes  that
purchasing  loans will continue to be a desirable way to augment its  portfolios
as opportunities arise.

      The Bank also  engages in mutual fund and  annuities  sales and  brokerage
services.  An Investment Services Program is offered through an alliance between
the Bank and ICBA Financial Services  Corporation  ("ICBA"),  under which mutual
funds and annuities  offered by ICBA are made available to the Bank's customers.
The Bank has also  expanded its product  offerings by entering into an agreement
with a  third  party  provider  to  offer  discount  brokerage  services  to its
customers.  The Bank offers  securities  trading through its web site,  which is
hyperlinked to FISERV Securities,  Inc., member NASD/SIPC, so that customers can
access their brokerage


                                       3
<PAGE>

accounts via the  Internet.  There is also a direct link from the  Company's web
site to the Nasdaq  National  Market to allow  investors to keep informed of the
daily quotes and market activity for the Company's common stock.

      Additional  information about the Bank and the Company may be found on our
web site at  www.interchangebank.com.  Information contained on our Internet web
site  is not  part  of  this  Annual  Report  on  Form  10-K  and  is not  being
incorporated by reference into this report.

   Market Areas
   ____________

      The  Company's  principal  market  for  its  deposit  gathering  and  loan
origination   activities   covers  major   portions  of  Bergen  County  in  the
northeastern corner of New Jersey adjacent to New York City. Bergen County has a
relatively large affluent base for the Company's services. The principal service
areas  of  the  Company  represent  a  diversified  mix  of  stable  residential
neighborhoods with a wide range of per household income levels; offices, service
industries and light industrial  facilities;  and large shopping malls and small
retail outlets.

   Competition
   ___________

      Competition  in the banking and  financial  services  industry  within the
Company's  primary  market  area is  strong.  The Bank  actively  competes  with
national and state-chartered commercial banks, operating on a local and national
scale,   and  other   financial   institutions,   including   savings  and  loan
associations,  mutual savings banks,  and credit unions.  In addition,  the Bank
faces  competition  from  less  heavily  regulated  entities  such as  brokerage
institutions, money management firms, consumer finance and credit card companies
and  various  other  types  of  financial  services  companies.  Many  of  these
institutions are larger than the Bank, some are better capitalized, and a number
pursue community banking strategies similar to those of the Bank.

      The Bank  believes  that  opportunities  continue  to exist to satisfy the
deposit and borrowing needs of small and middle market businesses.  Larger banks
continued to show an appetite  for only the largest  loans,  finding  themselves
challenged to administer  smaller loans  profitably.  Interchange has the desire
and the  ability to give  smaller and  mid-sized  businesses  the  service  they
require.  Many small businesses  eventually  become midsize  businesses,  with a
corresponding change in their financial  requirements.  By designing programs to
accommodate the changing needs of growing businesses, Interchange believes it is
extending the longevity of valuable customer relationships. For example, through
our  subsidiary,  Interchange  Capital  Company,  L.L.C.,  we are able to extend
cost-effective  equipment  leasing  solutions  for a variety  of  expansion  and
upgrading  projects.  The  Bank  believes  that  it  is  able  to  maintain  its
relationship  with  these  growing  businesses  because  of  its  ability  to be
responsive to both small and midsize business constituencies.


                                       4
<PAGE>

Personnel
_________

      The Company had 326  full-time-equivalent  employees at year-end 2004. The
Company believes its relationship with employees to be good.

Regulation and Supervision
__________________________

      Banking is a complex,  highly regulated industry. The primary goals of the
bank regulatory structure are to maintain a safe and sound banking system and to
facilitate the conduct of sound monetary policy.  In furtherance of those goals,
Congress has created several largely autonomous  regulatory agencies and enacted
myriad  legislation that governs banks,  bank holding  companies and the banking
industry.  Descriptions and references to the statutes and regulations below are
brief summaries thereof and do not purport to be complete.  The descriptions are
qualified  in  their  entirety  by  reference  to  the  specific   statutes  and
regulations discussed.

      The Company

      The Company is a registered  bank holding  company  under the Bank Holding
Company  Act of 1956,  as  amended  (the  "BHCA"),  and as such,  is  subject to
supervision  and  regulation  by the Board of Governors  of the Federal  Reserve
System  (the  "Federal  Reserve").  As a bank  holding  company,  the Company is
required to file an annual report with the Federal  Reserve and such  additional
information as the Federal Reserve may require  pursuant to the BHCA and Federal
Regulation Y. The Federal Reserve may conduct examinations of the Company or any
of its subsidiaries.

      The BHCA requires every bank holding  company to obtain the prior approval
of the Federal  Reserve  before it may acquire all or  substantially  all of the
assets of any bank (although the Federal Reserve may not assert  jurisdiction in
certain bank mergers that are regulated under the Bank Merger Act), or ownership
or control of any voting shares of any bank if after such  acquisition  it would
own or control  directly or indirectly more than 5% of the voting shares of such
bank.

      The BHCA also  provides  that,  with certain  limited  exceptions,  a bank
holding company may not (i) engage in any activities other than those of banking
or managing or controlling  banks and other authorized  subsidiaries or (ii) own
or control more than five percent (5%) of the voting  shares of any company that
is not a  bank,  including  any  foreign  company.  A bank  holding  company  is
permitted, however, to acquire shares of any company the activities of which the
Federal Reserve, after due notice and opportunity for hearing, has determined to
be so closely  related to banking or  managing or  controlling  banks as to be a
proper  incident  thereto.  The Federal Reserve has issued  regulations  setting
forth specific  activities  that are  permissible  under the  exception.  A bank
holding  company  and its  subsidiaries  are also  prohibited  from  engaging in
certain tie-in arrangements in connection with any extension of credit, lease or
sale of property or furnishing of services.


                                       5
<PAGE>

      Under  certain  circumstances,  prior  approval of the Federal  Reserve is
required under the BHCA before a bank holding company may purchase or redeem any
of its equity securities.

      Traditionally,  the activities of bank holding companies have been limited
to the  business of banking and  activities  closely  related or  incidental  to
banking.  The  Gramm-Leach-Bliley  Financial Services  Modernization Act of 1999
(the "Modernization  Act"), enacted on November 11, 1999, with an effective date
of March 11,  2000,  expanded  the types of  activities  in which a bank holding
company  may  engage.  Subject to various  limitations,  the  Modernization  Act
generally permits a bank holding company to elect to become a "financial holding
company." A financial  holding company may affiliate with  securities  firms and
insurance  companies  and  engage in other  activities  that are  "financial  in
nature."  Among the  activities  that are deemed  "financial  in nature" are, in
addition to traditional lending activities, securities underwriting,  dealing in
or  making a market  in  securities,  sponsoring  mutual  funds  and  investment
companies,  insurance  underwriting  and  agency  activities,  certain  merchant
banking  activities,  and activities  that the Federal  Reserve  considers to be
closely related to banking.

      A bank holding  company may become a financial  holding  company under the
Modernization  Act if each of its subsidiary banks is "well  capitalized"  under
the Federal Reserve  guidelines (See "Capital  Adequacy  Guidelines"  below), is
well  managed  and has at  least  a  satisfactory  rating  under  the  Community
Reinvestment Act. In addition,  the bank holding company must file a declaration
with the  Federal  Reserve  that the bank  holding  company  wishes  to become a
financial  holding company.  A bank holding company that falls out of compliance
with such  requirements may be required to cease engaging in certain  activities
permitted only for financial  holding  companies.  Any bank holding company that
does not elect to become a  financial  holding  company  remains  subject to the
current restrictions of the BHCA.

      Under the  Modernization  Act, the Federal  Reserve  serves as the primary
"umbrella" regulator of financial holding companies,  with supervisory authority
over each parent company and limited authority over its  subsidiaries.  Expanded
financial  activities of financial holding companies will generally be regulated
according to the type of such financial activity:  banking activities by banking
regulators,  securities  activities  by  securities  regulators,  and  insurance
activities  by  insurance   regulators.   The  Modernization  Act  also  imposes
additional restrictions and heightened disclosure requirements regarding private
information collected by financial institutions.

      Presently,  the  Company  has not  chosen  to become a  financial  holding
company.


                                       6
<PAGE>

      Monetary Policy

      The banking  industry is affected by the monetary  and fiscal  policies of
the Federal Reserve. An important function of the Federal Reserve is to regulate
the national supply of bank credit to moderate recessions and to curb inflation.
Among  the  instruments  of  monetary  policy  used by the  Federal  Reserve  to
implement  its  objectives  are:  open-market  operations  in U.  S.  government
securities,  changes in the discount  rate and the federal  funds rate (which is
the rate banks  charge  each other for  overnight  borrowings),  and  changes in
reserve requirements on bank deposits.

      Sarbanes-Oxley Act

      On July 30, 2002, the  Sarbanes-Oxley Act of 2002 was signed into law. The
Act addresses  many aspects of financial  accounting,  corporate  governance and
public company  disclosure.  Among other things,  it establishes a comprehensive
framework for the oversight of public company auditing and for strengthening the
independence of auditors and audit  committees.  Under the Act, audit committees
are responsible for the  appointment,  compensation and oversight of the work of
the auditors.  The  non-audit  services that can be provided to a company by its
auditor are limited. Audit committee members are subject to new rules addressing
their  independence.  The Act also requires  enhanced and accelerated  financial
disclosures,  and it establishes various responsibility measures (including, for
example,  requiring the chief executive  officer and chief financial  officer to
certify to the quality of a company's financial reporting).  The Act imposes new
restrictions  on and  accelerated  reporting  requirements  for certain  insider
trading  activities.  It imposes a variety of new  penalties for fraud and other
violations  and  creates a new  federal  felony for  securities  fraud.  Various
sections  of the Act are  applicable  to the  Company.  Portions of the Act were
effective immediately; others became effective or are in the process of becoming
effective  through rulings by the Securities and Exchange  Commission,  based on
timelines set forth in the law.

      Capital Adequacy Guidelines

      The Federal  Reserve issued  guidelines  establishing  risk-based  capital
requirements for bank holding  companies having more than $150 million in assets
and member banks of the Federal  Reserve  System.  The guidelines  established a
risk-based capital framework consisting of (1) a definition of capital and (2) a
system for assigning  risk weights.  Capital  consists of Tier 1 capital,  which
includes   common   shareholders'   equity  less  certain   intangibles   and  a
supplementary component called Tier 2, which includes a portion of the allowance
for loan  losses.  Effective  October 1, 1998,  the Federal  Reserve  adopted an
amendment to its risk-based  capital  guidelines that permits insured depository
institutions  to include in their  Tier 2 capital up to 45% of the  pre-tax  net
unrealized gains on certain available for sale equity securities. All assets and
off-balance-sheet items are


                                       7
<PAGE>

assigned to one of four weighted risk categories ranging from 0% to 100%. Higher
levels of capital are required for the categories  perceived as representing the
greater risks.  The Federal  Reserve  established a minimum  risk-based  capital
ratio of 8% (of which at least 4% must be Tier 1). An  institution's  risk-based
capital  ratio  is  determined  by  dividing  its  qualifying   capital  by  its
risk-weighted  assets. The guidelines make regulatory capital  requirements more
sensitive to  differences  in risk  profiles  among banking  institutions,  take
off-balance sheet items into account in assessing capital adequacy, and minimize
disincentives to holding liquid,  low-risk  assets.  Banking  organizations  are
generally  expected to operate  with  capital  positions  well above the minimum
rates.  Institutions  with  higher  levels  of  risk,  or  which  experience  or
anticipate  significant  growth, are also expected to operate well above minimum
capital standards. In addition to the risk-based guidelines discussed above, the
Federal  Reserve  requires  that a bank holding  company and bank which meet the
regulator's  highest  performance  and  operational  standards and which are not
contemplating  or experiencing  significant  growth maintain a minimum  leverage
ratio (Tier 1 capital as a percent of quarterly  average adjusted assets) of 3%.
For  those  financial  institutions  with  higher  levels  of risk  or that  are
experiencing or anticipating significant growth, the minimum leverage ratio will
be increased.  At December 31, 2004,  the Company and the Bank  satisfied  these
ratios to be  categorized  as a  "well-capitalized"  institutions,  which in the
regulatory  framework for prompt  corrective  action imposes the lowest level of
supervisory restraints.

      Capital  adequacy  guidelines  focus  principally  on broad  categories of
credit risk although the framework for assigning  assets and  off-balance  sheet
items to risk  categories  does  incorporate  elements  of  transfer  risk.  The
risk-based  capital ratio does not, however,  incorporate other factors that may
affect a company's financial condition,  such as overall interest rate exposure,
liquidity,  funding  and  market  risks,  the  quality  and  level of  earnings,
investment or loan  concentrations,  the quality of loans and  investments,  the
effectiveness  of loan and  investment  policies  and  management's  ability  to
monitor and control financial and operating risks.

      The  Federal  Reserve is vested  with broad  enforcement  powers over bank
holding  companies  to forestall  activities  that  represent  unsafe or unsound
practices or constitute violations of law. These powers may be exercised through
the issuance of cease and desist orders or other actions. The Federal Reserve is
also empowered to assess civil money penalties  against companies or individuals
that  violate  the BHCA,  to order  termination  of  non-banking  activities  of
non-banking  subsidiaries of bank holding  companies and to order termination of
ownership and control of  non-banking  subsidiaries  by bank holding  companies.
Neither the Company nor any of its  affiliates  has ever been the subject of any
such actions by the Federal Reserve.


                                       8
<PAGE>

The Bank

      As a New Jersey state-chartered bank, the Bank's operations are subject to
various  requirements  and  restrictions of state law pertaining to, among other
things,  lending limits,  reserves,  interest rates payable on deposits,  loans,
investments,  mergers and  acquisitions,  borrowings,  dividends,  locations  of
branch offices and capital adequacy. The Bank is subject to primary supervision,
periodic  examination and regulation by the New Jersey Department of Banking and
Insurance  ("NJDBI").  If, as a result of an  examination  of a bank,  the NJDBI
determines  that the financial  condition,  capital  resources,  asset  quality,
earnings  prospects,  management,  liquidity,  or other  aspects  of the  bank's
operations are unsatisfactory or that the bank or its management is violating or
has violated any law or regulation, various remedies are available to the NJDBI.
Such remedies  include the power to enjoin  "unsafe and unsound"  practices,  to
require  affirmative  action  to  correct  any  conditions  resulting  from  any
violation or practice,  to issue an administrative  order that can be judicially
enforced, to, among other things, direct an increase in capital, to restrict the
growth of the Bank,  to  assess  civil  penalties  and to  remove  officers  and
directors.  The Bank has never been the  subject of any  administrative  orders,
memoranda of understanding or any other regulatory action by the NJDBI. The Bank
also is a  member  of the  Federal  Reserve  System  and  therefore  subject  to
supervisory  examination by and  regulations of the Federal  Reserve Bank of New
York.

      The  Bank's  deposits  are  insured  by the Bank  Insurance  Fund  ("BIF")
administered  by the FDIC up to a maximum of $100,000  per  depositor.  For this
protection, the Bank pays a quarterly statutory deposit insurance assessment to,
and is subject to the rules and regulations of, the FDIC.

      The Bank's  ability to pay  dividends is subject to certain  statutory and
regulatory  restrictions.  The New  Jersey  Banking  Act of  1948,  as  amended,
provides  that no  state-chartered  bank may pay a dividend on its capital stock
unless,  following the payment of each such  dividend,  the capital stock of the
bank will be  unimpaired,  and the bank will have a surplus of not less than 50%
of its  capital,  or, if not, the payment of such  dividend  will not reduce the
surplus of the bank.  In  addition,  the payment of  dividends is limited by the
requirement  to meet the  risk-based  capital  guidelines  issued by the Federal
Reserve Board and other regulations.

      To the extent  that the  foregoing  information  describes  statutory  and
regulatory provisions,  it is qualified in its entirety by reference to the full
text of those provisions.  Also, as such statutes,  regulations and policies are
continually under review by Congress and state legislature and federal and state
regulatory  agencies.  A change in statutes,  regulations or regulatory policies
applicable  to the  Company  or the Bank  could  have a  material  effect on the
business of the Company.


                                       9
<PAGE>

   Available Information
   _____________________

      The Company's annual reports on Form 10-K, quarterly reports on Form 10-Q,
current  reports  on Form  8-K and all  amendments  to  those  reports  filed or
furnished  pursuant to Section  13(a) or 15(d) of the Exchange Act are available
free of charge through the Company's web site as soon as reasonably  practicable
after such material is  electronically  filed or furnished to the Securities and
Exchange  Commission.  The documents can also be obtained on the  Securities and
Exchange  Commission  website at www.sec.gov.  The Company's web site address is
www.interchangebank.com.

Forward Looking Information

      In addition  to  discussing  historical  information,  certain  statements
included  in  or  incorporated  into  this  report  relating  to  the  financial
condition,  results of  operations  and business of the  Company,  which are not
historical facts, may be deemed "forward-looking  statements" within the meaning
of the Private  Securities  Litigation Reform Act of 1995. When used herein, the
words "anticipate,"  "believe,"  "estimate,"  "expect," "will" and other similar
expressions  (including  when  preceded  or  followed  by the  word  "not")  are
generally intended to identify such forward-looking  statements. Such statements
are  intended to be covered by the safe harbor  provisions  for  forward-looking
statements  contained  in such Act,  and we are  including  this  statement  for
purposes  of  invoking  these  safe  harbor  provisions.   Such  forward-looking
statements  include,  but are not limited to, statements about the operations of
the Company,  the adequacy of the Company's allowance for losses associated with
the loan and lease portfolio,  the quality of the loan and lease portfolio,  the
prospects of continued loan and deposit growth, and improved credit quality. The
forward-looking   statements  in  this  report  involve  certain   estimates  or
assumptions, known and unknown risks and uncertainties, many of which are beyond
the control of the Company, and reflect what we currently anticipate will happen
in each  case.  What  actually  happens  could  differ  materially  from what we
currently anticipate will happen due to a variety of factors,  including,  among
others, (i) increased  competitive pressures among financial services companies;
(ii) changes in the interest  rate  environment,  reducing  interest  margins or
increasing   interest  rate  risk;  (iii)   deterioration  in  general  economic
conditions,  internationally,  nationally,  or in the State of New Jersey;  (iv)
disruptions  caused by  terrorism,  such as the events of September 11, 2001, or
military  actions  in the  Middle  East  or  other  areas;  (v)  legislation  or
regulatory  requirements  or changes  adversely  affecting  the  business of the
Company;  and (vi) other risks detailed in reports filed by the Company with the
Securities and Exchange Commission.  Readers should not place undue expectations
on any  forward-looking  statements.  We are not  promising  to make any  public
announcement when we consider forward-looking  statements in this document to be
no longer  accurate,  whether  as a result  of new  information,  what  actually
happens in the future or for any other reason.


                                       10
<PAGE>

Item 2. Properties

      The Company leases nineteen  banking  offices,  one  mini-branch  within a
supermarket,  one operations/support  facility and one  administrative/executive
facility.  It owns eight  banking  offices  and leases land on which it owns two
bank buildings.  All of the facilities are located in Bergen County, New Jersey,
which constitutes the Company's primary market area.

      In the opinion of management,  the physical  properties of the Company and
its subsidiaries are suitable and adequate.

Item 3. Legal Proceedings

      In the ordinary course of business,  the Company and its  subsidiaries are
involved in routine litigation  involving various aspects of its business,  none
of which, individually or in the aggregate, in the opinion of management and its
legal counsel, is expected to have a material adverse impact on the consolidated
financial condition, results of operations or liquidity of the Company.

Item 4. Submission of Matters to a Vote of Security Holders

      No matters were  submitted  to a vote of the  Company's  security  holders
through the  solicitation of proxies or otherwise  during the three months ended
December 31, 2004.


                                       11
<PAGE>

                                     Part II

Item 5. Market for the Registrant's Common Equity and Related Stockholder
        Matters

      The Company's common stock is presently listed for quotation on the Nasdaq
National Market System under the symbol "IFCJ". At February 28, 2005, there were
approximately  1,281  shareholders of record.  A portion of the Company's common
stock is held in "street name" by nominees for beneficial  owners, so the actual
number of shareholders is probably  higher.  The following table sets forth, for
the periods indicated, the reported high and low sales prices by quarter:

Quarterly Common Stock Price Range
for the years ended December 31,
--------------------------------------------------------------------------------

                                         High          Low          Cash
                                         Sales        Sales       Dividends
                                         Price        Price       Declared
                                         -----        -----       --------
2004
      First quarter ..............      $ 18.33      $ 14.80      $ 0.08
      Second quarter .............        16.89        14.85        0.08
      Third quarter ..............        17.15        15.33        0.08
      Fourth quarter .............        17.97        15.82        0.08

2003
      First quarter ..............      $ 12.02      $ 10.73      $ 0.07
      Second quarter .............        15.00        11.47        0.07
      Third quarter ..............        15.01        12.89        0.07
      Fourth quarter .............        17.79        13.63        0.07


All per share data was  restated to reflect a 3-for-2  stock  split  declared on
January 18, 2005 and paid on February 18, 2005.

      A cash  dividend of $0.07 and $0.08 was  declared  on each  common  share
outstanding in each quarter during 2003 and 2004, respectively.

      The Company intends, subject to its financial results, contractual, legal,
and regulatory  restrictions,  and other factors that its Board of Directors may
deem relevant,  to declare and pay a quarterly cash dividend on its common stock
in the future.  The  principal  source of the funds to pay any  dividends on the
Company's common stock is dividends  received from the Bank. Certain federal and
state regulators  impose  restrictions on the payment of dividends by banks. See
"Business - Regulation and Supervision" for a discussion of these  restrictions.
See  Note  18 of  Notes  to  Consolidated  Financial  Statement  for  additional
information.


                                       12
<PAGE>

Item 6. Selected Financial Data

      The  following  selected  financial  data are derived  from the  Company's
audited  Consolidated  Financial  Statements.  The  information  set forth below
should be read in conjunction with the Consolidated Financial Statements and the
Notes thereto and "Management's  Discussion and Analysis of Financial  Condition
and Results of Operations." The Consolidated  Statements of Financial  Condition
as of December 31, 2004 and 2003,  and the  Consolidated  Statements  of Income,
Changes  in  Stockholders'  Equity  and Cash  Flows for each of the years in the
three-year  period ended  December 31, 2004 and the report thereon of Deloitte &
Touche LLP are  included  on pages 13 through 52 of the  Company's  2004  Annual
Report to Shareholders filed as Exhibit 13 hereto,  which pages are incorporated
herein by reference.

CONSOLIDATED FINANCIAL HIGHLIGHTS
Years Ended December 31,
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                      2004             2003 (1)           2002            2001             2000
                                                  -------------     -------------     -------------   -------------   -------------
<S>                                               <C>               <C>               <C>             <C>             <C>
Income Statement Data (in thousands)
  Interest income                                 $      66,100     $      60,267     $      56,500   $      57,402   $      55,621
  Interest expense                                       13,654            13,874            17,478          23,444          24,227
                                                  -------------     -------------     -------------   -------------   -------------
    Net interest income                                  52,446            46,393            39,022          33,958          31,394
  Provision for loan losses                               1,200             1,815             1,500           1,075             750
                                                  -------------     -------------     -------------   -------------   -------------
    Net interest income after provision
      for loan losses                                    51,246            44,578            37,522          32,883          30,644
  Non-interest income                                    11,457            10,645             6,514           5,578           4,381
  Non-interest expenses                                  36,008            31,239            25,063          22,873          21,177
                                                  -------------     -------------     -------------   -------------   -------------
    Income before income taxes                           26,695            23,984            18,973          15,588          13,848
  Income Taxes                                            8,481             7,618             6,096           5,048           4,592
                                                  -------------     -------------     -------------   -------------   -------------
  Net income                                      $      18,214     $      16,366     $      12,877   $      10,540   $       9,256
                                                  =============     =============     =============   =============   =============

Per Share Data (2)
  Basic earnings per common share                 $        0.95     $        0.92     $        0.88   $        0.72   $        0.63
  Diluted earnings per common share                        0.94              0.91              0.86            0.72            0.63
  Cash dividends declared                                  0.33              0.29              0.27            0.24            0.22
  Special Cash Dividend                                       -                 -              0.03               -               -
  Book value                                               7.85              7.45              5.48            4.69            4.22
  Tangible book value (3)                                  4.74              4.39              5.37            4.69            4.21

  Weighted average shares outstanding
    (in thousands)
    Basic                                                19,124            17,724            14,714          14,667          14,715
    Diluted                                              19,476            17,987            14,899          14,734          14,756

Balance Sheet Data-end of year
  (in thousands)
  Total assets                                    $   1,464,141     $   1,385,872     $     936,332   $     830,949   $     770,244
  Securities held-to-maturity and
    securities available-for-sale                       388,729           452,060           252,512         193,902         161,354
  Loans and leases                                      934,181           796,581           615,641         581,323         560,879
  Allowance for loan and lease losses                     9,797             9,641             7,207           6,569           6,154
  Total deposits                                      1,246,138         1,156,797           815,672         726,483         668,860
  Securities sold under agreements
    to repurchase                                         4,401            15,618            17,390           6,700          18,500
  Short-term borrowings                                  24,600            46,491                 -          18,100          13,000
  Long-term borrowings                                   30,000            10,000            10,000               -               -
  Total stockholders' equity                      $     150,155     $     143,193     $      80,680   $      68,233   $      61,984

Selected Performance Ratios
  Return on average total assets                           1.29%             1.35%             1.43%           1.31%           1.24%
  Return on average total
    stockholders' equity                                  12.54             13.54             17.35           16.06           16.18
  Dividend Payout                                         35.03             30.37             33.56           33.37           35.24
  Average total stockholders' equity
    to average total assets                               10.25              9.95              8.27            8.13            7.64
  Net yield on interest earning assets
    (taxable equivalent) (4)                               4.16              4.29              4.68            4.49            4.41
  Non-interest income to average
    total assets                                           0.81              0.88              0.73            0.69            0.59
  Non-interest expense to average
    total assets                                           2.54              2.57              2.79            2.83            2.83

Asset Quality-end of year
  (in thousands)
  Nonaccrual loans and leases to total
    loans and leases                                       0.98%             1.08%             0.97%           0.37%           0.25%
  Nonperforming assets to total assets                     0.63              0.63              0.66            0.34            0.21
  Allowance for loan and lease losses
    to nonaccrual loans and leases                       107.27            112.50            120.86          304.12          441.15
  Allowance for loan and lease losses
    to total loans and leases                              1.05              1.21              1.17            1.13            1.10
  Net charge-offs to average loans
    and leases                                             0.12              0.13              0.14            0.11            0.01

Liquidity and Capital
  Average loans and leases to
    average deposits                                      72.63%            69.39%            78.21%          81.77%          82.81%
  Total stockholders' equity to
    total assets                                          10.26             10.33              8.62            8.21            8.05
  Tier 1 capital to risk weighted assets                   9.36              9.34             12.16           11.74           11.75
  Total capital to risk weighted assets                   10.35             10.46             13.33           12.89           12.92
  Tier 1 capital to average assets                         6.49              6.24              8.12            8.09            8.02
</TABLE>
--------------------------------------------------------------------------------
                                       13
<PAGE>

(1)   On April 30, 2003,  the Company  completed its  acquisition of Bridge View
      Bancorp ("Bridge View").  Bridge View's primary asset was Bridge View Bank
      which  operated  eleven  branches  in  Bergen  County,   New  Jersey.   At
      acquisition  date  Bridge  View had  approximately  $291  million in total
      assets,  $184 million in loans and $259 million in deposits without giving
      effect to any purchase  accounting  adjustments.  The Company's results of
      operations  include Bridge View from acquisition date. The transaction was
      accounted  for as a  purchase  and the assets  and  liabilities  of former
      Bridge View were recorded at their  respective fair values as of April 30,
      2003. Based on the fair values,  the Company recorded purchase  accounting
      adjustments  related  to:  loans  of  $1.6  million;  securities  of  $376
      thousand; other assets of $1.9 million; other liabilities of $2.5 million;
      core deposit intangibles of $4.3 million and goodwill of $54.4 million.

(2)   All per share data and weighted  average shares were restated to reflect a
      3-for-2 stock split declared on May 23, 2002 and January 18, 2005 and paid
      on July 12, 2002 and February 18, 2005, respectively.

(3)   Tangible book value is calculated by tangible capital (total stockholders'
      equity less goodwill and other intangible  assets) by total shares issued.
      This measure represents a non-GAAP measurement and may not be consistently
      calculated throughout the industry. Management believes that this non-GAAP
      measurement  provides a meaningful  way to analyze the Company's  tangible
      book value year over year and versus the industry.

<TABLE>
<CAPTION>
                                                         2004            2003 (1)          2002              2001             2000
                                                      ---------         ---------        ---------        ---------        ---------
<S>                                                   <C>               <C>              <C>              <C>              <C>
Total stockholders' equity                            $ 150,155         $ 143,193        $  80,680        $  68,233        $  61,984
Less: goodwill and other
  intangible assets                                      59,612            58,826            1,678                -               81
                                                      ---------         ---------        ---------        ---------        ---------
    Total tangible capital                            $  90,543         $  84,367        $  79,002        $  68,233        $  61,903
                                                      =========         =========        =========        =========        =========

Total shares issued (2)                                  19,120            19,215           14,723           14,536           14,694

    Tangible book value per share (2)                 $    4.74         $    4.39        $    5.37        $    4.69        $    4.21
</TABLE>

(4)   Net yield on interest earning assets (taxable equivalent) is calculated by
      dividing  net  interest  income  (on  a  fully  taxable  equivalent  basis
      utilizing a 34% effective tax rate) by average  interest  earning  assets.
      This measure represents a non-GAAP measure

<TABLE>
<CAPTION>
                                                    2004            2003 (1)            2002              2001              2000
                                                 ----------        ----------        ----------        ----------        ----------
<S>                                              <C>               <C>               <C>               <C>               <C>
Net interest income                              $   52,446        $   46,393        $   39,022        $   33,958        $   31,394
Tax-equivalent basis adjustment                         643               533               376               324               158
                                                 ----------        ----------        ----------        ----------        ----------
  Net interest income (on a
    fully taxable equivalent
    basis)                                       $   53,089        $   46,926        $   39,398        $   34,282        $   31,552
                                                 ==========        ==========        ==========        ==========        ==========

Average interest earning assets                  $1,275,734        $1,093,373        $  842,191        $  764,218        $  715,113

  Net yield on interest earning
    assets (taxable equivalent)                        4.16%             4.29%             4.68%             4.49%             4.41%
</TABLE>


                                       14
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

      The information contained in the section entitled "Management's Discussion
and  Analysis of  Financial  Condition  and Results of  Operations"  on pages 13
through 30 of the Company's 2004 Annual Report to Shareholders  filed as Exhibit
13 hereto is incorporated herein by reference.

Item 7A. Quantitative and Qualitative Disclosure about Market Risk

      The  information  regarding  the market  risk of the  Company's  financial
instruments,  contained in  "Management's  Discussion  and Analysis of Financial
Condition and Results of  Operations"  on page 25 of the  Company's  2004 Annual
Report to  Shareholders  filed as  Exhibit 13 hereto is  incorporated  herein by
reference.

Item 8. Financial Statements and Supplemental Data

      The  financial  statements  required  by this  Item  are  included  in the
Company's  2003 Annual Report to  Shareholders  on pages 31 through 52, filed as
Exhibit 13 hereto and incorporated herein by reference.

                                                                  Page of Annual
                                                                    Report to
                                                                   Shareholders
                                                                  --------------
      Report of Independent Registered Public Accounting Firm          31
      Interchange Financial Services Corporation
        and Subsidiaries
          Consolidated Balance Sheets                                  32
          Consolidated Statements of Income                            33
          Consolidated Statements of Changes in
            Stockholders' Equity                                       34
          Consolidated Statements of Cash Flows                        35
          Notes to Consolidated Financial Statements
            (Notes 1 - 22)                                           36 - 52

      No  supplementary  data is included in this report as it is  inapplicable,
not  required,  or the  information  is  included  elsewhere  in  the  financial
statements or notes thereto.

Item 9. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure

      There were no changes in or  disagreements  with accountants on accounting
and financial disclosure as defined by item 304 of Regulation S-K.

Item 9A.  Controls and Procedures

      Evaluation of Disclosure Controls and Procedures.

      We maintain  disclosure  controls and  procedures  designed to ensure that
information  required  to be  disclosed  in our  filings  under  the  Securities
Exchange Act of 1934 is recorded, processed,  summarized and reported accurately
within the time periods  specified in the Securities  and Exchange  Commission's
(SEC) rules and forms.  As of the end of the period  covered by this report,  an
evaluation was performed  under the supervision  and with the  participation  of
management,  including the Chief  Executive  Officer  (CEO) and Chief  Financial
Officer  (CFO),  of  the  effectiveness  of  the  design  and  operation  of our
disclosure controls and procedures (pursuant to Exchange Act Rule 13a-15). Based
upon this evaluation, the CEO and CFO concluded that our disclosure controls and
procedures  are  effective.  The  conclusions  of the  CEO  and  CFO  from  this
evaluation were communicated to the Audit Committee.


                                       15
<PAGE>

      Changes in Internal Control over Financial Reporting.

      There were no changes in our  internal  control over  financial  reporting
that  occurred  during  the  three  months  ended  December  31,  2004 that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

      Report on Internal Control Over Financial Reporting.

      The management of Interchange Financial Services Corporation (the
"Company"), is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial reporting is
defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange
Act of 1934 as a process designed by, or under the supervision of, the Company's
principal executive and principal financial officers and effected by the
Company's board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles and includes those policies and
procedures that:

o     Pertain to the maintenance of records that in reasonable detail accurately
      and fairly reflect the transactions and dispositions of the assets of the
      Company;

o     Provide reasonable assurance that transactions are recorded as necessary
      to permit preparation of financial statements in accordance with generally
      accepted accounting principles, and that receipts and expenditures of the
      Company are being made only in accordance with authorizations of
      management and directors of the Company;

o     Provide reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of the Company's assets that
      could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may change.

The Company's management assessed the effectiveness of the Company's internal
control over financial reporting as of December 31, 2004. In making this
assessment, the Company's management used the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO) in
Internal Control-Integrated Framework.

Based on our assessment, management determined that, as of December 31, 2004,
the Company's internal control over financial reporting was effective based on
those criteria.

Management's assessment of the effectiveness of the Company's internal control
over financial reporting as of December 31, 2004 has been audited by Deloitte &
Touche LLP, an independent registered public accounting


                                       16
<PAGE>
firm, as stated in their report which appears herein:

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Interchange Financial Services Corporation
Saddle Brook, New Jersey

We  have  audited   management's   assessment,   included  in  the  accompanying
management's  assertion report, that Interchange  Financial Services Corporation
and subsidiaries  (the "Company"),  maintained  effective  internal control over
financial  reporting as of December 31, 2004,  based on criteria  established in
Internal  Control-Integrated  Framework  issued by the  Committee of  Sponsoring
Organizations  of  the  Treadway   Commission.   The  Company's   management  is
responsible for maintaining  effective internal control over financial reporting
and for its assessment of the  effectiveness  of internal control over financial
reporting.   Our  responsibility  is  to  express  an  opinion  on  management's
assessment and an opinion on the effectiveness of the Company's internal control
over financial reporting based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain  reasonable  assurance  about whether  effective
internal  control  over  financial  reporting  was  maintained  in all  material
respects. Our audit included obtaining an understanding of internal control over
financial reporting, evaluating management's assessment, testing, and evaluating
the design and operating  effectiveness of internal control, and performing such
other  procedures as we considered  necessary in the  circumstances.  We believe
that our audit provides a reasonable basis for our opinions.

A company's internal control over financial  reporting is a process designed by,
or under the  supervision  of, the company's  principal  executive and principal
financial officers, or persons performing similar functions, and effected by the
company's  board of  directors,  management,  and  other  personnel  to  provide
reasonable  assurance  regarding the reliability of financial  reporting and the
preparation  of financial  statements for external  purposes in accordance  with
accounting  principles  generally  accepted  in the  United  States  America.  A
company's internal control over financial  reporting includes those policies and
procedures  that (1) pertain to the  maintenance  of records that, in reasonable
detail,  accurately and fairly reflect the  transactions and dispositions of the
assets of the company;  (2) provide  reasonable  assurance that transactions are
recorded  as  necessary  to  permit  preparation  of  financial   statements  in
accordance with generally accepted accounting principles,  and that receipts and
expenditures   of  the   company  are  being  made  only  in   accordance   with
authorizations  of  management  and  directors of the  company;  and (3) provide
reasonable  assurance  regarding  prevention or timely detection of unauthorized
acquisition,  use,  or  disposition  of the  company's  assets that could have a
material effect on the financial statements.

Because  of  the  inherent   limitations  of  internal  control  over  financial
reporting,  including  the  possibility  of  collusion  or  improper  management
override of controls,  material  misstatements  due to error or fraud may not be
prevented or detected on a timely basis. Also,  projections of any evaluation of
the  effectiveness  of the internal  control over financial  reporting to future
periods are subject to the risk that the controls may become inadequate  because
of changes in conditions,  or that the degree of compliance with the policies or
procedures may deteriorate.

In our opinion,  management's  assessment that the Company maintained  effective
internal  control over  financial  reporting as of December 31, 2004,  is fairly
stated, in all material respects,  based on the criteria established in Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission. Also, in our opinion, the Company maintained, in all
material  respects,  effective  internal control over financial  reporting as of
December   31,   2004,   based  on  the   criteria   established   in   Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission.

We have also  audited,  in accordance  with the standards of the Public  Company
Accounting   Oversight  Board  (United  States),   the  consolidated   financial
statements as of and for the year ended December 31, 2004 of the Company and our
report dated March 11, 2005 expressed an unqualified  opinion on those financial
statements.

/s/ Deloitte & Touche LLP

New York, New York
March 11, 2005

                                       17
<PAGE>

Item 9B. Other Information.

      Not applicable.

                                    PART III

Item 10. Directors and Executive Officers

      a. Directors

            The  information  contained  in the  section  entitled  "INTERCHANGE
      PROPOSAL NO. 1 - ELECTION OF DIRECTORS - Nominees  and  Directors"  in the
      Company's  2005 Annual  Meeting  Proxy  Statement to be filed on or before
      March 30, 2005 is  incorporated  herein by  reference  in response to this
      item.

      b. Executive Officers

            The  following  table  sets  forth  the  names,  ages,  and  present
      positions of the Company's and the Bank's principal executive officers:

      Name                     Age  Positions Held with the Company and the Bank
      ----                     ---  --------------------------------------------

      ANTHONY S. ABBATE ......  65  President and Chief Executive Officer

      ANTHONY J. LABOZZETTA ..  41  Executive Vice President and Chief
                                    Operating Officer

      PATRICIA D. ARNOLD .....  46  Senior Vice President and Chief
                                    Lending Officer

      CHARLES T. FIELD .......  40  Senior Vice President and Chief
                                    Financial Officer

      FRANK R. GIANCOLA ......  51  Senior Vice President and
                                     Compliance Officer

      Business Experience

            ANTHONY S. ABBATE, President and Chief Executive Officer of the Bank
      since 1981;  Senior Vice  President  and  Controller  from October 1980 to
      1981. Engaged in the banking industry since 1959.

            ANTHONY J. LABOZZETTA,  Executive Vice President and Chief Operating
      Officer since February 2003;  Executive Vice President and Chief Financial
      Officer from September  1997 to February  2003;  Senior Vice President and
      Treasurer from 1995 to 1997.  Engaged in the banking  industry since 1989.
      Formerly  a  senior  manager  with  an   international   accounting  firm,
      specializing in the financial services industry.

            PATRICIA D. ARNOLD,  Senior Vice President and Chief Lending Officer
      since August 1997; First Vice President from 1995 to 1997; Department Head
      Vice  President  from 1986 to 1995;  Assistant Vice President from 1985 to
      1986;  Commercial  Loan  Officer-Assistant  Treasurer  from  1983 to 1985.


                                       18
<PAGE>

      Engaged in the banking industry since 1981.

            CHARLES T. FIELD,  Senior Vice President and Chief Financial Officer
      since  February  2003.  Formerly Vice  President  Finance and Treasurer of
      Viatel, Inc. from 1999 to 2002 and Treasurer from 1998 to 1999,  Corporate
      Controller of Horsehead  Industries,  Inc. from 1995 to 1998 and a manager
      specializing in financial institutions at an international accounting firm
      from 1987 to 1995.

            FRANK R.  GIANCOLA,  Senior Vice  President and  Compliance  Officer
      since September 1997;  Senior Vice  President-Retail  Banking from 1993 to
      1997;  Senior  Vice  President-Operations  of the Bank  from 1984 to 1993;
      Senior  Operations  Officer  from  1982  to  1984;  Vice  President/Branch
      Administrator  from 1981 to 1982.  Engaged in the banking  industry  since
      1971.

            Officers are elected annually by the Board of Directors and serve at
      the  discretion of the Board of Directors.  Management is not aware of any
      family  relationship   between  any  director  or  executive  officer.  No
      executive  officer  was  selected to his or her  position  pursuant to any
      arrangement or understanding with any other person.

         c. Compliance with Section 16(a)

                  Information  contained  in  the  section  entitled  "PRINCIPAL
         SHAREHOLDERS  AND HOLDINGS OF MANAGEMENT OF INTERCHANGE - Section 16(a)
         Beneficial Ownership Reporting Compliance" in the Company's 2005 Annual
         Meeting  Proxy  Statement  to be filed on or  before March 30,  2005 is
         incorporated herein by reference in response to this item.

         d. Code of Ethics

                  We have adopted Codes of Ethics for our Board of Directors and
         employees. The Code of Ethics is available free of charge by contacting
         the Company.

Item 11. Executive Compensation

      Information  contained  in the  section  entitled  "INTERCHANGE  EXECUTIVE
COMPENSATION AND OTHER INTERCHANGE  INFORMATION - Executive Compensation" in the
Company's 2005 Annual Meeting Proxy Statement to be filed on or before March 30,
2005 is incorporated herein by reference in response to this item.


                                       19
<PAGE>

Item 12. Security Ownership of Certain Beneficial Owners and Management and
         Related Stockholder Matters

      The information contained in the section entitled "Principal  Shareholders
and Holdings of Management of  Interchange" in the Company's 2005 Annual Meeting
Proxy Statement to be filed on or before March 30, 2005 is  incorporated  herein
by reference in response to this item.

Equity Compensation Plan Information

      The table below summarizes  information about our common stock that may be
issued  upon the  exercise  of  options,  warrants  and rights  under all of our
existing equity compensation plans as of December 31, 2004.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
                                                                                                     Number of securities
                                                                                                    remaining available for
                                             Number of securities to be      Weighted-average        future issuance under
                                              issued upon exercise of       exercise price of      equity compensation plans
                                                outstanding options,       outstanding options,      (excluding securities
Plan category                                   warrants and rights        warrants and rights      reflected in column (a))
----------------------------------------------------------------------------------------------------------------------------
                                                       (a)                         (b)                         (c)
----------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                         <C>                         <C>
Equity compensation plans approved
  by security holders                                782,293                     $16.82                      271,575
Equity compensation plans not
  approved by security holders                             -                          -                            -
                                                     -------                     ------                      -------
Total                                                782,293                     $16.82                      271,575
                                                     =======                     ======                      =======
</TABLE>

The Outside Director Incentive Compensation Plan

      The Outside Director  Incentive  Compensation  Plan is designed to attract
qualified  personnel to accept positions of  responsibility as outside directors
with Interchange and to provide incentives for persons to remain on the board as
outside  directors.  The  Compensation/Stock  Option  Committee  administers the
Outside Director  Incentive  Compensation  Plan,  reviews the awards and submits
recommendations  to the full board of directors  for action.  Options to acquire
1,500  shares  (2,250  shares after  giving  effect for the 3-for-2  stock split
declared on January 18,  2005) of  Interchange  common stock are granted to each
outside director of Interchange each year on the anniversary date of the initial
grant. Each option represents the right to purchase, upon exercise, one share of
Interchange  common stock at an exercise  price equal to the price of a share of
stock at the  close of  business  on the date of the  grant as  reported  by the
NASDAQ  National  Market.  Stock options may be exercisable  between one and ten
years from the date  granted.  All options  granted  under the Outside  Director
Incentive Compensation Plan are non-qualified stock options and are not entitled
to special tax treatment under the Internal Revenue Code of 1986, as amended.

Stock Option and Incentive Plan

      The Stock Option and Incentive  Plan of 1997,  as amended,  is designed to
align shareholders' and executive officers'  interests.  The  Compensation/Stock
Option  Committee   administers  the  plan,   reviews  the  awards  and  submits
recommendations  to the full board of directors  for action.  Stock  options are
granted on a discretionary  basis with an exercise price equal to the price of a
share of stock at the close of  business on the date of the grant as reported by
the NASDAQ National Market. Stock options may be exercisable between one and ten
years  from the date  granted.  Such  stock  options  provide  a  retention  and
motivational  program  for  executives  and an  incentive  for the  creation  of
shareholder value over the long-term since their full benefit cannot be realized
unless an  appreciation in the price of the common stock occurs over a specified
number of years.

      The Stock  Option and  Incentive  Plan also  provides  for the issuance of
incentive  stock awards as determined by the board of directors of  Interchange.
Certain key  executives  may be awarded  incentive  compensation  in the form of
3-year  restricted  stock,  which is forfeitable  upon termination of employment
during that time period. Key employees may also use their cash bonus to purchase
two-year  restricted  stock at a twenty-five  percent  discount.  All amounts in
excess of the discounted purchase price of this stock are


                                       20
<PAGE>

forfeitable should the employee's  employment terminate during that time period.
Incentive stock awards are an important  factor in attracting and motivating key
executives who will dedicate their maximum efforts toward the advancement of the
Company.

Item 13. Certain Relationships and Related Transactions

      The information  contained in the section entitled "Certain  Relationships
and Related Party  Transactions  of  Interchange"  in the Company's  2005 Annual
Meeting Proxy  Statement to be filed on or before March 30, 2005 is incorporated
herein by reference in response to this item.

Item 14. Principal Accounting Fees and Services

      The  items  required  by Part  III,  Item 14 are  incorporated  herein  by
reference from the Company's 2005 Annual Meeting Proxy  Statement to be filed on
or before March 30, 2005.


                                       21
<PAGE>
                                     PART IV

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K

      (a)   The following documents are filed as part of this Report:

            1.    Financial Statements: The Financial Statements listed under
                  Item 8 to this Report are set forth at pages 31 through 34,
                  and the Notes to Consolidated Financial Statements are set
                  forth at pages 35 through 51, of the 2005 Annual Report to
                  Shareholders (See Exhibit 13 under paragraph (a)3 of this Item
                  14).

            2.    Financial Statement Schedules: All required schedules for the
                  Company and its subsidiaries have been included in the
                  Consolidated Financial Statements or related Notes thereto.

            3.    Exhibits: Exhibits followed by a parenthetical reference are
                  incorporated by reference herein from the document described
                  in such parenthetical reference.

                  Exhibit 2.1       Agreement and Plan of Merger, dated as of
                                    November 18, 2002, by and between Registrant
                                    and Bridge View Bancorp (Incorporated by
                                    reference to Exhibit 2.1 to Registrant's
                                    Form S-4, filed February 14, 2003,
                                    Registration Statement No. 333-103256)

                  Exhibit 3(a)      Restated Certificate of Incorporation of
                                    Registrant (Incorporated by reference to
                                    Exhibit 3.1 to Registrant's Form S-4, filed
                                    February 14, 2003, Registration Statement
                                    No. 333-103256)

                  Exhibit 3(b)      Amended and Restated Bylaws of Registrant,
                                    dated October 24, 2002(Incorporated by
                                    reference to Exhibit 4(b) to the
                                    Registrant's Quarterly Report on Form 10-Q
                                    for the quarter ended September 30, 2002)

            *     Exhibit 10(a)     Agreement for legal services between Andora
                                    and Romano and Registrant, dated April 22,
                                    2004.

            (1)   Exhibit 10(b)     Outside Director Incentive Compensation Plan
                                    (Incorporated by reference to Exhibit 4(a)
                                    to Registrant's Form S-8, filed June 26,
                                    2000, Registration Statement No. 33-40098)

            (1)   Exhibit 10(c)     Stock Option and Incentive Plan of 1997, as
                                    Amended (Incorporated by reference to
                                    Exhibit 4(a) to Registrant's Form S-8, filed
                                    August 26, 2002, Registration Statement No.
                                    33-98705)

            (1)   Exhibit 10(d)     Directors' Retirement Plan, as Amended 2003
                                    (Incorporated by reference to Exhibit 10(d)
                                    to Annual Report on Form 10-K for fiscal
                                    year ended December 31, 2003)

            (1)   Exhibit 10(e)     Executives' Supplemental Pension Plan
                                    (Incorporated by reference to Exhibit 10(i)
                                    (4) to Annual Report on Form 10-K for fiscal
                                    year ended December 31, 1994)

            (1)   Exhibit 10(f)     Change-in-Control Agreements for the
                                    Registrant's principal executive officers,
                                    and Amendment dated June 14, 2001
                                    (Incorporated by reference to Exhibit 10(f)
                                    to Annual Report on Form 10-K for fiscal
                                    year ended December 31, 2001)

            *     Exhibit 10(f)(1)  Change-in-Control Agreement for the
                                    Registrant's principal financial officer,
                                    dated April 12, 2004.

            *     Exhibit 11        Statement regarding computation of per share
                                    earnings

            *     Exhibit 13        Portion of the Annual Report to Shareholders
                                    for the year ended December 31, 2004

            *     Exhibit 21        Subsidiaries of Registrant

            *     Exhibit 31.1      Certification of Chief Executive Officer
                                    Pursuant to Section 302 of the
                                    Sarbanes-Oxley Act of 2002

                                       22
<PAGE>

            *     Exhibit 31.2      Certification of Chief Financial Officer
                                    Pursuant to Section 302 of the
                                    Sarbanes-Oxley Act of 2002

            *     Exhibit 32        Certification Pursuant to Section 906 of the
                                    Sarbanes-Oxley Act of 2002

      (b)   Reports on Form 8-K during the quarter ended December 31, 2004:

                                    Form 8-K filed October 20, 2004, reporting
                                    dividends for the fourth quarter period
                                    ending December 31, 2004.

                                    Form 8-K filed October 29, 2004, reporting
                                    earnings for the third quarter period ending
                                    September 30, 2004.

                                    Form 8-K filed November 22, 2004, reporting
                                    the resignation of Joseph C. Parisi from the
                                    Board of Directors of the Registrant.

                                    Form 8-K filed December 2, 2004, reporting
                                    the passing of Benjamin Rosenzweig, Director
                                    and Secretary of the Board of Directors of
                                    the Registrant and its subsidiary,
                                    Interchange Bank.

----------
(1)   Pursuant to Item 14(a) - 3 of Form 10-K, this exhibit represents a
      management contract or compensatory plan or arrangement required to be
      filed as an exhibit to this Form 10-K pursuant to Item 14(c) of this item.

*     Filed herewith


                                       23
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.

<TABLE>
<S>                                                        <C>
                                                           Interchange Financial Services Corporation

By: /s/Anthony S. Abbate                                       By:/s/Charles T. Field
    -------------------------------------------------          -------------------------------------------------
    Anthony S. Abbate                                          Charles T. Field
    President and Chief Executive Officer                      Senior Vice President and Chief Financial Officer
    (principal executive officer)                              (principal financial and accounting officer)
</TABLE>

March 16, 2005

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the Company
and in the capacities and on the dates indicated:

<TABLE>
<S>                                                        <C>
/s/Anthony S. Abbate                                       /s/Charles T. Field
-----------------------------------------------------      -----------------------------------------------------
Anthony S. Abbate                      March 16, 2005      Charles T. Field                       March 16, 2005
   Director                                                   Senior Vice President and
   President and Chief Executive Officer                      Chief Financial Officer

/s/Anthony D. Andora                                       /s/James E. Healey
-----------------------------------------------------      -----------------------------------------------------
Anthony D. Andora                      March 16, 2005      James E. Healey                        March 16, 2005
   Director                                                   Director
   Chairman of the Board

/s/Gerald A. Calabrese Jr.                                 /s/Nicholas R. Marcalus
-----------------------------------------------------      -----------------------------------------------------
Gerald A. Calabrese, Jr.               March 16, 2005      Nicholas R. Marcalus                   March 16, 2005
   Director                                                   Director

/s/Donald L. Correll                                       /s/Eleanore S. Nissley
-----------------------------------------------------      -----------------------------------------------------
Donald L. Correll                      March 16, 2005      Eleanore S. Nissley                    March 16, 2005
   Director                                                   Director

/s/Anthony R. Coscia                                       /s/Jeremiah F. O'Connor
-----------------------------------------------------      -----------------------------------------------------
Anthony R. Coscia                      March 16, 2005      Jeremiah F. O'Connor                   March 16, 2005
   Director                                                   Director

/s/John J. Eccleston                                       /s/Robert P. Rittereiser
-----------------------------------------------------      -----------------------------------------------------
John J. Eccleston                      March 16, 2005      Robert P. Rittereiser                  March 16, 2005
   Director                                                   Director

/s/David R. Ficca                                          /s/John A. Schepisi
-----------------------------------------------------      -----------------------------------------------------
David R. Ficca                         March 16, 2005      John A. Schepisi                       March 16, 2005
   Director                                                   Director
</TABLE>


                                       24