Interchange Financial Services Declares Quarterly Dividend

On July 18, 2006, Interchange Financial Services
Corporation (NASDAQ:IFCJ), the holding company for Interchange Bank,
declared a quarterly cash dividend of $0.10 per common share payable
on August 8, 2006, to holders of record as of July 31, 2006. This
dividend represents $0.40 per share on an annualized basis. Based upon
the stock's $22.50 closing price as quoted on July 18, 2006, the yield
is 1.78%.

   About Interchange

   Headquartered in Saddle Brook, N.J., Interchange Bank is New
Jersey's largest independent bank serving Bergen and Essex Counties,
and a wholly owned subsidiary of Interchange Financial Services Corp.
(NASDAQ:IFCJ). With $1.6 billion in assets and 30 branches,
Interchange Bank offers innovative financial products and services to
businesses and retail customers. For additional information, please
visit the company's Web site at www.interchangebank.com.

   "Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: Statements in this press release regarding
Interchange Financial's business which are not historical facts are
"forward-looking statements" that involve risks and uncertainties. For
a discussion of such risks and uncertainties, which could cause actual
results to differ from those contained in the forward-looking
statements, see "Risk Factors" in the Company's Annual Report or Form
10-K for the most recently ended fiscal year.