Investors Bancorp, Inc. Announces Second Quarter Financial Results

Jul 25, 2012, 19:01 ET from Investors Bancorp, Inc.

SHORT HILLS, N.J., July 25, 2012 /PRNewswire/ -- Investors Bancorp, Inc. (NASDAQ: ISBC) ("Company"), the holding company for Investors Bank ("Bank"), reported net income of $24.0 million for the three months ended June 30, 2012 compared to net income of $19.6 million for the three months ended June 30, 2011. Net income for the six months ended June 30, 2012 was $ 42.9 million compared to net income of $37.8 million for the six months ended June 30, 2011. Basic and diluted earnings per share were $0.22 for the three months ended June 30, 2012 compared to $0.18 for the three months ended June 30, 2011. Basic and diluted earnings per share were $0.40 for the six months ended June 30, 2012 compared to $0.35 for the six months ended June 30, 2011. The results for the six months ended June 30, 2012 include approximately $6 million in one-time expenses related to the acquisition of Brooklyn Federal Savings Bank.

Kevin Cummings, President and CEO commented on the quarter's results, "Earnings this quarter were strong as loan and deposit growth continue.  I am also pleased to report that return on average tangible equity surpassed 10% this quarter - a significant milestone for our company."

Mr. Cummings continued, "We are mindful of the continued uncertainty of the current economic environment and remain focused on asset quality and expense control. This is reflected in our efficiency ratio and the level of non-performing loans."  

The following represents performance highlights and significant events that occurred during the period:

  • The Company signed a definitive agreement to acquire Marathon Banking Corporation and its subsidiary Marathon National Bank of New York. This transaction enhances the Company's New York franchise.
  • Net loans increased $386.2 million, or 4.4%, to $9.18 billion at June 30, 2012 from $8.79 billion at December 31, 2011.
  • Deposits increased by $540.6 million, or 7.3% to $7.90 billion at June 30, 2012 from $7.36 billion at December 31, 2011. Core deposits increased $782.2 million or 19.5% since year end.
  • Net interest margin for the three months ended June 30, 2012 was 3.40%. This represents a decrease of 6 basis points compared to prior year and a 7 basis points increase from prior quarter.
  • Efficiency ratio was 43.94% for the three months ended June 30, 2012.
  • The Company maintains a strong tangible capital ratio of 8.48% and is considered well capitalized under regulatory guidelines.

Comparison of Operating Results

Interest and Dividend Income

Total interest and dividend income increased by $4.3 million, or 3.6%, to $122.9 million for the three months ended June 30, 2012 from $118.7 million for the three months ended June 30, 2011.  This increase is attributed to the average balance of interest-earning assets increasing $1.25 billion, or 13.1%, to $10.8 billion for the three months ended June 30, 2012 from $9.52 billion for the three months ended June 30, 2011.  This was partially offset by the weighted average yield on interest-earning assets decreasing 42 basis points to 4.57% for the three months ended June 30, 2012 compared to 4.99% for the three months ended June 30, 2011. 

Interest income on loans increased by $3.4 million, or 3.2%, to $112.3 million for the three months ended June 30, 2012 from $108.8 million for the three months ended June 30, 2011, reflecting an $718.7 million, or 8.6%, increase in the average balance of net loans to $9.04 billion for the three months ended June 30, 2012 from $8.32 billion for the three months ended June 30, 2011.  The increase is primarily attributed to the average balance of multi-family loans and commercial real estate loans increasing $633.0 million and $167.6 million respectively as we continue to focus on diversifying our loan portfolio by adding more multi-family loans and commercial real estate loans.  In addition, we recorded $2.2 million in loan prepayment penalties as interest income for the three months ended June 30, 2012 compared to $1.0 million for the three months ended June 30, 2011. This was partially offset by a 26 basis point decrease in the average yield on net loans to 4.97% for the three months ended June 30, 2012 from 5.23% for the three months ended June 30, 2011, as lower rates on new and refinanced loans reflect the current interest rate environment.

Interest income on all other interest-earning assets, excluding loans, increased by $820,000, or 8.3%, to $10.7 million for the three months ended June 30, 2012 from $9.8 million for the three months ended June 30, 2011.  This increase reflected a $526.8 million increase in the average balance of all other interest-earning assets, excluding loans, to $1.73 billion for the three months ended June 30, 2012 from $1.20 billion for the three months ended June 30, 2011. This was partially offset by the weighted average yield on interest-earning assets, excluding loans, decreasing by 81 basis points to 2.47% for the three months ended June 30, 2012 compared to 3.28% for the three months ended June 30, 2011 reflecting the lower interest rate environment.

Total interest and dividend income increased by $11.8 million, or 5.1%, to $244.2 million for the six months ended June 30, 2012 from $232.4 million for the six months ended June 30, 2011.  This increase is attributed to the average balance of interest-earning assets increasing $1.28 billion, or 13.6%, to $10.65 billion for the six months ended June 30, 2012 from $9.38 billion for the six months ended June 30, 2011.  This was partially offset by the weighted average yield on interest-earning assets decreasing 38 basis points to 4.58% for the six months ended June 30, 2012 compared to 4.96% for the six months ended June 30, 2011. 

Interest income on loans increased by $10.2 million, or 4.8%, to $222.5 million for the six months ended June 30, 2012 from $212.3 million for the six months ended June 30, 2011, reflecting an $794.4 million, or 9.7%, increase in the average balance of net loans to $8.98 billion for the six months ended June 30, 2012 from $8.18 billion for the six months ended June 30, 2011.  The increase is primarily attributed to the average balance of multi-family loans and commercial real estate loans increasing $637.1 million and $162.1 million, respectively as we continue to focus on diversifying our loan portfolio by adding more multi-family loans and commercial real estate loans. In addition, we recorded $3.3 million in loan prepayment penalties as interest income for the six months ended June 30, 2012 compared to $1.4 million for the six months ended June 30, 2011. This was partially offset by a 23 basis point decrease in the average yield on net loans to 4.96% for the six months ended June 30, 2012 from 5.19% for the six months ended June 30, 2011, as lower rates on new and refinanced loans reflect the current interest rate environment.

Interest income on all other interest-earning assets, excluding loans, increased by $1.6 million, or 7.9%, to $21.6 million for the six months ended June 30, 2012 from $20.0 million for the six months ended June 30, 2011.  This increase reflected a $483.1 million increase in the average balance of all other interest-earning assets, excluding loans, to $1.68 billion for the six months ended June 30, 2012 from $1.19 billion for the six months ended June 30, 2011. This was partially offset by the weighted average yield on interest-earning assets, excluding loans, decreasing by 78 basis points to 2.58% for the six months ended June 30, 2012 compared to 3.36% for the six months ended June 30, 2011 reflecting the current interest rate environment.

Interest Expense

Total interest expense decreased by $4.9 million, or 13.5%, to $31.4 million for the three months ended June 30, 2012 from $36.3 million for the three months ended June 30, 2011.  This decrease is attributed to the weighted average cost of total interest-bearing liabilities decreasing 38 basis points to 1.31% for the three months ended June 30, 2012 compared to 1.69% for the three months ended June 30, 2011.  This was partially offset by the average balance of total interest-bearing liabilities increasing by $1.0 billion, or 12.2%, to $9.60 billion for the three months ended June 30, 2012 from $8.56 billion for the three months ended June 30, 2011. 

Interest expense on interest-bearing deposits decreased $3.4 million, or 17.3% to $16.4 million for the three months ended June 30, 2012 from $19.8 million for the three months ended June 30, 2011.  This decrease is attributed to a 34 basis point decrease in the average cost of interest-bearing deposits to 0.89% for the three months ended June 30, 2012 from 1.23% for the three months ended June 30, 2011 as deposit rates reflect this lower interest rate environment.  This was partially offset by the average balance of total interest-bearing deposits increasing $875.1 million, or 13.5% to $7.34 billion for the three months ended June 30, 2012 from $6.47 billion for the three months ended June 30, 2011. Core deposit accounts- savings, checking and money market, outpaced average total interest-bearing deposit growth as average core deposits increased $1.06 billion.

Interest expense on borrowed funds decreased by $1.5 million, or 8.9%, to $15.0 million for the three months ended June 30, 2012 from $16.4 million for the three months ended June 30, 2011.  This decrease is attributed to the average cost of borrowed funds decreasing 49 basis points to 2.65% for the three months ended June 30, 2012 from 3.14% for the three months ended June 30, 2011 as maturing borrowings repriced to lower interest rates.  This was partially offset by the average balance of borrowed funds increasing by $169.1 million or 8.1%, to $2.26 billion for the three months ended June 30, 2012 from $2.09 billion for the three months ended June 30, 2011.

Total interest expense decreased by $7.3 million, or 10.2%, to $64.9 million for the six months ended June 30, 2012 from $72.2 million for the six months ended June 30, 2011.  This decrease is attributed to the weighted average cost of total interest-bearing liabilities decreasing 36 basis points to 1.36% for the six months ended June 30, 2012 compared to 1.72% for the six months ended June 30, 2011.  This was partially offset by the average balance of total interest-bearing liabilities increasing by $1.10 billion, or 13.1%, to $9.52 billion for the six months ended June 30, 2012 from $8.42 billion for the six months ended June 30, 2011. 

Interest expense on interest-bearing deposits decreased $5.1 million, or 12.8% to $34.7 million for the six months ended June 30, 2012 from $39.8 million for the six months ended June 30, 2011.  This decrease is attributed to a 29 basis point decrease in the average cost of interest-bearing deposits to 0.94% for the six months ended June 30, 2012 from 1.23% for the six months ended June 30, 2011 as deposit rates reflect the lower interest rate environment.  This was partially offset by the average balance of total interest-bearing deposits increasing $899.5 million, or 13.9% to $7.35 billion for the six months ended June 30, 2012 from $6.46 billion for the six months ended June 30, 2011.  Core deposit accounts- savings, checking and money market, outpaced average total interest-bearing deposit growth as average core deposits increased $978.9 million.

Interest expense on borrowed funds decreased by $2.3 million, or 7.0%, to $30.1 million for the six months ended June 30, 2012 from $32.4 million for the six months ended June 30, 2011.  This decrease is attributed to the average cost of borrowed funds decreasing 51 basis points to 2.79% for the six months ended June 30, 2012 from 3.30% for the six months ended June 30, 2011 as maturing borrowings repriced to lower interest rates.  This was partially offset by the average balance of borrowed funds increasing by $201.3 million or 10.3%, to $2.16 billion for the six months ended June 30, 2012 from $1.96 billion for the six months ended June 30, 2011.

Net Interest Income

Net interest income increased by $9.1 million, or 11.1%, to $91.6 million for the three months ended June 30, 2012 from $82.4 million for the three months ended June 30, 2011.  The increase was primarily due to the average balance of interest earning assets increasing $1.25 billion to $10.76 billion at June 30, 2012 compared to $9.52 billion at June 30, 2011, as well as a 38 basis point decrease in our cost of interest-bearing liabilities to 1.31% for the three months ended June 30, 2012 from 1.69% for the three months ended June 30, 2011. These were partially offset by the average balance of our interest earning liabilities increasing $1.04 billion to $9.60 billion at June 30, 2012 compared to $8.56 billion at June 30, 2011, as well as the yield on our interest-earning assets decreasing 42 basis points to 4.57% for the three months ended June 30, 2012 from 4.99% for the three months ended June 30, 2011. While the yield on our interest earning assets declined due to the lower interest rate environment, our cost of funds also continued to fall resulting in our net interest margin decreasing by 6 basis points from 3.46% for the three months ended June 30, 2011 to 3.40% for the three months ended June 30, 2012.

Net interest income increased by $19.1 million, or 12.0%, to $179.3 million for the six months ended June 30, 2012 from $160.2 million for the six months ended June 30, 2011.  The increase was primarily due to the average balance of interest earning assets increasing $1.28 billion to $10.65 billion at June 30, 2012 compared to $9.38 billion at June 30, 2011, as well as a 36 basis point decrease in our cost of interest-bearing liabilities to 1.36% for the six months ended June 30, 2012 from 1.72% for the six months ended June 30, 2011. These were partially offset by the average balance of our interest earning liabilities increasing $1.10 billion to $9.52 billion at June 30, 2012 compared to $8.42 billion at June 30, 2011, as well as the yield on our interest-earning assets decreasing 38 basis points to 4.58% for the six months ended June 30, 2012 from 4.96% for the six months ended June 30, 2011. While the yield on our interest earning assets declined due to the lower interest rate environment, our cost of funds also continued to fall resulting in our net interest margin decreasing by 5 basis points from 3.42% for the six months ended June 30, 2011 to 3.37% for the six months ended June 30, 2012.

Provision for Loan Losses

Our provision for loan losses was $19.0 million for the three months ended June 30, 2012 compared to $18.5 million for the three months ended June 30, 2011. For the three months ended June 30, 2012, net charge-offs were $14.0 million compared to $10.4 million for the three months ended June 30, 2011. For the six months ended June 30, 2012, our provision for loan losses was $32.0 million compared to $35.5 million for the six months ended June 30, 2011.  For the six months ended June 30, 2012, net charge-offs were $20.8 million compared to $19.5 million for the six months ended June 30, 2011.

The following table sets forth non-accrual loans and accruing past due loans on the dates indicated as well as certain asset quality ratios:

June 30,

March 31,

December 30,

September 30,

June 30,

2012

2012

2011

2011

2011

# of loans

Amount

# of loans

Amount

# of loans

Amount

# of loans

Amount

# of loans

Amount

(Dollars in millions)

Accruing past due loans:

30 to 59 days past due:

Residential and consumer

65

$        16.3

65

$        14.9

80

$        19.1

75

$        18.8

84

$        18.0

Construction

-

-

-

-

1

0.7

1

1.5

1

6.3

Multi-family

4

4.6

2

16.0

2

0.8

1

0.7

1

1.4

Commercial real estate

1

0.2

2

1.8

2

1.5

1

0.1

5

6.0

Commercial and industrial

-

-

-

-

-

-

1

0.1

-

-

       Total 30 to 59 days past due

70

21.1

69

32.7

85

22.1

79

21.2

91

31.7

60 to 89 days past due:

Residential and consumer

40

8.4

25

4.4

33

10.0

36

9.8

32

6.0

Construction

1

0.2

-

-

-

-

-

-

-

-

Multi-family

-

-

-

-

4

6.2

-

-

1

2.5

Commercial real estate

-

-

-

-

-

-

1

0.3

2

1.6

Commercial and industrial

3

3.3

1

0.7

-

-

1

0.4

1

0.1

       Total 60 to 89 days past due

44

11.9

26

5.1

37

16.2

38

10.5

36

10.2

Total accruing past due loans 

114

$        33.0

95

$        37.8

122

$        38.3

117

$        31.7

127

$        41.9

Non-accrual:

Residential and consumer

328

$        81.7

328

$        86.1

321

$        85.0

300

$        79.5

285

$        78.6

Construction

15

$        51.4

16

57.2

15

57.1

25

75.4

24

80.1

Multi-family

6

$        13.3

4

6.2

-

-

2

0.7

2

0.7

Commercial real estate

1

$          1.2

2

0.4

1

0.1

11

5.7

8

3.9

Commercial and industrial

2

$          0.8

-

-

-

-

4

0.7

3

0.6

Total Non-accrual Loans

352

$      148.4

350

$      149.9

337

$      142.2

342

$      162.0

322

$      163.9

Accruing troubled debt restructured loans

17

$          8.9

15

$          8.4

15

$        10.5

15

$        10.5

15

$        10.5

Non-accrual loans to total loans

1.60%

1.64%

1.60%

1.82%

1.91%

Allowance for loan loss as a  

     percent of non-accrual

     loans

86.58%

82.53%

82.44%

71.89%

65.32%

Allowance for loan losses as a 

     percent of total loans

1.38%

1.35%

1.32%

1.31%

1.25%

 

Total non-accrual loans increased $6.2 million to $ 148.4 million at June 30, 2012 compared to $142.2 million at December 31, 2011. At June 30, 2012, there were $20.1 million of loans deemed trouble debt restructurings, of which $8.9 million were accruing and $11.2 million were on non-accrual. Additionally, at June 30, 2012, a $6.5 million multi-family loan that was 60 days delinquent was place on non-accrual.

The allowance for loan losses increased by $11.2 million to $128.4 million at June 30, 2012 from $117.2 million at December 31, 2011.  The increase in our allowance for loan losses is due to the increased inherent credit risk in our overall portfolio, particularly the credit risk associated with commercial real estate lending; and the level of non-performing loans and delinquent loans caused by the adverse economic conditions in our lending area and the continued growth in the multi-family and commercial real estate loan portfolios. Future increases in the allowance for loan losses may be necessary based on the growth and composition of the loan portfolio, the level of loan delinquency and the impact of the deterioration of the real estate and economic environments in our lending area. 

Non-Interest Income

Total non-interest income increased by $ 4.4 million, or 71.5% to $10.6 million for the three months ended June 30, 2012 from $6.2 million for the three months ended June 30, 2011.  The increase is primarily attributed to the gain on the sale of loans increasing $3.1 to $4.8 million, and a $928,000 increase in other non-interest income primarily from the fees associated with the sale of non-deposit investment products. In addition, fees and service charges relating primarily to the servicing of third party loan portfolios as well as fees from commercial deposit and loan accounts increased $ 413,000 to $4.2 million for the three months ended June 30, 2012. 

Total non-interest income increased by $7.9 million, or 61.1% to $ 20.9 million for the six months ended June 30, 2012 from $ 13.0 million for the six months ended June 30, 2011.  The increase is primarily attributed to the gain on the sale of loans increasing $4.8 to $8.7 million, and a $1.7 million increase in other non-interest income primarily from the fees associated with the sale of non-deposit investment products. In addition, fees and service charges relating primarily to the servicing of third party loan portfolios as well as fees from commercial deposit and loan accounts increased $1.6 million to $9.2 million for the six months ended June 30, 2012. 

Non-Interest Expenses

Total non-interest expenses increased by $5.0 million, or 12.6%, to $44.9 million for the three months ended June 30, 2012 from $39.9 million for the three months ended June 30, 2011. Compensation and fringe benefits increased $4.0 million primarily as a result of the staff additions to support our continued growth, including employees from the acquisition of Brooklyn Federal, and normal merit increases. Data processing expenses increased $830,000 primarily due to the growth in the number of accounts and branches. These increases were partially offset by a $750,000 decrease in our FDIC insurance premium due to the implementation of FDIC assessment regulations finalized in July 2011.

Total non-interest expenses increased by $20.9 million, or 26.6%, to $99.3 million for the six months ended June 30, 2012 from $78.5 million for the six months ended June 30, 2011. Compensation and fringe benefits increased $8.3 million primarily as a result of the staff additions to support our continued growth, including employees from the acquisition of Brooklyn Federal, as well as normal merit increases and $1.4 million in acquisition related expenses of Brooklyn Federal. Occupancy expense increased $3.6 million as a result of a one-time charge of $3.0 million for the early termination of certain leased facilities and the costs associated with expanding our branch network. Data processing expenses increased $3.4 million primarily due to increased volume of accounts and a one-time charge of $1.5 million for the termination of a Brooklyn Federal data processing contract.

Income Taxes

Income tax expense was $14.3 million for the three months ended June 30, 2012, representing a 37.35% effective tax rate compared to income tax expense of $10.6 million for the three months ended June 30, 2011 representing a 35.08% effective tax rate.

Income tax expense was $26.0 million for the six months ended June 30, 2012, representing a 37.72% effective tax rate compared to income tax expense of $21.3 million for the six months ended June 30, 2011 representing a 36.05% effective tax rate.

Balance Sheet Summary

Total assets increased by $780.0 million, or 7.3%, to $11.48 billion at June 30, 2012 from $10.70 billion at December 31, 2011.  This increase was largely the result of net loans, including loans held for sale increasing $401.1 million to $9.21 billion at June 30, 2012 from $8.81 billion at December 31, 2011 and a $339.8 million increase in total available for sale securities to $1.32 billion at June 30, 2012 from $983.7 million at December 31, 2011.

Net loans, including loans held for sale, increased by $401.1 million, or 4.6%, to $9.21 billion at June 30, 2012 from $8.81 billion at December 31, 2011.  This increase in loans reflects our continued focus on generating multi-family and commercial real estate loans, which was partially offset by pay downs and payoffs of loans. The loans we originate and purchase are on properties located primarily in New Jersey and New York.

We originate residential mortgage loans through our mortgage subsidiary, Investors Home Mortgage Co. For the six months ended June 30, 2012, Investors Home Mortgage Co. originated $781.4 million in residential mortgage loans of which $404.8 million were sold to third party investors and $376.6 million were added to our portfolio. We also purchased mortgage loans from correspondent entities including other banks and mortgage bankers. Our agreements with these correspondent entities require them to originate loans that adhere to our underwriting standards. During the six months ended June 30, 2012, we purchased loans totaling $301.3 million from these entities. In addition, we acquired $177.5 million in loans from Brooklyn Federal and subsequently sold $49.4 million of commercial real estate loans and $37.9 million of commercial real estate loans on a pass through basis to a third party. 

For the six months ended June 30, 2012, we originated $437.5 million in multi-family loans, $205.2 million in commercial real estate loans, $36.2 million in commercial and industrial loans, $37.0 million in consumer and other loans and $25.5 million in construction loans.

At June 30, 2012, total loans were $9.29 billion and included $4.98 billion in residential loans, $2.17 billion in multi-family loans, $1.52 billion in commercial real estate loans, $264.0 million in construction loans, $237.5 million in consumer and other loans and $127.8 million in commercial and industrial loans.

Securities, in the aggregate, increased by $272.2 million, or 21.4%, to $1.54 billion at June 30, 2012, from $1.27 billion at December 31, 2011. The increase in the portfolio was primarily due to the purchase of $481.7 million of agency issued mortgage backed securities, and the purchase of $3.0 million in US government and agencies, partially offset by sales of normal pay downs or maturities during the six months ended June 30, 2012. 

Goodwill increased $17.4 million primarily as a result of the Brooklyn Federal acquisition. The amount of stock we own in the Federal Home Loan Bank (FHLB) increased by $14.7 million from $116.8 million at December 31, 2011 to $131.5 million at June 30, 2012 as a result of an increase in our level of borrowings at June 30, 2012. There was a $1.9 million reduction in bank owned life insurance as a result of death benefit payouts.

Deposits increased by $540.6 million, or 7.3%, to $7.90 billion at June 30, 2012 from $7.36 billion at December 31, 2011. This was attributed to an increase in core deposits of $782 million or 19.5%, partially offset by a $241.5 million decrease in certificates of deposit.

Borrowed funds increased $110.2 million, or 4.9%, to $2.37 billion at June 30, 2012 from $2.26 billion at December 31, 2011 to fund our asset growth.

Stockholders' equity increased $57.4 million to $1.02 billion at June 30, 2012 from $967.4 million at December 31, 2011. The increase is primarily attributed to the $42.9 million of net income for the six months ended June 30, 2012, $7.6 million as a result of the acquisition of Brooklyn Federal and $1.8 million of compensation cost related to equity incentive plans.

About the Company

Investors Bancorp, Inc. is the holding company for Investors Bank, which operates from its corporate headquarters in Short Hills, New Jersey, and as of June 30, 2012 eighty-seven branch offices located throughout northern and central New Jersey and New York.

Earnings Conference Call July 26, 2012 at 11:00 a.m. (ET)

The Company, as previously announced, will host an earnings conference call Thursday, July 26, 2012 at 11:00 a.m. (ET). The toll-free dial-in number is: (877) 317-6789. A telephone replay will be available on July 26, 2012 from 1:00 p.m. (ET) through October 31, 2012, 9:00 a.m. (ET). The replay number is (877) 344-7529 password 10012120. The conference call will also be simultaneously webcast on the Company's website www.myinvestorsbank.com and archived for one year.

Forward Looking Statements

Certain statements contained herein are "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Such forward looking statements may be identified by reference to a future period or periods, or by the use of forward looking terminology, such as "may," "will," "believe," "expect," "estimate," "anticipate," "continue," or similar terms or variations on those terms, or the negative of those terms.  Forward looking statements are subject to numerous risks and uncertainties, as described in our SEC filings, including, but not limited to, those related to the real estate and economic environment, particularly in the market areas in which the Company operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management, asset-liability management, the financial and securities markets and the availability of and costs associated with sources of liquidity.

The Company wishes to caution readers not to place undue reliance on any such forward looking statements, which speak only as of the date made.  The Company wishes to advise readers that the factors listed above could affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.  The Company does not undertake and specifically declines any obligation to publicly release the results of any revisions, which may be made to any forward looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

  

INVESTORS BANCORP, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

June 30, 2012 and December 31, 2011

June, 30

December 31,

Assets

2012

2011

(In thousands)

Cash and cash equivalents

$

112,269

90,139

Securities available-for-sale, at estimated fair value

1,323,499

983,715

Securities held-to-maturity, net (estimated fair value of

$238,756 and $311,860 at June 30, 2012

and December 31, 2011, respectively)

220,057

287,671

Loans receivable, net

9,180,402

8,794,211

Loans held-for-sale

33,728

18,847

Federal Home Loan Bank stock

131,526

116,813

Accrued interest receivable 

39,783

40,063

Other real estate owned

8,205

3,081

Office properties and equipment, net

75,668

60,555

Net deferred tax asset 

136,402

133,526

Bank owned life insurance  

111,000

112,990

Intangible assets

56,591

39,225

Other assets

52,442

20,749

          Total assets

$

11,481,572

10,701,585

Liabilities and Stockholders' Equity

Liabilities:

Deposits

$

7,902,648

7,362,003

Borrowed funds

2,365,700

2,255,486

Advance payments by borrowers for taxes and insurance

51,722

43,434

Other liabilities

136,597

73,222

          Total liabilities

10,456,667

9,734,145

Stockholders' equity:

Preferred stock, $0.01 par value, 50,000,000 authorized shares;  

none issued

Common stock, $0.01 par value, 200,000,000 shares authorized;

118,020,280 issued;  111,905,861 and 110,937,672 outstanding

at June 30, 2012 and December 31, 2011, respectively

532

532

Additional paid-in capital

531,747

536,408

Retained earnings

604,604

561,596

Treasury stock, at cost; 6,114,419 and 7,082,608 shares at

June 30, 2012 and December 31, 2011, respectively

(73,817)

(87,375)

Unallocated common stock held by the employee stock

ownership plan

(31,906)

(32,615)

Accumulated other comprehensive loss

(6,255)

(11,106)

          Total stockholders' equity

1,024,905

967,440

          Total liabilities and stockholders' equity

$

11,481,572

10,701,585

  

INVESTORS BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited)

For the Three Months

For the Six Months

Ended June 30,

Ended June 30,

2012

2011

2012

2011

(Dollars in thousands, except per share data)

Interest and dividend income:

Loans receivable and loans held-for-sale

$

112,277

108,837

222,529

212,318

Securities: 

Government-sponsored enterprise obligations

4

98

11

267

Mortgage-backed securities

8,125

7,570

16,419

15,145

Municipal bonds and other debt

1,255

1,272

2,513

2,628

Interest-bearing deposits

7

6

21

23

Federal Home Loan Bank stock

1,263

894

2,654

1,976

Total interest and dividend income

122,931

118,677

244,147

232,357

Interest expense:

Deposits 

16,406

19,833

34,739

39,821

Secured borrowings 

14,971

16,429

30,123

32,384

Total interest expense

31,377

36,262

64,862

72,205

Net interest income

91,554

82,415

179,285

160,152

Provision for loan losses 

19,000

18,500

32,000

35,500

Net interest income after provision

for loan losses

72,554

63,915

147,285

124,652

Non-interest income 

Fees and service charges

4,217

3,804

9,183

7,582

Income on bank owned life insurance   

550

1,067

1,214

1,716

Gain on loan transactions, net

4,794

1,655

8,683

3,910

(Loss) gain on securities transactions

72

(341)

30

(318)

Loss on sale of other real estate owned, net

(71)

(106)

(71)

(106)

Other income

1,018

90

1,896

206

Total non-interest income 

10,580

6,169

20,935

12,990

Non-interest expense

Compensation and fringe benefits

24,609

20,624

51,020

42,674

Advertising and promotional expense

1,929

1,389

3,441

2,766

Office occupancy and equipment expense 

7,402

7,637

17,473

13,866

Federal insurance premiums

1,950

2,700

3,900

5,400

Stationery, printing, supplies and telephone

865

841

2,081

1,630

Professional fees

1,442

1,148

5,884

2,159

Data processing service fees

2,962

2,132

7,511

4,064

Other operating expenses

3,717

3,386

8,021

5,914

Total non-interest expenses

44,876

39,857

99,331

78,473

Income before income tax expense 

38,258

30,227

68,889

59,169

Income tax expense 

14,292

10,604

25,988

21,332

Net income 

$

23,966

19,623

42,901

37,837

Basic earnings per share

$

0.22

0.18

0.40

0.35

Diluted earnings per share

0.22

0.18

0.40

0.35

Weighted average shares outstanding

Basic

107,374,863

108,482,969

107,316,336

108,525,151

Diluted

107,573,128

108,730,300

107,491,267

108,696,361

 

INVESTORS BANCORP, INC. AND SUBSIDIARIES

Average Balance Sheet and Yield/Rate Information

For Three Months Ended 

June 30, 2012

June 30, 2011

Average Outstanding Balance

Interest Earned/Paid

Average Yield/Rate

Average Outstanding Balance

Interest Earned/Paid

Average Yield/Rate

(Dollars in thousands)

Interest-earning assets:

Interest-earning cash accounts

$              86,690

$                     7

0.03%

$          65,556

$                   6

0.04%

Securities available-for-sale

1,278,226

6,053

1.89%

641,283

3,856

2.41%

Securities held-to-maturity

234,488

3,337

5.69%

392,104

5,084

5.19%

Net loans

9,038,667

112,277

4.97%

8,320,014

108,837

5.23%

Federal Home Loan Bank stock

126,447

1,263

4.00%

100,140

894

3.57%

Total interest-earning assets

10,764,518

122,937

4.57%

9,519,097

118,677

4.99%

Non-interest earning assets

472,632

403,903

Total assets

$       11,237,150

$     9,923,000

Interest-bearing liabilities:

Savings

$         1,486,569

$              1,989

0.54%

$     1,218,472

$            2,433

0.80%

Interest-bearing checking

1,337,777

1,649

0.49%

989,673

1,377

0.56%

Money market accounts

1,301,734

2,072

0.64%

856,997

1,678

0.78%

Certificates of deposit

3,214,617

10,696

1.33%

3,400,451

14,345

1.69%

Borrowed funds

2,261,258

14,971

2.65%

2,092,137

16,429

3.14%

Total interest-bearing liabilities

9,601,955

31,377

1.31%

8,557,730

36,262

1.69%

Non-interest bearing liabilities

623,525

435,619

Total liabilities

10,225,480

8,993,349

Stockholders' equity

1,011,670

929,651

Total liabilities and stockholders' equity

$       11,237,150

$     9,923,000

Net interest income

$            91,560

$          82,415

Net interest rate spread

3.26%

3.29%

Net interest earning assets

$    1,162,563.00

$        961,367

Net interest margin

3.40%

3.46%

Ratio of interest-earning assets to total interest-

bearing liabilities

1.12

X

1.11

X

INVESTORS BANCORP, INC. AND SUBSIDIARIES

Average Balance Sheet and Yield/Rate Information

For Six Months Ended 

June 30, 2012

June 30, 2011

Average Outstanding Balance

Interest Earned/Paid

Average Yield/Rate

Average Outstanding Balance

Interest Earned/Paid

Average Yield/Rate

(Dollars in thousands)

Interest-earning assets:

Interest-earning cash accounts

$            87,984

$              21

0.05%

$          68,288

$              23

0.07%

Securities available-for-sale

1,216,302

11,945

1.96%

612,927

7,178

2.34%

Securities held-to-maturity

251,836

7,004

5.56%

420,976

10,862

5.16%

Net loans

8,977,328

222,529

4.96%

8,182,968

212,318

5.19%

Federal Home Loan Bank stock

119,603

2,654

4.44%

90,427

1,976

4.37%

Total interest-earning assets

10,653,053

244,153

4.58%

9,375,586

232,357

4.96%

Non-interest earning assets

473,151

407,344

Total assets

$     11,126,204

$     9,782,930

Interest-bearing liabilities:

Savings

$       1,447,078

$         3,962

0.55%

$     1,209,551

$         4,994

0.83%

Interest-bearing checking

1,336,786

3,349

0.50%

1,000,641

2,823

0.56%

Money market accounts

1,261,608

4,159

0.66%

856,332

3,408

0.80%

Certificates of deposit

3,309,928

23,269

1.41%

3,389,333

28,596

1.69%

Borrowed funds

2,162,347

30,123

2.79%

1,961,010

32,384

3.30%

Total interest-bearing liabilities

9,517,747

64,862

1.36%

8,416,867

72,205

1.72%

Non-interest bearing liabilities

611,742

446,483

Total liabilities

10,129,489

8,863,350

Stockholders' equity

996,715

919,580

Total liabilities and stockholders' equity

$     11,126,204

$     9,782,930

Net interest income

$     179,291

$     160,152

Net interest rate spread

3.21%

3.23%

Net interest earning assets

$       1,135,306

$        958,719

Net interest margin

3.37%

3.42%

Ratio of interest-earning assets to total interest-

bearing liabilities

1.12

X

1.11

X

  

INVESTORS BANCORP, INC. AND SUBSIDIARIES

Selected Performance Ratios

For the Three Months Ended

June 30,

2012

2011

Return on average assets 

0.85%

0.79%

Return on average equity 

9.48%

8.44%

Return on average tangible equity

10.03%

8.82%

Interest rate spread

3.26%

3.29%

Net interest margin

3.40%

3.46%

Efficiency ratio 

43.94%

44.61%

Non-interest expense to average total assets  

1.60%

1.61%

Average interest-earning assets to average

   interest-bearing liabilities

1.12

1.11

For the Six Months Ended

June 30,

2012

2011

Return on average assets 

0.77%

0.77%

Return on average equity 

8.61%

8.23%

Return on average tangible equity

9.12%

8.60%

Interest rate spread

3.21%

3.24%

Net interest margin

3.37%

3.42%

Efficiency ratio 

49.61%

45.13%

Non-interest expense to average total assets  

1.79%

1.59%

Average interest-earning assets to average

   interest-bearing liabilities

1.12

1.11

INVESTORS BANCORP, INC. AND SUBSIDIARIES

Selected Financial Ratios and Other Data

June 30,

December 31,

2012

2011

Asset Quality Ratios:

Non-performing assets as a percent of total assets

1.44%

1.46%

Non-performing loans as a percent of total loans

1.69%

1.72%

Allowance for loan losses as a percent of non-accrual loans

86.58%

82.44%

Allowance for loan losses as a percent of total loans

1.38%

1.32%

Capital Ratios:

Total risk-based capital (to risk weighted assets)   (1)

12.73%

12.91%

Tier 1 risk-based capital (to risk weighted assets)   (1)

11.47%

11.65%

Tier 1 leverage (core) capital (to adjusted tangible assets)   (1)

8.07%

8.21%

Equity to total assets (period end)

8.93%

9.04%

Average equity to average assets

8.96%

9.26%

Tangible capital (to tangible assets)

8.48%

8.71%

Book value per common share

$    9.43

$8.98

Other Data:

Number of full service offices

87

81

Full time equivalent employees

1,035

959

(1) Ratios are for Investors Bank and do not include capital retained at the holding company level.

SOURCE Investors Bancorp, Inc.