Investors Bancorp, Inc. Announces Second Quarter Financial Results and Cash Dividend

SHORT HILLS, N.J., July 25, 2013 /PRNewswire/ -- Investors Bancorp, Inc. (NASDAQ: ISBC) ("Company"), the holding company for Investors Bank ("Bank"), reported net income of $28.1 million for the three months ended June 30, 2013 compared to net income of $24.0 million for the three months ended June 30, 2012. Net income for the six months ended June 30, 2013 was $55.2 million compared to net income of $42.9 million for the six months ended June 30, 2012. Basic and diluted earnings per share were $0.26 for the three months ended June 30, 2013 compared to $0.22 for the three months ended June 30, 2012. Basic and diluted earnings per share were $0.51 for the six months ended June 30, 2013 compared to $0.40 for the six months ended June 30, 2012. The results for the six months ended June 30, 2012 included approximately $6.1 million of one-time expenses related to the Brooklyn Federal acquisition.

The Company announced today that the Board of Directors has declared a cash dividend of $0.05 per share to stockholders of record as of August 9, payable on August 23, 2013. The majority of the outstanding stock of the Company is owned by Investors Bancorp MHC, a mutual holding company, which will receive the dividend payment along with the public shareholders.

Commenting on the results from the quarter, Kevin Cummings, President and CEO stated, "Investors results for the second quarter were strong highlighted by the quarter's loan growth, controlled operating expenses and lower non performing loan levels. Despite the recent rise in interest rates, loan demand is robust, especially in multi- family lending in New York City."

Regarding the Company's pending acquisitions, Mr. Cummings stated, "We anticipate completing the acquisitions in the third quarter. We continue to organically growth the bank while we await regulatory approval of the acquisitions of Roma Financial Inc. and Gateway Community Financial Inc."

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

  • Net loans increased $606.0 million, or 5.9%, to $10.91 billion at June 30, 2013 from $10.31 billion at December 31, 2012. During the three months ended June 30, 2013, we originated $385.6 million in multi-family loans and $96.8 million in commercial real estate loans.
  • Net interest margin for the three months ended June 30, 2013 was 3.35%. This represents a decrease of 5 basis points compared to June 30, 2012 and a decrease of 1 basis point compared to the first quarter of 2013.
  • Deposits decreased by $102.2 million from $8.77 billion at December 31, 2012 to $8.67 billion at June 30, 2013, however core deposits increased $102.2 million or 1.7% from December 31, 2012. As of June 30, 2013, core deposits represents over 68% of total deposits.
  • Efficiency ratio was 49.80% for the three months ended June 30, 2013, as compared with 50.05% for the first quarter of 2013.

Comparison of Operating Results

Interest and Dividend Income

Total interest and dividend income increased by $9.3 million, or 7.5%, to $132.2 million for the three months ended June 30, 2013 from $122.9 million for the three months ended June 30, 2012. This increase is attributed to the average balance of interest-earning assets increasing $1.75 billion or 16.3%, to $12.52 billion for the three months ended June 30, 2013 from $10.76 billion for the three months ended June 30, 2012 due to organic growth and acquisitions. This was partially offset by the weighted average yield on interest-earning assets decreasing 35 basis points to 4.22% for the three months ended June 30, 2013 compared to 4.57% for the three months ended June 30, 2012.

Interest income on loans increased by $10.4 million, or 9.2%, to $122.6 million for the three months ended June 30, 2013 from $112.3 million for the three months ended June 30, 2012, reflecting a $1.65 billion or 18.3%, increase in the average balance of net loans to $10.69 billion for the three months ended June 30, 2013 from $9.04 billion for the three months ended June 30, 2012. The increase is primarily attributed to the average balance of multi-family loans and commercial real estate loans increasing $1.21 billion and $558.1 million, respectively as we continue to focus on diversifying our loan portfolio by adding more multi-family loans and commercial real estate loans. This was partially offset by the decrease in the average balance of residential loans and construction loans of $87.7 million and $46.6 million, respectively for the three months ended June 30, 2013. The increase also reflects $3.6 million in loan prepayment fees recorded in interest income for the three months ended June 30, 2013 compared to $2.2 million for the three months ended June 30, 2012. The increase was partially offset by a 38 basis point decrease in the average yield on net loans to 4.59% for the three months ended June 30, 2013 from 4.97% for the three months ended June 30, 2012, as lower rates on new and refinanced loans reflect the current interest rate environment.

Interest income on all other interest-earning assets, excluding loans, decreased by $1.1 million or 10.3%, to $9.6 million for the three months ended June 30, 2013 from $10.7 million for the three months ended June 30, 2012. The decrease is attributed to the weighted average yield on interest-earning assets, excluding loans, decreasing by 38 basis points to 2.09% for the three months ended June 30, 2013 compared to 2.47% for the three months ended June 30, 2012 reflecting the lower interest rate environment. This was partially offset by a $101.4 million increase in the average balance of all other interest-earning assets, excluding loans, to $1.83 billion for the three months ended June 30, 2013 from $1.73 billion for the three months ended June 30, 2012.

Total interest and dividend income increased by $17.5 million, or 7.2%, to $261.6 million for the six months ended June 30, 2013 from $244.2 million for the six months ended June 30, 2012. This increase is attributed to the average balance of interest-earning assets increasing $1.68 billion, or 15.8%, to $12.34 billion for the six months ended June 30, 2013 from $10.65 billion for the six months ended June 30, 2012. This was partially offset by the weighted average yield on interest-earning assets decreasing 34 basis points to 4.24% for the six months ended June 30, 2013 compared to 4.58% for the six months ended June 30, 2012.

Interest income on loans increased by $20.0 million, or 9.0%, to $242.5 million for the six months ended June 30, 2013 from $222.5 million for the six months ended June 30, 2012, reflecting an $1.55 billion, or 17.3%, increase in the average balance of net loans to $10.53 billion for the six months ended June 30, 2013 from $8.98 billion for the six months ended June 30, 2012. The increase is primarily attributed to the average balance of multi-family loans and commercial real estate loans increasing $1.20 billion and $555.6 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 $6.7 million in loan prepayment penalties as interest income for the six months ended June 30, 2013 compared to $3.3 million for the six months ended June 30, 2012. This was partially offset by a 35 basis point decrease in the average yield on net loans to 4.61% for the six months ended June 30, 2013 from 4.96% for the six months ended June 30, 2012, as lower rates on new and refinanced loans reflect the current interest rate environment.

Interest income on all other interest-earning assets, excluding loans, decreased by $2.5 million, or 11.5%, to $19.1 million for the six months ended June 30, 2013 from $21.6 million for the six months ended June 30, 2012. This decrease reflected the weighted average yield on interest-earning assets, excluding loans, decreasing by 47 basis points to 2.11% for the six months ended June 30, 2013 compared to 2.58% for the six months ended June 30, 2012 reflecting the current interest rate environment. This was partially offset by a $134.6 million increase in the average balance of all other interest-earning assets, excluding loans, to $1.81 billion for the six months ended June 30, 2013 from $1.68 billion for the six months ended June 30, 2012.

Interest Expense

Total interest expense decreased by $3.9 million, or 12.4%, to $27.5 million for the three months ended June 30, 2013 from $31.4 million for the three months ended June 30, 2012. This decrease is attributed to the weighted average cost of total interest-bearing liabilities decreasing 30 basis points to 1.01% for the three months ended June 30, 2013 compared to 1.31% for the three months ended June 30, 2012. This was partially offset by the average balance of total interest-bearing liabilities increasing by $1.27 billion, or 13.2%, to $10.87 billion for the three months ended June 30, 2013 from $9.60 billion for the three months ended June 30, 2012.

Interest expense on interest-bearing deposits decreased $4.2 million, or 25.3% to $12.3 million for the three months ended June 30, 2013 from $16.4 million for the three months ended June 30, 2012. This decrease is attributed to a 26 basis point decrease in the average cost of interest-bearing deposits to 0.63% for the three months ended June 30, 2013 from 0.89% for the three months ended June 30, 2012 as deposit rates reflect the lower interest rate environment. This was partially offset by the average balance of total interest-bearing deposits increasing $470.0 million, or 6.4% to $7.81 billion for the three months ended June 30, 2013 from $7.34 billion for the three months ended June 30, 2012. Average balances of core deposit accounts- savings, checking and money market increased $868.6 million over the past year.

Interest expense on borrowed funds increased by $264,000 or 1.8%, to $15.2 million for the three months ended June 30, 2013 from $15.0 million for the three months ended June 30, 2012. This increase is attributed to the average balance of borrowed funds increasing $802.1 million or 35.5%, to $3.06 billion for the three months ended June 30, 2013 from $2.26 billion for the three months ended June 30, 2012. This increase was offset by a 66 basis points decrease to the average cost of borrowings to 1.99% for the three months ended June 30, 2013 from 2.65% for the three months ended June 30, 2012 as maturing and new borrowings repriced to current interest rates.

Total interest expense decreased by $10.0 million, or 15.4%, to $54.9 million for the six months ended June 30, 2013 from $64.9 million for the six months ended June 30, 2012. This decrease is attributed to the weighted average cost of total interest-bearing liabilities decreasing 34 basis points to 1.02% for the six months ended June 30, 2013 compared to 1.36% for the six months ended June 30, 2012. This was partially offset by the average balance of total interest-bearing liabilities increasing by $1.23 billion, or 12.9%, to $10.75 billion for the six months ended June 30, 2013 from $9.52 billion for the six months ended June 30, 2012.

Interest expense on interest-bearing deposits decreased $9.8 million, or 28.2% to $24.9 million for the six months ended June 30, 2013 from $34.7 million for the six months ended June 30, 2012. This decrease is attributed to a 31 basis point decrease in the average cost of interest-bearing deposits to 0.63% for the six months ended June 30, 2013 from 0.94% for the six months ended June 30, 2012 as deposit rates reflect the lower interest rate environment. This was partially offset by the average balance of total interest-bearing deposits increasing $545.9 million, or 7.4% to $7.90 billion for the six months ended June 30, 2013 from $7.36 billion for the six months ended June 30, 2012. Average balances of core deposit accounts- savings, checking and money market increased $984.5 million for the six months ended June 30, 2013.

Interest expense on borrowed funds decreased by $183,000, or 0.6%, to $29.9 million for the six months ended June 30, 2013 from $30.1 million for the six months ended June 30, 2012. This decrease is attributed to the average cost of borrowed funds decreasing 69 basis points to 2.10% for the six months ended June 30, 2013 from 2.79% for the six months ended June 30, 2012 as maturing and new borrowings repriced to current interest rates. This was partially offset by the average balance of borrowed funds increasing by $686.2 million or 31.7%, to $2.85 billion for the six months ended June 30, 2013 from $2.16 billion for the six months ended June 30, 2012.

Net Interest Income

Net interest income increased by $13.1 million, or 14.4%, to $104.7 million for the three months ended June 30, 2013 from $91.6 million for the three months ended June 30, 2012. The increase was primarily due to the average balance of interest earning assets increasing $1.75 billion to $12.52 billion at June 30, 2013 compared to $10.76 billion at June 30, 2012, as well as a 30 basis point decrease in our cost of interest-bearing liabilities to 1.01% for the three months ended June 30, 2013 from 1.31% for the three months ended June 30, 2012. These were partially offset by the average balance of our interest bearing liabilities increasing $1.27 billion to $10.87 billion at June 30, 2013 compared to $9.60 billion at June 30, 2012, as well as the yield on our interest-earning assets decreasing 35 basis points to 4.22% for the three months ended June 30, 2013 from 4.57% for the three months ended June 30, 2012. The net interest spread decreased by 5 basis points to 3.21% for the three months ended June 30, 2013 from 3.26% for the three months ended June 30, 2012 as yield on interest earning assets declined 35 basis points while cost of interest bearing liabilities declined 30 basis points.

Net interest income increased by $27.5 million, or 15.32%, to $206.8 million for the six months ended June 30, 2013 from $179.3 million for the six months ended June 30, 2012. The increase was primarily due to the average balance of interest earning assets increasing $1.68 billion to $12.34 billion at June 30, 2013 compared to $10.65 billion at June 30, 2012, as well as a 34 basis point decrease in our cost of interest-bearing liabilities to 1.02% for the six months ended June 30, 2013 from 1.36% for the six months ended June 30, 2012. These were partially offset by the average balance of our interest bearing liabilities increasing $1.23 billion to $10.75 billion at June 30, 2013 compared to $9.52 billion at June 30, 2012, as well as the yield on our interest-earning assets decreasing 34 basis points to 4.24% for the six months ended June 30, 2013 from 4.58% for the six months ended June 30, 2012. The net interest spread was 3.22% for both the six months ended June 30, 2013 and June 30, 2012.

Non-Interest Income

Total non-interest income decreased by $1.0 million, or 9.85% to $9.5 million for the three months ended June 30, 2013 from $10.6 million for the three months ended June 30, 2012. The decrease is primarily attributed to the gain on the sale of loans decreasing $2.8 million to $2.0 million for the three months ended June 30, 2013 due to lower volume of sales in the secondary market at slightly lower margins. This decrease was offset by increases to fees and service charges of $709,000 and gain on sales of real estate owned of $603,000. In addition, other income increased $322,000 as a result of income on non-deposit investment products.

Total non-interest income decreased by $1.3 million, or 6.25% to $19.6 million for the six months ended June 30, 2013 from $20.9 million for the six months ended June 30, 2012. The decrease is primarily attributed to gain on the sale of loans decreasing $3.6 million to $5.1 million for the six months ended June 30, 2013 as compared to $8.7 million for the six months ended June 30, 2012 due to lower volume of sales in the secondary market at slightly lower margins. This decrease was offset by $661,000 on gains from securities sold during the six months ended June 30, 2013 and gains on sale of real estate owned of $533,000. Other income increased $687,000 as a result of income on non-deposit investment products.

Non-Interest Expenses

Total non-interest expenses increased by $12.0 million, or 26.8%, to $56.9 million for the three months ended June 30, 2013 from $44.9 million for the three months ended June 30, 2012. Compensation and fringe benefits increased $4.4 million for the three months ended June 30, 2013 primarily as a result of the staff additions to support our continued growth including employees from the acquisition of Marathon Bank in the fourth quarter of 2012, as well as normal merit increases. Professional fees increased $922,000 for the three months ended June 30, 2013 attributed to increased legal and consulting services for the period. The Company has continued to increase its branch network and enter new markets through acquisitions as well as organic growth. As a result there has been an increase in occupancy expense, data processing fees, advertising and stationary expenses of $2.2 million, $1.0 million, $468,000 and $414,000, respectively for the three months ended June 30, 2013. Other operating expense also increased $926,000 for the three months ended June 30, 2013 related to higher recruiting, training and insurance expenses. FDIC insurance premium increased $1.7 million for the three months ended June 30, 2013 compared to June 30, 2012. This increase is a result of the FDIC finalizing its procedures for determining the deposit insurance assessment. These final rules were effective March 1, 2013.

Total non-interest expenses increased by $13.7 million, or 13.78%, to $113.0 million for the six months ended June 30, 2013 from $99.3 million for the six months ended June 30, 2012. The six months ended June 30, 2012 included $6.1 million in one time charges associated with the acquisition of Brooklyn Federal as well as $3.0 million for the early termination of certain leased facilities. Compensation and fringe benefits increased $7.9 million for the six months ended June 30, 2013 primarily as a result of the staff additions to support our continued growth including employees from the acquisition of Marathon Bank in the fourth quarter of 2012, as well as normal merit increases. The Company has continued to increase its branch network and enter new markets through acquisitions as well as organic growth. As a result there has been an increase to occupancy expense and advertising expense of $1.3 million and $770,000 for the six months ended June 30, 2013. In addition, our FDIC insurance premium increased $3.4 million for the six months ended June 30, 2013 as compared to the six months ended June 30, 2012. This increase is a result of the FDIC finalizing its procedures for determining the deposit insurance assessment. These final rules were effective March 1, 2013. Other operating expense increased $1.3 million for the six months ended June 30, 2013 related to higher recruiting, training and insurance expenses.

Income Taxes

Income tax expense was $15.5 million for the three months ended June 30, 2013, representing a 35.61% effective tax rate compared to income tax expense of $14.3 million for the three months ended June 30, 2012 representing a 37.35% effective tax rate.

Income tax expense was $30.6 million for the six months ended June 30, 2013, representing a 35.66% effective tax rate compared to income tax expense of $26.0 million for the six months ended June 30, 2012 representing a 37.72% effective tax rate.

Provision for Loan Losses

Our provision for loan losses was $13.8 million for the three months ended June 30, 2013 compared to $19.0 million for the three months ended June 30, 2012. For the three months ended June 30, 2013, net charge-offs were $8.9 million compared to $14.0 million for the three months ended June 30, 2012. For the six months ended June 30, 2013, our provision for loan losses was $27.5 million compared to $32.0 million for the six months ended June 30, 2012. For the six months ended June 30, 2013, net charge-offs were $15.2 million compared to $20.8 million for the six months ended June 30, 2012. Our provision for the three and six months ended June 30, 2013 is a result of continued growth in the loan portfolio, specifically the multi-family and commercial real estate portfolios; the inherent credit risk in our overall portfolio, particularly the credit risk associated with commercial real estate lending; the level of non-performing loans and delinquent loans caused by the adverse economic and real estate conditions in our lending area.

Our past due loans and non-accrual loans discussed below exclude certain purchased credit impaired (PCI) loans, primarily consisting of loans recorded in the acquisition of Marathon. Under U.S. GAAP, the PCI loans (acquired at a discount that is due, in part, to credit quality) are not subject to delinquency classification in the same manner as loans originated by Investors. The following table sets forth non-accrual loans and accruing past due loans (excluding PCI loans of $2.6 million) on the dates indicated as well as certain asset quality ratios.



June 30,

2013


March 31,

2013


December 31,

2012


September 30,

2012


June 30,

2012


# 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

55



$

17.9



76



$

20.0



114



$

34.3



71



$

23.6



65



$

16.3


Construction













1



0.4






Multi-family

1



0.1



2



4.5



1



0.2



2



3.1



4



4.6


Commercial real estate





1



0.5



6



16.5



1



0.3



1



0.2


Commercial and industrial

1



0.1



2



1.1



3



0.6










Total 30 to 59 days past due

57



$

18.1



81



$

26.1



124



$

51.6



75



$

27.4



70



$

21.1


60 to 89 days past due:






























Residential and consumer

37



10.3



36



9.7



45



11.9



43



11.9



40



8.4


Construction

















1



0.2


Multi-family





2



0.6



3



4.0



1



1.2






Commercial real estate





1



0.3



4



3.0










Commercial and industrial

1



0.1



4



0.8



2



2.6



1



0.1



3



3.3


Total 60 to 89 days past due

38



10.4



43



11.4



54



21.5



45



13.2



44



11.9


Total accruing past due loans

95



$

28.5



124



$

37.5



178



$

73.1



120



$

40.6



114



$

33.0






























































Non-accrual:






























Residential and consumer

286



72.0



328



84.1



354



82.5



335



81.2



328



81.7


Construction

10



24.1



9



24.1



9



25.8



9



26.6



15



51.4


Multi-family

9



14.9



7



14.5



5



11.1



6



12.0



6



13.3


Commercial real estate

3



2.0



6



10.2



4



0.8



1



0.8



1



1.2


Commercial and industrial

6



1.5



6



2.8



2



0.4



1



0.1



2



0.8


Total Non-accrual Loans

314



$

114.5



356



$

135.7



374



$

120.6



352



$

120.7



352



$

148.4


Accruing troubled debt

restructured loans

28



$

19.1



18



$

9.0



22



$

15.8



18



$

14.8



17



$

8.9


Non-accrual loans to total loans



1.04

%




1.28

%




1.16

%




1.28

%




1.60

%

Allowance for loan loss as a

percent of non-accrual loans



134.9

%




110.21

%




117.92

%




108.79

%




86.58

%

Allowance for loan losses as a

percent of total loans



1.40

%




1.41

%




1.36

%




1.39

%




1.38

%


Total non-accrual loans decreased $6.1 million to $114.5 million at June 30, 2013 compared to $120.6 million at December 31, 2012 as we continue to diligently resolve our troubled loans. Our allowance for loan loss as a percent of total loans is 1.40%. At June 30, 2013, there were $46.9 million of loans deemed troubled debt restructuring, of which $19.1 million were accruing and $27.7 million were on non-accrual.

The allowance for loan losses increased by $12.3 million to $154.5 million at June 30, 2013 from $142.2 million at December 31, 2012. The increase in our allowance for loan losses is due to the growth of the loan portfolio and the increased credit risk in our overall portfolio, particularly the inherent credit risk associated with commercial real estate lending. 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.

Balance Sheet Summary

Total assets increased by $623.8 million, or 4.9%, to $13.35 billion at June 30, 2013 from $12.72 billion at December 31, 2012. This increase was largely the result of net loans, including loans held for sale, increasing $599.9 million to $10.93 billion at June 30, 2013 from $10.34 billion at December 31, 2012. In addition, stock in FHLB increased $29.6 million to $180.1 million at June 30, 2013 from $150.5 million at December 31, 2012.

Net loans, including loans held for sale, increased by $599.9 million, or 5.8%, to $10.93 billion at June 30, 2013 from $10.34 billion at December 31, 2012. At June 30, 2013, total loans were $11.05 billion which included $4.98 billion in residential loans, $3.33 billion in multi-family loans, $2.09 billion in commercial real estate loans, $237.8 million in construction loans, $224.5 million in consumer and other loans and $191.4 million in commercial and industrial loans. For the six months June 30, 2013, we originated $612.9 million in multi-family loans, $226.4 million in commercial real estate loans, $76.8 million in commercial and industrial loans, $38.0 million in consumer and other loans and $42.0 million in construction loans. 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, 2013, Investors Home Mortgage Co. originated $832.8 million in residential mortgage loans of which $273.8 million were for sale to third party investors and $559.0 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 June 30, 2013, we purchased loans totaling $489.5 million from these entities.

Securities, in the aggregate, decreased by $28.7 million, or 1.8%, to $1.54 billion at June 30, 2013. The decrease in the portfolio was primarily due to normal pay downs or maturities during the six months ended June 30, 2013 and the decrease in market value of available for sale securities of $19.1 million from December 31, 2012. During the period, the Company reclassified $524.0 million of securities available for sale to securities held to maturity as the Company has the intent and ability to hold these securities until maturity.

Deposits decreased by $102.2 million or 1.2% from $8.77 billion at December 31, 2012 to $8.67 billion at June 30, 2013. This was attributed to an increase in core deposits of $102.2 million or 1.7%, partially offset by a $204.4 million decrease in certificates of deposit. Core deposits represents over 68% of our total deposit portfolio.

Borrowed funds increased $697.5 million, or 25.8%, to $3.40 billion at June 30, 2013 from $2.71 billion at December 31, 2012 due to the funding of our asset growth.

Stockholders' equity increased $29.3 million to $1.10 billion at June 30, 2013 from $1.07 billion at December 31, 2012. The increase is primarily attributed to the $55.2 million of net income for the six months ended June 30, 2013 offset by a $17.7 million increase to other comprehensive loss. Stockholders' equity was also impacted by $0.10 per common share of a cash dividend for the six month period that resulted in a decrease of $11.2 million.

About the Company

Investors Bancorp, Inc. is the holding company for Investors Bank, which as of June 30, 2013 operates from its corporate headquarters in Short Hills, New Jersey and 100 offices located throughout New Jersey and New York.

Earnings Conference Call July 26, 2013 at 11:00 a.m. (ET)

The Company, as previously announced, will host an earnings conference call Friday, July 26, 2013 at 11:00 a.m. (ET). The toll-free dial-in number is: (888) 317-6016. Callers who pre-register will bypass the live operator and may avoid any delays in joining the conference call. Participants will immediately receive an online confirmation, an email, and a calendar initiation for the event.

Conference Call Pre-registration link: https://services.choruscall.com/DiamondPassRegistration/register?confirmationNumber=10030698&linkSecurityString=258fa48d5e

A telephone replay will be available beginning on July 26, 2013 from 1:00 p.m. (ET) through October 25, 2013, 9:00 a.m. (ET). The replay number is (877) 344-7529 password 10030698. 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, 2013 and December 31, 2012




June 30, 2013


December 31, 2012

Assets

(In thousands)






Cash and cash equivalents

$ 155,481


155,153

Securities available-for-sale, at estimated fair value

846,301


1,385,328

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

$707,638 and $198,893 at June 30, 2013 and December 31,

2012 respectively)

690,275


179,922

Loans receivable, net

10,912,805


10,306,786

Loans held-for-sale

22,089


28,233

Federal Home Loan Bank stock

180,149


150,501

Accrued interest receivable

44,253


45,144

Other real estate owned

5,434


8,093

Office properties and equipment, net

99,494


91,408

Net deferred tax asset

167,302


150,006

Bank owned life insurance

115,429


113,941

Intangible assets

99,738


99,222

Other assets

7,628


8,837

                                      Total Assets

$ 13,346,378


12,722,574

Liabilities and Stockholders' Equity



Liabilities:



Deposits

$ 8,666,620


8,768,857

Borrowed funds

3,403,125


2,705,652

Advance payments by borrowers for taxes and insurance

64,639


52,707

Other liabilities

115,861


128,541

Total liabilities

12,250,245


11,655,757

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; 111,911,719 and

111,915,882 outstanding at June 30, 2013 and December

31, 2012, respectively

532


532

Additional paid-in capital

536,507


533,858

Retained earnings

688,985


644,923

Treasury stock, at cost; 6,108,561 and 6,104,398 shares at June

30, 2013 and December 31, 2012, respectively

(74,057)


(73,692)

Unallocated common stock held by the employee stock

ownership plan

(30,488)


(31,197)

Accumulated other comprehensive loss

(25,346)


(7,607)

Total stockholders' equity

1,096,133


1,066,817

Total liabilities and stockholders' equity

$ 13,346,378


12,722,574











INVESTORS BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)
















For the Three Months



For the Six Months



Ended June 30,



Ended June 30,



2013




2012



2013



2012



(Dollars in thousands, except per share data)




Interest and dividend income:












  Loans receivable and loans held-for-sale

$

122,636



112,277



242,496



222,529

  Securities:








    Government-sponsored enterprise obligations

1



4



2



11

    Mortgage-backed securities

6,636



8,125



13,213



16,419

    Equity securities available-for-sale

19



6



23



6

    Municipal bonds and other debt

1,463



1,255



2,995



2,513

Interest-bearing deposits

11



7



21



21

Federal Home Loan Bank stock

1,428



1,263



2,878



2,654

        Total interest and dividend income

132,194



122,937



261,628



244,153

Interest expense:








  Deposits

12,250



16,406



24,938



34,739

  Secured borrowings

15,235



14,971



29,940



30,123

        Total interest expense

27,485



31,377



54,878



64,862

        Net interest income

104,709



91,560



206,750



179,291

Provision for loan losses

13,750



19,000



27,500



32,000

        Net interest income after provision for loan losses

90,959



72,560



179,250



147,291

Non-interest income








  Fees and service charges

4,926



4,217



9,327



9,183

  Income on bank owned life insurance

731



550



1,488



1,214

  Gain on loan transactions, net

2,002



4,794



5,076



8,683

  Gain on securities transactions

7



72



691



30

  Gain (loss) on sales of other real estate owned, net

532



(71)



462



(71)

  Other income

1,340



1,018



2,583



1,896

        Total non-interest income

9,538



10,580



19,627



20,935

Non-interest expense








  Compensation and fringe benefits

29,056



24,609



58,880



51,020

  Advertising and promotional expense

2,397



1,929



4,211



3,441

  Office occupancy and equipment expense

9,411



7,217



18,640



17,350

  Federal insurance premiums

3,600



1,950



7,250



3,900

  Stationery, printing, supplies and telephone

991



577



1,578



1,455

  Professional fees

2,364



1,442



5,096



5,884

  Data processing service fees

4,436



3,436



8,092



8,260

  Other operating expenses

4,642



3,716



9,274



8,021

        Total non-interest expenses

56,897



44,876



113,021



99,331

        Income before income tax expense

43,600



38,264



85,856



68,895

Income tax expense

15,524



14,292



30,613



25,988

        Net income

$

28,076



23,972



55,243



42,907

Basic and diluted earnings per share

$

0.26



0.22


0.51



0.40

Weighted average shares outstanding:








  Basic

107,730,576



107,374,863



107,679,844



107,316.336

  Diluted

108,957,916



107,573,128



108,828,024



107,491.267



INVESTORS BANCORP, INC. AND SUBSIDIARIES

Average Balance Sheet and Yield/Rate Information





For Three Months Ended



June 30, 2013



June 30, 2012




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

$

121,617


11


0.04

%


86,690


7


0.03

%

    Securities available-for-sale

1,336,112


5,372


1.61

%


1,278,226


6,053


1.89

%

    Securities held-to-maturity

204,747


2,747


5.37

%


234,432


3,337


5.69

%

    Net loans

10,688,759


122,636


4.59

%


9,038,667


112,277


4.97

%

    Federal Home Loan Bank stock

164,710


1,428


3.47

%


126,447


1,263


4.00

%

        Total interest-earning assets

12,515,945


132,194


4.22

%


10,764,462


122,937


4.57

%

    Non-interest earning assets

567,056





472,634




        Total assets

$

13,083,001





$

11,237,096












Interest-bearing liabilities:








    Savings

1,750,081


1,542


0.35

%


1,486,569


1,989


0.54

%

    Interest-bearing checking

1,697,260


1,622


0.38

%


1,337,777


1,649


0.49

%

    Money market accounts

1,547,331


1,655


0.43

%


1,301,734


2,072


0.64

%

    Certificates of deposit

2,816,048


7,431


1.06

%


3,214,617


10,696


1.33

%

  Interest bearing deposits

7,810,720


12,250


0.63

%


7,340,697


16,406


0.89

%

    Borrowed funds

3,063,327


15,235


1.99

%


2,261,258


14,971


2.65

%

        Total interest-bearing liabilities

10,874,047


27,485


1.01

%


9,601,955


31,377


1.31

%

Non-interest bearing liabilities

1,112,053





623,526




        Total liabilities

11,986,100





10,225,481




Stockholders' equity

1,096,901





1,011,615




        Total liabilities and stockholders'

        equity

$

13,083,001





$

11,237,096












Net interest income


$

104,709





$

91,560











Net interest rate spread



3.21

%




3.26

%









Net interest earning assets

$

1,641,898





$

1,162,507










Net interest margin



3.35

%




3.40

%









Ratio of interest-earning assets to total

interest- bearing liabilities

1.15


X



1.12


X



INVESTORS BANCORP, INC. AND SUBSIDIARIES

Average Balance Sheet and Yield/Rate Information



















For Six Months Ended



June 30, 2013


June 30, 2012



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

$

116,238


21


0.04

%


87,984


21


0.05

%

    Securities available-for-sale

1,351,731


10,735


1.59

%


1,216,302


11,945


1.96

%

    Securities held-to-maturity

187,158


5,498


5.88

%


251,424


7,004


5.57

%

    Net loans

10,527,405


242,496


4.61

%


8,977,328


222,529


4.96

%

    Federal Home Loan Bank stock

154,785


2,878


3.72

%


119,603


2,654


4.44

%

        Total interest-earning assets

12,337,317


261,628


4.24

%


10,652,641


244,153


4.58

%

Non-interest earning assets

560,521





473,150




        Total assets

$

12,897,838





$

11,125,791












Interest-bearing liabilities:








    Savings

1,744,802


3,219


0.37

%


1,447,078


3,962


0.55

%

    Interest-bearing checking

1,718,649


3,080


0.36

%


1,336,786


3,349


0.50

%

    Money market accounts

1,566,555


3,342


0.43

%


1,261,608


4,159


0.66

%

    Certificates of deposit

2,871,314


15,297


1.07

%


3,309,928


23,269


1.41

%

  Interest bearing deposits

7,901,320


24,938


0.63

%


7,355,400


34,739


0.94

%

    Borrowed funds

2,848,563


29,940


2.10

%


2,162,347


30,123


2.79

%

        Total interest-bearing liabilities

10,749,883


54,878


1.02

%


9,517,747


64,862


1.36

%

Non-interest bearing liabilities

1,062,639





611,740




        Total liabilities

11,812,522





10,129,487




Stockholders' equity

1,085,316





996,304




        Total liabilities and stockholders'

        equity

$

12,897,838





$

11,125,791












Net interest income


$

206,750





$

179,291











Net interest rate spread



3.22

%




3.22

%







Net interest earning assets

$

1,587,434





$

1,134,894












Net interest margin



3.35

%




3.37

%









Ratio of interest-earning assets to total

interest- bearing liabilities

1.15


X



1.12


X



INVESTORS BANCORP, INC. AND SUBSIDIARIES

Selected Performance Ratios














For the Three Months Ended


June 30,


2013


2012

Return on average assets

0.86

%


0.85

%

Return on average equity

10.24

%


9.48

%

Return on average tangible equity

11.26

%


10.04

%

Interest rate spread

3.21

%


3.26

%

Net interest margin

3.35

%


3.40

%

Efficiency ratio

49.80

%


43.94

%

Non-interest expense to average total assets

1.74

%


1.60

%

Average interest-earning assets to average interest-
bearing liabilities

1.15



1.12









For the Six Months Ended


June 30,


2013



2012


Return on average assets

0.86

%


0.77

%

Return on average equity

10.18

%


8.61

%

Return on average tangible equity

11.20

%


9.12

%

Interest rate spread

3.22

%


3.22

%

Net interest margin

3.35

%


3.37

%

Efficiency ratio

49.93

%


49.61

%

Non-interest expense to average total assets

1.75

%


1.79

%

Average interest-earning assets to average interest-
bearing liabilities

1.15



1.12







INVESTORS BANCORP, INC. AND SUBSIDIARIES

Selected Financial Ratios and Other Data






June 30, 2013


December 31, 2012





Asset Quality Ratios:




Non-performing assets as a percent of total assets

1.04

%


1.14

%

Non-performing loans as a percent of total loans

1.21

%


1.31

%

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

134.90

%


117.92

%

Allowance for loan losses as a percent of total loans

1.40

%


1.36

%





Capital Ratios:




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

11.18

%


11.24

%

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

9.92

%


9.98

%

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

7.40

%


7.59

%

Equity to total assets (period end)

8.21

%


8.39

%

Average equity to average assets

8.41

%


8.92

%

Tangible capital (to tangible assets)

7.52

%


7.67

%

Book value per common share

$

10.07



$

9.81






Other Data:




Number of full service offices

100



101


Full time equivalent employees

1,236



1,193






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

SOURCE Investors Bancorp, Inc.



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