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

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SHORT HILLS, N.J., July 28, 2021 /PRNewswire/ -- Investors Bancorp, Inc. (NASDAQ: ISBC) ("Company"), the holding company for Investors Bank ("Bank"), reported net income of $79.8 million, or $0.34 per diluted share, for the three months ended June 30, 2021 as compared to $72.3 million, or $0.31 per diluted share, for the three months ended March 31, 2021 and $42.6 million, or $0.18 per diluted share, for the three months ended June 30, 2020.

For the six months ended June 30, 2021, net income totaled $152.1 million, or $0.64 per diluted share, compared to $82.1 million, or $0.35 per diluted share, for the six months ended June 30, 2020.

The Company also announced today that its Board of Directors declared a cash dividend of $0.14 per share to be paid on August 25, 2021 for stockholders of record as of August 10, 2021.

Kevin Cummings, Chairman and CEO, commented, "It was an impressive quarter for the bank as we continued our solid start to 2021. Net income and diluted earnings per share for the quarter were at record highs with return on average assets at 1.22% and return on average tangible equity at 12%."

Mr. Cummings also commented, "Our net interest margin expanded by 21 basis points quarter-over-quarter to 3.11% as deposit costs continued to drop and loan prepayments rebounded nicely. It was the third straight quarter that our return on average assets was at least 1% and our return on average equity was at least 10%. In addition, our credit quality remains strong as our non-accrual loans have decreased to 0.36% of total loans from 0.59% a year ago."

Performance Highlights

  • Return on average assets and return on average equity improved to 1.22% and 11.42%, respectively, for the three months ended June 30, 2021.

  • Net interest margin increased 21 basis points to 3.11% for the three months ended June 30, 2021 compared to the three months ended March 31, 2021 driven by higher prepayment penalties and the lower cost of interest-bearing liabilities. Net interest margin excluding prepayment penalties increased 8 basis points.

  • Provision for credit losses was a negative $9.7 million for the three months ended June 30, 2021 compared with a negative $3.0 million for the three months ended March 31, 2021. The Company recorded net recoveries of $807,000 during the quarter ended June 30, 2021 compared to net recoveries of $1.7 million during the quarter ended March 31, 2021. The allowance for loan losses as a percent of total loans was 1.26% at June 30, 2021 compared to 1.36% at March 31, 2021.

  • Total non-interest income was $13.1 million for the three months ended June 30, 2021, a decrease of $6.9 million compared to the three months ended March 31, 2021 and an increase of $2.9 million compared to the three months ended June 30, 2020.

  • Total non-interest expenses were $108.4 million for the three months ended June 30, 2021, an increase of $4.1 million compared to the three months ended March 31, 2021. Included in non-interest expenses for the second quarter were $1.7 million of acquisition-related costs.

  • Non-interest-bearing deposits increased $332.5 million, or 8.7%, during the three months ended June 30, 2021. The cost of interest-bearing deposits decreased 11 basis points to 0.43% for the three months ended June 30, 2021 compared to the three months ended March 31, 2021.

  • Total loans increased $494.8 million, or 2.4%, to $21.37 billion during the three months ended June 30, 2021. Multi-family loans increased $335.6 million, or 4.6%, and C&I loans increased $124.4 million, or 3.4%, during the three months ended June 30, 2021.

  • At June 30, 2021, COVID-19 related loan deferrals totaled $599 million, or 2.8% of loans, compared to $693 million, or 3.3% of loans, as of March 31, 2021. Approximately 87% of borrowers with a loan payment deferral are making interest payments.

  • Non-accrual loans decreased to $77.6 million, or 0.36% of total loans, at June 30, 2021 as compared to $83.3 million, or 0.40% of total loans, at March 31, 2021 and $126.8 million, or 0.59% of total loans, at June 30, 2020.

  • Tier 1 Leverage, Common Equity Tier 1 Risk-Based, Tier 1 Risk-Based and Total Risk-Based Capital Ratios were 10.61%, 13.17%, 13.17% and 14.48%, respectively, at June 30, 2021.

  • During July 2021, the Company received approval from the FDIC for the previously announced purchase of Berkshire Bank's New Jersey and eastern Pennsylvania branches. The Company expects to complete the transaction in the third quarter.

Financial Performance Overview

Second Quarter 2021 compared to First Quarter 2021

For the second quarter of 2021, net income totaled $79.8 million, an increase of $7.5 million as compared to $72.3 million for the first quarter of 2021. The changes in net income on a sequential quarter basis are highlighted below.

Net interest income increased by $14.0 million, or 7.7%, as compared to the first quarter of 2021. Changes within interest income and expense categories were as follows:

  • Interest and dividend income increased $11.3 million, or 5.1%, to $231.9 million as compared to the first quarter of 2021, primarily attributable to the weighted average yield on net loans which increased 19 basis points to 4.07% including the impact of higher prepayment penalties. In addition, the average balance of net loans increased $286.3 million, mainly as a result of loan originations, partially offset by paydowns and payoffs.

  • Prepayment penalties, which are included in interest income, totaled $10.8 million for the three months ended June 30, 2021 as compared to $2.3 million for the three months ended March 31, 2021.

  • Interest expense decreased $2.7 million, primarily attributed to the weighted average cost of interest-bearing liabilities which decreased 5 basis points to 0.79% for the three months ended June 30, 2021. In addition, the average balance of interest-bearing deposits decreased $914.0 million, or 5.9%, to $14.71 billion for the three months ended June 30, 2021, while the average balance of total borrowed funds increased $584.3 million, or 17.0%, to $4.02 billion for the three months ended June 30, 2021.

Net interest margin increased 21 basis points to 3.11% for the three months ended June 30, 2021 compared to the three months ended March 31, 2021, driven primarily by higher prepayment penalties and the lower cost of interest-bearing liabilities. Excluding prepayment penalties, net interest margin increased 8 basis points for the three months ended June 30, 2021.

Total non-interest income was $13.1 million for the three months ended June 30, 2021, a decrease of $6.9 million, as compared to $20.0 million for the first quarter of 2021. The decrease in non-interest income was due primarily to a decrease of $2.5 million in gain on loans due to a lower volume of mortgage banking loan sales to third parties, a decline of $1.8 million in customer swap fee income, a decrease of $1.0 million in fees and service charges related to our mortgage servicing rights valuation, a decline of $639,000 in gains on our equipment finance portfolio and a decrease of $586,000 in PPP referral income during the three months ended June 30, 2021.

Total non-interest expenses were $108.4 million for the three months ended June 30, 2021, an increase of $4.1 million compared to the three months ended March 31, 2021. The increase was primarily driven by an increase of $2.8 million in other operating expenses and an increase of $2.1 million in professional fees. Included in non-interest expenses for the second quarter were $1.7 million of acquisition-related costs.

Income tax expense was $29.2 million for the three months ended June 30, 2021 and $27.1 million for the three months ended March 31, 2021. The effective tax rate was 26.8% for the three months ended June 30, 2021 and 27.3% for the three months ended March 31, 2021.

Second Quarter 2021 compared to Second Quarter 2020

For the second quarter of 2021, net income totaled $79.8 million, an increase of $37.2 million as compared to $42.6 million in the second quarter of 2020. The changes in net income on a year over year quarter basis are highlighted below.

On a year over year basis, second quarter of 2021 net interest income increased by $12.7 million, or 7.0%, as compared to the second quarter of 2020 due to:

  • Interest expense decreased $27.1 million, or 42.2%, primarily attributed to the weighted average cost of interest-bearing liabilities, which decreased 39 basis points to 0.79% for the three months ended June 30, 2021. In addition, the average balance of total borrowed funds decreased $1.01 billion, or 20.1%, to $4.02 billion and the average balance of interest-bearing deposits decreased $1.98 billion, or 11.9%, to $14.71 billion for the three months ended June 30, 2021.

  • Interest and dividend income decreased $14.4 million, or 5.8%, to $231.9 million, primarily attributed to the average balance of net loans which decreased $589.4 million, mainly as a result of paydowns and payoffs, offset by loan originations. In addition, the weighted average yield on securities decreased 62 basis points to 1.94% and the weighted average yield on net loans decreased 1 basis point to 4.07%.

  • Prepayment penalties, which are included in interest income, totaled $10.8 million for the three months ended June 30, 2021 as compared to $8.1 million for the three months ended June 30, 2020.

Net interest margin increased 38 basis points year over year to 3.11% for the three months ended June 30, 2021 from 2.73% for the three months ended June 30, 2020, driven primarily by the lower cost of interest-bearing liabilities.

Total non-interest income was $13.1 million for the three months ended June 30, 2021, an increase of $2.9 million year over year. The increase was due primarily to an increase of $3.5 million in fees and service charges primarily related to our mortgage servicing rights valuation and an increase of $2.1 million in income from our wealth and investment products, partially offset by a decrease of $2.3 million in gain on loans due to a lower volume of mortgage banking loan sales to third parties.

Total non-interest expenses were $108.4 million for the three months ended June 30, 2021, an increase of $8.4 million compared to the three months ended June 30, 2020. The increase was driven by an increase of $5.6 million in compensation and fringe benefit expense primarily related to medical expenses and incentive compensation. Included in non-interest expenses for the second quarter of 2021 were $1.7 million of acquisition-related costs.

Income tax expense was $29.2 million for the three months ended June 30, 2021 and $16.2 million for the three months ended June 30, 2020. The effective tax rate was 26.8% for the three months ended June 30, 2021 and 27.6% for the three months ended June 30, 2020.

Six Months Ended June 30, 2021 compared to Six Months Ended June 30, 2020

Net income increased by $70.0 million year over year to $152.1 million for the six months ended June 30, 2021. The change in net income year over year is the result of the following:

Net interest income increased by $20.2 million as compared to the six months ended June 30, 2020 due to:

  • Interest expense decreased by $70.1 million, or 47.7%, to $77.0 million for the six months ended June 30, 2021, as compared to $147.0 million for the six months ended June 30, 2020, primarily attributed to a decrease in the weighted average cost of interest-bearing liabilities of 57 basis points to 0.81% for the six months ended June 30, 2021. In addition, the average balance of total borrowed funds decreased $1.63 billion, or 30.4%, to $3.73 billion for the six months ended June 30, 2021 and the average balance of interest-bearing deposits decreased $850.8 million, or 5.3%, to $15.17 billion for the six months ended June 30, 2021.

  • Interest and dividend income decreased by $49.9 million, or 9.9%, to $452.4 million for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020, primarily attributed to the weighted average yield on net loans, which decreased 17 basis points to 3.98%, and the weighted average yield on securities, which decreased 72 basis points to 1.97%. In addition, the average balance of net loans decreased $661.7 million, mainly from paydowns and payoffs, partially offset by loan originations and $453.3 million of loans acquired from Gold Coast in April 2020.

  • Prepayment penalties, which are included in interest income, totaled $13.1 million for the six months ended June 30, 2021, as compared to $15.8 million for the six months ended June 30, 2020.

Net interest margin increased 29 basis points to 3.01% for the six months ended June 30, 2021 from 2.72% for the six months ended June 30, 2020, primarily driven by the lower cost of interest-bearing liabilities, partially offset by the lower yield on interest-earning assets.

Total non-interest income was $33.1 million for the six months ended June 30, 2021, an increase of $8.3 million as compared to the six months ended June 30, 2020. The increase in non-interest income was due primarily to an increase of $3.3 million in fees and service charges related to our mortgage servicing rights valuation, an increase of $2.8 million in income from our wealth and investment products, an increase of $1.1 million in PPP referral income and an increase of $819,000 in customer swap fee income.

Total non-interest expenses were $212.8 million for the six months ended June 30, 2021, an increase of $10.2 million compared to the year ended June 30, 2020. This increase was driven by an increase of $7.6 million in compensation and fringe benefit expense primarily related to medical expenses and incentive compensation.

Income tax expense was $56.3 million for the six months ended June 30, 2021 compared to $30.9 million for the six months ended June 30, 2020. The effective tax rate was 27.0% for the six months ended June 30, 2021 and 27.3% for the six months ended June 30, 2020.

Asset Quality

Our provision for credit losses is primarily a result of the expected credit losses on our loans, unfunded commitments and held-to-maturity debt securities over the life of these financial instruments based on historical experience, current conditions and reasonable and supportable forecasts. Our provision for credit losses is also impacted by the inherent credit risk in these financial instruments, the composition of and changes in our portfolios of these financial instruments, and the level of charge-offs. At June 30, 2021, our allowance for credit losses continues to be affected by the impact of the COVID-19 pandemic on the current and forecasted economic conditions. For the three months ended June 30, 2021, our provision for credit losses was negative $9.7 million, compared to negative $3.0 million for the three months ended March 31, 2021 and $33.3 million for the three months ended June 30, 2020. Our provision was impacted by net loan recoveries of $807,000 for the three months ended June 30, 2021, net loan recoveries of $1.7 million for the three months ended March 31, 2021 and net loan charge-offs of $4.1 million for the three months ended June 30, 2020. Our provision for credit losses was negative $12.7 million for the six months ended June 30, 2021 compared to $64.5 million for the six months ended June 30, 2020. Our provision was impacted by net loan recoveries of $2.5 million for the six months ended June 30, 2021 and net loan charge-offs of $12.1 million for the six months ended June 30, 2020.

Total non-accrual loans were $77.6 million, or 0.36% of total loans, at June 30, 2021 compared to $83.3 million, or 0.40% of total loans, at March 31, 2021 and $126.8 million, or 0.59% of total loans, at June 30, 2020. We continue to proactively and diligently work to resolve our troubled loans.

At June 30, 2021, there were $28.3 million of loans deemed as troubled debt restructured loans ("TDRs"), of which $23.4 million were residential and consumer loans, $4.5 million were commercial real estate loans and $430,000 were commercial and industrial loans. TDRs of $9.3 million were classified as accruing and $19.0 million were classified as non-accrual at June 30, 2021.

The following table sets forth non-accrual loans and accruing past due loans (excluding loans held for sale) on the dates indicated as well as certain asset quality ratios.


June 30, 2021


March 31, 2021


December 31, 2020


September 30, 2020


June 30, 2020


# 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

62



$

12.8



62



$

13.2



84



$

18.5



78



$

17.2



79



$

19.9


Construction




















Multi-family

8



16.2



10



19.2



5



7.3



5



5.3



9



24.6


Commercial real estate

2



0.5



8



11.1



8



9.5



7



4.6



9



10.6


Commercial and industrial

3



14.5



9



7.3



6



0.9



6



3.7



13



7.5


Total 30 to 59 days past due

75



44.0



89



50.8



103



36.2



96



30.8



110



62.6


60 to 89 days past due:




















Residential and consumer

22



5.0



26



3.1



28



5.2



20



4.8



30



7.5


Construction




















Multi-family

4



10.2



1



3.4







2



2.1



5



19.1


Commercial real estate





2



2.6



5



2.3



5



26.3



8



3.3


Commercial and industrial

1





1



0.2



8



3.1



6



2.2



5



1.2


Total 60 to 89 days past due

27



15.2



30



9.3



41



10.6



33



35.4



48



31.1


Total accruing past due loans

102



$

59.2



119



$

60.1



144



$

46.8



129



$

66.2



158



$

93.7


Non-accrual:




















Residential and consumer

232



$

42.8



239



$

45.7



246



$

46.4



250



$

52.2



255



$

50.6


Construction




















Multi-family

11



16.6



13



19.2



15



35.6



13



51.1



14



48.3


Commercial real estate

24



13.0



25



14.0



29



15.9



28



17.8



22



12.3


Commercial and industrial

13



5.2



15



4.4



21



9.2



19



10.9



29



15.6


Total non-accrual loans

280



$

77.6



292



$

83.3



311



$

107.1



310



$

132.0



320



$

126.8


Accruing troubled debt restructured loans

49



$

9.3



45



$

9.1



47



$

9.2



51



$

9.8



52



$

12.2


Non-accrual loans to total loans



0.36

%




0.40

%




0.51

%




0.63

%




0.59

%

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



348.05

%




340.60

%




264.17

%




217.75

%




215.48

%

Allowance for loan losses as a percent
of total loans



1.26

%




1.36

%




1.36

%




1.37

%




1.28

%

Balance Sheet Summary

Total assets increased $779.0 million, or 3.0%, to $26.80 billion at June 30, 2021 from December 31, 2020. Cash and cash equivalents increased $600.0 million to $770.4 million at June 30, 2021. Net loans increased $502.1 million, or 2.4%, to $21.08 billion at June 30, 2021. Securities decreased $309.4 million, or 7.7%, to $3.73 billion at June 30, 2021.

The detail of the loan portfolio is below:


June 30, 2021


March 31, 2021


December 31, 2020


(In thousands)

Commercial Loans:






Multi-family loans

$

7,566,131



7,230,501



7,122,840


Commercial real estate loans

4,968,393



4,997,364



4,947,212


Commercial and industrial loans

3,766,551



3,642,178



3,575,641


Construction loans

464,887



393,516



404,367


Total commercial loans

16,765,962



16,263,559



16,050,060


Residential mortgage loans

3,887,917



3,911,884



4,119,894


Consumer and other

712,147



695,793



702,801


Total loans

21,366,026



20,871,236



20,872,755


Deferred fees, premiums and other, net

(13,391)



(14,815)



(9,318)


Allowance for loan losses

(270,114)



(283,760)



(282,986)


Net loans

...

$

21,082,521



20,572,661



20,580,451


During the six months ended June 30, 2021, we originated $1.25 billion in multi-family loans, $658.8 million in residential loans, $572.4 million in commercial and industrial loans, $412.5 million in commercial real estate loans, $47.2 million in construction loans and $33.4 million in consumer and other loans. Our originations reflect our continued focus on diversifying our loan portfolio. Our loans are primarily on properties and businesses located in New Jersey and New York.

In addition to the loans originated for our portfolio, we originated residential mortgage loans for sale to third parties totaling $143.2 million during the six months ended June 30, 2021. As of June 30, 2021, all of these loans were sold and there were no loans held for sale.

The allowance for loan losses decreased by $12.9 million to $270.1 million at June 30, 2021 from $283.0 million at December 31, 2020. The decrease reflects a negative provision for loan losses of $15.4 million, partially offset by an increase of $2.5 million resulting from net recoveries. Our allowance for loan losses and related provision were affected by the improving current and forecasted economic conditions. 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 current and forecasted economic conditions over the life of our loans. At June 30, 2021, our allowance for loan losses as a percent of total loans was 1.26%, a decrease from 1.36% at December 31, 2020 which was driven by the factors noted above.

Securities decreased by $309.4 million, or 7.7%, to $3.73 billion at June 30, 2021 from $4.04 billion at December 31, 2020. This decrease was primarily a result of paydowns and sales, partially offset by purchases.

Deposits decreased by $86.5 million, or 0.4%, to $19.44 billion at June 30, 2021 from $19.53 billion at December 31, 2020 primarily driven by decreases in money market and time deposits, partially offset by an increase in checking account deposits. Checking account deposits increased $817.7 million to $10.52 billion at June 30, 2021 from $9.71 billion at December 31, 2020. Core deposits (savings, checking and money market) represented approximately 88% of our total deposit portfolio at June 30, 2021 compared to 86% at December 31, 2020.

Borrowed funds increased by $738.1 million, or 22.4%, to $4.03 billion at June 30, 2021 from $3.30 billion at December 31, 2020 to support balance sheet growth.

Stockholders' equity increased by $104.0 million to $2.81 billion at June 30, 2021 from $2.71 billion at December 31, 2020, primarily attributable to net income of $152.1 million, other comprehensive income of $17.7 million and share-based plan activity of $15.5 million for the six months ended June 30, 2021. These increases were partially offset by cash dividends of $0.28 per share totaling $69.2 million and the repurchase of 1.0 million shares of common stock for $12.0 million during the six months ended June 30, 2021. The Company remains above the FDIC's "well capitalized" standards, with a Common Equity Tier 1 Risk-Based Ratio of 13.17% at June 30, 2021.

About the Company

Investors Bancorp, Inc. is the holding company for Investors Bank, which as of June 30, 2021 operated from its corporate headquarters in Short Hills, New Jersey and 146 branches located throughout New Jersey and New York.

With today's announcement that Citizens Financial Group, Inc. ("Citizens") and Investors Bancorp Inc. have entered into a plan of merger under which Citizens will acquire all of the outstanding shares of Investors, Investors Bancorp has canceled its live conference webcast to review second quarter 2021 financial results that was scheduled for Thursday, July 29, 2021 at 11:00 am ET. Citizens will host a live conference call and webcast at 8:00 am ET on Wednesday, July 28, 2021 to discuss the transaction. To listen to the live call, please dial 844-291-5495 and enter 1199032 for the conference ID. The webcast of the conference call, along with related slides, will be accessible at http://investor.citizensbank.com. The conference call will also be available for replay beginning at 11:00 a.m. ET on July 28, 2021 through August 28, 2021. To listen to the replay dial 866-207-1041. The passcode is 6041235. The webcast replay will be available at http://investor.citizensbank.com under Events & Presentations.

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 the "Risk Factors" disclosures included in our Annual Report on Form 10-K, as supplemented in quarterly reports on Form 10-Q, 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. Further, given its ongoing and dynamic nature, it is difficult to predict what the continuing effects of the COVID-19 pandemic will have on our business and results of operations. The pandemic and related local and national economic disruption may, among other effects, continue to result in a material adverse change for the demand for our products and services; increased levels of loan delinquencies, problem assets and foreclosures; branch disruptions, unavailability of personnel and increased cybersecurity risks as employees work remotely.

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 that 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.

Non-GAAP Financial Measures

We believe that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends and financial position. We utilize these measures for internal planning and forecasting purposes. We believe that our presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting our business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

INVESTORS BANCORP, INC. AND SUBSIDIARY

Consolidated Balance Sheets








June 30,

2021


March 31,

2021


December 31,
2020


(unaudited)


(unaudited)


(audited)

Assets

(Dollars in thousands)







Cash and cash equivalents

$

770,396



173,273



170,432


Equity securities

9,698



25,727



36,000


Debt securities available-for-sale, at estimated fair value

2,544,415



2,682,938



2,758,437


Debt securities held-to-maturity, net (estimated fair value of $1,253,521,
$1,243,268 and $1,320,872 at June 30, 2021, March 31, 2021 and
December 31, 2020, respectively)

1,178,812



1,191,771



1,247,853


Loans receivable, net

21,082,521



20,572,661



20,580,451


Loans held-for-sale



1,378



30,357


Federal Home Loan Bank stock

199,826



177,351



159,829


Accrued interest receivable

78,858



81,567



79,705


Other real estate owned and other repossessed assets

5,914



6,311



7,115


Office properties and equipment, net

134,579



136,893



139,663


Operating lease right-of-use assets

200,425



195,130



199,981


Net deferred tax asset

115,946



101,993



116,805


Bank owned life insurance

226,314



225,199



223,714


Goodwill and intangible assets

109,222



110,180



109,633


Other assets

145,185



140,517



163,184


Total assets

$

26,802,111



25,822,889



26,023,159


Liabilities and Stockholders' Equity






Liabilities:






Deposits

$

19,438,966



18,991,028



19,525,419


Borrowed funds

4,033,864



3,558,324



3,295,790


Advance payments by borrowers for taxes and insurance

130,225



140,949



115,729


Operating lease liabilities

213,050



207,653



212,559


Other liabilities

171,979



154,383



163,659


Total liabilities

23,988,084



23,052,337



23,313,156


Stockholders' equity

2,814,027



2,770,552



2,710,003


Total liabilities and stockholders' equity

$

26,802,111



25,822,889



26,023,159


INVESTORS BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Operations
















For the Three Months Ended


For the Six Months Ended







June 30,

2021


March 31,

2021


June 30,

2020


June 30,

2021


June 30,

2020







(unaudited)


(unaudited)


(unaudited)


(unaudited)


(audited)







(Dollars in thousands, except per share data)

Interest and dividend income:











Loans receivable and loans held-for-sale

$

211,523



198,750



217,733



410,273



442,262



Securities:












GSE obligations

573



526



310



1,099



616




Mortgage-backed securities

14,215



15,202



20,572



29,417



43,156




Equity

63



266



32



329



65




Municipal bonds and other debt

3,456



3,539



3,276



6,995



6,651



Interest-bearing deposits

38



61



294



99



1,134



Federal Home Loan Bank stock

1,983



2,200



3,997



4,183



8,429




Total interest and dividend income

231,851



220,544



246,214



452,395



502,313


Interest expense:











Deposits


15,993



21,192



38,991



37,185



92,170



Borrowed funds

21,148



18,617



25,236



39,765



54,873




Total interest expense

37,141



39,809



64,227



76,950



147,043




Net interest income

194,710



180,735



181,987



375,445



355,270


Provision for credit losses

(9,690)



(2,972)



33,278



(12,662)



64,504




Net interest income after provision for credit
losses

204,400



183,707



148,709



388,107



290,766


Non-interest income:











Fees and service charges

4,893



5,848



1,376



10,741



7,402



Income on bank owned life insurance

1,552



1,952



1,596



3,504



2,992



Gain on loans, net

1,288



3,833



3,557



5,121



5,403



Gain on securities, net

283



651



55



934



257



(Loss) gain on sale of other real estate owned,
net

(25)



77



(89)



52



651



Other income

5,083



7,642



3,645



12,725



8,095




Total non-interest income

13,074



20,003



10,140



33,077



24,800


Non-interest expense:











Compensation and fringe benefits

61,385



62,427



55,791



123,812



116,183



Advertising and promotional expense

2,397



2,229



2,199



4,626



4,562



Office occupancy and equipment expense

17,075



18,073



16,470



35,148



32,421



Federal insurance premiums

3,200



3,400



3,400



6,600



7,801



General and administrative

545



379



593



924



1,127



Professional fees

5,042



2,929



4,306



7,971



8,289



Data processing and communication

10,192



9,136



9,908



19,328



17,700



Debt extinguishment





326





326



Other operating expenses

8,602



5,788



7,027



14,390



14,169




Total non-interest expenses

108,438



104,361



100,020



212,799



202,578




Income before income tax expense

109,036



99,349



58,829



208,385



112,988


Income tax expense

29,229



27,074



16,218



56,303



30,865




Net income

$

79,807



72,275



42,611



152,082



82,123


Basic earnings per share

$0.34


0.31



0.18



0.65



0.35


Diluted earnings per share

$0.34


0.31



0.18



0.64



0.35













Basic weighted average shares outstanding

235,045,023



234,661,847



236,248,296



234,854,494



234,755,591



Diluted weighted average shares outstanding

236,497,536



235,379,381



236,382,103



235,936,179



234,927,420


INVESTORS BANCORP, INC. AND SUBSIDIARY

Average Balance Sheet and Yield/Rate Information




For the Three Months Ended




June 30, 2021


March 31, 2021


June 30, 2020




Average
Outstanding
Balance

Interest
Earned/Paid

Weighted
Average
Yield/Rate


Average
Outstanding
Balance

Interest
Earned/Paid

Weighted
Average
Yield/Rate


Average
Outstanding
Balance

Interest
Earned/Paid

Weighted
Average
Yield/Rate




(Dollars in thousands)

Interest-earning assets:













Interest-earning cash accounts

$

264,693


38


0.06

%


$

374,599


61


0.07

%


$

1,292,904


294


0.09

%


Equity securities

13,225


63


1.91

%


35,545


266


2.99

%


6,166


32


2.08

%


Debt securities available-for-sale

2,585,131


10,587


1.64

%


2,649,806


11,268


1.70

%


2,631,028


15,627


2.38

%


Debt securities held-to-maturity

1,171,317


7,657


2.61

%


1,222,551


7,999


2.62

%


1,145,553


8,531


2.98

%


Net loans

20,777,927


211,523


4.07

%


20,491,619


198,750


3.88

%


21,367,323


217,733


4.08

%


Federal Home Loan Bank stock

194,845


1,983


4.07

%


169,354


2,200


5.20

%


247,971


3,997


6.45

%


Total interest-earning assets

25,007,138


231,851


3.71

%


24,943,474


220,544


3.54

%


26,690,945


246,214


3.69

%

Non-interest earning assets

1,121,153





1,139,817





1,125,776





Total assets


$

26,128,291





$

26,083,291





$

27,816,721


















Interest-bearing liabilities:













Savings

$

2,008,855


1,404


0.28

%


$

2,013,906


1,480


0.29

%


$

2,051,599


2,907


0.57

%


Interest-bearing checking

6,044,766


6,536


0.43

%


6,277,393


7,028


0.45

%


5,891,587


8,873


0.60

%


Money market accounts

4,365,351


4,501


0.41

%


4,695,507


7,160


0.61

%


4,345,850


9,880


0.91

%


Certificates of deposit

2,291,616


3,552


0.62

%


2,637,830


5,524


0.84

%


4,406,310


17,331


1.57

%


Total interest-bearing deposits

14,710,588


15,993


0.43

%


15,624,636


21,192


0.54

%


16,695,346


38,991


0.93

%


Borrowed funds

4,019,587


21,148


2.10

%


3,435,285


18,617


2.17

%


5,030,118


25,236


2.01

%


Total interest-bearing liabilities

18,730,175


37,141


0.79

%


19,059,921


39,809


0.84

%


21,725,464


64,227


1.18

%

Non-interest-bearing liabilities

4,603,486





4,285,410





3,458,409





Total liabilities

23,333,661





23,345,331





25,183,873




Stockholders' equity

2,794,630





2,737,960





2,632,848





Total liabilities and
stockholders' equity

$

26,128,291





$

26,083,291





$

27,816,721


















Net interest income


$

194,710





$

180,735





$

181,987

















Net interest rate spread



2.92

%




2.70

%




2.51

%















Net interest earning assets

$

6,276,963





$

5,883,553





$

4,965,481


















Net interest margin



3.11

%




2.90

%




2.73

%















Ratio of interest-earning assets to
total interest-bearing liabilities

1.34


X



1.31


X



1.23


X































INVESTORS BANCORP, INC. AND SUBSIDIARY

Average Balance Sheet and Yield/Rate Information





For the Six Months Ended




June 30, 2021


June 30, 2020




Average
Outstanding
Balance

Interest
Earned/Paid

Weighted
Average
Yield/Rate


Average
Outstanding
Balance

Interest
Earned/Paid

Weighted
Average
Yield/Rate




(Dollars in thousands)

Interest-earning assets:









Interest-earning cash accounts

$

319,342


99


0.06

%


$

830,466


1,134


0.27

%


Equity securities

24,324


329


2.71

%


6,128


65


2.12

%


Debt securities available-for-sale

2,617,290


21,855


1.67

%


2,606,451


32,898


2.52

%


Debt securities held-to-maturity

1,196,793


15,656


2.62

%


1,136,836


17,525


3.08

%


Net loans

20,635,564


410,273


3.98

%


21,297,309


442,262


4.15

%


Federal Home Loan Bank stock

182,170


4,183


4.59

%


259,507


8,429


6.50

%



Total interest-earning assets

24,975,483


452,395


3.62

%


26,136,697


502,313


3.84

%

Non-interest earning assets

1,130,432





1,041,099






Total assets

$

26,105,915





$

27,177,796














Interest-bearing liabilities:









Savings

$

2,011,367


2,884


0.29

%


$

2,042,680


6,815


0.67

%


Interest-bearing checking

6,160,437


13,564


0.44

%


5,728,476


25,533


0.89

%


Money market accounts

4,529,517


11,661


0.51

%


4,082,474


24,104


1.18

%


Certificates of deposit

2,463,766


9,076


0.74

%


4,162,221


35,718


1.72

%


Total interest bearing deposits

15,165,087


37,185


0.49

%


16,015,851


92,170


1.15

%


Borrowed funds

3,729,050


39,765


2.13

%


5,355,731


54,873


2.05

%



Total interest-bearing liabilities

18,894,137


76,950


0.81

%


21,371,582


147,043


1.38

%

Non-interest-bearing liabilities

4,445,327





3,173,754






Total liabilities

23,339,464





24,545,336




Stockholders' equity

2,766,451





2,632,460






Total liabilities and
stockholders' equity

$

26,105,915





$

27,177,796














Net interest income


$

375,445





$

355,270













Net interest rate spread



2.81

%




2.46

%











Net interest earning assets

$

6,081,346





$

4,765,115














Net interest margin



3.01

%




2.72

%











Ratio of interest-earning assets to total
interest-bearing liabilities

1.32


X



1.22


X






















INVESTORS BANCORP, INC. AND SUBSIDIARY

Selected Performance Ratios












For the Three Months Ended


For the Six Months Ended


June 30,

2021


March 31,

2021


June 30,

2020


June 30,

2021


June 30,

2020

Return on average assets

1.22

%


1.11

%


0.61

%


1.17

%


0.60

%

Return on average equity

11.42

%


10.56

%


6.47

%


10.99

%


6.24

%

Return on average tangible equity

11.89

%


11.00

%


6.76

%


11.45

%


6.50

%

Interest rate spread

2.92

%


2.70

%


2.51

%


2.81

%


2.46

%

Net interest margin

3.11

%


2.90

%


2.73

%


3.01

%


2.72

%

Efficiency ratio

52.19

%


51.99

%


52.06

%


52.09

%


53.30

%

Non-interest expense to average total assets

1.66

%


1.60

%


1.44

%


1.63

%


1.49

%

Average interest-earning assets to average
interest-bearing liabilities

1.34



1.31



1.23



1.32



1.22



INVESTORS BANCORP, INC. AND SUBSIDIARY

Selected Financial Ratios and Other Data














June 30,

2021


March 31,

2021


December 31,

2020



Asset Quality Ratios:










Non-performing assets as a percent of total assets


0.35

%


0.38

%


0.47

%



Non-performing loans as a percent of total loans


0.41

%


0.44

%


0.56

%



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


348.05

%


340.60

%


264.17

%



Allowance for loan losses as a percent of total loans


1.26

%


1.36

%


1.36

%



Allowance for credit losses as a percent of total loans (1)


1.37

%


1.44

%


1.44

%













Capital Ratios:










Tier 1 Leverage Ratio (2)



10.61

%


10.43

%


10.14

%



Common equity tier 1 risk-based (2)



13.17

%


13.32

%


13.07

%



Tier 1 Risk-Based Capital (2)



13.17

%


13.32

%


13.07

%



Total Risk-Based Capital (2)



14.48

%


14.64

%


14.39

%



Equity to total assets (period end)



10.50

%


10.73

%


10.41

%



Average equity to average assets



10.70

%


10.50

%


10.20

%



Tangible capital to tangible assets (3)



10.13

%


10.35

%


10.03

%



Book value per common share (3)



$

11.88



$

11.70



$

11.43




Tangible book value per common share (3)



$

11.42



$

11.23



$

10.97














Other Data:










Number of full service offices



146



156



156




Full time equivalent employees



1,688



1,769



1,806










(1) Allowance for credit losses includes allowance for loan losses and allowance for losses on unfunded commitments.

(2) Capital ratios as of June 30, 2021 are estimated. In accordance with regulatory capital rules, the Company elected an option to delay the estimated impact of CECL on its regulatory capital over a five-year transition period ending December 31, 2024. As a result, capital ratios as of June 30, 2021, March 31, 2021 and December 31, 2020 exclude the impact of the increased allowance for credit losses on loans, unfunded commitments and held-to-maturity debt securities attributed to the adoption of CECL.

(3) See Non-GAAP Reconciliation.

Investors Bancorp, Inc.

Non-GAAP Reconciliation

(Dollars in thousands, except share data)







Book Value and Tangible Book Value per Share Computation










June 30, 2021


March 31, 2021


December 31, 2020







Total stockholders' equity

$

2,814,027



2,770,552



2,710,003


Goodwill and intangible assets

109,222



110,180



109,633


Tangible stockholders' equity

$

2,704,805



2,660,372



2,600,370








Book Value per Share Computation






Common stock issued

361,869,872



361,869,872



361,869,872


Treasury shares

(114,268,569)



(114,221,329)



(113,940,656)


Shares outstanding

247,601,303



247,648,543



247,929,216


Unallocated ESOP shares

(10,658,204)



(10,776,629)



(10,895,052)


Book value shares

236,943,099



236,871,914



237,034,164








Book Value per Share

$

11.88



$

11.70



$

11.43


Tangible Book Value per Share

$

11.42



$

11.23



$

10.97








Total assets

$

26,802,111



25,822,889



26,023,159


Goodwill and intangible assets

109,222



110,180



109,633


Tangible assets

$

26,692,889



25,712,709



25,913,526








Tangible capital to tangible assets

10.13

%


10.35

%


10.03

%

Contact:

Marianne Wade


(973) 924-5100


investorrelations@investorsbank.com

Cision
Cision

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SOURCE Investors Bancorp, Inc.