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

SHORT HILLS, N.J., Oct. 23, 2019 /PRNewswire/ -- Investors Bancorp, Inc. (ISBC) ("Company"), the holding company for Investors Bank ("Bank"), reported net income of $52.0 million, or  $0.20 per diluted share, for the three months ended September 30, 2019 as compared to $46.6 million, or $0.18 per diluted share, for the three months ended June 30, 2019 and $54.2 million, or $0.19 per diluted share, for the three months ended September 30, 2018.

For the nine months ended September 30, 2019, net income totaled $146.8 million, or $0.55 per diluted share, compared to $169.2 million, or $0.59 per diluted share, for the nine months ended September 30, 2018.

The Company also announced today that its Board of Directors declared a cash dividend of $0.11 per share to be paid on November 25, 2019 for stockholders of record as of November 11, 2019.

Kevin Cummings, Chairman and CEO, commented, "Several positive trends contributed to our earnings results this quarter including increased net interest income, strong fee income, and improving asset quality metrics.  Net interest margin expanded 6 basis points this quarter as we benefited from stable deposit costs, our continued focus on higher yielding commercial and industrial loans, and deemphasis on lower yielding real estate loans."

Mr. Cummings also commented, "Importantly, our deposit costs appear to have reached an inflection point and stand to benefit from past and potential future rate cuts by the Federal Reserve."

Performance Highlights

  • Net interest margin increased 6 basis points to 2.53% for the three months ended September 30, 2019 compared to the three months ended June 30, 2019.
  • Total assets decreased $339.0 million, or 1.3%, to $26.73 billion at September 30, 2019 from $27.06 billion at June 30, 2019.
  • Net loans decreased $248.6 million, or 1.1%, to $21.52 billion at September 30, 2019 from $21.76 billion at June 30, 2019. Commercial and industrial loans increased $96.5 million, or 3.7%, during the three months ended September 30, 2019.
  • Total deposits increased $28.3 million, or 0.2%, to $17.67 billion at September 30, 2019 from $17.64 billion at June 30, 2019.
  • Total non-interest income was $14.8 million for the three months ended September 30, 2019, an increase of $7.8 million compared to the three months ended June 30, 2019. Excluding a $5.7 million loss on the sale of securities during the three months ended June 30, 2019, non-interest income increased $2.1 million for the three months ended September 30, 2019.
  • Total non-interest expenses were $108.7 million for the three months ended September 30, 2019, an increase of $4.9 million, or 4.7%, compared to the three months ended June 30, 2019. Included in non-interest expenses for the three months ended September 30, 2019 were $3.3 million of compensation expenses related to employee severance expense and the settlement of our shareholder litigation. In addition, professional fees increased $2.5 million due primarily to costs associated with implementing enhanced commercial treasury management and online banking products, as well as costs to improve risk management process efficiency.
  • During the three months ended September 30, 2019, the Company repurchased 2.0 million shares of its outstanding common stock for approximately $22.5 million.

Financial Performance Overview

Third Quarter 2019 compared to Second Quarter 2019

For the third quarter of 2019, net income totaled $52.0 million, an increase of $5.3 million as compared to $46.6 million for the second quarter of 2019.  The changes in net income on a sequential quarter basis are highlighted below.

Net interest income increased by $5.3 million, or 3.3%, as compared to the second quarter of 2019.  Changes within interest income and expense categories are as follows:

  • An increase in interest and dividend income of $5.5 million, or 2.1%, to $264.6 million as compared to the second quarter of 2019 primarily attributable to the weighted average yield on net loans, which increased 6 basis points to 4.27%. The average balance of net loans increased $113.4 million primarily from loan originations, offset by paydowns and payoffs.
  • Interest expense increased $202,000, primarily attributable to the average balance of interest-bearing deposits, which increased $136.8 million, or 0.9%, to $15.36 billion and the average balance of total borrowed funds, which increased $49.0 million, or 0.9%, to $5.76 billion for the three months ended September 30, 2019. The weighted average cost of interest-bearing liabilities decreased 1 basis point to 1.90% for the three months ended September 30, 2019.
  • Prepayment penalties, which are included in interest income, totaled $5.2 million for the three months ended September 30, 2019 as compared to $2.6 million for the three months ended June 30, 2019.

Net interest margin increased 6 basis points to 2.53% for the three months ended September 30, 2019 compared to the three months ended June 30, 2019, driven primarily by higher prepayment penalty fees, higher yields on interest-earning assets and lower cost of interest-bearing liabilities.

Total non-interest income was $14.8 million for the three months ended September 30, 2019, an increase of $7.8 million, as compared to $7.0 million for the second quarter of 2019.  Excluding a $5.7 million loss on the sale of securities in the second quarter, the increase in non-interest income was primarily due to a $2.0 million increase in customer swap fee income.

Total non-interest expenses were $108.7 million for the three months ended September 30, 2019, an increase of $4.9 million, or 4.7%, as compared to the second quarter of 2019.  The change was due to an increase in compensation and benefit expense of $3.7 million, of which $2.0 million was accelerated stock compensation expense related to the settlement of our shareholder litigation and $1.3 million was employee severance expense related to a workforce reduction.  In addition, professional fees increased $2.5 million due primarily to costs associated with implementing enhanced commercial treasury management and online banking products, as well as costs to improve risk management process efficiency.  Partially offsetting these increases, advertising and promotional expense decreased $1.3 million.

Income tax expense was $21.0 million for the three months ended September 30, 2019 and $18.7 million for the three months ended June 30, 2019.  The effective tax rate was 28.8% for the three months ended September 30, 2019 and 28.6% for the three months ended June 30, 2019.

Third Quarter 2019 compared to Third Quarter 2018

For the third quarter of 2019, net income totaled $52.0 million, a decrease of $2.3 million as compared to $54.2 million in the third quarter of 2018.  The changes in net income on a year over year quarter basis are highlighted below.

On a year over year basis, third quarter of 2019 net interest income decreased by $2.5 million, or 1.5%, as compared to the third quarter of 2018 due to:

  • Interest expense increased $23.0 million, or 29.8%, primarily attributable to an increase in the weighted average cost of interest-bearing liabilities of 34 basis points to 1.90% for the three months ended September 30, 2019. The average balance of interest-bearing deposits increased $457.9 million, or 3.1%, to $15.36 billion for the three months ended September 30, 2019 and the average balance of total borrowed funds increased $859.1 million, or 17.5%, to $5.76 billion.
  • An increase in interest and dividend income of $20.5 million, or 8.4%, to $264.6 million primarily as a result of a $1.08 billion increase in the average balance of net loans mainly from loan originations, offset by paydowns and payoffs. The weighted average yield on net loans increased 7 basis points to 4.27% primarily driven by higher average yields on loan originations and an increase in prepayment penalties. In addition, the weighted average yield on securities increased 50 basis points to 2.96%.
  • Prepayment penalties, which are included in interest income, totaled $5.2 million for the three months ended September 30, 2019 as compared to $4.6 million for the three months ended September 30, 2018.

Net interest margin decreased 16 basis points year over year to 2.53% for the three months ended September 30, 2019 from 2.69% for the three months ended September 30, 2018, primarily driven by the higher cost of interest-bearing liabilities, partially offset by higher yields on interest-earning assets.

Total non-interest income was $14.8 million for the three months ended September 30, 2019, an increase of $4.5 million, or 43.7%, year over year.  This increase was primarily due to an increase of $2.5 million in other income attributed to customer swap fee income and an increase of $1.2 million in gain on loans.

Total non-interest expenses were $108.7 million for the three months ended September 30, 2019, an increase of $6.9 million, or 6.8%, year over year.  The increase was due to an increase of $4.3 million in compensation and benefit expense, of which $2.0 million was accelerated stock compensation expense related to the settlement of our shareholder litigation and $1.3 million was employee severance expense related to a workforce reduction.  In addition, professional fees increased $2.4 million due primarily to costs associated with implementing enhanced commercial treasury management and online banking products, as well as costs to improve risk management process efficiency.

Income tax expense was $21.0 million for the three months ended September 30, 2019 and $19.2 million for the three months ended September 30, 2018.  The effective tax rate was 28.8% for the three months ended September 30, 2019 and 26.2% for the three months ended September 30, 2018.  The increase in the tax rate is primarily related to the change in New Jersey state tax law.

Nine Months Ended September 30, 2019 compared to Nine Months Ended September 30, 2018

Net income decreased by $22.5 million year over year to $146.8 million for the nine months ended September 30, 2019.  The change in net income year over year is the result of the following:

Net interest income decreased by $24.4 million as compared to the nine months ended September 30, 2018 due to:

  • Interest expense increased by $90.3 million, or 44.4%, to $293.5 million for the nine months ended September 30, 2019, as compared to $203.3 million for the nine months ended September 30, 2018, primarily attributable to an increase in the weighted average cost of interest-bearing liabilities of 48 basis points to 1.87% for the nine months ended September 30, 2019. The average balance of total borrowed funds increased $690.4 million, or 14.2%, to $5.57 billion for the nine months ended September 30, 2019 and the average balance of interest-bearing deposits increased $644.4 million, or 4.4%, to $15.33 billion.
  • Total interest and dividend income increased by $65.8 million, or 9.2%, to $779.8 million for the nine months ended September 30, 2019 as compared to the nine months ended September 30, 2018, primarily attributed to a $1.26 billion increase in the average balance of net loans primarily from loan originations, offset by paydowns and payoffs. The weighted average yield on net loans increased 7 basis points to 4.22% primarily driven by higher average yields on new loan origination volume, partially offset by a decrease in prepayment penalties. In addition, the weighted average yield on securities increased 49 basis points to 2.91%.
  • Prepayment penalties, which are included in interest income, totaled $11.4 million for the nine months ended September 30, 2019, as compared to $15.4 million for the nine months ended September 30, 2018.

Net interest margin decreased 26 basis points to 2.52% for the nine months ended September 30, 2019 from 2.78% for the nine months ended September 30, 2018, primarily driven by the higher cost of interest-bearing liabilities, partially offset by higher yields on interest-earning assets.

Total non-interest income was $33.0 million for the nine months ended September 30, 2019, an increase of $2.1 million, or 6.7%, as compared to the nine months ended September 30, 2018.  The increase is primarily due to an increase of $5.4 million in other income primarily attributed to customer swaps, a sale-leaseback transaction and non-depository investment products.  In addition, gain on loans, fees and service charges, income on bank owned life insurance and gain on the sale of other real estate owned increased $1.7 million, $591,000, $524,000 and $513,000, respectively.  These increases were partially offset by a decrease of $6.7 million in non-interest income on securities primarily resulting from a $5.7 million loss on the sale of securities during the second quarter of 2019.

Total non-interest expenses were $315.9 million for the nine months ended September 30, 2019, an increase of $10.5 million, or 3.4%, as compared to the nine months ended September 30, 2018.  This increase is due to an increase of $5.3 million in compensation and fringe benefit expense, an increase of $3.7 million in data processing and communication expense, an increase of $2.6 million in other non-interest expense and an increase of $1.8 million in advertising and promotional expense.  These increases were partially offset by a decrease of $4.1 million in federal insurance premiums.

Income tax expense was $59.1 million for the nine months ended September 30, 2019 compared to $58.4 million for the nine months ended September 30, 2018.  The effective tax rate was 28.7% for the nine months ended September 30, 2019 and 25.6% for the nine months ended September 30, 2018. The increase in the tax rate is primarily related to the change in New Jersey state tax law.

Asset Quality

Our provision for loan losses is primarily a result of the inherent credit risk in our overall portfolio, the growth and composition of the loan portfolio, and the level of non-accrual loans and charge-offs.  At September 30, 2019, our allowance for loan losses and related year-to-date provision were impacted by improved credit quality, including the level of non-accrual loans and charge-offs/recoveries, and modest loan growth.  For the three months ended September 30, 2019, our provision for loan losses was a $2.5 million reduction to the allowance for loan losses, compared to a reduction to the allowance for loan losses of $3.0 million for the three months ended June 30, 2019 and an addition to the allowance for loan losses of $2.0 million for the three months ended September 30, 2018.  For the three months ended September 30, 2019, net charge-offs were $1.5 million compared to net recoveries of $221,000 for the three months ended June 30, 2019 and net charge-offs of $2.0 million for the three months ended September 30, 2018.  Our provision was a $2.5 million reduction to the allowance for loan losses for the nine months ended September 30, 2019 and an $8.5 million addition to the allowance for the nine months ended September 30, 2018.  For the nine months ended September 30, 2019, net charge-offs were $5.3 million compared to $8.7 million for the nine months ended September 30, 2018.

Our accruing past due loans and non-accrual loans discussed below exclude certain purchased credit impaired ("PCI") loans, primarily consisting of loans recorded in the Company's acquisitions.  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 the Bank.

Total non-accrual loans were $92.1 million, or 0.42% of total loans, at September 30, 2019 compared to $111.6 million, or 0.51% of total loans, at June 30, 2019 and $124.9 million, or 0.58% of total loans, at December 31, 2018.  We continue to proactively and diligently work to resolve our troubled loans.

At September 30, 2019, there were $37.3 million of loans deemed as troubled debt restructured loans ("TDRs"), of which $27.8 million were residential and consumer loans, $6.9 million were commercial and industrial loans and $2.6 million were commercial real estate loans.  TDRs of $12.5 million were classified as accruing and $24.8 million were classified as non-accrual at September 30, 2019.

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



September 30, 2019


June 30, 2019


March 31, 2019


December 31, 2018


September 30, 2018


# 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

89



$

17.6



104



$

20.9



113



$

24.8



97



$

20.2



99



$

21.3


Construction













3



9.2






Multi-family

9



16.0



7



12.0



11



29.6



6



23.1



11



12.4


Commercial real estate

7



17.8



5



26.6



4



4.5



7



5.5



8



15.3


Commercial and industrial

9



5.9



5



1.1



15



11.3



9



2.1



14



5.0


Total 30 to 59 days past due

114



57.3



121



60.6



143



70.2



122



60.1



132



54.0


60 to 89 days past due:




















Residential and consumer

46



11.6



30



5.5



37



7.1



37



9.2



34



5.2


Construction

















3



9.3


Multi-family

2



3.5



2



17.2



1



1.1



1



2.6



10



36.7


Commercial real estate

3



3.2



4



6.9







1



3.4



4



4.2


Commercial and industrial

5



4.7



4



4.1



7



3.8



5



0.9



4



5.4


Total 60 to 89 days past due

56



23.0



40



33.7



45



12.0



44



16.1



55



60.8


Total accruing past due loans

170



$

80.3



161



$

94.3



188



$

82.2



166



$

76.2



187



$

114.8


Non-accrual:




















Residential and consumer

261



$

48.2



275



$

51.2



296



$

56.4



320



$

59.0



347



$

66.3


Construction





1



0.2



1



0.2



1



0.2



1



0.2


Multi-family

6



19.6



14



34.1



14



34.1



15



33.9



3



2.6


Commercial real estate

30



12.3



27



8.1



32



9.8



35



12.4



39



15.5


Commercial and industrial

16



12.0



13



18.0



14



17.2



14



19.4



14



19.8


Total non-accrual loans

313



$

92.1



330



$

111.6



357



$

117.7



385



$

124.9



404



$

104.4


Accruing troubled debt
restructured loans

58



$

12.5



56



$

12.2



54



$

13.6



54



$

13.6



59



$

13.2


Non-accrual loans to total loans



0.42

%




0.51

%




0.54

%




0.58

%




0.50

%

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



247.62

%




207.83

%




199.44

%




188.78

%




221.06

%

Allowance for loan losses as a
percent of total loans



1.05

%




1.05

%




1.08

%




1.09

%




1.10

%


Balance Sheet Summary

Total assets increased $496.2 million, or 1.9%, to $26.73 billion at September 30, 2019 from December 31, 2018.  Net loans increased $138.1 million, or 0.6%, to $21.52 billion at September 30, 2019.  Securities increased $84.7 million, or 2.3%, to $3.77 billion at September 30, 2019.

Effective January 1, 2019, the Company adopted new accounting guidance that requires leases to be recognized on our Consolidated Balance Sheet as a right-of-use asset and a lease liability.  Our operating lease right-of-use assets and operating lease liabilities were $179.6 million and $189.9 million, respectively, at September 30, 2019.

The detail of the loan portfolio (including PCI loans) is below:


September 30, 2019


June 30, 2019


December 31, 2018


(In thousands)

Commercial Loans:






Multi-family loans

$

7,995,095



8,156,766



8,165,187


Commercial real estate loans

4,771,928



4,897,466



4,786,825


Commercial and industrial loans

2,681,577



2,585,069



2,389,756


Construction loans

289,857



252,628



227,015


Total commercial loans

15,738,457



15,891,929



15,568,783


Residential mortgage loans

5,307,412



5,408,686



5,351,115


Consumer and other

700,341



699,972



707,866


Total Loans

21,746,210



22,000,587



21,627,764


Deferred fees, premiums and other, net

(1,991)



(3,770)



(13,811)


Allowance for loan losses

(227,985)



(231,937)



(235,817)


Net loans

$

21,516,234



21,764,880



21,378,136


 

During the nine months ended September 30, 2019, we originated $794.3 million in commercial and industrial loans, $634.1 million in multi-family loans, $461.3 million in commercial real estate loans, $355.2 million in residential loans, $61.0 million in consumer and other loans and $27.6 million in construction loans.  The growth in the loan portfolio reflects our continued focus on growing and diversifying our loan portfolio.  Our loans are primarily on properties and businesses located in New Jersey and New York.

We also purchase 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 nine months ended September 30, 2019, we purchased loans totaling $258.0 million from these entities.  In addition to the loans originated for our portfolio, we originated residential mortgage loans for sale to third parties totaling $160.3 million during the nine months ended September 30, 2019.

The allowance for loan losses decreased by $7.8 million to $228.0 million at September 30, 2019 from $235.8 million at December 31, 2018.  Our allowance for loan losses was positively impacted by improved credit quality, including the level of non-accrual loans and charge-offs/recoveries, and modest loan growth.  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 economic conditions in our lending area.  At September 30, 2019 and June 30, 2019, our allowance for loan losses as a percent of total loans was 1.05%, a decrease from 1.09% at December 31, 2018 which was driven by the factors noted above.

Securities increased by $84.7 million, or 2.3%, to $3.77 billion at September 30, 2019 from $3.68 billion at December 31, 2018.  This increase was primarily a result of purchases, partially offset by sales and paydowns.

Deposits increased by $92.5 million, or 0.5%, from $17.58 billion at December 31, 2018 to $17.67 billion at September 30, 2019 primarily driven by increases in interest-bearing checking and money market accounts, partially offset by decreases in non-interest checking, savings and time deposit accounts.  Checking accounts increased $216.7 million to $7.54 billion at September 30, 2019 from $7.32 billion at December 31, 2018.  Core deposits (savings, checking and money market) represented approximately 75% of our total deposit portfolio at September 30, 2019 compared to 74% at December 31, 2018.

Borrowed funds increased by $258.9 million, or 4.8%, to $5.69 billion at September 30, 2019 from $5.44 billion at December 31, 2018 to help fund the growth of the loan portfolio.

Stockholders' equity decreased by $74.0 million to $2.93 billion at September 30, 2019 from $3.01 billion at December 31, 2018, primarily attributed to the repurchase of 12.0 million shares of common stock for $140.2 million and cash dividends of $0.33 per share totaling $91.9 million during the nine months ended September 30, 2019.  These decreases were partially offset by net income of $146.8 million and share-based plan activity of $20.8 million for the nine months ended September 30, 2019.  The Bank remains above FDIC "well capitalized" standards, with a Tier 1 Leverage Ratio of 9.68% at September 30, 2019.

About the Company

Investors Bancorp, Inc. is the holding company for Investors Bank, which as of September 30, 2019 operated from its corporate headquarters in Short Hills, New Jersey and 147 branches located throughout New Jersey and New York.

Earnings Conference Call October 24, 2019 at 11:00 a.m. (ET)

The Company, as previously announced, will host an earnings conference call on Thursday, October 24, 2019 at 11:00 a.m. (ET).  The toll-free dial-in number is: (866) 218-2404.  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 invitation for the event.

Conference Call Pre-registration link: http://dpregister.com/10135533

A telephone replay will be available beginning on October 24, 2019 from 1:00 p.m. (ET) through 9:00 a.m. (ET) on January 24, 2020.  The replay number is (877) 344-7529, password 10135533.  The conference call will also be simultaneously webcast on the Company's website www.investorsbank.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 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.

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








September 30,
2019


June 30,
2019


December 31,
2018


(unaudited)


(unaudited)


(audited)

Assets

(Dollars in thousands)







Cash and cash equivalents

$

195,400



254,382



196,891


Equity securities

6,030



5,975



5,793


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

2,644,024



2,679,708



2,122,162


Debt securities held-to-maturity, net (estimated fair value of $1,158,769,
$1,174,483 and $1,558,564 at September 30, 2019, June 30, 2019 and

December 31, 2018, respectively)

1,117,699



1,132,018



1,555,137


Loans receivable, net

21,516,234



21,764,880



21,378,136


Loans held-for-sale

31,373



16,411



4,074


Federal Home Loan Bank stock

273,996



294,155



260,234


Accrued interest receivable

83,951



83,015



77,501


Other real estate owned and other repossessed assets

12,675



7,097



6,911


Office properties and equipment, net

171,266



174,663



177,432


Operating lease right-of-use assets

179,632



184,215




Net deferred tax asset

108,634



106,208



104,411


Bank owned life insurance

216,925



215,032



211,914


Goodwill and intangible assets

97,566



97,997



99,063


Other assets

69,758



48,360



29,349


Total assets

$

26,725,163



27,064,116



26,229,008


Liabilities and Stockholders' Equity






Liabilities:






Deposits

$

17,672,756



17,644,471



17,580,269


Borrowed funds

5,694,553



6,083,737



5,435,681


Advance payments by borrowers for taxes and insurance

147,359



125,521



129,891


Operating lease liabilities

189,927



194,233




Other liabilities

89,201



89,279



77,837


Total liabilities

23,793,796



24,137,241



23,223,678


Stockholders' equity

2,931,367



2,926,875



3,005,330


Total liabilities and stockholders' equity

$

26,725,163



27,064,116



26,229,008


 


INVESTORS BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Operations
















For the Three Months Ended


For the Nine Months Ended







September 30,
2019


June 30,
2019


September 30,
2018


September 30,
2019


September 30,
2018







(unaudited)


(unaudited)


(unaudited)


(unaudited)


(unaudited)







(Dollars in thousands, except per share data)

Interest and dividend income:











Loans receivable and loans held-for-sale

$

231,734



227,462



216,516



684,086



633,029



Securities:












GSE obligations

343



267



266



876



813




Mortgage-backed securities

23,978



23,883



19,624



71,491



59,279




Equity

36



35



32



108



100




Municipal bonds and other debt

3,186



2,734



2,615



8,442



7,305



Interest-bearing deposits

821



609



677



1,965



1,541



Federal Home Loan Bank stock

4,456



4,078



4,296



12,871



11,928




Total interest and dividend income

264,554



259,068



244,026



779,839



713,995


Interest expense:











Deposits


67,972



67,828



51,923



201,222



130,366



Borrowed funds

32,130



32,072



25,177



92,319



72,918




Total interest expense

100,102



99,900



77,100



293,541



203,284




Net interest income

164,452



159,168



166,926



486,298



510,711


Provision for loan losses

(2,500)



(3,000)



2,000



(2,500)



8,500




Net interest income after provision for loan
losses

166,952



162,168



164,926



488,798



502,211


Non-interest income:











Fees and service charges

5,796



5,654



5,506



16,785



16,194



Income on bank owned life insurance

1,832



1,540



1,596



4,949



4,425



Gain on loans, net

1,679



1,015



478



3,127



1,398



Gain (loss) on securities, net

30



(5,617)



97



(5,523)



1,198



Gain on sales of other real estate owned, net

358



281



13



863



350



Other income

5,085



4,108



2,597



12,754



7,310




Total non-interest income

14,780



6,981



10,287



32,955



30,875


Non-interest expense:











Compensation and fringe benefits

63,603



59,854



59,279



184,455



179,139



Advertising and promotional expense

2,994



4,282



3,229



10,888



9,123



Office occupancy and equipment expense

15,702



15,423



15,151



47,296



46,446



Federal insurance premiums

3,300



3,300



4,935



9,900



13,960



General and administrative

487



692



509



1,663



1,702



Professional fees

6,010



3,461



3,578



12,411



11,781



Data processing and communication

8,348



7,642



7,090



23,989



20,319



Other operating expenses

8,274



9,150



8,017



25,329



22,987




Total non-interest expenses

108,718



103,804



101,788



315,931



305,457




Income before income tax expense

73,014



65,345



73,425



205,822



227,629


Income tax expense

21,042



18,721



19,201



59,068



58,383




Net income

$

51,972



46,624



54,224



146,754



169,246


Basic earnings per share

$0.20


0.18



0.19



0.56



0.60


Diluted earnings per share

$0.20


0.18



0.19



0.55



0.59













Basic weighted average shares outstanding

261,678,994



263,035,892



280,755,898



264,104,402



284,289,363



Diluted weighted average shares outstanding

261,812,970



263,477,477



281,172,921



264,422,265



285,376,003



 

INVESTORS BANCORP, INC. AND SUBSIDIARY

Average Balance Sheet and Yield/Rate Information




For the Three Months Ended




September 30, 2019


June 30, 2019


September 30, 2018




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

$

224,882


821


1.46

%


$

179,572


609


1.36

%


$

227,346


677


1.19

%


Equity securities

6,001


36


2.40

%


5,902


35


2.37

%


5,802


32


2.21

%


Debt securities available-for-sale

2,591,055


18,167


2.80

%


2,244,900


16,218


2.89

%


2,015,096


11,122


2.21

%


Debt securities held-to-maturity

1,131,194


9,340


3.30

%


1,480,400


10,666


2.88

%


1,638,722


11,383


2.78

%


Net loans

21,722,751


231,734


4.27

%


21,609,361


227,462


4.21

%


20,644,566


216,516


4.20

%


Federal Home Loan Bank stock

279,356


4,456


6.38

%


281,548


4,078


5.79

%


246,037


4,296


6.98

%


Total interest-earning assets

25,955,239


264,554


4.08

%


25,801,683


259,068


4.02

%


24,777,569


244,026


3.94

%

Non-interest earning assets

992,118





956,909





708,904





Total assets


$

26,947,357





$

26,758,592





$

25,486,473


















Interest-bearing liabilities:













Savings

$

1,958,748


4,377


0.89

%


$

1,901,506


3,809


0.80

%


$

2,142,642


3,462


0.65

%


Interest-bearing checking

4,894,643


21,094


1.72

%


4,867,288


22,119


1.82

%


4,449,767


15,736


1.41

%


Money market accounts

3,750,846


16,065


1.71

%


3,691,258


15,815


1.71

%


3,747,501


13,043


1.39

%


Certificates of deposit

4,756,086


26,436


2.22

%


4,763,516


26,085


2.19

%


4,562,549


19,682


1.73

%


 Total interest-bearing deposits

15,360,323


67,972


1.77

%


15,223,568


67,828


1.78

%


14,902,459


51,923


1.39

%


Borrowed funds

5,756,197


32,130


2.23

%


5,707,174


32,072


2.25

%


4,897,119


25,177


2.06

%


Total interest-bearing liabilities

21,116,520


100,102


1.90

%


20,930,742


99,900


1.91

%


19,799,578


77,100


1.56

%

Non-interest-bearing liabilities

2,892,067





2,883,230





2,610,074





Total liabilities

24,008,587





23,813,972





22,409,652




Stockholders' equity

2,938,770





2,944,620





3,076,821





Total liabilities and
stockholders' equity

$

26,947,357





$

26,758,592





$

25,486,473


















Net interest income


$

164,452





$

159,168





$

166,926

















Net interest rate spread



2.18

%




2.11

%




2.38

%















Net interest earning assets

$

4,838,719





$

4,870,941





$

4,977,991


















Net interest margin



2.53

%




2.47

%




2.69

%















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

1.23


X



1.23


X



1.25


X
































 

INVESTORS BANCORP, INC. AND SUBSIDIARY

Average Balance Sheet and Yield/Rate Information





For the Nine Months Ended




September 30, 2019


September 30, 2018




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

$

193,427


1,965


1.35

%


$

201,743


1,541


1.02

%


Equity securities

5,905


108


2.44

%


5,740


100


2.32

%


Debt securities available-for-sale

2,317,685


49,801


2.86

%


2,008,724


32,803


2.18

%


Debt securities held-to-maturity

1,379,982


31,008


3.00

%


1,696,718


34,594


2.72

%


Net loans

21,596,000


684,086


4.22

%


20,337,264


633,029


4.15

%


Federal Home Loan Bank stock

273,885


12,871


6.27

%


246,858


11,928


6.44

%



Total interest-earning assets

25,766,884


779,839


4.04

%


24,497,047


713,995


3.89

%

Non-interest earning assets

964,031





716,163






Total assets

$

26,730,915





$

25,213,210














Interest-bearing liabilities:









Savings

$

1,966,427


12,556


0.85

%


$

2,206,307


9,705


0.59

%


Interest-bearing checking

4,912,085


65,295


1.77

%


4,581,974


43,372


1.26

%


Money market accounts

3,691,378


46,126


1.67

%


3,897,632


32,832


1.12

%


Certificates of deposit

4,757,446


77,245


2.16

%


3,997,059


44,457


1.48

%


 Total interest bearing deposits

15,327,336


201,222


1.75

%


14,682,972


130,366


1.18

%


Borrowed funds

5,566,273


92,319


2.21

%


4,875,857


72,918


1.99

%



Total interest-bearing liabilities

20,893,609


293,541


1.87

%


19,558,829


203,284


1.39

%

Non-interest-bearing liabilities

2,881,242





2,551,722






Total liabilities

23,774,851





22,110,551




Stockholders' equity

2,956,064





3,102,659






Total liabilities and stockholders'
equity

$

26,730,915





$

25,213,210














Net interest income


$

486,298





$

510,711













Net interest rate spread



2.17

%




2.50

%











Net interest earning assets

$

4,873,275





$

4,938,218














Net interest margin



2.52

%




2.78

%











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

1.23


X



1.25


X






















 


INVESTORS BANCORP, INC. AND SUBSIDIARY

Selected Performance Ratios












For the Three Months Ended


For the Nine Months Ended


September 30,
2019


June 30,
2019


September 30,
2018


September 30,
2019


September 30,
2018

Return on average assets

0.77

%


0.70

%


0.85

%


0.73

%


0.90

%

Return on average equity

7.07

%


6.33

%


7.05

%


6.62

%


7.27

%

Return on average tangible equity

7.32

%


6.55

%


7.29

%


6.85

%


7.52

%

Interest rate spread

2.18

%


2.11

%


2.38

%


2.17

%


2.50

%

Net interest margin

2.53

%


2.47

%


2.69

%


2.52

%


2.78

%

Efficiency ratio

60.66

%


62.48

%


57.44

%


60.84

%


56.40

%

Non-interest expense to average total assets

1.61

%


1.55

%


1.60

%


1.58

%


1.62

%

Average interest-earning assets to average
interest-bearing liabilities

1.23



1.23



1.25



1.23



1.25





INVESTORS BANCORP, INC. AND SUBSIDIARY

Selected Financial Ratios and Other Data














September 30,
2019


June 30,
2019


December 31,
2018



Asset Quality Ratios:










Non-performing assets as a percent of total assets


0.44

%


0.48

%


0.55

%



Non-performing loans as a percent of total loans


0.48

%


0.56

%


0.64

%



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


247.62

%


207.83

%


188.78

%



Allowance for loan losses as a percent of total loans


1.05

%


1.05

%


1.09

%













Capital Ratios:










Tier 1 Leverage Ratio (2)



9.68

%


9.70

%


10.28

%



Common equity tier 1 risk-based (2)



12.95

%


12.69

%


13.41

%



Tier 1 Risk-Based Capital (2)



12.95

%


12.69

%


13.41

%



Total Risk-Based Capital (2)



14.10

%


13.84

%


14.60

%



Equity to total assets (period end)



10.97

%


10.81

%


11.46

%



Average equity to average assets



10.91

%


11.00

%


11.71

%



Tangible capital to tangible assets (1)



10.64

%


10.49

%


11.12

%



Book value per common share (1)



$

11.13



$

11.04



$

10.95




Tangible book value per common share (1)



$

10.76



$

10.67



$

10.59














Other Data:










Number of full service offices



147



147



151




Full time equivalent employees



1,887



1,962



1,928









(1) See Non-GAAP Reconciliation.



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




 

Investors Bancorp, Inc.

Non-GAAP Reconciliation

(Dollars in thousands, except share data)







Book Value and Tangible Book Value per Share Computation










September 30, 2019


June 30, 2019


December 31, 2018







Total stockholders' equity

$

2,931,367



2,926,875



3,005,330


Goodwill and intangible assets

97,566



97,997



99,063


Tangible stockholders' equity

$

2,833,801



2,828,878



2,906,267








Book Value per Share Computation






Common stock issued

359,070,852



359,070,852



359,070,852


Treasury shares

(84,314,431)



(82,250,311)



(72,797,738)


Shares outstanding

274,756,421



276,820,541



286,273,114


Unallocated ESOP shares

(11,487,175)



(11,605,600)



(11,842,448)


Book value shares

263,269,246



265,214,941



274,430,666








Book Value per Share

$

11.13



$

11.04



$

10.95


Tangible Book Value per Share

$

10.76



$

10.67



$

10.59








Total assets

$

26,725,163



27,064,116



26,229,008


Goodwill and intangible assets

97,566



97,997



99,063


Tangible assets

$

26,627,597



26,966,119



26,129,945








Tangible capital to tangible assets

10.64

%


10.49

%


11.12

%


 

 

Contact:   

Marianne Wade                      


(973) 924-5100            


investorrelations@investorsbank.com

 

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