Exhibit 99.1

image0a23.jpg

101 JFK Parkway, Short Hills, NJ 07078
news release
         Contact: Marianne Wade
(973) 924-5100
investorrelations@investorsbank.com


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

Short Hills, N.J. - (PR NEWSWIRE) - October 25, 2018 - Investors Bancorp, Inc. (NASDAQ:ISBC) (“Company”), the holding company for Investors Bank (“Bank”), reported net income of $54.2 million, or $0.19 per diluted share, for the three months ended September 30, 2018 compared to $57.1 million, or $0.20 per diluted share, for the three months ended June 30, 2018 and $45.8 million, or $0.16 per diluted share, for the three months ended September 30, 2017.  

For the nine months ended September 30, 2018, net income totaled $169.2 million, or $0.59 per diluted share, compared to $131.5 million, or $0.45 per diluted share, for the nine months ended September 30, 2017.

The Company announced today that its Board of Directors approved the Company’s fourth share repurchase program which authorizes the repurchase of an additional 10% of the Company’s outstanding shares of common stock, or approximately 29 million shares. The new repurchase program will commence immediately upon completion of the third repurchase plan announced in April 2016. In addition, the Company’s Board of Directors declared a cash dividend of $0.11 per share to be paid on November 23, 2018 for stockholders of record as of November 9, 2018, representing a 22% increase from the prior quarter.

Kevin Cummings, Chairman and CEO, commented, “Our year over year quarterly earnings per share grew 19% to $0.19 per share. In an environment of rising funding costs, we continue to grow and diversify our loan portfolio, prioritize efforts to grow core deposits and control expenses.”

Mr. Cummings also commented, “We remain committed to our efficient management of capital, evidenced by our repurchase of almost 7 million shares this quarter, an increase in our dividend to $0.11 per share and our new share repurchase plan.”

Performance Highlights
Total assets increased $153.6 million, or 0.6%, to $25.52 billion at September 30, 2018 from $25.36 billion at June 30, 2018.

1


Net loans increased $191.8 million, or 0.9%, to $20.73 billion at September 30, 2018 from $20.54 billion at June 30, 2018.
Total deposits increased $480.4 million, or 2.8%, to $17.40 billion at September 30, 2018 from $16.92 billion at June 30, 2018.
Non-interest income for the three months ended September 30, 2018 was $10.3 million, a 22.5% increase compared to the three months ended September 30, 2017.
Non-interest expense for the three months ended September 30, 2018 was $101.8 million, a 1.4% decrease compared to the three months ended September 30, 2017.
During the three months ended September 30, 2018, the Company repurchased 6.9 million shares of its outstanding common stock for approximately $88.0 million.
In August 2018, the Company entered into a $1.0 billion asset swap transaction where fixed rate loan payments were exchanged for variable rate payments. This transaction was executed in an effort to reduce the Company’s interest rate exposure to rising rates.

Financial Performance Overview
Third Quarter 2018 compared to Second Quarter 2018
For the third quarter of 2018, net income totaled $54.2 million, a decrease of $2.9 million as compared to $57.1 million for the second quarter of 2018. The changes in net income on a sequential quarter basis are highlighted below.

Net interest income decreased by $4.4 million, or 2.6%, as compared to the second quarter of 2018. Changes within interest income and expense categories are as follows:
Interest expense increased $10.0 million, primarily attributable to the weighted average cost of interest-bearing liabilities which increased 19 basis points to 1.56% for the three months ended September 30, 2018. Also contributing to the increase, the average balance of total interest-bearing liabilities increased $229.6 million, or 1.2%, to $19.80 billion.
An increase in interest and dividend income of $5.6 million, or 2.4%, to $244.0 million as compared to the second quarter of 2018 primarily attributed to a $295.7 million 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 4 basis points to 4.20%, predominately driven by higher average yields on new loan originations.
Prepayment penalties, which are included in interest income, totaled $4.6 million for the three months ended September 30, 2018 as compared to $5.6 million for the three months ended June 30, 2018.

Net interest margin decreased 11 basis points to 2.69% for the three months ended September 30, 2018 compared to the three months ended June 30, 2018, primarily driven by the higher costs of interest-bearing liabilities. In August 2018, the Company entered into a $1.0 billion asset swap transaction where fixed rate loan payments were exchanged for variable rate payments. This transaction was executed in an effort to reduce the Company’s interest rate exposure to rising rates. For the three months ended September 30, 2018, this transaction negatively impacted net interest margin and yield on loans by approximately 2 basis points. The decline in prepayment penalties in the third quarter also negatively impacted net interest margin by approximately 2 basis points.


2



Total non-interest income was $10.3 million for the three months ended September 30, 2018, a decrease of $1.2 million, or 10.4%, as compared to the three months ended June 30, 2018, primarily driven by a decrease in gain on securities of $1.1 million.

Total non-interest expenses were $101.8 million for the three months ended September 30, 2018, a decrease of $796,000, or 0.8%, as compared to the second quarter of 2018. For the three months ended September 30, 2018, compensation and fringe benefits decreased $1.5 million and advertising and promotional expense decreased $578,000. These decreases were partially offset by other non-interest expense which increased $881,000.

Income tax expense was $19.2 million for the three months ended September 30, 2018 and $19.1 million for the three months ended June 30, 2018. The effective tax rate was 26.2% for the three months ended September 30, 2018 and 25.1% for the three months ended June 30, 2018.

On July 1, 2018, the State of New Jersey enacted new legislation that created a temporary surtax effective for tax years 2018 through 2021 and will require companies to file combined tax returns beginning in 2019. The new legislation did not result in a material change to our net deferred tax asset or state tax expense for the three months ended September 30, 2018.

Third Quarter 2018 compared to Third Quarter 2017
For the third quarter of 2018, net income totaled $54.2 million, an increase of $8.4 million as compared to $45.8 million in the third quarter of 2017. The changes in net income on a year over year quarter basis are highlighted below.

On a year over year basis, third quarter of 2018 net interest income decreased by $4.0 million, or 2.3%, as compared to the third quarter of 2017 due to:
Interest expense increased $22.2 million, or 40.6%, primarily attributed to an increase in the weighted average cost of interest-bearing liabilities of 40 basis points to 1.56% for the three months ended September 30, 2018. Additionally, the average balance of interest-bearing deposits increased $601.1 million, or 4.2%, to $14.90 billion for the three months ended September 30, 2018 and the average balance of total borrowed funds increased $263.5 million, or 5.7%, to $4.90 billion.
An increase in interest and dividend income of $18.3 million, or 8.1%, to $244.0 million primarily as a result of a $1.01 billion increase in the average balance of net loans from organic loan growth and the acquired equipment finance portfolio, offset by paydowns and payoffs. The weighted average yield on net loans increased 10 basis points to 4.20% primarily driven by higher average yields on new loan origination volume.
Prepayment penalties, which are included in interest income, totaled $4.6 million for the three months ended September 30, 2018 as compared to $5.4 million for the three months ended September 30, 2017.

Net interest margin decreased 18 basis points year over year to 2.69% for the three months ended September 30, 2018 from 2.87% for the three months ended September 30, 2017, primarily driven by the higher costs of interest-bearing liabilities.

Total non-interest income was $10.3 million for the three months ended September 30, 2018, an increase of $1.9 million, or 22.5%, as compared to the three months ended September 30, 2017, primarily driven by an increase in other income attributed to non-depository investment products of $1.4 million.


3



Total non-interest expenses decreased $1.5 million, or 1.4%, year over year. For the three months ended September 30, 2018, professional fees decreased $4.6 million largely attributable to lower consulting fees associated with risk management and compliance efforts. Partially offsetting this decrease, compensation and fringe benefits increased $2.2 million as a result of additions to our staff to support the growth and build out of our risk management and operating infrastructure, as well as normal merit and benefit increases.

Income tax expense was $19.2 million for the three months ended September 30, 2018 and $28.4 million for the three months ended September 30, 2017. The effective tax rate was 26.2% for the three months ended September 30, 2018 and 38.3% for the three months ended September 30, 2017. The decrease in the effective tax rate is primarily driven by the enactment of the Tax Cuts and Jobs Act (“Tax Act”) in December 2017.

On July 1, 2018, the State of New Jersey enacted new legislation that created a temporary surtax effective for tax years 2018 through 2021 and will require companies to file combined tax returns beginning in 2019. The new legislation did not result in a material change to our net deferred tax asset or state tax expense for the three months ended September 30, 2018.

Nine Months Ended September 30, 2018 compared to Nine Months Ended September 30, 2017
Net income increased by $37.7 million, or 28.7%, year over year to $169.2 million for the nine months ended September 30, 2018. The change in net income year over year is the result of the following:

Net interest income increased by $5.6 million, or 1.1%, as compared to the nine months ended September 30, 2017 due to:
Total interest and dividend income increased by $62.6 million, or 9.6%, to $714.0 million for the nine months ended September 30, 2018 as compared to the nine months ended September 30, 2017, primarily attributed to a $1.05 billion increase in the average balance of net loans from organic loan growth and the acquired equipment finance portfolio, offset by paydowns and payoffs. The weighted average yield on net loans increased 14 basis points to 4.15% primarily driven by higher average yields on new loan origination volume and an increase in prepayment penalties.
Prepayment penalties, which are included in interest income, totaled $15.4 million for the nine months ended September 30, 2018, as compared to $11.6 million for the nine months ended September 30, 2017.
Total interest expense increased by $57.0 million, or 39.0%, to $203.3 million for the nine months ended September 30, 2018, as compared to $146.3 million for the nine months ended September 30, 2017, primarily attributed to an increase in the weighted average cost of interest-bearing liabilities of 33 basis points to 1.39% for the nine months ended September 30, 2018. In addition, the average balance of total interest-bearing liabilities increased $1.14 billion, or 6.2%, to $19.56 billion for the nine months ended September 30, 2018.

Net interest margin decreased 11 basis points to 2.78% for the nine months ended September 30, 2018 from 2.89% for the nine months ended September 30, 2017, primarily driven by the higher costs of interest-bearing liabilities, partially offset by higher yield on loans.

Total non-interest income was $30.9 million for the nine months ended September 30, 2018, an increase of $3.5 million, or 12.6%, as compared to the nine months ended September 30, 2017. The increase was driven by a $2.8 million increase in other income attributed to non-depository investment products, an increase of $1.6 million in income on bank owned life insurance and an increase of $1.2 million in fees and service charges. These increases were partially offset by a $1.5 million decrease in gain on loans, net.


4



Total non-interest expenses were $305.5 million for the nine months ended September 30, 2018, a decrease of $3.6 million, or 1.2%, as compared to the nine months of 2017. Professional fees decreased $18.4 million for the nine months ended September 30, 2018 as compared to the nine months ended September 30, 2017, largely attributable to lower consulting fees associated with risk management and compliance efforts. Partially offsetting this decrease, compensation and fringe benefits increased $10.9 million as a result of additions to our staff to support the growth and build out of our risk management and operating infrastructure, as well as normal merit increases. Data processing and communication expense increased $2.8 million and office occupancy and equipment expense increased $2.7 million.

Income tax expense was $58.4 million for the nine months ended September 30, 2018 compared to $80.2 million for the nine months ended September 30, 2017. The effective tax rate was 25.6% for the nine months ended September 30, 2018 and 37.9% for the nine months ended September 30, 2017. The decrease in the effective tax rate is primarily driven by the enactment of the Tax Act. Additionally, income tax expense includes the excess tax benefits related to the Company’s stock plans of $1.1 million for the nine months ended September 30, 2018 and $1.6 million for the nine months ended September 30, 2017.

On July 1, 2018, the State of New Jersey enacted new legislation that created a temporary surtax effective for tax years 2018 through 2021 and will require companies to file combined tax returns beginning in 2019. The new legislation did not result in a material change to our net deferred tax asset or state tax expense for the nine months ended September 30, 2018.

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. For the three months ended September 30, 2018, our provision for loan losses was $2.0 million, compared to $4.0 million for the three months ended June 30, 2018 and $1.8 million for the three months ended September 30, 2017. For the three months ended September 30, 2018, net charge-offs were $2.0 million compared to net charge-offs of $4.3 million for the three months ended June 30, 2018 and net charge-offs of $1.7 million for the three months ended September 30, 2017. Our provision for loan losses was $8.5 million for the nine months ended September 30, 2018 compared with $11.8 million for the nine months ended September 30, 2017. For the nine months ended September 30, 2018, net charge-offs were $8.7 million compared to $10.1 million for the nine months ended September 30, 2017.
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 $104.4 million, or 0.50% of total loans, at September 30, 2018 compared to $134.6 million, or 0.65% of total loans, at June 30, 2018 and $135.7 million, or 0.68% of total loans, at December 31, 2017. We continue to proactively and diligently work to resolve our troubled loans.
At September 30, 2018, there were $44.2 million of loans deemed as troubled debt restructured loans (“TDRs”), of which $27.6 million were residential and consumer loans, $15.1 million were commercial and industrial loans, $898,000 were multi-family loans and $614,000 were commercial real estate loans. TDRs of $13.2 million were classified as accruing and $31.0 million were classified as non-accrual at September 30, 2018.
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.

5



 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
 
# 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
99

 
$
21.3

 
101

 
$
20.6

 
97

 
$
16.9

 
126

 
$
20.0

 
108

 
$
21.5

Construction

 

 

 

 

 

 

 

 

 

Multi-family
11

 
12.4

 
6

 
27.4

 
3

 
5.0

 
5

 
6.3

 
10

 
15.8

Commercial real estate
8

 
15.3

 
9

 
8.7

 
5

 
5.7

 
5

 
4.6

 
6

 
32.3

Commercial and industrial
14

 
5.0

 
7

 
2.9

 
6

 
3.4

 
11

 
4.3

 
8

 
0.6

Total 30 to 59 days past due
132

 
54.0

 
123

 
59.6

 
111

 
31.0

 
147

 
35.2

 
132

 
70.2

60 to 89 days past due:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential and consumer
34

 
5.2

 
37

 
9.5

 
46

 
7.7

 
50

 
8.2

 
47

 
7.7

Construction
3

 
9.3

 

 

 

 

 

 

 

 

Multi-family
10

 
36.7

 

 

 

 

 
2

 
7.7

 

 

Commercial real estate
4

 
4.2

 

 

 
1

 
0.3

 
2

 
0.8

 
2

 
1.0

Commercial and industrial
4

 
5.4

 
1

 
2.1

 
1

 
0.1

 

 

 
2

 
1.4

Total 60 to 89 days past due
55


60.8

 
38

 
11.6

 
48

 
8.1

 
54

 
16.7

 
51

 
10.1

Total accruing past due loans
187

 
$
114.8

 
161

 
$
71.2

 
159

 
$
39.1

 
201

 
$
51.9

 
183

 
$
80.3

Non-accrual:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential and consumer
347

 
$
66.3

 
375

 
$
69.2

 
390

 
$
72.5

 
427

 
$
76.4

 
417

 
$
74.3

Construction
1

 
0.2

 
1

 
0.3

 
1

 
0.3

 
1

 
0.3

 

 

Multi-family
3

 
2.6

 
9

 
19.5

 
8

 
20.2

 
5

 
15.0

 
4

 
14.2

Commercial real estate
39

 
15.5

 
36

 
16.7

 
38

 
19.7

 
37

 
34.0

 
31

 
35.3

Commercial and industrial
14

 
19.8

 
13

 
28.9

 
19

 
23.3

 
11

 
10.0

 
6

 
1.9

Total non-accrual loans
404

 
$
104.4

 
434

 
$
134.6

 
456

 
$
136.0

 
481

 
$
135.7

 
458

 
$
125.7

Accruing troubled debt restructured loans
59

 
$
13.2

 
56

 
$
12.8

 
54

 
$
12.4

 
49

 
$
11.0

 
58

 
$
13.4

Non-accrual loans to total loans
 
 
0.50
%
 
 
 
0.65
%
 
 
 
0.66
%
 
 
 
0.68
%
 
 
 
0.63
%
Allowance for loan losses as a percent of non-accrual loans
 
 
221.06
%
 
 
 
171.46
%
 
 
 
169.97
%
 
 
 
170.17
%
 
 
 
183.09
%
Allowance for loan losses as a percent of total loans
 
 
1.10
%
 
 
 
1.11
%
 
 
 
1.12
%
 
 
 
1.15
%
 
 
 
1.15
%

6



Balance Sheet Summary

Total assets increased $389.3 million, or 1.5%, to $25.52 billion at September 30, 2018 from December 31, 2017. Net loans increased $876.8 million, or 4.4%, to $20.73 billion at September 30, 2018. Securities decreased $182.5 million, or 4.8%, to $3.60 billion at September 30, 2018 and cash decreased $407.8 million to $210.6 million at September 30, 2018 from December 31, 2017.

The detail of the loan portfolio (including PCI loans) is below:
 
September 30, 2018
 
June 30, 2018
 
December 31, 2017
 
(In thousands)
Commercial Loans:
 
 
 
 
 
Multi-family loans
$
7,985,847

 
7,903,469

 
7,802,835

Commercial real estate loans
4,605,352

 
4,654,592

 
4,548,101

Commercial and industrial loans
2,198,905

 
2,147,430

 
1,625,375

Construction loans
234,078

 
270,892

 
416,883

Total commercial loans
15,024,182

 
14,976,383

 
14,393,194

Residential mortgage loans
5,265,440

 
5,140,556

 
5,026,517

Consumer and other
686,454

 
668,127

 
671,137

Total Loans
20,976,076

 
20,785,066

 
20,090,848

Deferred fees and premiums on purchased loans, net
(16,407
)
 
(17,141
)
 
(7,778
)
Allowance for loan losses
(230,818
)
 
(230,838
)
 
(230,969
)
Net loans
$
20,728,851

 
20,537,087

 
19,852,101


During the nine months ended September 30, 2018, we originated $1.18 billion in multi-family loans, $607.5 million in commercial and industrial loans, $456.6 million in residential loans, $397.4 million in commercial real estate loans, $83.2 million in construction loans and $80.8 million in consumer and other loans. This growth in the loan portfolio reflects our continued focus on generating multi-family loans, commercial and industrial loans and commercial real estate loans, which was partially offset by pay downs and payoffs of loans. During February 2018, we completed the acquisition of a $345.8 million equipment finance portfolio, comprised of both loans and leases, which is classified within our commercial and industrial portfolio. Our loans are primarily on properties and businesses located in New Jersey and New York.

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 nine months ended September 30, 2018, we purchased loans totaling $333.7 million from these entities. In addition to the loans originated for our portfolio, our mortgage subsidiary, Investors Home Mortgage Co., originated residential mortgage loans for sale to third parties totaling $44.2 million during the nine months ended September 30, 2018.

The allowance for loan losses decreased by $151,000 to $230.8 million at September 30, 2018 from $231.0 million at December 31, 2017. While our allowance for loan losses is impacted by the inherent credit risk and the growth and composition of our overall portfolio, during the year we have successfully resolved a number of credit issues which has resulted in a reduction in net charge-offs and improvement in our ratio of non-accrual loans to total loans. 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, 2018, our allowance for loan losses as a percent of total loans was 1.10%.

7




Securities decreased by $182.5 million, or 4.8%, to $3.60 billion at September 30, 2018 from $3.78 billion at December 31, 2017. This decrease was a result of paydowns, partially offset by purchases. Bank owned life insurance increased $54.8 million to $210.4 million at September 30, 2018. During the nine months ended September 30, 2018, we purchased $125.0 million of bank owned life insurance and surrendered $71.1 million of an older policy. Goodwill and intangible assets increased $2.1 million to $99.8 million at September 30, 2018 primarily due to the acquisition of the equipment finance portfolio.

Deposits increased by $40.1 million, or 0.2%, from $17.36 billion at December 31, 2017 to $17.40 billion at September 30, 2018 primarily driven by an increase in time deposits, partially offset by decreases in money market, checking and savings accounts. Checking accounts decreased $340.4 million to $6.99 billion at September 30, 2018 from $7.33 billion at December 31, 2017. Core deposits (savings, checking and money market) represented approximately 73% of our total deposit portfolio at September 30, 2018 compared to 80% at December 31, 2017.

Borrowed funds increased by $392.2 million, or 8.8%, to $4.85 billion at September 30, 2018 from $4.46 billion at December 31, 2017 to help fund the growth of the loan portfolio.

Stockholders’ equity decreased by $90.2 million to $3.04 billion at September 30, 2018 from $3.13 billion at December 31, 2017, primarily attributed to the repurchase of 14.5 million shares of common stock for $191.0 million and cash dividends of $0.27 per share totaling $81.2 million during the nine months ended September 30, 2018. These decreases were partially offset by net income of $169.2 million and share-based plan activity of $23.9 million for the nine months ended September 30, 2018. The Bank remains significantly above FDIC “well capitalized” standards, with a Tier 1 Leverage Ratio of 10.51% at September 30, 2018.

About the Company

Investors Bancorp, Inc. is the holding company for Investors Bank, which as of September 30, 2018 operated from its corporate headquarters in Short Hills, New Jersey and 151 branches located throughout New Jersey and New York.

Earnings Conference Call October 26, 2018 at 11:00 a.m. (ET)

The Company, as previously announced, will host an earnings conference call on Friday, October 26, 2018 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/10124841

A telephone replay will be available beginning on October 26, 2018 from 1:00 p.m. (ET) through 9:00 a.m. (ET) on January 26, 2019. The replay number is (877) 344-7529, password 10124841. The conference call will also be simultaneously webcast on the Company’s website www.investorsbank.com and archived for one year.


8



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.

9




INVESTORS BANCORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
 
 
 
 
 
 
 
September 30,
2018
 
June 30,
2018
 
December 31, 2017
 
(unaudited)
 
(unaudited)
 
(audited)
Assets
(Dollars in thousands)
 
 
 
 
 
 
Cash and cash equivalents
$
210,595

 
195,995

 
618,394

Equity securities
5,872

 
5,753

 
5,701

Debt securities available-for-sale, at estimated fair value
1,984,537

 
1,915,265

 
1,982,026

Debt securities held-to-maturity, net (estimated fair value of $1,601,807, $1,659,095 and $1,820,125 at September 30, 2018, June 30, 2018 and December 31, 2017, respectively)
1,611,409

 
1,660,967

 
1,796,621

Loans receivable, net
20,728,851

 
20,537,087

 
19,852,101

Loans held-for-sale
4,270

 
5,949

 
5,185

Federal Home Loan Bank stock
242,403

 
247,410

 
231,544

Accrued interest receivable
78,283

 
73,944

 
72,855

Other real estate owned
7,755

 
5,190

 
5,830

Office properties and equipment, net
175,387

 
176,546

 
180,231

Net deferred tax asset
135,521

 
131,761

 
121,663

Bank owned life insurance
210,413

 
208,818

 
155,635

Goodwill and intangible assets
99,764

 
100,621

 
97,665

Other assets
23,435

 
99,586

 
3,793

Total assets
$
25,518,495

 
25,364,892

 
25,129,244

Liabilities and Stockholders’ Equity
 
 
 
 
 
Liabilities:
 
 
 
 
 
Deposits
$
17,397,812

 
16,917,405

 
17,357,697

Borrowed funds
4,853,774

 
5,144,987

 
4,461,533

Advance payments by borrowers for taxes and insurance
131,038

 
116,482

 
104,308

Other liabilities
100,650

 
95,035

 
80,255

Total liabilities
22,483,274

 
22,273,909

 
22,003,793

Stockholders’ equity
3,035,221

 
3,090,983

 
3,125,451

Total liabilities and stockholders’ equity
$
25,518,495

 
25,364,892

 
25,129,244



10



INVESTORS BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended
 
For the Nine Months Ended
 
 
 
 
 
 
September 30,
2018
 
June 30,
2018
 
September 30,
2017
 
September 30,
2018
 
September 30,
2017
 
 
 
 
 
 
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
 
(unaudited)
 
 
 
 
 
 
(Dollars in thousands, except per share data)
Interest and dividend income:
 
 
 
 
 
 
 
 
 
 
Loans receivable and loans held-for-sale
$
216,516

 
211,791

 
201,069

 
633,029

 
579,921

 
Securities:
 
 
 
 
 
 
 
 
 
 
 
GSE obligations
266

 
273

 
175

 
813

 
211

 
 
Mortgage-backed securities
19,624

 
19,633

 
17,829

 
59,279

 
51,812

 
 
Equity
32

 
33

 
30

 
100

 
108

 
 
Municipal bonds and other debt
2,615

 
2,432

 
2,229

 
7,305

 
8,433

 
Interest-bearing deposits
677

 
409

 
875

 
1,541

 
1,159

 
Federal Home Loan Bank stock
4,296

 
3,831

 
3,557

 
11,928

 
9,722

 
 
Total interest and dividend income
244,026

 
238,402

 
225,764

 
713,995

 
651,366

Interest expense:
 
 
 
 
 
 
 
 
 
 
Deposits
 
51,923

 
42,067

 
32,300

 
130,366

 
79,820

 
Borrowed funds
25,177

 
25,034

 
22,553

 
72,918

 
66,460

 
 
Total interest expense
77,100

 
67,101

 
54,853

 
203,284

 
146,280

 
 
Net interest income
166,926

 
171,301

 
170,911

 
510,711

 
505,086

Provision for loan losses
2,000

 
4,000

 
1,750

 
8,500

 
11,750

 
 
Net interest income after provision for loan losses
164,926

 
167,301

 
169,161

 
502,211

 
493,336

Non-interest income:
 
 
 
 
 
 
 
 
 
 
Fees and service charges
5,506

 
5,230

 
5,076

 
16,194

 
14,966

 
Income on bank owned life insurance
1,596

 
1,543

 
935

 
4,425

 
2,826

 
Gain on loans, net
478

 
663

 
726

 
1,398

 
2,924

 
Gain on securities, net
97

 
1,147

 

 
1,198

 
1,275

 
Gain on sales of other real estate owned, net
13

 
184

 
446

 
350

 
871

 
Other income
2,597

 
2,711

 
1,212

 
7,310

 
4,556

 
 
Total non-interest income
10,287

 
11,478

 
8,395

 
30,875

 
27,418

Non-interest expense:
 
 
 
 
 
 
 
 
 
 
Compensation and fringe benefits
59,279

 
60,799

 
57,052

 
179,139

 
168,207

 
Advertising and promotional expense
3,229

 
3,807

 
4,355

 
9,123

 
10,956

 
Office occupancy and equipment expense
15,151

 
14,717

 
14,589

 
46,446

 
43,769

 
Federal insurance premiums
4,935

 
4,525

 
4,500

 
13,960

 
12,110

 
General and administrative
509

 
693

 
691

 
1,702

 
2,267

 
Professional fees
3,578

 
3,801

 
8,140

 
11,781

 
30,141

 
Data processing and communication
7,090

 
7,106

 
5,719

 
20,319

 
17,493

 
Other operating expenses
8,017

 
7,136

 
8,228

 
22,987

 
24,157

 
 
Total non-interest expenses
101,788

 
102,584

 
103,274

 
305,457

 
309,100

 
 
Income before income tax expense
73,425

 
76,195

 
74,282

 
227,629

 
211,654

Income tax expense
19,201

 
19,098

 
28,437

 
58,383

 
80,156

 
 
Net income
$
54,224

 
57,097

 
45,845

 
169,246

 
131,498

Basic earnings per share
$0.19
 
0.20

 
0.16

 
0.60

 
0.45

Diluted earnings per share
$0.19
 
0.20

 
0.16

 
0.59

 
0.45

 
 
 
 
 
 
 
 
 
 
 
Basic weighted average shares outstanding
280,755,898

 
284,502,818

 
289,715,414

 
284,289,363

 
290,670,601

 
Diluted weighted average shares outstanding
281,172,921

 
285,733,542

 
290,890,307

 
285,376,003

 
292,489,906


11



INVESTORS BANCORP, INC. AND SUBSIDIARY
Average Balance Sheet and Yield/Rate Information
 
 
 
For the Three Months Ended
 
 
 
September 30, 2018
 
June 30, 2018
 
September 30, 2017
 
 
 
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
$
227,346

677

1.19
%
 
$
178,293

409

0.92
%
 
$
379,670

875

0.92
%
 
Equity securities
5,802

32

2.21
%
 
5,714

33

2.31
%
 
5,592

30

2.15
%
 
Debt securities available-for-sale
2,015,096

11,122

2.21
%
 
1,990,306

10,829

2.18
%
 
1,896,034

9,644

2.03
%
 
Debt securities held-to-maturity
1,638,722

11,383

2.78
%
 
1,693,025

11,509

2.72
%
 
1,672,675

10,589

2.53
%
 
Net loans
20,644,566

216,516

4.20
%
 
20,348,913

211,791

4.16
%
 
19,633,388

201,069

4.10
%
 
Federal Home Loan Bank stock
246,037

4,296

6.98
%
 
255,362

3,831

6.00
%
 
241,033

3,557

5.90
%
 
Total interest-earning assets
24,777,569

244,026

3.94
%
 
24,471,613

238,402

3.90
%
 
23,828,392

225,764

3.79
%
Non-interest earning assets
708,904

 
 
 
741,974

 
 
 
759,203

 
 
 
Total assets
 
$
25,486,473

 
 
 
$
25,213,587

 
 
 
$
24,587,595

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Savings
$
2,142,642

3,462

0.65
%
 
$
2,146,880

2,953

0.55
%
 
$
2,076,769

2,174

0.42
%
 
Interest-bearing checking
4,449,767

15,736

1.41
%
 
4,487,247

14,057

1.25
%
 
4,422,930

10,883

0.98
%
 
Money market accounts
3,747,501

13,043

1.39
%
 
3,858,022

10,497

1.09
%
 
4,320,547

9,478

0.88
%
 
Certificates of deposit
4,562,549

19,682

1.73
%
 
4,017,105

14,560

1.45
%
 
3,481,135

9,765

1.12
%
 
 Total interest-bearing deposits
14,902,459

51,923

1.39
%
 
14,509,254

42,067

1.16
%
 
14,301,381

32,300

0.90
%
 
Borrowed funds
4,897,119

25,177

2.06
%
 
5,060,767

25,034

1.98
%
 
4,633,628

22,553

1.95
%
 
Total interest-bearing liabilities
19,799,578

77,100

1.56
%
 
19,570,021

67,101

1.37
%
 
18,935,009

54,853

1.16
%
Non-interest-bearing liabilities
2,610,074

 
 
 
2,535,093

 
 
 
2,485,667

 
 
 
Total liabilities
22,409,652

 
 
 
22,105,114

 
 
 
21,420,676

 
 
Stockholders’ equity
3,076,821

 
 
 
3,108,473

 
 
 
3,166,919

 
 
 
Total liabilities and stockholders’ equity
$
25,486,473

 
 
 
$
25,213,587

 
 
 
$
24,587,595

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
$
166,926

 
 
 
$
171,301

 
 
 
$
170,911

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest rate spread
 
 
2.38
%
 
 
 
2.53
%
 
 
 
2.63
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest earning assets
$
4,977,991

 
 
 
$
4,901,592

 
 
 
$
4,893,383

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest margin
 
 
2.69
%
 
 
 
2.80
%
 
 
 
2.87
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratio of interest-earning assets to total interest-bearing liabilities
1.25

X
 
 
1.25

X
 
 
1.26

X
 

12



INVESTORS BANCORP, INC. AND SUBSIDIARY
Average Balance Sheet and Yield/Rate Information
 
 
 
 
For the Nine Months Ended
 
 
 
September 30, 2018
 
September 30, 2017
 
 
 
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
$
201,743

1,541

1.02
%
 
$
229,729

1,159

0.67
%
 
Equity securities
5,740

100

2.32
%
 
5,709

108

2.52
%
 
Debt securities available-for-sale
2,008,724

32,803

2.18
%
 
1,802,253

26,851

1.99
%
 
Debt securities held-to-maturity
1,696,718

34,594

2.72
%
 
1,689,790

33,605

2.65
%
 
Net loans
20,337,264

633,029

4.15
%
 
19,291,939

579,921

4.01
%
 
Federal Home Loan Bank stock
246,858

11,928

6.44
%
 
247,228

9,722

5.24
%
 
 
Total interest-earning assets
24,497,047

713,995

3.89
%
 
23,266,648

651,366

3.73
%
Non-interest earning assets
716,163

 
 
 
758,616

 
 
 
 
Total assets
$
25,213,210

 
 
 
$
24,025,264

 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
Savings
$
2,206,307

9,705

0.59
%
 
$
2,100,918

6,053

0.38
%
 
Interest-bearing checking
4,581,974

43,372

1.26
%
 
4,265,758

25,712

0.80
%
 
Money market accounts
3,897,632

32,832

1.12
%
 
4,225,519

24,772

0.78
%
 
Certificates of deposit
3,997,059

44,457

1.48
%
 
3,086,739

23,283

1.01
%
 
 Total interest bearing deposits
14,682,972

130,366

1.18
%
 
13,678,934

79,820

0.78
%
 
Borrowed funds
4,875,857

72,918

1.99
%
 
4,744,701

66,460

1.87
%
 
 
Total interest-bearing liabilities
19,558,829

203,284

1.39
%
 
18,423,635

146,280

1.06
%
Non-interest-bearing liabilities
2,551,722

 
 
 
2,436,893

 
 
 
 
Total liabilities
22,110,551

 
 
 
20,860,528

 
 
Stockholders’ equity
3,102,659

 
 
 
3,164,736

 
 
 
 
Total liabilities and stockholders’ equity
$
25,213,210

 
 
 
$
24,025,264

 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
$
510,711

 
 
 
$
505,086

 
 
 
 
 
 
 
 
 
 
 
Net interest rate spread
 
 
2.50
%
 
 
 
2.67
%
 
 
 
 
 
 
 
 
 
 
Net interest earning assets
$
4,938,218

 
 
 
$
4,843,013

 
 
 
 
 
 
 
 
 
 
 
 
Net interest margin
 
 
2.78
%
 
 
 
2.89
%
 
 
 
 
 
 
 
 
 
 
Ratio of interest-earning assets to total interest-bearing liabilities
1.25

X
 
 
1.26

X
 




13



INVESTORS BANCORP, INC. AND SUBSIDIARY
Selected Performance Ratios
 
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended
 
For the Nine Months Ended
 
September 30,
2018
 
June 30,
2018
 
September 30,
2017
 
September 30,
2018
 
September 30,
2017
Return on average assets
0.85
%
 
0.91
%
 
0.75
%
 
0.90
%
 
0.73
%
Return on average equity
7.05
%
 
7.35
%
 
5.79
%
 
7.27
%
 
5.54
%
Return on average tangible equity
7.29
%
 
7.59
%
 
5.98
%
 
7.52
%
 
5.72
%
Interest rate spread
2.38
%
 
2.53
%
 
2.63
%
 
2.50
%
 
2.67
%
Net interest margin
2.69
%
 
2.80
%
 
2.87
%
 
2.78
%
 
2.89
%
Efficiency ratio
57.44
%
 
56.12
%
 
57.60
%
 
56.40
%
 
58.05
%
Non-interest expense to average total assets
1.60
%
 
1.63
%
 
1.68
%
 
1.62
%
 
1.72
%
Average interest-earning assets to average interest-bearing liabilities
1.25

 
1.25

 
1.26

 
1.25

 
1.26

 
INVESTORS BANCORP, INC. AND SUBSIDIARY
Selected Financial Ratios and Other Data
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30,
2018
 
June 30,
2018
 
December 31,
2017
 
 
Asset Quality Ratios:
 
 
 
 
 
 
 
 
 
Non-performing assets as a percent of total assets
 
0.49
%
 
0.60
%
 
0.61
%
 
 
Non-performing loans as a percent of total loans
 
0.56
%
 
0.71
%
 
0.73
%
 
 
Allowance for loan losses as a percent of non-accrual loans
 
221.06
%
 
171.46
%
 
170.17
%
 
 
Allowance for loan losses as a percent of total loans
 
1.10
%
 
1.11
%
 
1.15
%
 
 
 
 
 
 
 
 
 
 
 
 
Capital Ratios:
 
 
 
 
 
 
 
 
 
Tier 1 Leverage Ratio (1)
 
 
10.51
%
 
10.91
%
 
11.00
%
 
 
Common equity tier 1 risk-based (1)
 
 
13.60
%
 
13.42
%
 
13.94
%
 
 
Tier 1 Risk-Based Capital (1)
 
 
13.60
%
 
13.42
%
 
13.94
%
 
 
Total Risk-Based Capital (1)
 
 
14.77
%
 
14.55
%
 
15.13
%
 
 
Equity to total assets (period end)
 
 
11.89
%
 
12.19
%
 
12.44
%
 
 
Average equity to average assets
 
 
12.07
%
 
12.33
%
 
12.74
%
 
 
Tangible capital to tangible assets (2)
 
 
11.55
%
 
11.84
%
 
12.10
%
 
 
Book value per common share (2)
 
 
$
10.83

 
$
10.77

 
$
10.64

 
 
Tangible book value per common share (2)
 
 
$
10.48

 
$
10.42

 
$
10.31

 
 
 
 
 
 
 
 
 
 
 
 
Other Data:
 
 
 
 
 
 
 
 
 
Number of full service offices
 
 
151

 
151

 
156

 
 
Full time equivalent employees
 
 
1,951

 
1,964

 
1,931

 
 
 
 
 
 
 
(1) Ratios are for Investors Bank and do not include capital retained at the holding company level.
 
 
(2) See Non-GAAP Reconciliation.
 
 
 
 

14



Investors Bancorp, Inc.
Non-GAAP Reconciliation
(Dollars in thousands, except share data)
 
 
 
 
 
 
Book Value and Tangible Book Value per Share Computation
 
 
 
 
 
 
 
 
 
September 30, 2018
 
June 30, 2018
 
December 31, 2017
 
 
 
 
 
 
Total stockholders’ equity
$
3,035,221

 
3,090,983

 
3,125,451

Goodwill and intangible assets
99,764

 
100,621

 
97,665

Tangible stockholders’ equity
$
2,935,457

 
2,990,362

 
3,027,786

 
 
 
 
 
 
Book Value per Share Computation
 
 
 
 
 
Common stock issued
359,070,852

 
359,070,852

 
359,070,852

Treasury shares
(66,946,798
)
 
(60,029,302
)
 
(52,944,765
)
Shares outstanding
292,124,054

 
299,041,550

 
306,126,087

Unallocated ESOP shares
(11,960,873
)
 
(12,079,298
)
 
(12,316,149
)
Book value shares
280,163,181

 
286,962,252

 
293,809,938

 
 
 
 
 
 
Book Value per Share
$
10.83

 
$
10.77

 
$
10.64

Tangible Book Value per Share
$
10.48

 
$
10.42

 
$
10.31

 
 
 
 
 
 
Total assets
$
25,518,495

 
25,364,892

 
25,129,244

Goodwill and intangible assets
99,764

 
100,621

 
97,665

Tangible assets
$
25,418,731

 
25,264,271

 
25,031,579

 
 
 
 
 
 
Tangible capital to tangible assets
11.55
%
 
11.84
%
 
12.10
%
 


15

View differences made from one to another to evaluate Investors Bancorp, Inc.'s financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 8-K Corporate News to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Investors Bancorp, Inc..

Continue

Never Miss A New SEC Filing Again


Real-Time SEC Filing Notifications
Screenshot taken from Gmail for a new 10-K Annual Report
Last10K.com Member Feature

Receive an e-mail as soon as a company files an Annual Report, Quarterly Report or has new 8-K corporate news.

Continue

We Highlighted This SEC Filing For You


SEC Filing Sentiment Analysis - Bullish, Bearish, Neutral
Screenshot taken from Wynn's 2018 10-K Annual Report
Last10K.com Member Feature

Read positive and negative remarks made by management in their entirety without having to find them in a 10-K/Q.

Continue

Widen Your SEC Filing Reading Experience


Increased Reading Area for SEC Filings
Screenshot taken from Adobe Inc.'s 10-Q Quarterly Report
Last10K.com Member Feature

Remove data columns and navigations in order to see much more filing content and tables in one view

Continue

Uncover Actionable Information Inside SEC Filings


SEC Filing Disclosures
Screenshot taken from Lumber Liquidators 10-K Annual Report
Last10K.com Member Feature

Read both hidden opportunities and early signs of potential problems without having to find them in a 10-K/Q

Continue

Adobe PDF, Microsoft Word and Excel Downloads


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshots of actual 10-K and 10-Q SEC Filings in PDF, Word and Excel formats
Last10K.com Member Feature

Export Annual and Quarterly Reports to Adobe PDF, Microsoft Word and Excel for offline viewing, annotations and analysis

Continue

FREE Financial Statements


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshot of actual balance sheet from company 10-K Annual Report
Last10K.com Member Feature

Get one-click access to balance sheets, income, operations and cash flow statements without having to find them in Annual and Quarterly Reports

Continue for FREE

Intrinsic Value Calculator


Intrinsic Value Calculator
Screenshot of intrinsic value for AT&T (2019)
Last10K.com Member Feature

Our Intrinsic Value calculator estimates what an entire company is worth using up to 10 years of financial ratios to determine if a stock is overvalued or not

Continue

Financial Stability Report


Financial Stability Report
Screenshot of financial stability report for Coco-Cola (2019)
Last10K.com Member Feature

Our Financial Stability reports uses up to 10 years of financial ratios to determine the health of a company's EPS, Dividends, Book Value, Return on Equity, Current Ratio and Debt-to-Equity

Continue

Get a Better Picture of a Company's Performance


Financial Ratios
Available Financial Ratios
Last10K.com Member Feature

See how over 70 Growth, Profitability and Financial Ratios perform over 10 Years

Continue

Log in with your credentials

or    

Forgot your details?

Create Account