UPDATE: Compass Point Initiates Coverage on Investors Bancorp with Buy Rating, $31 PT on Unique Investment Opportunity

In a report published Thursday, Compass Point analyst Laurie Havener Hunsicker initiated coverage on

with a Buy rating and $31.00 price target. In the report, Compass Point noted, “We initiate with a Buy rating and a $31 price target, representing 1.3x market-adjusted fully-converted TB (FCTB); our price target will be exchange ratio adjusted following the offering. ISBC offers investors a unique opportunity to invest in the largest publicly-traded bank headquartered in NJ; ISBC is a well-capitalized, 88+ year old, whistle-clean, $18 billion-asset sized bank (pro forma), trading close to tangible book; additionally, ISBC has a coveted footprint serving the greater NYC MSA, spanning from Philadelphia through Long Island. The key to the investment thesis sits in understanding the MHC (Mutual Holding Company) structure and the implications for existing and new shareholders as ISBC is currently undergoing a second-step IPO. We base our valuation on a blended five-pronged approach: 1) Franchise footprint (including acquisition track record and sensitivity to TB dilution); 2) Current pricing relative to peers (with added emphasis on the P/TB metric); 3) Credit; 4) Capital (including use of capital management tools); and 5) Management expertise (including inside ownership).” Investors Bancorp closed on Wednesday at $27.04.