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

SHORT HILLS, N.J., Jan. 29, 2020 /PRNewswire/ -- Investors Bancorp, Inc. ISBC ("Company"), the holding company for Investors Bank ("Bank"), reported net income of $48.7 million, or  $0.19 per diluted share, for the three months ended December 31, 2019 as compared to $52.0 million, or $0.20 per diluted share, for the three months ended September 30, 2019 and $33.3 million, or $0.12 per diluted share, for the three months ended December 31, 2018.  Included for the three months ended December 31, 2019 is $7.8 million, or $0.03 per diluted share, of additional income tax expense resulting from the revaluation of the Company's net deferred tax asset as the State of New Jersey provided clarification in December 2019 relating to previously enacted tax law changes.

For the year ended December 31, 2019, net income totaled $195.5 million, or $0.74 per diluted share, compared to $202.6 million, or $0.72 per diluted share, for the year ended December 31, 2018.  Included for the year ended December 31, 2019 is $7.8 million, or $0.03 per diluted share, of additional income tax expense resulting from the revaluation of the Company's net deferred tax asset as the State of New Jersey provided clarification in December 2019 relating to previously enacted tax law changes.

The Company also announced today that its Board of Directors declared a cash dividend of $0.12 per share to be paid on February 25, 2020 for stockholders of record as of February 10, 2020, representing a 9% increase from the prior quarter.

Kevin Cummings, Chairman and CEO, commented, "Increased net interest income and fee income, in addition to lower expenses, contributed to our strong fourth quarter results. Our net interest margin expanded eight basis points this quarter as our deposit costs declined and we continued our focus on higher yielding commericial and industrial loans."

Performance Highlights



  • Net interest margin increased 8 basis points to 2.61% for the three months ended December 31, 2019 compared to the three months ended September 30, 2019.
  • The cost of interest-bearing deposits decreased 18 basis points to 1.59% for the three months ended December 31, 2019 compared to the three months ended September 30, 2019.
  • Total deposits increased $187.6 million, or 1.1%, to $17.86 billion at December 31, 2019 from $17.67 billion at September 30, 2019.
  • Net loans decreased $40.2 million, or 0.2%, to $21.48 billion at December 31, 2019 from $21.52 billion at September 30, 2019.  Commercial and industrial loans increased $269.7 million, or 10.1%, during the three months ended December 31, 2019.
  • Total non-interest income was $20.5 million for the three months ended December 31, 2019, an increase of $5.7 million compared to the three months ended September 30, 2019.
  • Total non-interest expenses were $106.8 million for the three months ended December 31, 2019, a decrease of $1.9 million, or 1.7%, compared to the three months ended September 30, 2019.
  • The Company revalued its net deferred tax asset as the State of New Jersey provided clarification in December 2019 in regard to previously enacted tax law changes that is expected to lower the Company's state tax rate going forward.  As a result, income tax expense for the three months ended December 31, 2019 included $7.8 million, or $0.03 per diluted share, of additional income tax expense related to the write down of the Company's net deferred tax asset.
  • During December 2019, the Company entered into a purchase and sale agreement with Blue Harbour Group, L.P. ("Blue Harbour"), pursuant to which the Company repurchased from Blue Harbour the 27,318,628 shares of the Company's common stock beneficially owned by Blue Harbour, at a purchase price of $12.29 per share, representing aggregate consideration of approximately $335.7 million.

Financial Performance Overview

Fourth Quarter 2019 compared to Third Quarter 2019

For the fourth quarter of 2019, net income totaled $48.7 million, a decrease of $3.2 million as compared to $52.0 million for the third quarter of 2019.  The changes in net income on a sequential quarter basis are highlighted below.

Net interest income increased by $4.3 million, or 2.6%, as compared to the third quarter of 2019.  Changes within interest income and expense categories are as follows:

  • Interest expense decreased $8.5 million, primarily attributed to the weighted average cost of interest-bearing liabilities, which decreased 16 basis points to 1.74% for the three months ended December 31, 2019.  The average balance of interest-bearing deposits decreased $66.8 million, or 0.4%, to $15.29 billion and the average balance of total borrowed funds decreased $11.7 million, or 0.2%, to $5.74 billion for the three months ended December 31, 2019.
  • A decrease in interest and dividend income of $4.2 million, or 1.6%, to $260.4 million as compared to the third quarter of 2019, primarily attributed to the average balance of net loans, which decreased $202.8 million, mainly from paydowns and payoffs, partially offset by loan originations.  The weighted average yield on net loans decreased 3 basis points to 4.24%.
  • Prepayment penalties, which are included in interest income, totaled $5.4 million for the three months ended December 31, 2019 as compared to $5.2 million for the three months ended September 30, 2019.

Net interest margin increased 8 basis points to 2.61% for the three months ended December 31, 2019 compared to the three months ended September 30, 2019, driven primarily by the lower cost of interest-bearing liabilities, partially offset by the lower yield on interest-earning assets.

Total non-interest income was $20.5 million for the three months ended December 31, 2019, an increase of $5.7 million, as compared to $14.8 million for the third quarter of 2019.  The increase in non-interest income was primarily due to a $2.6 million increase in net gains on our equipment finance portfolio, a $1.5 million increase in customer swap fee income and a $1.0 million increase in fees and service charges.

Total non-interest expenses were $106.8 million for the three months ended December 31, 2019, a decrease of $1.9 million, or 1.7%, as compared to the third quarter of 2019.  The change was primarily due to a decrease in compensation and benefit expense of $4.3 million, driven mainly by accelerated stock compensation expense related to the settlement of our shareholder litigation and employee severance expense related to a workforce reduction recorded during the three months ended September 30, 2019.  Partially offsetting this decrease, other non-interest expense increased $2.9 million driven by overdraft losses and customer swap expense.

Income tax expense was $32.2 million for the three months ended December 31, 2019 and $21.0 million for the three months ended September 30, 2019.  The effective tax rate was 39.8% for the three months ended December 31, 2019 and 28.8% for the three months ended September 30, 2019.  The increase in the effective tax rate was primarily related to a clarification of the change in New Jersey state tax law.

Fourth Quarter 2019 compared to Fourth Quarter 2018

For the fourth quarter of 2019, net income totaled $48.7 million, an increase of $15.4 million as compared to $33.3 million in the fourth quarter of 2018.  The changes in net income on a year over year quarter basis are highlighted below.

On a year over year basis, fourth quarter of 2019 net interest income decreased by $531,000, or 0.3%, as compared to the fourth quarter of 2018 due to:

  • Interest expense increased $6.5 million, or 7.6%, primarily attributed to the average balance of total borrowed funds, which increased $777.4 million, or 15.7%, to $5.74 billion, and the average balance of interest-bearing deposits, which increased $112.8 million, or 0.7%, to $15.29 billion for the three months ended December 31, 2019.  The weighted average cost of interest-bearing liabilities increased 5 basis points to 1.74% for the three months ended December 31, 2019.
  • An increase in interest and dividend income of $6.0 million, or 2.3%, to $260.4 million, primarily as a result of a $541.6 million increase in the average balance of net loans, mainly from loan originations, partially offset by paydowns and payoffs.  The weighted average yield on net loans increased 2 basis points to 4.24%.
  • Prepayment penalties, which are included in interest income, totaled $5.4 million for the three months ended December 31, 2019 as compared to $5.2 million for the three months ended December 31, 2018.

Net interest margin decreased 8 basis points year over year to 2.61% for the three months ended December 31, 2019 from 2.69% for the three months ended December 31, 2018, primarily driven by the higher cost of interest-bearing liabilities.

Total non-interest income was $20.5 million for the three months ended December 31, 2019, an increase of $41.3 million year over year.  Excluding the $32.8 million loss on the sale of securities in the fourth quarter of 2018, total non-interest income increased $8.4 million as compared with the three months ended December 31, 2018.  This increase was primarily due to an increase of $3.9 million in customer swap fee income, an increase of $2.1 million in net gains on our equipment finance portfolio and an increase of $1.5 million in gain on loans.

Total non-interest expenses were $106.8 million for the three months ended December 31, 2019, an increase of $4.6 million, or 4.5%, year over year.  The increase was due to an increase of $2.5 million in compensation and benefit expense and other non-interest expense which increased $2.2 million.

Income tax expense was $32.2 million for the three months ended December 31, 2019 and $9.5 million for the three months ended December 31, 2018.  The effective tax rate was 39.8% for the three months ended December 31, 2019 and 22.1% for the three months ended December 31, 2018.  The increase in the effective tax rate was primarily related to a clarification of the change in New Jersey state tax law.  In addition, the effective tax rate for the three months ended December 31, 2018 was positively impacted by a charitable contribution to the State of New Jersey's Neighborhood Revitalization Tax Credit Program, which provided a $1.0 million tax credit.

Year Ended December 31, 2019 compared to Year Ended December 31, 2018

Net income decreased by $7.1 million year over year to $195.5 million for the year ended December 31, 2019.  The change in net income year over year is the result of the following:

Net interest income decreased by $24.9 million as compared to the year ended December 31, 2018 due to:

  • Interest expense increased by $96.7 million, or 33.5%, to $385.1 million for the year ended December 31, 2019, as compared to $288.4 million for the year ended December 31, 2018, primarily attributed to an increase in the weighted average cost of interest-bearing liabilities of 38 basis points to 1.84% for the year ended December 31, 2019.  The average balance of total borrowed funds increased $712.3 million, or 14.5%, to $5.61 billion for the year ended December 31, 2019 and the average balance of interest-bearing deposits increased $510.4 million, or 3.5%, to $15.32 billion.
  • Total interest and dividend income increased by $71.8 million, or 7.4%, to $1.04 billion for the year ended December 31, 2019 as compared to the year ended December 31, 2018, primarily attributed to 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 6 basis points to 4.23% 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 34 basis points to 2.90%.
  • Prepayment penalties, which are included in interest income, totaled $16.8 million for the year ended December 31, 2019, as compared to $20.6 million for the year ended December 31, 2018.

Net interest margin decreased 22 basis points to 2.54% for the year ended December 31, 2019 from 2.76% for the year ended December 31, 2018, primarily driven by the higher cost of interest-bearing liabilities, partially offset by the higher yield on interest-earning assets.

Total non-interest income was $53.4 million for the year ended December 31, 2019, an increase of $43.3 million as compared to the year ended December 31, 2018.  The increase was primarily due to an increase of $26.1 million in non-interest income on securities predominately resulting from a $5.7 million loss on the sale of securities during 2019 as compared to a $32.8 million loss on the sale of securities during 2018.  In addition, other income increased $11.8 million primarily attributed to customer swap fee income, gains on our equipment finance portfolio, non-depository investment products and a sale-leaseback transaction.

Total non-interest expenses were $422.8 million for the year ended December 31, 2019, an increase of $15.1 million, or 3.7%, as compared to the year ended December 31, 2018.  This increase was due to an increase of $7.9 million in compensation and fringe benefit expense, an increase of $4.8 million in other non-interest expense, an increase of $4.2 million in data processing and communication expense, and an increase of $2.0 million in professional fees.  These increases were partially offset by a decrease of $4.6 million in federal insurance premiums.

Income tax expense was $91.2 million for the year ended December 31, 2019 compared to $67.8 million for the year ended December 31, 2018.  The effective tax rate was 31.8% for the year ended December 31, 2019 and 25.1% for the year ended December 31, 2018. The increase in the tax rate was primarily related to a clarification of 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 December 31, 2019, our allowance for loan losses and related year-ended 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 December 31, 2019, our provision for loan losses was a $1.5 million addition to the allowance for loan losses, compared to a reduction to the allowance for loan losses of $2.5 million for the three months ended September 30, 2019 and an addition to the allowance for loan losses of $3.5 million for the three months ended December 31, 2018.  For the three months ended December 31, 2019, net charge-offs were $1.4 million compared to net charge-offs of $1.5 million for the three months ended September 30, 2019 and net recoveries of $1.5 million for the three months ended December 31, 2018.  Our provision was a $1.0 million reduction to the allowance for loan losses for the year ended December 31, 2019 and a $12.0 million addition to the allowance for the year ended December 31, 2018.  For the year ended December 31, 2019, net charge-offs were $6.7 million compared to $7.2 million for the year ended December 31, 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 $95.2 million, or 0.44% of total loans, at December 31, 2019 compared to $92.1 million, or 0.42% of total loans, at September 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 December 31, 2019, there were $36.6 million of loans deemed as troubled debt restructured loans ("TDRs"), of which $27.0 million were residential and consumer loans, $7.2 million were commercial and industrial loans and $2.4 million were commercial real estate loans.  TDRs of $13.1 million were classified as accruing and $23.5 million were classified as non-accrual at December 31, 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.

 

 





December 31, 2019



September 30, 2019



June 30, 2019



March 31, 2019



December 31, 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

111





$

23.4





89





$

17.6





104





$

20.9





113





$

24.8





97





$

20.2



Construction

































3





9.2



Multi-family

5





45.6





9





16.0





7





12.0





11





29.6





6





23.1



Commercial real estate

9





6.8





7





17.8





5





26.6





4





4.5





7





5.5



Commercial and industrial

16





7.8





9





5.9





5





1.1





15





11.3





9





2.1



Total 30 to 59 days past due

141





83.6





114





57.3





121





60.6





143





70.2





122





60.1



60 to 89 days past due:







































Residential and consumer

33





6.5





46





11.6





30





5.5





37





7.1





37





9.2



Construction







































Multi-family

1





1.9





2





3.5





2





17.2





1





1.1





1





2.6



Commercial real estate









3





3.2





4





6.9













1





3.4



Commercial and industrial

6





2.0





5





4.7





4





4.1





7





3.8





5





0.9



Total 60 to 89 days past due

40





10.4





56





23.0





40





33.7





45





12.0





44





16.1



Total accruing past due loans

181





$

94.0





170





$

80.3





161





$

94.3





188





$

82.2





166





$

76.2



Non-accrual:







































Residential and consumer

255





$

47.4





261





$

48.2





275





$

51.2





296





$

56.4





320





$

59.0



Construction

















1





0.2





1





0.2





1





0.2



Multi-family

8





23.3





6





19.6





14





34.1





14





34.1





15





33.9



Commercial real estate

22





12.0





30





12.3





27





8.1





32





9.8





35





12.4



Commercial and industrial

18





12.5





16





12.0





13





18.0





14





17.2





14





19.4



Total non-accrual loans

303





$

95.2





313





$

92.1





330





$

111.6





357





$

117.7





385





$

124.9



Accruing troubled debt restructured loans

57





$

13.1





58





$

12.5





56





$

12.2





54





$

13.6





54





$

13.6



Non-accrual loans to total loans





0.44

%







0.42

%







0.51

%







0.54

%







0.58

%

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





239.66

%







247.62

%







207.83

%







199.44

%







188.78

%

Allowance for loan losses as a percent of total loans





1.05

%







1.05

%







1.05

%







1.08

%







1.09

%

 

 

Balance Sheet Summary

Total assets increased $469.8 million, or 1.8%, to $26.70 billion at December 31, 2019 from December 31, 2018.  Net loans increased $97.9 million, or 0.5%, to $21.48 billion at December 31, 2019.  Securities increased $167.2 million, or 4.5%, to $3.85 billion at December 31, 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 $175.1 million and $185.8 million, respectively, at December 31, 2019.

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

 



December 31, 2019



September 30, 2019



December 31, 2018



(In thousands)

Commercial Loans:











Multi-family loans

$

7,813,236





7,995,095





8,165,187



Commercial real estate loans

4,831,347





4,771,928





4,786,825



Commercial and industrial loans

2,951,306





2,681,577





2,389,756



Construction loans

262,866





289,857





227,015



Total commercial loans

15,858,755





15,738,457





15,568,783



Residential mortgage loans

5,144,718





5,307,412





5,351,115



Consumer and other

699,796





700,341





707,866



Total Loans

21,703,269





21,746,210





21,627,764



Deferred fees, premiums and other, net

907





(1,991)





(13,811)



Allowance for loan losses

(228,120)





(227,985)





(235,817)



Net loans

$

21,476,056





21,516,234





21,378,136



 

During the year ended December 31, 2019, we originated $1.27 billion in commercial and industrial loans, $861.0 million in commercial real estate loans, $793.6 million in multi-family loans, $462.6 million in residential loans, $76.2 million in consumer and other loans and $69.8 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 year ended December 31, 2019, we purchased loans totaling $294.1 million from these entities.  In addition to the loans originated for our portfolio, we originated residential mortgage loans for sale to third parties totaling $269.8 million during the year ended December 31, 2019.

The allowance for loan losses decreased by $7.7 million to $228.1 million at December 31, 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 December 31, 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 $167.2 million, or 4.5%, to $3.85 billion at December 31, 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 $280.1 million, or 1.6%, from $17.58 billion at December 31, 2018 to $17.86 billion at December 31, 2019 primarily driven by increases in interest-bearing checking and money market accounts, partially offset by decreases in time deposit and non-interest checking accounts.  Checking accounts increased $665.8 million to $7.99 billion at December 31, 2019 from $7.32 billion at December 31, 2018.  Core deposits (savings, checking and money market) represented approximately 78% of our total deposit portfolio at December 31, 2019 compared to 74% at December 31, 2018.

Borrowed funds increased by $391.4 million, or 7.2%, to $5.83 billion at December 31, 2019 from $5.44 billion at December 31, 2018 to help fund the growth of the security and loan portfolios and our share repurchases.

Stockholders' equity decreased by $383.4 million to $2.62 billion at December 31, 2019 from $3.01 billion at December 31, 2018, primarily attributed to the repurchase of 39.4 million shares of common stock for $475.9 million and cash dividends of $0.44 per share totaling $122.2 million during the year ended December 31, 2019.  As previously noted, during December 2019, the Company repurchased 27,318,628 shares beneficially owned by Blue Harbour for approximately $335.7 million.  These decreases were partially offset by net income of $195.5 million and share-based plan activity of $26.3 million for the year ended December 31, 2019.  The Bank remains above the FDIC's "well capitalized" standards, with a Tier 1 Leverage Ratio of 8.27% at December 31, 2019.

About the Company

Investors Bancorp, Inc. is the holding company for Investors Bank, which as of December 31, 2019 operated from its corporate headquarters in Short Hills, New Jersey and 147 branches located throughout New Jersey and New York.

Earnings Conference Call January 30, 2020 at 11:00 a.m. (ET)

The Company, as previously announced, will host an earnings conference call on Thursday, January 30, 2020 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/10137873

A telephone replay will be available beginning on January 30, 2020 from 1:00 p.m. (ET) through 9:00 a.m. (ET) on April 30, 2020.  The replay number is (877) 344-7529, password 10137873.  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















December 31,

2019



September 30,

2019



December 31,

2018



(unaudited)



(unaudited)



(audited)

Assets

(Dollars in thousands)













Cash and cash equivalents

$

174,915





195,400





196,891



Equity securities

6,039





6,030





5,793



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

2,695,390





2,644,024





2,122,162



Debt securities held-to-maturity, net (estimated fair value of $1,190,104,

$1,158,769 and $1,558,564 at December 31, 2019, September 30, 2019

and December 31, 2018, respectively)

1,148,815





1,117,699





1,555,137



Loans receivable, net

21,476,056





21,516,234





21,378,136



Loans held-for-sale

29,797





31,373





4,074



Federal Home Loan Bank stock

267,219





273,996





260,234



Accrued interest receivable

79,313





83,951





77,501



Other real estate owned and other repossessed assets

13,538





12,675





6,911



Office properties and equipment, net

169,614





171,266





177,432



Operating lease right-of-use assets

175,143





179,632







Net deferred tax asset

64,220





108,634





104,411



Bank owned life insurance

218,517





216,925





211,914



Goodwill and intangible assets

97,869





97,566





99,063



Other assets

82,321





69,758





29,349



Total assets

$

26,698,766





26,725,163





26,229,008



Liabilities and Stockholders' Equity











Liabilities:











Deposits

$

17,860,338





17,672,756





17,580,269



Borrowed funds

5,827,111





5,694,553





5,435,681



Advance payments by borrowers for taxes and insurance

121,719





147,359





129,891



Operating lease liabilities

185,827





189,927







Other liabilities

81,821





89,201





77,837



Total liabilities

24,076,816





23,793,796





23,223,678



Stockholders' equity

2,621,950





2,931,367





3,005,330



Total liabilities and stockholders' equity

$

26,698,766





26,725,163





26,229,008



 

 

INVESTORS BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Operations































For the Three Months Ended



For the Year Ended













December 31,

2019



September 30,

2019



December 31,

2018



December 31,

2019



December 31,

2018













(unaudited)



(unaudited)



(unaudited)



(unaudited)



(audited)













(Dollars in thousands, except per share data)

Interest and dividend income:





















Loans receivable and loans held-for-sale

$

228,005





231,734





221,566





912,091





854,595





Securities:























GSE obligations

336





343





267





1,212





1,080







Mortgage-backed securities

23,642





23,978





21,627





95,133





80,906







Equity

35





36





34





143





134







Municipal bonds and other debt

3,052





3,186





5,755





11,494





13,060





Interest-bearing deposits

840





821





894





2,805





2,435





Federal Home Loan Bank stock

4,470





4,456





4,278





17,341





16,206







Total interest and dividend income

260,380





264,554





254,421





1,040,219





968,416



Interest expense:





















Deposits



60,635





67,972





58,279





261,857





188,645





Borrowed funds

30,970





32,130





26,836





123,289





99,754







Total interest expense

91,605





100,102





85,115





385,146





288,399







Net interest income

168,775





164,452





169,306





655,073





680,017



Provision for loan losses

1,500





(2,500)





3,500





(1,000)





12,000







Net interest income after provision for loan losses

167,275





166,952





165,806





656,073





668,017



Non-interest income:





















Fees and service charges

6,819





5,796





5,948





23,604





22,142





Income on bank owned life insurance

1,593





1,832





1,501





6,542





5,926





Gain on loans, net

2,218





1,679





746





5,345





2,144





(Loss) gain on securities, net

(13)





30





(32,802)





(5,536)





(31,604)





Gain on sales of other real estate owned, net

282





358





573





1,145





923





Other income

9,559





5,085





3,240





22,313





10,550







Total non-interest income

20,458





14,780





(20,794)





53,413





10,081



Non-interest expense:





















Compensation and fringe benefits

59,327





63,603





56,789





243,782





235,928





Advertising and promotional expense

3,005





2,994





3,931





13,893





13,054





Office occupancy and equipment expense

16,700





15,702





17,093





63,996





63,539





Federal insurance premiums

3,300





3,300





3,800





13,200





17,760





General and administrative

559





487





626





2,222





2,328





Professional fees

4,897





6,010





3,497





17,308





15,278





Data processing and communication

7,998





8,348





7,491





31,987





27,810





Other operating expenses

11,037





8,274





8,996





36,366





31,983







Total non-interest expenses

106,823





108,718





102,223





422,754





407,680







Income before income tax expense

80,910





73,014





42,789





286,732





270,418



Income tax expense

32,180





21,042





9,459





91,248





67,842







Net income

$

48,730





51,972





33,330





195,484





202,576



Basic earnings per share

$0.19





0.20





0.12





0.75





0.72



Diluted earnings per share

$0.19





0.20





0.12





0.74





0.72

























Basic weighted average shares outstanding

256,559,205





261,678,994





274,909,840





262,202,598





281,925,219





Diluted weighted average shares outstanding

257,006,084





261,812,970





275,249,994





262,519,788





282,791,859



 

 

INVESTORS BANCORP, INC. AND SUBSIDIARY

Average Balance Sheet and Yield/Rate Information







For the Three Months Ended







December 31, 2019



September 30, 2019



December 31, 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

$

280,790



840



1.20

%



$

224,882



821



1.46

%



$

246,322



894



1.45

%



Equity securities

6,036



35



2.32

%



6,001



36



2.40

%



5,796



34



2.35

%



Debt securities available-for-sale

2,624,612



18,021



2.75

%



2,591,055



18,167



2.80

%



2,141,255



13,254



2.48

%



Debt securities held-to-maturity

1,131,386



9,009



3.19

%



1,131,194



9,340



3.30

%



1,583,201



14,395



3.64

%



Net loans

21,519,941



228,005



4.24

%



21,722,751



231,734



4.27

%



20,978,370



221,566



4.22

%



Federal Home Loan Bank stock

276,965



4,470



6.46

%



279,356



4,456



6.38

%



249,454



4,278



6.86

%



Total interest-earning assets

25,839,730



260,380



4.03

%



25,955,239



264,554



4.08

%



25,204,398



254,421



4.04

%

Non-interest earning assets

1,009,868









992,118









681,282









Total assets



$

26,849,598









$

26,947,357









$

25,885,680



































Interest-bearing liabilities:

























Savings

$

2,040,678



4,592



0.90

%



$

1,958,748



4,377



0.89

%



$

2,064,286



3,535



0.68

%



Interest-bearing checking

5,344,156



19,403



1.45

%



4,894,643



21,094



1.72

%



4,857,070



19,075



1.57

%



Money market accounts

3,739,126



14,770



1.58

%



3,750,846



16,065



1.71

%



3,657,772



13,562



1.48

%



Certificates of deposit

4,169,591



21,870



2.10

%



4,756,086



26,436



2.22

%



4,601,607



22,107



1.92

%



 Total interest-bearing deposits

15,293,551



60,635



1.59

%



15,360,323



67,972



1.77

%



15,180,735



58,279



1.54

%



Borrowed funds

5,744,538



30,970



2.16

%



5,756,197



32,130



2.23

%



4,967,147



26,836



2.16

%



Total interest-bearing liabilities

21,038,089



91,605



1.74

%



21,116,520



100,102



1.90

%



20,147,882



85,115



1.69

%

Non-interest-bearing liabilities

2,906,473









2,892,067









2,706,262









Total liabilities

23,944,562









24,008,587









22,854,144







Stockholders' equity

2,905,036









2,938,770









3,031,536









Total liabilities and stockholders' equity

$

26,849,598









$

26,947,357









$

25,885,680



































Net interest income



$

168,775









$

164,452









$

169,306

































Net interest rate spread





2.29

%







2.18

%







2.35

%





























Net interest earning assets

$

4,801,641









$

4,838,719









$

5,056,516



































Net interest margin





2.61

%







2.53

%







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 Year Ended







December 31, 2019



December 31, 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

$

215,447



2,805



1.30

%



$

212,980



2,435



1.14

%



Equity securities

5,938



143



2.41

%



5,754



134



2.33

%



Debt securities available-for-sale

2,395,047



67,822



2.83

%



2,042,129



46,057



2.26

%



Debt securities held-to-maturity

1,317,322



40,017



3.04

%



1,668,106



48,989



2.94

%



Net loans

21,576,829



912,091



4.23

%



20,498,857



854,595



4.17

%



Federal Home Loan Bank stock

274,661



17,341



6.31

%



247,513



16,206



6.55

%





Total interest-earning assets

25,785,244



1,040,219



4.03

%



24,675,339



968,416



3.92

%

Non-interest earning assets

975,585









707,370











Total assets

$

26,760,829









$

25,382,709



























Interest-bearing liabilities:

















Savings

$

1,985,142



17,148



0.86

%



$

2,170,510



13,240



0.61

%



Interest-bearing checking

5,020,991



84,698



1.69

%



4,651,313



62,447



1.34

%



Money market accounts

3,703,413



60,896



1.64

%



3,837,174



46,394



1.21

%



Certificates of deposit

4,609,274



99,115



2.15

%



4,149,438



66,564



1.60

%



 Total interest bearing deposits

15,318,820



261,857



1.71

%



14,808,435



188,645



1.27

%



Borrowed funds

5,611,206



123,289



2.20

%



4,898,867



99,754



2.04

%





Total interest-bearing liabilities

20,930,026



385,146



1.84

%



19,707,302



288,399



1.46

%

Non-interest-bearing liabilities

2,887,601









2,590,675











Total liabilities

23,817,627









22,297,977







Stockholders' equity

2,943,202









3,084,732











Total liabilities and stockholders' equity

$

26,760,829









$

25,382,709



























Net interest income



$

655,073









$

680,017

























Net interest rate spread





2.19

%







2.46

%





















Net interest earning assets

$

4,855,218









$

4,968,037



























Net interest margin





2.54

%







2.76

%





















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 Year Ended



December 31,

2019



September 30,

2019



December 31,

2018



December 31,

2019



December 31,

2018

Return on average assets

0.73

%



0.77

%



0.52

%



0.73

%



0.80

%

Return on average equity

6.71

%



7.07

%



4.40

%



6.64

%



6.57

%

Return on average tangible equity

6.94

%



7.32

%



4.55

%



6.87

%



6.79

%

Interest rate spread

2.29

%



2.18

%



2.35

%



2.19

%



2.46

%

Net interest margin

2.61

%



2.53

%



2.69

%



2.54

%



2.76

%

Efficiency ratio

56.45

%



60.66

%



68.83

%



59.67

%



59.08

%

Non-interest expense to average total assets

1.59

%



1.61

%



1.58

%



1.58

%



1.61

%

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



























December 31,

2019



September 30,

2019



December 31,

2018





Asset Quality Ratios:



















Non-performing assets as a percent of total assets



0.46

%



0.44

%



0.55

%





Non-performing loans as a percent of total loans



0.50

%



0.48

%



0.64

%





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



239.66

%



247.62

%



188.78

%





Allowance for loan losses as a percent of total loans



1.05

%



1.05

%



1.09

%

























Capital Ratios:



















Tier 1 Leverage Ratio (1)





8.27

%



9.68

%



10.28

%





Common equity tier 1 risk-based (1)





11.03

%



12.95

%



13.41

%





Tier 1 Risk-Based Capital (1)





11.03

%



12.95

%



13.41

%





Total Risk-Based Capital (1)





12.18

%



14.10

%



14.60

%





Equity to total assets (period end)





9.82

%



10.97

%



11.46

%





Average equity to average assets





10.82

%



10.91

%



11.71

%





Tangible capital to tangible assets (2)





9.49

%



10.64

%



11.12

%





Book value per common share (2)





$

11.11





$

11.13





$

10.95







Tangible book value per common share (2)





$

10.69





$

10.76





$

10.59



























Other Data:



















Number of full service offices





147





147





151







Full time equivalent employees





1,761





1,887





1,928

















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





(2) 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



















December 31, 2019



September 30, 2019



December 31, 2018













Total stockholders' equity

$

2,621,950





2,931,367





3,005,330



Goodwill and intangible assets

97,869





97,566





99,063



Tangible stockholders' equity

$

2,524,081





2,833,801





2,906,267















Book Value per Share Computation











Common stock issued

359,070,852





359,070,852





359,070,852



Treasury shares

(111,630,950)





(84,314,431)





(72,797,738)



Shares outstanding

247,439,902





274,756,421





286,273,114



Unallocated ESOP shares

(11,368,750)





(11,487,175)





(11,842,448)



Book value shares

236,071,152





263,269,246





274,430,666















Book Value per Share

$

11.11





$

11.13





$

10.95



Tangible Book Value per Share

$

10.69





$

10.76





$

10.59















Total assets

$

26,698,766





26,725,163





26,229,008



Goodwill and intangible assets

97,869





97,566





99,063



Tangible assets

$

26,600,897





26,627,597





26,129,945















Tangible capital to tangible assets

9.49

%



10.64

%



11.12

%

 

Contact:     

Marianne Wade

(973) 924-5100

investorrelations@investorsbank.com

Cision View original content:http://www.prnewswire.com/news-releases/investors-bancorp-inc-announces-fourth-quarter-financial-results-and-cash-dividend-300995681.html

SOURCE Investors Bancorp, Inc.

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