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

SHORT HILLS, N.J., Oct. 27, 2016 /PRNewswire/ -- Investors Bancorp, Inc. ISBC ("Company"), the holding company for Investors Bank ("Bank"), reported net income of $43.4 million, or  $0.15 per diluted share, for the three months ended September 30, 2016, compared to $44.4 million, or  $0.15  per diluted share for the three months ended June 30, 2016, and $48.8 million, or $0.15 per diluted share for the three months ended September 30, 2015.

For the nine months ended September 30, 2016, net income totaled $131.4 million, or $0.43 per diluted share, compared to $137.1 million, or $0.41 per diluted share for the nine months ended September 30, 2015.

Net income for the 2015 periods include a $4.1 million tax benefit for a one-time discrete item related to a net operating loss carryforward from a previous acquisition.  Excluding this item, net income for the three and nine months ended September 30, 2015 would have been $44.7 million and $133.0 million, respectively.  Basic and diluted earnings per share for the three months ended September 30, 2015 would have been $0.14.  Basic and diluted earnings per share for the nine months ended September 30, 2015 would have been $0.40 and $0.39, respectively. (1)

The Company also announced today that its Board of Directors declared a cash dividend of $0.08 per share to be paid on November 23, 2016 for stockholders of record as of November 10, 2016, representing a $0.02 increase from the prior quarter.

Kevin Cummings, President and CEO commented, "While we continue to grow, asset quality remains strong here at Investors as our non-performing loan ratios continue to fall. We remain mindful of commercial real estate concerns in our primary lending areas and will continue to be diligent in our lending practices."

Mr. Cummings also commented on the board's recent decision to increase dividends, "The dividend increase reinforces our confidence in our business model and our strategic plan to evolve into a more commercially focused bank."

Performance Highlights

  • Total assets increased $817.7 million, or 4% to $22.54 billion at September 30, 2016, from $21.72 billion at June 30, 2016.
  • Net loans increased $657.3 million, or 4%, to $18.07 billion at September 30, 2016 from $17.41 billion at June 30, 2016. During the three months ended September 30, 2016, we originated $632.7 million in multi-family loans, $217.3 million in commercial and industrial loans, $137.9 million in construction loans, $165.5 million in residential loans, $140.9 million in commercial real estate loans and $45.2 million in consumer and other loans.
  • Deposits increased $525.9 million, or 4% from $14.43 billion at June 30, 2016 to $14.95 billion at September 30, 2016. Core deposit accounts (savings, checking and money market) represent approximately 80% of total deposits as of September 30, 2016.
  • Net interest margin for the three months ended September 30, 2016 was 3.00%, which was a 4 basis point decrease compared to the three months ended June 30, 2016 and a 14 basis point decrease compared to the three months ended September 30, 2015.
  • During the three months ended September 30, 2016, the Company repurchased 6.4 million shares of its outstanding common stock for approximately $73.7 million. As of September 30, 2016, the Company had approximately 23 million shares remaining under its current repurchase plan.

Financial Performance Overview - Third Quarter 2016

For the third quarter of 2016, net income totaled $43.4 million, a decrease of $0.9 million as compared to the second quarter of 2016 and a decrease of $5.4 million as compared to the third quarter of 2015.  The changes in net income on both a sequential and year over year quarter basis are the result of the following:

Net interest income increased by $2.3 million, or 1.5% as compared to the second quarter of 2016 due to:

  • An increase in interest and dividend income of $3.4 million, or 1.8% to $198.4 million as compared to the second quarter of 2016 primarily attributed to commercial loan growth, offset by a decrease of 5 basis points on the weighted average loan yield to 4.05%.
  • Prepayment penalties, which are included in interest income, totaled $4.0 million for the three months ended September 30, 2016 as compared to $5.9 million for the three months ended June 30, 2016.
  • An increase in total interest expense of $1.1 million was primarily attributed to an increase in interest expense on borrowed funds of $1.4 million to $18.4 million, or 8%, partially offset by a decrease of 1 basis point to 0.93% on the weighted average cost of interest-bearing liabilities for the three months ended September 30, 2016.

The net interest margin decreased 4 basis points to 3.00% for the three months ended September 30, 2016 from 3.04% for the three months ended June 30, 2016.

On a year over year basis, net interest income increased by $8.3 million, or 5.5% in the third quarter of 2016, as compared to the third quarter of 2015 due to:

  • An increase in interest and dividend income of $11.5 million, or 6.1% to $198.4 million as a result of a $1.86 billion increase in the average balance of net loans, partially offset by the weighted average yield on net loans decreasing 22 basis points to 4.05%.
  • Prepayment penalties, which are included in interest income, totaled $4.0 million for the three months ended September 30, 2016 as compared to $6.4 million for the three months ended September 30, 2015.
  • An increase in total interest expense of $3.1 million was primarily attributed to an increase in the average balance of total interest-bearing deposits of $891.6 million, or 7.6% to $12.56 billion for the three months ended September 30, 2016 and an increase in the average balance of total borrowed funds of $829.0 million . In addition, the weighted average cost of interest-bearing liabilities decreased 3 basis points to 0.93% for the three months ended September 30, 2016.

The net interest margin decreased 14 basis points year over year to 3.00% for the three months ended September 30, 2016 from 3.14% for the three months ended September 30, 2015.

Total non-interest income was $8.5 million for the three months ended September 30, 2016, a decrease of $2.9 million as compared to the second quarter of 2016.   Gain on securities transactions decreased $1.6 million primarily due to the fact that the second quarter of 2016 included a  sale  of $37.4 million of securities resulting in a gain of $1.6 million.  Fees and service charges decreased $529,000 from the second quarter of 2016, primarily driven by a decrease to loan fees as well as an increase to the valuation reserve on mortgage servicing rights.  Other income decreased $485,000 from the second quarter of 2016.

Compared to the third quarter of 2015, total non-interest income decreased $2.8 million year over year.  Gain on loans, net decreased $737,000 for the three months ended September 30, 2016 primarily as a result of lower loan sales through our mortgage subsidiary as well as the Bank.  In addition security transactions and gain on other real estate owned decreased $861,000 and $795,000, respectively, from the third quarter of 2015.

Total non-interest expenses were $91.4 million for the three months ended September 30, 2016, an increase of $389,000 as compared to the second quarter of 2016.  Professional fees increased $866,000 as we continue to build additional risk management and operational infrastructure as our company grows and as we enhance our employee training and development programs.  In addition, federal insurance premiums increased $800,000.  These increases were offset by decreases to advertising and promotional expense and compensation and fringe benefits totaling $956,000 and $556,000, respectively. 

Compared to the third quarter of 2015, total non-interest expenses increased $5.5 million, or 6.4% year over year.  Compensation and fringe benefits increased $4.0 million for the three months ended September 30, 2016 primarily due to additions to our staff to support continued growth and infrastructure and normal merit increases.  In addition, professional fees increased $1.8 million as we build additional risk management and operational infrastructure.  Federal insurance premiums and office occupancy and equipment expense increased $1.4 million and $1.2 million, respectively, for the three months ended September 30, 2016.

Income tax expense was $28.3 million for the three months ended September 30, 2016 and $28.4 million for the three months ended June 30, 2016, representing an effective tax rate of 39.4% and 39.0%, respectively.  Income tax expense was $22.9 million for the three months ended September 30, 2015, representing an effective tax rate of 31.9% which includes a one time discrete item related to a NOL carryforward.  Absent this discrete item, the tax rate for the three months ended September 30, 2015 would have been 37.6%. 

Financial Performance Overview- Nine Months of 2016

Net income decreased by $5.7 million, year over year to $131.4 million for the nine months ended September 30, 2016.  The changes in net income for the nine months ended year over year are the result of the following:

  • Total interest and dividend income increased by $41.9 million, or 7.7% to $585.4 million for the nine months ended September 30, 2016 as compared to the nine months of 2015 primarily attributed to growth in the commercial loan portfolio. This increase was offset by a decrease of 15 basis points to the weighted average yield on net loans to 4.09%.
  • Prepayment penalties, which are included in interest income, totaled $14.6 million for the nine months ended September 30, 2016 compared to $16.6 million for the nine months ended September 30, 2015.
  • Total interest expense increased by $14.7 million or 14.8% to $114.0 million for the nine months ended September 30, 2016 as compared to the nine months of 2015. The average balance of total interest-bearing deposits increased $1.14 billion, or 10.0% to $12.43 billion for the nine months ended September 30, 2016. In addition, the weighted average cost of interest-bearing deposits increased 6 basis points to 0.66% for the nine months ended September 30, 2016.
  • Net interest margin decreased 12 basis points as compared to the nine months of 2015 to 3.03% for the nine months ended September 30, 2016.

Total non-interest income was $28.7 million for the nine months ended September 30, 2016, a decrease of $2.7 million, or 8.7% as compared to the nine months of 2015.  Gain on loans, net decreased $2.9 million for the nine months ended September 30, 2016 primarily as a result of lower loan sales through our mortgage subsidiary as well as the Bank.  In addition, gain on sale of other real estate owned decreased $1.2 million as compared to the nine months of 2015.  These decreases were offset by an increase of $2.1 million in gain on securities transactions for the nine months ended September 30, 2016 primarily due to the sale of securities totaling $69.1 million, resulting in a gain of $3.1 million.

Total non-interest expense was $269.6 million for the nine months ended September 30, 2016, an increase of $26.9 million, or 11.1% as compared to the nine months of 2015.  Compensation and fringe benefits increased $20.8 million for the nine months ended September 30, 2016.  The increase was primarily due to an increase of $10.3 million in equity incentive expense for the nine months ended September 30, 2016 resulting from the restricted stock and stock option grants on June 23, 2015 to certain employees, officers and directors of the Company, pursuant to the Investors Bancorp, Inc. 2015 Equity Incentive Plan; additions to our staff to support continued growth; and normal merit increases.   Office occupancy and equipment expense increased $4.2 million for the nine months ended September 30, 2016 primarily due to new branch openings.  Professional fees and other operating expenses increased $2.9 million and $1.8 million, respectively, for the nine months ended September 30, 2016 as we continue to build additional risk management and operational infrastructure as our company grows and we enhance our employee training and development programs.

Income tax expense was $84.2 million for the nine months ended September 30, 2016 compared to $74.9 million for the nine months ended September 30, 2015, representing an effective tax rate of 39.1%  and 35.3%, respectively.  The tax rate for the nine months ended September 30, 2015 includes a one time discrete item related to a NOL carryforward.  Absent this discrete item, the tax rate for the nine months ended September 30, 2015 would have been 37.3%.

Asset Quality

Our provision for loan losses was $5.0 million for each of the three months ended September 30, 2016, the second quarter of 2016 and the three months ended September 30, 2015. For the three months ended September 30, 2016, net charge-offs were $1.8 million compared to $1.3 million for the second quarter of 2016 and $504,000 for the three months ended September 30, 2015.  For the nine months ended September 30, 2016 our provision for loan loss was $15.0 million compared with $21.0 million for the nine months ended September 30, 2015.  For the nine months ended September 30, 2016, net charge-offs were $10.0 million compared to $2.8 million for the nine months ended September 30, 2015.

Our provision for the three and nine months ended September 30, 2016 is primarily a result of continued organic growth in the loan portfolio, specifically the multi-family, commercial real estate and commercial and industrial portfolios; the inherent credit risk in our overall portfolio, particularly the credit risk associated with commercial real estate lending and commercial and industrial lending; offset by the improvement in the level of non-performing loans.

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. 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.

Total non-accrual loans decreased to $97.5 million at September 30, 2016 compared to $100.3 million at June 30, 2016 and $124.1 million at September 30, 2015. We continue to diligently resolve our troubled loans, however it takes a long period of time to resolve residential credits in our lending area. At September 30, 2016, there were $30.0 million of loans deemed as troubled debt restructurings, of which $23.5 million were residential and consumer loans, $4.1 million were commercial real estate loans, and $2.4 million were commercial and industrial loans. Troubled debt restructured loans in the amount of $8.8 million were classified as accruing and $21.2 million were classified as non-accrual at September 30, 2016.

 




September 30, 2016


June 30, 2016


March 31, 2016


December 31, 2015


September 30, 2015


# 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

110



$

18.9



131



$

24.9



151



$

28.6



168



$

28.6



135



$

23.5


Construction




















Multi-family

3



4.1







6



18.0



5



13.7



9



11.2


Commercial real estate

11



24.0



5



3.9



12



24.5



6



1.3



13



7.3


Commercial and industrial

6



1.4



1



2.8



3



3.8



3



0.6



9



2.9


Total 30 to 59 days past due

130



$

48.4



137



$

31.6



172



$

74.9



182



$

44.2



166



$

44.9


60 to 89 days past due:




















Residential and consumer

62



11.1



51



7.8



66



16.3



86



14.2



57



14.6


Construction




















Multi-family

1



1.1


















Commercial real estate

3



16.4



2



0.7



1



0.3



3



0.4



1



0.3


Commercial and industrial

3



0.4



1



0.8



1





2





3



0.9


Total 60 to 89 days past due

69



29.0



54



9.3



68



16.6



91



14.6



61



15.8


Total accruing past due loans

199



$

77.4



191



$

40.9



240



$

91.5



273



$

58.8



227



$

60.7


Non-accrual:




















Residential and consumer

481



86.1



471



86.5



488



85.9



500



91.1



506



99.8


Construction





1



0.2



3



0.5



4



0.8



5



1.0


Multi-family

1



0.2



2



1.2



3



2.9



4



3.5



4



3.0


Commercial real estate

29



8.9



33



11.7



35



10.3



37



10.8



40



13.8


Commercial and industrial

6



2.3



6



0.7



10



5.6



17



9.2



9



6.5


Total non-accrual loans

517



$

97.5



513



$

100.3



539



$

105.2



562



$

115.4



564



$

124.1


Accruing troubled debt restructured loans

31



$

8.8



29



$

12.1



30



$

10.7



39



$

22.5



38



$

25.2


Non-accrual loans to total loans



0.53

%




0.57

%




0.61

%




0.68

%




0.76

%

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



229.31

%




219.60

%




205.83

%




189.30

%




175.97

%

Allowance for loan losses as a percent of total loans



1.22

%




1.25

%




1.26

%




1.29

%




1.33

%

 

Balance Sheet Summary

Total assets increased by $1.65 billion, or 7.9% to $22.54 billion at September 30, 2016 from December 31, 2015.  Net loans increased $1.41 billion or 8.4%, to $18.07 billion at September 30, 2016, and securities increased by $157.4 million, or 5.0%, to $3.31 billion at September 30, 2016 from December 31, 2015. 

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

           


September 30, 2016


June 30, 2016


December 31, 2015


(Dollars in thousands)

Commercial Loans:






Multi-family loans

$

7,360,733



$

6,903,992



$

6,255,903


Commercial real estate loans

4,103,250



4,035,401



3,829,099


Commercial and industrial loans

1,191,234



1,100,453



1,044,386


Construction loans

277,155



242,302



225,843


Total commercial loans

12,932,372



12,282,148



11,355,231


Residential mortgage loans

4,798,386



4,821,415



5,039,543


Consumer and other

576,402



543,861



496,556


Total Loans

18,307,160



17,647,424



16,891,330


Premiums on purchased loans and deferred loan fees, net

(15,428)



(16,237)



(11,692)


Allowance for loan losses

(223,550)



(220,316)



(218,505)


Net loans

$

18,068,182



$

17,410,871



$

16,661,133


 

During the nine months ended September 30, 2016, we originated $1.74 billion in multi-family loans, $670.0 million in commercial and industrial loans, $442.0 million in commercial real estate loans, $395.0 million in residential loans, $335.7 million in construction loans and $235.7 million in consumer and other loans.  This increase in loans reflects our continued focus on generating multi-family loans, commercial real estate loans and commercial and industrial loans, which was partially offset by pay downs and payoffs of loans.  Our loans are primarily on properties and businesses located in New Jersey and New York.

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 $166.5 million during the nine months ended September 30, 2016.

The allowance for loan losses increased by $5.1 million to $223.6 million at September 30, 2016 from $218.5 million at December 31, 2015.  The increase in our allowance for loan losses is due to the growth of the loan portfolio and the credit risk in our overall portfolio, particularly the inherent credit risk associated with commercial real estate lending as well as commercial and industrial 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, 2016, our allowance for loan loss as a percent of total loans was 1.22%.

Securities, in the aggregate, increased by $157.4 million, or 5.0%, to $3.31 billion at September 30, 2016 from $3.15 billion at December 31, 2015.  This increase was a result of purchases partially offset by paydowns and sales. 

Deposits increased by $888.1 million, or 6.3%, from $14.06 billion at December 31, 2015 to $14.95 billion at September 30, 2016.  Checking accounts increased $1.24 billion to $5.88 billion at September 30, 2016 from $4.64 billion at December 31, 2015.  Core deposits  (savings, checking and money market) represented approximately 80% of our total deposit portfolio at September 30, 2016.

Borrowed funds increased by $940.6 million, or 28.8%, to $4.20 billion at September 30, 2016 from $3.26 billion at  December 31, 2015 to help fund the continued growth of the loan portfolio. 

Stockholders' equity decreased by $196.6 million to $3.12 billion at September 30, 2016 from $3.31 billion at December 31, 2015.  The decrease is primarily attributed to the repurchase of 29.2 million shares of common stock for $337.5 million as well as cash dividends of $0.18 per share totaling $57.6 million for the nine months ended September 30, 2016.  These decreases were offset by net income of $131.4 million for the nine months ended September 30, 2016.

About the Company

Investors Bancorp, Inc. is the holding company for Investors Bank, which as of September 30, 2016 operates from its corporate headquarters in Short Hills, New Jersey and 148 branches located throughout New Jersey and New York.

Earnings Conference Call October 28, 2016 at 11:00 a.m. (ET)

The Company, as previously announced, will host an earnings conference call on  Friday, October 28, 2016 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/10093389

A telephone replay will be available beginning on October 28, 2016 from 1:00 p.m. (ET) through 9:00 a.m. (ET) on January 28, 2017.  The replay number is (877) 344-7529 password 10093389.  The conference call will also be simultaneously webcast on the Company's website www.myinvestorsbank.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.

(1)  Please refer to the Non-GAAP Reconciliation for details pertaining to adjustments.

 

Contact:
Marianne Wade
(973) 924-5100
investorrelations@myinvestorsbank.com

 


INVESTORS BANCORP, INC. AND SUBSIDIARIES

Consolidated Balance Sheets








September 30, 2016


June 30, 2016


December 31,

 2015


(unaudited)


(unaudited)



Assets

(Dollars in thousands)







Cash and cash equivalents

$

168,629



148,322



148,904


Securities available-for-sale, at estimated fair value

1,512,146



1,381,041



1,304,697


Securities held-to-maturity, net (estimated fair value of $1,868,397, $1,905,064 and $1,888,686 at September 30, 2016, June 30, 2016 and December 31, 2015, respectively)

1,794,131



1,827,761



1,844,223


Loans receivable, net

18,068,182



17,410,871



16,661,133


Loans held-for-sale

24,240



9,970



7,431


Federal Home Loan Bank stock

222,562



208,824



178,437


Accrued interest receivable

66,048



64,491



58,563


Other real estate owned

4,835



3,774



6,283


Office properties and equipment, net

178,623



176,006



172,519


Net deferred tax asset

228,902



220,141



237,367


Bank owned life insurance

161,187



160,181



159,152


Goodwill and intangible assets

102,825



103,975



105,311


Other assets

3,667



2,941



4,664


Total assets

$

22,535,977



21,718,298



20,888,684


Liabilities and Stockholders' Equity






Liabilities:






Deposits

$

14,951,742



14,425,857



14,063,656


Borrowed funds

4,203,711



3,894,171



3,263,090


Advance payments by borrowers for taxes and insurance

122,823



118,177



108,721


Other liabilities

142,612



147,841



141,570


Total liabilities

19,420,888



18,586,046



17,577,037


Stockholders' equity:






Preferred stock, $0.01 par value, 100,000,000 authorized shares;  none issued






Common stock, $0.01 par value, 1,000,000,000 shares authorized; 359,070,852 issued at September 30, 2016, June 30, 2016, and December 31, 2015; 310,528,382, 313,473,634 and 334,894,181 outstanding at September 30, 2016, June 30, 2016, and December 31, 2015, respectively

3,591



3,591



3,591


Additional paid-in capital

2,780,312



2,788,796



2,785,503


Retained earnings

1,009,727



984,958



936,040


Treasury stock, at cost; 48,542,470, 45,597,218 and 24,176,671 shares at September 30, 2016, June 30, 2016 and December 31, 2015, respectively

(575,187)



(542,407)



(295,412)


Unallocated common stock held by the employee stock ownership plan

(88,003)



(88,752)



(90,250)


Accumulated other comprehensive loss

(15,351)



(13,934)



(27,825)


Total stockholders' equity

3,115,089



3,132,252



3,311,647


Total liabilities and stockholders' equity

$

22,535,977



21,718,298



20,888,684


 


INVESTORS BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Income

(unaudited)

 







For the Three Months Ended


For the Nine Months Ended







September 30, 2016


June 30,

 2016


September 30, 2015


September 30, 2016


September 30, 2015







(Dollars in thousands, except per share data)

Interest and dividend income:











Loans receivable and loans held-for-sale

$

179,234



175,922



169,216



527,989



493,783



Securities:












GSE obligations

8



9



11



27



34




Mortgage-backed securities

14,653



14,830



14,171



44,581



40,374




Equity

49



47



25



147



73




Municipal bonds and other debt

2,039



2,057



1,535



6,048



4,151



Interest-bearing deposits

76



74



68



253



124



Federal Home Loan Bank stock

2,315



2,021



1,871



6,396



5,046




Total interest and dividend income

198,374



194,960



186,897



585,441



543,585


Interest expense:











Deposits


20,326



20,588



18,664



61,639



51,112



Borrowed funds

18,442



17,067



16,959



52,328



48,205




Total interest expense

38,768



37,655



35,623



113,967



99,317




Net interest income

159,606



157,305



151,274



471,474



444,268


Provision for loan losses

5,000



5,000



5,000



15,000



21,000




Net interest income after provision for loan losses

154,606



152,305



146,274



456,474



423,268


Non-interest income:











Fees and service charges

4,108



4,637



4,347



12,925



12,949



Income on bank owned life insurance

1,006



1,001



949



3,267



2,961



Gain on loans, net

1,401



1,677



2,138



3,516



6,461



Gain on securities transactions

72



1,640



933



3,100



1,017



Gain (loss) on sales of other real estate owned, net

35



131



830



(67)



1,141



Other income

1,898



2,383



2,109



5,956



6,896




Total non-interest income

8,520



11,469



11,306



28,697



31,425


Non-interest expense:











Compensation and fringe benefits

53,051



53,607



49,024



158,475



137,700



Advertising and promotional expense

1,495



2,451



3,260



5,640



8,532



Office occupancy and equipment expense

14,099



13,703



12,856



41,612



37,398



Federal insurance premiums

3,600



2,800



2,200



8,800



6,800



Stationery, printing, supplies and telephone

641



949



1,742



2,407



3,379



Professional fees

5,673



4,807



3,880



14,493



11,593



Data processing service fees

5,299



4,962



5,979



15,821



16,775



Other operating expenses

7,540



7,730



6,980



22,304



20,489




Total non-interest expenses

91,398



91,009



85,921



269,552



242,666




Income before income tax expense

71,728



72,765



71,659



215,619



212,027


Income tax expense

28,287



28,410



22,865



84,196



74,924




Net income

$

43,441



44,355



48,794



131,423



137,103


Basic earnings per share

$0.15



0.15



0.15



0.44



0.41


Diluted earnings per share

$0.15



0.15



0.15



0.43



0.41













Basic weighted average shares outstanding

292,000,061



298,417,609



324,065,364



299,873,985



333,786,211



Diluted weighted average shares outstanding

294,174,812



301,509,608



327,193,519



302,854,220



337,005,469


 


INVESTORS BANCORP, INC. AND SUBSIDIARIES

Average Balance Sheet and Yield/Rate Information

 




For the Three Months Ended




September 30, 2016


June 30, 2016


September 30, 2015




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

$

129,226


76


0.24

%


$

136,718


74


0.22

%


$

224,276


68


0.12

%


Securities available-for-sale

1,424,338


6,315


1.77

%


1,300,953


5,955


1.83

%


1,274,256


5,759


1.81

%


Securities held-to-maturity

1,815,288


10,434


2.30

%


1,876,567


10,988


2.34

%


1,772,043


9,983


2.25

%


Net loans

17,707,883


179,234


4.05

%


17,173,249


175,922


4.10

%


15,843,434


169,216


4.27

%


Federal Home Loan Bank stock

216,813


2,315


4.27

%


196,130


2,021


4.12

%


177,616


1,871


4.21

%


Total interest-earning assets

21,293,548


198,374


3.73

%


20,683,617


194,960


3.77

%


19,291,625


186,897


3.88

%

Non-interest earning assets

778,244





767,991





773,225





Total assets


$

22,071,792





$

21,451,608





$

20,064,850


















Interest-bearing liabilities:













Savings

$

2,104,583


2,463


0.47

%


$

2,076,058


2,342


0.45

%


$

2,178,877


1,732


0.32

%


Interest-bearing checking

3,472,472


4,451


0.51

%


3,146,805


3,612


0.46

%


2,632,445


2,255


0.34

%


Money market accounts

3,971,339


5,719


0.58

%


3,805,237


5,216


0.55

%


3,571,504


5,602


0.63

%


Certificates of deposit

3,009,330


7,693


1.02

%


3,376,342


9,418


1.12

%


3,283,262


9,075


1.11

%


 Total interest bearing deposits

12,557,724


20,326


0.65

%


12,404,442


20,588


0.66

%


11,666,088


18,664


0.64

%


Borrowed funds

4,074,743


18,442


1.81

%


3,608,637


17,067


1.89

%


3,245,751


16,959


2.09

%


Total interest-bearing liabilities

16,632,467


38,768


0.93

%


16,013,079


37,655


0.94

%


14,911,839


35,623


0.96

%

Non-interest bearing liabilities

2,316,873





2,260,876





1,766,491





Total liabilities

18,949,340





18,273,955





16,678,330




Stockholders' equity

3,122,452





3,177,653





3,386,520





Total liabilities and stockholders' equity

$

22,071,792





$

21,451,608





$

20,064,850


















Net interest income


$

159,606





$

157,305





$

151,274

















Net interest rate spread



2.80

%




2.83

%




2.92

%















Net interest earning assets

$

4,661,081





$

4,670,538





$

4,379,786


















Net interest margin



3.00

%




3.04

%




3.14

%















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

1.28


X



1.29


X



1.29


X































 

INVESTORS BANCORP, INC. AND SUBSIDIARIES

Average Balance Sheet and Yield/Rate Information















For the Nine Months Ended




September 30, 2016


September 30, 2015




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

$

141,230


253


0.24

%


$

203,336


124


0.08%


Securities available-for-sale

1,339,122


18,350


1.83

%


1,236,175


16,676


1.80%


Securities held-to-maturity

1,856,318


32,453


2.33

%


1,668,829


27,956


2.23%


Net loans

17,218,547


527,989


4.09

%


15,515,391


493,783


4.24%


Federal Home Loan Bank stock

197,958


6,396


4.31

%


171,194


5,046


3.93%



Total interest-earning assets

20,753,175


585,441


3.76

%


18,794,925


543,585


3.86%

Non-interest earning assets

774,102





768,739






Total assets

$

21,527,277





$

19,563,664














Interest-bearing liabilities:









Savings

$

2,099,960


7,184


0.46

%


$

2,275,965


5,026


0.29%


Interest-bearing checking

3,207,413


11,198


0.47

%


2,694,033


7,110


0.35%


Money market accounts

3,868,155


16,384


0.56

%


3,504,684


17,538


0.67%


Certificates of deposit

3,258,702


26,873


1.10

%


2,824,479


21,438


1.01%


 Total interest bearing deposits

12,434,230


61,639


0.66

%


11,299,161


51,112


0.60%


Borrowed funds

3,667,473


52,328


1.90

%


3,141,608


48,205


2.05%



Total interest-bearing liabilities

16,101,703


113,967


0.94

%


14,440,769


99,317


0.92%

Non-interest bearing liabilities

2,234,692





1,637,013






Total liabilities

18,336,395





16,077,782




Stockholders' equity

3,190,882





3,485,882






Total liabilities and stockholders' equity

$

21,527,277





$

19,563,664














Net interest income


$

471,474





$

444,268













Net interest rate spread



2.82

%




2.94

%











Net interest earning assets

$

4,651,472





$

4,354,156














Net interest margin



3.03

%




3.15

%











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

1.29


X



1.30


X






















 


INVESTORS BANCORP, INC. AND SUBSIDIARIES

Selected Performance Ratios

 












For the Three Months Ended


For the Nine Months Ended


September 30,

 2016


June 30,

 2016


September 30,

 2015


September 30,

 2016


September 30,

 2015











Return on average assets

0.79

%


0.83

%


0.97

%


0.81

%


0.93

%

Return on average equity

5.56

%


5.58

%


5.76

%


5.49

%


5.24

%

Return on average tangible equity (1)

5.76

%


5.77

%


5.95

%


5.68

%


5.41

%

Interest rate spread

2.80

%


2.83

%


2.92

%


2.82

%


2.94

%

Net interest margin

3.00

%


3.04

%


3.14

%


3.03

%


3.15

%

Efficiency ratio

54.36

%


53.92

%


52.85

%


53.89

%


51.01

%

Non-interest expense to average total assets

1.66

%


1.70

%


1.71

%


1.67

%


1.65

%

Average interest-earning assets to average interest-bearing liabilities

1.28



1.29



1.29



1.29



1.30






















 

INVESTORS BANCORP, INC. AND SUBSIDIARIES

Selected Financial Ratios and Other Data

 














September 30,

 2016


June 30,

 2016


December 31, 2015













Asset Quality Ratios:










Non-performing assets as a percent of total assets



0.49

%


0.54

%


0.69

%



Non-performing loans as a percent of total loans



0.58

%


0.64

%


0.82

%



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


229.31

%


219.60

%


189.30

%



Allowance for loan losses as a percent of total loans


1.22

%


1.25

%


1.29

%













Capital Ratios:










Tier 1 Leverage Ratio (2)



12.25

%


12.33

%


12.41

%



Common equity tier 1 risk-based (2)



15.09

%


15.39

%


15.87

%



Tier 1 Risk-Based Capital (2)



15.09

%


15.39

%


15.87

%



Total Risk-Based Capital (2)



16.33

%


16.64

%


17.12

%



Equity to total assets (period end)



13.82

%


14.42

%


15.85

%



Average equity to average assets



14.82

%


15.18

%


17.41

%



Tangible capital (to tangible assets) (1)



13.43

%


14.01

%


15.43

%



Book value per common share (1)



$

10.47



$

10.43



$

10.30




Tangible book value per common share (1)



$

10.12



$

10.08



$

9.97














Other Data:










Number of full service offices



148



146



140




Full time equivalent employees



1,782



1,785



1,734







(1) See Non GAAP Reconciliation.





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



 

Investors Bancorp, Inc.

Non GAAP Reconciliation

(dollars in thousands, except share data)

 







Book Value and Tangible Book Value per Share Computation

 




At the period ended


September 30, 2016


June 30,

 2016


December 31, 2015







Total stockholders' equity

3,115,089



3,132,252



3,311,647


Goodwill and intangible assets

102,825



103,975



105,311


Tangible stockholders' equity

3,012,264



3,028,277



3,206,336








Book Value per Share Computation






Common stock issued

359,070,852



359,070,852



359,070,852


Treasury shares

(48,542,470)



(45,597,218)



(24,176,671)


Shares Outstanding

310,528,382



313,473,634



334,894,181


Unallocated ESOP shares

(12,908,272)



(13,026,696)



(13,263,545)


Book value shares

297,620,110



300,446,938



321,630,636








Book Value Per Share

$

10.47



$

10.43



$

10.30








Tangible Book Value per Share

$

10.12



$

10.08



$

9.97








 

Investors Bancorp, Inc.

Non GAAP Reconciliation

(dollars in thousands)

 








Adjusted Tax Rate








For the Three Months Ended September 30


For the Nine Months Ended

 September 30


2016


2015


2016


2015









Income before income tax expense

$

71,728



$

71,659



$

215,619



$

212,027


Income tax expense

28,287



22,865



84,196



74,924


Net Income

43,441



48,794



131,423



137,103










Effective tax rate

39.4

%


31.9

%


39.1

%


35.3

%









Tax adjustment (1)



4,076





4,076










Adjusted net income

$

43,441



$

44,718



$

131,423



$

133,027


Adjusted tax rate

39.4

%


37.6

%


39.1

%


37.3

%









Adjusted basic earnings per share

$

0.15



$

0.14



$

0.44



$

0.40


Adjusted diluted earnings per share

$

0.15



$

0.14



$

0.43



$

0.39










Weighted average shares outstanding:








Basic

292,000,061



324,065,364



299,873,985



333,786,211


Diluted

294,174,812



327,193,519



302,854,220



337,005,469










(1) For the 2015 periods, represents a tax benefit related to a net operating loss carryforward related to a prior acquisition recognized in the third quarter of 2015.

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/investors-bancorp-inc-announces-third-quarter-financial-results-and-cash-dividend-300353088.html

SOURCE Investors Bancorp, Inc.

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