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

SHORT HILLS, N.J., Jan. 26, 2017 /PRNewswire/ -- Investors Bancorp, Inc. ISBC ("Company"), the holding company for Investors Bank ("Bank"), reported net income of $52.5 million, or  $0.18 per diluted share, for the three months ended December 31, 2016, compared to $49.9 million, or  $0.17  per diluted share for the three months ended September 30, 2016, and $44.4 million, or $0.14 per diluted share for the three months ended December 31, 2015. 

During the fourth quarter, the Company adopted accounting standards update No. 2016-09 related to the accounting of stock compensation resulting in the revision of prior interim periods for the fiscal year 2016.  Excluding the impact of the ASU adoption and one-time expenses, adjusted net income for the three months ended December 31, 2016 was $51.7 million, or $0.18 per diluted share, compared to $43.4 million, or $0.15 per diluted share for the three months ended September 30, 2016 and $43.6 million, or $0.14 per diluted share for the three months ended December 31, 2015.(1)

For the year ended December 31, 2016, net income totaled $192.1 million, or $0.64 per diluted share, compared to $181.5 million, or $0.55 per diluted share for the year ended December 31, 2015.  Excluding the impact of the ASU adoption and one-time expenses, net income for the year ended December 31, 2016 totaled $183.1 million, or $0.61 per diluted share, compared to $173.4 million, or $0.52 per diluted share for the year ended December 31, 2015.(1)

The Company also announced today that its Board of Directors declared a cash dividend of $0.08 per share to be paid on February 24, 2017 for stockholders of record as of February 10, 2017.

Kevin Cummings, President and CEO commented, "2016 was another strong year of record earnings for Investors as earnings per share grew 17% year over year.  We continue to make significant investments in our risk management infrastructure and branch franchise."

Mr. Cummings also commented, "Credit quality remains a key focus for our Company as demonstrated by our level of non-accrual loans."

Performance Highlights

  • Total assets increased $638.7 million, or 2.8% to $23.17 billion at December 31, 2016, from $22.54 billion at September 30, 2016.
  • Net loans increased $501.7 million, or 2.8%, to $18.57 billion at December 31, 2016 from $18.07 billion at September 30, 2016. During the three months ended December 31, 2016, we originated $467.0 million in commercial real estate loans, $424.4 million in multi-family loans, $128.4 million in residential loans, $115.8 million in construction loans, $108.5 million in commercial and industrial loans and $24.3 million in consumer and other loans.
  • Deposits increased $329.1 million, or 2.2% from $14.95 billion at September 30, 2016 to $15.28 billion at December 31, 2016.  Core deposit accounts (savings, checking and money market) represent approximately 81% of total deposits as of December 31, 2016.
  • Net interest margin for the three months ended December 31, 2016 was 3.07%, a 7 basis point increase compared to the three months ended September 30, 2016 and a 2 basis point increase compared to the three months ended December 31, 2015.
  • Total non-interest expenses were $89.0 million for the three months ended December 31, 2016, a decrease of $2.4 million as compared to the three months ended September 30, 2016.
  • Non accrual loans to total loans ratio was 0.50%  at December 31, 2016 compared to 0.53% in the third quarter of 2016.
  • During the three months ended December 31, 2016, the Company repurchased 2.2 million shares of its outstanding common stock for approximately $25.9 million.  Total shares repurchased during 2016 were 31.3 million shares at a cost of $363.4 million.  As of December 31, 2016, the Company had approximately 21 million shares remaining under its current repurchase plan. 

Financial Performance Overview - Fourth Quarter 2016

For the fourth quarter of 2016, net income totaled $52.5 million, an increase of $2.6 million as compared to the third quarter of 2016 and an increase of $8.1 million as compared to the fourth 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 $9.1 million, or 5.7% as compared to the third quarter of 2016 due to:

  • An increase in interest and dividend income of $9.7 million, or 4.9% to $208.1 million as compared to the third quarter of 2016 primarily attributed to commercial loan growth, as well as an increase of 7 basis points on the weighted average loan yield to 4.12%.
  • Prepayment penalties, which are included in interest income, totaled $7.4 million for the three months ended December 31, 2016 as compared to $4.0 million for the three months ended September 30, 2016.
  • An increase  in total interest expense of $601,000 was primarily attributed to an increase in the average balance of interest bearing liabilities of $583.2 million, or 3.51% to $17.22 billion, partially offset by a decrease of 2 basis points to 0.91% on the weighted average cost of interest-bearing liabilities for the three months ended December 31, 2016.

The net interest margin increased 7 basis points to 3.07% for the three months ended December 31, 2016 from 3.00% for the three months ended September 30, 2016.

On a year over year basis, net interest income increased by $17.9 million, or 11.9% in the fourth quarter of 2016, as compared to the fourth quarter of 2015 due to:

  • An increase in interest and dividend income of $19.9 million, or 10.6% to $208.1 million as a result of a $1.95 billion increase in the average balance of net loans, partially offset by the weighted average yield on net loans decreasing 4 basis points to 4.12%.
  • Prepayment penalties, which are included in interest income, totaled $7.4 million for the three months ended December 31, 2016 as compared to $4.5 million for the three months ended December 31, 2015.
  • An increase in total interest expense of $2.0 million was primarily attributed to an increase in the average balance of total interest-bearing deposits of $828.7 million, or 6.8% to $12.96 billion for the three months ended December 31, 2016 and an increase in the average balance of total borrowed funds of  $1.05 billion.  This was partially offset by the weighted average cost of interest-bearing liabilities decreasing 6 basis points to 0.91% for the three months ended December 31, 2016.

The net interest margin increased 2 basis points year over year to 3.07% for the three months ended December 31, 2016 from 3.05% for the three months ended December 31, 2015.

Total non-interest income remained relatively flat at $8.5 million for the three months ended December 31, 2016 and September 30, 2016, respectively.

Compared to the fourth quarter of 2015, total non-interest income decreased $196,000 primarily driven by a decrease in gain on sale of other real estate owned of $327,000 for the three months ended December 31, 2016.  This decrease was offset by increases to income on bank owned life insurance and fees and service charges of $169,000 and $53,000, respectively. 

Total non-interest expenses were $89.0 million for the three months ended December 31, 2016, a decrease of $2.4 million compared to the third quarter of 2016.  Compensation and fringe benefits decreased $4.8 million, primarily due to a decline in incentive compensation and the freezing of both the defined benefit pension plan and supplemental executive retirement wage replacement plan that was approved by the Board of Directors during the fourth quarter.  These decreases were partially offset by the accelerated vesting of equity awards due to the death of a director in December 2016.  Advertising and promotional expense increased  $1.5 million as compared to the third quarter.  During the fourth quarter, the Company entered into an agreement with the New Jersey Devils and Prudential Center as the official bank of the hockey club and the sports and entertainment arena, as well as a presenting partner of New Jersey Devils hockey.  In addition, office occupancy and equipment expense increased $509,000 with three branch openings in the fourth quarter.  Included in professional fees for the three months ended December 31, 2016 is $840,000 related to the recently announced termination of the Bank of Princeton acquisition. 

Compared to the fourth quarter of 2015, total non-interest expenses increased $3.3 million, or 3.9% year over year.  Professional fees, federal insurance premiums and office occupancy and equipment expense each increased $1.1 million for the three months ended December 31, 2016. Compensation and fringe benefits decreased $397,000 for the three months ended December 31, 2016 as a result of the benefit changes during the fourth quarter 2016, offset by additions to our staff to support continued growth and infrastructure, normal merit increases and the accelerated vesting of equity awards.

In March 2016, the FASB issued ASU No. 2016-09, "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." ASU No. 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and accounting for forfeitures.  In the fourth quarter of 2016 the Company adopted ASU No. 2016-09.  Adjustments to previously reported 2016 interim periods are included for comparative purposes and reflected in the year-to-date results.

The adoption of ASU No. 2016-09 resulted in recognizing income tax benefits related to stock compensation of $10.4 million for the year ended  December 31, 2016, $2.2 million of which is included in the fourth quarter.  For comparative purposes, $6.4 million of tax benefit for the adoption of this standard was reflected in the September 30, 2016 period.  These benefits correlate to the deductibility for tax purposes upon exercise and/or vesting of equity awards.

Income tax expense was $31.0 million for the three months ended December 31, 2016 and $21.9 million for the three months ended September 30, 2016.  The adoption of ASU No. 2016-09 resulted in a tax benefit of $2.2 million and $6.4 million, respectively, for the three months ended December 31, 2016 and September 30, 2016.  Excluding this discrete item, the effective tax rate was 39.7% and 39.5%, respectively.(1)

Income tax expense was $24.4 million for the three months ended December 31, 2015, representing an effective tax rate of 35.5% which includes a tax benefit realized from revaluing the Company's deferred tax asset as a result of the New  York City tax law reform enacted in 2015.  Absent the revaluing, the tax rate for the three months ended December 31, 2015 would have been 37.8%.(1)

Financial Performance Overview- Year Ended 2016

Net income increased by $10.6 million, year over year to $192.1 million for the year ended December 31, 2016.  The changes in net income for the year over year are the result of the following:

  • Total interest and dividend income increased by $61.8 million, or 8.4% to $793.5 million for the year ended December 31, 2016 as compared to 2015 primarily attributed to growth in the commercial loan portfolio.  This increase was offset by a decrease of 12 basis points to the weighted average yield on net loans to 4.10%.
  • Prepayment penalties, which are included in interest income, totaled $22.0 million for the year ended December 31, 2016 compared to $21.0 million for the year ended December 31, 2015.
  • Total interest expense increased by $16.7 million or 12.2% to $153.3 million for the year ended December 31, 2016 as compared to 2015.  The average balance of total interest-bearing deposits increased $1.06 billion, or 9.2% to $12.57 billion for the year ended December 31, 2016.  In addition, the weighted average cost of interest-bearing deposits increased 3 basis points to 0.65% for the year ended December 31, 2016.
  • Net interest margin decreased 8 basis points as compared to 2015 to 3.04% for the year ended December 31, 2016.

Total non-interest income was $37.2 million for the year ended December 31, 2016, a decrease of $2.9 million, or 7.3% as compared to 2015.  Gain on loans, net decreased $3.0 million for the year ended December 31, 2016 primarily as a result of fewer loan sales at the Bank.  Loan sales at our mortgage subsidiary were consistent year over year for the twelve months.  In addition, gain on sale of other real estate owned decreased $1.5 million as compared to 2015.  These decreases were offset by an increase of $2.1 million in gain on securities transactions for the year ended December 31, 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 $358.6 million for the year ended December 31, 2016, an increase of $30.2 million, or 9.2% as compared to 2015.  Compensation and fringe benefits increased $20.4 million for the year ended December 31, 2016.  The increase was primarily due to an increase of $12.8 million in equity incentive expense for the year ended December 31, 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 our growth and continued build out of our risk management and operating infrastructure; as well as normal merit increases.  These increases were partially offset by decreases of approximately $1.7 million in benefit expenses related to the changes in the defined benefit pension plan and supplemental executive retirement wage replacement plan.  Office occupancy and equipment expense increased $5.4 million for the year ended December 31, 2016 primarily due to new branch openings.  Professional fees and other operating expenses increased $4.0 million and $2.3 million, respectively, for the year ended December 31, 2016 as we continue to enhance additional risk management and operational infrastructure as our company grows and we expand our employee training and development programs.  Included in professional fees for the three months ended December 31, 2016 is $840,000 related to the recently announced termination of the Bank of Princeton acquisition. 

Income tax expense was $106.9 million for the year ended December 31, 2016 compared to $99.4 million for the year ended December 31, 2015.  The adoption of ASU No. 2016-09 resulted in a tax benefit of $10.4 million for the year ended December 31, 2016.  Excluding this discrete item the effective tax rate was 39.2%.  The tax rate for the year ended December 31, 2015 includes a tax benefit realized from revaluing the Company's deferred tax asset as as result of the York city tax law reform enacted in 2015 and a discrete item related to a net operating loss carryforward on a prior acquisition.  Absent these items, the tax rate for the year ended December 31, 2015 would have been 38.6%. (1)

Asset Quality

Our provision for loan losses was $4.8 million for the three months ended December 31, 2016, compared to $5.0 million for both the third quarter of 2016 and the three months ended December 31, 2015. For the three months ended December 31, 2016, net recoveries were $73,000 compared to net charge offs of $1.8 million for the third quarter of 2016 and $5.0 million for the three months ended December 31, 2015.  For the year ended December 31, 2016, our provision for loan loss was $19.8 million compared to $26.0 million for the year ended December 31, 2015.  For the year ended December 31, 2016, net charge-offs were $9.9 million  compared to $7.8 million for the the year ended December 31, 2015.

Our provision for the three months and year ended December 31, 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-accrual loans and charge offs.

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 decreased to $94.3 million at December 31, 2016 compared to $97.5 million at September 30, 2016 and $115.4 million at December 31, 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 December 31, 2016, there were $30.4 million of loans deemed as troubled debt restructurings, of which $24.8 million were residential and consumer loans, $3.6 million were commercial real estate loans, $1.7 million were commercial and industrial loans and $248,000 were multi-family loans.  Troubled debt restructured loans in the amount of $9.4 million were classified as accruing and $20.9 million were classified as non-accrual at December 31, 2016.

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, 2016


September 30, 2016


June 30, 2016


March 31, 2016


December 31, 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

116



$

27.1



110



$

18.9



131



$

24.9



151



$

28.6



168



$

28.6


Construction




















Multi-family

2



5.3



3



4.1







6



18.0



5



13.7


Commercial real estate

3



6.4



11



24.0



5



3.9



12



24.5



6



1.3


Commercial and industrial

4



0.8



6



1.4



1



2.8



3



3.8



3



0.6


Total 30 to 59 days past due

125



$

39.6



130



$

48.4



137



$

31.6



172



$

74.9



182



$

44.2


60 to 89 days past due:




















Residential and consumer

57



10.8



62



11.1



51



7.8



66



16.3



86



14.2


Construction




















Multi-family

1



1.1



1



1.1














Commercial real estate

8



32.0



3



16.4



2



0.7



1



0.3



3



0.4


Commercial and industrial

4



0.9



3



0.4



1



0.8



1





2




Total 60 to 89 days past due

70



44.8



69



29.0



54



9.3



68



16.6



91



14.6


Total accruing past due loans

195



$

84.4



199



$

77.4



191



$

40.9



240



$

91.5



273



$

58.8


Non-accrual:




















Residential and consumer

478



79.9



481



86.1



471



86.5



488



85.9



500



91.1


Construction









1



0.2



3



0.5



4



0.8


Multi-family

2



0.5



1



0.2



2



1.2



3



2.9



4



3.5


Commercial real estate

24



9.2



29



8.9



33



11.7



35



10.3



37



10.8


Commercial and industrial

8



4.7



6



2.3



6



0.7



10



5.6



17



9.2


Total non-accrual loans

512



$

94.3



517



$

97.5



513



$

100.3



539



$

105.2



562



$

115.4


Accruing troubled debt restructured loans

42



$

9.4



31



$

8.8



29



$

12.1



30



$

10.7



39



$

22.5


Non-accrual loans to total loans



0.50

%




0.53

%




0.57

%




0.61

%




0.68

%

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



242.24

%




229.31

%




219.60

%




205.83

%




189.30

%

Allowance for loan losses as a percent of total loans



1.21

%




1.22

%




1.25

%




1.26

%




1.29

%

 

Balance Sheet Summary

Total assets increased by $2.29 billion, or 10.9% to $23.17 billion at December 31, 2016 from December 31, 2015.  Net loans increased $1.91 billion or 11.5%, to $18.57 billion at December 31, 2016, and securities increased by $267.1 million, or 8.5%, to $3.42 billion at December 31, 2016 from December 31, 2015. 

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


December 31, 2016


September 30, 2016


December 31, 2015


(Dollars in thousands)

Commercial Loans:






Multi-family loans

$

7,459,131



$

7,360,733



$

6,255,903


Commercial real estate loans

4,452,300



4,103,250



3,829,099


Commercial and industrial loans

1,275,283



1,191,234



1,044,386


Construction loans

314,843



277,155



225,843


Total commercial loans

13,501,557



12,932,372



11,355,231


Residential mortgage loans

4,711,880



4,798,386



5,039,543


Consumer and other

597,265



576,402



496,556


Total Loans

18,810,702



18,307,160



16,891,330


Premiums on purchased loans and deferred loan fees, net

(12,474)



(15,428)



(11,692)


Allowance for loan losses

(228,373)



(223,550)



(218,505)


Net loans

$

18,569,855



$

18,068,182



$

16,661,133


 

During the year ended December 31, 2016, we originated $2.16 billion in multi-family loans, $1.08 billion in commercial real estate loans, $608.9 million in commercial and industrial loans, $523.3 million in residential loans, $451.5 million in construction loans and $260.0 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 $245.8 million during the year ended December 31, 2016.

The allowance for loan losses increased by $9.9 million to $228.4 million at December 31, 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 December 31, 2016, our allowance for loan loss as a percent of total loans was 1.21%.

Securities, in the aggregate, increased by $267.1 million, or 8.5%, to $3.42 billion at December 31, 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 $1.22 billion, or 8.7%, from $14.06 billion at December 31, 2015 to $15.28 billion at December 31, 2016.  Checking accounts increased $1.45 billion to $6.09 billion at December 31, 2016 from $4.64 billion at December 31, 2015.  Core deposits  (savings, checking and money market) represented approximately 81% of our total deposit portfolio at December 31, 2016.

Borrowed funds increased by $1.28 billion, or 39.3%, to $4.55 billion at December 31, 2016 from $3.26 billion at  December 31, 2015 to help fund the continued growth of the loan portfolio. 

Stockholders' equity decreased by $188.4 million to $3.12 billion at December 31, 2016 from $3.31 billion at December 31, 2015.  The decrease is primarily attributed to the repurchase of 31.3 million shares of common stock for $363.4 million as well as cash dividends of $0.26 per share totaling $82.3 million for the year ended December 31, 2016.  These decreases were offset by net income of $192.1 million for the year ended December 31, 2016.

About the Company

Investors Bancorp, Inc. is the holding company for Investors Bank, which as of December 31, 2016 operates from its corporate headquarters in Short Hills, New Jersey and 151 branches located throughout New Jersey and New York.

Earnings Conference Call January 27, 2017 at 11:00 a.m. (ET)

The Company, as previously announced, will host an earnings conference call on Friday, January 27, 2017 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/10098682

A telephone replay will be available beginning on January 27, 2017 from 1:00 p.m. (ET) through 9:00 a.m. (ET) on April 27, 2017.  The replay number is (877) 344-7529 password 10098682.  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) Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures.  For the fourth quarter 2016, the Company adjusted net income for one-time expense items and the tax benefits related to the adoption of ASU No. 2016-09 for comparability purposes.  For the the 2015 period, the Company adjusted net income for non recurring non interest expense items and non recurring tax items.  Please refer to the non-GAAP Reconciliation for details pertaining to adjustments.

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 SUBSIDIARIES

Consolidated Balance Sheets








December 31,
2016


September 30,
2016 (1)


December 31,
2015


(unaudited)


(unaudited)



Assets

(Dollars in thousands)







Cash and cash equivalents

$

164,178



168,629



148,904


Securities available-for-sale, at estimated fair value

1,660,433



1,512,146



1,304,697


Securities held-to-maturity, net (estimated fair value of $1,782,801, $1,868,397 and $1,888,686 at December 31, 2016, September 30, 2016 and December 31, 2015, respectively)

1,755,556



1,794,131



1,844,223


Loans receivable, net

18,569,855



18,068,182



16,661,133


Loans held-for-sale

38,298



24,240



7,431


Federal Home Loan Bank stock

237,878



222,562



178,437


Accrued interest receivable

65,969



66,048



58,563


Other real estate owned

4,492



4,835



6,283


Office properties and equipment, net

177,417



178,623



172,519


Net deferred tax asset

222,277



228,902



237,367


Bank owned life insurance

161,940



161,187



159,152


Goodwill and intangible assets

101,839



102,825



105,311


Other assets

14,543



3,667



4,664


Total assets

$

23,174,675



22,535,977



20,888,684


Liabilities and Stockholders' Equity






Liabilities:






Deposits

$

15,280,833



14,951,742



14,063,656


Borrowed funds

4,546,251



4,203,711



3,263,090


Advance payments by borrowers for taxes and insurance

105,851



122,823



108,721


Other liabilities

118,495



142,612



141,570


Total liabilities

20,051,430



19,420,888



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 December 31, 2016 September 30, 2016, and December 31, 2015; 309,449,388, 310,528,382 and 334,894,181 outstanding at December 31, 2016, September 30, 2016 and December 31, 2015, respectively

3,591



3,591



3,591


Additional paid-in capital

2,765,732



2,764,023



2,785,503


Retained earnings

1,053,750



1,026,016



936,040


Treasury stock, at cost; 49,621,464, 48,542,470 and 24,176,671 shares at December 31, 2016, September 30, 2016 and December 31, 2015, respectively

(587,974)



(575,187)



(295,412)


Unallocated common stock held by the employee stock ownership plan

(87,254)



(88,003)



(90,250)


Accumulated other comprehensive loss

(24,600)



(15,351)



(27,825)


Total stockholders' equity

3,123,245



3,115,089



3,311,647


Total liabilities and stockholders' equity

$

23,174,675



22,535,977



20,888,684



(1) September 30, 2016 additional paid-in capital and retained earnings have been revised to reflect the impact of the Company's adoption of ASU No. 2016-09.

 

 

INVESTORS BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Income








For the Three Months Ended


Year Ended







December 31,
2016


September 30,
2016 (1)


December 31,
2015


December 31,
2016


December 31,
2015







(unaudited)


(unaudited)


(unaudited)


(unaudited)


(audited)







(Dollars in thousands, except per share data)

Interest and dividend income:











Loans receivable and loans held-for-sale

$

187,912



179,234



169,641



715,901



663,424



Securities:












GSE obligations

8



8



11



36



45




Mortgage-backed securities

15,631



14,653



14,722



60,211



55,096




Equity

51



49



50



198



123




Municipal bonds and other debt

1,665



2,039



1,778



7,713



5,929



Interest-bearing deposits

88



76



101



342



225



Federal Home Loan Bank stock

2,724



2,315



1,835



9,120



6,881




Total interest and dividend income

208,079



198,374



188,138



793,521



731,723


Interest expense:











Deposits


20,418



20,326



20,302



82,057



71,414



Borrowed funds

18,951



18,442



17,020



71,279



65,225




Total interest expense

39,369



38,768



37,322



153,336



136,639




Net interest income

168,710



159,606



150,816



640,185



595,084


Provision for loan losses

4,750



5,000



5,000



19,750



26,000




Net interest income after provision for loan losses

163,960



154,606



145,816



620,435



569,084


Non-interest income:











Fees and service charges

4,223



4,108



4,170



17,148



17,119



Income on bank owned life insurance

1,156



1,006



987



4,423



3,948



Gain on loans, net

1,271



1,401



1,325



4,787



7,786



Gain on securities transactions



72



19



3,100



1,036



Gain on sales of other real estate owned, net

163



35



490



96



1,631



Other income

1,691



1,898



1,709



7,647



8,605




Total non-interest income

8,504



8,520



8,700



37,201



40,125


Non-interest expense:











Compensation and fringe benefits

48,223



53,051



48,620



206,698



186,320



Advertising and promotional expense

3,004



1,495



2,456



8,644



10,988



Office occupancy and equipment expense

14,608



14,099



13,467



56,220



50,865



Federal insurance premiums

3,383



3,600



2,250



12,183



9,050



General and administrative

724



641



993



3,131



4,372



Professional fees

5,611



5,673



4,511



20,104



16,104



Data processing and communication

5,222



5,299



5,591



21,043



22,366



Other operating expenses

8,235



7,540



7,778



30,541



28,267




Total non-interest expenses

89,010



91,398



85,666



358,564



328,332




Income before income tax expense

83,454



71,728



68,850



299,072



280,877


Income tax expense

30,989



21,878



24,448



106,947



99,372




Net income

$

52,465



49,850



44,402



192,125



181,505


Basic earnings per share

$0.18


0.17



0.14



0.65



0.55


Diluted earnings per share

$0.18


0.17



0.14



0.64



0.55













Basic weighted average shares outstanding

290,751,171



292,000,061



317,826,651



297,580,834



329,763,527



Diluted weighted average shares outstanding

292,623,922



294,673,452



321,234,483



300,954,885



332,933,448




(1) September 30, 2016 income tax expense, net income and diluted shares have been revised to reflect the impact of the Company's adoption of ASU No. 2016-09.


 

 

INVESTORS BANCORP, INC. AND SUBSIDIARIES

Average Balance Sheet and Yield/Rate Information





For the Three Months Ended




December 31, 2016


September 30, 2016


December 31, 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

$

154,678


88


0.23

%


$

129,226


76


0.24

%


$

219,187


101


0.18

%


Securities available-for-sale

1,574,840


7,165


1.82

%


1,424,338


6,315


1.77

%


1,274,141


5,971


1.87

%


Securities held-to-maturity

1,778,239


10,190


2.29

%


1,815,288


10,434


2.30

%


1,824,935


10,590


2.32

%


Net loans

18,258,406


187,912


4.12

%


17,707,883


179,234


4.05

%


16,311,324


169,641


4.16

%


Federal Home Loan Bank stock

224,917


2,724


4.84

%


216,813


2,315


4.27

%


175,849


1,835


4.17

%


Total interest-earning assets

21,991,080


208,079


3.78

%


21,293,548


198,374


3.73

%


19,805,436


188,138


3.80

%

Non-interest earning assets

794,131





778,244





774,784





Total assets


$

22,785,211





$

22,071,792





$

20,580,220


















Interest-bearing liabilities:













Savings

$

2,087,267


1,620


0.31

%


$

2,104,583


1,577


0.30

%


$

2,116,231


1,557


0.29

%


Interest-bearing checking

3,901,601


5,070


0.52

%


3,472,472


4,451


0.51

%


2,858,600


2,532


0.35

%


Money market accounts

4,094,678


6,737


0.66

%


3,971,339


6,605


0.67

%


3,741,248


6,417


0.69

%


Certificates of deposit

2,873,374


6,991


0.97

%


3,009,330


7,693


1.02

%


3,412,178


9,796


1.15

%


 Total interest bearing deposits

12,956,920


20,418


0.63

%


12,557,724


20,326


0.65

%


12,128,257


20,302


0.67

%


Borrowed funds

4,258,697


18,951


1.78

%


4,074,743


18,442


1.81

%


3,203,911


17,020


2.12

%


Total interest-bearing liabilities

17,215,617


39,369


0.91

%


16,632,467


38,768


0.93

%


15,332,168


37,322


0.97

%

Non-interest bearing liabilities

2,450,879





2,316,873





1,898,587





Total liabilities

19,666,496





18,949,340





17,230,755




Stockholders' equity

3,118,715





3,122,452





3,349,465





Total liabilities and stockholders' equity

$

22,785,211





$

22,071,792





$

20,580,220


















Net interest income


$

168,710





$

159,606





$

150,816

















Net interest rate spread



2.87

%




2.80

%




2.83

%















Net interest earning assets

$

4,775,463





$

4,661,081





$

4,473,268


















Net interest margin



3.07

%




3.00

%




3.05

%















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

1.28


X



1.28


X



1.29


X































 

 

INVESTORS BANCORP, INC. AND SUBSIDIARIES

Average Balance Sheet and Yield/Rate Information

















Year Ended




December 31, 2016


December 31, 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

$

144,610


342


0.24

%


$

207,331


225


0.11

%


Securities available-for-sale

1,398,373


25,515


1.82

%


1,245,745


22,646


1.82

%


Securities held-to-maturity

1,836,692


42,643


2.32

%


1,708,176


38,547


2.26

%


Net loans

17,479,932


715,901


4.10

%


15,716,010


663,424


4.22

%


Federal Home Loan Bank stock

204,735


9,120


4.45

%


172,367


6,881


3.99

%



Total interest-earning assets

21,064,342


793,521


3.77

%


19,049,629


731,723


3.84

%

Non-interest earning assets

779,138





770,262







Total assets

$

21,843,480





$

19,819,891
















Interest-bearing liabilities:










Savings

$

2,096,769


6,304


0.30

%


$

2,235,703


6,402


0.29

%


Interest-bearing checking

3,381,909


16,268


0.48

%


2,735,513


9,642


0.35

%


Money market accounts

3,925,095


25,621


0.65

%


3,564,311


24,136


0.68

%


Certificates of deposit

3,161,843


33,864


1.07

%


2,972,611


31,234


1.05

%


 Total interest bearing deposits

12,565,616


82,057


0.65

%


11,508,138


71,414


0.62

%


Borrowed funds

3,816,087


71,279


1.87

%


3,157,311


65,225


2.07

%



Total interest-bearing liabilities

16,381,703


153,336


0.94

%


14,665,449


136,639


0.93

%

Non-interest bearing liabilities

2,289,036





1,702,945







Total liabilities

18,670,739





16,368,394





Stockholders' equity

3,172,741





3,451,497







Total liabilities and stockholders' equity

$

21,843,480





$

19,819,891
















Net interest income


$

640,185





$

595,084















Net interest rate spread



2.83

%




2.91

%












Net interest earning assets

$

4,682,639





$

4,384,180
















Net interest margin



3.04

%




3.12

%












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


Year Ended


December 31,
2016


September 30,
2016 (1)


December 31,
2015


December 31,
2016


December 31,
2015











Return on average assets

0.92

%


0.90

%


0.86

%


0.88

%


0.92

%

Return on average assets, adjusted (2)

0.91

%


0.79

%


0.85

%


0.84

%


0.87

%

Return on average equity

6.73

%


6.39

%


5.30

%


6.06

%


5.26

%

Return on average tangible equity

6.96

%


6.60

%


5.48

%


6.26

%


5.43

%

Return on average tangible equity, adjusted (2)

6.85

%


5.76

%


5.38

%


5.97

%


5.18

%

Interest rate spread

2.87

%


2.80

%


2.83

%


2.83

%


2.91

%

Net interest margin

3.07

%


3.00

%


3.05

%


3.04

%


3.12

%

Efficiency ratio

50.23

%


54.36

%


53.70

%


52.93

%


51.69

%

Efficiency ratio, adjusted (2)

48.94

%


54.36

%


52.89

%


52.60

%


51.48

%

Non-interest expense to average total assets

1.56

%


1.66

%


1.67

%


1.64

%


1.66

%

Average interest-earning assets to average interest-bearing liabilities

1.28



1.28



1.29



1.29



1.30



(1)  September 30, 2016 ratios have been revised to reflect the impact of the Company's adoption of ASU No. 2016-09.

(2) See Non GAAP Reconciliation.






 

 

INVESTORS BANCORP, INC. AND SUBSIDIARIES

Selected Financial Ratios and Other Data














December 31,
2016


September 30,
2016


December 31,
2015













Asset Quality Ratios:










Non-performing assets as a percent of total assets



0.47

%


0.49

%


0.69

%



Non-performing loans as a percent of total loans



0.55

%


0.58

%


0.82

%



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


242.24

%


229.31

%


189.30

%



Allowance for loan losses as a percent of total loans


1.21

%


1.22

%


1.29

%













Capital Ratios:










Tier 1 Leverage Ratio (1)



12.03

%


12.25

%


12.41

%



Common equity tier 1 risk-based (1)



14.75

%


15.09

%


15.87

%



Tier 1 Risk-Based Capital (1)



14.75

%


15.09

%


15.87

%



Total Risk-Based Capital (1)



15.98

%


16.33

%


17.12

%



Equity to total assets (period end)



13.48

%


13.82

%


15.85

%



Average equity to average assets



13.69

%


14.15

%


16.28

%



Tangible capital (to tangible assets) (2)



13.10

%


13.43

%


15.43

%



Book value per common share (2)



$

10.53



$

10.47



$

10.30




Tangible book value per common share (2)



$

10.18



$

10.12



$

9.97














Other Data:










Number of full service offices



151



148



140




Full time equivalent employees



1,829



1,782



1,734









(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





At the period ended



December 31, 2016


September 30, 2016 (1)


December 31, 2015









Total stockholders' equity

3,123,245



3,115,089



3,311,647



Goodwill and intangible assets

101,839



102,825



105,311



Tangible stockholders' equity

3,021,406



3,012,264



3,206,336










Book Value per Share Computation







Common stock issued

359,070,852



359,070,852



359,070,852



Treasury shares

(49,621,464)



(48,542,470)



(24,176,671)



Shares Outstanding

309,449,388



310,528,382



334,894,181



Unallocated ESOP shares

(12,789,847)



(12,908,272)



(13,263,545)



Book value shares

296,659,541



297,620,110



321,630,636










Book Value Per Share

$

10.53



$

10.47



$

10.30










Tangible Book Value per Share

$

10.18



$

10.12



$

9.97




 

 

Investors Bancorp, Inc.

Non GAAP Reconciliation

(dollars in thousands, except share data)







Net Income and Diluted EPS, as adjusted







For the Three Months Ended


For the Year Ended 
December 31


December 31

September 30

December 31



2016

2016 (1)

2015


2016

2015








Income before income tax expense

$

83,454


$

71,728


$

68,850



$

299,072


$

280,877


Income tax expense

30,989


21,878


24,448



106,947


99,372


Net Income

52,465


49,850


44,402



192,125


181,505









Compensation and fringe benefits (2)

1,445



1,298



1,445


1,298


Professional fees (3)

840





840



Total one time items

2,285



1,298



2,285


1,298


One time items, net of tax

1,377



837



1,388


839









Tax adjustment (4)

(2,175)


(6,409)


(1,601)



(10,414)


(8,940)









Adjusted net income

$

51,667


$

43,441


$

43,638



$

183,099


$

173,404


Adjusted tax rate

39.7

%

39.5

%

37.8

%


39.2

%

38.6

%








Adjusted diluted earnings per share

$

0.18


$

0.15


$

0.14



$

0.61


$

0.52









Weighted average diluted shares

292,623,922


294,673,452


321,234,483



300,954,885


332,933,448









Performance Ratio, as adjusted








For the Three Months Ended


For the Year Ended 


December 31

September 30

December 31


December 31,


2016

2016 (1)

2015


2016

2015

 Total non-interest expense

$

89,010


$

91,398


$

85,666



$

358,564


$

328,332


 Net interest income

168,710


159,606


150,816



640,185


595,084


 Total non-interest income

8,504


8,520


8,700



37,201


40,125









 Efficiency Ratio

50.23

%

54.36

%

53.70

%


52.93

%

51.69

%








Compensation and fringe benefits (2)

1,445



1,298



1,445


1,298


Professional fees (3)

840


$




840



Adjusted Non-Interest Expense

$

86,725


$

91,398


$

84,368



$

356,279


$

327,034









 Adjusted Efficiency Ratio

48.94

%

54.36

%

52.89

%


52.60

%

51.48

%

Average tangible equity

3,016,484


3,018,996


3,243,506



3,068,885


3,345,520


Average assets

22,785,211


22,071,792


20,580,220



21,843,480


19,819,891









Adjusted return on average assets

0.91

%

0.79

%

0.85

%


0.84

%

0.87

%

Adjusted return on average tangible equity

6.85

%

5.76

%

5.38

%


5.97

%

5.18

%








(1)  September 30, 2016 ratios have been revised to reflect the impact of the Company's adoption of ASU No. 2016-09.

(2)  For the 2016 periods, compensation includes expenses related to the accelerated vesting of equity awards upon the death of a director.  For the 2015 periods, compensation expense includes a one time item related to a payout under an employment agreement with our former CFO.

(3) As a result of the termination of the Bank of Princeton acquisition, professional fees were expensed during 2016.

(4)  For the 2016 periods, amounts represent the tax impact of the Company's adoption of ASU No. 2016-09.  For the 2015 periods, represents a tax benefit realized from revaluing the Company's deferred tax asset as a result of the New York City tax law reform enacted in 2015 as well as a net operating loss carryforward related to a prior acquisition.

 

 

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

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/investors-bancorp-inc-announces-fourth-quarter-financial-results-and-cash-dividend-300397854.html

SOURCE Investors Bancorp, Inc.

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