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

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

PR Newswire

SHORT HILLS, N.J., July 26, 2018 /PRNewswire/ -- Investors Bancorp, Inc. (NASDAQ:ISBC) ("Company"), the holding company for Investors Bank ("Bank"), reported net income of $57.1 million, or  $0.20 per diluted share, for the three months ended June 30, 2018 compared to $57.9 million, or $0.20 per diluted share, for the three months ended March 31, 2018 and $39.6 million, or $0.14 per diluted share, for the three months ended June 30, 2017.

For the six months ended June 30, 2018, net income totaled $115.0 million, or $0.40 per diluted share, compared to $85.7 million, or $0.29 per diluted share, for the six months ended June 30, 2017.

The Company also announced today that its Board of Directors declared a cash dividend of $0.09 per share to be paid on August 24, 2018 for stockholders of record as of August 10, 2018.

Kevin Cummings, Chairman and CEO, commented, "We delivered another strong quarter at the Bank as year over year earnings per share grew 43% to $0.20 per share.  We and our shareholders continue to benefit from our loan diversification and expense control efforts, as well as a lower federal tax rate."

Mr. Cummings also commented, "We have achieved solid net income despite higher funding costs.  We remain committed to our efficient management of capital, evidenced by our repurchase of 3.1 million shares this quarter."

Performance Highlights

  • Total assets increased $139.2 million, or 0.6%, to $25.36 billion at June 30, 2018 from $25.23 billion at March 31, 2018.
  • Net loans increased $185.9 million, or 0.9%, to $20.54 billion at June 30, 2018 from $20.35 billion at March 31, 2018.
  • Total deposits increased $371.1 million, or 2.2%, to $16.92 billion at June 30, 2018 from $16.55 billion at March 31, 2018.
  • Net interest income for the three months ended June 30, 2018 was $171.3 million, a 2.5% increase compared to the three months ended June 30, 2017.
  • Non-interest income for the three months ended June 30, 2018 was $11.5 million, a 23.2% increase compared to the three months ended June 30, 2017.
  • Efficiency ratio improved to 56.12% for the three months ended June 30, 2018 compared to 60.25% for the three months ended June 30, 2017.
  • During the three months ended June 30, 2018, the Company repurchased 3.1 million shares of its outstanding common stock for approximately $41.2 million.

Financial Performance Overview

Second Quarter 2018 compared to First Quarter 2018

For the second quarter of 2018, net income totaled $57.1 million, a decrease of $828,000 as compared to $57.9 million in the first quarter of 2018.  The changes in net income on a sequential quarter basis are highlighted below.

Net interest income decreased by $1.2 million, or 0.7%, as compared to the first quarter of 2018.  Changes within interest income and expense categories are as follows:

  • Interest expense increased $8.0 million, primarily attributable to the weighted average cost of interest-bearing liabilities which increased 15 basis points to 1.37% for the three months ended June 30, 2018.  Additionally, the average balance of total interest-bearing liabilities increased $268.6 million, or 1.4%, to $19.57 billion.
  • An increase in interest and dividend income of $6.8 million, or 3.0%, to $238.4 million as compared to the first quarter of 2018 primarily attributed to a $337.6 million increase in the average balance of net loans from organic loan growth, offset by paydowns and payoffs, and a 7 basis point increase in the weighted average loan yield to 4.16%, predominately driven by higher average yields on new loan originations.
  • Prepayment penalties, which are included in interest income, totaled $5.6 million for the three months ended June 30, 2018 as compared to $5.2 million for the three months ended March 31, 2018.

Net interest margin decreased 5 basis points to 2.80% for the three months ended June 30, 2018 compared to the three months ended March 31, 2018, primarily driven by the higher costs of interest-bearing liabilities.

Total non-interest income was $11.5 million for the three months ended June 30, 2018, an increase of $2.4 million, or 26.0%, as compared to the three months ended March 31, 2018, primarily driven by an increase in gain on securities of $1.2 million and an increase in other income attributed to non-depository investment products of $709,000.

Total non-interest expenses were $102.6 million for the three months ended June 30, 2018, an increase of $1.5 million, or 1.5%, as compared to the first quarter of 2018.  For the three months ended June 30, 2018, compensation and fringe benefits increased $1.7 million and advertising and promotional expense increased $1.7 million.  These increases were partially offset by office occupancy and equipment expense which decreased $1.9 million.

Income tax expense was $19.1 million for the three months ended June 30, 2018 and $20.1 million for the three months ended March 31, 2018.  The effective tax rate was 25.1% for the three months ended June 30, 2018 and 25.7% for the three months ended March 31, 2018.  Additionally, income tax expense includes the excess tax benefits related to the Company's stock plans of $503,000 for the three months ended June 30, 2018 compared to $811,000 for the three months ended March 31, 2018. On July 1, 2018, the State of New Jersey enacted new legislation that created a temporary surtax effective for tax years 2018 through 2021 and requires companies to file combined tax returns beginning in 2019. The Company is currently evaluating the effect of this new legislation on its net deferred tax asset and future tax expense.

Second Quarter 2018 compared to Second Quarter 2017

For the second quarter of 2018, net income totaled $57.1 million, an increase of $17.5 million as compared to $39.6 million in the second quarter of 2017.  The changes in net income on a year over year quarter basis are highlighted below.

On a year over year basis, second quarter of 2018 net interest income increased by $4.2 million, or 2.5%, as compared to the second quarter of 2017 due to:

  • An increase in interest and dividend income of $22.9 million, or 10.6%, to $238.4 million primarily as a result of a $941.0 million increase in the average balance of net loans from organic loan growth and the acquired equipment finance portfolio, offset by paydowns and payoffs.  The weighted average yield on net loans increased 18 basis points to 4.16% primarily driven by higher average yields on new loan origination volume and an increase in prepayment penalties.
  • Prepayment penalties, which are included in interest income, totaled $5.6 million for the three months ended June 30, 2018 as compared to $3.1 million for the three months ended June 30, 2017.
  • Interest expense increased $18.6 million, or 38.5%, primarily attributed to an increase in the weighted average cost of interest-bearing liabilities of 32 basis points to 1.37% for the three months ended June 30, 2018.  Additionally, the average balance of interest-bearing deposits increased $1.06 billion, or 7.9%, to $14.51 billion for the three months ended June 30, 2018 and the average balance of total borrowed funds increased $80.1 million, or 1.6%, to $5.06 billion.

Net interest margin decreased 7 basis points year over year to 2.80% for the three months ended June 30, 2018 from 2.87% for the three months ended June 30, 2017, primarily driven by the higher costs of interest-bearing liabilities.

Total non-interest income was $11.5 million for the three months ended June 30, 2018, an increase of $2.2 million, or 23.2%, as compared to the three months ended June 30, 2017, primarily driven by an increase in gain on securities of $1.1 million and an increase in other income attributed to non-depository investment products of $1.0 million.

Total non-interest expenses decreased $3.7 million, or 3.5%, year over year.  For the three months ended June 30, 2018, professional fees decreased $10.8 million largely attributable to lower consulting fees associated with risk management and compliance efforts.  Partially offsetting this decrease, compensation and fringe benefits increased $6.9 million as a result of additions to our staff to support the growth and build out of our risk management and operating infrastructure, as well as normal merit and benefit increases.

Income tax expense was $19.1 million for the three months ended June 30, 2018 and $24.5 million for the three months ended June 30, 2017.  The effective tax rate was 25.1% for the three months ended June 30, 2018 and 38.2% for the three months ended June 30, 2017.  The decrease in the effective tax rate is primarily driven by the enactment of the Tax Cuts and Jobs Act ("Tax Act") in December 2017.  Additionally, income tax expense includes the excess tax benefits related to the Company's stock plans of $503,000 for the three months ended June 30, 2018 and $173,000 for the three months ended June 30, 2017.

Six Months Ended June 30, 2018 compared to Six Months Ended June 30, 2017

Net income increased by $29.4 million year over year to $115.0 million for the six months ended June 30, 2018.  The change in net income year over year is the result of the following:

Net interest income increased by $9.6 million, or 2.9%, as compared to the six months ended June 30, 2017 due to:

  • Total interest and dividend income increased by $44.4 million, or 10.4%, to $470.0 million for the six months ended June 30, 2018 as compared to the six months ended June 30, 2017, primarily attributed to a $1.06 billion increase in the average balance of net loans from organic loan growth and the acquired equipment finance portfolio, offset by paydowns and payoffs.  The weighted average yield on net loans increased 17 basis points to 4.13% primarily driven by higher average yields on new loan origination volume and an increase in prepayment penalties.
  • Prepayment penalties, which are included in interest income, totaled $10.9 million for the six months ended June 30, 2018, as compared to $6.2 million for the six months ended June 30, 2017.
  • Total interest expense increased by $34.8 million, or 38.0%, to $126.2 million for the six months ended June 30, 2018, as compared to the six months ended June 30, 2017, primarily attributed to an increase in the weighted average cost of interest-bearing liabilities of 29 basis points to 1.30% for the six months ended June 30, 2018.  In addition, the average balance of total interest-bearing liabilities increased $1.27 billion, or 7.0%, to $19.44 billion for the six months ended June 30, 2018.

Net interest margin decreased 9 basis points to 2.82% for the six months ended June 30, 2018 from 2.91% for the six months ended June 30, 2017, primarily driven by the higher costs of interest-bearing liabilities.

Total non-interest income was $20.6 million for the six months ended June 30, 2018, an increase of $1.6 million, or 8.2%, as compared to the six months ended June 30, 2017.  The increase was driven by a $1.4 million increase in other income attributed to non-depository investment products, an increase of $938,000 in income on bank owned life insurance and an increase of $798,000 in fees and service charges.  These increases were partially offset by a $1.3 million decrease in gain on loans, net.

Total non-interest expenses were $203.7 million for the six months ended June 30, 2018, a decrease of $2.2 million, or 1.0%, as compared to the six months of 2017.  Professional fees decreased $13.8 million for the six months ended June 30, 2018 as compared to the six months ended June 30, 2017, largely attributable to lower consulting fees associated with risk management and compliance efforts.  Partially offsetting this decrease, compensation and fringe benefits increased $8.7 million as a result of additions to our staff to support the growth and build out of our risk management and operating infrastructure, as well as normal merit increases.  Office occupancy and equipment expense increased $2.1 million.

Income tax expense was $39.2 million for the six months ended June 30, 2018 compared to $51.7 million for the six months ended June 30, 2017.  The effective tax rate was 25.4% for the six months ended June 30, 2018 and 37.6% for the six months ended June 30, 2017.  The decrease in the effective tax rate is primarily driven by the enactment of the Tax Act.  Additionally, income tax expense includes the excess tax benefits related to the Company's stock plans of $1.3 million for the six months ended June 30, 2018 and $1.5 million for the six months ended June 30, 2017.

Asset Quality

Our provision for loan losses is primarily a result of the inherent credit risk in our overall portfolio, the growth and composition of the loan portfolio, and the level of non-accrual loans and charge-offs.  For the three months ended June 30, 2018, our provision for loan losses was $4.0 million, compared to $2.5 million for the three months ended March 31, 2018 and $6.0 million for the three months ended June 30, 2017.  For the three months ended June 30, 2018, net charge-offs were $4.3 million compared to net charge-offs of $2.3 million for the three months ended March 31, 2018 and net charge-offs of $6.9 million for the three months ended June 30, 2017.  Our provision for loan losses was $6.5 million for the six months ended June 30, 2018 compared with $10.0 million for the six months ended June 30, 2017.  For the six months ended June 30, 2018, net charge-offs were $6.6 million compared to $8.3 million for the six months ended June 30, 2017.

Our accruing past due loans and non-accrual loans discussed below exclude certain purchased credit impaired ("PCI") loans, primarily consisting of loans recorded in the Company's acquisitions.  Under U.S. GAAP, the PCI loans (acquired at a discount that is due, in part, to credit quality) are not subject to delinquency classification in the same manner as loans originated by the Bank.

Total non-accrual loans were $134.6 million, or 0.65% of total loans, at June 30, 2018 compared to $136.0 million, or 0.66% of total loans, at March 31, 2018 and $135.7 million, or 0.68% of total loans, at December 31, 2017.  We continue to proactively and diligently work to resolve our troubled loans.

At June 30, 2018, there were $40.2 million of loans deemed as troubled debt restructured loans ("TDRs"), of which $27.3 million were residential and consumer loans, $11.3 million were commercial and industrial loans, $904,000 were multi-family loans and $634,000 were commercial real estate loans.  TDRs of $12.8 million were classified as accruing and $27.4 million were classified as non-accrual at June 30, 2018.

The following table sets forth non-accrual loans and accruing past due loans (excluding PCI loans and loans held for sale) on the dates indicated as well as certain asset quality ratios.

 


June 30, 2018


March 31, 2018


December 31, 2017


September 30, 2017


June 30, 2017


# of loans


amount


# of loans


amount


# of loans


amount


# of loans


amount


# of loans


amount


(Dollars in millions)

Accruing past due loans:




















30 to 59 days past due:




















Residential and consumer

101



$

20.6



97



$

16.9



126



$

20.0



108



$

21.5



86



$

14.2


Construction




















Multi-family

6



27.4



3



5.0



5



6.3



10



15.8



4



10.4


Commercial real estate

9



8.7



5



5.7



5



4.6



6



32.3



2



1.9


Commercial and industrial

7



2.9



6



3.4



11



4.3



8



0.6



6



0.6


Total 30 to 59 days past due

123



59.6



111



31.0



147



35.2



132



70.2



98



27.1


60 to 89 days past due:




















Residential and consumer

37



9.5



46



7.7



50



8.2



47



7.7



35



5.8


Construction




















Multi-family









2



7.7










Commercial real estate





1



0.3



2



0.8



2



1.0






Commercial and industrial

1



2.1



1



0.1







2



1.4



1



0.3


Total 60 to 89 days past due

38



11.6



48



8.1



54



16.7



51



10.1



36



6.1


Total accruing past due loans

161



$

71.2



159



$

39.1



201



$

51.9



183



$

80.3



134



$

33.2


Non-accrual:




















Residential and consumer

375



$

69.2



390



$

72.5



427



$

76.4



417



$

74.3



447



$

81.0


Construction

1



0.3



1



0.3



1



0.3










Multi-family

9



19.5



8



20.2



5



15.0



4



14.2



6



19.0


Commercial real estate

36



16.7



38



19.7



37



34.0



31



35.3



36



75.6


Commercial and industrial

13



28.9



19



23.3



11



10.0



6



1.9



5



1.8


Total non-accrual loans

434



$

134.6



456



$

136.0



481



$

135.7



458



$

125.7



494



$

177.4


Accruing troubled debt restructured loans

56



$

12.8



54



$

12.4



49



$

11.0



58



$

13.4



45



$

11.7


Non-accrual loans to total loans



0.65

%




0.66

%




0.68

%




0.63

%




0.89

%

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



171.46

%




169.97

%




170.17

%




183.09

%




129.68

%

Allowance for loan losses as a
percent of total loans



1.11

%




1.12

%




1.15

%




1.15

%




1.16

%


 

Balance Sheet Summary

Total assets increased $235.6 million, or 0.9%, to $25.36 billion at June 30, 2018 from December 31, 2017.  Net loans increased $685.0 million, or 3.5%, to $20.54 billion at June 30, 2018, securities decreased $202.4 million, or 5.3%, to $3.58 billion at June 30, 2018, and cash decreased $422.4 million to $196.0 million at June 30, 2018 from December 31, 2017.

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


June 30, 2018


March 31, 2018


December 31, 2017


(In thousands)

Commercial Loans:






Multi-family loans

$

7,903,469



7,844,123



7,802,835


Commercial real estate loans

4,654,592



4,593,577



4,548,101


Commercial and industrial loans

2,147,430



2,024,903



1,625,375


Construction loans

270,892



390,853



416,883


Total commercial loans

14,976,383



14,853,456



14,393,194


Residential mortgage loans

5,140,556



5,083,779



5,026,517


Consumer and other

668,127



665,647



671,137


Total Loans

20,785,066



20,602,882



20,090,848


Deferred fees and premiums on purchased loans, net

(17,141)



(20,506)



(7,778)


Allowance for loan losses

(230,838)



(231,144)



(230,969)


Net loans

$

20,537,087



20,351,232



19,852,101


 

During the six months ended June 30, 2018, we originated $745.0 million in multi-family loans, $440.3 million in commercial and industrial loans, $308.1 million in commercial real estate loans, $288.8 million in residential loans, $67.3 million in construction loans and $41.9 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.  During February 2018, we completed the acquisition of a $345.8 million equipment finance portfolio, comprised of both loans and leases, which is classified within our commercial and industrial portfolio.  Our loans are primarily on properties and businesses located in New Jersey and New York.

We also purchased mortgage loans from correspondent entities including other banks and mortgage bankers.  Our agreements with these correspondent entities require them to originate loans that adhere to our underwriting standards.  During the six months ended June 30, 2018, we purchased loans totaling $170.9 million from these entities.  In addition to the loans originated for our portfolio, our mortgage subsidiary, Investors Home Mortgage Co., originated residential mortgage loans for sale to third parties totaling $19.3 million during the six months ended June 30, 2018.

The allowance for loan losses decreased by $131,000 to $230.8 million at June 30, 2018 from $231.0 million at December 31, 2017.  Our allowance for loan losses is impacted by 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.  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 June 30, 2018, our allowance for loan losses as a percent of total loans was 1.11%.

Securities decreased by $202.4 million, or 5.3%, to $3.58 billion at June 30, 2018 from $3.78 billion at December 31, 2017.  This decrease was a result of paydowns, partially offset by purchases.  Bank owned life insurance increased $53.2 million to $208.8 million at June 30, 2018.  During the six months ended June 30, 2018, we purchased $125.0 million of bank owned life insurance and surrendered $71.1 million of an older policy.  The proceeds from the surrendered policy are included as a receivable in other assets and are expected to be received in the third quarter.  Goodwill and intangible assets increased $3.0 million to $100.6 million at June 30, 2018 primarily due to the acquisition of the equipment finance portfolio.

Deposits decreased by $440.3 million, or 2.5%, from $17.36 billion at December 31, 2017 to $16.92 billion at June 30, 2018 primarily driven by decreases in interest-bearing checking and money market accounts, partially offset by an increase in time deposits.  Checking accounts decreased $678.9 million to $6.65 billion at June 30, 2018 from $7.33 billion at December 31, 2017.  Core deposits (savings, checking and money market) represented approximately 75% of our total deposit portfolio at June 30, 2018 compared to 80% at December 31, 2017.

Borrowed funds increased by $683.5 million, or 15.3%, to $5.14 billion at June 30, 2018 from $4.46 billion at December 31, 2017 to fund the growth of the loan portfolio as deposits declined.

Stockholders' equity decreased by $34.5 million to $3.09 billion at June 30, 2018 from $3.13 billion at December 31, 2017, primarily attributed to the repurchase of 7.6 million shares of common stock for $103.0 million and cash dividends of $0.18 per share totaling $54.5 million during the six months ended June 30, 2018.  These decreases were partially offset by net income of $115.0 million and share-based plan activity of $17.6 million for the six months ended June 30, 2018.  The Bank remains significantly above FDIC "well capitalized" standards, with a Tier 1 Leverage Ratio of 10.91% at June 30, 2018.

About the Company

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

Earnings Conference Call July 27, 2018 at 11:00 a.m. (ET)

The Company, as previously announced, will host an earnings conference call on Friday, July 27, 2018 at 11:00 a.m. (ET).  The toll-free dial-in number is: (866) 218-2404.  Callers who pre-register will bypass the live operator and may avoid any delays in joining the conference call.  Participants will immediately receive an online confirmation, an email and a calendar invitation for the event.

Conference Call Pre-registration link: http://dpregister.com/10121999

A telephone replay will be available beginning on July 27, 2018 from 1:00 p.m. (ET) through 9:00 a.m. (ET) on October 26, 2018.  The replay number is (877) 344-7529, password 10121999.  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








June 30,
2018


March 31,
2018


December 31,
2017


(unaudited)


(unaudited)


(audited)

Assets

(Dollars in thousands)







Cash and cash equivalents

$

195,995



153,439



618,394


Equity securities

5,753



5,677



5,701


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

1,915,265



1,940,588



1,982,026


Debt securities held-to-maturity, net (estimated fair value of $1,659,095, $1,717,381 and $1,820,125 at June 30, 2018, March 31, 2018 and December 31, 2017, respectively)

1,660,967



1,715,531



1,796,621


Loans receivable, net

20,537,087



20,351,232



19,852,101


Loans held-for-sale

5,949



1,011



5,185


Federal Home Loan Bank stock

247,410



264,919



231,544


Accrued interest receivable

73,944



74,200



72,855


Other real estate owned

5,190



4,873



5,830


Office properties and equipment, net

176,546



177,368



180,231


Net deferred tax asset

131,761



130,250



121,663


Bank owned life insurance

208,818



207,274



155,635


Goodwill and intangible assets

100,621



101,609



97,665


Other assets

99,586



97,706



3,793


Total assets

$

25,364,892



25,225,677



25,129,244


Liabilities and Stockholders' Equity






Liabilities:






Deposits

$

16,917,405



16,546,325



17,357,697


Borrowed funds

5,144,987



5,361,260



4,461,533


Advance payments by borrowers for taxes and insurance

116,482



128,745



104,308


Other liabilities

95,035



97,266



80,255


Total liabilities

22,273,909



22,133,596



22,003,793


Stockholders' equity

3,090,983



3,092,081



3,125,451


Total liabilities and stockholders' equity

$

25,364,892



25,225,677



25,129,244


 

 


INVESTORS BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Operations
















For the Three Months Ended


For the Six Months Ended







June 30,
 2018


March 31,
 2018


June 30,
 2017


June 30,
 2018


June 30,
 2017







(unaudited)


(unaudited)


(unaudited)


(unaudited)


(unaudited)







(Dollars in thousands, except per share data)

Interest and dividend income:











Loans receivable and loans held-for-sale

$

211,791



204,722



192,891



416,513



378,852



Securities:












GSE obligations

273



274



28



547



36




Mortgage-backed securities

19,633



20,022



17,274



39,655



33,983




Equity

33



35



30



68



78




Municipal bonds and other debt

2,432



2,258



2,136



4,690



6,204



Interest-bearing deposits

409



455



177



864



284



Federal Home Loan Bank stock

3,831



3,801



2,972



7,632



6,165




Total interest and dividend income

238,402



231,567



215,508



469,969



425,602


Interest expense:











Deposits


42,067



36,376



25,336



78,443



47,520



Borrowed funds

25,034



22,707



23,116



47,741



43,907




Total interest expense

67,101



59,083



48,452



126,184



91,427




Net interest income

171,301



172,484



167,056



343,785



334,175


Provision for loan losses

4,000



2,500



6,000



6,500



10,000




Net interest income after provision for loan losses

167,301



169,984



161,056



337,285



324,175


Non-interest income:











Fees and service charges

5,230



5,458



4,962



10,688



9,890



Income on bank owned life insurance

1,543



1,286



1,166



2,829



1,891



Gain on loans, net

663



257



1,206



920



2,198



Gain (loss) on securities, net

1,147



(46)



48



1,101



1,275



Gain on sales of other real estate owned, net

184



153



251



337



425



Other income

2,711



2,002



1,687



4,713



3,344




Total non-interest income

11,478



9,110



9,320



20,588



19,023


Non-interest expense:











Compensation and fringe benefits

60,799



59,061



53,881



119,860



111,155



Advertising and promotional expense

3,807



2,087



4,516



5,894



6,601



Office occupancy and equipment expense

14,717



16,578



14,333



31,295



29,180



Federal insurance premiums

4,525



4,500



3,900



9,025



7,610



General and administrative

693



500



842



1,193



1,576



Professional fees

3,801



4,402



14,580



8,203



22,001



Data processing and communication

7,106



6,123



5,914



13,229



11,774



Other operating expenses

7,136



7,834



8,302



14,970



15,929




Total non-interest expenses

102,584



101,085



106,268



203,669



205,826




Income before income tax expense

76,195



78,009



64,108



154,204



137,372


Income tax expense

19,098



20,084



24,475



39,182



51,719




Net income

$

57,097



57,925



39,633



115,022



85,653


Basic earnings per share

$0.20



0.20



0.14



0.40



0.29


Diluted earnings per share

$0.20



0.20



0.14



0.40



0.29













Basic weighted average shares outstanding

284,502,818



287,685,531



291,127,119



286,085,380



291,156,097



Diluted weighted average shares outstanding

285,733,542



289,131,916



293,130,285



287,413,166



293,264,007



 

 

INVESTORS BANCORP, INC. AND SUBSIDIARY

Average Balance Sheet and Yield/Rate Information





For the Three Months Ended




June 30, 2018


March 31, 2018


June 30, 2017




Average
Outstanding
Balance

Interest
Earned/Paid

Weighted
Average
Yield/Rate


Average
Outstanding
Balance

Interest
Earned/Paid

Weighted
Average
Yield/Rate


Average
Outstanding
Balance

Interest
Earned/Paid

Weighted
Average
Yield/Rate




(Dollars in thousands)

Interest-earning assets:













Interest-earning cash accounts

$

178,293


409


0.92

%


$

199,283


455


0.91

%


$

162,787


177


0.43

%


Equity securities

5,714


33


2.31

%


5,702


35


2.46

%


5,509


30


2.18

%


Debt securities available-for-sale

1,990,306


10,829


2.18

%


2,020,833


10,852


2.15

%


1,793,254


8,959


2.00

%


Debt securities held-to-maturity

1,693,025


11,509


2.72

%


1,759,737


11,702


2.66

%


1,672,517


10,479


2.51

%


Net loans

20,348,913


211,791


4.16

%


20,011,353


204,722


4.09

%


19,407,939


192,891


3.98

%


Federal Home Loan Bank stock

255,362


3,831


6.00

%


239,100


3,801


6.36

%


259,497


2,972


4.58

%


Total interest-earning assets

24,471,613


238,402


3.90

%


24,236,008


231,567


3.82

%


23,301,503


215,508


3.70

%

Non-interest earning assets

741,974





697,486





761,432





Total assets


$

25,213,587





$

24,933,494





$

24,062,935


















Interest-bearing liabilities:













Savings

$

2,146,880


2,953


0.55

%


$

2,331,475


3,290


0.56

%


$

2,120,219


2,045


0.39

%


Interest-bearing checking

4,487,247


14,057


1.25

%


4,812,897


13,579


1.13

%


4,266,755


8,346


0.78

%


Money market accounts

3,858,022


10,497


1.09

%


4,091,149


9,292


0.91

%


4,175,137


8,104


0.78

%


Certificates of deposit

4,017,105


14,560


1.45

%


3,398,732


10,215


1.20

%


2,887,454


6,841


0.95

%


 Total interest-bearing deposits

14,509,254


42,067


1.16

%


14,634,253


36,376


0.99

%


13,449,565


25,336


0.75

%


Borrowed funds

5,060,767


25,034


1.98

%


4,667,160


22,707


1.95

%


4,980,705


23,116


1.86

%


Total interest-bearing liabilities

19,570,021


67,101


1.37

%


19,301,413


59,083


1.22

%


18,430,270


48,452


1.05

%

Non-interest-bearing liabilities

2,535,093





2,508,888





2,458,208





Total liabilities

22,105,114





21,810,301





20,888,478




Stockholders' equity

3,108,473





3,123,193





3,174,457





Total liabilities and stockholders' equity

$

25,213,587





$

24,933,494





$

24,062,935


















Net interest income


$

171,301





$

172,484





$

167,056

















Net interest rate spread



2.53

%




2.60

%




2.65

%















Net interest earning assets

$

4,901,592





$

4,934,595





$

4,871,233


















Net interest margin



2.80

%




2.85

%




2.87

%















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

1.25

X




1.26

X




1.26

X



 


 

INVESTORS BANCORP, INC. AND SUBSIDIARY

Average Balance Sheet and Yield/Rate Information





For the Six Months Ended




June 30, 2018


June 30, 2017




Average
Outstanding
Balance

Interest
Earned/Paid

Weighted
Average
Yield/Rate


Average
Outstanding
Balance

Interest
Earned/Paid

Weighted
Average
Yield/Rate




(Dollars in thousands)

Interest-earning assets:









Interest-earning cash accounts

$

188,730


864


0.92

%


$

153,516


284


0.37

%


Equity securities

5,708


68


2.38

%


5,768


78


2.70

%


Debt securities available-for-sale

2,005,485


21,681


2.16

%


1,754,586


17,207


1.96

%


Debt securities held-to-maturity

1,726,197


23,211


2.69

%


1,698,489


23,016


2.71

%


Net loans

20,181,066


416,513


4.13

%


19,118,385


378,852


3.96

%


Federal Home Loan Bank stock

247,276


7,632


6.17

%


250,377


6,165


4.92

%



Total interest-earning assets

24,354,462


469,969


3.86

%


22,981,121


425,602


3.70

%

Non-interest earning assets

719,852





758,317






Total assets

$

25,074,314





$

23,739,438














Interest-bearing liabilities:









Savings

$

2,238,667


6,243


0.56

%


$

2,113,192


3,879


0.37

%


Interest-bearing checking

4,649,173


27,636


1.19

%


4,185,870


14,829


0.71

%


Money market accounts

3,973,942


19,789


1.00

%


4,177,217


15,294


0.73

%


Certificates of deposit

3,709,627


24,775


1.34

%


2,886,273


13,518


0.94

%


 Total interest bearing deposits

14,571,409


78,443


1.08

%


13,362,552


47,520


0.71

%


Borrowed funds

4,865,051


47,741


1.96

%


4,801,159


43,907


1.83

%



Total interest-bearing liabilities

19,436,460


126,184


1.30

%


18,163,711


91,427


1.00

%

Non-interest-bearing liabilities

2,522,062





2,412,101






Total liabilities

21,958,522





20,575,812




Stockholders' equity

3,115,792





3,163,626






Total liabilities and stockholders' equity

$

25,074,314





$

23,739,438














Net interest income


$

343,785





$

334,175













Net interest rate spread



2.56

%




2.70

%











Net interest earning assets

$

4,918,002





$

4,817,410














Net interest margin



2.82

%




2.91

%











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

1.25


X



1.27


X


 

 


INVESTORS BANCORP, INC. AND SUBSIDIARY

Selected Performance Ratios












For the Three Months Ended


For the Six Months Ended


June 30,
 2018


March 31,
 2018


June 30,
 2017


June 30,
 2018


June 30,
 2017

Return on average assets

0.91

%


0.93

%


0.66

%


0.92

%


0.72

%

Return on average equity

7.35

%


7.42

%


4.99

%


7.38

%


5.41

%

Return on average tangible equity

7.59

%


7.67

%


5.16

%


7.63

%


5.59

%

Interest rate spread

2.53

%


2.60

%


2.65

%


2.56

%


2.70

%

Net interest margin

2.80

%


2.85

%


2.87

%


2.82

%


2.91

%

Efficiency ratio

56.12

%


55.67

%


60.25

%


55.90

%


58.27

%

Non-interest expense to average total assets

1.63

%


1.62

%


1.77

%


1.62

%


1.73

%

Average interest-earning assets to average interest-bearing liabilities

1.25



1.26



1.26



1.25



1.27



INVESTORS BANCORP, INC. AND SUBSIDIARY

Selected Financial Ratios and Other Data














June 30,
 2018


March 31,
 2018


December 31,
 2017



Asset Quality Ratios:










Non-performing assets as a percent of total assets


0.60

%


0.61

%


0.61

%



Non-performing loans as a percent of total loans


0.71

%


0.72

%


0.73

%



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


171.46

%


169.97

%


170.17

%



Allowance for loan losses as a percent of total loans


1.11

%


1.12

%


1.15

%













Capital Ratios:










Tier 1 Leverage Ratio (1)



10.91

%


11.09

%


11.00

%



Common equity tier 1 risk-based (1)



13.27

%


13.58

%


13.94

%



Tier 1 Risk-Based Capital (1)



13.27

%


13.58

%


13.94

%



Total Risk-Based Capital (1)



14.39

%


14.73

%


15.13

%



Equity to total assets (period end)



12.19

%


12.26

%


12.44

%



Average equity to average assets



12.33

%


12.53

%


12.74

%



Tangible capital to tangible assets (2)



11.84

%


11.90

%


12.10

%



Book value per common share (2)



$

10.77



$

10.68



$

10.64




Tangible book value per common share (2)



$

10.42



$

10.33



$

10.31














Other Data:










Number of full service offices



151



150



156




Full time equivalent employees



1,964



1,901



1,931









(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










June 30, 2018


March 31, 2018


December 31, 2017







Total stockholders' equity

$

3,090,983



3,092,081



3,125,451


Goodwill and intangible assets

100,621



101,609



97,665


Tangible stockholders' equity

$

2,990,362



2,990,472



3,027,786








Book Value per Share Computation






Common stock issued

359,070,852



359,070,852



359,070,852


Treasury shares

(60,029,302)



(57,274,414)



(52,944,765)


Shares outstanding

299,041,550



301,796,438



306,126,087


Unallocated ESOP shares

(12,079,298)



(12,197,723)



(12,316,149)


Book value shares

286,962,252



289,598,715



293,809,938








Book Value per Share

$

10.77



$

10.68



$

10.64


Tangible Book Value per Share

$

10.42



$

10.33



$

10.31








Total assets

$

25,364,892



25,225,677



25,129,244


Goodwill and intangible assets

100,621



101,609



97,665


Tangible assets

$

25,264,271



25,124,068



25,031,579








Tangible capital to tangible assets

11.84

%


11.90

%


12.10

%

 

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

Cision View original content:http://www.prnewswire.com/news-releases/investors-bancorp-inc-announces-second-quarter-financial-results-and-cash-dividend-300687543.html

SOURCE Investors Bancorp, Inc.

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