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

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

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

PR Newswire

SHORT HILLS, N.J., Jan. 29, 2020

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

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

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

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

Performance Highlights


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

Financial Performance Overview

Fourth Quarter 2019 compared to Third Quarter 2019

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

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

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

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

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

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

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

Fourth Quarter 2019 compared to Fourth Quarter 2018

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

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

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

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

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

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

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

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

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

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

  • Interest expense increased by $96.7 million, or 33.5%, to $385.1 million for the year ended December 31, 2019, as compared to $288.4 million for the year ended December 31, 2018, primarily attributed to an increase in the weighted average cost of interest-bearing liabilities of 38 basis points to 1.84% for the year ended December 31, 2019.  The average balance of total borrowed funds increased $712.3 million, or 14.5%, to $5.61 billion for the year ended December 31, 2019 and the average balance of interest-bearing deposits increased $510.4 million, or 3.5%, to $15.32 billion.
  • Total interest and dividend income increased by $71.8 million, or 7.4%, to $1.04 billion for the year ended December 31, 2019 as compared to the year ended December 31, 2018, primarily attributed to a $1.08 billion increase in the average balance of net loans mainly from loan originations, offset by paydowns and payoffs.  The weighted average yield on net loans increased 6 basis points to 4.23% primarily driven by higher average yields on new loan origination volume, partially offset by a decrease in prepayment penalties.  In addition, the weighted average yield on securities increased 34 basis points to 2.90%.
  • Prepayment penalties, which are included in interest income, totaled $16.8 million for the year ended December 31, 2019, as compared to $20.6 million for the year ended December 31, 2018.

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

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

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

Income tax expense was $91.2 million for the year ended December 31, 2019 compared to $67.8 million for the year ended December 31, 2018.  The effective tax rate was 31.8% for the year ended December 31, 2019 and 25.1% for the year ended December 31, 2018. The increase in the tax rate was primarily related to a clarification of the change in New Jersey state tax law.

Asset Quality

Our provision for loan losses is primarily a result of the inherent credit risk in our overall portfolio, the growth and composition of the loan portfolio, and the level of non-accrual loans and charge-offs.  At December 31, 2019, our allowance for loan losses and related year-ended provision were impacted by improved credit quality, including the level of non-accrual loans and charge-offs/recoveries, and modest loan growth.  For the three months ended December 31, 2019, our provision for loan losses was a $1.5 million addition to the allowance for loan losses, compared to a reduction to the allowance for loan losses of $2.5 million for the three months ended September 30, 2019 and an addition to the allowance for loan losses of $3.5 million for the three months ended December 31, 2018.  For the three months ended December 31, 2019, net charge-offs were $1.4 million compared to net charge-offs of $1.5 million for the three months ended September 30, 2019 and net recoveries of $1.5 million for the three months ended December 31, 2018.  Our provision was a $1.0 million reduction to the allowance for loan losses for the year ended December 31, 2019 and a $12.0 million addition to the allowance for the year ended December 31, 2018.  For the year ended December 31, 2019, net charge-offs were $6.7 million compared to $7.2 million for the year ended December 31, 2018.

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

Total non-accrual loans were $95.2 million, or 0.44% of total loans, at December 31, 2019 compared to $92.1 million, or 0.42% of total loans, at September 30, 2019 and $124.9 million, or 0.58% of total loans, at December 31, 2018.  We continue to proactively and diligently work to resolve our troubled loans.

At December 31, 2019, there were $36.6 million of loans deemed as troubled debt restructured loans ("TDRs"), of which $27.0 million were residential and consumer loans, $7.2 million were commercial and industrial loans and $2.4 million were commercial real estate loans.  TDRs of $13.1 million were classified as accruing and $23.5 million were classified as non-accrual at December 31, 2019.

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

 

 



December 31, 2019


September 30, 2019


June 30, 2019


March 31, 2019


December 31, 2018


# of loans


amount


# of loans


amount


# of loans


amount


# of loans


amount


# of loans


amount


(Dollars in millions)

Accruing past due loans:




















30 to 59 days past due:




















Residential and consumer

111



$

23.4



89



$

17.6



104



$

20.9



113



$

24.8



97



$

20.2


Construction

















3



9.2


Multi-family

5



45.6



9



16.0



7



12.0



11



29.6



6



23.1


Commercial real estate

9



6.8



7



17.8



5



26.6



4



4.5



7



5.5


Commercial and industrial

16



7.8



9



5.9



5



1.1



15



11.3



9



2.1


Total 30 to 59 days past due

141



83.6



114



57.3



121



60.6



143



70.2



122



60.1


60 to 89 days past due:




















Residential and consumer

33



6.5



46



11.6



30



5.5



37



7.1



37



9.2


Construction




















Multi-family

1



1.9



2



3.5



2



17.2



1



1.1



1



2.6


Commercial real estate





3



3.2



4



6.9







1



3.4


Commercial and industrial

6



2.0



5



4.7



4



4.1



7



3.8



5



0.9


Total 60 to 89 days past due

40



10.4



56



23.0



40



33.7



45



12.0



44



16.1


Total accruing past due loans

181



$

94.0



170



$

80.3



161



$

94.3



188



$

82.2



166



$

76.2


Non-accrual:




















Residential and consumer

255



$

47.4



261



$

48.2



275



$

51.2



296



$

56.4



320



$

59.0


Construction









1



0.2



1



0.2



1



0.2


Multi-family

8



23.3



6



19.6



14



34.1



14



34.1



15



33.9


Commercial real estate

22



12.0



30



12.3



27



8.1



32



9.8



35



12.4


Commercial and industrial

18



12.5



16



12.0



13



18.0



14



17.2



14



19.4


Total non-accrual loans

303



$

95.2



313



$

92.1



330



$

111.6



357



$

117.7



385



$

124.9


Accruing troubled debt restructured loans

57



$

13.1



58



$

12.5



56



$

12.2



54



$

13.6



54



$

13.6


Non-accrual loans to total loans



0.44

%




0.42

%




0.51

%




0.54

%




0.58

%

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



239.66

%




247.62

%




207.83

%




199.44

%




188.78

%

Allowance for loan losses as a percent of total loans



1.05

%




1.05

%




1.05

%




1.08

%




1.09

%

 

 

Balance Sheet Summary

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

Effective January 1, 2019, the Company adopted new accounting guidance that requires leases to be recognized on our Consolidated Balance Sheet as a right-of-use asset and a lease liability.  Our operating lease right-of-use assets and operating lease liabilities were $175.1 million and $185.8 million, respectively, at December 31, 2019.

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

 


December 31, 2019


September 30, 2019


December 31, 2018


(In thousands)

Commercial Loans:






Multi-family loans

$

7,813,236



7,995,095



8,165,187


Commercial real estate loans

4,831,347



4,771,928



4,786,825


Commercial and industrial loans

2,951,306



2,681,577



2,389,756


Construction loans

262,866



289,857



227,015


Total commercial loans

15,858,755



15,738,457



15,568,783


Residential mortgage loans

5,144,718



5,307,412



5,351,115


Consumer and other

699,796



700,341



707,866


Total Loans

21,703,269



21,746,210



21,627,764


Deferred fees, premiums and other, net

907



(1,991)



(13,811)


Allowance for loan losses

(228,120)



(227,985)



(235,817)


Net loans

$

21,476,056



21,516,234



21,378,136


 

During the year ended December 31, 2019, we originated $1.27 billion in commercial and industrial loans, $861.0 million in commercial real estate loans, $793.6 million in multi-family loans, $462.6 million in residential loans, $76.2 million in consumer and other loans and $69.8 million in construction loans.  The growth in the loan portfolio reflects our continued focus on growing and diversifying our loan portfolio.  Our loans are primarily on properties and businesses located in New Jersey and New York.

We also purchase mortgage loans from correspondent entities including other banks and mortgage bankers.  Our agreements with these correspondent entities require them to originate loans that adhere to our underwriting standards.  During the year ended December 31, 2019, we purchased loans totaling $294.1 million from these entities.  In addition to the loans originated for our portfolio, we originated residential mortgage loans for sale to third parties totaling $269.8 million during the year ended December 31, 2019.

The allowance for loan losses decreased by $7.7 million to $228.1 million at December 31, 2019 from $235.8 million at December 31, 2018.  Our allowance for loan losses was positively impacted by improved credit quality, including the level of non-accrual loans and charge-offs/recoveries, and modest loan growth.  Future increases in the allowance for loan losses may be necessary based on the growth and composition of the loan portfolio, the level of loan delinquency and the economic conditions in our lending area.  At December 31, 2019, our allowance for loan losses as a percent of total loans was 1.05%, a decrease from 1.09% at December 31, 2018 which was driven by the factors noted above.

Securities increased by $167.2 million, or 4.5%, to $3.85 billion at December 31, 2019 from $3.68 billion at December 31, 2018.  This increase was primarily a result of purchases, partially offset by sales and paydowns.

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

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

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

About the Company

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

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

The Company, as previously announced, will host an earnings conference call on Thursday, January 30, 2020 at 11:00 a.m. (ET).  The toll-free dial-in number is: (866) 218-2404.  Callers who pre-register will bypass the live operator and may avoid any delays in joining the conference call.  Participants will immediately receive an online confirmation, an email and a calendar invitation for the event.

Conference Call Pre-registration link: http://dpregister.com/10137873

A telephone replay will be available beginning on January 30, 2020 from 1:00 p.m. (ET) through 9:00 a.m. (ET) on April 30, 2020.  The replay number is (877) 344-7529, password 10137873.  The conference call will also be simultaneously webcast on the Company's website www.investorsbank.com and archived for one year.

Forward Looking Statements

Certain statements contained herein are "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Such forward looking statements may be identified by reference to a future period or periods, or by the use of forward looking terminology, such as "may," "will," "believe," "expect," "estimate," "anticipate," "continue," or similar terms or variations on those terms, or the negative of those terms.  Forward looking statements are subject to numerous risks and uncertainties, as described in the "Risk Factors" disclosures included in our Annual Report on Form 10-K, as supplemented in quarterly reports on Form 10-Q, including, but not limited to, those related to the real estate and economic environment, particularly in the market areas in which the Company operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management, asset-liability management, the financial and securities markets and the availability of and costs associated with sources of liquidity.

The Company wishes to caution readers not to place undue reliance on any such forward looking statements, which speak only as of the date made.  The Company wishes to advise readers that the factors listed above could affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.  The Company does not undertake and specifically declines any obligation to publicly release the results of any revisions that may be made to any forward looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Non-GAAP Financial Measures

We believe that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends and financial position.  We utilize these measures for internal planning and forecasting purposes.  We believe that our presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting our business and allows investors to view performance in a manner similar to management.  These non-GAAP measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure.  Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

 

 

INVESTORS BANCORP, INC. AND SUBSIDIARY

Consolidated Balance Sheets








December 31,
2019


September 30,
2019


December 31,
2018


(unaudited)


(unaudited)


(audited)

Assets

(Dollars in thousands)







Cash and cash equivalents

$

174,915



195,400



196,891


Equity securities

6,039



6,030



5,793


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

2,695,390



2,644,024



2,122,162


Debt securities held-to-maturity, net (estimated fair value of $1,190,104,
$1,158,769 and $1,558,564 at December 31, 2019, September 30, 2019
and December 31, 2018, respectively)

1,148,815



1,117,699



1,555,137


Loans receivable, net

21,476,056



21,516,234



21,378,136


Loans held-for-sale

29,797



31,373



4,074


Federal Home Loan Bank stock

267,219



273,996



260,234


Accrued interest receivable

79,313



83,951



77,501


Other real estate owned and other repossessed assets

13,538



12,675



6,911


Office properties and equipment, net

169,614



171,266



177,432


Operating lease right-of-use assets

175,143



179,632




Net deferred tax asset

64,220



108,634



104,411


Bank owned life insurance

218,517



216,925



211,914


Goodwill and intangible assets

97,869



97,566



99,063


Other assets

82,321



69,758



29,349


Total assets

$

26,698,766



26,725,163



26,229,008


Liabilities and Stockholders' Equity






Liabilities:






Deposits

$

17,860,338



17,672,756



17,580,269


Borrowed funds

5,827,111



5,694,553



5,435,681


Advance payments by borrowers for taxes and insurance

121,719



147,359



129,891


Operating lease liabilities

185,827



189,927




Other liabilities

81,821



89,201



77,837


Total liabilities

24,076,816



23,793,796



23,223,678


Stockholders' equity

2,621,950



2,931,367



3,005,330


Total liabilities and stockholders' equity

$

26,698,766



26,725,163



26,229,008


 

 

INVESTORS BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Operations
















For the Three Months Ended


For the Year Ended







December 31,
2019


September 30,
2019


December 31,
2018


December 31,
2019


December 31,
2018







(unaudited)


(unaudited)


(unaudited)


(unaudited)


(audited)







(Dollars in thousands, except per share data)

Interest and dividend income:











Loans receivable and loans held-for-sale

$

228,005



231,734



221,566



912,091



854,595



Securities:












GSE obligations

336



343



267



1,212



1,080




Mortgage-backed securities

23,642



23,978



21,627



95,133



80,906




Equity

35



36



34



143



134




Municipal bonds and other debt

3,052



3,186



5,755



11,494



13,060



Interest-bearing deposits

840



821



894



2,805



2,435



Federal Home Loan Bank stock

4,470



4,456



4,278



17,341



16,206




Total interest and dividend income

260,380



264,554



254,421



1,040,219



968,416


Interest expense:











Deposits


60,635



67,972



58,279



261,857



188,645



Borrowed funds

30,970



32,130



26,836



123,289



99,754




Total interest expense

91,605



100,102



85,115



385,146



288,399




Net interest income

168,775



164,452



169,306



655,073



680,017


Provision for loan losses

1,500



(2,500)



3,500



(1,000)



12,000




Net interest income after provision for loan losses

167,275



166,952



165,806



656,073



668,017


Non-interest income:











Fees and service charges

6,819



5,796



5,948



23,604



22,142



Income on bank owned life insurance

1,593



1,832



1,501



6,542



5,926



Gain on loans, net

2,218



1,679



746



5,345



2,144



(Loss) gain on securities, net

(13)



30



(32,802)



(5,536)



(31,604)



Gain on sales of other real estate owned, net

282



358



573



1,145



923



Other income

9,559



5,085



3,240



22,313



10,550




Total non-interest income

20,458



14,780



(20,794)



53,413



10,081


Non-interest expense:











Compensation and fringe benefits

59,327



63,603



56,789



243,782



235,928



Advertising and promotional expense

3,005



2,994



3,931



13,893



13,054



Office occupancy and equipment expense

16,700



15,702



17,093



63,996



63,539



Federal insurance premiums

3,300



3,300



3,800



13,200



17,760



General and administrative

559



487



626



2,222



2,328



Professional fees

4,897



6,010



3,497



17,308



15,278



Data processing and communication

7,998



8,348



7,491



31,987



27,810



Other operating expenses

11,037



8,274



8,996



36,366



31,983




Total non-interest expenses

106,823



108,718



102,223



422,754



407,680




Income before income tax expense

80,910



73,014



42,789



286,732



270,418


Income tax expense

32,180



21,042



9,459



91,248



67,842




Net income

$

48,730



51,972



33,330



195,484



202,576


Basic earnings per share

$0.19



0.20



0.12



0.75



0.72


Diluted earnings per share

$0.19



0.20



0.12



0.74



0.72













Basic weighted average shares outstanding

256,559,205



261,678,994



274,909,840



262,202,598



281,925,219



Diluted weighted average shares outstanding

257,006,084



261,812,970



275,249,994



262,519,788



282,791,859


 

 

INVESTORS BANCORP, INC. AND SUBSIDIARY

Average Balance Sheet and Yield/Rate Information




For the Three Months Ended




December 31, 2019


September 30, 2019


December 31, 2018




Average
Outstanding
Balance

Interest
Earned/Paid

Weighted
Average
Yield/Rate


Average
Outstanding
Balance

Interest
Earned/Paid

Weighted
Average
Yield/Rate


Average
Outstanding
Balance

Interest
Earned/Paid

Weighted
Average
Yield/Rate




(Dollars in thousands)

Interest-earning assets:













Interest-earning cash accounts

$

280,790


840


1.20

%


$

224,882


821


1.46

%


$

246,322


894


1.45

%


Equity securities

6,036


35


2.32

%


6,001


36


2.40

%


5,796


34


2.35

%


Debt securities available-for-sale

2,624,612


18,021


2.75

%


2,591,055


18,167


2.80

%


2,141,255


13,254


2.48

%


Debt securities held-to-maturity

1,131,386


9,009


3.19

%


1,131,194


9,340


3.30

%


1,583,201


14,395


3.64

%


Net loans

21,519,941


228,005


4.24

%


21,722,751


231,734


4.27

%


20,978,370


221,566


4.22

%


Federal Home Loan Bank stock

276,965


4,470


6.46

%


279,356


4,456


6.38

%


249,454


4,278


6.86

%


Total interest-earning assets

25,839,730


260,380


4.03

%


25,955,239


264,554


4.08

%


25,204,398


254,421


4.04

%

Non-interest earning assets

1,009,868





992,118





681,282





Total assets


$

26,849,598





$

26,947,357





$

25,885,680


















Interest-bearing liabilities:













Savings

$

2,040,678


4,592


0.90

%


$

1,958,748


4,377


0.89

%


$

2,064,286


3,535


0.68

%


Interest-bearing checking

5,344,156


19,403


1.45

%


4,894,643


21,094


1.72

%


4,857,070


19,075


1.57

%


Money market accounts

3,739,126


14,770


1.58

%


3,750,846


16,065


1.71

%


3,657,772


13,562


1.48

%


Certificates of deposit

4,169,591


21,870


2.10

%


4,756,086


26,436


2.22

%


4,601,607


22,107


1.92

%


 Total interest-bearing deposits

15,293,551


60,635


1.59

%


15,360,323


67,972


1.77

%


15,180,735


58,279


1.54

%


Borrowed funds

5,744,538


30,970


2.16

%


5,756,197


32,130


2.23

%


4,967,147


26,836


2.16

%


Total interest-bearing liabilities

21,038,089


91,605


1.74

%


21,116,520


100,102


1.90

%


20,147,882


85,115


1.69

%

Non-interest-bearing liabilities

2,906,473





2,892,067





2,706,262





Total liabilities

23,944,562





24,008,587





22,854,144




Stockholders' equity

2,905,036





2,938,770





3,031,536





Total liabilities and stockholders' equity

$

26,849,598





$

26,947,357





$

25,885,680


















Net interest income


$

168,775





$

164,452





$

169,306

















Net interest rate spread



2.29

%




2.18

%




2.35

%















Net interest earning assets

$

4,801,641





$

4,838,719





$

5,056,516


















Net interest margin



2.61

%




2.53

%




2.69

%















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

1.23


X



1.23


X



1.25


X


 

 

INVESTORS BANCORP, INC. AND SUBSIDIARY

Average Balance Sheet and Yield/Rate Information





For the Year Ended




December 31, 2019


December 31, 2018




Average
Outstanding
Balance

Interest
Earned/Paid

Weighted
Average
Yield/Rate


Average
Outstanding
Balance

Interest
Earned/Paid

Weighted
Average
Yield/Rate




(Dollars in thousands)

Interest-earning assets:









Interest-earning cash accounts

$

215,447


2,805


1.30

%


$

212,980


2,435


1.14

%


Equity securities

5,938


143


2.41

%


5,754


134


2.33

%


Debt securities available-for-sale

2,395,047


67,822


2.83

%


2,042,129


46,057


2.26

%


Debt securities held-to-maturity

1,317,322


40,017


3.04

%


1,668,106


48,989


2.94

%


Net loans

21,576,829


912,091


4.23

%


20,498,857


854,595


4.17

%


Federal Home Loan Bank stock

274,661


17,341


6.31

%


247,513


16,206


6.55

%



Total interest-earning assets

25,785,244


1,040,219


4.03

%


24,675,339


968,416


3.92

%

Non-interest earning assets

975,585





707,370






Total assets

$

26,760,829





$

25,382,709














Interest-bearing liabilities:









Savings

$

1,985,142


17,148


0.86

%


$

2,170,510


13,240


0.61

%


Interest-bearing checking

5,020,991


84,698


1.69

%


4,651,313


62,447


1.34

%


Money market accounts

3,703,413


60,896


1.64

%


3,837,174


46,394


1.21

%


Certificates of deposit

4,609,274


99,115


2.15

%


4,149,438


66,564


1.60

%


 Total interest bearing deposits

15,318,820


261,857


1.71

%


14,808,435


188,645


1.27

%


Borrowed funds

5,611,206


123,289


2.20

%


4,898,867


99,754


2.04

%



Total interest-bearing liabilities

20,930,026


385,146


1.84

%


19,707,302


288,399


1.46

%

Non-interest-bearing liabilities

2,887,601





2,590,675






Total liabilities

23,817,627





22,297,977




Stockholders' equity

2,943,202





3,084,732






Total liabilities and stockholders' equity

$

26,760,829





$

25,382,709














Net interest income


$

655,073





$

680,017













Net interest rate spread



2.19

%




2.46

%











Net interest earning assets

$

4,855,218





$

4,968,037














Net interest margin



2.54

%




2.76

%











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

1.23


X



1.25


X


 

 

INVESTORS BANCORP, INC. AND SUBSIDIARY

Selected Performance Ratios












For the Three Months Ended


For the Year Ended


December 31,
2019


September 30,
2019


December 31,
2018


December 31,
2019


December 31,
2018

Return on average assets

0.73

%


0.77

%


0.52

%


0.73

%


0.80

%

Return on average equity

6.71

%


7.07

%


4.40

%


6.64

%


6.57

%

Return on average tangible equity

6.94

%


7.32

%


4.55

%


6.87

%


6.79

%

Interest rate spread

2.29

%


2.18

%


2.35

%


2.19

%


2.46

%

Net interest margin

2.61

%


2.53

%


2.69

%


2.54

%


2.76

%

Efficiency ratio

56.45

%


60.66

%


68.83

%


59.67

%


59.08

%

Non-interest expense to average total assets

1.59

%


1.61

%


1.58

%


1.58

%


1.61

%

Average interest-earning assets to average interest-bearing liabilities

1.23



1.23



1.25



1.23



1.25



INVESTORS BANCORP, INC. AND SUBSIDIARY

Selected Financial Ratios and Other Data














December 31,
2019


September 30,
2019


December 31,
2018



Asset Quality Ratios:










Non-performing assets as a percent of total assets


0.46

%


0.44

%


0.55

%



Non-performing loans as a percent of total loans


0.50

%


0.48

%


0.64

%



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


239.66

%


247.62

%


188.78

%



Allowance for loan losses as a percent of total loans


1.05

%


1.05

%


1.09

%













Capital Ratios:










Tier 1 Leverage Ratio (1)



8.27

%


9.68

%


10.28

%



Common equity tier 1 risk-based (1)



11.03

%


12.95

%


13.41

%



Tier 1 Risk-Based Capital (1)



11.03

%


12.95

%


13.41

%



Total Risk-Based Capital (1)



12.18

%


14.10

%


14.60

%



Equity to total assets (period end)



9.82

%


10.97

%


11.46

%



Average equity to average assets



10.82

%


10.91

%


11.71

%



Tangible capital to tangible assets (2)



9.49

%


10.64

%


11.12

%



Book value per common share (2)



$

11.11



$

11.13



$

10.95




Tangible book value per common share (2)



$

10.69



$

10.76



$

10.59














Other Data:










Number of full service offices



147



147



151




Full time equivalent employees



1,761



1,887



1,928









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



(2) See Non-GAAP Reconciliation.



 

 


Investors Bancorp, Inc.

Non-GAAP Reconciliation

(Dollars in thousands, except share data)







Book Value and Tangible Book Value per Share Computation










December 31, 2019


September 30, 2019


December 31, 2018







Total stockholders' equity

$

2,621,950



2,931,367



3,005,330


Goodwill and intangible assets

97,869



97,566



99,063


Tangible stockholders' equity

$

2,524,081



2,833,801



2,906,267








Book Value per Share Computation






Common stock issued

359,070,852



359,070,852



359,070,852


Treasury shares

(111,630,950)



(84,314,431)



(72,797,738)


Shares outstanding

247,439,902



274,756,421



286,273,114


Unallocated ESOP shares

(11,368,750)



(11,487,175)



(11,842,448)


Book value shares

236,071,152



263,269,246



274,430,666








Book Value per Share

$

11.11



$

11.13



$

10.95


Tangible Book Value per Share

$

10.69



$

10.76



$

10.59








Total assets

$

26,698,766



26,725,163



26,229,008


Goodwill and intangible assets

97,869



97,566



99,063


Tangible assets

$

26,600,897



26,627,597



26,129,945








Tangible capital to tangible assets

9.49

%


10.64

%


11.12

%

 

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

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SOURCE Investors Bancorp, Inc.