SHORT HILLS, N.J., July 27 /PRNewswire-FirstCall/ -- Investors Bancorp, Inc. ("Company"), the holding company for Investors Savings Bank ("Bank"), reported net income of $6.3 million for the three months ended June 30, 2006 compared to $7.0 million for the three months ended June 30, 2005. The Company also reported net income of $15.0 million for the year ended June 30, 2006 compared to a net loss of $3.1 million for the year ended June 30, 2005.
The Company reported basic and diluted earnings of $0.06 per share for the three months ended June 30, 2006. Since the Company completed its initial public stock offering on October 11, 2005, earnings per share are not applicable for the other periods presented.
The Company's results of operations for the fiscal year ended June 30, 2006 were negatively impacted by a $20.7 million pre-tax charitable contribution expense and positively impacted by the investment of stock subscription proceeds received in its initial public offering. With respect to the prior fiscal year, in March 2005 the Company executed a restructuring transaction in which it repaid $448.0 million in FHLB borrowings and sold approximately $500.0 million of securities with a book yield of 4.00% or less, to fund the repayment of these borrowings. This restructuring transaction resulted in charges to income of $54.0 million before taxes ($35.5 million after taxes) in March 2005, consisting of the losses on prepayment of the borrowings and sale of the securities.
Robert M. Cashill, the Company's President and CEO, said, "The challenging interest rate environment and the intense competition for deposits continue to put pressure on net income. While interest and dividend income continues to increase as a result of our efforts to change the mix of our assets, increases in the cost to attract deposits have more than offset these gains." He added, "We maintain our long standing commitment to change the composition of both our asset and liability mix in order to provide both increases and consistency of earnings."
Comparison of Operating Results
Interest and Dividend Income
Total interest and dividend income increased by $9.4 million, or 16.9%, to $65.0 million for the three months ended June 30, 2006 from $55.7 million for the three months ended June 30, 2005. This increase is primarily due to a 36 basis point increase in the weighted average yield on interest-earning assets to 4.99% for the three months ended June 30, 2006 compared to 4.63% for the three months ended June 30, 2005. There was also a $406.3 million, or 8.5% increase in the average balance of interest-earning assets to $5.21 billion for the three months ended June 30, 2006 from $4.80 billion for the three months ended June 30, 2005.
Interest income on loans increased by $13.7 million, or 58.8%, to $37.1 million for the three months ended June 30, 2006 from $23.3 million for the three months ended June 30, 2005, reflecting a $953.9 million, or 52.3%, increase in the average balance of net loans to $2.78 billion for the three months ended June 30, 2006 from $1.83 billion for the three months ended June 30, 2005. In addition, the average yield on loans increased to 5.33% for the three months ended June 30, 2006 from 5.11% for the three months ended June 30, 2005.
Interest income on all other interest-earning assets, excluding loans, decreased by $4.3 million, or 13.4%, to $28.0 million for the three months ended June 30, 2006 from $32.3 million for the three months ended June 30, 2005. This decrease reflected a $547.6 million decrease in the average balance of securities and other interest-earning assets, partially offset by a 27 basis point increase in the average yield on securities and other interest- earning assets to 4.61% for the three months ended June 30, 2006 from 4.34% for the three months ended June 30, 2005.
Total interest and dividend income increased by $19.5 million, or 8.6%, to $246.1 million for the year ended June 30, 2006 from $226.5 million for the year ended June 30, 2005. This increase was primarily due to a 35 basis point increase in the weighted average yield on interest-earning assets to 4.81% for the year ended June 30, 2006 compared to 4.46% for the year ended June 30, 2005. There was also an increase in the average balance of interest-earning assets of $45.4 million, or 0.9%, to $5.12 billion for the year ended June 30, 2006 from $5.08 billion for the year ended June 30, 2005.
Interest income on loans increased by $49.8 million, or 64.7%, to $126.6 million for the year ended June 30, 2006 from $76.9 million for the year ended June 30, 2005, reflecting a $924.8 million, or 61.5%, increase in the average balance of net loans to $2.43 billion for the year ended June 30, 2006 from $1.50 billion for the year ended June 30, 2005. In addition, the average yield on loans increased to 5.22% for the year ended June 30, 2006 from 5.11% for the year ended June 30, 2005.
Interest income on all other interest-earning assets, excluding loans, decreased by $30.2 million, or 20.2%, to $119.5 million for the year ended June 30, 2006 from $149.7 million for the year ended June 30, 2005. This decrease reflected an $879.4 million decrease in the average balance of securities and other interest-earning assets, partially offset by a 25 basis point increase in the average yield on securities and other interest-earning assets to 4.44% for the year ended June 30, 2006 from 4.19% for the year ended June 30, 2005.
Interest Expense
Total interest expense increased by $10.3 million, or 34.0%, to $40.4 million for the three months ended June 30, 2006 from $30.2 million for the three months ended June 30, 2005. This increase was primarily due to a 100 basis point increase in the weighted average cost of total interest-bearing liabilities to 3.69% for the three months ended June 30, 2006 compared to 2.69% for the three months ended June 30, 2005. This was partially offset by a $106.0 million, or 2.4%, decrease in the average balance of total interest- bearing liabilities to $4.39 billion for the three months ended June 30, 2006 from $4.49 billion for the three months ended June 30, 2005. Consistent with our strategic plan of reducing our reliance on wholesale funding, the average balance of wholesale borrowings decreased by $126.8 million for the three months ended June 30, 2006 compared to the average balance for the three months ended June 30, 2005.
Interest expense on interest-bearing deposits increased $8.4 million, or 44.3% to $27.5 million for the three months ended June 30, 2006 from $19.0 million for the three months ended June 30, 2005. This increase was due to a $20.8 million increase in the average balance and a 102 basis point increase in the average cost of interest-bearing deposits.
Interest expense on borrowed funds increased by $1.8 million, or 16.5%, to $13.0 million for the three months ended June 30, 2006 from $11.1 million for the three months ended June 30, 2005. This increase was primarily caused by a 104 basis point increase in the average cost of borrowed funds to 4.56% for the three months ended June 30, 2006 from 3.52% for the three months ended June 30, 2005, partially offset by a $126.8 million or 10.0% decrease in the average balance of borrowed funds to $1.14 billion for the three months ended June 30, 2006 from $1.27 billion for the three months ended June 30, 2005.
Total interest expense increased by $15.1 million, or 11.9%, to $141.8 million for the year ended June 30, 2006 from $126.7 million for the year ended June 30, 2005. This increase was primarily due to a 52 basis point increase in the weighted average cost of total interest-bearing liabilities to 3.19% for the year ended June 30, 2006 compared to 2.67% for the year ended June 30, 2005. This was partially offset by a $301.1 million, or 6.3%, decrease in the average balance of total interest-bearing liabilities to $4.44 billion for the year ended June 30, 2006 from $4.74 billion for the year ended June 30, 2005. We reduced the average balance of wholesale borrowings during the year ended June 30, 2006 by $384.9 million to $1.12 billion which was partially offset by an increase in the average balance of interest-bearing deposits for the year ended June 30, 2006 of $83.9 million to $3.33 billion.
Interest expense on interest-bearing deposits increased $26.7 million, or 38.2% to $96.6 million for the year ended June 30, 2006 from $69.9 million for the year ended June 30, 2005. This increase was due to an $83.9 million increase in the average balance of interest-bearing deposits and a 75 basis point increase in the average cost of interest-bearing deposits.
Interest expense on borrowed funds decreased by $11.6 million, or 20.4%, to $45.2 million for the year ended June 30, 2006 from $56.8 million for the year ended June 30, 2005. The average balance of borrowed funds decreased by $384.9 million or 25.7%, to $1.12 billion for the year ended June 30, 2006 from $1.50 billion for the year ended June 30, 2005. This decrease was primarily attributed to the utilization of the proceeds from our initial public stock offering to reduce higher cost wholesale borrowings and to the restructuring transaction that took place in March 2005 in which we repaid wholesale borrowings. The average cost of borrowed funds increased by 26 basis points to 4.05% for the year ended June 30, 2006 from 3.79% for the year ended June 30, 2005.
Net Interest Income
Net interest income decreased by $887,000, or 3.5%, to $24.6 million for the three months ended June 30, 2006 from $25.5 million for the three months ended June 30, 2005. This decrease was caused primarily by our cost of interest-bearing liabilities increasing 100 basis points to 3.69% for the three months ended June 30, 2006 from 2.69% for the three months ended June 30, 2005. This was partially offset by a reduction in the average balance of interest-bearing liabilities of $106.0 million, or 2.4%, to $4.39 billion for the three months ended June 30, 2006 from $4.49 billion for the three months ended June 30, 2005 and a 36 basis point improvement in our yield on interest- earning assets to 4.99% for the three months ended June 30, 2006 from 4.63% for the three months ended June 30, 2005.
Net interest income increased by $4.4 million, or 4.4%, to $104.3 million for the year ended June 30, 2006 from $99.8 million for the year ended June 30, 2005. The increase was caused primarily by a 35 basis point improvement in our yield on interest-earning assets to 4.81% for the year ended June 30, 2006 from 4.46% for the year ended June 30, 2005 and a reduction in the average balance of interest-bearing liabilities of $301.1 million, or 6.3%, to $4.44 billion for the year ended June 30, 2006 from $4.74 billion for the year ended June 30, 2005. This was partially offset by an increase in our cost of interest-bearing liabilities to 3.19% for the year ended June 30, 2006 from 2.67% for the year ended June 30, 2005.
Provision for Loan Losses
Our provision for loan losses was unchanged at $200,000 for the three month periods and $600,000 for the years ended June 30, 2006 and 2005. There were net charge-offs of $31,000 for the three months ended June 30, 2006 and net recoveries of $46,000 for the year ended June 30, 2006. For the three months and year ended June 30, 2005 there were net charge-offs of $31,000 and $99,000, respectively. The allowance for loan losses increased by $646,000 to $6.3 million at June 30, 2006 from $5.7 million at June 30, 2005. The allowance for loan losses reflects the inherent credit risk in our loan portfolio, the growth in our portfolio, the level of our non-performing loans and our charge-off experience.
Our asset quality continued to improve in fiscal 2006. Total non- performing loans, defined as non-accruing loans, decreased by $4.6 million to $3.3 million at June 30, 2006 from $7.9 million at June 30, 2005. The ratio of non-performing loans to total loans was 0.11% at June 30, 2006 compared with 0.40% at June 30, 2005. The allowance for loan losses as a percentage of non-performing loans was 192.18% at June 30, 2006 compared with 72.40% at June 30, 2005. At June 30, 2006 and 2005 our allowance for loan losses as a percentage of total loans was 0.21% and 0.29%, respectively. Future increases in the allowance for loan losses may be necessary based on the growth and change in the composition of our loan portfolio.
Other Income (Loss)
Total other income increased by $981,000 to $1.6 million for the three months ended June 30, 2006 from $638,000 for the three months ended June 30, 2005. This increase was primarily due to the income associated with our bank owned life insurance contract increasing by $1.3 million for the three months ended June 30, 2006.
Total other income increased by $8.0 million to $5.6 million for the year ended June 30, 2006 from a loss of $2.4 million for the year ended June 30, 2005. This increase was largely the result of the losses recorded in the year ended June 30, 2005 on the sale of securities of $9.5 million, primarily attributed to the balance sheet restructuring. This was partially offset by a decrease in income associated with our bank owned life insurance of $1.3 million to $2.7 million for the year ended June 30, 2006.
Operating Expenses
Total operating expenses increased by $1.8 million, or 12.2%, to $16.8 million for the three months ended June 30, 2006 from $15.0 million for the three months ended June 30, 2005. This increase was primarily attributed to an increase in compensation and fringe benefits of $1.6 million, or 18.2%, to $10.6 million for the three months ended June 30, 2006. This increase was primarily due to staff additions in our commercial real estate and retail banking areas, as well as normal merit increases and increases in employee benefit costs. In addition, the increase includes $517,000 in ESOP expenses recorded during the three months ended June 30, 2006 which we did not have in fiscal 2005 because we had not yet completed our stock offering.
Total operating expenses decreased by $16.5 million, or 15.9%, to $86.8 million for the year ended June 30, 2006 from $103.3 million for the year ended June 30, 2005. The decrease was primarily attributed to the balance sheet restructuring in the year ended June 30, 2005, in which a loss of $43.6 million on the early extinguishment of debt was realized, partially offset by the $20.7 million contribution of cash and Company stock made to the Investors Savings Bank Charitable Foundation in the year ended June 30, 2006 as part of our initial public stock offering. In addition, compensation and fringe benefits increased by $6.3 million, or 17.6%, to $42.0 million for the year ended June 30, 2006. This increase was primarily due to staff additions in our commercial real estate and retail banking areas, as well as normal merit increases and increases in employee benefit costs. Additionally, $2.7 million is attributed to the recognition in fiscal year 2006 of expense related to the ESOP share allocations to employees for calendar year 2005 and the ESOP expense for the first half of calendar year 2006.
Income Taxes
Income tax expense was $2.9 million for the three months ended June 30, 2006, as compared to $4.0 million for the three months ended June 30, 2005. Our effective tax expense rates were 31.8% and 36.1% for the three months ended June 30, 2006 and 2005, respectively.
Income tax expense was $7.4 million for the year ended June 30, 2006, as compared to income tax benefit of $3.3 million for the year ended June 30, 2005. Our effective tax expense rate was 33.0% for the year ended June 30, 2006.
Balance Sheet Summary
Total assets increased by $504.5 million, or 10.10%, to $5.50 billion at June 30, 2006 from $4.99 billion at June 30, 2005. This increase was largely the result of the growth in our loan portfolio partially offset by the decrease in our securities portfolio. The cash flow from our securities portfolio is being used to fund our loan growth, consistent with our strategic plan.
Cash and cash equivalents decreased by $41.5 million, or 51.0%, to $39.8 million at June 30, 2006 from $81.3 million at June 30, 2005. This decrease is a result of utilizing cash to fund loan growth and repay maturing wholesale borrowings.
Securities, both available-for-sale and held-to-maturity, decreased by $422.9 million, or 15.6%, to $2.29 billion at June 30, 2006, from $2.71 billion at June 30, 2005. This decrease is consistent with our strategy to change our mix of assets by reducing the size of our securities portfolio and increasing the size of our loan portfolio. The cash flows from our securities portfolio were used primarily to fund our loan growth.
Net loans, including loans held for sale, increased by $964.2 million, or 48.3%, to $2.96 billion at June 30, 2006 from $2.00 billion at June 30, 2005. The majority of our loan growth was in residential mortgage loans. Total residential loan production for the year ended June 30, 2006 was $1.05 billion. We originate residential mortgage loans directly and through our mortgage subsidiary, ISB Mortgage Co. During the year ended June 30, 2006 we originated $224.1 million in residential mortgage loans. In addition, we 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 June 30, 2006 we purchased loans totaling $694.9 million from these entities. We also purchase pools of mortgage loans in the secondary market on a "bulk purchase" basis from several well-established financial institutions. During the year ended June 30, 2006, we purchased loans totaling $130.0 million on a "bulk purchase" basis.
Additionally, for the year ended June 30, 2006, we originated $67.5 million in multi-family and commercial real estate loans and $95.0 million in construction loans. This is consistent with our strategy of originating multi-family, commercial real estate and construction loans to diversify our loan portfolio.
Deposits increased by $61.6 million, or 1.9%, to $3.30 billion at June 30, 2006 from $3.24 billion at June 30, 2005. The increase is primarily due to an increase in interest-bearing checking and time deposits of $65.3 million and $141.0 million, respectively, partially offset by a decrease in savings and money market accounts of $44.8 million and $106.2 million, respectively. We attribute the increase and shift in deposits to new products being offered and higher rates on our CD's in response to market interest rates, consumer demands and competition.
Borrowed funds decreased $68.0 million, or 5.2%, to $1.25 billion at June 30, 2006 from $1.31 billion at June 30, 2005. This decrease was primarily a result of utilizing the proceeds from the stock offering to reduce wholesale borrowings, partially offset by borrowing to fund loan growth.
Stockholders' equity increased $491.4 million, or 120.5%, to $899.3 million at June 30, 2006 from $407.8 million at June 30, 2005. The increase in stockholders' equity was primarily due to $525.3 million of capital raised in our initial public stock offering, which was completed in October 2005. This was partially offset by the purchase of 4,254,072 shares for our employee stock ownership plan at a cost of $42.5 million.
About the Company
Investors Bancorp, Inc. is the holding company for Investors Savings Bank, which operates from its corporate headquarters in Short Hills, New Jersey, and forty-six branch offices located in Essex, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Somerset and Union Counties, New Jersey.
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, as described in our SEC filings, and uncertainties, including, but not limited to, those related to the economic environment, particularly in the market areas in which the Company operated, 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, which 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.
INVESTORS BANCORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
June 30, 2006 (Unaudited) and June 30, 2005
June 30, June 30,
Assets 2006 2005
(In thousands)
Cash and cash equivalents $ 39,824 81,329
Securities available-for-sale, at
estimated fair value 528,876 673,951
Securities held-to-maturity, net
(estimated fair value of
$1,695,975 and $2,032,939 at June
30, 2006 and June 30, 2005,
respectively) 1,763,032 2,040,882
Loans receivable, net 2,960,583 1,993,904
Loans held-for-sale 974 3,412
Stock in the Federal Home Loan Bank 46,125 60,688
Accrued interest receivable 21,053 18,263
Office properties and equipment, net 27,911 29,544
Net deferred tax asset 28,176 13,128
Bank owned life insurance contract 78,903 76,229
Other assets 1,789 1,423
Total assets $5,497,246 4,992,753
Liabilities and Stockholders' Equity
Liabilities:
Deposits $3,302,043 3,240,420
Borrowed funds 1,245,740 1,313,769
Advance payments by borrowers for
taxes and insurance 15,337 10,817
Other liabilities 34,859 19,920
Total liabilities 4,597,979 4,584,926
Stockholders' equity:
Preferred stock, $0.01 par value,
500,000 authorized shares; none
issued - -
Common stock, $0.01 par value,
200,000,000 shares authorized;
116,275,688 issued and outstanding
at June 30, 2006, and $0.10 par
value, 3,000 shares authorized;
50 issued and outstanding at
June 30, 2005 532 -
Additional paid-in capital 524,751 25
Unallocated common stock held by the
employee stock ownership plan (41,123) -
Retained earnings 426,233 411,219
Accumulated other comprehensive loss:
Net unrealized loss on securities
available for sale, net of tax (10,758) (2,316)
Minimum pension liability, net of
tax (368) (1,101)
(11,126) (3,417)
Total stockholders' equity 899,267 407,827
Total liabilities and
stockholders' equity $5,497,246 4,992,753
INVESTORS BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
For the Three Months For the Years
Ended June 30, Ended June 30,
2006 2005 2006 2005
(Dollars in thousands, except
per share data)
Interest and dividend income:
Loans receivable and loans held-
for-sale $ 37,059 23,333 126,613 76,857
Securities:
Government-sponsored enterprise
obligations 1,338 1,341 6,843 5,496
Mortgage-backed securities 23,015 29,125 97,557 138,210
Equity securities available-
for-sale 455 474 1,825 1,776
Municipal bonds and other debt 2,285 375 6,805 1,369
Interest-bearing deposits 188 146 2,863 489
Repurchase agreements - - 613 -
Federal Home Loan Bank stock 702 864 2,949 2,327
Total interest and dividend
income 65,042 55,658 246,068 226,524
Interest expense:
Deposits 27,464 19,031 96,578 69,862
Secured borrowings 12,972 11,134 45,218 56,817
Total interest expense 40,436 30,165 141,796 126,679
Net interest income 24,606 25,493 104,272 99,845
Provision for loan losses 200 200 600 600
Net interest income after
provision for loan losses 24,406 25,293 103,672 99,245
Other income (loss):
Fees and service charges 638 673 2,524 2,451
Increase (decrease) in and death
benefits on bank owned life
insurance contract 898 (356) 2,674 3,977
Gain on sales of mortgage loans,
net 57 24 289 406
Gain (loss) on securities
transactions, net 5 256 5 (9,494)
Gain on sale of other real estate
owned, net - 26 5 38
Other income 21 15 83 191
Total other income (loss) 1,619 638 5,580 (2,431)
Operating expenses:
Compensation and fringe benefits 10,640 9,002 41,963 35,695
Advertising and promotional
expense 750 475 2,502 2,636
Office occupancy and equipment
expense 2,509 3,008 10,306 10,340
Federal insurance premiums 111 116 470 470
Stationery, printing, supplies
and telephone 429 388 1,756 1,711
Legal, audit, accounting, and
supervisory examination fees 563 475 1,746 1,456
Data processing service fees 907 756 3,633 3,340
Amortization of premium on
deposit acquisition - - - 1,102
Loss on early extinguishment of
debt - - - 43,616
Contribution to charitable
foundation - - 20,651 -
Other operating expenses 903 759 3,803 2,936
Total operating expenses 16,812 14,979 86,830 103,302
Income (Loss) before income
tax expense (benefit) 9,213 10,952 22,422 (6,488)
Income tax expense (benefit) 2,933 3,953 7,408 (3,346)
Net income (loss) $ 6,280 6,999 15,014 (3,142)
Earnings per share - basic and
diluted $ 0.06 n/a n/a n/a
Weighted average shares
outstanding - basic and diluted 112,163,418 n/a n/a n/a
INVESTORS BANCORP, INC. AND SUBSIDIARY
Average Balance Sheet and Yield/Rate Information
For Three Months Ended
June 30, 2006
Average
Outstanding Interest Average
Balance Earned/Paid Yield/Rate
(Dollars in thousands)
Interest-earning assets:
Due from banks $ 20,429 $ 188 3.68%
Securities available-for-sale 564,203 6,020 4.27%
Securities held-to-maturity 1,797,084 21,073 4.69%
Net loans 2,779,381 37,059 5.33%
Stock in FHLB 48,620 702 5.78%
Total interest-earning assets 5,209,717 65,042 4.99%
Non-interest earning assets 135,492
Total assets $5,345,209
Interest-bearing Liabilities:
Savings $ 232,348 485 0.83%
Interest-bearing checking 318,926 1,821 2.28%
Money market accounts 210,635 726 1.38%
Certificates of deposit 2,485,857 24,432 3.93%
Borrowed funds 1,138,215 12,972 4.56%
Total interest-bearing
liabilities 4,385,981 40,436 3.69%
Non-interest bearing liabilities 69,630
Total liabilities 4,455,611
Stockholders' equity 889,598
Total liabilities and
stockholders' equity $5,345,209
Net interest income $24,606
Net interest rate spread 1.30%
Net interest earning assets $ 823,736
Net interest margin 1.89%
Ratio of interest-earning assets to
total interest-bearing liabilities 1.19X
For Three Months Ended
June 30, 2005
Average
Outstanding Interest Average
Balance Earned/Paid Yield/Rate
(Dollars in thousands)
Interest-earning assets:
Due from banks $ 17,901 $ 146 3.26%
Securities available-for-sale 773,419 8,247 4.27%
Securities held-to-maturity 2,128,210 23,068 4.34%
Net loans 1,825,527 23,333 5.11%
Stock in FHLB 58,379 864 5.92%
Total interest-earning assets 4,803,436 55,658 4.63%
Non-interest earning assets 141,041
Total assets $4,944,477
Interest-bearing Liabilities:
Savings $275,526 576 0.84%
Interest-bearing checking 231,823 734 1.27%
Money market accounts 339,041 1,126 1.33%
Certificates of deposit 2,380,599 16,595 2.79%
Borrowed funds 1,265,014 11,134 3.52%
Total interest-bearing
liabilities 4,492,003 30,165 2.69%
Non-interest bearing liabilities 54,819
Total liabilities 4,546,822
Stockholders' equity 397,655
Total liabilities and
stockholders' equity $4,944,477
Net interest income $25,493
Net interest rate spread 1.94%
Net interest earning assets $ 311,433
Net interest margin 2.12%
Ratio of interest-earning assets to
total interest-bearing liabilities 1.07X
INVESTORS BANCORP, INC. AND SUBSIDIARY
Average Balance Sheet and Yield/Rate Information
For the Years Ended June 30,
2006
Average
Outstanding Interest Average
Balance Earned/Paid Yield/Rate
(Dollars in thousands)
Interest-earning assets:
Due from banks $ 82,677 $ 2,863 3.46%
Repurchase agreements 16,387 613 3.74%
Securities available-for-sale 609,265 25,828 4.24%
Securities held-to-maturity 1,930,206 87,202 4.52%
Net loans 2,427,506 126,613 5.22%
Stock in FHLB 54,834 2,949 5.38%
Total interest-earning assets 5,120,875 246,068 4.81%
Non-interest earning assets 135,799
Total assets $5,256,674
Interest-bearing Liabilities:
Savings $ 330,840 2,820 0.85%
Interest-bearing checking 306,079 6,027 1.97%
Money market accounts 255,154 3,423 1.34%
Certificates of deposit 2,435,089 84,308 3.46%
Borrowed funds 1,115,723 45,218 4.05%
Total interest-bearing
liabilities 4,442,885 141,796 3.19%
Non-interest bearing liabilities 62,867
Total liabilities 4,505,752
Stockholders' equity 750,922
Total liabilities and
stockholders' equity $5,256,674
Net interest income $104,272
Net interest rate spread 1.62%
Net interest earning assets $ 677,990
Net interest margin 2.04%
Ratio of interest-earning assets to
total interest-bearing liabilities 1.15X
For the Years Ended June 30,
2005
Average
Outstanding Interest Average
Balance Earned/Paid Yield/Rate
(Dollars in thousands)
Interest-earning assets:
Due from banks $ 20,162 $ 489 2.43%
Repurchase agreements - - -
Securities available-for-sale 1,190,712 47,408 3.98%
Securities held-to-maturity 2,289,520 99,443 4.34%
Net loans 1,502,704 76,857 5.11%
Stock in FHLB 72,388 2,327 3.21%
Total interest-earning assets 5,075,486 226,524 4.46%
Non-interest earning assets 139,856
Total assets $5,215,342
Interest-bearing Liabilities:
Savings $ 279,953 2,349 0.84%
Interest-bearing checking 218,327 2,533 1.16%
Money market accounts 380,623 5,075 1.33%
Certificates of deposit 2,364,399 59,905 2.53%
Borrowed funds 1,500,671 56,817 3.79%
Total interest-bearing
liabilities 4,743,973 126,679 2.67%
Non-interest bearing liabilities 70,468
Total liabilities 4,814,441
Stockholders' equity 400,901
Total liabilities and
stockholders' equity $5,215,342
Net interest income $ 99,845
Net interest rate spread 1.79%
Net interest earning assets $ 331,513
Net interest margin 1.97%
Ratio of interest-earning assets to
total interest-bearing liabilities 1.07X
INVESTORS BANCORP, INC. AND SUBSIDIARY
Selected Ratios and Other Data
At or For the At or For the
Three Months Ended Years Ended
June 30, June 30,
2006 2005 2006 2005
Performance Ratios:
Return on average assets (1) (2) 0.47% 0.57% 0.29% -0.06%
Return on average equity (1) (2) 2.82% 7.04% 2.00% -0.78%
Interest rate spread 1.30% 1.94% 1.62% 1.79%
Net interest margin 1.89% 2.12% 2.04% 1.97%
Efficiency ratio (1) (2) 64.11% 57.32% 79.04% 106.04%
Non-interest expense to average total
assets (1) (2) 1.26% 1.21% 1.65% 1.98%
Average interest-earning assets to
average interest-bearing liabilities 1.19 1.07 1.15 1.07
Asset Quality Ratios:
Non-performing assets as a percent of
total assets 0.06% 0.16% 0.06% 0.16%
Non-performing loans as a percent of
total loans 0.11% 0.40% 0.11% 0.40%
Allowance for loan losses as a percent
of total loans 0.21% 0.29% 0.21% 0.29%
Allowance for loan losses as a percent
of non-performing loans 192.18% 72.40% 192.18% 72.40%
Capital Ratios:
Total risk-based capital (to risk
weighted assets) (3) 26.44% 21.48% 26.44% 21.48%
Tier 1 risk-based capital (to risk
weighted assets) (3) 26.19% 21.48% 26.19% 21.18%
Tier 1 leverage (core) capital (to
adjusted tangible assets) (3) 12.23% 8.28% 12.23% 8.28%
Equity to total assets (period end) 16.36% 8.17% 16.36% 8.17%
Average equity to average assets 16.64% 8.04% 14.29% 7.69%
Tangible capital (to tangible assets) 16.35% 8.16% 16.35% 8.16%
Other Data:
Number of full service offices 46 46 46 46
Full time equivalent employees 473 459 473 459
(1) June 2006 year end results reflect a pre-tax expense of $20.7 million
for the charitable contribution made to Investors Savings Bank
Charitable Foundation as part of our IPO.
(2) June 30, 2005 year end results reflect pre-tax expense of $54.0
million attributable to the March 2005 balance sheet restructuring.
(3) Ratios are for Investors Savings Bank and do not include capital
retained at the holding company level.
