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

$ISBC
Savings Institutions
Finance
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SHORT HILLS, N.J., Jan. 26, 2022 /PRNewswire/ -- Investors Bancorp, Inc. (NASDAQ:ISBC) ("Company"), the holding company for Investors Bank ("Bank"), reported net income of $94.3 million, or $0.40 per diluted share, for the three months ended December 31, 2021 as compared to $66.9 million, or $0.28 per diluted share, for the three months ended September 30, 2021 and $75.1 million, or $0.32 per diluted share, for the three months ended December 31, 2020.

For the year ended December 31, 2021, net income totaled $313.3 million, or $1.33 per diluted share, compared to $221.6 million, or $0.94 per diluted share, for the year ended December 31, 2020.

The Company also announced today that its Board of Directors declared a cash dividend of $0.16 per share to be paid on February 25, 2022 for stockholders of record as of February 10, 2022.

Kevin Cummings, Chairman and CEO, commented, "We closed the year out on a strong note, with both loans and non-interest bearing deposits growing at double-digit annualized levels. In addition, our profitability reached new heights as the economy and the real estate markets continued to improve over the course of the year. Return on average assets was 1.17% and return on average tangible equity was 12% for the year ended 2021. Importantly, our balance sheet is better positioned for rising rates than it was during the last rising interest rate cycle."

Mr. Cummings also commented, "With Shareholder approval received in November, we look forward to the completion of our merger with Citizens. As we await regulatory approvals of the deal, our teams continue to work to ensure a smooth closing and transition."

Performance Highlights

  • Total loans increased $692.7 million, or 3.2%, to $22.60 billion during the three months ended December 31, 2021. Commercial Real Estate and Multi Family loans increased $236.6 million, or 4.6% and $210.5 million, or 2.7% respectively. C&I loans increased $179.9 million, or 4.6%, during the three months ended December 31, 2021.
  • Non-interest-bearing deposits increased $312.4 million, or 7.2%, during the three months ended December 31, 2021. The cost of interest-bearing deposits decreased 3 basis points to 0.37% for the three months ended December 31, 2021 compared to the three months ended September 30, 2021.
  • Return on average assets and return on average tangible equity were 1.35% and 13.68% for the three months ended December 31, 2021, respectively.
  • Net interest margin increased 1 basis point to 3.00% for the three months ended December 31, 2021 compared to the three months ended September 30, 2021.
  • Provision for credit losses was a negative $23.0 million for the three months ended December 31, 2021 compared with a negative $13.0 million for the three months ended September 30, 2021.
  • Total non-interest income was $15.4 million for the three months ended December 31, 2021, a decrease of $518,000 compared to the three months ended September 30, 2021.
  • Total non-interest expenses were $110.9 million for the three months ended December 31, 2021, a decrease of $21.1 million compared to the three months ended September 30, 2021. Included in non-interest expenses for the fourth quarter were $1.5 million of merger and acquisition related costs in connection with the Citizens transaction. Third quarter non-interest expenses included $10.2 million of debt extinguishment costs and $14.9 million of merger and acquisition related costs.
  • At December 31, 2021, COVID-19 Cares Act related loan payment deferrals decreased to $279 million, or 1.2% of loans, compared to $496 million, or 2.3% of loans, as of September 30, 2021. Cares Act loan payment deferrals totaling $275 million are scheduled to expire in the first quarter of 2022. Approximately 96% of borrowers with a Cares Act loan payment deferral were making interest payments as of December 31, 2021.
  • Tier 1 Leverage, Common Equity Tier 1 Risk-Based, Tier 1 Risk-Based and Total Risk-Based Capital Ratios were 10.19%, 12.83%, 12.83% and 14.00%, respectively, at December 31, 2021.
  • On November 19, 2021 the Company's shareholders approved the planned merger with Citizens Financial Group, Inc at a special meeting. Citizens Financial Group and the Company are targeting a transaction close in early second quarter of 2022, subject to the receipt of required regulatory approvals and other customary closing conditions.

Financial Performance Overview

Fourth Quarter 2021 compared to Third Quarter 2021

For the fourth quarter of 2021, net income totaled $94.3 million, an increase of $27.4 million as compared to $66.9 million for the third quarter of 2021. The changes in net income on a sequential quarter basis are highlighted below.

Net interest income increased by $6.4 million, or 3.3%, as compared to the third quarter of 2021. Changes within interest income and expense categories were as follows:

  • Interest and dividend income increased $3.8 million, or 1.6%, to $235.0 million as compared to the third quarter of 2021, primarily attributable to the average balance of net loans which increased $545.2 million, mainly as a result of loan originations as well as an increase in prepayment penalties. The weighted average yield on net loans decreased 4 basis points to 3.93%.
  • Prepayment penalties, which are included in interest income, totaled $6.2 million for the three months ended December 31, 2021 as compared to $5.3 million for the three months ended September 30, 2021.
  • Interest expense decreased $2.6 million, primarily attributed to the weighted average cost of interest-bearing liabilities which decreased 7 basis points to 0.68% for the three months ended December 31, 2021. In addition, the average balance of total borrowed funds decreased $364.6 million, or 9.4%, to $3.50 billion for the three months ended December 31, 2021, while the average balance of interest-bearing deposits increased $743.3 million, or 4.8%, to $16.38 billion for the three months ended December 31, 2021.

Net interest margin increased 1 basis point to 3.00% for the three months ended December 31, 2021 compared to the three months ended September 30, 2021.

Total non-interest income was $15.4 million for the three months ended December 31, 2021, a decrease of $518,000, as compared to $16.0 million for the third quarter of 2021. The decrease in non-interest income was due primarily to decreases in other income and gain on loans of $1.3 million and $1.6 million, respectively, offset by increases of in gains on securities and fees and service charges of $1.4 million and $947,000, respectively.

Total non-interest expenses were $110.9 million for the three months ended December 31, 2021, a decrease of $21.1 million compared to the three months ended September 30, 2021. Included in non-interest expenses for the fourth quarter were $1.5 million of merger and acquisition related costs, while third quarter non-interest expenses included $10.2 million of debt extinguishment costs and $14.9 million of merger and acquisition related costs resulting from the recent Berkshire Bank transaction and the pending Citizens transaction. Excluding these items, non-interest expenses increased approximately $2.5 million driven primarily by advertising and promotion and office occupancy expenses.

Income tax expense was $34.2 million for the three months ended December 31, 2021 and $24.6 million for the three months ended September 30, 2021. The effective tax rate was 26.6% for the three months ended December 31, 2021 and 26.9% for the three months ended September 30, 2021.

Fourth Quarter 2021 compared to Fourth Quarter 2020

For the fourth quarter of 2021, net income totaled $94.3 million, an increase of $19.2 million as compared to $75.1 million in the fourth quarter of 2020. The changes in net income on a year over year quarter basis are highlighted below.

On a year over year basis, fourth quarter of 2021 net interest income increased by $12.2 million, or 6.4%, as compared to the fourth quarter of 2020 due to:

  • Interest expense decreased $15.1 million, or 30.7%, primarily attributed to the weighted average cost of interest-bearing liabilities, which decreased 32 basis points to 0.68% for the three months ended December 31, 2021. In addition, the average balance of interest-bearing deposits increased $233.2 million, or 1.4%, to $16.38 billion for the three months ended December 31, 2021.
  • Interest and dividend income decreased $2.9 million, or 1.2%, to $235.0 million, primarily attributable to the weighted average yield on net loans which decreased 20 basis point to 3.93% and the weighted average yield on securities which decreased 27 basis points to 1.83%. Partially offsetting this decrease, the average balance of net loans increased $1.13 billion, mainly as a result of loan originations and $219 million of loans acquired from Berkshire Bank, partially offset by paydowns and payoffs.
  • Prepayment penalties, which are included in interest income, totaled $6.2 million for the three months ended December 31, 2021 as compared to $9.2 million for the three months ended December 31, 2020.

Net interest margin increased 2 basis points year over year to 3.00% for the three months ended December 31, 2021 from 2.98% for the three months ended December 31, 2020, 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 $15.4 million for the three months ended December 31, 2021, a decrease of $30.4 million year over year. Included in non-interest income for the three months ended December 31, 2020 were $23.1 million of gains from sale-leaseback transactions. Excluding this item, non-interest income decreased $7.2 million, primarily due to a decrease of $5.4 million in gain on loans due to a lower volume of mortgage banking loan sales to third parties and a decrease in other income of $3.0 million, partially offset by an increase in fees and service charges of $1.2 million.

Total non-interest expenses were $110.9 million for the three months ended December 31, 2021, a decrease of $32.0 million compared to the three months ended December 31, 2020. Included in non-interest expenses for the fourth quarter 2021 were $1.5 million of merger and acquisition related costs from the pending Citizen's transaction, while fourth quarter 2020 non-interest expenses included debt extinguishment costs of $22.8 million as well as $11.7 million of costs associated with the Company's branch rationalization plans. Excluding these items, non-interest expenses increased approximately $1.0 million.

Income tax expense was $34.2 million for the three months ended December 31, 2021 and $19.3 million for the three months ended December 31, 2020. The effective tax rate was 26.6% for the three months ended December 31, 2021 and 20.4% for the three months ended December 31, 2020.

Year Ended December 31, 2021 compared to Year Ended December 31, 2020

Net income increased by $91.8 million year over year to $313.3 million for the year ended December 31, 2021. The changes in net income on a year over year basis are highlighted below.

Net interest income increased by $45.3 million as compared to the year ended December 31, 2020 due to:

  • Interest expense decreased by $107.6 million, or 42.2%, to $147.6 million for the year ended December 31, 2021, as compared to $255.2 million for the year ended December 31, 2020, primarily attributed to a decrease in the weighted average cost of interest-bearing liabilities of 46 basis points to 0.77% for the year ended December 31, 2021. In addition, the average balance of total borrowed funds decreased $960.2 million, or 20.6%, to $3.70 billion for the year ended December 31, 2021 and the average balance of interest-bearing deposits decreased $508.2 million, or 3.2%, to $15.59 billion for the year ended December 31, 2021.
  • Interest and dividend income decreased by $62.3 million, or 6.3%, to $918.6 million for the year ended December 31, 2021 as compared to the year ended December 31, 2020, primarily attributed to the weighted average yield on net loans, which decreased 18 basis points to 3.96%, and the weighted average yield on securities, which decreased 49 basis points to 1.92% as well as the impact of higher cash balances at year end December 31, 2021.
  • Prepayment penalties, which are included in interest income, totaled $24.6 million for the year ended December 31, 2021, as compared to $32.4 million for the year ended December 31, 2020.

Net interest margin increased 20 basis points to 3.00% for the year ended December 31, 2021 from 2.80% for the year ended December 31, 2020, primarily driven by the lower cost of interest-bearing liabilities, partially offset by the lower yield on interest-earning assets.

Total non-interest income was $64.5 million for the year ended December 31, 2021, a decrease of $26.1 million as compared to the year ended December 31, 2020. Included in non-interest income for the year ended December 30, 2020 were $23.1 million of gains from sale-leaseback transactions. Excluding this item, non-interest income decreased $2.9 million, primarily due to a decrease of $9.3 million in gain on loans due to a lower volume of mortgage banking loan sales to third parties offset by increases of $4.2 in fees and service charges and $3.2 in other income.

Total non-interest expenses were $455.7 million for the year ended December 31, 2021, an increase of $6.2 million compared to the year ended December 31, 2020. This increase was driven by increases of $10.3 million in professional fees primarily driven by acquisition-related fees, $4.1 million in compensation and fringe benefit expense primarily related to incentive compensation and medical expenses, $3.3 million in data processing and communication expenses, $2.7 million in other operating expenses, offset by a decrease of $13.9 million in debt extinguishment costs.

Income tax expense was $115.1 million for the year ended December 31, 2021 compared to $75.0 million for the year ended December 31, 2020. The effective tax rate was 26.9% for the year ended December 31, 2021 and 25.3% for the year ended December 31, 2020.

Asset Quality

Our provision for credit losses is primarily a result of the expected credit losses on our loans, unfunded commitments and held-to-maturity debt securities over the life of these financial instruments based on historical experience, current conditions and reasonable and supportable forecasts. Our provision for credit losses is also impacted by the inherent credit risk in these financial instruments, the composition of and changes in our portfolios of these financial instruments, and the level of charge-offs. At December 31, 2021, our allowance for credit losses continues to be affected by the impact of the COVID-19 pandemic on the current and forecasted economic conditions. For the three months ended December 31, 2021, our provision for credit losses was impacted by improving economic and commercial real estate conditions and forecasts. For the three months ended December 31, 2021, our provision for credit losses was negative $23.0 million, compared to negative $13.0 million for the three months ended September 30, 2021 and negative $2.7 million for the three months ended December 31, 2020. Our provision was impacted by net loan charge-offs of $1.7 million for the three months ended December 31, 2021, net loan charge-offs of $252,000 for the three months ended September 30, 2021 and net loan recoveries of $2.1 million for the three months ended December 31, 2020. Our provision for credit losses was negative $48.7 million for the year ended December 31, 2021 compared to $70.2 million for the year ended December 31, 2020. Our provision was impacted by net loan recoveries of $541,000 for the year ended December 31, 2021 and net loan charge-offs of $10.7 million for the year ended December 31, 2020.

Total non-accrual loans were $105.2 million, or 0.47% of total loans, at December 31, 2021 compared to $76.5 million, or 0.35% of total loans, at September 30, 2021 and $107.1 million, or 0.51% of total loans, at December 31, 2020. For the three months ended December 31, 2021, the increase in non-accrual loans was driven by a previously disclosed multi-family potential problem loan totaling $35.8 million as of December 31, 2021 that was restructured and classified as a troubled debt restructuring and moved to non-accrual status in the fourth quarter. The borrower is performing in accordance with the modified terms. We continue to proactively work to resolve our non-accrual loans.

At December 31, 2021, there were $60.6 million of loans deemed as troubled debt restructured loans ("TDRs"), of which $35.8 million was a multi-family loan, $19.7 million were residential and consumer loans and $4.3 million were commercial real estate loans. TDRs of $7.6 million were classified as accruing and $53.1 million were classified as non-accrual at December 31, 2021.

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





December 31, 2021



September 30, 2021



June 30, 2021



March 31, 2021



December 31, 2020



# 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

47



$  10.7



50



$  12.3



62



$  12.8



62



$  13.2



84



$  18.5

Construction



















Multi-family

7



14.0



9



11.5



8



16.2



10



19.2



5



7.3

Commercial real estate

7



15.6



9



19.5



2



0.5



8



11.1



8



9.5

Commercial and industrial

9



21.3



11



1.3



3



14.5



9



7.3



6



0.9

Total 30 to 59 days past due

70



61.6



79



44.6



75



44.0



89



50.8



103



36.2

60 to 89 days past due:







































Residential and consumer

18



1.9



18



2.3



22



5.0



26



3.1



28



5.2

Construction



















Multi-family

2



3.0



4



8.2



4



10.2



1



3.4





Commercial real estate

1



1.7



1



0.3







2



2.6



5



2.3

Commercial and industrial

2



0.1



1



0.2



1





1



0.2



8



3.1

Total 60 to 89 days past due

23



6.7



24



11.0



27



15.2



30



9.3



41



10.6

Total accruing past due loans

93



$  68.3



103



$  55.6



102



$  59.2



119



$  60.1



144



$  46.8

Non-accrual:







































Residential and consumer

216



$  38.3



231



$  43.5



232



$  42.8



239



$  45.7



246



$  46.4

Construction



















Multi-family

13



55.3



15



19.9



11



16.6



13



19.2



15



35.6

Commercial real estate

19



8.3



22



9.8



24



13.0



25



14.0



29



15.9

Commercial and industrial

15



3.3



16



3.3



13



5.2



15



4.4



21



9.2

Total non-accrual loans

263



$  105.2



284



$  76.5



280



$  77.6



292



$  83.3



311



$  107.1

Accruing troubled debt restructured loans

44



$    7.6



47



$    8.1



49



$    9.3



45



$    9.1



47



$    9.2

Non-accrual loans to total loans





0.47 %







0.35 %







0.36 %







0.40 %







0.51 %

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





228.82 %







344.61 %







348.05 %







340.60 %







264.17 %

Allowance for loan losses as a percent of total loans





1.07 %







1.20 %







1.26 %







1.36 %







1.36 %

 

Balance Sheet Summary

Total assets increased $1.78 billion, or 6.9%, to $27.81 billion at December 31, 2021 from $26.02 billion December 31, 2020. Cash and cash equivalents increased $117.6 million to $288.0 million at December 31, 2021. Net loans increased $1.76 billion, or 8.6%, to $22.34 billion at December 31, 2021. Securities decreased $46.8 million, or 1.2%, to $4.00 billion at December 31, 2021.

The detail of the loan portfolio is below:



December 31, 2021



September 30, 2021



December 31, 2020



(In thousands)

Commercial Loans:











Multi-family loans

$          7,865,592



7,655,135



7,122,840

Commercial real estate loans

5,371,758



5,135,123



4,947,212

Commercial and industrial loans

4,113,792



3,933,926



3,575,641

Construction loans

550,950



509,620



404,367

Total commercial loans

17,902,092



17,233,804



16,050,060

Residential mortgage loans

3,929,170



3,930,683



4,119,894

Consumer and other

766,785



740,827



702,801

Total loans

22,598,047



21,905,314



20,872,755

Deferred fees, premiums and other, net

(14,754)



(17,071)



(9,318)

Allowance for loan losses

(240,681)



(263,515)



(282,986)

Net loans

$        22,342,612



21,624,728



20,580,451

During the year ended December 31, 2021, we originated $2.43 billion in multi-family loans, $1.27 billion in residential loans, $1.26 billion in commercial and industrial loans, $1.24 billion in commercial real estate loans, $170.6 million in construction loans and $118.2 million in consumer and other loans. In addition, we acquired $219 million of loans from Berkshire Bank. Our loans are primarily on properties and businesses located in New Jersey and New York.

In addition to the loans originated for our portfolio, we originated residential mortgage loans for sale to third parties totaling $145.0 million during the year ended December 31, 2021. As of December 31, 2021, loans held for sale were $809,000.

The allowance for loan losses decreased by $42.3 million to $240.7 million at December 31, 2021 from $283.0 million at December 31, 2020. The decrease reflects a negative provision for loan losses of $43.8 million, partially offset by an increase of $541,000 resulting from net recoveries and an increase of approximately $1.0 million from the initial allowance on loans identified as PCD which were acquired from Berkshire Bank. Our allowance for loan losses and related provision were affected by the improving current and forecasted economic conditions and commercial real estate prices. 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 current and forecasted economic conditions over the life of our loans. At December 31, 2021, our allowance for loan losses as a percent of total loans was 1.07%, a decrease from 1.36% at December 31, 2020 which was driven by the factors noted above.

Securities decreased by $46.8 million, or 1.2%, to $4.00 billion at December 31, 2021 from $4.04 billion at December 31, 2020. This decrease was primarily a result of paydowns and sales, partially offset by purchases.

Deposits increased by $1.30 billion, or 6.7%, to $20.82 billion at December 31, 2021 from $19.53 billion at December 31, 2020 primarily driven by an increase in checking account deposits, partially offset by decreases in time deposits and money market deposits. Checking account deposits increased $2.22 billion to $11.93 billion at December 31, 2021 from $9.71 billion at December 31, 2020. Core deposits (savings, checking and money market) represented approximately 90% of our total deposit portfolio at December 31, 2021 compared to 86% at December 31, 2020. Non interest checking increased $995.2 million, or 27.2% to $4.66 billion for the year ended December 31, 2021

Borrowed funds increased by $239.2 million, or 7.3%, to $3.54 billion at December 31, 2021 from $3.30 billion at December 31, 2020 to support balance sheet growth.

Stockholders' equity increased by $228.4 million to $2.94 billion at December 31, 2021 from $2.71 billion at December 31, 2020, primarily attributable to net income of $313.3 million, share-based plan activity of $32.1 million and other comprehensive income of $33.7 million for the year ended December 31, 2021. These increases were partially offset by cash dividends of $0.56 per share totaling $138.6 million and the repurchase of approximately 1.0 million shares of common stock for $12.1 million during the year ended December 31, 2021. The Company remains above the FDIC's "well capitalized" standards, with a Common Equity Tier 1 Risk-Based Ratio of 12.83% at December 31, 2021.

About the Company

Investors Bancorp, Inc. is the holding company for Investors Bank, which as of December 31, 2021 operated from its corporate headquarters in Short Hills, New Jersey and 154 branches located throughout New Jersey, New York and Pennsylvania.

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, failure to consummate the transaction with Citizens Financial Group, Inc. for any reason, including the failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company), failure to obtain shareholder approval or failure to satisfy any of the other closing conditions in a timely basis or at all; the diversion of management's time from ongoing business operations due to issues relating to the transaction with Citizens Financial Group, Inc., the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement between the Company and Citizens Financial Group, Inc., the outcome of any legal proceedings that may be instituted against Citizens Financial Group, Inc. or the Company, potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction, 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. Further, given its ongoing and dynamic nature, it is difficult to predict what the continuing effects of the COVID-19 pandemic will have on our business and results of operations. The pandemic and related local and national economic disruption may, among other effects, continue to result in a material adverse change for the demand for our products and services; increased levels of loan delinquencies, problem assets and foreclosures; branch disruptions, unavailability of personnel and increased cybersecurity risks as employees work remotely.

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,

2021



September 30,

2021



December 31,

2020



(unaudited)



(unaudited)



(audited)

Assets

(Dollars in thousands)













Cash and cash equivalents

$           287,990



670,295



170,432

Equity securities

8,194



7,673



36,000

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

2,393,540



2,531,573



2,758,437

Debt securities held-to-maturity, net (estimated fair value of $1,651,504, $1,336,957 and $1,320,872 at December 31, 2021, September 30, 2021 and December 31, 2020, respectively)

1,593,785



1,272,683



1,247,853

Loans receivable, net

22,342,612



21,624,728



20,580,451

Loans held-for-sale

809



397



30,357

Federal Home Loan Bank stock

176,480



177,058



159,829

Accrued interest receivable

78,636



81,549



79,705

Other real estate owned and other repossessed assets

2,882



5,849



7,115

Office properties and equipment, net

129,288



132,259



139,663

Operating lease right-of-use assets

199,603



203,522



199,981

Net deferred tax asset

87,251



109,588



116,805

Bank owned life insurance

229,358



227,822



223,714

Goodwill and intangible assets

131,993



133,237



109,633

Other assets

144,197



139,561



163,184

Total assets

$     27,806,618



27,317,794



26,023,159

Liabilities and Stockholders' Equity











Liabilities:











Deposits

$     20,824,638



20,400,424



19,525,419

Borrowed funds

3,535,038



3,534,536



3,295,790

Advance payments by borrowers for taxes and insurance

137,438



152,407



115,729

Operating lease liabilities

212,678



216,374



212,559

Other liabilities

158,398



161,494



163,659

Total liabilities

24,868,190



24,465,235



23,313,156

Stockholders' equity

2,938,428



2,852,559



2,710,003

Total liabilities and stockholders' equity

$     27,806,618



27,317,794



26,023,159

 



INVESTORS BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Operations































For the Three Months Ended



For the Year Ended













December 31,

2021



September 30,

2021



December 31,

2020



December 31,

2021



December 31,

2020













(unaudited)



(unaudited)



(unaudited)



(unaudited)



(audited)













(Dollars in thousands, except per share data)

Interest and dividend income:





















Loans receivable and loans held-for-sale

$       214,709



211,189



213,928



836,171



871,411



Securities:























GSE obligations

571



567



523



2,237



1,517





Mortgage-backed securities

13,800



13,321



16,674



56,539



77,925





Equity

64



65



252



458



362





Municipal bonds and other debt

3,443



3,601



3,552



14,039



13,480



Interest-bearing deposits

281



268



93



648



1,460



Federal Home Loan Bank stock

2,130



2,234



2,858



8,546



14,739





Total interest and dividend income

234,998



231,245



237,880



918,638



980,894

Interest expense:





















Deposits



15,036



15,683



29,310



67,905



155,589



Borrowed funds

18,994



20,960



19,776



79,718



99,619





Total interest expense

34,030



36,643



49,086



147,623



255,208





Net interest income

200,968



194,602



188,794



771,015



725,686

Provision for credit losses

(22,999)



(13,015)



(2,682)



(48,676)



70,158





Net interest income after provision for credit losses

223,967



207,617



191,476



819,691



655,528

Non-interest income:





















Fees and service charges

6,143



5,196



4,935



22,080



17,916



Income on bank owned life insurance

1,536



1,508



1,579



6,548



6,638



Gain on loans, net

92



1,698



5,538



6,911



16,226



Gain (loss) on securities, net

503



(931)



157



506



406



Gain on sale of other real estate owned, net



34



270



86



1,054



Gain on sale-leaseback transactions





23,129





23,129



Other income

7,160



8,447



10,184



28,332



25,149





Total non-interest income

15,434



15,952



45,792



64,463



90,518

Non-interest expense:





















Compensation and fringe benefits

61,022



60,231



64,891



245,065



240,970



Advertising and promotional expense

4,346



3,111



2,645



12,083



9,551



Office occupancy and equipment expense

18,105



23,535



28,451



76,788



77,754



Federal insurance premiums

2,800



2,950



3,550



12,350



14,276



General and administrative

624



706



455



2,254



2,133



Professional fees

5,586



12,925



3,834



26,483



16,220



Data processing and communication

9,729



9,985



9,004



39,042



35,702



Debt extinguishment



10,159



22,807



10,159



24,098



Other operating expenses

8,703



8,424



7,230



31,517



28,801





Total non-interest expenses

110,915



132,026



142,867



455,741



449,505





Income before income tax expense

128,486



91,543



94,401



428,413



296,541

Income tax expense

34,169



24,609



19,256



115,080



74,961





Net income

$         94,317



66,934



75,145



313,333



221,580

Basic earnings per share

$0.40



0.28



0.32



1.33



0.94

Diluted earnings per share

$0.40



0.28



0.32



1.33



0.94























Basic weighted average shares outstanding

235,935,642



235,602,277



236,679,655



235,315,487



235,761,457



Diluted weighted average shares outstanding

237,415,493



236,413,268



236,757,361



236,436,081



235,838,808

 



INVESTORS BANCORP, INC. AND SUBSIDIARY

Average Balance Sheet and Yield/Rate Information







For the Three Months Ended







December 31, 2021



September 30, 2021



December 31, 2020







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

$       858,964

281

0.13 %



$       844,365

268

0.13 %



$       454,986

93

0.08 %



Equity securities

7,758

64

3.30 %



8,747

65

2.97 %



25,915

252

3.89 %



Debt securities available-for-sale

2,439,916

9,098

1.49 %



2,501,016

9,683

1.55 %



2,717,128

12,502

1.84 %



Debt securities held-to-maturity

1,449,625

8,716

2.41 %



1,174,563

7,806

2.66 %



1,264,286

8,247

2.61 %



Net loans

21,829,427

214,709

3.93 %



21,284,262

211,189

3.97 %



20,695,149

213,928

4.13 %



Federal Home Loan Bank stock

175,525

2,130

4.85 %



192,111

2,234

4.65 %



175,097

2,858

6.53 %



Total interest-earning assets

26,761,215

234,998

3.51 %



26,005,064

231,245

3.56 %



25,332,561

237,880

3.76 %

Non-interest earning assets

1,122,901







1,151,571







1,144,838







Total assets



$ 27,884,116







$ 27,156,635







$ 26,477,399

































Interest-bearing liabilities:

























Savings

$    2,043,716

1,326

0.26 %



$    2,060,893

1,381

0.27 %



$    2,039,954

2,551

0.50 %



Interest-bearing checking

7,331,456

7,090

0.39 %



6,658,248

6,833

0.41 %



6,117,420

7,823

0.51 %



Money market accounts

4,785,618

4,371

0.37 %



4,613,066

4,475

0.39 %



4,949,313

9,944

0.80 %



Certificates of deposit

2,214,590

2,249

0.41 %



2,299,850

2,994

0.52 %



3,035,484

8,992

1.18 %



 Total interest-bearing deposits

16,375,380

15,036

0.37 %



15,632,057

15,683

0.40 %



16,142,171

29,310

0.73 %



Borrowed funds

3,498,840

18,994

2.17 %



3,863,460

20,960

2.17 %



3,470,338

19,776

2.28 %



Total interest-bearing liabilities

19,874,220

34,030

0.68 %



19,495,517

36,643

0.75 %



19,612,509

49,086

1.00 %

Non-interest-bearing liabilities

5,118,684







4,827,551







4,164,206







Total liabilities

24,992,904







24,323,068







23,776,715





Stockholders' equity

2,891,212







2,833,567







2,700,684







Total liabilities and stockholders' equity

$ 27,884,116







$ 27,156,635







$ 26,477,399

































Net interest income



$ 200,968







$ 194,602







$ 188,794































Net interest rate spread





2.83 %







2.81 %







2.76 %





























Net interest earning assets

$   6,886,995







$   6,509,547







$    5,720,052

































Net interest margin





3.00 %







2.99 %







2.98 %





























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

1.35

X





1.33

X





1.29

X



 



INVESTORS BANCORP, INC. AND SUBSIDIARY

Average Balance Sheet and Yield/Rate Information









For the Year Ended







December 31, 2021



December 31, 2020







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

$      587,691

648

0.11 %



$      773,177

1,460

0.19 %



Equity securities

16,222

458

2.82 %



11,365

362

3.19 %



Debt securities available-for-sale

2,543,274

40,636

1.60 %



2,672,537

58,873

2.20 %



Debt securities held-to-maturity

1,254,917

32,179

2.56 %



1,184,984

34,049

2.87 %



Net loans

21,099,992

836,171

3.96 %



21,040,964

871,411

4.14 %



Federal Home Loan Bank stock

183,001

8,546

4.67 %



229,120

14,739

6.43 %





Total interest-earning assets

25,685,097

918,638

3.58 %



25,912,147

980,894

3.79 %

Non-interest earning assets

1,133,861







1,096,400









Total assets

$  26,818,958







$ 27,008,547

























Interest-bearing liabilities:

















Savings

$  2,032,004

5,591

0.28 %



$   2,039,686

12,056

0.59 %



Interest-bearing checking

6,581,074

27,488

0.42 %



5,869,801

42,014

0.72 %



Money market accounts

4,615,127

20,508

0.44 %



4,367,498

42,568

0.97 %



Certificates of deposit

2,359,645

14,318

0.61 %



3,819,029

58,951

1.54 %



 Total interest bearing deposits

15,587,850

67,905

0.44 %



16,096,014

155,589

0.97 %



Borrowed funds

3,704,903

79,718

2.15 %



4,665,094

99,619

2.14 %





Total interest-bearing liabilities

19,292,753

147,623

0.77 %



20,761,108

255,208

1.23 %

Non-interest-bearing liabilities

4,711,391







3,594,290









Total liabilities

24,004,144







24,355,398





Stockholders' equity

2,814,814







2,653,149









Total liabilities and stockholders' equity

$  26,818,958







$ 27,008,547

























Net interest income



$     771,015







$    725,686























Net interest rate spread





2.81 %







2.56 %





















Net interest earning assets

$  6,392,344







$   5,151,039

























Net interest margin





3.00 %







2.80 %





















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

1.33

X





1.25

X



 



INVESTORS BANCORP, INC. AND SUBSIDIARY

Selected Performance Ratios























For the Three Months Ended



For the Year Ended



December 31,

2021



September 30,

2021



December 31,

2020



December 31,

2021



December 31,

2020

Return on average assets

1.35 %



0.99 %



1.14 %



1.17 %



0.82 %

Return on average equity

13.05 %



9.45 %



11.13 %



11.13 %



8.35 %

Return on average tangible equity

13.68 %



9.86 %



11.60 %



11.62 %



8.70 %

Interest rate spread

2.83 %



2.81 %



2.76 %



2.81 %



2.56 %

Net interest margin

3.00 %



2.99 %



2.98 %



3.00 %



2.80 %

Efficiency ratio

51.25 %



62.70 %



60.90 %



54.55 %



55.07 %

Non-interest expense to average total assets

1.59 %



1.94 %



2.16 %



1.70 %



1.66 %

Average interest-earning assets to average interest-bearing liabilities

1.35



1.33



1.29



1.33



1.25



INVESTORS BANCORP, INC. AND SUBSIDIARY

Selected Financial Ratios and Other Data



























December 31,

2021



September 30,

2021



December 31,

2020





Asset Quality Ratios:



















Non-performing assets as a percent of total assets



0.42 %



0.33 %



0.47 %





Non-performing loans as a percent of total loans



0.50 %



0.39 %



0.56 %





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



228.82 %



344.61 %



264.17 %





Allowance for loan losses as a percent of total loans



1.07 %



1.20 %



1.36 %





Allowance for credit losses as a percent of total loans (1)



1.13 %



1.28 %



1.44 %

























Capital Ratios:



















Tier 1 Leverage Ratio (2)





10.19 %



10.24 %



10.14 %





Common equity tier 1 risk-based (2)





12.83 %



12.83 %



13.07 %





Tier 1 Risk-Based Capital (2)





12.83 %



12.83 %



13.07 %





Total Risk-Based Capital (2)





14.00 %



14.11 %



14.39 %





Equity to total assets (period end)





10.57 %



10.44 %



10.41 %





Average equity to average assets





10.37 %



10.43 %



10.20 %





Tangible capital to tangible assets (3)





10.14 %



10.00 %



10.03 %





Book value per common share (3)





$       12.36



$       12.03



$       11.43





Tangible book value per common share (3)





$       11.81



$       11.47



$       10.97

























Other Data:



















Number of full service offices





154



154



156





Full time equivalent employees





1,643



1,707



1,806















(1) Allowance for credit losses includes allowance for loan losses and allowance for losses on unfunded commitments.

(2) Capital ratios as of December 31, 2021 are estimated. In accordance with regulatory capital rules, the Company elected an option to delay the estimated impact of CECL on its regulatory capital over a five-year transition period ending December 31, 2024. As a result, capital ratios as of December 31, 2021, September 30, 2021 and December 31, 2020 exclude the impact of the increased allowance for credit losses on loans, unfunded commitments and held-to-maturity debt securities attributed to the adoption of CECL.

(3) 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, 2021



September 30, 2021



December 31, 2020













Total stockholders' equity

$              2,938,428



2,852,559



2,710,003

Goodwill and intangible assets

131,993



133,237



109,633

Tangible stockholders' equity

$              2,806,435



2,719,322



2,600,370













Book Value per Share Computation











Common stock issued

361,869,872



361,869,872



361,869,872

Treasury shares

(113,872,606)



(114,184,985)



(113,940,656)

Shares outstanding

247,997,266



247,684,887



247,929,216

Unallocated ESOP shares

(10,347,370)



(10,539,779)



(10,895,052)

Book value shares

237,649,896



237,145,108



237,034,164













Book Value per Share

$                      12.36



$                      12.03



$                      11.43

Tangible Book Value per Share

$                      11.81



$                      11.47



$                      10.97













Total assets

$            27,806,618



27,317,794



26,023,159

Goodwill and intangible assets

131,993



133,237



109,633

Tangible assets

$            27,674,625



27,184,557



25,913,526













Tangible capital to tangible assets

10.14 %



10.00 %



10.03 %

 

Contact: Marianne Wade

(973) 924-5100

investorrelations@investorsbank.com

 

Cision View original content:https://www.prnewswire.com/news-releases/investors-bancorp-inc-announces-fourth-quarter-financial-results-and-cash-dividend-301469086.html

SOURCE Investors Bancorp, Inc.

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