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

For the first quarter of 2021, net income totaled $72.3 million, a decrease of $2.9 million as compared to $75.1 million for the fourth quarter of 2020.  The changes in net income on a sequential quarter basis are highlighted below.

Net interest income decreased by $8.1 million, or 4.3%, as compared to the fourth quarter of 2020.  Changes within interest income and expense categories were as follows:

• Interest and dividend income decreased $17.3 million, or 7.3%, to $220.5 million as compared to the fourth quarter of 2020, primarily attributed to the weighted average yield on net loans which decreased 25 basis points to 3.88% including the impact of a decline in prepayment penalties. In addition, the average balance of net loans decreased $203.5 million, mainly as a result of paydowns and payoffs, partially offset by loan originations.
• Prepayment penalties, which are included in interest income, totaled $2.3 million for the three months ended March 31, 2021 as compared to $9.2 million for the three months ended December 31, 2020.
• Interest expense decreased $9.3 million, primarily attributed to the weighted average cost of interest-bearing liabilities which decreased 16 basis points to 0.84% for the three months ended March 31, 2021. In addition, the average balance of interest-bearing deposits decreased $517.5 million, or 3.2%, to $15.62 billion for the three months ended March 31, 2021 and the average balance of total borrowed funds decreased $35.1 million, or 1.0%, to $3.44 billion for the three months ended March 31, 2021.

Net interest margin decreased 8 basis points to 2.90% for the three months ended March 31, 2021 compared to the three months ended December 31, 2020, driven primarily by the decrease in prepayment penalties, partially offset by the lower cost of interest-bearing liabilities.  Excluding prepayment penalties, net interest margin increased 2 basis points for the three months ended March 31, 2021.

Total non-interest income was $20.0 million for the three months ended March 31, 2021, a decrease of $25.8 million, as compared to $45.8 million for the fourth quarter of 2020.  The decrease in non-interest income was due primarily to a gain of $23.1 million on the sale-leaseback of 15 branch locations and one corporate location during the three months ended December 31, 2020 and a $2.6 million decline in customer swap fee income.

Total non-interest expenses were $104.4 million for the three months ended March 31, 2021, a decrease of $38.5 million compared to the three months ended December 31, 2020.  Total non-interest expenses for the three months ended December 31, 2020 included $22.8 million of costs from the early extinguishment of wholesale funding and $11.7 million of costs associated with the Company's branch rationalization announcement in December 2020.  Excluding these items, non-interest expenses for the three months ended March 31, 2021 decreased $4.0 million compared to the three months ended December 31, 2020.  The decrease was primarily driven by incentive compensation.

Income tax expense was $27.1 million for the three months ended March 31, 2021 and $19.3 million for the three months ended December 31, 2020.  The effective tax rate was 27.3% for the three months ended March 31, 2021 and 20.4% for the three months ended December 31, 2020.  The effective tax rate in the fourth quarter of 2020 was positively impacted by tax credit investments, as well as state income apportionment.

First Quarter 2021 compared to First Quarter 2020

For the first quarter of 2021, net income totaled $72.3 million, an increase of $32.8 million as compared to $39.5 million in the first quarter of 2020.  The changes in net income on a year over year quarter basis are highlighted below.

On a year over year basis, first quarter of 2021 net interest income increased by $7.5 million, or 4.3%, as compared to the first quarter of 2020 due to:

• Interest expense decreased $43.0 million, or 51.9%, primarily attributed to the weighted average cost of interest-bearing liabilities, which decreased 74 basis points to 0.84% for the three months ended March 31, 2021. In addition, the average balance of total borrowed funds decreased $2.25 billion, or 39.5%, to $3.44 billion, while the average balance of interest-bearing deposits increased $288.3 million, or 1.9%, to $15.62 billion for the three months ended March 31, 2021.
• Interest and dividend income decreased $35.6 million, or 13.9%, to $220.5 million, primarily attributed to the weighted average yield on net loans which decreased 35 basis points to 3.88%, including the impact of a decline in prepayment penalties, and the weighted average yield on securities which decreased 83 basis points to 2.00%. In addition, the average balance of net loans decreased $735.7 million, mainly as a result of paydowns and payoffs, offset by loan originations and $453.3 million of loans acquired from Gold Coast in April 2020.
• Prepayment penalties, which are included in interest income, totaled $2.3 million for the three months ended March 31, 2021 as compared to $7.6 million for the three months ended March 31, 2020.

Net interest margin increased 19 basis points year over year to 2.90% for the three months ended March 31, 2021 from 2.71% for the three months ended March 31, 2020, driven primarily by the lower cost of interest-bearing liabilities, partially offset by the lower yields on interest-earnings assets and a decrease in prepayment penalties.  Excluding prepayment penalties, net interest margin increased 27 basis points for the three months ended March 31, 2021.

Total non-interest income was $20.0 million for the three months ended March 31, 2021, an increase of $5.3 million year over year.  The increase in non-interest income was due primarily to an increase of $2.0 million in gain on loans due to a higher volume of mortgage banking loan sales to third parties, an increase of $819,000 in customer swap fee income, an increase of $757,000 in income from our wealth and investment products and an increase of $610,000 in gains on our equipment finance portfolio. 

Total non-interest expenses were $104.4 million for the three months ended March 31, 2021, an increase of $1.8 million compared to the three months ended March 31, 2020.

Income tax expense was $27.1 million for the three months ended March 31, 2021 and $14.6 million for the three months ended March 31, 2020.  The effective tax rate was 27.3% for the three months ended March 31, 2021 and 27.0% for the three months ended March 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 March 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 March 31, 2021, our provision for credit losses was negative $3.0 million compared to negative $2.7 million for the three months ended December 31, 2020 and $31.2 million for the three months ended March 31, 2020.  Our provision was impacted by net loan recoveries of $1.7 million for the three months ended March 31, 2021, net loan recoveries of $2.1 million for the three months ended December 31, 2020 and net loan charge-offs of $8.0 million for the three months ended March 31, 2020. 

Total non-accrual loans were $83.3 million, or 0.40% of total loans, at March 31, 2021 compared to $107.1 million, or 0.51% of total loans, at December 31, 2020 and $98.4 million, or 0.46% of total loans, at March 31, 2020.  We continue to proactively and diligently work to resolve our troubled loans.

At March 31, 2021, there were $29.7 million of loans deemed as troubled debt restructured loans ("TDRs"), of which $24.4 million were residential and consumer loans, $4.4 million were commercial real estate loans and $900,000 were commercial and industrial loans.  TDRs of $9.1 million were classified as accruing and $20.6 million were classified as non-accrual at March 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.

	March 31, 2021							December 31, 2020							September 30, 2020							June 30, 2020							March 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	62			$	13.2			84			$	18.5			78			$	17.2			79			$	19.9			106			$	24.6
Construction	—			—				—			—				—			—				—			—				—			—
Multi-family	10			19.2				5			7.3				5			5.3				9			24.6				10			57.9
Commercial real estate	8			11.1				8			9.5				7			4.6				9			10.6				6			23.5
Commercial and industrial	9			7.3				6			0.9				6 Werbung Mehr Nachrichten zur INVESTORS BANCORP Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 08.07.24 - ARIVA.DE Redaktion Minimaler Kursabschlag bei der SAP-Aktie (189,06 €) 08.07.24 - ARIVA.DE Redaktion Aktienmarkt: Kurs der Aktie von ThyssenKrupp im Minus (4,07 €) 08.07.24 - ARIVA.DE Redaktion RWE-Aktie mit Kursverlusten (33,21 €)