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

Second Quarter 2021 compared to First Quarter 2021

For the second quarter of 2021, net income totaled $79.8 million, an increase of $7.5 million as compared to $72.3 million for the first quarter of 2021.  The changes in net income on a sequential quarter basis are highlighted below.

Net interest income increased by $14.0 million, or 7.7%, as compared to the first quarter of 2021.  Changes within interest income and expense categories were as follows:

• Interest and dividend income increased $11.3 million, or 5.1%, to $231.9 million as compared to the first quarter of 2021, primarily attributable to the weighted average yield on net loans which increased 19 basis points to 4.07% including the impact of higher prepayment penalties. In addition, the average balance of net loans increased $286.3 million, mainly as a result of loan originations, partially offset by paydowns and payoffs.
• Prepayment penalties, which are included in interest income, totaled $10.8 million for the three months ended June 30, 2021 as compared to $2.3 million for the three months ended March 31, 2021.
• Interest expense decreased $2.7 million, primarily attributed to the weighted average cost of interest-bearing liabilities which decreased 5 basis points to 0.79% for the three months ended June 30, 2021. In addition, the average balance of interest-bearing deposits decreased $914.0 million, or 5.9%, to $14.71 billion for the three months ended June 30, 2021, while the average balance of total borrowed funds increased $584.3 million, or 17.0%, to $4.02 billion for the three months ended June 30, 2021.

Net interest margin increased 21 basis points to 3.11% for the three months ended June 30, 2021 compared to the three months ended March 31, 2021, driven primarily by higher prepayment penalties and the lower cost of interest-bearing liabilities.  Excluding prepayment penalties, net interest margin increased 8 basis points for the three months ended June 30, 2021.

Total non-interest income was $13.1 million for the three months ended June 30, 2021, a decrease of $6.9 million, as compared to $20.0 million for the first quarter of 2021.  The decrease in non-interest income was due primarily to a decrease of $2.5 million in gain on loans due to a lower volume of mortgage banking loan sales to third parties, a decline of $1.8 million in customer swap fee income, a decrease of $1.0 million in fees and service charges related to our mortgage servicing rights valuation, a decline of $639,000 in gains on our equipment finance portfolio and a decrease of $586,000 in PPP referral income during the three months ended June 30, 2021. 

Total non-interest expenses were $108.4 million for the three months ended June 30, 2021, an increase of $4.1 million compared to the three months ended March 31, 2021.  The increase was primarily driven by an increase of $2.8 million in other operating expenses and an increase of $2.1 million in professional fees. Included in non-interest expenses for the second quarter were $1.7 million of acquisition-related costs.

Income tax expense was $29.2 million for the three months ended June 30, 2021 and $27.1 million for the three months ended March 31, 2021. The effective tax rate was 26.8% for the three months ended June 30, 2021 and 27.3% for the three months ended March 31, 2021.

Second Quarter 2021 compared to Second Quarter 2020

For the second quarter of 2021, net income totaled $79.8 million, an increase of $37.2 million as compared to $42.6 million in the second quarter of 2020.  The changes in net income on a year over year quarter basis are highlighted below.

On a year over year basis, second quarter of 2021 net interest income increased by $12.7 million, or 7.0%, as compared to the second quarter of 2020 due to:

• Interest expense decreased $27.1 million, or 42.2%, primarily attributed to the weighted average cost of interest-bearing liabilities, which decreased 39 basis points to 0.79% for the three months ended June 30, 2021. In addition, the average balance of total borrowed funds decreased $1.01 billion, or 20.1%, to $4.02 billion and the average balance of interest-bearing deposits decreased $1.98 billion, or 11.9%, to $14.71 billion for the three months ended June 30, 2021.
• Interest and dividend income decreased $14.4 million, or 5.8%, to $231.9 million, primarily attributed to the average balance of net loans which decreased $589.4 million, mainly as a result of paydowns and payoffs, offset by loan originations. In addition, the weighted average yield on securities decreased 62 basis points to 1.94% and the weighted average yield on net loans decreased 1 basis point to 4.07%.
• Prepayment penalties, which are included in interest income, totaled $10.8 million for the three months ended June 30, 2021 as compared to $8.1 million for the three months ended June 30, 2020.

Net interest margin increased 38 basis points year over year to 3.11% for the three months ended June 30, 2021 from 2.73% for the three months ended June 30, 2020, driven primarily by the lower cost of interest-bearing liabilities.

Total non-interest income was $13.1 million for the three months ended June 30, 2021, an increase of $2.9 million year over year.  The increase was due primarily to an increase of $3.5 million in fees and service charges primarily related to our mortgage servicing rights valuation and an increase of $2.1 million in income from our wealth and investment products, partially offset by a decrease of $2.3 million in gain on loans due to a lower volume of mortgage banking loan sales to third parties. 

Total non-interest expenses were $108.4 million for the three months ended June 30, 2021, an increase of $8.4 million compared to the three months ended June 30, 2020.  The increase was driven by an increase of $5.6 million in compensation and fringe benefit expense primarily related to medical expenses and incentive compensation. Included in non-interest expenses for the second quarter of 2021 were $1.7 million of acquisition-related costs.

Income tax expense was $29.2 million for the three months ended June 30, 2021 and $16.2 million for the three months ended June 30, 2020.  The effective tax rate was 26.8% for the three months ended June 30, 2021 and 27.6% for the three months ended June 30, 2020.

Six Months Ended June 30, 2021 compared to Six Months Ended June 30, 2020

Net income increased by $70.0 million year over year to $152.1 million for the six months ended June 30, 2021.  The change in net income year over year is the result of the following:

Net interest income increased by $20.2 million as compared to the six months ended June 30, 2020 due to:

• Interest expense decreased by $70.1 million, or 47.7%, to $77.0 million for the six months ended June 30, 2021, as compared to $147.0 million for the six months ended June 30, 2020, primarily attributed to a decrease in the weighted average cost of interest-bearing liabilities of 57 basis points to 0.81% for the six months ended June 30, 2021. In addition, the average balance of total borrowed funds decreased $1.63 billion, or 30.4%, to $3.73 billion for the six months ended June 30, 2021 and the average balance of interest-bearing deposits decreased $850.8 million, or 5.3%, to $15.17 billion for the six months ended June 30, 2021.
• Interest and dividend income decreased by $49.9 million, or 9.9%, to $452.4 million for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020, primarily attributed to the weighted average yield on net loans, which decreased 17 basis points to 3.98%, and the weighted average yield on securities, which decreased 72 basis points to 1.97%. In addition, the average balance of net loans decreased $661.7 million, mainly from paydowns and payoffs, partially 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 $13.1 million for the six months ended June 30, 2021, as compared to $15.8 million for the six months ended June 30, 2020.

Net interest margin increased 29 basis points to 3.01% for the six months ended June 30, 2021 from 2.72% for the six months ended June 30, 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 $33.1 million for the six months ended June 30, 2021, an increase of $8.3 million as compared to the six months ended June 30, 2020. The increase in non-interest income was due primarily to an increase of $3.3 million in fees and service charges related to our mortgage servicing rights valuation, an increase of $2.8 million in income from our wealth and investment products, an increase of $1.1 million in PPP referral income and an increase of $819,000 in customer swap fee income.

Total non-interest expenses were $212.8 million for the six months ended June 30, 2021, an increase of $10.2 million compared to the year ended June 30, 2020.  This increase was driven by an increase of $7.6 million in compensation and fringe benefit expense primarily related to medical expenses and incentive compensation. 

Income tax expense was $56.3 million for the six months ended June 30, 2021 compared to $30.9 million for the six months ended June 30, 2020.  The effective tax rate was 27.0% for the six months ended June 30, 2021 and 27.3% for the six months ended June 30, 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 June 30, 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 June 30, 2021, our provision for credit losses was negative $9.7 million, compared to negative $3.0 million for the three months ended March 31, 2021 and $33.3 million for the three months ended June 30, 2020.  Our provision was impacted by net loan recoveries of $807,000 for the three months ended June 30, 2021, net loan recoveries of $1.7 million for the three months ended March 31, 2021 and net loan charge-offs of $4.1 million for the three months ended June 30, 2020.  Our provision for credit losses was negative $12.7 million for the six months ended June 30, 2021 compared to $64.5 million for the six months ended June 30, 2020.  Our provision was impacted by net loan recoveries of $2.5 million for the six months ended June 30, 2021 and net loan charge-offs of $12.1 million for the six months ended June 30, 2020.

Total non-accrual loans were $77.6 million, or 0.36% of total loans, at June 30, 2021 compared to $83.3 million, or 0.40% of total loans, at March 31, 2021 and $126.8 million, or 0.59% of total loans, at June 30, 2020.  We continue to proactively and diligently work to resolve our troubled loans.

At June 30, 2021, there were $28.3 million of loans deemed as troubled debt restructured loans ("TDRs"), of which $23.4 million were residential and consumer loans, $4.5 million were commercial real estate loans and $430,000 were commercial and industrial loans. TDRs of $9.3 million were classified as accruing and $19.0 million were classified as non-accrual at June 30, 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.

	June 30, 2021							March 31, 2021							December 31, 2020							September 30, 2020							June 30, 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			$	12.8			62			$	13.2			84			$	18.5			78			$	17.2			79			$	19.9
Construction	—			—				—			—				—			—				—			—				—			—
Multi-family	8			16.2				10			19.2				5			7.3				5			5.3				9			24.6
Commercial real estate	2			0.5				8			11.1				8			9.5				7			4.6 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 14:24 - ARIVA.DE Redaktion Munich Re-Aktie legt um 2,56 Prozent zu (457,00 €) 14:13 - ARIVA.DE Redaktion Aktienmarkt: Kurs der Aktie von ThyssenKrupp im Minus (4,07 €) 14:13 - ARIVA.DE Redaktion RWE-Aktie mit Kursverlusten (33,21 €)