PR Newswire
SHORT HILLS, N.J., Oct. 27, 2021
SHORT HILLS, N.J., Oct. 27, 2021 /PRNewswire/ -- Investors Bancorp, Inc. (NASDAQ:ISBC) ("Company"), the holding company for Investors Bank ("Bank"), reported net income of $66.9 million, or $0.28 per diluted share, for the three months ended September 30, 2021 as compared to $79.8 million, or $0.34 per diluted share, for the three months ended June 30, 2021 and $64.3 million, or $0.27 per diluted share, for the three months ended September 30, 2020.
For the nine months ended September 30, 2021, net income totaled $219.0 million, or $0.93 per diluted share, compared to $146.4 million, or $0.62 per diluted share, for the nine months ended September 30, 2020.
Net income for the three months ended September 30, 2021 included approximately $10.9 million, or $0.05 per diluted share, of after-tax costs associated with the Company's pending merger with Citizens Financial Group, Inc. and completed Berkshire Bank branch acquisition and approximately $7.4 million, or $0.03 per diluted share, of after-tax costs in connection with the Company's extinguishment of $600 million of FHLB borrowings announced in August 2021.
The Company also announced today that its Board of Directors declared a cash dividend of $0.14 per share to be paid on November 26, 2021 for stockholders of record as of November 10, 2021.
Kevin Cummings, Chairman and CEO, commented, "This quarter was another strong quarter for the bank. Our loan portfolio grew by $539 million, or 10% annualized, while our funding mix continued to improve, with non-interest bearing deposits now representing 21% of total deposits. In addition, our credit quality metrics continue to trend in a positive direction."
Mr. Cummings also commented, "We completed our acquisition of Berkshire Bank's New Jersey and eastern Pennsylvania branches in August and we are excited about the strategic partnership that we announced with Citizens in July. We look forward to the completion of the merger with Citizens, and we are working hard on the anticipated integration of these two great banks."
Performance Highlights
Financial Performance Overview
Third Quarter 2021 compared to Second Quarter 2021
For the third quarter of 2021, net income totaled $66.9 million, a decrease of $12.9 million as compared to $79.8 million for the second quarter of 2021. The changes in net income on a sequential quarter basis are highlighted below.
Net interest income decreased by $108,000, or 0.1%, as compared to the second quarter of 2021. Changes within interest income and expense categories were as follows:
Net interest margin decreased 12 basis points to 2.99% for the three months ended September 30, 2021 compared to the three months ended June 30, 2021 as a result of lower prepayment penalties and an elevated average cash position.
Total non-interest income was $16.0 million for the three months ended September 30, 2021, an increase of $2.9 million, as compared to $13.1 million for the second quarter of 2021. The increase in non-interest income was due primarily to an increase of $4.3 million in customer swap fee income, partially offset by a $931,000 unrealized loss on equity securities during the three months ended September 30, 2021.
Total non-interest expenses were $132.0 million for the three months ended September 30, 2021, an increase of $23.6 million compared to the three months ended June 30, 2021. The increase was primarily driven by $10.2 million of costs associated with the Company's extinguishment of $600 million of FHLB borrowings and $14.9 million of merger and acquisition related costs resulting from the Berkshire Bank and Citizens transactions inclusive of $6.6 million of branch closure costs related to the Berkshire Bank branch acquisition.
Income tax expense was $24.6 million for the three months ended September 30, 2021 and $29.2 million for the three months ended June 30, 2021. The effective tax rate was 26.9% for the three months ended September 30, 2021 and 26.8% for the three months ended June 30, 2021.
Third Quarter 2021 compared to Third Quarter 2020
For the third quarter of 2021, net income totaled $66.9 million, an increase of $2.6 million as compared to $64.3 million in the third quarter of 2020. The changes in net income on a year over year quarter basis are highlighted below.
On a year over year basis, third quarter of 2021 net interest income increased by $13.0 million, or 7.1%, as compared to the third quarter of 2020 due to:
Net interest margin increased 20 basis points year over year to 2.99% for the three months ended September 30, 2021 from 2.79% for the three months ended September 30, 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 $16.0 million for the three months ended September 30, 2021, a decrease of $4.0 million year over year. The decrease was due primarily to a decrease of $3.6 million in gain on loans due to a lower volume of mortgage banking loan sales to third parties and a $931,000 unrealized loss on equity securities during the three months ended September 30, 2021, partially offset by an increase of $1.2 million in customer swap fee income.
Total non-interest expenses were $132.0 million for the three months ended September 30, 2021, an increase of $28.0 million compared to the three months ended September 30, 2020. The increase was primarily driven by $10.2 million of costs associated with the Company's extinguishment of $600 million of FHLB borrowings and $14.9 million of merger and acquisition related costs resulting from the Berkshire Bank and Citizens transactions inclusive of $6.6 million of branch closure costs related to the Berkshire Bank branch acquisition.
Income tax expense was $24.6 million for the three months ended September 30, 2021 and $24.8 million for the three months ended September 30, 2020. The effective tax rate was 26.9% for the three months ended September 30, 2021 and 27.9% for the three months ended September 30, 2020.
Nine Months Ended September 30, 2021 compared to Nine Months Ended September 30, 2020
Net income increased by $72.6 million year over year to $219.0 million for the nine months ended September 30, 2021. The change in net income year over year is the result of the following:
Net interest income increased by $33.2 million as compared to the nine months ended September 30, 2020 due to:
Net interest margin increased 26 basis points to 3.00% for the nine months ended September 30, 2021 from 2.74% for the nine months ended September 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 $49.0 million for the nine months ended September 30, 2021, an increase of $4.3 million as compared to the nine months ended September 30, 2020. The increase in non-interest income was due primarily to an increase of $3.0 million in fees and service charges predominately related to our mortgage servicing rights valuation, an increase of $2.8 million in income from our wealth and investment products and an increase of $2.0 million in customer swap fee income, partially offset by a decrease of $3.9 million in gain on loans due to a lower volume of mortgage banking loan sales to third parties.
Total non-interest expenses were $344.8 million for the nine months ended September 30, 2021, an increase of $38.2 million compared to the year ended September 30, 2020. This increase was driven by an increase of $8.9 million in debt extinguishment costs, an increase of $8.5 million in professional fees driven by acquisition-related fees, an increase of $8.0 million in compensation and fringe benefit expense primarily related to incentive compensation and medical expenses and $6.6 million of branch closure costs related to the Berkshire acquisition. Included in non-interest expenses for the nine months ended September 30, 2021 were $10.0 million of acquisition-related costs.
Income tax expense was $80.9 million for the nine months ended September 30, 2021 compared to $55.7 million for the nine months ended September 30, 2020. The effective tax rate was 27.0% for the nine months ended September 30, 2021 and 27.6% for the nine months ended September 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 September 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 September 30, 2021, our provision for credit losses was impacted by improving economic conditions and commercial real estate prices. For the three months ended September 30, 2021, our provision for credit losses was negative $13.0 million, compared to negative $9.7 million for the three months ended June 30, 2021 and $8.3 million for the three months ended September 30, 2020. Our provision was impacted by net loan charge-offs of $252,000 for the three months ended September 30, 2021, net loan recoveries of $807,000 for the three months ended June 30, 2021 and net loan charge-offs of $667,000 for the three months ended September 30, 2020. Our provision for credit losses was negative $25.7 million for the nine months ended September 30, 2021 compared to $72.8 million for the nine months ended September 30, 2020. Our provision was impacted by net loan recoveries of $2.3 million for the nine months ended September 30, 2021 and net loan charge-offs of $12.8 million for the nine months ended September 30, 2020.
Total non-accrual loans were $76.5 million, or 0.35% of total loans, at September 30, 2021 compared to $77.6 million, or 0.36% of total loans, at June 30, 2021 and $132.0 million, or 0.63% of total loans, at September 30, 2020. We continue to proactively and diligently work to resolve our troubled loans.
At September 30, 2021, there were $26.4 million of loans deemed as troubled debt restructured loans ("TDRs"), of which $22.0 million were residential and consumer loans and $4.4 million were commercial real estate loans. TDRs of $8.1 million were classified as accruing and $18.3 million were classified as non-accrual at September 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.
| September 30, 2021 | | June 30, 2021 | | March 31, 2021 | | December 31, 2020 | | September 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 | 50 | | | $ | 12.3 | | | 62 | | | $ | 12.8 | | | 62 | | | $ | 13.2 | | | 84 | | | $ | 18.5 | | | 78 | | | $ | 17.2 | |
Construction | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | |||||
Multi-family | 9 | | | 11.5 | | | 8 | | | 16.2 | | | 10 | | | 19.2 | | | 5 | | | 7.3 | | | 5 | | | 5.3 | | |||||
Commercial real estate | 9 | | | 19.5 | | | 2 | | | 0.5 | | | 8 | | | 11.1 | | | 8 Werbung Mehr Nachrichten zur INVESTORS BANCORP Aktie kostenlos abonnieren
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