Investors Bancorp Inc. (ISBC) filed Quarterly Report for the period ended 2009-03-31.
Investors Bancorp Inc. has a market cap of $981.48 million; its shares were traded at around $9 with a P/E ratio of 37.5 and P/S ratio of 3.07.
Highlight of Business Operations:
At December 31, 2008, the Company recognized a $152.8 million pre-tax, ($90.6 million after-tax), non-cash other-than-temporary impairment (OTTI) charge related to our portfolio of pooled bank trust preferred collateralized debt obligations (CDOs). The portfolio is comprised of 31 securities whose book value of $173.6 million was reduced to $20.8 million as a result of this charge. The impairment was recognized because the market value of these securities continued to decline during the quarter and we do not believe the market value of these securities will recover within the foreseeable future. Management is analyzing the new accounting guidance issued by the Financial Accounting Standards Board (FASB) in April 2009 regarding OTTI impairment which must be adopted in the June 2009 quarter. The adoption of this accounting pronouncement could result in a significant reclass to the components within stocholders equity. In addition, this pronouncement will eliminate accretion income recognition pertaining to securities previously written down through an OTTI charge.
Total loans increased to $5.57 billion at March 31, 2009 from $4.66 billion at June 30, 2008, an increase of 19.5%. The majority of the growth came from residential mortgage loans which grew 14.9% or $595.4 million to $4.61 billion. In order to diversify our loan portfolio we have continued our expansion into commercial real estate lending. During the nine months ended March 31, 2009 commercial real estate, construction and multi-family loans increased $326.1 million or 67.2%. We believe this may provide us with an opportunity to increase net interest income and improve our interest rate risk position.
For the nine months ended March 31, 2009, we originated $58.5 million in multi-family loans, $117.8 million in commercial real estate loans and $111.6 million in construction loans. We also purchased $100.9 million of multi-family loans in the secondary market on a bulk purchase basis. This activity is consistent with our strategy to diversify our loan portfolio by adding more multi-family, commercial real estate and construction loans.
Securities. Securities, in the aggregate, decreased by $361.2 million, or 24.8%, to $1.10 billion at March 31, 2009, from $1.46 billion at June 30, 2008. The decrease is the result of the run-off of the securities portfolio in addition to the writedown of the book value of pooled bank trust preferred CDOs through a $156.7 million pre-tax non-cash OTTI charge during the prior quarter. During the current quarter the Company recognized $1.3 million in accretion income related to our expected cashflows relating to these securities. The cash flows from our securities portfolio are being used to help fund our loan growth. This is consistent with our strategic plan to change our mix of assets by reducing the size of our securities portfolio and increasing the size of our loan portfolio.
Stock in the Federal Home Loan Bank, Bank Owned Life Insurance and Other Assets. The amount of stock we own in the Federal Home Loan Bank (FHLB) increased by $8.6 million from $60.9 million at June 30, 2008 to $69.6 million at March 31, 2009 as a result of an increase in our level of borrowings at March 31, 2009. There was also an increase in accrued interest receivable of $4.8 million resulting from an increase in the average balance of our interest-earning assets. Additionally, bank owned life insurance increased by $2.2 million from $96.2 million at June 30, 2008 to $98.4 million at March 31, 2009.
Deposits. Deposits increased by $799.9 million, or 20.1%, to $4.77 billion at March 31, 2009 from $3.97 billion at June 30, 2008. Checking account deposits, savings account deposits, money market account deposits and certificates of deposits increased by $485.2 million, $194.6 million, $86.3 million and $33.8 million, respectively. Deposits increased as we were successful in attracting new municipal deposit accounts, opened our newest branch during the quarter and added business from existing customer relationships, most notably the branches acquired in the Summit Federal merger in June 2008.