Attached files
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| 8-K - 8-K - Investors Bancorp, Inc. | a8kq42016earningsrelease.htm |
Exhibit 99.1
101 JFK Parkway, Short Hills, NJ 07078
news release
Contact: Marianne Wade(973) 924-5100
investorrelations@myinvestorsbank.com
Investors Bancorp, Inc. Announces Fourth Quarter Financial Results and Cash Dividend
Short Hills, N.J. - (PR NEWSWIRE) - January 26, 2017 - Investors Bancorp, Inc. (NASDAQ:ISBC) (“Company”), the holding company for Investors Bank (“Bank”), reported net income of $52.5 million, or $0.18 per diluted share, for the three months ended December 31, 2016, compared to $49.9 million, or $0.17 per diluted share for the three months ended September 30, 2016, and $44.4 million, or $0.14 per diluted share for the three months ended December 31, 2015.
During the fourth quarter, the Company adopted accounting standards update No. 2016-09 related to the accounting of stock compensation resulting in the revision of prior interim periods for the fiscal year 2016. Excluding the impact of the ASU adoption and one-time expenses, adjusted net income for the three months ended December 31, 2016 was $51.7 million, or $0.18 per diluted share, compared to $43.4 million, or $0.15 per diluted share for the three months ended September 30, 2016 and $43.6 million, or $0.14 per diluted share for the three months ended December 31, 2015.(1)
For the year ended December 31, 2016, net income totaled $192.1 million, or $0.64 per diluted share, compared to $181.5 million, or $0.55 per diluted share for the year ended December 31, 2015. Excluding the impact of the ASU adoption and one-time expenses, net income for the year ended December 31, 2016 totaled $183.1 million, or $0.61 per diluted share, compared to $173.4 million, or $0.52 per diluted share for the year ended December 31, 2015.(1)
The Company also announced today that its Board of Directors declared a cash dividend of $0.08 per share to be paid on February 24, 2017 for stockholders of record as of February 10, 2017.
Kevin Cummings, President and CEO commented, "2016 was another strong year of record earnings for Investors as earnings per share grew 17% year over year. We continue to make significant investments in our risk management infrastructure and branch franchise."
Mr. Cummings also commented, "Credit quality remains a key focus for our Company as demonstrated by our level of non-accrual loans."
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Performance Highlights
• | Total assets increased $638.7 million, or 2.8% to $23.17 billion at December 31, 2016, from $22.54 billion at September 30, 2016. |
• | Net loans increased $501.7 million, or 2.8%, to $18.57 billion at December 31, 2016 from $18.07 billion at September 30, 2016. During the three months ended December 31, 2016, we originated $467.0 million in commercial real estate loans, $424.4 million in multi-family loans, $128.4 million in residential loans, $115.8 million in construction loans, $108.5 million in commercial and industrial loans and $24.3 million in consumer and other loans. |
• | Deposits increased $329.1 million, or 2.2% from $14.95 billion at September 30, 2016 to $15.28 billion at December 31, 2016. Core deposit accounts (savings, checking and money market) represent approximately 81% of total deposits as of December 31, 2016. |
• | Net interest margin for the three months ended December 31, 2016 was 3.07%, a 7 basis point increase compared to the three months ended September 30, 2016 and a 2 basis point increase compared to the three months ended December 31, 2015. |
• | Total non-interest expenses were $89.0 million for the three months ended December 31, 2016, a decrease of $2.4 million as compared to the three months ended September 30, 2016. |
• | Non accrual loans to total loans ratio was 0.50% at December 31, 2016 compared to 0.53% in the third quarter of 2016. |
• | During the three months ended December 31, 2016, the Company repurchased 2.2 million shares of its outstanding common stock for approximately $25.9 million. Total shares repurchased during 2016 were 31.3 million shares at a cost of $363.4 million. As of December 31, 2016, the Company had approximately 21 million shares remaining under its current repurchase plan. |
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Financial Performance Overview - Fourth Quarter 2016
For the fourth quarter of 2016, net income totaled $52.5 million, an increase of $2.6 million as compared to the third quarter of 2016 and an increase of $8.1 million as compared to the fourth quarter of 2015. The changes in net income on both a sequential and year over year quarter basis are the result of the following:
Net interest income increased by $9.1 million, or 5.7% as compared to the third quarter of 2016 due to:
• | An increase in interest and dividend income of $9.7 million, or 4.9% to $208.1 million as compared to the third quarter of 2016 primarily attributed to commercial loan growth, as well as an increase of 7 basis points on the weighted average loan yield to 4.12%. |
• | Prepayment penalties, which are included in interest income, totaled $7.4 million for the three months ended December 31, 2016 as compared to $4.0 million for the three months ended September 30, 2016. |
• | An increase in total interest expense of $601,000 was primarily attributed to an increase in the average balance of interest bearing liabilities of $583.2 million, or 3.51% to $17.22 billion, partially offset by a decrease of 2 basis points to 0.91% on the weighted average cost of interest-bearing liabilities for the three months ended December 31, 2016. |
The net interest margin increased 7 basis points to 3.07% for the three months ended December 31, 2016 from 3.00% for the three months ended September 30, 2016.
On a year over year basis, net interest income increased by $17.9 million, or 11.9% in the fourth quarter of 2016, as compared to the fourth quarter of 2015 due to:
• | An increase in interest and dividend income of $19.9 million, or 10.6% to $208.1 million as a result of a $1.95 billion increase in the average balance of net loans, partially offset by the weighted average yield on net loans decreasing 4 basis points to 4.12%. |
• | Prepayment penalties, which are included in interest income, totaled $7.4 million for the three months ended December 31, 2016 as compared to $4.5 million for the three months ended December 31, 2015. |
• | An increase in total interest expense of $2.0 million was primarily attributed to an increase in the average balance of total interest-bearing deposits of $828.7 million, or 6.8% to $12.96 billion for the three months ended December 31, 2016 and an increase in the average balance of total borrowed funds of $1.05 billion. This was partially offset by the weighted average cost of interest-bearing liabilities decreasing 6 basis points to 0.91% for the three months ended December 31, 2016. |
The net interest margin increased 2 basis points year over year to 3.07% for the three months ended December 31, 2016 from 3.05% for the three months ended December 31, 2015.
Total non-interest income remained relatively flat at $8.5 million for the three months ended December 31, 2016 and September 30, 2016, respectively.
Compared to the fourth quarter of 2015, total non-interest income decreased $196,000 primarily driven by a decrease in gain on sale of other real estate owned of $327,000 for the three months ended December 31, 2016. This decrease was offset by increases to income on bank owned life insurance and fees and service charges of $169,000 and $53,000, respectively.
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Total non-interest expenses were $89.0 million for the three months ended December 31, 2016, a decrease of $2.4 million compared to the third quarter of 2016. Compensation and fringe benefits decreased $4.8 million, primarily due to a decline in incentive compensation and the freezing of both the defined benefit pension plan and supplemental executive retirement wage replacement plan that was approved by the Board of Directors during the fourth quarter. These decreases were partially offset by the accelerated vesting of equity awards due to the death of a director in December 2016. Advertising and promotional expense increased $1.5 million as compared to the third quarter. During the fourth quarter, the Company entered into an agreement with the New Jersey Devils and Prudential Center as the official bank of the hockey club and the sports and entertainment arena, as well as a presenting partner of New Jersey Devils hockey. In addition, office occupancy and equipment expense increased $509,000 with three branch openings in the fourth quarter. Included in professional fees for the three months ended December 31, 2016 is $840,000 related to the recently announced termination of the Bank of Princeton acquisition.
Compared to the fourth quarter of 2015, total non-interest expenses increased $3.3 million, or 3.9% year over year. Professional fees, federal insurance premiums and office occupancy and equipment expense each increased $1.1 million for the three months ended December 31, 2016. Compensation and fringe benefits decreased $397,000 for the three months ended December 31, 2016 as a result of the benefit changes during the fourth quarter 2016, offset by additions to our staff to support continued growth and infrastructure, normal merit increases and the accelerated vesting of equity awards.
In March 2016, the FASB issued ASU No. 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” ASU No. 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and accounting for forfeitures. In the fourth quarter of 2016 the Company adopted ASU No. 2016-09. Adjustments to previously reported 2016 interim periods are included for comparative purposes and reflected in the year-to-date results.
The adoption of ASU No. 2016-09 resulted in recognizing income tax benefits related to stock compensation of $10.4 million for the year ended December 31, 2016, $2.2 million of which is included in the fourth quarter. For comparative purposes, $6.4 million of tax benefit for the adoption of this standard was reflected in the September 30, 2016 period. These benefits correlate to the deductibility for tax purposes upon exercise and/or vesting of equity awards.
Income tax expense was $31.0 million for the three months ended December 31, 2016 and $21.9 million for the three months ended September 30, 2016. The adoption of ASU No. 2016-09 resulted in a tax benefit of $2.2 million and $6.4 million, respectively, for the three months ended December 31, 2016 and September 30, 2016. Excluding this discrete item, the effective tax rate was 39.7% and 39.5%, respectively.(1)
Income tax expense was $24.4 million for the three months ended December 31, 2015, representing an effective tax rate of 35.5% which includes a tax benefit realized from revaluing the Company's deferred tax asset as a result of the New York City tax law reform enacted in 2015. Absent the revaluing, the tax rate for the three months ended December 31, 2015 would have been 37.8%.(1)
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Financial Performance Overview- Year Ended 2016
Net income increased by $10.6 million, year over year to $192.1 million for the year ended December 31, 2016. The changes in net income for the year over year are the result of the following:
• | Total interest and dividend income increased by $61.8 million, or 8.4% to $793.5 million for the year ended December 31, 2016 as compared to 2015 primarily attributed to growth in the commercial loan portfolio. This increase was offset by a decrease of 12 basis points to the weighted average yield on net loans to 4.10%. |
• | Prepayment penalties, which are included in interest income, totaled $22.0 million for the year ended December 31, 2016 compared to $21.0 million for the year ended December 31, 2015. |
• | Total interest expense increased by $16.7 million or 12.2% to $153.3 million for the year ended December 31, 2016 as compared to 2015. The average balance of total interest-bearing deposits increased $1.06 billion, or 9.2% to $12.57 billion for the year ended December 31, 2016. In addition, the weighted average cost of interest-bearing deposits increased 3 basis points to 0.65% for the year ended December 31, 2016. |
• | Net interest margin decreased 8 basis points as compared to 2015 to 3.04% for the year ended December 31, 2016. |
Total non-interest income was $37.2 million for the year ended December 31, 2016, a decrease of $2.9 million, or 7.3% as compared to 2015. Gain on loans, net decreased $3.0 million for the year ended December 31, 2016 primarily as a result of fewer loan sales at the Bank. Loan sales at our mortgage subsidiary were consistent year over year for the twelve months. In addition, gain on sale of other real estate owned decreased $1.5 million as compared to 2015. These decreases were offset by an increase of $2.1 million in gain on securities transactions for the year ended December 31, 2016 primarily due to the sale of securities totaling $69.1 million, resulting in a gain of $3.1 million.
Total non-interest expense was $358.6 million for the year ended December 31, 2016, an increase of $30.2 million, or 9.2% as compared to 2015. Compensation and fringe benefits increased $20.4 million for the year ended December 31, 2016. The increase was primarily due to an increase of $12.8 million in equity incentive expense for the year ended December 31, 2016 resulting from the restricted stock and stock option grants on June 23, 2015 to certain employees, officers and directors of the Company, pursuant to the Investors Bancorp, Inc. 2015 Equity Incentive Plan; additions to our staff to support our growth and continued build out of our risk management and operating infrastructure; as well as normal merit increases. These increases were partially offset by decreases of approximately $1.7 million in benefit expenses related to the changes in the defined benefit pension plan and supplemental executive retirement wage replacement plan. Office occupancy and equipment expense increased $5.4 million for the year ended December 31, 2016 primarily due to new branch openings. Professional fees and other operating expenses increased $4.0 million and $2.3 million, respectively, for the year ended December 31, 2016 as we continue to enhance additional risk management and operational infrastructure as our company grows and we expand our employee training and development programs. Included in professional fees for the three months ended December 31, 2016 is $840,000 related to the recently announced termination of the Bank of Princeton acquisition.
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Income tax expense was $106.9 million for the year ended December 31, 2016 compared to $99.4 million for the year ended December 31, 2015. The adoption of ASU No. 2016-09 resulted in a tax benefit of $10.4 million for the year ended December 31, 2016. Excluding this discrete item the effective tax rate was 39.2%. The tax rate for the year ended December 31, 2015 includes a tax benefit realized from revaluing the Company's deferred tax asset as as result of the York city tax law reform enacted in 2015 and a discrete item related to a net operating loss carryforward on a prior acquisition. Absent these items, the tax rate for the year ended December 31, 2015 would have been 38.6%. (1)
Asset Quality
Our provision for loan losses was $4.8 million for the three months ended December 31, 2016, compared to $5.0 million for both the third quarter of 2016 and the three months ended December 31, 2015. For the three months ended December 31, 2016, net recoveries were $73,000 compared to net charge offs of $1.8 million for the third quarter of 2016 and $5.0 million for the three months ended December 31, 2015. For the year ended December 31, 2016, our provision for loan loss was $19.8 million compared to $26.0 million for the year ended December 31, 2015. For the year ended December 31, 2016, net charge-offs were $9.9 million compared to $7.8 million for the the year ended December 31, 2015.
Our provision for the three months and year ended December 31, 2016 is primarily a result of continued organic growth in the loan portfolio, specifically the multi-family, commercial real estate and commercial and industrial portfolios; the inherent credit risk in our overall portfolio, particularly the credit risk associated with commercial real estate lending and commercial and industrial lending; offset by the improvement in the level of non-accrual loans and charge offs.
Our accruing past due loans and non-accrual loans discussed below exclude certain purchased credit impaired (PCI) loans, primarily consisting of loans recorded in the Company's acquisitions. Under U.S. GAAP, the PCI loans (acquired at a discount that is due, in part, to credit quality) are not subject to delinquency classification in the same manner as loans originated by the Bank.
Total non-accrual loans decreased to $94.3 million at December 31, 2016 compared to $97.5 million at September 30, 2016 and $115.4 million at December 31, 2015. We continue to diligently resolve our troubled loans, however it takes a long period of time to resolve residential credits in our lending area. At December 31, 2016, there were $30.4 million of loans deemed as troubled debt restructurings, of which $24.8 million were residential and consumer loans, $3.6 million were commercial real estate loans, $1.7 million were commercial and industrial loans and $248,000 were multi-family loans. Troubled debt restructured loans in the amount of $9.4 million were classified as accruing and $20.9 million were classified as non-accrual at December 31, 2016.
The following table sets forth non-accrual loans and accruing past due loans (excluding PCI loans and loans held for sale) on the dates indicated as well as certain asset quality ratios.
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December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | ||||||||||||||||||||||||||||||
# 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 | 116 | $ | 27.1 | 110 | $ | 18.9 | 131 | $ | 24.9 | 151 | $ | 28.6 | 168 | $ | 28.6 | |||||||||||||||||||
Construction | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Multi-family | 2 | 5.3 | 3 | 4.1 | — | — | 6 | 18.0 | 5 | 13.7 | ||||||||||||||||||||||||
Commercial real estate | 3 | 6.4 | 11 | 24.0 | 5 | 3.9 | 12 | 24.5 | 6 | 1.3 | ||||||||||||||||||||||||
Commercial and industrial | 4 | 0.8 | 6 | 1.4 | 1 | 2.8 | 3 | 3.8 | 3 | 0.6 | ||||||||||||||||||||||||
Total 30 to 59 days past due | 125 | $ | 39.6 | 130 | $ | 48.4 | 137 | $ | 31.6 | 172 | $ | 74.9 | 182 | $ | 44.2 | |||||||||||||||||||
60 to 89 days past due: | ||||||||||||||||||||||||||||||||||
Residential and consumer | 57 | 10.8 | 62 | 11.1 | 51 | 7.8 | 66 | 16.3 | 86 | 14.2 | ||||||||||||||||||||||||
Construction | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Multi-family | 1 | 1.1 | 1 | 1.1 | — | — | — | — | — | — | ||||||||||||||||||||||||
Commercial real estate | 8 | 32.0 | 3 | 16.4 | 2 | 0.7 | 1 | 0.3 | 3 | 0.4 | ||||||||||||||||||||||||
Commercial and industrial | 4 | 0.9 | 3 | 0.4 | 1 | 0.8 | 1 | — | 2 | — | ||||||||||||||||||||||||
Total 60 to 89 days past due | 70 | 44.8 | 69 | 29.0 | 54 | 9.3 | 68 | 16.6 | 91 | 14.6 | ||||||||||||||||||||||||
Total accruing past due loans | 195 | $ | 84.4 | 199 | $ | 77.4 | 191 | $ | 40.9 | 240 | $ | 91.5 | 273 | $ | 58.8 | |||||||||||||||||||
Non-accrual: | ||||||||||||||||||||||||||||||||||
Residential and consumer | 478 | 79.9 | 481 | 86.1 | 471 | 86.5 | 488 | 85.9 | 500 | 91.1 | ||||||||||||||||||||||||
Construction | — | — | — | — | 1 | 0.2 | 3 | 0.5 | 4 | 0.8 | ||||||||||||||||||||||||
Multi-family | 2 | 0.5 | 1 | 0.2 | 2 | 1.2 | 3 | 2.9 | 4 | 3.5 | ||||||||||||||||||||||||
Commercial real estate | 24 | 9.2 | 29 | 8.9 | 33 | 11.7 | 35 | 10.3 | 37 | 10.8 | ||||||||||||||||||||||||
Commercial and industrial | 8 | 4.7 | 6 | 2.3 | 6 | 0.7 | 10 | 5.6 | 17 | 9.2 | ||||||||||||||||||||||||
Total non-accrual loans | 512 | $ | 94.3 | 517 | $ | 97.5 | 513 | $ | 100.3 | 539 | $ | 105.2 | 562 | $ | 115.4 | |||||||||||||||||||
Accruing troubled debt restructured loans | 42 | $ | 9.4 | 31 | $ | 8.8 | 29 | $ | 12.1 | 30 | $ | 10.7 | 39 | $ | 22.5 | |||||||||||||||||||
Non-accrual loans to total loans | 0.50 | % | 0.53 | % | 0.57 | % | 0.61 | % | 0.68 | % | ||||||||||||||||||||||||
Allowance for loan loss as a percent of non-accrual loans | 242.24 | % | 229.31 | % | 219.60 | % | 205.83 | % | 189.30 | % | ||||||||||||||||||||||||
Allowance for loan losses as a percent of total loans | 1.21 | % | 1.22 | % | 1.25 | % | 1.26 | % | 1.29 | % | ||||||||||||||||||||||||
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Balance Sheet Summary
Total assets increased by $2.29 billion, or 10.9% to $23.17 billion at December 31, 2016 from December 31, 2015. Net loans increased $1.91 billion or 11.5%, to $18.57 billion at December 31, 2016, and securities increased by $267.1 million, or 8.5%, to $3.42 billion at December 31, 2016 from December 31, 2015.
The detail of the loan portfolio (including PCI loans) is below:
December 31, 2016 | September 30, 2016 | December 31, 2015 | |||||||||
(Dollars in thousands) | |||||||||||
Commercial Loans: | |||||||||||
Multi-family loans | $ | 7,459,131 | $ | 7,360,733 | $ | 6,255,903 | |||||
Commercial real estate loans | 4,452,300 | 4,103,250 | 3,829,099 | ||||||||
Commercial and industrial loans | 1,275,283 | 1,191,234 | 1,044,386 | ||||||||
Construction loans | 314,843 | 277,155 | 225,843 | ||||||||
Total commercial loans | 13,501,557 | 12,932,372 | 11,355,231 | ||||||||
Residential mortgage loans | 4,711,880 | 4,798,386 | 5,039,543 | ||||||||
Consumer and other | 597,265 | 576,402 | 496,556 | ||||||||
Total Loans | 18,810,702 | 18,307,160 | 16,891,330 | ||||||||
Premiums on purchased loans and deferred loan fees, net | (12,474 | ) | (15,428 | ) | (11,692 | ) | |||||
Allowance for loan losses | (228,373 | ) | (223,550 | ) | (218,505 | ) | |||||
Net loans | $ | 18,569,855 | $ | 18,068,182 | $ | 16,661,133 | |||||
During the year ended December 31, 2016, we originated $2.16 billion in multi-family loans, $1.08 billion in commercial real estate loans, $608.9 million in commercial and industrial loans, $523.3 million in residential loans, $451.5 million in construction loans and $260.0 million in consumer and other loans. This increase in loans reflects our continued focus on generating multi-family loans, commercial real estate loans and commercial and industrial loans, which was partially offset by pay downs and payoffs of loans. Our loans are primarily on properties and businesses located in New Jersey and New York.
In addition to the loans originated for our portfolio, our mortgage subsidiary, Investors Home Mortgage Co., originated residential mortgage loans for sale to third parties totaling $245.8 million during the year ended December 31, 2016.
The allowance for loan losses increased by $9.9 million to $228.4 million at December 31, 2016 from $218.5 million at December 31, 2015. The increase in our allowance for loan losses is due to the growth of the loan portfolio and the credit risk in our overall portfolio, particularly the inherent credit risk associated with commercial real estate lending as well as commercial and industrial loans. 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 economic conditions in our lending area. At December 31, 2016, our allowance for loan loss as a percent of total loans was 1.21%.
Securities, in the aggregate, increased by $267.1 million, or 8.5%, to $3.42 billion at December 31, 2016 from $3.15 billion at December 31, 2015. This increase was a result of purchases partially offset by paydowns and sales.
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Deposits increased by $1.22 billion, or 8.7%, from $14.06 billion at December 31, 2015 to $15.28 billion at December 31, 2016. Checking accounts increased $1.45 billion to $6.09 billion at December 31, 2016 from $4.64 billion at December 31, 2015. Core deposits (savings, checking and money market) represented approximately 81% of our total deposit portfolio at December 31, 2016.
Borrowed funds increased by $1.28 billion, or 39.3%, to $4.55 billion at December 31, 2016 from $3.26 billion at December 31, 2015 to help fund the continued growth of the loan portfolio.
Stockholders' equity decreased by $188.4 million to $3.12 billion at December 31, 2016 from $3.31 billion at December 31, 2015. The decrease is primarily attributed to the repurchase of 31.3 million shares of common stock for $363.4 million as well as cash dividends of $0.26 per share totaling $82.3 million for the year ended December 31, 2016. These decreases were offset by net income of $192.1 million for the year ended December 31, 2016.
About the Company
Investors Bancorp, Inc. is the holding company for Investors Bank, which as of December 31, 2016 operates from its corporate headquarters in Short Hills, New Jersey and 151 branches located throughout New Jersey and New York.
Earnings Conference Call January 27, 2017 at 11:00 a.m. (ET)
The Company, as previously announced, will host an earnings conference call on Friday, January 27, 2017 at 11:00 a.m. (ET). The toll-free dial-in number is: (866) 218-2404. Callers who pre-register will bypass the live operator and may avoid any delays in joining the conference call. Participants will immediately receive an online confirmation, an email and a calendar invitation for the event.
Conference Call Pre-registration link: http://dpregister.com/10098682
A telephone replay will be available beginning on January 27, 2017 from 1:00 p.m. (ET) through 9:00 a.m. (ET) on April 27, 2017. The replay number is (877) 344-7529 password 10098682. The conference call will also be simultaneously webcast on the Company's website www.myinvestorsbank.com and archived for one year.
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, 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.
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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.
(1) Non-GAAP Financial Measures
In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures. For the fourth quarter 2016, the Company adjusted net income for one-time expense items and the tax benefits related to the adoption of ASU No. 2016-09 for comparability purposes. For the the 2015 period, the Company adjusted net income for non recurring non interest expense items and non recurring tax items. Please refer to the non-GAAP Reconciliation for details pertaining to adjustments.
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.
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INVESTORS BANCORP, INC. AND SUBSIDIARIES | |||||||||
Consolidated Balance Sheets | |||||||||
December 31, 2016 | September 30, 2016 (1) | December 31, 2015 | |||||||
(unaudited) | (unaudited) | ||||||||
Assets | (Dollars in thousands) | ||||||||
Cash and cash equivalents | $ | 164,178 | 168,629 | 148,904 | |||||
Securities available-for-sale, at estimated fair value | 1,660,433 | 1,512,146 | 1,304,697 | ||||||
Securities held-to-maturity, net (estimated fair value of $1,782,801, $1,868,397 and $1,888,686 at December 31, 2016, September 30, 2016 and December 31, 2015, respectively) | 1,755,556 | 1,794,131 | 1,844,223 | ||||||
Loans receivable, net | 18,569,855 | 18,068,182 | 16,661,133 | ||||||
Loans held-for-sale | 38,298 | 24,240 | 7,431 | ||||||
Federal Home Loan Bank stock | 237,878 | 222,562 | 178,437 | ||||||
Accrued interest receivable | 65,969 | 66,048 | 58,563 | ||||||
Other real estate owned | 4,492 | 4,835 | 6,283 | ||||||
Office properties and equipment, net | 177,417 | 178,623 | 172,519 | ||||||
Net deferred tax asset | 222,277 | 228,902 | 237,367 | ||||||
Bank owned life insurance | 161,940 | 161,187 | 159,152 | ||||||
Goodwill and intangible assets | 101,839 | 102,825 | 105,311 | ||||||
Other assets | 14,543 | 3,667 | 4,664 | ||||||
Total assets | $ | 23,174,675 | 22,535,977 | 20,888,684 | |||||
Liabilities and Stockholders' Equity | |||||||||
Liabilities: | |||||||||
Deposits | $ | 15,280,833 | 14,951,742 | 14,063,656 | |||||
Borrowed funds | 4,546,251 | 4,203,711 | 3,263,090 | ||||||
Advance payments by borrowers for taxes and insurance | 105,851 | 122,823 | 108,721 | ||||||
Other liabilities | 118,495 | 142,612 | 141,570 | ||||||
Total liabilities | 20,051,430 | 19,420,888 | 17,577,037 | ||||||
Stockholders' equity: | |||||||||
Preferred stock, $0.01 par value, 100,000,000 authorized shares; none issued | — | — | — | ||||||
Common stock, $0.01 par value, 1,000,000,000 shares authorized; 359,070,852 issued at December 31, 2016 September 30, 2016, and December 31, 2015; 309,449,388, 310,528,382 and 334,894,181 outstanding at December 31, 2016, September 30, 2016 and December 31, 2015, respectively | 3,591 | 3,591 | 3,591 | ||||||
Additional paid-in capital | 2,765,732 | 2,764,023 | 2,785,503 | ||||||
Retained earnings | 1,053,750 | 1,026,016 | 936,040 | ||||||
Treasury stock, at cost; 49,621,464, 48,542,470 and 24,176,671 shares at December 31, 2016, September 30, 2016 and December 31, 2015, respectively | (587,974 | ) | (575,187 | ) | (295,412 | ) | |||
Unallocated common stock held by the employee stock ownership plan | (87,254 | ) | (88,003 | ) | (90,250 | ) | |||
Accumulated other comprehensive loss | (24,600 | ) | (15,351 | ) | (27,825 | ) | |||
Total stockholders' equity | 3,123,245 | 3,115,089 | 3,311,647 | ||||||
Total liabilities and stockholders' equity | $ | 23,174,675 | 22,535,977 | 20,888,684 | |||||
(1) September 30, 2016 additional paid-in capital and retained earnings have been revised to reflect the impact of the Company's adoption of ASU No. 2016-09.
11
INVESTORS BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||||||
Consolidated Statements of Income | ||||||||||||||||||||
For the Three Months Ended | Year Ended | |||||||||||||||||||
December 31, 2016 | September 30, 2016 (1) | December 31, 2015 | December 31, 2016 | December 31, 2015 | ||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (audited) | ||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||
Interest and dividend income: | ||||||||||||||||||||
Loans receivable and loans held-for-sale | $ | 187,912 | 179,234 | 169,641 | 715,901 | 663,424 | ||||||||||||||
Securities: | ||||||||||||||||||||
GSE obligations | 8 | 8 | 11 | 36 | 45 | |||||||||||||||
Mortgage-backed securities | 15,631 | 14,653 | 14,722 | 60,211 | 55,096 | |||||||||||||||
Equity | 51 | 49 | 50 | 198 | 123 | |||||||||||||||
Municipal bonds and other debt | 1,665 | 2,039 | 1,778 | 7,713 | 5,929 | |||||||||||||||
Interest-bearing deposits | 88 | 76 | 101 | 342 | 225 | |||||||||||||||
Federal Home Loan Bank stock | 2,724 | 2,315 | 1,835 | 9,120 | 6,881 | |||||||||||||||
Total interest and dividend income | 208,079 | 198,374 | 188,138 | 793,521 | 731,723 | |||||||||||||||
Interest expense: | ||||||||||||||||||||
Deposits | 20,418 | 20,326 | 20,302 | 82,057 | 71,414 | |||||||||||||||
Borrowed funds | 18,951 | 18,442 | 17,020 | 71,279 | 65,225 | |||||||||||||||
Total interest expense | 39,369 | 38,768 | 37,322 | 153,336 | 136,639 | |||||||||||||||
Net interest income | 168,710 | 159,606 | 150,816 | 640,185 | 595,084 | |||||||||||||||
Provision for loan losses | 4,750 | 5,000 | 5,000 | 19,750 | 26,000 | |||||||||||||||
Net interest income after provision for loan losses | 163,960 | 154,606 | 145,816 | 620,435 | 569,084 | |||||||||||||||
Non-interest income: | ||||||||||||||||||||
Fees and service charges | 4,223 | 4,108 | 4,170 | 17,148 | 17,119 | |||||||||||||||
Income on bank owned life insurance | 1,156 | 1,006 | 987 | 4,423 | 3,948 | |||||||||||||||
Gain on loans, net | 1,271 | 1,401 | 1,325 | 4,787 | 7,786 | |||||||||||||||
Gain on securities transactions | — | 72 | 19 | 3,100 | 1,036 | |||||||||||||||
Gain on sales of other real estate owned, net | 163 | 35 | 490 | 96 | 1,631 | |||||||||||||||
Other income | 1,691 | 1,898 | 1,709 | 7,647 | 8,605 | |||||||||||||||
Total non-interest income | 8,504 | 8,520 | 8,700 | 37,201 | 40,125 | |||||||||||||||
Non-interest expense: | ||||||||||||||||||||
Compensation and fringe benefits | 48,223 | 53,051 | 48,620 | 206,698 | 186,320 | |||||||||||||||
Advertising and promotional expense | 3,004 | 1,495 | 2,456 | 8,644 | 10,988 | |||||||||||||||
Office occupancy and equipment expense | 14,608 | 14,099 | 13,467 | 56,220 | 50,865 | |||||||||||||||
Federal insurance premiums | 3,383 | 3,600 | 2,250 | 12,183 | 9,050 | |||||||||||||||
General and administrative | 724 | 641 | 993 | 3,131 | 4,372 | |||||||||||||||
Professional fees | 5,611 | 5,673 | 4,511 | 20,104 | 16,104 | |||||||||||||||
Data processing and communication | 5,222 | 5,299 | 5,591 | 21,043 | 22,366 | |||||||||||||||
Other operating expenses | 8,235 | 7,540 | 7,778 | 30,541 | 28,267 | |||||||||||||||
Total non-interest expenses | 89,010 | 91,398 | 85,666 | 358,564 | 328,332 | |||||||||||||||
Income before income tax expense | 83,454 | 71,728 | 68,850 | 299,072 | 280,877 | |||||||||||||||
Income tax expense | 30,989 | 21,878 | 24,448 | 106,947 | 99,372 | |||||||||||||||
Net income | $ | 52,465 | 49,850 | 44,402 | 192,125 | 181,505 | ||||||||||||||
Basic earnings per share | $0.18 | 0.17 | 0.14 | 0.65 | 0.55 | |||||||||||||||
Diluted earnings per share | $0.18 | 0.17 | 0.14 | 0.64 | 0.55 | |||||||||||||||
Basic weighted average shares outstanding | 290,751,171 | 292,000,061 | 317,826,651 | 297,580,834 | 329,763,527 | |||||||||||||||
Diluted weighted average shares outstanding | 292,623,922 | 294,673,452 | 321,234,483 | 300,954,885 | 332,933,448 | |||||||||||||||
(1) September 30, 2016 income tax expense, net income and diluted shares have been revised to reflect the impact of the Company's adoption of ASU No. 2016-09.
12
INVESTORS BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||||
Average Balance Sheet and Yield/Rate Information | ||||||||||||||||||||||||||||
For the Three Months Ended | ||||||||||||||||||||||||||||
December 31, 2016 | September 30, 2016 | December 31, 2015 | ||||||||||||||||||||||||||
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 | $ | 154,678 | 88 | 0.23 | % | $ | 129,226 | 76 | 0.24 | % | $ | 219,187 | 101 | 0.18 | % | |||||||||||||
Securities available-for-sale | 1,574,840 | 7,165 | 1.82 | % | 1,424,338 | 6,315 | 1.77 | % | 1,274,141 | 5,971 | 1.87 | % | ||||||||||||||||
Securities held-to-maturity | 1,778,239 | 10,190 | 2.29 | % | 1,815,288 | 10,434 | 2.30 | % | 1,824,935 | 10,590 | 2.32 | % | ||||||||||||||||
Net loans | 18,258,406 | 187,912 | 4.12 | % | 17,707,883 | 179,234 | 4.05 | % | 16,311,324 | 169,641 | 4.16 | % | ||||||||||||||||
Federal Home Loan Bank stock | 224,917 | 2,724 | 4.84 | % | 216,813 | 2,315 | 4.27 | % | 175,849 | 1,835 | 4.17 | % | ||||||||||||||||
Total interest-earning assets | 21,991,080 | 208,079 | 3.78 | % | 21,293,548 | 198,374 | 3.73 | % | 19,805,436 | 188,138 | 3.80 | % | ||||||||||||||||
Non-interest earning assets | 794,131 | 778,244 | 774,784 | |||||||||||||||||||||||||
Total assets | $ | 22,785,211 | $ | 22,071,792 | $ | 20,580,220 | ||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||
Savings | $ | 2,087,267 | 1,620 | 0.31 | % | $ | 2,104,583 | 1,577 | 0.30 | % | $ | 2,116,231 | 1,557 | 0.29 | % | |||||||||||||
Interest-bearing checking | 3,901,601 | 5,070 | 0.52 | % | 3,472,472 | 4,451 | 0.51 | % | 2,858,600 | 2,532 | 0.35 | % | ||||||||||||||||
Money market accounts | 4,094,678 | 6,737 | 0.66 | % | 3,971,339 | 6,605 | 0.67 | % | 3,741,248 | 6,417 | 0.69 | % | ||||||||||||||||
Certificates of deposit | 2,873,374 | 6,991 | 0.97 | % | 3,009,330 | 7,693 | 1.02 | % | 3,412,178 | 9,796 | 1.15 | % | ||||||||||||||||
Total interest bearing deposits | 12,956,920 | 20,418 | 0.63 | % | 12,557,724 | 20,326 | 0.65 | % | 12,128,257 | 20,302 | 0.67 | % | ||||||||||||||||
Borrowed funds | 4,258,697 | 18,951 | 1.78 | % | 4,074,743 | 18,442 | 1.81 | % | 3,203,911 | 17,020 | 2.12 | % | ||||||||||||||||
Total interest-bearing liabilities | 17,215,617 | 39,369 | 0.91 | % | 16,632,467 | 38,768 | 0.93 | % | 15,332,168 | 37,322 | 0.97 | % | ||||||||||||||||
Non-interest bearing liabilities | 2,450,879 | 2,316,873 | 1,898,587 | |||||||||||||||||||||||||
Total liabilities | 19,666,496 | 18,949,340 | 17,230,755 | |||||||||||||||||||||||||
Stockholders' equity | 3,118,715 | 3,122,452 | 3,349,465 | |||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 22,785,211 | $ | 22,071,792 | $ | 20,580,220 | ||||||||||||||||||||||
Net interest income | $ | 168,710 | $ | 159,606 | $ | 150,816 | ||||||||||||||||||||||
Net interest rate spread | 2.87 | % | 2.80 | % | 2.83 | % | ||||||||||||||||||||||
Net interest earning assets | $ | 4,775,463 | $ | 4,661,081 | $ | 4,473,268 | ||||||||||||||||||||||
Net interest margin | 3.07 | % | 3.00 | % | 3.05 | % | ||||||||||||||||||||||
Ratio of interest-earning assets to total interest-bearing liabilities | 1.28 | X | 1.28 | X | 1.29 | X | ||||||||||||||||||||||
13
INVESTORS BANCORP, INC. AND SUBSIDIARIES | |||||||||||||||||||
Average Balance Sheet and Yield/Rate Information | |||||||||||||||||||
Year Ended | |||||||||||||||||||
December 31, 2016 | December 31, 2015 | ||||||||||||||||||
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 | $ | 144,610 | 342 | 0.24 | % | $ | 207,331 | 225 | 0.11 | % | |||||||||
Securities available-for-sale | 1,398,373 | 25,515 | 1.82 | % | 1,245,745 | 22,646 | 1.82 | % | |||||||||||
Securities held-to-maturity | 1,836,692 | 42,643 | 2.32 | % | 1,708,176 | 38,547 | 2.26 | % | |||||||||||
Net loans | 17,479,932 | 715,901 | 4.10 | % | 15,716,010 | 663,424 | 4.22 | % | |||||||||||
Federal Home Loan Bank stock | 204,735 | 9,120 | 4.45 | % | 172,367 | 6,881 | 3.99 | % | |||||||||||
Total interest-earning assets | 21,064,342 | 793,521 | 3.77 | % | 19,049,629 | 731,723 | 3.84 | % | |||||||||||
Non-interest earning assets | 779,138 | 770,262 | |||||||||||||||||
Total assets | $ | 21,843,480 | $ | 19,819,891 | |||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||
Savings | $ | 2,096,769 | 6,304 | 0.30 | % | $ | 2,235,703 | 6,402 | 0.29 | % | |||||||||
Interest-bearing checking | 3,381,909 | 16,268 | 0.48 | % | 2,735,513 | 9,642 | 0.35 | % | |||||||||||
Money market accounts | 3,925,095 | 25,621 | 0.65 | % | 3,564,311 | 24,136 | 0.68 | % | |||||||||||
Certificates of deposit | 3,161,843 | 33,864 | 1.07 | % | 2,972,611 | 31,234 | 1.05 | % | |||||||||||
Total interest bearing deposits | 12,565,616 | 82,057 | 0.65 | % | 11,508,138 | 71,414 | 0.62 | % | |||||||||||
Borrowed funds | 3,816,087 | 71,279 | 1.87 | % | 3,157,311 | 65,225 | 2.07 | % | |||||||||||
Total interest-bearing liabilities | 16,381,703 | 153,336 | 0.94 | % | 14,665,449 | 136,639 | 0.93 | % | |||||||||||
Non-interest bearing liabilities | 2,289,036 | 1,702,945 | |||||||||||||||||
Total liabilities | 18,670,739 | 16,368,394 | |||||||||||||||||
Stockholders' equity | 3,172,741 | 3,451,497 | |||||||||||||||||
Total liabilities and stockholders' equity | $ | 21,843,480 | $ | 19,819,891 | |||||||||||||||
Net interest income | $ | 640,185 | $ | 595,084 | |||||||||||||||
Net interest rate spread | 2.83 | % | 2.91 | % | |||||||||||||||
Net interest earning assets | $ | 4,682,639 | $ | 4,384,180 | |||||||||||||||
Net interest margin | 3.04 | % | 3.12 | % | |||||||||||||||
Ratio of interest-earning assets to total interest-bearing liabilities | 1.29 | X | 1.30 | X | |||||||||||||||
14
INVESTORS BANCORP, INC. AND SUBSIDIARIES | |||||||||||||||||
Selected Performance Ratios | |||||||||||||||||
For the Three Months Ended | Year Ended | ||||||||||||||||
December 31, 2016 | September 30, 2016 (1) | December 31, 2015 | December 31, 2016 | December 31, 2015 | |||||||||||||
Return on average assets | 0.92 | % | 0.90 | % | 0.86 | % | 0.88 | % | 0.92 | % | |||||||
Return on average assets, adjusted (2) | 0.91 | % | 0.79 | % | 0.85 | % | 0.84 | % | 0.87 | % | |||||||
Return on average equity | 6.73 | % | 6.39 | % | 5.30 | % | 6.06 | % | 5.26 | % | |||||||
Return on average tangible equity | 6.96 | % | 6.60 | % | 5.48 | % | 6.26 | % | 5.43 | % | |||||||
Return on average tangible equity, adjusted (2) | 6.85 | % | 5.76 | % | 5.38 | % | 5.97 | % | 5.18 | % | |||||||
Interest rate spread | 2.87 | % | 2.80 | % | 2.83 | % | 2.83 | % | 2.91 | % | |||||||
Net interest margin | 3.07 | % | 3.00 | % | 3.05 | % | 3.04 | % | 3.12 | % | |||||||
Efficiency ratio | 50.23 | % | 54.36 | % | 53.70 | % | 52.93 | % | 51.69 | % | |||||||
Efficiency ratio, adjusted (2) | 48.94 | % | 54.36 | % | 52.89 | % | 52.60 | % | 51.48 | % | |||||||
Non-interest expense to average total assets | 1.56 | % | 1.66 | % | 1.67 | % | 1.64 | % | 1.66 | % | |||||||
Average interest-earning assets to average interest-bearing liabilities | 1.28 | 1.28 | 1.29 | 1.29 | 1.30 | ||||||||||||
(1) September 30, 2016 ratios have been revised to reflect the impact of the Company's adoption of ASU No. 2016-09. | |||||||||||||||||
(2) See Non GAAP Reconciliation. | |||||||||||||||||
INVESTORS BANCORP, INC. AND SUBSIDIARIES | |||||||||||||||||
Selected Financial Ratios and Other Data | |||||||||||||||||
December 31, 2016 | September 30, 2016 | December 31, 2015 | |||||||||||||||
Asset Quality Ratios: | |||||||||||||||||
Non-performing assets as a percent of total assets | 0.47 | % | 0.49 | % | 0.69 | % | |||||||||||
Non-performing loans as a percent of total loans | 0.55 | % | 0.58 | % | 0.82 | % | |||||||||||
Allowance for loan losses as a percent of non-accrual loans | 242.24 | % | 229.31 | % | 189.30 | % | |||||||||||
Allowance for loan losses as a percent of total loans | 1.21 | % | 1.22 | % | 1.29 | % | |||||||||||
Capital Ratios: | |||||||||||||||||
Tier 1 Leverage Ratio (1) | 12.03 | % | 12.25 | % | 12.41 | % | |||||||||||
Common equity tier 1 risk-based (1) | 14.75 | % | 15.09 | % | 15.87 | % | |||||||||||
Tier 1 Risk-Based Capital (1) | 14.75 | % | 15.09 | % | 15.87 | % | |||||||||||
Total Risk-Based Capital (1) | 15.98 | % | 16.33 | % | 17.12 | % | |||||||||||
Equity to total assets (period end) | 13.48 | % | 13.82 | % | 15.85 | % | |||||||||||
Average equity to average assets | 13.69 | % | 14.15 | % | 16.28 | % | |||||||||||
Tangible capital (to tangible assets) (2) | 13.10 | % | 13.43 | % | 15.43 | % | |||||||||||
Book value per common share (2) | $ | 10.53 | $ | 10.47 | $ | 10.30 | |||||||||||
Tangible book value per common share (2) | $ | 10.18 | $ | 10.12 | $ | 9.97 | |||||||||||
Other Data: | |||||||||||||||||
Number of full service offices | 151 | 148 | 140 | ||||||||||||||
Full time equivalent employees | 1,829 | 1,782 | 1,734 | ||||||||||||||
15
(1) Ratios are for Investors Bank and do not include capital retained at the holding company level. | |||||||||||||||||
(2) 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 | ||||||||||||
At the period ended | ||||||||||||
December 31, 2016 | September 30, 2016 (1) | December 31, 2015 | ||||||||||
Total stockholders' equity | 3,123,245 | 3,115,089 | 3,311,647 | |||||||||
Goodwill and intangible assets | 101,839 | 102,825 | 105,311 | |||||||||
Tangible stockholders' equity | 3,021,406 | 3,012,264 | 3,206,336 | |||||||||
Book Value per Share Computation | ||||||||||||
Common stock issued | 359,070,852 | 359,070,852 | 359,070,852 | |||||||||
Treasury shares | (49,621,464 | ) | (48,542,470 | ) | (24,176,671 | ) | ||||||
Shares Outstanding | 309,449,388 | 310,528,382 | 334,894,181 | |||||||||
Unallocated ESOP shares | (12,789,847 | ) | (12,908,272 | ) | (13,263,545 | ) | ||||||
Book value shares | 296,659,541 | 297,620,110 | 321,630,636 | |||||||||
Book Value Per Share | $ | 10.53 | $ | 10.47 | $ | 10.30 | ||||||
Tangible Book Value per Share | $ | 10.18 | $ | 10.12 | $ | 9.97 | ||||||
16
Investors Bancorp, Inc. | ||||||||||||||||
Non GAAP Reconciliation | ||||||||||||||||
(dollars in thousands, except share data) | ||||||||||||||||
Net Income and Diluted EPS, as adjusted | ||||||||||||||||
For the Three Months Ended | For the Year Ended December 31 | |||||||||||||||
December 31 | September 30 | December 31 | ||||||||||||||
2016 | 2016 (1) | 2015 | 2016 | 2015 | ||||||||||||
Income before income tax expense | $ | 83,454 | $ | 71,728 | $ | 68,850 | $ | 299,072 | $ | 280,877 | ||||||
Income tax expense | 30,989 | 21,878 | 24,448 | 106,947 | 99,372 | |||||||||||
Net Income | 52,465 | 49,850 | 44,402 | 192,125 | 181,505 | |||||||||||
Compensation and fringe benefits (2) | 1,445 | — | 1,298 | 1,445 | 1,298 | |||||||||||
Professional fees (3) | 840 | — | — | 840 | — | |||||||||||
Total one time items | 2,285 | — | 1,298 | 2,285 | 1,298 | |||||||||||
One time items, net of tax | 1,377 | — | 837 | 1,388 | 839 | |||||||||||
Tax adjustment (4) | (2,175 | ) | (6,409 | ) | (1,601 | ) | (10,414 | ) | (8,940 | ) | ||||||
Adjusted net income | $ | 51,667 | $ | 43,441 | $ | 43,638 | $ | 183,099 | $ | 173,404 | ||||||
Adjusted tax rate | 39.7 | % | 39.5 | % | 37.8 | % | 39.2 | % | 38.6 | % | ||||||
Adjusted diluted earnings per share | $ | 0.18 | $ | 0.15 | $ | 0.14 | $ | 0.61 | $ | 0.52 | ||||||
Weighted average diluted shares | 292,623,922 | 294,673,452 | 321,234,483 | 300,954,885 | 332,933,448 | |||||||||||
Performance Ratio, as adjusted | ||||||||||||||||
For the Three Months Ended | ||||||||||||||||
December 31 | September 30 | December 31 | For the Year Ended December 31, | |||||||||||||
2016 | 2016 (1) | 2015 | 2016 | 2015 | ||||||||||||
Total non-interest expense | $ | 89,010 | $ | 91,398 | $ | 85,666 | $ | 358,564 | $ | 328,332 | ||||||
Net interest income | 168,710 | 159,606 | 150,816 | 640,185 | 595,084 | |||||||||||
Total non-interest income | 8,504 | 8,520 | 8,700 | 37,201 | 40,125 | |||||||||||
Efficiency Ratio | 50.23 | % | 54.36 | % | 53.70 | % | 52.93 | % | 51.69 | % | ||||||
Compensation and fringe benefits (2) | 1,445 | — | 1,298 | 1,445 | 1,298 | |||||||||||
Professional fees (3) | 840 | $ | — | — | 840 | — | ||||||||||
Adjusted Non-Interest Expense | $ | 86,725 | $ | 91,398 | $ | 84,368 | $ | 356,279 | $ | 327,034 | ||||||
Adjusted Efficiency Ratio | 48.94 | % | 54.36 | % | 52.89 | % | 52.60 | % | 51.48 | % | ||||||
Average tangible equity | 3,016,484 | 3,018,996 | 3,243,506 | 3,068,885 | 3,345,520 | |||||||||||
Average assets | 22,785,211 | 22,071,792 | 20,580,220 | 21,843,480 | 19,819,891 | |||||||||||
Adjusted return on average assets | 0.91% | 0.79% | 0.85% | 0.84% | 0.87% | |||||||||||
Adjusted return on average tangible equity | 6.85% | 5.76% | 5.38% | 5.97% | 5.18% | |||||||||||
(1) September 30, 2016 ratios have been revised to reflect the impact of the Company's adoption of ASU No. 2016-09. | ||||||||||||||||
17
(2) For the 2016 periods, compensation includes expenses related to the accelerated vesting of equity awards upon the death of a director. For the 2015 periods, compensation expense includes a one time item related to a payout under an employment agreement with our former CFO. | ||||||||||||||||
(3) As a result of the termination of the Bank of Princeton acquisition, professional fees were expensed during 2016. | ||||||||||||||||
(4) For the 2016 periods, amounts represent the tax impact of the Company’s adoption of ASU No. 2016-09. For the 2015 periods, represents a tax benefit realized from revaluing the Company's deferred tax asset as a result of the New York City tax law reform enacted in 2015 as well as a net operating loss carryforward related to a prior acquisition. | ||||||||||||||||
18