##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended: September 30, 2008
 Commission file number: 0-51557
 Investors Bancorp, Inc.
  Delaware
    
    22-3493930(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 101 JFK Parkway, Short Hills, New Jersey 07078
 (973) 924-5100
 þ o
  Large accelerated filer þAccelerated filer oNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o o þ




---



##### 



Investors Bancorp, Inc.
FORM 10-Q
 Index
 PagePart I. Financial InformationItem 1.
    
    Financial StatementsConsolidated Balance Sheets as of September 30, 2008
(unaudited) and June 30, 2008
    
    
    1Consolidated Statements of Income for the Three
Months Ended September 30, 2008 and 2007 (unaudited)
    
    
    2Consolidated Statements of Stockholders Equity for
the Three Months Ended September 30, 2008 and 2007 (unaudited)
    
    
    3Consolidated Statements of Cash Flows for the Three Months
Ended September 30, 2008 and 2007 (unaudited)
    
    
    4Notes to Consolidated Financial Statements
    
    
    5Item 2.
    
    Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    13Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    27Item 4.
    
    Controls and Procedures
    
    
    29Part II. Other InformationItem 1.
    
    Legal Proceedings
    
    
    30Item 1A.
    
    Risk Factors
    
    
    30Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    31Item 3.
    
    Defaults upon Senior Securities
    
    
    31Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    31Item 5.
    
    Other Information
    
    
    32Item 6.
    
    Exhibits
    
    
    32Signature Page
    
    
    34EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32: CERTIFICATION




---



##### Table of Contents



Part I. Financial Information
 
 Item 1. Financial Statements
 
 INVESTORS BANCORP, INC. AND SUBSIDIARY
 September 30,
    
    
    June 30,2008
    
    
    2008(In thousands)AssetsCash and cash equivalents
    
    $
    20,500
    
    
    
    22,823Securities available-for-sale, at estimated fair value
    
    
    190,498
    
    
    
    203,032Securities held-to-maturity, net (estimated fair value of
$1,118,336 and $1,198,053 at September 30, 2008
and June 30, 2008, respectively)
    
    
    1,199,443
    
    
    
    1,255,054Loans receivable, net
    
    
    5,311,500
    
    
    
    4,670,150Loans held-for-sale
    
    
    20,696
    
    
    
    9,814Stock in the Federal Home Loan Bank
    
    
    86,450
    
    
    
    60,935Accrued interest receivable
    
    
    31,686
    
    
    
    27,716Office properties and equipment, net
    
    
    31,811
    
    
    
    29,710Net deferred tax asset
    
    
    43,891
    
    
    
    40,702Bank owned life insurance contract
    
    
    97,183
    
    
    
    96,170Other assets
    
    
    3,361
    
    
    
    3,036Total assets
    
    $
    7,037,019
    
    
    
    6,419,142Liabilities and Stockholders EquityLiabilities:Deposits
    
    $
    4,002,005
    
    
    
    3,970,275Borrowed funds
    
    
    2,130,576
    
    
    
    1,563,583Advance payments by borrowers for taxes and insurance
    
    
    23,238
    
    
    
    21,829Other liabilities
    
    
    44,729
    
    
    
    34,917Total liabilities
    
    
    6,200,548
    
    
    
    5,590,604Stockholders equity:Preferred stock, $0.01 par value, 50,000,000 authorized shares;
none issued
    
    
    
    
    
    
    Common stock, $0.01 par value, 200,000,000 shares authorized;
118,020,280 issued; 109,010,756 outstanding
at September 30, 2008 and June 30, 2008
    
    
    532
    
    
    
    532Additional paid-in capital
    
    
    517,372
    
    
    
    514,613Retained earnings
    
    
    491,735
    
    
    
    486,244Treasury stock, at cost; 9,009,524 shares at
September 30, 2008 and June 30, 2008
    
    
    (128,977
    )
    
    
    (128,977
    )Unallocated common stock held by the employee stock
ownership plan
    
    
    (37,223
    )
    
    
    (37,578
    )Accumulated other comprehensive loss
    
    
    (6,968
    )
    
    
    (6,296
    )Total stockholders equity
    
    
    836,471
    
    
    
    828,538Total liabilities and stockholders equity
    
    $
    7,037,019
    
    
    
    6,419,142
  1




---



##### Table of Contents



INVESTORS BANCORP, INC. AND SUBSIDIARY
 For the Three MonthsEnded September 30,2008
    
    
    2007(Dollars in thousands, except per share data)Interest and dividend income:Loans receivable and loans held-for-sale
    
    $
    70,480
    
    
    
    53,472Securities:Government-sponsored enterprise obligations
    
    
    500
    
    
    
    1,462Mortgage-backed securities
    
    
    13,439
    
    
    
    17,133Equity securities available-for-sale
    
    
    55
    
    
    
    80Municipal bonds and other debt
    
    
    2,137
    
    
    
    3,096Interest-bearing deposits
    
    
    32
    
    
    
    281Federal Home Loan Bank stock
    
    
    805
    
    
    
    596Total interest and dividend income
    
    
    87,448
    
    
    
    76,120Interest expense:Deposits
    
    
    31,009
    
    
    
    39,753Secured borrowings
    
    
    17,699
    
    
    
    14,103Total interest expense
    
    
    48,708
    
    
    
    53,856Net interest income
    
    
    38,740
    
    
    
    22,264Provision for loan losses
    
    
    5,000
    
    
    
    199Net interest income after provision
for loan losses
    
    
    33,740
    
    
    
    22,065Non-interest (loss) income:Fees and service charges
    
    
    843
    
    
    
    755Income on bank owned life insurance contract
    
    
    1,013
    
    
    
    983Gain on sales of mortgage loans, net
    
    
    184
    
    
    
    81Loss on securities transactions, net
    
    
    (4,366
    )
    
    
    (242
    )Other income
    
    
    94
    
    
    
    85Total non-interest (loss) income
    
    
    (2,232
    )
    
    
    1,662Non-interest expenses:Compensation and fringe benefits
    
    
    14,682
    
    
    
    13,829Advertising and promotional expense
    
    
    805
    
    
    
    510Office occupancy and equipment expense
    
    
    2,745
    
    
    
    2,664Federal insurance premiums
    
    
    681
    
    
    
    108Stationery, printing, supplies and telephone
    
    
    539
    
    
    
    430Legal, audit, accounting, and supervisory examination fees
    
    
    549
    
    
    
    460Data processing service fees
    
    
    1,157
    
    
    
    1,109Other operating expenses
    
    
    1,203
    
    
    
    1,053Total non-interest expenses
    
    
    22,361
    
    
    
    20,163Income before income tax expense
    
    
    9,147
    
    
    
    3,564Income tax expense
    
    
    3,656
    
    
    
    1,132Net income
    
    $
    5,491
    
    
    
    2,432Earnings per share  basic and diluted
    
    $
    0.05
    
    
    
    0.02Weighted average shares outstandingBasic
    
    
    103,794,369
    
    
    
    106,810,092Diluted
    
    
    104,092,853
    
    
    
    106,981,331
  2




---



##### Table of Contents



INVESTORS BANCORP, INC. AND SUBSIDIARY
    AccumulatedAdditional
    
    
    
    
    
    
    
    
    
    
    Unallocated
    
    
    other
    
    
    TotalCommon
    
    
    paid-in
    
    
    Retained
    
    
    Treasury
    
    
    Common Stock
    
    
    comprehensive
    
    
    stockholdersstock
    
    
    capital
    
    
    earnings
    
    
    stock
    
    
    Held by ESOP
    
    
    loss
    
    
    equity(In thousands)Balance at June 30, 2007
    
    $
    532
    
    
    
    506,026
    
    
    
    470,205
    
    
    
    (70,973
    )
    
    
    (38,996
    )
    
    
    (7,935
    )
    
    
    858,859Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    2,432
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,432Unrealized gain on securities available-for-sale, net of tax expense of $891
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,282
    
    
    
    1,282Reclassification adjustment for losses
included in net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    242
    
    
    
    242Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,956Cumulative effect adjustment
for uncertainty in income tax FIN-48
    
    
    
    
    
    
    
    
    
    
    300
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    300Purchase of treasury stock (1,395,200 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,263
    )
    
    
    
    
    
    
    
    
    
    
    (18,263
    )Compensation cost for stock
options and restricted stock
    
    
    
    
    
    
    2,361
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,361ESOP shares allocated or committed to be released
    
    
    
    
    
    
    124
    
    
    
    
    
    
    
    
    
    
    
    355
    
    
    
    
    
    
    
    479Balance at September 30, 2007
    
    $
    532
    
    
    
    508,511
    
    
    
    472,937
    
    
    
    (89,236
    )
    
    
    (38,641
    )
    
    
    (6,411
    )
    
    
    847,692Balance at June 30, 2008
    
    $
    532
    
    
    
    514,613
    
    
    
    486,244
    
    
    
    (128,977
    )
    
    
    (37,578
    )
    
    
    (6,296
    )
    
    
    828,538Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    5,491
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,491Change in funded status of retirement
obligations, net of tax benefit of $152
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (231
    )
    
    
    (231
    )Unrealized loss on securities available-for-sale, net of tax benefit of $453
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (898
    )
    
    
    (898
    )Reclassification adjustment for losses
included in net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    457
    
    
    
    457Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,819Compensation cost for stock
options and restricted stock
    
    
    
    
    
    
    2,598
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,598ESOP shares allocated or committed to be released
    
    
    
    
    
    
    161
    
    
    
    
    
    
    
    
    
    
    
    355
    
    
    
    
    
    
    
    516Balance at September 30, 2008
    
    $
    532
    
    
    
    517,372
    
    
    
    491,735
    
    
    
    (128,977
    )
    
    
    (37,223
    )
    
    
    (6,968
    )
    
    
    836,471
  3




---



##### Table of Contents



INVESTORS BANCORP, INC. AND SUBSIDIARY
   For the Three Months EndedSeptember 30,2008
    
    
    2007(In thousands)Cash flows from operating activities:Net income
    
    $
    5,491
    
    
    
    2,432Adjustments to reconcile net income to net cash used in operating activities:ESOP and stock-based compensation expense
    
    
    3,114
    
    
    
    2,840Amortization of premiums and accretion of discounts on securities, net
    
    
    123
    
    
    
    320Amortization of premium and accretion of fees and costs on loans, net
    
    
    641
    
    
    
    441Provision for loan losses
    
    
    5,000
    
    
    
    199Depreciation and amortization of office properties and equipment
    
    
    621
    
    
    
    688Loss on securities, net
    
    
    4,366
    
    
    
    242Mortgage loans originated for sale
    
    
    (77,090
    )
    
    
    (16,214
    )Proceeds from mortgage loan sales
    
    
    66,392
    
    
    
    11,043Gain on sales of mortgage loans, net
    
    
    (184
    )
    
    
    (81
    )Increase in bank owned life insurance contract
    
    
    (1,013
    )
    
    
    (983
    )Increase in accrued interest receivable
    
    
    (3,970
    )
    
    
    (2,827
    )Deferred tax benefit
    
    
    (2,584
    )
    
    
    (1,433
    )Increase in other assets
    
    
    (325
    )
    
    
    (32
    )Increase in other liabilities
    
    
    9,429
    
    
    
    2,536Total adjustments
    
    
    4,520
    
    
    
    (3,261
    )Net cash provided by (used in) operating activities
    
    
    10,011
    
    
    
    (829
    )Cash flows from investing activities:Purchases of loans receivable
    
    
    (563,326
    )
    
    
    (234,629
    )Net originations of loans receivable
    
    
    (83,665
    )
    
    
    (37,836
    )Purchases of debt securities held-to-maturity
    
    
    
    
    
    
    (10,000
    )Purchases of other investments available-for-sale
    
    
    (100
    )
    
    
    Proceeds from paydowns/maturities on mortgage-backed
securities held-to-maturity
    
    
    50,362
    
    
    
    64,372Proceeds from calls/maturities on debt securities held-to-maturity
    
    
    1,177
    
    
    
    211Proceeds from paydowns/maturities on mortgage-backed
securities available-for-sale
    
    
    11,073
    
    
    
    17,096Proceeds from sale of equity securities available-for-sale
    
    
    250
    
    
    
    Proceeds from redemptions of Federal Home Loan Bank stock
    
    
    13,118
    
    
    
    49,857Purchases of Federal Home Loan Bank stock
    
    
    (38,633
    )
    
    
    (62,074
    )Purchases of office properties and equipment
    
    
    (2,722
    )
    
    
    (764
    )Net cash used in investing activities
    
    
    (612,466
    )
    
    
    (213,767
    )Cash flows from financing activities:Net increase in deposits
    
    
    31,730
    
    
    
    60,588Net (decrease) increase in funds borrowed under short-term repurchase agreements
    
    
    (25,000
    )
    
    
    379,500Proceeds from funds borrowed under other repurchase agreements
    
    
    
    
    
    
    75,000Repayments of funds borrowed under other repurchase agreements
    
    
    (70,000
    )
    
    
    (50,000
    )Net increase (decrease) in other borrowings
    
    
    661,993
    
    
    
    (233,008
    )Net increase in advance payments by borrowers for taxes and insurance
    
    
    1,409
    
    
    
    843Purchase of treasury stock
    
    
    
    
    
    
    (18,263
    )Net cash provided by financing activities
    
    
    600,132
    
    
    
    214,660Net (decrease) increase in cash and cash equivalents
    
    
    (2,323
    )
    
    
    64Cash and cash equivalents at beginning of period
    
    
    22,823
    
    
    
    35,582Cash and cash equivalents at end of period
    
    $
    20,500
    
    
    
    35,646Supplemental cash flow information:Cash paid during the period for:Interest
    
    
    46,673
    
    
    
    52,596Income taxes
    
    
    2,858
    
    
    
    343
  4




---



##### Table of Contents



INVESTORS BANCORP, INC. AND SUBSIDIARY
 1. Basis of Presentation
     2. Earnings Per Share
  5




---



##### Table of Contents



For the Three Months Ended September 30,2008
    
    
    2007Per
    
    
    
    
    
    
    
    
    
    
    PerShare
    
    
    
    
    
    
    
    
    
    
    ShareIncome
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount(In thousands, except per share data)Net Income
    
    $
    5,491
    
    
    
    
    
    
    
    
    
    
    $
    2,432Basic earnings per share:Income available to common
stockholders
    
    $
    5,491
    
    
    
    103,794,369
    
    
    $
    0.05
    
    
    $
    2,432
    
    
    
    106,810,092
    
    
    $
    0.02Effect of dilutive common stock
equivalents
    
    
    
    
    
    
    298,484
    
    
    
    
    
    
    
    
    
    
    
    171,239Diluted earnings per share:Income available to common
stockholders
    
    $
    5,491
    
    
    
    104,092,853
    
    
    $
    0.05
    
    
    $
    2,432
    
    
    
    106,981,331
    
    
    $
    0.02
  6




---



##### Table of Contents



3. Loans Receivable, Net
  September 30,
    
    
    June 30,2008
    
    
    2008(In thousands)Residential mortgage loans
    
    $
    4,478,915
    
    
    
    4,009,563Multi-family and commercial
    
    
    389,009
    
    
    
    225,154Construction loans
    
    
    272,442
    
    
    
    260,177Consumer and other loans
    
    
    168,119
    
    
    
    168,819Total loans
    
    
    5,308,485
    
    
    
    4,663,713Premiums on purchased loans
    
    
    24,191
    
    
    
    22,622Deferred loan fees, net
    
    
    (2,614
    )
    
    
    (2,620
    )Allowance for loan losses
    
    
    (18,562
    )
    
    
    (13,565
    )Net loans
    
    $
    5,311,500
    
    
    
    4,670,150
 4. Deposits
  September 30,
    
    
    June 30,2008
    
    
    2008(In thousands)Savings acounts
    
    $
    392,108
    
    
    
    417,196Checking accounts
    
    
    417,027
    
    
    
    401,100Money market accounts
    
    
    266,644
    
    
    
    229,018Total core deposits
    
    
    1,075,779
    
    
    
    1,047,314Certificates of deposit
    
    
    2,926,226
    
    
    
    2,922,961$
    4,002,005
    
    
    
    3,970,275
 5. Equity Incentive Plan
     7




---



##### Table of Contents



6. Net Periodic Benefit Plans Expense
     Three months ended September 30,SERP and Directors Plan
    
    
    Other Benefits2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands)Service cost
    
    $
    113
    
    
    
    114
    
    
    $
    
    
    
    
    11Interest cost
    
    
    256
    
    
    
    240
    
    
    
    11
    
    
    
    61Amortization of:Transition obligation
    
    
    
    
    
    
    
    
    
    
    9
    
    
    
    19Prior service cost
    
    
    25
    
    
    
    25
    
    
    
    
    
    
    
    Net loss
    
    
    32
    
    
    
    29
    
    
    
    (4
    )
    
    
    (2
    )Total net periodic benefit expense
    
    $
    426
    
    
    
    408
    
    
    $
    16
    
    
    
    89
    8




---



##### Table of Contents



7. Income Taxes
   8. Fair Value Measurements
    9




---



##### Table of Contents




    
    Level 1  Valuation is based upon quoted prices for identical
instruments traded in active markets.
    
    Level 2  Valuation is based upon quoted prices for similar
instruments in active markets, quoted prices for identical or similar
instruments in markets that are not active and model-based valuation
techniques for which all significant assumptions are observable in the
market.
    
    Level 3  Valuation is generated from model-based techniques that use
significant assumptions not observable in the market. These
unobservable assumptions reflect our own estimates of assumptions that
market participants would use in pricing the asset or liability.
Valuation techniques include the use of option pricing models,
discounted cash flow models and similar techniques. The results cannot
be determined with precision and may not be realized in an actual sale
or immediate settlement of the asset or liability.
   Securities available-for-sale
   10




---



##### Table of Contents



Carrying Value at September 30, 2008Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3(In thousands)Securities available for sale:Mortgage-backed securities
    
    $
    184,375
    
    
    
    
    
    
    
    184,375
    
    
    $
    Equity securities and
Mutual Funds
    
    
    6,123
    
    
    
    4,569
    
    
    
    1,554
    
    
    
    $
    190,498
    
    
    $
    4,569
    
    
    $
    185,929
    
    
    $
    
  Securities held-to-maturity
  Mortgage Servicing Rights, net
  Loans Receivable
   11




---



##### Table of Contents



Carrying Value at September 30, 2008Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3(In thousands)Secutities held-to-maturity
    
    $
    5,090
    
    
    $
    
    
    
    $
    
    
    
    $
    5,090MSR, net
    
    
    1,004
    
    
    
    
    
    
    
    
    
    
    
    1,004Impaired loans
    
    
    8,483
    
    
    
    
    
    
    
    
    
    
    
    8,483$
    14,577
    
    
    $
    
    
    
    $
    
    
    
    $
    14,577
 9. Recent Accounting Pronouncements
 Business Combinations.
  Noncontrolling Interests in Consolidated Financial
Statements.
   12




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward Looking Statements
   Executive Summary
    13




---



##### Table of Contents



14




---



##### Table of Contents



Comparison of Financial Condition at September 30, 2008 and June 30, 2008
 Total Assets .
 Net Loans.
  15




---



##### Table of Contents



16




---



##### Table of Contents



Securities.
    17




---



##### Table of Contents



Stock in the Federal Home Loan Bank, Bank Owned Life Insurance and Other Assets.
 Deposits .
 Borrowed Funds .
 Stockholders Equity .
 Average Balance Sheets for the Three Months ended September 30, 2008 and 2007
  18




---



##### Table of Contents



For the three months endedSeptember 30, 2008
    
    
    September 30, 2007Average Outstanding Balance
    
    
    Interest Earned/Paid
    
    
    Average Yield/Rate
    
    
    Average Outstanding Balance
    
    
    Interest Earned/Paid
    
    
    Average Yield/Rate(Dollars in thousands)Interest-earning assets:Interest-bearing deposits
    
    $
    18,321
    
    
    $
    32
    
    
    
    0.70
    %
    
    $
    26,244
    
    
    $
    281
    
    
    
    4.28
    %Securities available-for-sale(1)
    
    
    202,533
    
    
    
    2,314
    
    
    
    4.57
    %
    
    
    257,309
    
    
    
    2,960
    
    
    
    4.60
    %Securities held-to-maturity
    
    
    1,230,798
    
    
    
    13,817
    
    
    
    4.49
    %
    
    
    1,555,332
    
    
    
    18,811
    
    
    
    4.84
    %Net loans
    
    
    4,940,058
    
    
    
    70,480
    
    
    
    5.71
    %
    
    
    3,752,468
    
    
    
    53,472
    
    
    
    5.70
    %Stock in FHLB
    
    
    70,374
    
    
    
    805
    
    
    
    4.58
    %
    
    
    39,629
    
    
    
    596
    
    
    
    6.02
    %Total interest-earning assets
    
    
    6,462,084
    
    
    
    87,448
    
    
    
    5.41
    %
    
    
    5,630,982
    
    
    
    76,120
    
    
    
    5.41
    %Non-interest earning assets
    
    
    187,218
    
    
    
    
    
    
    
    
    
    
    
    182,724Total assets
    
    $
    6,649,302
    
    
    
    
    
    
    
    
    
    
    $
    5,813,706Interest-bearing Liabilities:Savings
    
    $
    401,532
    
    
    
    1,872
    
    
    
    1.86
    %
    
    $
    352,048
    
    
    
    1,884
    
    
    
    2.14
    %Interest-bearing checking
    
    
    362,575
    
    
    
    1,373
    
    
    
    1.51
    %
    
    
    369,363
    
    
    
    2,461
    
    
    
    2.67
    %Money market accounts
    
    
    231,650
    
    
    
    1,219
    
    
    
    2.10
    %
    
    
    187,534
    
    
    
    1,239
    
    
    
    2.64
    %Certificates of deposit
    
    
    2,912,856
    
    
    
    26,545
    
    
    
    3.65
    %
    
    
    2,840,211
    
    
    
    34,169
    
    
    
    4.81
    %Borrowed funds
    
    
    1,804,823
    
    
    
    17,699
    
    
    
    3.92
    %
    
    
    1,118,723
    
    
    
    14,103
    
    
    
    5.04
    %Total interest-bearing liabilities
    
    
    5,713,436
    
    
    
    48,708
    
    
    
    3.41
    %
    
    
    4,867,879
    
    
    
    53,856
    
    
    
    4.43
    %Non-interest bearing liabilities
    
    
    110,969
    
    
    
    
    
    
    
    
    
    
    
    103,217Total liabilities
    
    
    5,824,405
    
    
    
    
    
    
    
    
    
    
    
    4,971,096Stockholders equity
    
    
    824,897
    
    
    
    
    
    
    
    
    
    
    
    842,610Total liabilities and stockholders equity
    
    $
    6,649,302
    
    
    
    
    
    
    
    
    
    
    $
    5,813,706Net interest income
    
    
    
    
    
    $
    38,740
    
    
    
    
    
    
    
    
    
    
    $
    22,264Net interest rate spread(2)
    
    
    
    
    
    
    
    
    
    
    2.00
    %
    
    
    
    
    
    
    
    
    
    
    0.98
    %Net interest earning assets(3)
    
    $
    748,648
    
    
    
    
    
    
    
    
    
    
    $
    763,103Net interest margin(4)
    
    
    
    
    
    
    
    
    
    
    2.40
    %
    
    
    
    
    
    
    
    
    
    
    1.58
    %Ratio of interest-earning assets to total interest-bearing liabilities
    
    
    1.13
    X
    
    
    
    
    
    
    
    
    
    
    1.16
    X
 
 (1)
    
    Securities available-for-sale are stated at amortized cost, adjusted for unamortized
purchased premiums and discounts.(2)
    
    Net interest rate spread represents the difference between the yield on average
interest-earning assets and the cost of average interest-bearing liabilities.(3)
    
    Net interest-earning assets represent total interest-earning assets less total
interest-bearing liabilities.(4)
    
    Net interest margin represents net interest income divided by average total interest-earning
assets. 19




---



##### Table of Contents



Comparison of Operating Results for the Three Months Ended September 30, 2008 and 2007
 Net Income .
 Net Interest Income .
  Interest and Dividend Income .
  20




---



##### Table of Contents



Interest Expense.
   Provision for Loan Losses. Comparison of Financial Condition at September 30, 2008 and June 30, 2008.
 Non-interest Income.
 21




---



##### Table of Contents



Non-interest Expenses .
 Income Taxes.
 Liquidity and Capital Resources
     22




---



##### Table of Contents



As of September 30, 2008Actual
    
    RequiredAmount
    
    Ratio
    
    Amount
    
    Ratio(Dollars in thousands)Total capital (to risk-weighted assets)
    
    $
    754,304
    
    
    
    20.0
    %
    
    $
    301,179
    
    
    
    8.0
    %Tier I capital (to risk-weighted assets)
    
    
    735,742
    
    
    
    19.5
    
    
    
    150,589
    
    
    
    4.0Tier I capital (to average assets)
    
    
    735,743
    
    
    
    11.1
    
    
    
    265,706
    
    
    
    4.0
 Off-Balance Sheet Arrangements and Contractual Obligations
   Less than
    
    One-Two
    
    Two-Three
    
    More thanContractual Obligations
    
    Total
    
    One Year
    
    Years
    
    Years
    
    Three YearsDebt obligations (excluding capitalized leases)
    
    $
    2,130,576
    
    
    
    645,000
    
    
    
    415,000
    
    
    
    490,000
    
    
    
    580,576Commitments to originate and purchase loans
    
    $
    490,383
    
    
    
    490,383
    
    
    
    
    
    
    
    
    
    
    
    Commitments to sell loans
    
    $
    59,655
    
    
    
    59,655
    
    
    
    
    
    
    
    
    
    
    
    
    23




---



##### Table of Contents



Critical Accounting Policies
  Allowance for Loan Losses.
   24




---



##### Table of Contents



25




---



##### Table of Contents



Deferred Income Taxes. Accounting for Income Taxes
 Asset Impairment Judgments.
    26




---



##### Table of Contents



Stock-Based Compensation.
   
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Qualitative Analysis
  27




---



##### Table of Contents



Quantitative Analysis
 28




---



##### Table of Contents



Net Interest Income (3)Increase (Decrease) inChange in
    
    Net Portfolio Value (1),(2)
    
    
    
    
    
    Estimated Net InterestInterest Rates
    
    
    
    
    
    Estimated Increase (Decrease)
    
    Estimated Net
    
    Income(basis points)
    
    Estimated NPV
    
    Amount
    
    Percent
    
    Interest Income
    
    Amount
    
    Percent(Dollars in thousands)+200bp
    
    $
    469,932
    
    
    $
    (339,533
    )
    
    
    (41.9
    )%
    
    $
    152,467
    
    
    $
    (16,588
    )
    
    
    (9.8
    )%0bp
    
    $
    809,465
    
    
    
    
    
    
    
    
    
    
    $
    169,054
    
    
    
    
    
    
    
    -100bp
    
    $
    884,932
    
    
    $
    75,467
    
    
    
    9.3
    %
    
    $
    176,004
    
    
    $
    6,950
    
    
    
    4.1
    %
 
 (1)
    
    NPV is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts.(2)
    
    Assumes an instantaneous uniform change in interest rates at all maturities.(3)
    
    Assumes a gradual change in interest rates over a one year period at all maturities   
 Item 4. Controls and Procedures
  29




---



##### Table of Contents



Part II  Other Information
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  Our Expenses Will Increase as a Result of Increases in FDIC Insurance Premiums
   30




---



##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  31




---



##### Table of Contents



Proposal 1:
 Doreen R. Byrnes
    
    For: 102,500,831
    
    Withheld: 1,986,387Richard J. Petroski
    
    For: 103,446,988
    
    Withheld: 1,040,230Rose Sigler
    
    For: 102,789,605
    
    Withheld: 1,697,613Stephen J. Szabatin
    
    For: 102,845,604
    
    Withheld: 1,641,614
 Proposal 2:
 For:
    
    
    95,801,946Against:
    
    
    1,964,633Abstain:
    
    
    190,056Broker Non-Vote
    
    
    6,530,583
 Proposal 3:
 For:
    
    
    103,750,136Against:
    
    
    593,896Abstain:
    
    
    143,186
 
 Item 5. Other Information
  
 Item 6. Exhibits
  3.1
    
    Certificate of Incorporation of Investors Bancorp, Inc.*3.2
    
    Bylaws of Investors Bancorp, Inc.*4
    
    Form of Common Stock Certificate of Investors Bancorp, Inc.*10.1
    
    Form of Employment Agreement between Investors Bancorp, Inc. and certain
executive officers*10.2
    
    Form of Change in Control Agreement between Investors Bancorp, Inc. and certain
executive officers *10.3
    
    Investors Savings Bank Director Retirement Plan*
 32




---



##### Table of Contents



10.4
    
    Investors Savings Bank Supplemental Retirement Plan*10.5
    
    Investors Bancorp, Inc. Supplemental Wage Replacement Plan*31.1
    
    Certification of Principal Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 200231.2
    
    Certification of Principal Financial and Accounting Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 200232
    
    Certification of Principal Executive Officer and Principal Financial and
Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 *
    
    Filed as exhibits to the Companys Registration Statement on Form S-1, and any amendments
thereto, with the Securities and Exchange Commission (Registration No. 333-125703) 33




---



##### Table of Contents



SIGNATURES
  Investors Bancorp, Inc.Dated: November 10, 2008
    /s/ Kevin CummingsKevin CummingsPresident and Chief Executive Officer
(Principal Executive Officer)Dated: November 10, 2008
    /s/ Thomas F. Splaine, Jr.Thomas F. Splaine, Jr.Senior Vice President and Chief Financial Officer

(Principal Financial and Accounting Officer) 34