##### 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 1934For the quarterly period ended: September 30,
2007
 Commission file number: 0-51557
 Investors Bancorp, Inc.
  Delaware
(State or other jurisdiction of incorporation or organization)
    
    22-3493930
(I.R.S. Employer Identification No.)
 101 JFK Parkway, Short Hills, New Jersey 07078
  (973) 924-5100
  þ o
  þ o o o o o
 o þ




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##### 



Investors Bancorp, Inc.
FORM 10-Q
 Index
  
 PagePart I. Financial InformationItem 1.
    
    Financial StatementsConsolidated Balance Sheets as of September 30, 2007 (unaudited) and June 30, 2007
    
    
    1Consolidated Statements of Income for the Three Months Ended September 30, 2007 and 2006 (unaudited)
    
    
    2Consolidated Statements of Stockholders Equity for the Three Months Ended September 30, 2007 and 2006 (unaudited)
    
    
    3Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2007 and 2006 (unaudited)
    
    
    4Notes to Consolidated Financial Statements
    
    
    5Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    10Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    20Item 4.
    
    Controls and Procedures
    
    
    23Part II. Other InformationItem 1.
    
    Legal Proceedings
    
    
    23Item 1A.
    
    Risk Factors
    
    
    23Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    23Item 3.
    
    Defaults upon Senior Securities
    
    
    24Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    24Item 5.
    
    Other Information
    
    
    24Item 6.
    
    Exhibits
    
    
    24Signature Page
    
    
    26EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32: CERTIFICATION




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##### Table of Contents



Part I. Financial Information
 
 Item 1. Financial Statements
 
 INVESTORS BANCORP, INC. AND SUBSIDIARY
 September 30,
    
    
    June 30,2007
    
    
    2007(In thousands)AssetsCash and cash equivalents
    
    $
    23,802
    
    
    
    24,810Securities available-for-sale, at estimated fair value
    
    
    237,088
    
    
    
    251,970Securities held-to-maturity, net (estimated fair value of
$1,433,098 and $1,472,385 at September 30, 2007
and June 30, 2007, respectively)
    
    
    1,465,466
    
    
    
    1,517,664Loans receivable, net
    
    
    3,862,504
    
    
    
    3,589,373Loans held-for-sale
    
    
    8,662
    
    
    
    3,410Stock in the Federal Home Loan Bank
    
    
    46,104
    
    
    
    33,887Accrued interest receivable
    
    
    27,214
    
    
    
    24,300Office properties and equipment, net
    
    
    27,258
    
    
    
    27,155Net deferred tax asset
    
    
    39,941
    
    
    
    39,399Bank owned life insurance contract
    
    
    88,950
    
    
    
    88,018Other assets
    
    
    1,140
    
    
    
    1,102Total assets
    
    $
    5,828,129
    
    
    
    5,601,088Liabilities and Stockholders EquityLiabilities:Deposits
    
    $
    3,728,419
    
    
    
    3,664,966Borrowed funds
    
    
    1,210,202
    
    
    
    1,038,710Advance payments by borrowers for taxes and insurance
    
    
    18,545
    
    
    
    17,671Other liabilities
    
    
    38,580
    
    
    
    36,376Total liabilities
    
    
    4,995,746
    
    
    
    4,757,723Stockholders 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;
116,275,688 issued; 110,073,752 and 111,468,952 outstanding
at September 30, 2007 and June 30, 2007, respectively
    
    
    532
    
    
    
    532Additional paid-in capital
    
    
    508,501
    
    
    
    506,016Retained earnings
    
    
    456,903
    
    
    
    453,751Treasury stock, at cost; 6,201,936 and 4,806,736 shares at
September 30, 2007 and June 30, 2007, respectively
    
    
    (89,236
    )
    
    
    (70,973
    )Unallocated common stock held by the employee stock
ownership plan
    
    
    (38,641
    )
    
    
    (38,996
    )Accumulated other comprehensive loss
    
    
    (5,676
    )
    
    
    (6,965
    )Total stockholders equity
    
    
    832,383
    
    
    
    843,365Total liabilities and
stockholders equity
    
    $
    5,828,129
    
    
    
    5,601,088
  1




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##### Table of Contents



INVESTORS BANCORP, INC. AND SUBSIDIARY
 For the Three MonthsEnded September 30,2007
    
    
    2006(Dollars in thousands, except per share data)Interest and dividend income:Loans receivable and loans held-for-sale
    
    $
    52,966
    
    
    
    41,912Securities:Government-sponsored enterprise obligations
    
    
    1,337
    
    
    
    1,339Mortgage-backed securities
    
    
    16,656
    
    
    
    22,053Equity securities available-for-sale
    
    
    
    
    
    
    455Municipal bonds and other debt
    
    
    3,096
    
    
    
    2,406Interest-bearing deposits
    
    
    160
    
    
    
    169Federal Home Loan Bank stock
    
    
    593
    
    
    
    697Total interest and dividend income
    
    
    74,808
    
    
    
    69,031Interest expense:Deposits
    
    
    39,302
    
    
    
    30,750Secured borrowings
    
    
    14,103
    
    
    
    15,814Total interest expense
    
    
    53,405
    
    
    
    46,564Net interest income
    
    
    21,403
    
    
    
    22,467Provision for loan losses
    
    
    200
    
    
    
    225Net interest income after provision
for loan losses
    
    
    21,203
    
    
    
    22,242Other income:Fees and service charges
    
    
    711
    
    
    
    660Income on bank owned life insurance contract
    
    
    932
    
    
    
    795Gain on sales of mortgage loans, net
    
    
    81
    
    
    
    83Other income
    
    
    64
    
    
    
    21Total other income
    
    
    1,788
    
    
    
    1,559Operating expenses:Compensation and fringe benefits
    
    
    12,990
    
    
    
    10,300Advertising and promotional expense
    
    
    502
    
    
    
    900Office, occupancy and equipment expense
    
    
    2,548
    
    
    
    2,423Federal insurance premiums
    
    
    105
    
    
    
    110Stationery, printing, supplies and telephone
    
    
    401
    
    
    
    393Legal, audit, accounting, and supervisory examination fees
    
    
    429
    
    
    
    790Data processing service fees
    
    
    1,010
    
    
    
    936Other operating expenses
    
    
    1,012
    
    
    
    1,235Total operating expenses
    
    
    18,997
    
    
    
    17,087Income before income tax expense
    
    
    3,994
    
    
    
    6,714Income tax expense
    
    
    1,142
    
    
    
    2,363Net income
    
    $
    2,852
    
    
    
    4,351Earnings per share  basic and diluted
    
    $
    0.03
    
    
    
    0.04Weighted average shares outstandingBasic
    
    
    106,732,844
    
    
    
    112,246,699Diluted
    
    
    106,880,099
    
    
    
    112,246,699
  2




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##### Table of Contents



INVESTORS BANCORP, INC. AND SUBSIDIARY
 Additional
    
    
    
    
    
    
    
    
    
    
    Unallocated
    
    
    
    
    
    
    TotalCommon
    
    
    paid-in
    
    
    Retained
    
    
    Treasury
    
    
    Common Stock
    
    
    Accumulated other
    
    
    stockholdersstock
    
    
    capital
    
    
    earnings
    
    
    stock
    
    
    Held by ESOP
    
    
    comprehensive loss
    
    
    equity(In thousands)Balance at June 30, 2006
    
    $
    532
    
    
    
    524,962
    
    
    
    426,233
    
    
    
    
    
    
    
    (40,414
    )
    
    
    (11,126
    )
    
    
    900,187Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    4,351
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,351Unrealized gain on securities
available-for-sale, net of tax expense of $2,944
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,490
    
    
    
    4,490Total comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,841Cumulative effect of change
in accounting principle
    
    
    
    
    
    
    
    
    
    
    5,564
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,564ESOP shares allocated or committed to be released
    
    
    
    
    
    
    143
    
    
    
    
    
    
    
    
    
    
    
    355
    
    
    
    
    
    
    
    498Balance at September 30, 2006
    
    $
    532
    
    
    
    525,105
    
    
    
    436,148
    
    
    
    
    
    
    
    (40,059
    )
    
    
    (6,636
    )
    
    
    915,090Balance at June 30, 2007
    
    $
    532
    
    
    
    506,016
    
    
    
    453,751
    
    
    
    (70,973
    )
    
    
    (38,996
    )
    
    
    (6,965
    )
    
    
    843,365Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    2,852
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,852Unrealized gain on securities
available-for-sale, net of tax expense of $891
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,289
    
    
    
    1,289Total comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,141Cummulative effect adjustment
upon adoption of 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
    
    
    
    508,501
    
    
    
    456,903
    
    
    
    (89,236
    )
    
    
    (38,641
    )
    
    
    (5,676
    )
    
    
    832,383
  3




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##### Table of Contents



INVESTORS BANCORP, INC. AND SUBSIDIARY
 For the Three Months EndedSeptember 30,2007
    
    
    2006(In thousands)Cash flows from operating activities:Net income
    
    $
    2,852
    
    
    
    4,351Adjustments to reconcile net income to net cash used in operating activities:ESOP and stock-based compensation expense
    
    
    2,840
    
    
    
    498Amortization of premiums and accretion of discounts on securities, net
    
    
    315
    
    
    
    485Amortization of premium and accretion of fees and costs on loans, net
    
    
    442
    
    
    
    569Provision for loan losses
    
    
    200
    
    
    
    225Depreciation and amortization of office properties and equipment
    
    
    667
    
    
    
    667Mortgage loans originated for sale
    
    
    (16,214
    )
    
    
    (10,194
    )Proceeds from mortgage loan sales
    
    
    11,043
    
    
    
    8,837Gain on sales of mortgage loans, net
    
    
    (81
    )
    
    
    (83
    )Increase in bank owned life insurance contract
    
    
    (932
    )
    
    
    (795
    )Increase in accrued interest receivable
    
    
    (2,914
    )
    
    
    (2,737
    )Deferred tax benefit
    
    
    (1,433
    )
    
    
    (820
    )(Increase) decrease in other assets
    
    
    (38
    )
    
    
    89Increase (decrease) in other liabilities
    
    
    2,504
    
    
    
    (2,262
    )Total adjustments
    
    
    (3,601
    )
    
    
    (5,521
    )Net cash used in operating activities
    
    
    (749
    )
    
    
    (1,170
    )Cash flows from investing activities:Purchases of loans receivable
    
    
    (234,629
    )
    
    
    (240,366
    )Net (originations) repayments of loans receivable
    
    
    (39,144
    )
    
    
    8,635Purchases of mortgage-backed securities held-to-maturity
    
    
    
    
    
    
    (5,317
    )Purchases of debt securities held-to-maturity
    
    
    (10,000
    )
    
    
    Proceeds from paydowns/maturities on mortgage-backed
securities held-to-maturity
    
    
    61,639
    
    
    
    84,459Proceeds from calls/maturities on debt securities held-to-maturity
    
    
    210
    
    
    
    14Proceeds from paydowns/maturities on mortgage-backed
securities available-for-sale
    
    
    17,096
    
    
    
    28,146Proceeds from redemptions of Federal Home Loan Bank stock
    
    
    3,803
    
    
    
    8,932Purchases of Federal Home Loan Bank stock
    
    
    (16,020
    )
    
    
    (11,700
    )Purchases of office properties and equipment
    
    
    (770
    )
    
    
    (202
    )Net cash used in investing activities
    
    
    (217,815
    )
    
    
    (127,399
    )Cash flows from financing activities:Net increase in deposits
    
    
    63,453
    
    
    
    54,615Net increase (decrease) in funds borrowed under short-term repurchase agreements
    
    
    379,500
    
    
    
    (150,000
    )Proceeds from funds borrowed under other repurchase agreements
    
    
    75,000
    
    
    
    125,000Repayments of funds borrowed under other repurchase agreements
    
    
    (50,000
    )
    
    
    Net (decrease) increase in other borrowings
    
    
    (233,008
    )
    
    
    86,492Net increase in advance payments by borrowers for taxes and insurance
    
    
    874
    
    
    
    713Purchase of treasury stock
    
    
    (18,263
    )
    
    
    Net cash provided by financing
activities
    
    
    217,556
    
    
    
    116,820Net decrease in cash and cash
equivalents
    
    
    (1,008
    )
    
    
    (11,749
    )Cash and cash equivalents at beginning of period
    
    
    24,810
    
    
    
    39,824Cash and cash equivalents at end of period
    
    $
    23,802
    
    
    
    28,075Supplemental cash flow information:Cash paid during the period for:Interest
    
    
    52,047
    
    
    
    44,599Income taxes
    
    
    343
    
    
    
    3,258
  4




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##### Table of Contents



INVESTORS BANCORP, INC. AND SUBSIDIARY
 1.
    
    Basis of Presentation
    2.
    
    Earnings Per Share
  For the Three Months Ended September 30,2007
    
    
    2006Income
    
    
    Shares
    
    
    Per Share Amount
    
    
    Income
    
    
    Shares
    
    
    Per Share Amount(In thousands, except per share data)Net Income
    
    $
    2,852
    
    
    
    
    
    
    
    
    
    
    $
    4,351Basic earnings per share:Income available to common
stockholders
    
    $
    2,852
    
    
    
    106,732,844
    
    
    $
    0.03
    
    
    $
    4,351
    
    
    
    112,246,699
    
    
    $
    0.04Effect of dilutive common stock
equivalents
    
    
    
    
    
    
    147,255
    
    
    
    
    
    
    
    
    
    
    
    Diluted earnings per share:Income available to common
stockholders
    
    $
    2,852
    
    
    
    106,880,099
    
    
    $
    0.03
    
    
    $
    4,351
    
    
    
    112,246,699
    
    
    $
    0.04
 5




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##### Table of Contents



3.
    
    Loans Receivable, Net
  September 30,
    
    
    June 30,2007
    
    
    2007(In thousands)Residential mortgage loans
    
    $
    3,372,015
    
    
    
    3,153,212Multi-family and commercial
    
    
    125,946
    
    
    
    107,350Construction loans
    
    
    178,793
    
    
    
    152,670Consumer and other loans
    
    
    169,001
    
    
    
    161,395Total loans
    
    
    3,845,755
    
    
    
    3,574,627Premiums on purchased loans
    
    
    25,793
    
    
    
    23,587Deferred loan fees, net
    
    
    (1,932
    )
    
    
    (1,924
    )Allowance for loan losses
    
    
    (7,112
    )
    
    
    (6,917
    )Net loans
    
    $
    3,862,504
    
    
    
    3,589,373
 4.
    
    Deposits
  September 30,
    
    
    June 30,2007
    
    
    2007(In thousands)Savings acounts
    
    $
    311,105
    
    
    
    320,880Checking accounts
    
    
    385,277
    
    
    
    388,215Money market accounts
    
    
    197,169
    
    
    
    182,274Total core deposits
    
    
    893,551
    
    
    
    891,369Certificates of deposit
    
    
    2,834,868
    
    
    
    2,773,597$
    3,728,419
    
    
    
    3,664,966
 5.
    
    Equity Incentive Plan
   6




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##### Table of Contents



Weighted AverageNumber of Stock
    
    Weighted Average
    
    Remaining
    
    Aggregate IntrinsicOptions
    
    Exercise Price
    
    Contractual Life
    
    ValueOutstanding at June 30, 2007
    
    
    4,437,401
    
    
    $
    15.26
    
    
    9.4 years
    
    $
    Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Outstanding at September 30, 2007
    
    
    4,437,401
    
    
    $
    15.26
    
    
    9.2 years
    
    $
    Exercisable at September 30, 2007
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    N/A
  Weighted AverageNumber of Stock
    
    Grant Date FairOptions
    
    ValueNon-vested at June 30, 2007
    
    
    4,437,401
    
    
    $
    4.17Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Non-vested at September 30, 2007
    
    
    4,437,401
    
    
    $
    4.17
    Weighted AverageNumber of Shares
    
    Grant Date FairAwarded
    
    ValueNon-vested at June 30, 2007
    
    
    1,666,959
    
    
    $
    15.25Granted
    
    
    
    
    
    
    Vested
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Non-vested at September 30, 2007
    
    
    1,666,959
    
    
    $
    15.25
 7




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##### Table of Contents



6.
    
    Net Periodic Benefit Plans Expense
     Three months ended September 30,SERP and Directors Plan
    
    
    Other Benefits2007
    
    
    2006
    
    
    2007
    
    
    2006(In thousands)Service cost
    
    $
    135
    
    
    
    296
    
    
    $
    43
    
    
    
    40Interest cost
    
    
    252
    
    
    
    225
    
    
    
    140
    
    
    
    135Amortization of:Transition obligation
    
    
    
    
    
    
    
    
    
    
    50
    
    
    
    50Prior service cost
    
    
    (25
    )
    
    
    5
    
    
    
    
    
    
    
    Net loss
    
    
    49
    
    
    
    37
    
    
    
    
    
    
    
    Total net periodic
benefit expense
    
    $
    411
    
    
    
    563
    
    
    $
    233
    
    
    
    225
   7.
    
    Income Taxes
  8




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##### Table of Contents



8.
    
    Stock Repurchase Program
  9.
    
    Recent Accounting Pronouncements
   9




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##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward Looking Statements
   Executive Summary
  10




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##### Table of Contents



Comparison of Financial Condition at September 30, 2007 and June 30, 2007
 Total Assets .
 Securities.
 11




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##### Table of Contents



Net Loans.
      12




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##### Table of Contents



Bank Owned Life Insurance, Stock in the Federal Home Loan Bank and Other Assets.
 Deposits .
 Borrowed Funds .
 Stockholders Equity .
 Average Balance Sheets for the Three Months ended September 30, 2007 and 2006
  13




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For Three Months EndedSeptember 30, 2007
    
    
    September 30, 2006Average
    
    
    
    
    
    
    
    
    
    
    AverageOutstanding
    
    
    Interest
    
    
    Average
    
    
    Outstanding
    
    
    Interest
    
    
    AverageBalance
    
    
    Earned/Paid
    
    
    Yield/Rate
    
    
    Balance
    
    
    Earned/Paid
    
    
    Yield/Rate(Dollars in thousands)Interest-earning assets:Interest-bearing deposits
    
    $
    16,238
    
    
    $
    160
    
    
    
    3.94
    %
    
    $
    20,078
    
    
    $
    169
    
    
    
    3.37
    %Securities available-for-sale(1)
    
    
    251,340
    
    
    
    2,880
    
    
    
    4.58
    %
    
    
    534,833
    
    
    
    5,722
    
    
    
    4.28
    %Securities held-to-maturity
    
    
    1,495,413
    
    
    
    18,209
    
    
    
    4.87
    %
    
    
    1,729,172
    
    
    
    20,531
    
    
    
    4.75
    %Net loans
    
    
    3,717,582
    
    
    
    52,966
    
    
    
    5.70
    %
    
    
    3,081,486
    
    
    
    41,912
    
    
    
    5.44
    %Stock in FHLB
    
    
    39,447
    
    
    
    593
    
    
    
    6.01
    %
    
    
    47,782
    
    
    
    697
    
    
    
    5.83
    %Total interest-earning assets
    
    
    5,520,020
    
    
    
    74,808
    
    
    
    5.42
    %
    
    
    5,413,351
    
    
    
    69,031
    
    
    
    5.10
    %Non-interest earning assets
    
    
    174,060
    
    
    
    
    
    
    
    
    
    
    
    149,168Total assets
    
    $
    5,694,080
    
    
    
    
    
    
    
    
    
    
    $
    5,562,519Interest-bearing Liabilities:Savings
    
    $
    314,195
    
    
    
    1,815
    
    
    
    2.31
    %
    
    $
    223,182
    
    
    
    526
    
    
    
    0.94
    %Interest-bearing checking
    
    
    353,947
    
    
    
    2,448
    
    
    
    2.77
    %
    
    
    307,730
    
    
    
    1,845
    
    
    
    2.40
    %Money market accounts
    
    
    187,534
    
    
    
    1,239
    
    
    
    2.64
    %
    
    
    207,345
    
    
    
    873
    
    
    
    1.68
    %Certificates of deposit
    
    
    2,793,867
    
    
    
    33,800
    
    
    
    4.84
    %
    
    
    2,555,204
    
    
    
    27,506
    
    
    
    4.31
    %Borrowed funds
    
    
    1,118,723
    
    
    
    14,103
    
    
    
    5.04
    %
    
    
    1,282,547
    
    
    
    15,814
    
    
    
    4.93
    %Total interest-bearing liabilities
    
    
    4,768,266
    
    
    
    53,405
    
    
    
    4.48
    %
    
    
    4,576,008
    
    
    
    46,564
    
    
    
    4.07
    %Non-interest bearing liabilities
    
    
    99,883
    
    
    
    
    
    
    
    
    
    
    
    83,243Total liabilities
    
    
    4,868,149
    
    
    
    
    
    
    
    
    
    
    
    4,659,251Stockholders equity
    
    
    825,931
    
    
    
    
    
    
    
    
    
    
    
    903,268Total liabilities and
stockholders equity
    
    $
    5,694,080
    
    
    
    
    
    
    
    
    
    
    $
    5,562,519Net interest income
    
    
    
    
    
    $
    21,403
    
    
    
    
    
    
    
    
    
    
    $
    22,467Net interest rate spread(2)
    
    
    
    
    
    
    
    
    
    
    0.94
    %
    
    
    
    
    
    
    
    
    
    
    1.03
    %Net interest earning assets(3)
    
    $
    751,754
    
    
    
    
    
    
    
    
    
    
    $
    837,343Net interest margin(4)
    
    
    
    
    
    
    
    
    
    
    1.55
    %
    
    
    
    
    
    
    
    
    
    
    1.66
    %Ratio of interest-earning assets to total interest-
bearing liabilities
    
    
    1.16X
    
    
    
    
    
    
    
    
    
    
    
    1.18X
 
 (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. 14




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##### Table of Contents



Comparison of Operating Results for the Three Months Ended September 30, 2007 and 2006
 Net Income .
 Net Interest Income .
 Interest and Dividend Income .
   Interest Expense.
  15




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##### Table of Contents



Provision for Loan Losses. Comparison of Financial Condition at
September 30, 2007 and June 30, 2007.
 Other Income.
 Operating Expenses .
 Income Taxes.
 Liquidity and Capital Resources
  16




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##### Table of Contents



As of September 30, 2007Actual
    
    RequiredAmount
    
    Ratio
    
    Amount
    
    Ratio(Dollars in thousands)Total capital (to risk-weighted assets)
    
    $
    699,234
    
    
    
    23.8
    %
    
    $
    234,752
    
    
    
    8.0
    %Tier I capital (to risk-weighted assets)
    
    
    692,122
    
    
    
    23.6
    
    
    
    117,376
    
    
    
    4.0Tier I capital (to average assets)
    
    
    692,122
    
    
    
    12.2
    
    
    
    227,617
    
    
    
    4.0
 Critical Accounting Policies
  17




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##### Table of Contents



Allowance for Loan Losses.
     18




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##### Table of Contents



Deferred Income Taxes.
 19




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##### Table of Contents



Asset Impairment Judgments.
  Stock-Based Compensation.
   
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Qualitative Analysis
 20




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21




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##### Table of Contents



Quantitative Analysis
 Net Interest Income (3)Change in
    
    Net Portfolio Value (1),(2)
    
    
    
    
    
    Increase (Decrease) in EstimatedInterest Rates
    
    
    
    
    
    Estimated Increase (Decrease)
    
    Estimated Net
    
    Net Interest Income(basis points)
    
    Estimated NPV
    
    Amount
    
    Percent
    
    Interest Income
    
    Amount
    
    Percent(Dollars in thousands)+200bp
    
    
    446,551
    
    
    
    (279,872
    )
    
    
    (38.5
    )%
    
    
    83,597
    
    
    
    (12,116
    )
    
    
    (12.7
    )%0bp
    
    
    726,423
    
    
    
    
    
    
    
    
    
    
    
    95,713
    
    
    
    
    
    
    
    -200bp
    
    
    820,156
    
    
    
    93,733
    
    
    
    12.9
    %
    
    
    109,419
    
    
    
    13,706
    
    
    
    14.3
    %
 
 (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   22




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##### Table of Contents



Item 4. Controls and Procedures
   
 Part II  Other Information
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  23




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##### Table of Contents



Total Number of
    
    Maximum NumberShares Purchased as
    
    of Shares that MayTotal Number of
    
    
    
    
    
    Part of Publicly
    
    Yet Be PurchasedShares
    
    Average price
    
    Announced Plans or
    
    Under the Plans orPeriod
    
    Purchased (1)
    
    Paid per Share
    
    Programs
    
    ProgramsJuly 1, 2007 through July 31, 2007
    
    
    583,000
    
    
    $
    13.01
    
    
    
    583,000
    
    
    
    3,046,726August 1, 2007 through August 31, 2007
    
    
    618,700
    
    
    
    12.82
    
    
    
    618,700
    
    
    
    2,428,026September 1, 2007 through September
30, 2007
    
    
    193,500
    
    
    
    14.20
    
    
    
    193,500
    
    
    
    2,234,526Total
    
    
    1,395,200
    
    
    $
    13.09
    
    
    
    1,395,200
 
 (1)
    
    On April 26, 2007, the Company announced its second Share Repurchase Program, which authorized the purchase of an additonal
10% of its publicly-held outstanding shares of common stock, or 4,785,831 shares. This stock repurchase program commenced upon
completion of the first program on May 10, 2007. This program has no expiration date and has 2,234,526 shares yet to be purchased
as of September 30, 2007. 
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 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 *
 24




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##### Table of Contents



10.3
    
    Investors Savings Bank Director Retirement Plan*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) 25




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##### Table of Contents



SIGNATURES
   Investors Bancorp, Inc.Dated: November 9, 2007
    /s/ Robert M. CashillRobert M. CashillPresident and Chief Executive
Officer
(Principal Executive Officer)Dated: November 9, 2007
    /s/ Domenick A. CamaDomenick A. CamaExecutive Vice President and Chief
Financial Officer
(Principal Financial and Accounting Officer) 26