##### 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: March 31, 2010
 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
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ
 o o




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##### 



Investors Bancorp, Inc.
FORM 10-Q
 Index
 PagePart I. Financial InformationItem 1. Financial StatementsConsolidated Balance Sheets as of March 31, 2010
(unaudited) and December 31, 2009
    
    
    2Consolidated Statements of Operations for the Three
Months Ended March 31, 2010 and 2009 (unaudited)
    
    
    3Consolidated Statements of Stockholders Equity for
the Three Months Ended March 31, 2010 and 2009 (unaudited)
    
    
    4Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 2010 and 2009 (unaudited)
    
    
    5Notes to Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    22Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    37Item 4. Controls and Procedures
    
    
    40Part II. Other InformationItem 1. Legal Proceedings
    
    
    40Item 1A. Risk Factors
    
    
    40Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    40Item 3. Defaults upon Senior Securities
    
    
    41Item 4. [Reserved]
    
    
    41Item 5. Other Information
    
    
    41Item 6. Exhibits
    
    
    41Signature PageEX-31.1EX-31.2EX-32
  1




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##### Table of Contents



INVESTORS BANCORP, INC. AND SUBSIDIARY
 
 
 March 31,
    
    
    December 31,2010
    
    
    2009(In thousands)AssetsCash and cash equivalents
    
    $
    284,540
    
    
    
    73,606Securities available-for-sale, at estimated fair value
    
    
    522,346
    
    
    
    471,243Securities held-to-maturity, net (estimated fair value of
$696,512 and $753,405 at March 31, 2010
and December 31, 2009, respectively)
    
    
    658,706
    
    
    
    717,441Loans receivable, net
    
    
    6,800,429
    
    
    
    6,615,459Loans held-for-sale
    
    
    22,616
    
    
    
    27,043Stock in the Federal Home Loan Bank
    
    
    74,077
    
    
    
    66,202Accrued interest receivable
    
    
    37,594
    
    
    
    36,942Office properties and equipment, net
    
    
    50,746
    
    
    
    49,384Net deferred tax asset
    
    
    117,736
    
    
    
    117,143Bank owned life insurance
    
    
    115,063
    
    
    
    114,542Intangible assets
    
    
    31,400
    
    
    
    31,668Other assets
    
    
    33,512
    
    
    
    37,143Total assets
    
    $
    8,748,765
    
    
    
    8,357,816Liabilities and Stockholders EquityLiabilities:Deposits
    
    $
    6,012,964
    
    
    
    5,840,643Borrowed funds
    
    
    1,775,535
    
    
    
    1,600,542Advance payments by borrowers for taxes and insurance
    
    
    33,494
    
    
    
    29,675Other liabilities
    
    
    58,543
    
    
    
    36,743Total liabilities
    
    
    7,880,536
    
    
    
    7,507,603Stockholders 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; 114,893,587 and 114,448,888 outstanding
at March 31, 2010 and December 31, 2009, respectively
    
    
    532
    
    
    
    532Additional paid-in capital
    
    
    526,275
    
    
    
    530,133Retained earnings
    
    
    434,560
    
    
    
    422,211Treasury stock, at cost; 3,126,693 and 3,571,392 shares at
March 31, 2010 and December 31, 2009
    
    
    (38,183
    )
    
    
    (44,810
    )Unallocated common stock held by the employee stock
ownership plan
    
    
    (35,096
    )
    
    
    (35,451
    )Accumulated other comprehensive loss
    
    
    (19,859
    )
    
    
    (22,402
    )Total stockholders equity
    
    
    868,229
    
    
    
    850,213Total liabilities and stockholders equity
    
    $
    8,748,765
    
    
    
    8,357,816
  2




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INVESTORS BANCORP, INC. AND SUBSIDIARY
 
   For the Three MonthsEnded March 31,2010
    
    
    2009(Dollars in thousands, except per share data)Interest and dividend income:Loans receivable and loans held-for-sale
    
    $
    91,028
    
    
    
    76,723Securities:Government-sponsored enterprise obligations
    
    
    198
    
    
    
    304Mortgage-backed securities
    
    
    10,046
    
    
    
    11,946Equity securities available-for-sale
    
    
    
    
    
    
    1Municipal bonds and other debt
    
    
    795
    
    
    
    2,986Interest-bearing deposits
    
    
    73
    
    
    
    119Federal Home Loan Bank stock
    
    
    928
    
    
    
    670Total interest and dividend income
    
    
    103,068
    
    
    
    92,749Interest expense:Deposits
    
    
    23,760
    
    
    
    33,900Secured borrowings
    
    
    17,378
    
    
    
    17,691Total interest expense
    
    
    41,138
    
    
    
    51,591Net interest income
    
    
    61,930
    
    
    
    41,158Provision for loan losses
    
    
    13,050
    
    
    
    8,000Net interest income after provision
for loan losses
    
    
    48,880
    
    
    
    33,158Non-interest incomeFees and service charges
    
    
    1,590
    
    
    
    906Income on bank owned life insurance
    
    
    521
    
    
    
    256Gain on sales of loans, net
    
    
    1,747
    
    
    
    2,163(Loss) gain on securities transactions
    
    
    (48
    )
    
    
    2Other income
    
    
    123
    
    
    
    90Total non-interest income
    
    
    3,933
    
    
    
    3,417Non-interest expenseCompensation and fringe benefits
    
    
    17,136
    
    
    
    15,670Advertising and promotional expense
    
    
    872
    
    
    
    640Office occupancy and equipment expense
    
    
    4,356
    
    
    
    2,998Federal insurance premiums
    
    
    3,225
    
    
    
    1,800Stationery, printing, supplies and telephone
    
    
    635
    
    
    
    488Professional fees
    
    
    1,082
    
    
    
    599Data processing service fees
    
    
    1,431
    
    
    
    1,113Other operating expenses
    
    
    1,689
    
    
    
    1,147Total non-interest expenses
    
    
    30,426
    
    
    
    24,455Income before income tax expense
    
    
    22,387
    
    
    
    12,120Income tax expense
    
    
    9,077
    
    
    
    5,042Net income
    
    $
    13,310
    
    
    
    7,078Basic and diluted earnings per share
    
    $
    0.12
    
    
    
    0.07Weighted average shares outstandingBasic
    
    
    110,146,888
    
    
    
    104,192,971Diluted
    
    
    110,201,851
    
    
    
    104,228,891
  3




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##### Table of Contents



INVESTORS BANCORP, INC.
 
    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 December 31, 2008
    
    $
    532
    
    
    
    518,457
    
    
    
    408,534
    
    
    
    (128,121
    )
    
    
    (36,869
    )
    
    
    (8,734
    )
    
    
    753,799Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    7,078
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,078Change in funded status of retirement
obligations, net of tax expense of $39
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58
    
    
    
    58Unrealized gain on securities available-
for-sale, net of tax expense of $1,380
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,900
    
    
    
    1,900Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,036Compensation cost for stock
options and restricted stock
    
    
    
    
    
    
    3,684
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,684ESOP shares allocated or committed to be released
    
    
    
    
    
    
    (15
    )
    
    
    
    
    
    
    
    
    
    
    355
    
    
    
    
    
    
    
    340Balance at March 31, 2009
    
    $
    532
    
    
    
    522,126
    
    
    
    415,612
    
    
    
    (128,121
    )
    
    
    (36,514
    )
    
    
    (6,776
    )
    
    
    766,859Balance at December 31, 2009
    
    $
    532
    
    
    
    530,133
    
    
    
    422,211
    
    
    
    (44,810
    )
    
    
    (35,451
    )
    
    
    (22,402
    )
    
    
    850,213Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    13,310
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,310Change in funded status of retirement
obligations, net of tax expense of $36
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53
    
    
    
    53Unrealized gain on securities available-
for-sale, net of tax expense of $1,138
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,910
    
    
    
    1,910Other-than-temporary impairment accretion
on debt securities, net of tax
expense of $401
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    580
    
    
    
    580Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,853Purchase of treasury stock (50,500 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (608
    )
    
    
    
    
    
    
    
    
    
    
    (608
    )Treasury stock allocated to
restricted stock plan
    
    
    
    
    
    
    (6,272
    )
    
    
    (961
    )
    
    
    7,233
    
    
    
    
    
    
    
    
    
    
    
    Compensation cost for stock
options and restricted stock
    
    
    
    
    
    
    2,335
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,335ESOP shares allocated or committed to be released
    
    
    
    
    
    
    79
    
    
    
    
    
    
    
    2
    
    
    
    355
    
    
    
    
    
    
    
    436Balance at March 31, 2010
    
    $
    532
    
    
    
    526,275
    
    
    
    434,560
    
    
    
    (38,183
    )
    
    
    (35,096
    )
    
    
    (19,859
    )
    
    
    868,229
  4




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INVESTORS BANCORP, INC. AND SUBSIDIARY
 
   For the Three Months EndedMarch 31,2010
    
    
    2009(In thousands)Cash flows
from operating activities:Net income
    
    $
    13,310
    
    
    
    7,078Adjustments to reconcile net income to net cash provided by operating activitiesESOP and stock-based compensation expense
    
    
    2,769
    
    
    
    4,024Amortization of premiums and accretion of discounts on securities, net
    
    
    1,903
    
    
    
    (1,153
    )Amortization of premium and accretion of fees and costs on loans, net
    
    
    1,489
    
    
    
    2,506Amortization of intangible assets
    
    
    183
    
    
    
    Provision for loan losses
    
    
    13,050
    
    
    
    8,000Depreciation and amortization of office properties and equipment
    
    
    1,016
    
    
    
    624Loss (gain) on securities transactions
    
    
    48
    
    
    
    (2
    )Mortgage loans originated for sale
    
    
    (118,700
    )
    
    
    (233,414
    )Proceeds from mortgage loan sales
    
    
    124,323
    
    
    
    215,292Gain on sales of loans, net
    
    
    (1,196
    )
    
    
    (2,163
    )Income on bank owned life insurance contract
    
    
    (521
    )
    
    
    (255
    )(Increase) decrease in accrued interest
    
    
    (652
    )
    
    
    396Deferred tax benefit
    
    
    (2,169
    )
    
    
    (928
    )Decrease (increase) in other assets
    
    
    3,717
    
    
    
    (3,122
    )Increase in other liabilities
    
    
    21,890
    
    
    
    8,622Total adjustments
    
    
    47,150
    
    
    
    (1,573
    )Net cash provided by operating activities
    
    
    60,460
    
    
    
    5,505Cash flows from investing activities:Purchases of loans receivable
    
    
    (245,869
    )
    
    
    (151,725
    )Net repayments of loans receivable
    
    
    43,927
    
    
    
    198,726Mortgage-backed securities available for sale received in like-kind exchange
    
    
    
    
    
    
    3,911Proceeds from sale of non performing loan
    
    
    2,984
    
    
    
    Gain on sale of loan
    
    
    (551
    )
    
    
    Purchases of mortgage-backed securities available-for-sale
    
    
    (98,944
    )
    
    
    Proceeds from paydowns/maturities on mortgage-backed
securities held-to-maturity
    
    
    59,611
    
    
    
    53,643Proceeds from calls/maturities on debt securities held-to-maturity
    
    
    (244
    )
    
    
    31Proceeds from paydowns/maturities on mortgage-backed
securities available-for-sale
    
    
    34,288
    
    
    
    13,131Proceeds from maturities of US Government and agency obligations available-for-sale
    
    
    15,000
    
    
    
    Redemption
of equity securities available-for-sale
    
    
    
    
    
    
    (3,911
    )Proceeds from redemptions of Federal Home Loan Bank stock
    
    
    5,940
    
    
    
    20,184Purchases of Federal Home Loan Bank stock
    
    
    (13,815
    )
    
    
    (3,173
    )Purchases of office properties and equipment
    
    
    (2,378
    )
    
    
    (2,008
    )Net cash (used in) provided by investing
activities
    
    
    (200,051
    )
    
    
    128,809Cash flows from financing activities:Net increase in deposits
    
    
    172,321
    
    
    
    537,540Repayments of funds borrowed under other repurchase agreements
    
    
    (75,000
    )
    
    
    (25,000
    )Net increase (decrease) in other borrowings
    
    
    249,993
    
    
    
    (353,007
    )Net increase in advance payments by borrowers for taxes and insurance
    
    
    3,819
    
    
    
    1,930Purchase of treasury stock
    
    
    (608
    )
    
    
    Net cash provided by financing activities
    
    
    350,525
    
    
    
    161,463Net increase in cash and cash equivalents
    
    
    210,934
    
    
    
    295,777Cash and cash equivalents at beginning of the period
    
    
    73,606
    
    
    
    26,692Cash and cash equivalents at end of the period
    
    $
    284,540
    
    
    
    322,469Supplemental cash flow information:Cash paid during the year for:Interest
    
    $
    41,136
    
    
    
    52,621Income taxes
    
    
    2,600
    
    
    
    1,600
  5




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INVESTORS BANCORP, INC. AND SUBSIDIARY
 
  1. Basis of Presentation
    2. Earnings Per Share
  For the Three Months Ended March 31,2010
    
    
    2009Per Share
    
    
    
    
    
    
    
    
    
    Per ShareIncome
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount(Dollars in thousands, except per share data)Net Income
    
    $
    13,310
    
    
    
    
    
    
    
    
    
    
    $
    7,078Basic earnings per share:Income available to common
stockholders
    
    $
    13,310
    
    
    
    110,146,888
    
    
    $
    0.12
    
    
    $
    7,078
    
    
    
    104,192,971
    
    
    $
    0.07Effect of dilutive common stock
equivalents
    
    
    
    
    
    
    54,963
    
    
    
    
    
    
    
    
    
    
    
    35,920Diluted earnings per share:Income available to common
stockholders
    
    $
    13,310
    
    
    
    110,201,851
    
    
    $
    0.12
    
    
    $
    7,078
    
    
    
    104,228,891
    
    
    $
    0.07
  6




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##### Table of Contents



3. Securities
  March 31, 2010Gross
    
    
    GrossAmortized
    
    
    unrealized
    
    
    unrealized
    
    
    Estimatedcost
    
    
    gains
    
    
    losses
    
    
    fair value(In thousands)Available-for-sale:Equity securities
    
    $
    1,825
    
    
    
    483
    
    
    
    
    
    
    
    2,308Debt securities:Government-sponsored enterprises
    
    
    10,001
    
    
    
    2
    
    
    
    
    
    
    
    10,003Mortgage-backed securities:Federal Home Loan Mortgage
Corporation
    
    
    209,907
    
    
    
    3,757
    
    
    
    526
    
    
    
    213,138Federal National Mortgage
Association
    
    
    223,893
    
    
    
    2,891
    
    
    
    308
    
    
    
    226,476Government National Mortgage
Association
    
    
    10,238
    
    
    
    109
    
    
    
    
    
    
    
    10,347Non-agency securities
    
    
    62,384
    
    
    
    778
    
    
    
    3,088
    
    
    
    60,074506,422
    
    
    
    7,535
    
    
    
    3,922
    
    
    
    510,035Total securities available-for-sale
    
    
    518,248
    
    
    
    8,020
    
    
    
    3,922
    
    
    
    522,346Held-to-maturity:Debt securities:Government-sponsored enterprises
    
    
    15,219
    
    
    
    642
    
    
    
    
    
    
    
    15,861Municipal bonds
    
    
    10,258
    
    
    
    144
    
    
    
    3
    
    
    
    10,399Corporate and other debt securities
    
    
    22,383
    
    
    
    18,427
    
    
    
    2,304
    
    
    
    38,50647,860
    
    
    
    19,213
    
    
    
    2,307
    
    
    
    64,766Mortgage-backed securities:Federal Home Loan
Mortgage Corporation
    
    
    320,695
    
    
    
    10,837
    
    
    
    77
    
    
    
    331,455Federal National Mortgage
Association
    
    
    220,437
    
    
    
    10,445
    
    
    
    4
    
    
    
    230,878Government National
Mortgage Association
    
    
    3,716
    
    
    
    269
    
    
    
    
    
    
    
    3,985Federal housing authorities
    
    
    2,495
    
    
    
    230
    
    
    
    
    
    
    
    2,725Non-agency securities
    
    
    63,503
    
    
    
    140
    
    
    
    940
    
    
    
    62,703610,846
    
    
    
    21,921
    
    
    
    1,021
    
    
    
    631,746Total securities held-to-maturity
    
    
    658,706
    
    
    
    41,134
    
    
    
    3,328
    
    
    
    696,512Total securities
    
    $
    1,176,954
    
    
    
    49,154
    
    
    
    7,250
    
    
    
    1,218,858
 7




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##### Table of Contents



December 31, 2009Gross
    
    
    GrossAmortized
    
    
    unrealized
    
    
    unrealized
    
    
    Estimatedcost
    
    
    gains
    
    
    losses
    
    
    fair value(In thousands)Available-for-sale:Equity securities
    
    $
    1,832
    
    
    
    221
    
    
    
    
    
    
    
    2,053Debt securities:Government-sponsored enterprises
    
    
    25,013
    
    
    
    26
    
    
    
    
    
    
    
    25,039Mortgage-backed securities:Federal Home Loan Mortgage
Corporation
    
    
    206,877
    
    
    
    2,725
    
    
    
    80
    
    
    
    209,522Federal National Mortgage
Association
    
    
    158,678
    
    
    
    2,197
    
    
    
    448
    
    
    
    160,427Government National Mortgage
Association
    
    
    10,504
    
    
    
    25
    
    
    
    79
    
    
    
    10,450Non-agency securities
    
    
    67,290
    
    
    
    284
    
    
    
    3,822
    
    
    
    63,752443,349
    
    
    
    5,231
    
    
    
    4,429
    
    
    
    444,151Total securities available-for-sale
    
    
    470,194
    
    
    
    5,478
    
    
    
    4,429
    
    
    
    471,243Held-to-maturity:Debt securities:Government-sponsored enterprises
    
    
    15,226
    
    
    
    731
    
    
    
    1
    
    
    
    15,956Municipal bonds
    
    
    10,259
    
    
    
    196
    
    
    
    4
    
    
    
    10,451Corporate and other debt securities
    
    
    21,411
    
    
    
    18,015
    
    
    
    1,617
    
    
    
    37,80946,896
    
    
    
    18,942
    
    
    
    1,622
    
    
    
    64,216Mortgage-backed securities:Federal Home Loan
Mortgage Corporation
    
    
    358,998
    
    
    
    10,565
    
    
    
    159
    
    
    
    369,404Federal National Mortgage
Association
    
    
    236,109
    
    
    
    9,268
    
    
    
    24
    
    
    
    245,353Government National
Mortgage Association
    
    
    3,880
    
    
    
    277
    
    
    
    
    
    
    
    4,157Federal housing authorities
    
    
    2,549
    
    
    
    231
    
    
    
    
    
    
    
    2,780Non-agency securities
    
    
    69,009
    
    
    
    47
    
    
    
    1,561
    
    
    
    67,495670,545
    
    
    
    20,388
    
    
    
    1,744
    
    
    
    689,189Total securities held-to-maturity
    
    
    717,441
    
    
    
    39,330
    
    
    
    3,366
    
    
    
    753,405Total securities
    
    $
    1,187,635
    
    
    
    44,808
    
    
    
    7,795
    
    
    
    1,224,648
 8




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##### Table of Contents



March 31, 2010Less than 12 months
    
    
    12 months or more
    
    
    TotalEstimated
    
    
    Unrealized
    
    
    Estimated
    
    
    Unrealized
    
    
    Estimated
    
    
    Unrealizedfair value
    
    
    losses
    
    
    fair value
    
    
    losses
    
    
    fair value
    
    
    losses(In thousands)Available-for-sale:Mortgage-backed securities:Federal Home Loan Mortgage
Association
    
    $
    22,168
    
    
    
    526
    
    
    
    
    
    
    
    
    
    
    
    22,168
    
    
    
    526Federal National Mortgage
Association
    
    
    56,610
    
    
    
    308
    
    
    
    
    
    
    
    
    
    
    
    56,610
    
    
    
    308Non-agency securities
    
    
    109
    
    
    
    99
    
    
    
    25,898
    
    
    
    2,989
    
    
    
    26,007
    
    
    
    3,08878,887
    
    
    
    933
    
    
    
    25,898
    
    
    
    2,989
    
    
    
    104,785
    
    
    
    3,922Total available-for-sale:
    
    
    78,887
    
    
    
    933
    
    
    
    25,898
    
    
    
    2,989
    
    
    
    104,785
    
    
    
    3,922Held-to-maturity:Debt securities:Government-sponsored enterprises
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Municipal bonds
    
    
    
    
    
    
    
    
    
    
    1,035
    
    
    
    3
    
    
    
    1,035
    
    
    
    3Corporate and other debt securities
    
    
    803
    
    
    
    2,304
    
    
    
    
    
    
    
    
    
    
    
    803
    
    
    
    2,304803
    
    
    
    2,304
    
    
    
    1,035
    
    
    
    3
    
    
    
    1,838
    
    
    
    2,307Mortgage-backed securities:Federal Home Loan
Mortgage Corporation
    
    
    13,549
    
    
    
    77
    
    
    
    
    
    
    
    
    
    
    
    13,549
    
    
    
    77Federal National Mortgage
Association
    
    
    4,526
    
    
    
    2
    
    
    
    1,096
    
    
    
    2
    
    
    
    5,622
    
    
    
    4Non-agency securities
    
    
    10,716
    
    
    
    106
    
    
    
    39,638
    
    
    
    834
    
    
    
    50,354
    
    
    
    94028,791
    
    
    
    185
    
    
    
    40,734
    
    
    
    836
    
    
    
    69,525
    
    
    
    1,021Total held-to-maturity
    
    
    29,594
    
    
    
    2,489
    
    
    
    41,769
    
    
    
    839
    
    
    
    71,363
    
    
    
    3,328Total
    
    $
    108,481
    
    
    
    3,422
    
    
    
    67,667
    
    
    
    3,828
    
    
    
    176,148
    
    
    
    7,250
 9




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##### Table of Contents



December 31, 2009Less than 12 months
    
    
    12 months or more
    
    
    TotalEstimated
    
    
    Unrealized
    
    
    Estimated
    
    
    Unrealized
    
    
    Estimated
    
    
    Unrealizedfair value
    
    
    losses
    
    
    fair value
    
    
    losses
    
    
    fair value
    
    
    losses(In thousands)Available-for-sale:Mortgage-backed securities:Federal Home Loan Mortgage
Corporation
    
    $
    33,595
    
    
    
    80
    
    
    
    
    
    
    
    
    
    
    
    33,595
    
    
    
    80Federal National Mortgage
Association
    
    
    63,527
    
    
    
    446
    
    
    
    16
    
    
    
    2
    
    
    
    63,543
    
    
    
    448Government National Mortgage
Association
    
    
    10,168
    
    
    
    79
    
    
    
    
    
    
    
    
    
    
    
    10,168
    
    
    
    79Non-agency securities
    
    
    4,563
    
    
    
    370
    
    
    
    26,736
    
    
    
    3,452
    
    
    
    31,299
    
    
    
    3,822111,853
    
    
    
    975
    
    
    
    26,752
    
    
    
    3,454
    
    
    
    138,605
    
    
    
    4,429Total available-for-sale:
    
    
    111,853
    
    
    
    975
    
    
    
    26,752
    
    
    
    3,454
    
    
    
    138,605
    
    
    
    4,429Held-to-maturity:Debt securities:Government-sponsored enterprises
    
    
    
    
    
    
    
    
    
    
    225
    
    
    
    1
    
    
    
    225
    
    
    
    1Municipal bonds
    
    
    
    
    
    
    
    
    
    
    1,035
    
    
    
    4
    
    
    
    1,035
    
    
    
    4Corporate and other debt securities
    
    
    1,024
    
    
    
    1,617
    
    
    
    
    
    
    
    
    
    
    
    1,024
    
    
    
    1,6171,024
    
    
    
    1,617
    
    
    
    1,260
    
    
    
    5
    
    
    
    2,284
    
    
    
    1,622Mortgage-backed securities:Federal Home Loan
Mortgage Corporation
    
    
    5,860
    
    
    
    159
    
    
    
    
    
    
    
    
    
    
    
    5,860
    
    
    
    159Federal National Mortgage
Association
    
    
    2,699
    
    
    
    5
    
    
    
    5,392
    
    
    
    19
    
    
    
    8,091
    
    
    
    24Non-agency securities
    
    
    16,352
    
    
    
    257
    
    
    
    42,308
    
    
    
    1,304
    
    
    
    58,660
    
    
    
    1,56124,911
    
    
    
    421
    
    
    
    47,700
    
    
    
    1,323
    
    
    
    72,611
    
    
    
    1,744Total held-to-maturity:
    
    
    25,935
    
    
    
    2,038
    
    
    
    48,960
    
    
    
    1,328
    
    
    
    74,895
    
    
    
    3,366Total
    
    $
    137,788
    
    
    
    3,013
    
    
    
    75,712
    
    
    
    4,782
    
    
    
    213,500
    
    
    
    7,795
    10




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##### Table of Contents



11




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##### Table of Contents



Current
    
    
    Expected
    
    
    ExcessNumber of
    
    
    Deferrals and
    
    
    Deferrals and
    
    
    SubordinationUnrealized
    
    
    Issuers
    
    
    Defaults as a
    
    
    Defaults as %
    
    
    as a % of
    
    
    Moodys/(Dollars in 000s)
    
    
    
    
    
    
    
    
    
    
    
    Gains
    
    
    Currently
    
    
    % of Total
    
    
    of Remaining
    
    
    Performing
    
    
    Fitch CreditDescription
    
    Class
    
    Book Value
    
    
    Fair Value
    
    
    (Losses)
    
    
    Performing
    
    
    Collateral (1)
    
    
    Collateral (2)
    
    
    Collateral (3)
    
    
    RatingsAlesco PF II
    
    B1
    
    $
    158.6
    
    
    
    353.4
    
    
    
    194.8
    
    
    
    34
    
    
    
    23.6
    %
    
    
    13.1
    %
    
    
    0.0
    %
    
    Ca / CAlesco PF III
    
    B1
    
    
    325.5
    
    
    
    527.6
    
    
    
    202.1
    
    
    
    36
    
    
    
    25.5
    
    
    
    22.8
    
    
    
    0.0
    
    
    Ca / CAlesco PF III
    
    B2
    
    
    130.2
    
    
    
    211.0
    
    
    
    80.8
    
    
    
    36
    
    
    
    25.5
    
    
    
    22.8
    
    
    
    0.0
    
    
    Ca / CAlesco PF IV
    
    B1
    
    
    228.9
    
    
    
    232.4
    
    
    
    3.5
    
    
    
    47
    
    
    
    24.3
    
    
    
    21.8
    
    
    
    0.0
    
    
    Ca / CAlesco PF VI
    
    C2
    
    
    283.5
    
    
    
    495.5
    
    
    
    212.1
    
    
    
    47
    
    
    
    29.9
    
    
    
    19.2
    
    
    
    0.0
    
    
    Ca / CMM Comm III
    
    B
    
    
    1,541.5
    
    
    
    4,091.2
    
    
    
    2,549.7
    
    
    
    8
    
    
    
    20.2
    
    
    
    36.8
    
    
    
    12.8
    
    
    Baa3 / B /*MM Comm IX
    
    B1
    
    
    45.1
    
    
    
    86.6
    
    
    
    41.5
    
    
    
    20
    
    
    
    28.6
    
    
    
    32.5
    
    
    
    0.0
    
    
    Caa3 / CMMCaps XVII
    
    C1
    
    
    651.8
    
    
    
    1,870.0
    
    
    
    1,218.2
    
    
    
    44
    
    
    
    10.6
    
    
    
    16.8
    
    
    
    0.0
    
    
    Ca / CMMCaps XIX
    
    C
    
    
    397.5
    
    
    
    7.5
    
    
    
    (390.0
    )
    
    
    34
    
    
    
    30.9
    
    
    
    24.9
    
    
    
    0.0
    
    
    Ca / CTpref I
    
    B
    
    
    1,287.1
    
    
    
    2,891.2
    
    
    
    1,604.1
    
    
    
    15
    
    
    
    37.4
    
    
    
    18.0
    
    
    
    0.0
    
    
    Caa3 / CTpref II
    
    B
    
    
    2,138.8
    
    
    
    4,716.8
    
    
    
    2,578.0
    
    
    
    21
    
    
    
    26.9
    
    
    
    25.0
    
    
    
    0.0
    
    
    Caa3 / CUS Cap I
    
    B2
    
    
    478.4
    
    
    
    1,184.1
    
    
    
    705.7
    
    
    
    37
    
    
    
    11.4
    
    
    
    14.7
    
    
    
    0.0
    
    
    Caa1 / CUS Cap I
    
    B1
    
    
    1,413.4
    
    
    
    3,552.3
    
    
    
    2,138.9
    
    
    
    37
    
    
    
    11.4
    
    
    
    14.7
    
    
    
    0.0
    
    
    Caa1 / CUS Cap II
    
    B1
    
    
    675.8
    
    
    
    2,147.5
    
    
    
    1,471.7
    
    
    
    49
    
    
    
    11.7
    
    
    
    18.8
    
    
    
    0.0
    
    
    Ca / CUS Cap III
    
    B1
    
    
    861.7
    
    
    
    1,886.3
    
    
    
    1,024.6
    
    
    
    37
    
    
    
    17.1
    
    
    
    18.0
    
    
    
    0.0
    
    
    Ca / CUS Cap IV
    
    B1
    
    
    731.1
    
    
    
    143.0
    
    
    
    (588.1
    )
    
    
    48
    
    
    
    30.3
    
    
    
    22.5
    
    
    
    0.0
    
    
    Ca / DTrapeza XII
    
    C1
    
    
    684.2
    
    
    
    309.0
    
    
    
    (375.2
    )
    
    
    36
    
    
    
    23.6
    
    
    
    19.5
    
    
    
    0.0
    
    
    Ca / CTrapeza XIII
    
    C1
    
    
    616.1
    
    
    
    157.9
    
    
    
    (458.1
    )
    
    
    42
    
    
    
    21.4
    
    
    
    28.2
    
    
    
    0.0
    
    
    Ca / CPretsl IV
    
    Mezzanine
    
    
    106.5
    
    
    
    118.7
    
    
    
    12.2
    
    
    
    5
    
    
    
    27.1
    
    
    
    26.0
    
    
    
    19.0
    
    
    Ca / CCCPretsl V
    
    Mezzanine
    
    
    21.2
    
    
    
    40.4
    
    
    
    19.1
    
    
    
    2
    
    
    
    43.1
    
    
    
    43.8
    
    
    
    0.0
    
    
    Ba3 / CPretsl VII
    
    Mezzanine
    
    
    1,007.6
    
    
    
    1,515.6
    
    
    
    508
    
    
    
    8
    
    
    
    43.6
    
    
    
    52.3
    
    
    
    0.0
    
    
    Ca / CPretsl XV
    
    B1
    
    
    549.8
    
    
    
    928.6
    
    
    
    378.9
    
    
    
    60
    
    
    
    20.0
    
    
    
    20.9
    
    
    
    0.0
    
    
    Ca / CPretsl XVII
    
    C
    
    
    306.3
    
    
    
    384.8
    
    
    
    78.4
    
    
    
    46
    
    
    
    18.9
    
    
    
    18.7
    
    
    
    0.0
    
    
    Ca / CPretsl XVIII
    
    C
    
    
    626.9
    
    
    
    1,125.4
    
    
    
    498.5
    
    
    
    64
    
    
    
    18.9
    
    
    
    15.1
    
    
    
    0.0
    
    
    Ca / CPretsl XIX
    
    C
    
    
    214.8
    
    
    
    342.1
    
    
    
    127.3
    
    
    
    59
    
    
    
    19.3
    
    
    
    16.4
    
    
    
    0.0
    
    
    Ca / CPretsl XX
    
    C
    
    
    151.0
    
    
    
    42.1
    
    
    
    (108.9
    )
    
    
    50
    
    
    
    22.8
    
    
    
    20.1
    
    
    
    0.0
    
    
    Ca / CPretsl XXI
    
    C1
    
    
    170.1
    
    
    
    229.8
    
    
    
    59.7
    
    
    
    58
    
    
    
    23.8
    
    
    
    20.9
    
    
    
    0.0
    
    
    Ca / CPretsl XXIII
    
    A-FP
    
    
    1,744.1
    
    
    
    2,450.5
    
    
    
    706.4
    
    
    
    104
    
    
    
    18.0
    
    
    
    21.9
    
    
    
    18.3
    
    
    B1 / BB /*Pretsl XXIV
    
    C1
    
    
    398.4
    
    
    
    59.2
    
    
    
    (339.3
    )
    
    
    69
    
    
    
    23.8
    
    
    
    25.0
    
    
    
    0.0
    
    
    Ca / CPretsl XXV
    
    C1
    
    
    128.8
    
    
    
    83.8
    
    
    
    (45.0
    )
    
    
    56
    
    
    
    25.0
    
    
    
    21.4
    
    
    
    0.0
    
    
    Ca / CPretsl XXVI
    
    C1
    
    
    104.0
    
    
    
    137.2
    
    
    
    33.1
    
    
    
    58
    
    
    
    22.1
    
    
    
    22.9
    
    
    
    0.0
    
    
    C / C$
    18,178.9
    
    
    $
    32,321.8
    
    
    $
    14,142.9
 
 (1)
    
    At March 31, 2010, assumed recoveries for current deferrals and defaulted issuers ranged from 0%
to 10.0%.(2)
    
    At March 31, 2010, assumed recoveries for expected deferrals and defaulted issuers ranged from 10.0% to
14.7%.(3)
    
    Excess subordination represents the amount of remaining performing collateral that is in excess
of the amount needed to payoff a specified class of bonds and all classes senior to the specified
class. Excess subordination reduces an investors potential risk of loss on their investment as
excess subordination absorbs principal and interest shortfalls in the event underlying issuers are
not able to make their contractual payments.*
    
    Ratings watch negative 12




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##### Table of Contents



March 31, 2010(In thousands)Balance, beginning of period
    
    $
    122,410Additions:Initial credit impairments
    
    
    Subsequent credit impairments
    
    
    Reductions:Balance, end of period
    
    $
    122,410
      13




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##### Table of Contents



March 31, 2010Amortized
    
    
    Estimatedcost
    
    
    fair value(In thousands)Due in one year or less
    
    $
    10,001
    
    
    
    10,003Due after one year through five years
    
    
    20,108
    
    
    
    20,791Due after five years through ten years
    
    
    239
    
    
    
    239Due after ten years
    
    
    27,513
    
    
    
    43,736Total
    
    $
    57,861
    
    
    
    74,769
 4. Loans Receivable, Net
  March 31,
    
    
    December 31,2010
    
    
    2009(In thousands)Residential mortgage loans
    
    $
    4,847,200
    
    
    
    4,773,556Multi-family loans
    
    
    650,466
    
    
    
    612,743Commercial real estate loans
    
    
    809,242
    
    
    
    730,012Construction loans
    
    
    340,487
    
    
    
    334,480Commercial and industrial loans
    
    
    22,893
    
    
    
    23,159Consumer and other loans
    
    
    174,000
    
    
    
    178,177Total loans
    
    
    6,844,288
    
    
    
    6,652,127Premiums on purchased loans
    
    
    24,478
    
    
    
    22,958Deferred loan fees, net
    
    
    (5,394
    )
    
    
    (4,574
    )Allowance for loan losses
    
    
    (62,943
    )
    
    
    (55,052
    )Net loans
    
    $
    6,800,429
    
    
    
    6,615,459
  March 31, 2010(In thousands)Balance at December 31, 2009
    
    $
    55,052Charge offs:Residential mortgage loans
    
    
    (1,446
    )Multi-family loans
    
    
    (454
    )Construction
    
    
    (3,250
    )Consumer and other loans
    
    
    (10
    )Loan charged off
    
    
    (5,160
    )Recoveries:
    
    
    1Net charge-offs
    
    
    (5,159
    )Provision for loan losses
    
    
    13,050Balance at March 31, 2010
    
    $
    62,943
 14




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##### Table of Contents



5. Deposits
  March 31,
    
    
    December 31,2010
    
    
    2010(In thousands)Savings accounts
    
    $
    884,543
    
    
    
    877,421Checking accounts
    
    
    1,104,051
    
    
    
    927,675Money market accounts
    
    
    682,407
    
    
    
    742,618Total core deposits
    
    
    2,671,001
    
    
    
    2,547,714Certificates of deposit
    
    
    3,341,963
    
    
    
    3,292,929$
    6,012,964
    
    
    
    5,840,643
 6. Equity Incentive Plan
    7. Net Periodic Benefit Plans Expense
  15




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##### Table of Contents



Three months ended March 31,SERP and Directors Plan2010
    
    
    2009(In thousands)Service cost
    
    $
    179
    
    
    
    136Interest cost
    
    
    221
    
    
    
    263Amortization of:Prior service cost
    
    
    25
    
    
    
    24Net loss
    
    
    14
    
    
    
    35Total net periodic
benefit expense
    
    $
    439
    
    
    
    458
    8. Fair Value Measurements
   16




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##### 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
   17




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##### Table of Contents



Carrying Value at March 31, 2010Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3(In thousands)Securities available for sale:Mortgage-backed securities
    
    $
    510,035
    
    
    $
    
    
    
    $
    510,035
    
    
    $
    Government-sponsored enterprises
    
    
    10,003
    
    
    
    
    
    
    
    10,003
    
    
    
    Equity securities
    
    
    2,308
    
    
    
    
    
    
    
    2,308
    
    
    
    $
    522,346
    
    
    $
    
    
    
    $
    522,346
    
    
    $
    
  Securities held-to-maturity
  Mortgage Servicing Rights, net
  Loans Receivable
  18




---



##### Table of Contents



Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3(In thousands)Impaired loans
    
    $
    33,906
    
    
    $
    
    
    
    $
    
    
    
    $
    33,906
 9. Fair Value of Financial Instruments
  Cash and Cash Equivalents
  Securities
  FHLB Stock
  Loans
   19




---



##### Table of Contents



Deposit Liabilities
  Borrowings
  Commitments to Extend Credit
   March 31, 2010
    
    
    December 31, 2009Carrying
    
    
    
    
    
    
    Carryingamount
    
    
    Fair value
    
    
    amount
    
    
    Fair value(In thousands)Financial assets:Cash and cash equivalents
    
    $
    284,540
    
    
    $
    284,540
    
    
    $
    73,606
    
    
    $
    73,606Securities available-for-sale
    
    
    522,346
    
    
    
    522,346
    
    
    
    471,243
    
    
    
    471,243Securities held-to-maturity
    
    
    658,706
    
    
    
    696,512
    
    
    
    717,441
    
    
    
    753,405Stock in FHLB
    
    
    74,077
    
    
    
    74,077
    
    
    
    66,202
    
    
    
    66,202Loans
    
    
    6,823,045
    
    
    
    7,029,032
    
    
    
    6,642,502
    
    
    
    6,821,767Financial liabilities:Deposits
    
    
    6,012,964
    
    
    
    6,053,461
    
    
    
    5,840,643
    
    
    
    5,881,083Borrowed funds
    
    
    1,775,375
    
    
    
    1,840,537
    
    
    
    1,600,542
    
    
    
    1,666,513
 Limitations
  20




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##### Table of Contents



10. Recent Accounting Pronouncements
     21




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##### Table of Contents



11. Subsequent Events
   12. Purchase and Assumption Agreement
  
 Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward Looking Statements
  22




---



##### Table of Contents



Critical Accounting Policies
  Allowance for Loan Losses.
   23




---



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24




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##### Table of Contents



Deferred Income Taxes. Income
Taxes
 Asset Impairment Judgments.
  25




---



##### Table of Contents



Goodwill Impairment.
 Valuation of Mortgage Servicing Rights (MSR).
 26




---



##### Table of Contents



Stock-Based Compensation.
   Executive Summary
   27




---



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28




---



##### Table of Contents



Comparison of Financial Condition at March 31, 2010 and December 31, 2009
 Total Assets .
 Net Loans.
   29




---



##### Table of Contents



March 31,
    
    
    December 31,
    
    
    September 30,
    
    
    June 30,2010
    
    
    2009
    
    
    2009
    
    
    2009# of
    
    
    
    
    
    
    # of
    
    
    
    
    
    
    # of
    
    
    
    
    
    
    # ofloans
    
    
    Amount
    
    
    loans
    
    
    Amount
    
    
    loans
    
    
    Amount
    
    
    loans
    
    
    Amount(Dollars in millions)Residential and consumer
    
    
    199
    
    
    $
    57.1
    
    
    
    185
    
    
    $
    51.2
    
    
    
    164
    
    
    $
    41.0
    
    
    
    112
    
    
    $
    30.0Multi-family
    
    
    2
    
    
    
    2.5
    
    
    
    4
    
    
    
    0.6
    
    
    
    4
    
    
    
    0.6
    
    
    
    4
    
    
    
    20.1Commercial
    
    
    9
    
    
    
    3.5
    
    
    
    10
    
    
    
    3.4
    
    
    
    9
    
    
    
    3.4
    
    
    
    8
    
    
    
    2.8Construction
    
    
    22
    
    
    
    61.6
    
    
    
    22
    
    
    
    65.0
    
    
    
    22
    
    
    
    70.5
    
    
    
    19
    
    
    
    68.8Total Non-Performing Loans
    
    
    232
    
    
    $
    124.7
    
    
    
    221
    
    
    $
    120.2
    
    
    
    199
    
    
    $
    115.5
    
    
    
    143
    
    
    $
    121.7Non-performing loans to total loans
    
    
    
    
    
    
    1.82
    %
    
    
    
    
    
    
    1.81
    %
    
    
    
    
    
    
    1.82
    %
    
    
    
    
    
    
    1.97
    %Allowance for loan loss as a
percent of non-performing
    
    
    
    
    
    
    50.47
    %
    
    
    
    
    
    
    45.80
    %
    
    
    
    
    
    
    46.35
    %
    
    
    
    
    
    
    38.30
    %Allowance for loan losses as a
percent of total loans
    
    
    
    
    
    
    0.92
    %
    
    
    
    
    
    
    0.83
    %
    
    
    
    
    
    
    0.84
    %
    
    
    
    
    
    
    0.76
    %
   30




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##### Table of Contents



March 31, 2010
    
    
    December 31, 2009Percent of Loans in
    
    
    
    
    
    
    Percent of Loans inAllowance for
    
    
    Each Category to
    
    
    Allowance for
    
    
    Each Category toLoan Losses
    
    
    Total Loans
    
    
    Loan Losses
    
    
    Total Loans(Dollars in thousands)End of period allocated to:Residential mortgage loans
    
    $
    16,657
    
    
    
    70.82
    %
    
    $
    13,741
    
    
    
    71.76
    %Multi-family
    
    
    3,537
    
    
    
    9.50
    %
    
    
    3,227
    
    
    
    9.21
    %Commercial
    
    
    11,451
    
    
    
    11.82
    %
    
    
    10,208
    
    
    
    10.97
    %Construction loans
    
    
    28,714
    
    
    
    4.97
    %
    
    
    25,194
    
    
    
    5.03
    %Commercial and industrial
    
    
    638
    
    
    
    0.35
    %
    
    
    558
    
    
    
    0.35
    %Consumer and other loans
    
    
    413
    
    
    
    2.54
    %
    
    
    510
    
    
    
    2.68
    %Unallocated
    
    
    1,533
    
    
    
    
    
    
    
    1,614
    
    
    
    Total allowance
    
    $
    62,943
    
    
    
    100.00
    %
    
    $
    55,052
    
    
    
    100.00
    %
   31




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##### Table of Contents



Securities.
 Stock in the Federal Home Loan Bank, Other Assets.
 Deposits.
 Borrowed Funds .
 Stockholders Equity .
 Average Balance Sheets for the Three Months ended March 31, 2010 and 2009
  32




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##### Table of Contents



For the three months ended March 31,2010
    
    
    2009Average
    
    
    
    
    
    
    
    
    
    
    AverageOutstanding
    
    
    Interest
    
    
    Average
    
    
    Outstanding
    
    
    Interest
    
    
    AverageBalance
    
    
    Earned/Paid
    
    
    Yield/Rate
    
    
    Balance
    
    
    Earned/Paid
    
    
    Yield/Rate(Dollars in thousands)Interest-earning assets:Interest-bearing deposits
    
    $
    159,194
    
    
    $
    73
    
    
    
    0.18
    %
    
    $
    205,083
    
    
    $
    119
    
    
    
    0.23
    %Securities available-for-sale(1)
    
    
    464,673
    
    
    
    3,203
    
    
    
    2.76
    %
    
    
    179,298
    
    
    
    2,083
    
    
    
    4.65
    %Securities held-to-maturity
    
    
    690,495
    
    
    
    7,836
    
    
    
    4.54
    %
    
    
    960,946
    
    
    
    13,154
    
    
    
    5.48
    %Net loans(2)
    
    
    6,715,435
    
    
    
    91,028
    
    
    
    5.42
    %
    
    
    5,631,836
    
    
    
    76,723
    
    
    
    5.45
    %Stock in FHLB
    
    
    74,254
    
    
    
    928
    
    
    
    5.00
    %
    
    
    73,062
    
    
    
    670
    
    
    
    3.67
    %Total interest-earning assets
    
    
    8,104,051
    
    
    
    103,068
    
    
    
    5.09
    %
    
    
    7,050,225
    
    
    
    92,749
    
    
    
    5.26
    %Non-interest earning assets
    
    
    386,967
    
    
    
    
    
    
    
    
    
    
    
    258,737Total assets
    
    $
    8,491,018
    
    
    
    
    
    
    
    
    
    
    $
    7,308,962Interest-bearing Liabilities:Savings
    
    $
    876,737
    
    
    $
    3,429
    
    
    
    1.56
    %
    
    $
    555,319
    
    
    $
    3,242
    
    
    
    2.34
    %Interest-bearing checking
    
    
    729,200
    
    
    
    1,672
    
    
    
    0.92
    %
    
    
    711,075
    
    
    
    4,082
    
    
    
    2.30
    %Money market accounts
    
    
    702,781
    
    
    
    1,962
    
    
    
    1.12
    %
    
    
    294,927
    
    
    
    1,558
    
    
    
    2.11
    %Certificates of deposit
    
    
    3,309,288
    
    
    
    16,697
    
    
    
    2.02
    %
    
    
    3,025,100
    
    
    
    25,018
    
    
    
    3.31
    %Borrowed funds
    
    
    1,781,260
    
    
    
    17,378
    
    
    
    3.90
    %
    
    
    1,836,931
    
    
    
    17,691
    
    
    
    3.85
    %Total interest-bearing liabilities
    
    
    7,399,266
    
    
    
    41,138
    
    
    
    2.22
    %
    
    
    6,423,352
    
    
    
    51,591
    
    
    
    3.21
    %Non-interest bearing liabilities
    
    
    237,332
    
    
    
    
    
    
    
    
    
    
    
    134,248Total liabilities
    
    
    7,636,598
    
    
    
    
    
    
    
    
    
    
    
    6,557,600Stockholders equity
    
    
    854,420
    
    
    
    
    
    
    
    
    
    
    
    751,362Total liabilities and
stockholders equity
    
    $
    8,491,018
    
    
    
    
    
    
    
    
    
    
    $
    7,308,962Net interest income
    
    
    
    
    
    $
    61,930
    
    
    
    
    
    
    
    
    
    
    $
    41,158Net interest rate spread(3)
    
    
    
    
    
    
    
    
    
    
    2.87
    %
    
    
    
    
    
    
    
    
    
    
    2.05
    %Net interest earning assets(4)
    
    $
    704,785
    
    
    
    
    
    
    
    
    
    
    $
    626,873Net interest margin(5)
    
    
    
    
    
    
    
    
    
    
    3.06
    %
    
    
    
    
    
    
    
    
    
    
    2.34
    %Ratio of interest-earning assets to total interest-
bearing liabilities
    
    
    1.10 X
    
    
    
    
    
    
    
    
    
    
    
    1.10 X
 
 (1)
    
    Securities available-for-sale are stated at amortized cost, adjusted for unamortized
purchased premiums and discounts.(2)
    
    Net loans include loans held-for-sale and non-performing loans.(3)
    
    Net interest rate spread represents the difference between the yield on average
interest-earning assets and the cost of average interest-bearing liabilities.(4)
    
    Net interest-earning assets represent total interest-earning assets less total
interest-bearing liabilities.(5)
    
    Net interest margin represents net interest income divided by average total interest-earning
assets. Comparison of Operating Results for the Three Months Ended March 31, 2010 and 2009
 Net Income .
 33




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##### Table of Contents



Net Interest Income .
 Interest and Dividend Income .
   Interest Expense.
  34




---



##### Table of Contents



Provision for Loan Losses. Comparison of Financial Condition at March 31, 2010 and December 31, 2009.
 Non-interest Income.
 Non-interest Expenses
 Income Taxes.
 Liquidity and Capital Resources
  35




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##### Table of Contents



As of March 31, 2010Actual
    
    
    RequiredAmount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio(Dollars in thousands)Total capital (to risk-weighted assets)
    
    $
    828,661
    
    
    
    15.8
    %
    
    $
    419,009
    
    
    
    8.0
    %Tier I capital (to risk-weighted assets)
    
    
    765,718
    
    
    
    14.6
    
    
    
    209,504
    
    
    
    4.0Tier I capital (to average assets)
    
    
    765,718
    
    
    
    9.1
    
    
    
    337,495
    
    
    
    4.0
 Off-Balance Sheet Arrangements and Contractual Obligations
  36




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##### Table of Contents



Less than
    
    
    One-Two
    
    
    Two-Three
    
    
    More thanContractual Obligations
    
    Total
    
    
    One Year
    
    
    Years
    
    
    Years
    
    
    Three YearsDebt obligations (excluding capitalized leases)
    
    $
    1,775,535
    
    
    
    330,000
    
    
    
    610,000
    
    
    
    240,535
    
    
    
    595,000Commitments to originate and purchase loans
    
    $
    412,472
    
    
    
    412,472
    
    
    
    
    
    
    
    
    
    
    
    Commitments to sell loans
    
    $
    50,982
    
    
    
    50,982
    
    
    
    
    
    
    
    
    
    
    
    
      
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Qualitative Analysis
  37




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38




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##### Table of Contents



Quantitative Analysis
 Net Portfolio Value (1),(2)
    
    Net Interest Income (3)Change in
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Increase (Decrease) inInterest
    
    
    
    
    
    Estimated Increase
    
    Estimated
    
    Estimated Net InterestRates (basis
    
    Estimated
    
    (Decrease)
    
    Net Interest
    
    Incomepoints)
    
    NPV
    
    Amount
    
    Percent
    
    Income
    
    Amount
    
    Percent(Dollars in thousands)+200bp
    
    $
    739,962
    
    
    $
    (354,591
    )
    
    
    (32.4
    )%
    
    
    261,199
    
    
    $
    (10,992
    )
    
    
    (4.0
    )%0bp
    
    $
    1,094,553
    
    
    
    
    
    
    
    
    
    
    
    272,191
    
    
    
    
    
    
    
    -100bp
    
    $
    1,093,567
    
    
    $
    (986
    )
    
    
    (0.1
    )%
    
    
    275,210
    
    
    $
    3,019
    
    
    
    1.1
    %
 
 (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   39




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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
  40




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##### Table of Contents



Total Number of
    
    
    Maximum NumberShares Purchased as
    
    
    of Shares that MayTotal Number
    
    
    
    
    
    
    Part of Publicly
    
    
    Yet Be Purchasedof Shares
    
    
    Average price
    
    
    Announced Plans or
    
    
    Under the Plans orPeriod
    
    Purchased
    
    
    Paid per Share
    
    
    Programs
    
    
    Programs (1)January 1, 2010 through January 31, 2010
    
    
    
    
    
    $
    0.00
    
    
    
    
    
    
    
    2,878,804February 1, 2010 through February 28, 2010
    
    
    40,500
    
    
    
    11.71
    
    
    
    40,500
    
    
    
    2,838,304March 1, 2010 through March 31, 2010
    
    
    10,000
    
    
    
    13.39
    
    
    
    10,000
    
    
    
    2,828,304Total
    
    
    50,500
    
    
    $
    12.04
    
    
    
    50,500
 
 (1)
    
    On January 22, 2008, the Company announced its third Share Repurchase
Program, which authorized the purchase of an additional 10% of its
publicly-held outstanding shares of common stock, or 4,307,248 shares. This
stock repurchase program commenced upon the completion of the second program on
May 7, 2008. This program has no expiration date and has 2,828,304 shares yet
to be purchased as of March 31, 2010. 
 Item 3. Defaults Upon Senior Securities
  
 Item 4. [Reserved]
 
 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*10.4
    
    Investors Savings Bank Supplemental Retirement Plan*
 41




---



##### Table of Contents



10.5
    
    Investors Bancorp, Inc. Supplemental Wage Replacement Plan*10.6
    
    Investors Savings Bank Deferred Directors Fee Plan*10.7
    
    Investors Bancorp, Inc. Deferred Directors Fee Plan*10.8
    
    Executive Officer Annual Incentive Plan**10.9
    
    Agreement and Plan of Merger by and Between Investors Bancorp, Inc and American
Bancorp of New Jersey, Inc.***14
    
    Code of Ethics****21
    
    Subsidiaries of Registrant*23.1
    
    Consent of Independent Registered Public Accounting Firm31.1
    
    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
 
 *
    
    Incorporated by reference to the Registration Statement on Form S-1
of Investors Bancorp, Inc. (file no. 333-125703), originally filed
with the Securities and Exchange Commission on June 10, 2005.**
    
    Incorporated by reference to Appendix A of the Companys definitive
proxy statement filed with the Securities and Exchange Commission
on September 26, 2008.***
    
    Incorporated by reference to Form 8-Ks originally filed with the
Securities and Exchange Commission on December 15, 2008 and
March 18, 2009.****
    
    Available on our website www.isbnj.com 42




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##### Table of Contents



SIGNATURES
  Investors Bancorp, Inc.Dated:      May 10, 2010
    /s/ Kevin CummingsKevin CummingsPresident and Chief Executive Officer
(Principal Executive Officer)Dated:      May 10, 2010
    /s/ Thomas F. Splaine, Jr.Thomas F. Splaine, Jr.Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer) 43