##### 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, 2009
 Commission file number: 0-51557
 Investors Bancorp, Inc.
  Delaware
    
    22-3493930(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 101 JFK Parkway, Short Hills, New Jersey 07078
 (973) 924-5100
 þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ
 o o




---



##### 



Investors Bancorp, Inc.
FORM 10-Q
 Index
 PagePart I. Financial InformationItem 1. Financial StatementsConsolidated Balance Sheets as of March 31, 2009
(unaudited) and June 30, 2008
    
    
    3Consolidated Statements of Operations for the Three and Nine
Months Ended March 31, 2009 and 2008 (unaudited)
    
    
    4Consolidated Statements of Stockholders Equity for the
Nine Months Ended March 31, 2009 and
2008 (unaudited)
    
    
    5Consolidated Statements of Cash Flows for the Nine Months
Ended March 31, 2009 and 2008 (unaudited)
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    16Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    33Item 4. Controls and Procedures
    
    
    35Part II. Other InformationItem 1. Legal Proceedings
    
    
    36Item 1A. Risk Factors
    
    
    36Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    36Item 3. Defaults upon Senior Securities
    
    
    36Item 4. Submission of Matters to a Vote of Security Holders
    
    
    36Item 5. Other Information
    
    
    37Item 6. Exhibits
    
    
    37Signature PageEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32: CERTIFICATION
  2




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##### Table of Contents



Part I. Financial Information
 
 Item 1. Financial Statements
 INVESTORS BANCORP, INC. AND SUBSIDIARY
 
   March 31,
    
    
    June 30,2009
    
    
    2008(In thousands)AssetsCash and cash equivalents
    
    $
    322,469
    
    
    
    22,823Securities available-for-sale, at estimated fair value
    
    
    166,584
    
    
    
    203,032Securities held-to-maturity, net (estimated fair value of
$948,896 and $1,198,053 at March 31, 2009
and June 30, 2008, respectively)
    
    
    930,349
    
    
    
    1,255,054Loans receivable, net
    
    
    5,560,678
    
    
    
    4,670,150Loans held-for-sale
    
    
    37,220
    
    
    
    9,814Stock in the Federal Home Loan Bank
    
    
    69,574
    
    
    
    60,935Accrued interest receivable
    
    
    32,535
    
    
    
    27,716Office properties and equipment, net
    
    
    34,894
    
    
    
    29,710Net deferred tax asset
    
    
    108,214
    
    
    
    40,702Bank owned life insurance contract
    
    
    98,409
    
    
    
    96,170Other assets
    
    
    5,907
    
    
    
    3,036Total assets
    
    $
    7,366,833
    
    
    
    6,419,142Liabilities and Stockholders EquityLiabilities:Deposits
    
    $
    4,770,178
    
    
    
    3,970,275Borrowed funds
    
    
    1,755,562
    
    
    
    1,563,583Advance payments
by borrowers for taxes
and insurance
    
    
    24,015
    
    
    
    21,829Other liabilities
    
    
    50,219
    
    
    
    34,917Total liabilities
    
    
    6,599,974
    
    
    
    5,590,604Stockholders equity:Preferred
stock, $0.01 par value, 50,000,000
authorized shares;
none issued
    
    
    
    
    
    
    Common stock,
$0.01 par value, 200,000,000 shares authorized;
118,020,280 issued; 109,052,929 and 109,010,756 outstanding
at March 31, 2009 and June 30, 2008, respectively
    
    
    532
    
    
    
    532Additional
paid-in capital
    
    
    522,126
    
    
    
    514,613Retained earnings
    
    
    415,612
    
    
    
    486,244Treasury stock,
at cost; 8,967,351 and 9,009,524 shares at
March 31, 2009 and June 30, 2008, respectively
    
    
    (128,121
    )
    
    
    (128,977
    )Unallocated
common stock held
by
the employee stock
ownership plan
    
    
    (36,514
    )
    
    
    (37,578
    )Accumulated
other comprehensive loss
    
    
    (6,776
    )
    
    
    (6,296
    )Total stockholders equity
    
    
    766,859
    
    
    
    828,538Total liabilities and stockholders equity
    
    $
    7,366,833
    
    
    
    6,419,142
  3




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##### Table of Contents



INVESTORS BANCORP, INC. AND SUBSIDIARY
 
   For the Three Months
    
    
    For the Nine MonthsEnded March 31,
    
    
    Ended March 31,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands, except per share data)Interest and dividend income:Loans receivable and loans held-for-sale
    
    $
    76,723
    
    
    
    57,605
    
    
    
    225,494
    
    
    
    168,262Securities:Government-sponsored enterprise obligations
    
    
    304
    
    
    
    1,119
    
    
    
    1,295
    
    
    
    4,024Mortgage-backed securities
    
    
    11,946
    
    
    
    15,346
    
    
    
    38,219
    
    
    
    48,717Equity securities available-for-sale
    
    
    1
    
    
    
    68
    
    
    
    64
    
    
    
    224Municipal bonds and other debt
    
    
    2,986
    
    
    
    2,627
    
    
    
    7,372
    
    
    
    8,773Interest-bearing deposits
    
    
    119
    
    
    
    258
    
    
    
    158
    
    
    
    814Repurchase agreements
    
    
    
    
    
    
    162
    
    
    
    
    
    
    
    162Federal Home Loan Bank stock
    
    
    670
    
    
    
    975
    
    
    
    2,094
    
    
    
    2,375Total interest and dividend income
    
    
    92,749
    
    
    
    78,160
    
    
    
    274,696
    
    
    
    233,351Interest expense:Deposits
    
    
    33,900
    
    
    
    38,395
    
    
    
    96,837
    
    
    
    118,206Borrowings
    
    
    17,691
    
    
    
    12,887
    
    
    
    55,053
    
    
    
    41,414Total interest expense
    
    
    51,591
    
    
    
    51,282
    
    
    
    151,890
    
    
    
    159,620Net interest income
    
    
    41,158
    
    
    
    26,878
    
    
    
    122,806
    
    
    
    73,731Provision for loan losses
    
    
    8,000
    
    
    
    997
    
    
    
    21,000
    
    
    
    2,946Net interest income after provision
for loan losses
    
    
    33,158
    
    
    
    25,881
    
    
    
    101,806
    
    
    
    70,785Non-interest income (loss) :Fees and service charges
    
    
    906
    
    
    
    780
    
    
    
    2,358
    
    
    
    2,348Income on bank owned life insurance contracts
    
    
    256
    
    
    
    950
    
    
    
    2,239
    
    
    
    3,016Gain on sales of mortgage loans, net
    
    
    2,163
    
    
    
    234
    
    
    
    2,229
    
    
    
    466Gain (loss) on securities transactions, net
    
    
    2
    
    
    
    (17
    )
    
    
    (157,969
    )
    
    
    (241
    )Other income
    
    
    90
    
    
    
    188
    
    
    
    302
    
    
    
    366Total non-interest income (loss)
    
    
    3,417
    
    
    
    2,135
    
    
    
    (150,841
    )
    
    
    5,955Non-interest expenses:Compensation and fringe benefits
    
    
    15,670
    
    
    
    13,998
    
    
    
    45,413
    
    
    
    40,268Advertising and promotional expense
    
    
    640
    
    
    
    643
    
    
    
    2,400
    
    
    
    1,890Office occupancy and equipment expense
    
    
    2,998
    
    
    
    2,685
    
    
    
    8,540
    
    
    
    8,052Federal deposit insurance premiums
    
    
    1,800
    
    
    
    115
    
    
    
    3,157
    
    
    
    335Stationery, printing, supplies and telephone
    
    
    488
    
    
    
    494
    
    
    
    1,523
    
    
    
    1,388Legal, audit, accounting, and supervisory examination fees
    
    
    599
    
    
    
    580
    
    
    
    1,789
    
    
    
    1,616Data processing service fees
    
    
    1,113
    
    
    
    1,197
    
    
    
    3,348
    
    
    
    3,375Other operating expenses
    
    
    1,147
    
    
    
    922
    
    
    
    3,466
    
    
    
    3,175Total non-interest expenses
    
    
    24,455
    
    
    
    20,634
    
    
    
    69,636
    
    
    
    60,099Income (loss) before income tax expense (benefit)
    
    
    12,120
    
    
    
    7,382
    
    
    
    (118,671
    )
    
    
    16,641Income tax expense (benefit)
    
    
    5,042
    
    
    
    2,847
    
    
    
    (48,281
    )
    
    
    6,091Net income (loss)
    
    $
    7,078
    
    
    
    4,535
    
    
    
    (70,390
    )
    
    
    10,550Basic earnings (loss) per share
    
    $
    0.07
    
    
    
    0.04
    
    
    
    (0.68
    )
    
    
    0.10Diluted earnings per share
    
    $
    0.07
    
    
    
    0.04
    
    
    
    n/a
    
    
    
    0.10Weighted average shares outstandingBasic
    
    
    104,192,971
    
    
    
    104,697,317
    
    
    
    103,977,771
    
    
    
    105,809,536Diluted
    
    
    104,228,891
    
    
    
    104,780,465
    
    
    
    103,977,771
    
    
    
    105,953,418
  4




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##### Table of Contents



INVESTORS BANCORP, INC. AND SUBSIDIARY
 
    AccumulatedAdditional
    
    
    
    
    
    
    
    
    
    
    Unallocated
    
    
    other
    
    
    TotalCommon
    
    
    paid-in
    
    
    Retained
    
    
    Treasury
    
    
    Common Stock
    
    
    comprehensive
    
    
    stockholdersstock
    
    
    capital
    
    
    earnings
    
    
    stock
    
    
    Held by ESOP
    
    
    loss
    
    
    equity(In thousands)Balance at June 30, 2007
    
    $
    532
    
    
    
    506,026
    
    
    
    470,205
    
    
    
    (70,973
    )
    
    
    (38,996
    )
    
    
    (7,935
    )
    
    
    858,859Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    10,550
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,550Change in funded status of postretirement
plan due to plan curtailment and settlement,
net of tax expense of $891
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,337
    
    
    
    1,337Change in funded status of retirement
obligations, net of tax expense of $54
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80
    
    
    
    80Unrealized gain on securities available-
for-sale, net of tax expense of $1,520
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,175
    
    
    
    2,175Reclassification adjustment for losses
included in net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    242
    
    
    
    242Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,384Cummulative effect adjustment
upon adoption of FIN-48
    
    
    
    
    
    
    
    
    
    
    300
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    300Purchase of treasury stock (3,470,200 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (47,920
    )
    
    
    
    
    
    
    
    
    
    
    (47,920
    )Treasury stock allocated to restricted stock plan
    
    
    
    
    
    
    (1,830
    )
    
    
    (289
    )
    
    
    2,119
    
    
    
    
    
    
    
    
    
    
    
    Compensation cost for stock
options and restricted stock
    
    
    
    
    
    
    7,215
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,215ESOP shares allocated or committed to be released
    
    
    
    
    
    
    449
    
    
    
    
    
    
    
    
    
    
    
    1,064
    
    
    
    
    
    
    
    1,513Balance at March 31, 2008
    
    $
    532
    
    
    
    511,860
    
    
    
    480,766
    
    
    
    (116,774
    )
    
    
    (37,932
    )
    
    
    (4,101
    )
    
    
    834,351Balance at June 30, 2008
    
    $
    532
    
    
    
    514,613
    
    
    
    486,244
    
    
    
    (128,977
    )
    
    
    (37,578
    )
    
    
    (6,296
    )
    
    
    828,538Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    (70,390
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (70,390
    )Change in funded status of retirement
obligations, net of tax benefit of $81
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (116
    )
    
    
    (116
    )Unrealized loss on securities available-
for-sale, net of tax benefit of $303
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (821
    )
    
    
    (821
    )Reclassification adjustment for losses
included in net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    457
    
    
    
    457Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (70,870
    )Purchase of treasury stock (82,827 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,097
    )
    
    
    
    
    
    
    
    
    
    
    (1,097
    )Treasury stock allocated to restricted stock plan
    
    
    
    
    
    
    (1,711
    )
    
    
    (242
    )
    
    
    1,953
    
    
    
    
    
    
    
    
    
    
    
    Compensation cost for stock
options and restricted stock
    
    
    
    
    
    
    8,953
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,953ESOP shares allocated or committed to be released
    
    
    
    
    
    
    271
    
    
    
    
    
    
    
    
    
    
    
    1,064
    
    
    
    
    
    
    
    1,335Balance at March 31, 2009
    
    $
    532
    
    
    
    522,126
    
    
    
    415,612
    
    
    
    (128,121
    )
    
    
    (36,514
    )
    
    
    (6,776
    )
    
    
    766,859
  5




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##### Table of Contents



INVESTORS BANCORP, INC. AND SUBSIDIARY
 
   For the Nine Months EndedMarch 31,2009
    
    
    2008(In thousands)Cash flows from operating activities:Net (loss) income
    
    $
    (70,390
    )
    
    
    10,550Adjustments to reconcile net income to net cash used in operating activities:ESOP and stock-based compensation expense
    
    
    10,288
    
    
    
    8,728Amortization of premiums and accretion of discounts on securities, net
    
    
    (895
    )
    
    
    800Amortization of premium and accretion of fees and costs on loans, net
    
    
    3,755
    
    
    
    1,549Provision for loan losses
    
    
    21,000
    
    
    
    2,946Depreciation and amortization of office properties and equipment
    
    
    1,629
    
    
    
    2,090Loss on securities, net
    
    
    157,969
    
    
    
    241Mortgage loans originated for sale
    
    
    (437,142
    )
    
    
    (59,982
    )Proceeds from mortgage loan sales
    
    
    411,965
    
    
    
    57,136Gain on sales of mortgage loans, net
    
    
    (2,229
    )
    
    
    (466
    )Increase in bank owned life insurance contract
    
    
    (2,239
    )
    
    
    (3,016
    )Increase in accrued interest
    
    
    (4,819
    )
    
    
    (1,718
    )Deferred tax benefit
    
    
    (67,131
    )
    
    
    (1,639
    )Increase in other assets
    
    
    (2,871
    )
    
    
    (29
    )Increase in other liabilities
    
    
    15,107
    
    
    
    3,072Total adjustments
    
    
    104,387
    
    
    
    9,713Net cash provided by operating activities
    
    
    33,997
    
    
    
    20,263Cash flows from investing activities:Purchases of loans receivable
    
    
    (973,835
    )
    
    
    (467,362
    )Net originations (pay down) of loans receivable
    
    
    58,552
    
    
    
    (22,647
    )Purchases of debt securities held-to-maturity
    
    
    
    
    
    
    (23,117
    )Purchases of other investments available-for-sale
    
    
    (100
    )
    
    
    (1,400
    )Proceeds from paydowns/maturities on mortgage-backed
securities held-to-maturity
    
    
    149,079
    
    
    
    178,178Proceeds from calls/maturities on debt securities held-to-maturity
    
    
    19,643
    
    
    
    73,508Proceeds from paydowns/maturities on mortgage-backed
securities available-for-sale
    
    
    33,928
    
    
    
    43,087Redemption of equity securities available-for-sale
    
    
    863
    
    
    
    Proceeds from redemptions of Federal Home Loan Bank stock
    
    
    50,762
    
    
    
    21,323Purchases of Federal Home Loan Bank stock
    
    
    (59,401
    )
    
    
    (29,282
    )Purchases of office properties and equipment
    
    
    (6,813
    )
    
    
    (2,869
    )Net cash used in investing activities
    
    
    (727,322
    )
    
    
    (230,581
    )Cash flows from financing activities:Net increase in deposits
    
    
    799,903
    
    
    
    215,148Net decrease in funds borrowed under short-term repurchase agreements
    
    
    (25,000
    )
    
    
    (160,000
    )Proceeds from funds borrowed under other repurchase agreements
    
    
    55,000
    
    
    
    590,000Repayments of funds borrowed under other repurchase agreements
    
    
    (145,000
    )
    
    
    (80,000
    )Net increase (decrease) in other borrowings
    
    
    306,979
    
    
    
    (233,121
    )Net increase in advance payments by borrowers for taxes and insurance
    
    
    2,186
    
    
    
    1,690Purchase of treasury stock
    
    
    (1,097
    )
    
    
    (47,920
    )Net cash provided by financing activities
    
    
    992,971
    
    
    
    285,797Net increase in cash and cash equivalents
    
    
    299,646
    
    
    
    75,478Cash and cash equivalents at beginning of the period
    
    
    22,823
    
    
    
    35,582Cash and cash equivalents at end of the period
    
    $
    322,469
    
    
    
    111,060Supplemental cash flow information:Cash paid during the period for:Interest
    
    $
    150,747
    
    
    
    156,942Income taxes
    
    
    10,415
    
    
    
    2,194
  6




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##### Table of Contents



INVESTORS BANCORP, INC. AND SUBSIDIARY
 
  1. Basis of Presentation
     2. Mergers and Acquisitions
  3. Earnings Per Share
  7




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##### Table of Contents



For the Three Months Ended March 31,2009
    
    
    2008Per
    
    
    
    
    
    
    
    
    
    
    PerShare
    
    
    
    
    
    
    
    
    
    
    ShareIncome
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount(In thousands, except per share data)Net Income
    
    $
    7,078
    
    
    
    
    
    
    
    
    
    
    $
    4,535Basic earnings per share:Income available to common
stockholders
    
    $
    7,078
    
    
    
    104,192,971
    
    
    $
    0.07
    
    
    $
    4,535
    
    
    
    104,697,317
    
    
    $
    0.04Effect of dilutive common stock
equivalents
    
    
    
    
    
    
    35,920
    
    
    
    
    
    
    
    
    
    
    
    83,148Diluted earnings per share:Income available to common
stockholders
    
    $
    7,078
    
    
    
    104,228,891
    
    
    $
    0.07
    
    
    $
    4,535
    
    
    
    104,780,465
    
    
    $
    0.04
 For the Nine Months Ended March 31,2009
    
    
    2008Per
    
    
    
    
    
    
    
    
    
    
    PerShare
    
    
    
    
    
    
    
    
    
    
    ShareLoss
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount(In thousands, except per share data)Net (Loss) Income
    
    $
    (70,390
    )
    
    
    
    
    
    
    
    
    
    $
    10,550Basic (loss) earnings per share:(Loss) income available to common
stockholders
    
    $
    (70,390
    )
    
    
    103,977,771
    
    
    $
    (0.68
    )
    
    $
    10,550
    
    
    
    105,809,536
    
    
    $
    0.10Effect of dilutive common stock
equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    143,882Diluted (loss) earnings per share:(Loss) income available to common
stockholders
    
    $
    (70,390
    )
    
    
    103,977,771
    
    
    
    n/a
    
    
    $
    10,550
    
    
    
    105,953,418
    
    
    $
    0.10
 8




---



##### Table of Contents



4. Loans Receivable, Net
  March 31,
    
    
    June 30,2009
    
    
    2008(In thousands)Residential mortgage loans
    
    $
    4,605,008
    
    
    
    4,009,563Multi-family and commercial
    
    
    496,308
    
    
    
    225,154Construction loans
    
    
    315,151
    
    
    
    260,177Consumer and other loans
    
    
    158,258
    
    
    
    168,819Total loans
    
    
    5,574,725
    
    
    
    4,663,713Premiums on purchased loans, net
    
    
    23,462
    
    
    
    22,622Deferred loan fees, net
    
    
    (2,968
    )
    
    
    (2,620
    )Allowance for loan losses
    
    
    (34,541
    )
    
    
    (13,565
    )Net loans
    
    $
    5,560,678
    
    
    
    4,670,150
 5. Deposits
  March 31,
    
    
    June 30,2009
    
    
    2008(In thousands)Savings acounts
    
    $
    611,750
    
    
    
    417,196Checking accounts
    
    
    886,264
    
    
    
    401,100Money market accounts
    
    
    315,357
    
    
    
    229,018Total core deposits
    
    
    1,813,371
    
    
    
    1,047,314Certificates of deposit
    
    
    2,956,807
    
    
    
    2,922,961$
    4,770,178
    
    
    
    3,970,275
 6. Equity Incentive Plan
    9




---



##### Table of Contents



7. Net Periodic Benefit Plans Expense
    Three months ended March 31,SERP and Directors Plan
    
    
    Other Benefits2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands)Service cost
    
    $
    112
    
    
    
    114
    
    
    $
    
    
    
    
    12Interest cost
    
    
    257
    
    
    
    239
    
    
    
    11
    
    
    
    61Amortization of:Transition obligation
    
    
    
    
    
    
    
    
    
    
    8
    
    
    
    19Prior service cost
    
    
    25
    
    
    
    25
    
    
    
    
    
    
    
    Net loss
    
    
    32
    
    
    
    29
    
    
    
    (3
    )
    
    
    (3
    )Total net periodic
benefit expense
    
    $
    426
    
    
    
    407
    
    
    $
    16
    
    
    
    89
 Nine months ended March 31,SERP and Directors Plan
    
    
    Other Benefits2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands)Service cost
    
    $
    337
    
    
    
    342
    
    
    $
    
    
    
    
    35Interest cost
    
    
    769
    
    
    
    718
    
    
    
    33
    
    
    
    182Amortization of:Transition obligation
    
    
    
    
    
    
    
    
    
    
    26
    
    
    
    56Prior service cost
    
    
    74
    
    
    
    74
    
    
    
    
    
    
    
    Net loss
    
    
    96
    
    
    
    86
    
    
    
    (11
    )
    
    
    (7
    )Total net periodic
benefit expense
    
    $
    1,276
    
    
    
    1,220
    
    
    $
    48
    
    
    
    266
 10




---



##### Table of Contents



8. Income Taxes
   9. Fair Value Measurements
  11




---



##### 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
  12




---



##### Table of Contents



Carrying Value at March 31, 2009Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3(In thousands)Securities available for sale:Mortgage-backed securities
    
    $
    165,172
    
    
    
    
    
    
    
    165,172
    
    
    
    Equity securities
    
    
    1,412
    
    
    
    
    
    
    
    1,412
    
    
    
    $
    166,584
    
    
    
    
    
    
    
    166,584
    
    
    
    
  Securities held-to-maturity
  Mortgage Servicing Rights, net
  Loans Receivable
  13




---



##### Table of Contents



Carrying Value at March 31, 2009Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3(In thousands)Securities held-to-maturity
    
    $
    20,800
    
    
    
    
    
    
    
    20,800
    
    
    
    MSR, net
    
    
    961
    
    
    
    
    
    
    
    
    
    
    
    961Impaired loans
    
    
    25,523
    
    
    
    
    
    
    
    
    
    
    
    25,523$
    47,284
    
    
    
    
    
    
    
    20,800
    
    
    
    26,484
 10. Recent Accounting Pronouncements
   14




---



##### Table of Contents



Business Combinations.
  Noncontrolling Interests in Consolidated Financial
Statements.
  15




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward Looking Statements
   Executive Summary
   16




---



##### Table of Contents



17




---



##### Table of Contents



Comparison of Financial Condition at March 31, 2009 and June 30, 2008
 Total Assets .
 Net Loans.
 18




---



##### Table of Contents



19




---



##### Table of Contents



March 31,
    
    
    December 31,
    
    
    September 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2008
    
    
    2008# of
    
    
    
    
    
    
    # of
    
    
    
    
    
    
    # of
    
    
    
    
    
    
    # ofloans
    
    
    Amount
    
    
    loans
    
    
    Amount
    
    
    loans
    
    
    Amount
    
    
    loans
    
    
    Amount(Dollars in millions)Residential and consumer
    
    
    66
    
    
    $
    17.5
    
    
    
    46
    
    
    $
    10.4
    
    
    
    34
    
    
    $
    6.9
    
    
    
    39
    
    
    $
    6.8Multi-family
    
    
    4
    
    
    
    19.8
    
    
    
    4
    
    
    
    19.8
    
    
    
    4
    
    
    
    19.8
    
    
    
    3
    
    
    
    0.5Commercial
    
    
    2
    
    
    
    1.9
    
    
    
    1
    
    
    
    0.6
    
    
    
    1
    
    
    
    0.6
    
    
    
    0
    
    
    
    0Construction
    
    
    9
    
    
    
    40.9
    
    
    
    5
    
    
    
    17.0
    
    
    
    4
    
    
    
    14.8
    
    
    
    2
    
    
    
    12.1Total Non-Performing Loans
    
    
    81
    
    
    $
    80.1
    
    
    
    56
    
    
    $
    47.8
    
    
    
    43
    
    
    $
    42.1
    
    
    
    44
    
    
    $
    19.4Non-performing loans to total
loans
    
    
    
    
    
    
    1.44
    %
    
    
    
    
    
    
    0.85
    %
    
    
    
    
    
    
    0.79
    %
    
    
    
    
    
    
    0.42
    %Allowance for loan loss as a
percent of non-performing
loans
    
    
    
    
    
    
    43.10
    %
    
    
    
    
    
    
    55.53
    %
    
    
    
    
    
    
    44.05
    %
    
    
    
    
    
    
    70.03
    %Allowance for loan losses as a
percent of total loans
    
    
    
    
    
    
    0.62
    %
    
    
    
    
    
    
    0.47
    %
    
    
    
    
    
    
    0.35
    %
    
    
    
    
    
    
    0.29
    %
   Critical Accounting Policies
 Securities.
  20




---



##### Table of Contents



Net Deferred Tax Asset .
 Stock in the Federal Home Loan Bank, Bank Owned Life Insurance and Other Assets.
 Deposits.
 Borrowed Funds.
 Stockholders Equity.
 Average Balance Sheets for the Three Months ended March 31, 2009 and 2008
  21




---



##### Table of Contents



For the three months endedMarch 31, 2009
    
    
    March 31, 2008Average
    
    
    
    
    
    
    
    
    
    
    AverageOutstanding
    
    
    Interest
    
    
    Average
    
    
    Outstanding
    
    
    Interest
    
    
    AverageBalance
    
    
    Earned/Paid
    
    
    Yield/Rate
    
    
    Balance
    
    
    Earned/Paid
    
    
    Yield/Rate(Dollars in thousands)Interest-earning assets:Interest-bearing deposits
    
    $
    205,083
    
    
    $
    119
    
    
    
    0.23
    %
    
    $
    41,718
    
    
    $
    258
    
    
    
    2.47
    %Repurchase agreements
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    23,626
    
    
    $
    162
    
    
    
    2.74
    %Securities available-for-sale(1)
    
    
    179,298
    
    
    
    2,083
    
    
    
    4.65
    %
    
    
    227,877
    
    
    
    2,625
    
    
    
    4.61
    %Securities held-to-maturity
    
    
    960,946
    
    
    
    13,154
    
    
    
    5.48
    %
    
    
    1,405,903
    
    
    
    16,535
    
    
    
    4.70
    %Net loans
    
    
    5,631,836
    
    
    
    76,723
    
    
    
    5.45
    %
    
    
    4,053,804
    
    
    
    57,605
    
    
    
    5.68
    %Stock in FHLB
    
    
    73,062
    
    
    
    670
    
    
    
    3.67
    %
    
    
    44,270
    
    
    
    975
    
    
    
    8.81
    %Total interest-earning assets
    
    
    7,050,225
    
    
    
    92,749
    
    
    
    5.26
    %
    
    
    5,797,198
    
    
    
    78,160
    
    
    
    5.39
    %Non-interest earning assets
    
    
    258,737
    
    
    
    
    
    
    
    
    
    
    
    185,045Total assets
    
    $
    7,308,962
    
    
    
    
    
    
    
    
    
    
    $
    5,982,243Interest-bearing Liabilities:Savings
    
    $
    555,319
    
    
    $
    3,242
    
    
    
    2.34
    %
    
    $
    389,507
    
    
    $
    2,075
    
    
    
    2.13
    %Interest-bearing checking
    
    
    711,075
    
    
    
    4,082
    
    
    
    2.30
    %
    
    
    345,902
    
    
    
    1,608
    
    
    
    1.86
    %Money market accounts
    
    
    294,927
    
    
    
    1,558
    
    
    
    2.11
    %
    
    
    208,798
    
    
    
    1,225
    
    
    
    2.35
    %Certificates of deposit
    
    
    3,025,100
    
    
    
    25,018
    
    
    
    3.31
    %
    
    
    2,923,675
    
    
    
    33,487
    
    
    
    4.58
    %Borrowed funds
    
    
    1,836,931
    
    
    
    17,691
    
    
    
    3.85
    %
    
    
    1,190,571
    
    
    
    12,887
    
    
    
    4.33
    %Total interest-bearing liabilities
    
    
    6,423,352
    
    
    
    51,591
    
    
    
    3.21
    %
    
    
    5,058,453
    
    
    
    51,282
    
    
    
    4.06
    %Non-interest bearing liabilities
    
    
    134,248
    
    
    
    
    
    
    
    
    
    
    
    97,722Total liabilities
    
    
    6,557,600
    
    
    
    
    
    
    
    
    
    
    
    5,156,175Stockholders equity
    
    
    751,362
    
    
    
    
    
    
    
    
    
    
    
    826,068Total liabilities and
stockholders equity
    
    $
    7,308,962
    
    
    
    
    
    
    
    
    
    
    $
    5,982,243Net interest income
    
    
    
    
    
    $
    41,158
    
    
    
    
    
    
    
    
    
    
    $
    26,878Net interest rate spread(2)
    
    
    
    
    
    
    
    
    
    
    2.05
    %
    
    
    
    
    
    
    
    
    
    
    1.33
    %Net interest earning assets(3)
    
    $
    626,873
    
    
    
    
    
    
    
    
    
    
    $
    738,745Net interest margin(4)
    
    
    
    
    
    
    
    
    
    
    2.34
    %
    
    
    
    
    
    
    
    
    
    
    1.85
    %Ratio of interest-earning assets to
total interest-
bearing liabilities
    
    
    1.10
    X
    
    
    
    
    
    
    
    
    
    
    1.15
    X
 22




---



##### Table of Contents



For Nine Months EndedMarch 31, 2009
    
    
    March 31, 2008Average
    
    
    
    
    
    
    
    
    
    
    AverageOutstanding
    
    
    Interest
    
    
    Average
    
    
    Outstanding
    
    
    Interest
    
    
    AverageBalance
    
    
    Earned/Paid
    
    
    Yield/Rate
    
    
    Balance
    
    
    Earned/Paid
    
    
    Yield/Rate(Dollars in thousands)Interest-earning assets:Interest-bearing deposits
    
    $
    81,979
    
    
    $
    158
    
    
    
    0.26
    %
    
    $
    31,414
    
    
    $
    814
    
    
    
    3.45
    %Repurchase agreements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,732
    
    
    
    162
    
    
    
    2.79
    %Securities available-for-sale (1)
    
    
    191,002
    
    
    
    6,574
    
    
    
    4.59
    %
    
    
    242,244
    
    
    
    8,354
    
    
    
    4.60
    %Securities held-to-maturity
    
    
    1,122,518
    
    
    
    40,376
    
    
    
    4.80
    %
    
    
    1,483,264
    
    
    
    53,384
    
    
    
    4.80
    %Net loans
    
    
    5,371,836
    
    
    
    225,494
    
    
    
    5.60
    %
    
    
    3,927,416
    
    
    
    168,262
    
    
    
    5.71
    %Stock in FHLB
    
    
    77,326
    
    
    
    2,094
    
    
    
    3.61
    %
    
    
    43,327
    
    
    
    2,375
    
    
    
    7.31
    %Total interest-earning assets
    
    
    6,844,661
    
    
    
    274,696
    
    
    
    5.35
    %
    
    
    5,735,397
    
    
    
    233,351
    
    
    
    5.42
    %Non-interest-earning assets
    
    
    213,655
    
    
    
    
    
    
    
    
    
    
    
    184,797Total assets
    
    $
    7,058,316
    
    
    
    
    
    
    
    
    
    
    $
    5,920,194Interest-bearing liabilities:Savings
    
    $
    448,667
    
    
    $
    6,892
    
    
    
    2.05
    %
    
    $
    361,733
    
    
    $
    5,662
    
    
    
    2.09
    %Interest-bearing checking
    
    
    485,867
    
    
    
    6,924
    
    
    
    1.90
    %
    
    
    353,957
    
    
    
    5,959
    
    
    
    2.24
    %Money market accounts
    
    
    275,134
    
    
    
    4,582
    
    
    
    2.22
    %
    
    
    201,230
    
    
    
    3,889
    
    
    
    2.58
    %Certificates of deposit
    
    
    2,987,340
    
    
    
    78,439
    
    
    
    3.50
    %
    
    
    2,896,570
    
    
    
    102,696
    
    
    
    4.73
    %Borrowed funds
    
    
    1,938,909
    
    
    
    55,053
    
    
    
    3.79
    %
    
    
    1,170,464
    
    
    
    41,414
    
    
    
    4.72
    %Total interest-bearing liabilities
    
    
    6,135,917
    
    
    
    151,890
    
    
    
    3.30
    %
    
    
    4,983,954
    
    
    
    159,620
    
    
    
    4.27
    %Non-interest-bearing liabilities
    
    
    120,936
    
    
    
    
    
    
    
    
    
    
    
    102,084Total liabilities
    
    
    6,256,853
    
    
    
    
    
    
    
    
    
    
    
    5,086,038Stockholders equity
    
    
    801,463
    
    
    
    
    
    
    
    
    
    
    
    834,156Total liabilities and stockholders equity
    
    $
    7,058,316
    
    
    
    
    
    
    
    
    
    
    $
    5,920,194Net interest income
    
    
    
    
    
    $
    122,806
    
    
    
    
    
    
    
    
    
    
    $
    73,731Net interest rate spread (2)
    
    
    
    
    
    
    
    
    
    
    2.05
    %
    
    
    
    
    
    
    
    
    
    
    1.15
    %Net interest-earning assets (3)
    
    $
    708,744
    
    
    
    
    
    
    
    
    
    
    $
    751,443Net interest margin (4)
    
    
    
    
    
    
    
    
    
    
    2.39
    %
    
    
    
    
    
    
    
    
    
    
    1.71
    %Ratio of interest-earning assets to total
interest-
bearing liabilities
    
    
    1.12
    X
    
    
    
    
    
    
    
    
    
    
    1.15
    X
 
 (1)
    
    Securities available-for-sale are stated at amortized cost, adjusted for unamortized
purchased premiums and discounts.(2)
    
    Net interest rate spread represents the difference between the yield on average
interest-earning assets and the cost of average interest-bearing liabilities.(3)
    
    Net interest-earning assets represent total interest-earning assets less total
interest-bearing liabilities.(4)
    
    Net interest margin represents net interest income divided by average total interest-earning
assets. 23




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##### Table of Contents



Comparison of Operating Results for the Three Months Ended March 31, 2009 and 2008
 Net Income .
 Net Interest Income .
  Interest and Dividend Income .
   Interest Expense.
 24




---



##### Table of Contents



Provision for Loan Losses. Comparison of Financial Condition at March 31, 2009 and June
30, 2008.
 Non-interest Income.
 Non-interest Expenses .
 25




---



##### Table of Contents



Income Taxes.
 Comparison of Operating Results for the Nine Months Ended March 31, 2009 and 2008
 Net Income .
 Net Interest Income.
  Interest and Dividend Income .
   26




---



##### Table of Contents



Interest Expense.
   Provision for Loan Losses. Comparison of
Financial Condition at March 31, 2009 and June 30, 2008.
 Non-interest Income.
 27




---



##### Table of Contents



Non-interest Expenses.
 Income Taxes.
 Liquidity and Capital Resources
      28




---



##### Table of Contents



As of March 31, 2009Actual
    
    RequiredAmount
    
    Ratio
    
    Amount
    
    Ratio(Dollars in thousands)Total capital (to risk-weighted assets)
    
    $
    694,763
    
    
    
    17.3
    %
    
    $
    320,857
    
    
    
    8.0
    %Tier I capital (to risk-weighted assets)
    
    
    660,222
    
    
    
    16.5
    
    
    
    160,429
    
    
    
    4.0Tier I capital (to average assets)
    
    
    660,222
    
    
    
    9.0
    
    
    
    292,060
    
    
    
    4.0
  Off-Balance Sheet Arrangements and Contractual Obligations
   Less than
    
    One-Two
    
    Two-Three
    
    More thanContractual Obligations
    
    Total
    
    One Year
    
    Years
    
    Years
    
    Three YearsDebt obligations (excluding capitalized leases)
    
    $
    1,755,562
    
    
    
    280,000
    
    
    
    330,000
    
    
    
    610,000
    
    
    
    535,562Commitments to originate and purchase loans
    
    $
    256,046
    
    
    
    256,046
    
    
    
    
    
    
    
    
    
    
    
    Commitments to sell loans
    
    $
    67,737
    
    
    
    67,737
    
    
    
    
    
    
    
    
    
    
    
    
    29




---



##### Table of Contents



Critical Accounting Policies
  Allowance for Loan Losses.
   30




---



##### Table of Contents



31




---



##### Table of Contents



Deferred Income Taxes. Accounting for Income Taxes
 Asset Impairment Judgments.
    32




---



##### Table of Contents



Stock-Based Compensation.
   
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Qualitative Analysis
  33




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Quantitative Analysis
 34




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##### Table of Contents



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
    
    $
    534,874
    
    
    $
    (261,825
    )
    
    
    (32.9
    )%
    
    $
    176,443
    
    
    $
    (8,777
    )
    
    
    (4.7
    )%0bp
    
    $
    796,699
    
    
    
    
    
    
    
    
    
    
    $
    185,220
    
    
    
    
    
    
    
    -100bp
    
    $
    812,474
    
    
    $
    15,775
    
    
    
    2.0
    %
    
    $
    189,010
    
    
    $
    3,790
    
    
    
    2.0
    %
 
 (1)
    
    NPV is the discounted present value of expected cash flows from assets, liabilities and
off-balance sheet contracts.(2)
    
    Assumes an instantaneous uniform change in interest rates at all maturities.(3)
    
    Assumes a gradual change in interest rates over a one year period at all maturities   
 Item 4. Controls and Procedures
  35




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##### Table of Contents



Part II  Other Information
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  36




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##### Table of Contents



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*10.5
    
    Investors Bancorp, Inc. Supplemental Wage Replacement Plan*10.6
    
    Executive Officer Annual Incentive 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)**
    
    Filed as Appendix A to the Companys definitive proxy statement with the Securities and Exchange
Commission of September 26, 2008. 37




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##### Table of Contents



SIGNATURES
  Investors Bancorp, Inc.Dated:      May 11, 2009
    /s/ Kevin CummingsKevin CummingsPresident and Chief Executive Officer
(Principal Executive Officer) Dated:      May 11, 2009
    /s/ Thomas F. Splaine, Jr.Thomas F. Splaine, Jr.Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)