##### 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, 2008
 Commission file number: 0-51557
 Investors Bancorp, Inc.
  Delaware
    
    22-3493930(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 101 JFK Parkway, Short Hills, New Jersey 07078
 (973) 924-5100
 þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



Investors Bancorp, Inc.
FORM 10-Q
 Index
 PagePart I. Financial InformationItem 1. Financial StatementsConsolidated Balance Sheets as of March 31, 2008 (unaudited) and June 30, 2007
    
    
    1Consolidated Statements of Income for the Three and Nine Months Ended March 31, 2008 and 2007 (unaudited)
    
    
    2Consolidated Statements of Stockholders Equity for the Nine Months Ended March 31, 2008 and 2007 (unaudited)
    
    
    3Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2008 and 2007 (unaudited)
    
    
    4Notes to Consolidated Financial Statements
    
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    27Item 4. Controls and Procedures
    
    
    30Part II. Other InformationItem 1. Legal Proceedings
    
    
    30Item 1A. Risk Factors
    
    
    30Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    30Item 3. Defaults upon Senior Securities
    
    
    31Item 4. Submission of Matters to a Vote of Security Holders
    
    
    31Item 5. Other Information
    
    
    31Item 6. Exhibits
    
    
    31Signature Page
    
    
    33EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32: CERTIFICATION




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##### Table of Contents



INVESTORS BANCORP, INC. AND SUBSIDIARY
 
   March 31,
    
    
    June 30,2008
    
    
    2007(In thousands)AssetsCash and cash equivalents
    
    $
    90,938
    
    
    
    24,810Securities available-for-sale, at estimated fair value
    
    
    214,049
    
    
    
    251,970Securities held-to-maturity, net (estimated fair value of
$1,271,313 and $1,472,385 at March 31, 2008
and June 30, 2007, respectively)
    
    
    1,302,356
    
    
    
    1,517,664Loans receivable, net
    
    
    4,078,254
    
    
    
    3,589,373Loans held-for-sale
    
    
    6,722
    
    
    
    3,410Stock in the Federal Home Loan Bank
    
    
    41,846
    
    
    
    33,887Accrued interest receivable
    
    
    26,183
    
    
    
    24,300Office properties and equipment, net
    
    
    28,009
    
    
    
    27,155Net deferred tax asset
    
    
    38,571
    
    
    
    39,399Bank owned life insurance contract
    
    
    90,949
    
    
    
    88,018Other assets
    
    
    1,153
    
    
    
    1,102Total assets
    
    $
    5,919,030
    
    
    
    5,601,088Liabilities and Stockholders EquityLiabilities:Deposits
    
    $
    3,887,967
    
    
    
    3,664,966Borrowed funds
    
    
    1,155,589
    
    
    
    1,038,710Advance payments by borrowers for taxes and insurance
    
    
    19,374
    
    
    
    17,671Other liabilities
    
    
    36,215
    
    
    
    36,376Total liabilities
    
    
    5,099,145
    
    
    
    4,757,723Stockholders equity:Preferred stock, $0.01 par value, 50,000,000 authorized shares;
none issued
    
    
    
    
    
    
    Common stock, $0.01 par value, 200,000,000 shares authorized; 116,275,688 issued; 108,135,665
and 111,468,952 outstanding
at March 31, 2008 and June 30, 2007, respectively
    
    
    532
    
    
    
    532Additional paid-in capital
    
    
    511,850
    
    
    
    506,016Retained earnings
    
    
    465,575
    
    
    
    453,751Treasury stock, at cost; 8,276,765 and 4,806,736 shares at
March 31, 2008 and June 30, 2007, respectively
    
    
    (116,774
    )
    
    
    (70,973
    )Unallocated common stock held by the employee stock
ownership plan
    
    
    (37,932
    )
    
    
    (38,996
    )Accumulated other comprehensive loss
    
    
    (3,366
    )
    
    
    (6,965
    )Total stockholders equity
    
    
    819,885
    
    
    
    843,365Total liabilities and stockholders equity
    
    $
    5,919,030
    
    
    
    5,601,088
  1




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##### Table of Contents



INVESTORS BANCORP, INC. AND SUBSIDIARY
 
   For the Three Months
    
    
    For the Nine MonthsEnded March 31,
    
    
    Ended March 31,2008
    
    
    2007
    
    
    2008
    
    
    2007(Dollars in thousands, except per share data)Interest and dividend income:Loans receivable and loans held-for-sale
    
    $
    57,123
    
    
    
    45,868
    
    
    
    166,777
    
    
    
    131,906Securities:Government-sponsored enterprise obligations
    
    
    1,042
    
    
    
    1,339
    
    
    
    3,714
    
    
    
    4,017Mortgage-backed securities
    
    
    14,919
    
    
    
    18,286
    
    
    
    47,358
    
    
    
    60,988Equity securities available-for-sale
    
    
    
    
    
    
    443
    
    
    
    
    
    
    
    1,370Municipal bonds and other debt
    
    
    2,627
    
    
    
    2,410
    
    
    
    8,773
    
    
    
    7,228Interest-bearing deposits
    
    
    151
    
    
    
    154
    
    
    
    452
    
    
    
    545Repurchase agreements
    
    
    162
    
    
    
    
    
    
    
    162
    
    
    
    Federal Home Loan Bank stock
    
    
    971
    
    
    
    798
    
    
    
    2,364
    
    
    
    2,248Total interest and dividend income
    
    
    76,995
    
    
    
    69,298
    
    
    
    229,600
    
    
    
    208,302Interest expense:Deposits
    
    
    37,980
    
    
    
    35,673
    
    
    
    116,899
    
    
    
    100,467Secured borrowings
    
    
    12,887
    
    
    
    11,995
    
    
    
    41,414
    
    
    
    42,744Total interest expense
    
    
    50,867
    
    
    
    47,668
    
    
    
    158,313
    
    
    
    143,211Net interest income
    
    
    26,128
    
    
    
    21,630
    
    
    
    71,287
    
    
    
    65,091Provision for loan losses
    
    
    1,000
    
    
    
    200
    
    
    
    2,950
    
    
    
    525Net interest income after provision
for loan losses
    
    
    25,128
    
    
    
    21,430
    
    
    
    68,337
    
    
    
    64,566Non-interest income:Fees and service charges
    
    
    740
    
    
    
    642
    
    
    
    2,219
    
    
    
    1,961Income on bank owned life insurance contract
    
    
    954
    
    
    
    910
    
    
    
    2,931
    
    
    
    2,629Gain on sales of mortgage loans, net
    
    
    234
    
    
    
    135
    
    
    
    466
    
    
    
    89Gain (loss) on securities transactions, net
    
    
    (17
    )
    
    
    
    
    
    
    1
    
    
    
    (3,666
    )Other income
    
    
    171
    
    
    
    23
    
    
    
    301
    
    
    
    65Total non-interest income
    
    
    2,082
    
    
    
    1,710
    
    
    
    5,918
    
    
    
    1,078Non-interest expenses:Compensation and fringe benefits
    
    
    13,027
    
    
    
    12,962
    
    
    
    37,378
    
    
    
    35,520Advertising and promotional expense
    
    
    635
    
    
    
    767
    
    
    
    1,865
    
    
    
    2,525Office occupancy and equipment expense
    
    
    2,565
    
    
    
    2,469
    
    
    
    7,703
    
    
    
    7,407Federal insurance premiums
    
    
    112
    
    
    
    108
    
    
    
    326
    
    
    
    326Stationery, printing, supplies and telephone
    
    
    465
    
    
    
    399
    
    
    
    1,305
    
    
    
    1,172Legal, audit, accounting, and supervisory examination fees
    
    
    543
    
    
    
    504
    
    
    
    1,517
    
    
    
    1,551Data processing service fees
    
    
    1,076
    
    
    
    1,004
    
    
    
    3,061
    
    
    
    2,912Other operating expenses
    
    
    878
    
    
    
    891
    
    
    
    3,043
    
    
    
    3,025Total non-interest expenses
    
    
    19,301
    
    
    
    19,104
    
    
    
    56,198
    
    
    
    54,438Income before income tax expense (benefit)
    
    
    7,909
    
    
    
    4,036
    
    
    
    18,057
    
    
    
    11,206Income tax expense (benefit)
    
    
    2,905
    
    
    
    1,042
    
    
    
    6,244
    
    
    
    (8,159
    )Net income
    
    $
    5,004
    
    
    
    2,994
    
    
    
    11,813
    
    
    
    19,365Earnings per share  basic and diluted
    
    $
    0.05
    
    
    $
    0.03
    
    
    $
    0.11
    
    
    $
    0.17Weighted average shares outstandingBasic
    
    
    102,952,725
    
    
    
    109,165,928
    
    
    
    104,064,944
    
    
    
    111,066,524Diluted
    
    
    103,080,783
    
    
    
    109,252,301
    
    
    
    104,208,845
    
    
    
    111,071,493
  2




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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 June 30, 2006
    
    $
    532
    
    
    
    524,962
    
    
    
    426,233
    
    
    
    
    
    
    
    (40,414
    )
    
    
    (11,126
    )
    
    
    900,187Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    19,365
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,365Unrealized gain on securities available-
for-sale, net of tax expense of $6,760
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,117
    
    
    
    10,117Reclassification adjustment for losses
included in net income, net of tax benefit
of $1,347
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,951
    )
    
    
    (1,951
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,531Cummulative effect of change
in accounting for bank owned life insurance
    
    
    
    
    
    
    
    
    
    
    5,564
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,564Purchase of treasury stock (4,856,295 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (74,082
    )
    
    
    
    
    
    
    
    
    
    
    (74,082
    )Treasury stock allocated to
restricted stock plan
    
    
    
    
    
    
    (25,421
    )
    
    
    (312
    )
    
    
    25,733
    
    
    
    
    
    
    
    
    
    
    
    Compensation cost for stock
options and restricted stock
    
    
    
    
    
    
    3,458
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,458ESOP shares allocated or commited to be released
    
    
    
    
    
    
    512
    
    
    
    
    
    
    
    
    
    
    
    1,064
    
    
    
    
    
    
    
    1,576Balance at March 31, 2007
    
    $
    532
    
    
    
    503,511
    
    
    
    450,850
    
    
    
    (48,349
    )
    
    
    (39,350
    )
    
    
    (2,960
    )
    
    
    864,234Balance at June 30, 2007
    
    $
    532
    
    
    
    506,016
    
    
    
    453,751
    
    
    
    (70,973
    )
    
    
    (38,996
    )
    
    
    (6,965
    )
    
    
    843,365Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    11,813
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,813Change in funded status of postretirement
plan due to plan curtailment and settlement,
net of tax expense of $891
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,337
    
    
    
    1,337Amortization related to postretirement
obligations, net of tax expense of $54
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80
    
    
    
    80Unrealized gain on securities available-
for-sale, net of tax expense of $1,521
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,182
    
    
    
    2,182Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,412Cummulative effect adjustment
upon adoption of FIN 48
    
    
    
    
    
    
    
    
    
    
    300
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    300Purchase of treasury stock (3,470,029 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
    
    
    
    511,850
    
    
    
    465,575
    
    
    
    (116,774
    )
    
    
    (37,932
    )
    
    
    (3,366
    )
    
    
    819,885
  3




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##### Table of Contents



INVESTORS BANCORP, INC. AND SUBSIDIARY
 
 
 For the Nine Months EndedMarch 31,2008
    
    
    2007(In thousands)Cash flows from operating activities:Net income
    
    $
    11,813
    
    
    
    19,365Adjustments to reconcile net income to net cash provided by operating activities:ESOP and stock-based compensation expense
    
    
    8,728
    
    
    
    5,034Amortization of premiums and accretion of discounts on securities, net
    
    
    785
    
    
    
    1,228Amortization of premium and accretion of fees and costs on loans, net
    
    
    1,559
    
    
    
    1,386Provision for loan losses
    
    
    2,950
    
    
    
    525Depreciation and amortization of office properties and equipment
    
    
    2,026
    
    
    
    2,106(Gain) loss on securities transactions, net
    
    
    (1
    )
    
    
    3,666Mortgage loans originated for sale
    
    
    (59,982
    )
    
    
    (35,225
    )Proceeds from mortgage loan sales
    
    
    57,136
    
    
    
    30,471Gain on sales of mortgage loans, net
    
    
    (466
    )
    
    
    (89
    )Income on bank owned life insurance contract
    
    
    (2,931
    )
    
    
    (2,629
    )Increase in accrued interest receivable
    
    
    (1,883
    )
    
    
    (2,819
    )Deferred tax benefit
    
    
    (1,638
    )
    
    
    (14,058
    )(Increase) decrease in other assets
    
    
    (51
    )
    
    
    147Increase (decrease) in other liabilities
    
    
    2,501
    
    
    
    (4,709
    )Total adjustments
    
    
    8,732
    
    
    
    (14,966
    )Net cash provided by operating activities
    
    
    20,545
    
    
    
    4,399Cash flows from investing activities:Purchases of loans receivable
    
    
    (467,362
    )
    
    
    (503,647
    )Net (originations) repayments of loans receivable
    
    
    (26,028
    )
    
    
    73,334Purchases of mortgage-backed securities held-to-maturity
    
    
    
    
    
    
    (22,701
    )Purchases of debt securities held-to-maturity
    
    
    (23,118
    )
    
    
    (13,000
    )Purchases of other investments available-for-sale
    
    
    (1,400
    )
    
    
    Proceeds from paydowns/maturities on mortgage-backed
securities held-to-maturity
    
    
    170,072
    
    
    
    214,761Proceeds from calls/maturities on debt securities held-to-maturity
    
    
    67,508
    
    
    
    2,063Proceeds from paydowns/maturities on mortgage-backed
securities available-for-sale
    
    
    43,087
    
    
    
    70,809Proceeds from call of equity securities available-for-sale
    
    
    
    
    
    
    10,000Proceeds from sale of mortgage-backed securities held-to-maturity
    
    
    
    
    
    
    22,942Proceeds from sale of mortgage-backed securities available-for-sale
    
    
    
    
    
    
    161,112Proceeds from redemptions of Federal Home Loan Bank stock
    
    
    21,323
    
    
    
    29,251Purchases of Federal Home Loan Bank stock
    
    
    (29,282
    )
    
    
    (16,650
    )Purchases of office properties and equipment
    
    
    (2,880
    )
    
    
    (1,396
    )Net cash (used in) provided by investing activities
    
    
    (248,080
    )
    
    
    26,878Cash flows from financing activities:Net increase in deposits
    
    
    223,001
    
    
    
    282,066Net decrease in funds borrowed under short-term repurchase agreements
    
    
    (160,000
    )
    
    
    (125,000
    )Proceeds from funds borrowed under other repurchase agreements
    
    
    590,000
    
    
    
    310,000Repayments of funds borrowed under other repurchase agreements
    
    
    (80,000
    )
    
    
    (475,000
    )Net (decrease) increase in other borrowings
    
    
    (233,121
    )
    
    
    34,977Net increase in advance payments by borrowers for taxes and insurance
    
    
    1,703
    
    
    
    689Purchase of treasury stock
    
    
    (47,920
    )
    
    
    (74,082
    )Net cash provided by (used in) financing activities
    
    
    293,663
    
    
    
    (46,350
    )Net increase (decrease) in cash and cash equivalents
    
    
    66,128
    
    
    
    (15,073
    )Cash and cash equivalents at beginning of period
    
    
    24,810
    
    
    
    39,824Cash and cash equivalents at end of period
    
    $
    90,938
    
    
    
    24,751Supplemental cash flow information:Cash paid during the period for:Interest
    
    
    155,635
    
    
    
    143,168Income taxes
    
    
    2,194
    
    
    
    7,615
  4




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##### Table of Contents



INVESTORS BANCORP, INC. AND SUBSIDIARY
 
  1. Basis of Presentation
    2. Earnings Per Share
  For the Three Months Ended March 31,2008
    
    
    2007Per
    
    
    
    
    
    
    
    
    
    
    PerShare
    
    
    
    
    
    
    
    
    
    
    ShareIncome
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount(In thousands, except per share data)Net Income
    
    $
    5,004
    
    
    
    
    
    
    
    
    
    
    $
    2,994Basic earnings per share:Income available to common
stockholders
    
    $
    5,004
    
    
    
    102,952,725
    
    
    $
    0.05
    
    
    $
    2,994
    
    
    
    109,165,928
    
    
    $
    0.03Effect of dilutive common stock
equivalents
    
    
    
    
    
    
    128,058
    
    
    
    
    
    
    
    
    
    
    
    86,373Diluted earnings per share:Income available to common
stockholders
    
    $
    5,004
    
    
    
    103,080,783
    
    
    $
    0.05
    
    
    $
    2,994
    
    
    
    109,252,301
    
    
    $
    0.03
 5




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##### Table of Contents



For the Nine Months Ended March 31,2008
    
    
    2007Per
    
    
    
    
    
    
    
    
    
    
    PerShare
    
    
    
    
    
    
    
    
    
    
    ShareIncome
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount(In thousands, except per share data)Net Income
    
    $
    11,813
    
    
    
    
    
    
    
    
    
    
    $
    19,365Basic earnings per share:Income available to common
stockholders
    
    $
    11,813
    
    
    
    104,064,944
    
    
    $
    0.11
    
    
    $
    19,365
    
    
    
    111,066,524
    
    
    $
    0.17Effect of dilutive common stock
equivalents
    
    
    
    
    
    
    143,901
    
    
    
    
    
    
    
    
    
    
    
    4,969Diluted earnings per share:Income available to common
stockholders
    
    $
    11,813
    
    
    
    104,208,845
    
    
    $
    0.11
    
    
    $
    19,365
    
    
    
    111,071,493
    
    
    $
    0.17
  3. Loans Receivable, Net
  March 31,
    
    
    June 30,2008
    
    
    2007(In thousands)Residential mortgage loans
    
    $
    3,488,985
    
    
    
    3,153,212Multi-family and commercial
    
    
    155,106
    
    
    
    107,350Construction loans
    
    
    254,766
    
    
    
    152,670Consumer and other loans
    
    
    166,745
    
    
    
    161,395Total loans
    
    
    4,065,602
    
    
    
    3,574,627Premiums and deferred costs
    
    
    25,011
    
    
    
    23,587Deferred loan fees
    
    
    (2,522
    )
    
    
    (1,924
    )Allowance for loan losses
    
    
    (9,837
    )
    
    
    (6,917
    )Net loans
    
    $
    4,078,254
    
    
    
    3,589,373
 6




---



##### Table of Contents



4. Deposits
  March 31,
    
    
    June 30,2008
    
    
    2007(In thousands)Savings accounts
    
    $
    362,694
    
    
    
    320,880Checking accounts
    
    
    382,866
    
    
    
    388,215Money market accounts
    
    
    211,193
    
    
    
    182,274Total core deposits
    
    
    956,753
    
    
    
    891,369Certificates of deposit
    
    
    2,931,214
    
    
    
    2,773,597$
    3,887,967
    
    
    
    3,664,966
 5. Equity Incentive Plan
    Nine months ended March 31,2008
    
    2007Weighted
    
    
    
    
    
    WeightedNumber of
    
    Average
    
    Number of
    
    AverageStock
    
    Exercise
    
    Stock
    
    ExerciseOptions
    
    Price
    
    Options
    
    PriceOutstanding at beginning of period
    
    
    4,437,401
    
    
    $
    15.26
    
    
    
    
    
    
    $
    Granted
    
    
    351,851
    
    
    
    13.39
    
    
    
    4,447,401
    
    
    
    15.26Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at end of period
    
    
    4,789,252
    
    
    $
    15.12
    
    
    
    4,447,401
    
    
    $
    15.26Exercisable at end of period
    
    
    887,480
    
    
    $
    15.26
    
    
    
    
    
    
    $
    
  7




---



##### Table of Contents



Nine months ended March 31,2008
    
    
    2007Weighted
    
    
    
    
    
    
    WeightedNumber of
    
    
    Average
    
    
    Number of
    
    
    AverageStock
    
    
    Grant Date
    
    
    Stock
    
    
    Grant DateOptions
    
    
    Fair Value
    
    
    Options
    
    
    Fair ValueNon-vested at the beginning of period
    
    
    4,437,401
    
    
    $
    4.17
    
    
    
    
    
    
    $
    Granted
    
    
    351,851
    
    
    
    3.46
    
    
    
    4,447,401
    
    
    
    4.17Vested
    
    
    (887,480
    )
    
    
    4.17
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-vested at end of period
    
    
    3,901,772
    
    
    $
    4.10
    
    
    
    4,447,401
    
    
    $
    4.17
    Nine months ended March 31,2008
    
    
    2007Weighted
    
    
    
    
    
    
    WeightedNumber of
    
    
    Average
    
    
    Number of
    
    
    AverageShares
    
    
    Grant Date
    
    
    Shares
    
    
    Grant DateAwarded
    
    
    Fair Value
    
    
    Awarded
    
    
    Fair ValueNon-vested at the beginning of period
    
    
    1,666,959
    
    
    $
    15.25
    
    
    
    
    
    
    $
    Granted
    
    
    136,742
    
    
    
    13.38
    
    
    
    1,666,959
    
    
    
    15.25Vested
    
    
    (333,389
    )
    
    
    15.25
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-vested at end of period
    
    
    1,470,312
    
    
    $
    15.08
    
    
    
    1,666,959
    
    
    $
    15.25
  6. Net Periodic Benefit Plans Expense
  8




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##### Table of Contents



Three months ended March 31,SERP and directors plan
    
    
    Other Benefits2008
    
    
    2007
    
    
    2008
    
    
    2007( In thousands)Service cost
    
    $
    135
    
    
    
    296
    
    
    
    
    
    
    
    40Interest cost
    
    
    253
    
    
    
    225
    
    
    
    12
    
    
    
    135Amortization of:Transition obligation
    
    
    
    
    
    
    
    
    
    
    9
    
    
    
    50Prior service cost
    
    
    (25
    )
    
    
    5
    
    
    
    
    
    
    
    Net loss (gain)
    
    
    49
    
    
    
    37
    
    
    
    (5
    )
    
    
    Total net periodic benefit expense
    
    $
    412
    
    
    
    563
    
    
    
    16
    
    
    
    225
 Nine months ended March 31,SERP and directors plan
    
    
    Other Benefits2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands)Service cost
    
    $
    404
    
    
    
    888
    
    
    
    46
    
    
    
    119Interest cost
    
    
    758
    
    
    
    674
    
    
    
    229
    
    
    
    404Amortization of:Transition obligation
    
    
    
    
    
    
    
    
    
    
    66
    
    
    
    150Prior service cost
    
    
    (74
    )
    
    
    14
    
    
    
    
    
    
    
    Net loss (gain)
    
    
    146
    
    
    
    113
    
    
    
    (4
    )
    
    
    Total net periodic benefit expense
    
    $
    1,234
    
    
    
    1,689
    
    
    
    337
    
    
    
    673
   9




---



##### Table of Contents



7. Income Taxes
    8. Stock Repurchase Program
  10




---



##### Table of Contents



9. Pending Acquisition
   10. Recent Accounting Pronouncements
   11




---



##### Table of Contents



"
  
 Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward Looking Statements
  12




---



##### Table of Contents



Executive Summary
      13




---



##### Table of Contents



Comparison of Financial Condition at March 31, 2008 and June 30, 2007
 Total Assets .
 Securities.
 Net Loans.
 14




---



##### Table of Contents



15




---



##### Table of Contents



Stock in the Federal Home Loan Bank, Bank Owned Life Insurance and Other Assets.
 Deposit s.
 Borrowed Funds .
 Stockholders Equity .
 Average Balance Sheets for the Three and Nine Months ended March 31, 2008 and 2007
  16




---



##### Table of Contents



For Three Months EndedMarch 31, 2008
    
    
    March 31, 2007Average
    
    
    
    
    
    
    
    
    
    
    AverageOutstanding
    
    
    Interest
    
    
    Average
    
    
    Outstanding
    
    
    Interest
    
    
    AverageBalance
    
    
    Earned/Paid
    
    
    Yield/Rate
    
    
    Balance
    
    
    Earned/Paid
    
    
    Yield/Rate(Dollars in thousands)Interest-earning assets:Interest-bearing deposits
    
    $
    27,013
    
    
    $
    151
    
    
    
    2.24
    %
    
    $
    18,317
    
    
    $
    154
    
    
    
    3.36
    %Repurchase agreements and Fed Funds
    
    
    23,626
    
    
    
    162
    
    
    
    2.74
    %
    
    
    
    
    
    
    
    
    
    
    Securities available-for-sale (1)
    
    
    221,914
    
    
    
    2,557
    
    
    
    4.61
    %
    
    
    318,611
    
    
    
    3,643
    
    
    
    4.57
    %Securities held-to-maturity
    
    
    1,355,945
    
    
    
    16,031
    
    
    
    4.73
    %
    
    
    1,573,901
    
    
    
    18,835
    
    
    
    4.79
    %Net loans
    
    
    4,020,387
    
    
    
    57,123
    
    
    
    5.68
    %
    
    
    3,313,269
    
    
    
    45,868
    
    
    
    5.54
    %Stock in FHLB
    
    
    44,088
    
    
    
    971
    
    
    
    8.81
    %
    
    
    35,541
    
    
    
    798
    
    
    
    8.98
    %Total
interest-earning
assets
    
    
    5,692,973
    
    
    
    76,995
    
    
    
    5.41
    %
    
    
    5,259,639
    
    
    
    69,298
    
    
    
    5.27
    %Non-interest-earning assets
    
    
    176,304
    
    
    
    
    
    
    
    
    
    
    
    173,157Total assets
    
    $
    5,869,277
    
    
    
    
    
    
    
    
    
    
    $
    5,432,796Interest-bearing liabilities:Savings
    
    $
    353,576
    
    
    
    2,014
    
    
    
    2.28
    %
    
    $
    275,530
    
    
    
    1,306
    
    
    
    1.90
    %Interest-bearing checking
    
    
    330,973
    
    
    
    1,595
    
    
    
    1.93
    %
    
    
    303,904
    
    
    
    1,817
    
    
    
    2.39
    %Money market accounts
    
    
    208,798
    
    
    
    1,225
    
    
    
    2.35
    %
    
    
    174,671
    
    
    
    856
    
    
    
    1.96
    %Certificates of deposit
    
    
    2,880,853
    
    
    
    33,146
    
    
    
    4.60
    %
    
    
    2,711,528
    
    
    
    31,694
    
    
    
    4.68
    %Borrowed funds
    
    
    1,190,571
    
    
    
    12,887
    
    
    
    4.33
    %
    
    
    1,003,698
    
    
    
    11,995
    
    
    
    4.78
    %Total
interest-bearing
liabilities
    
    
    4,964,771
    
    
    
    50,867
    
    
    
    4.10
    %
    
    
    4,469,331
    
    
    
    47,668
    
    
    
    4.27
    %Non-interest-bearing liabilities
    
    
    93,214
    
    
    
    
    
    
    
    
    
    
    
    83,284Total liabilities
    
    
    5,057,985
    
    
    
    
    
    
    
    
    
    
    
    4,552,615Stockholders equity
    
    
    811,292
    
    
    
    
    
    
    
    
    
    
    
    880,181Total liabilities
and stockholders
equity
    
    $
    5,869,277
    
    
    
    
    
    
    
    
    
    
    $
    5,432,796Net interest income
    
    
    
    
    
    $
    26,128
    
    
    
    
    
    
    
    
    
    
    $
    21,630Net interest rate spread (2)
    
    
    
    
    
    
    
    
    
    
    1.31
    %
    
    
    
    
    
    
    
    
    
    
    1.00
    %Net interest-earning assets (3)
    
    $
    728,202
    
    
    
    
    
    
    
    
    
    
    $
    790,308Net interest margin (4)
    
    
    
    
    
    
    
    
    
    
    1.84
    %
    
    
    
    
    
    
    
    
    
    
    1.64
    %Ratio of interest-earning assets to total interest-
bearing liabilities
    
    
    1.15
    X
    
    
    
    
    
    
    
    
    
    
    1.18
    X
 17




---



##### Table of Contents



For Nine Months EndedMarch 31, 2008
    
    
    March 31, 2007Average
    
    
    
    
    
    
    
    
    
    
    AverageOutstanding
    
    
    Interest
    
    
    Average
    
    
    Outstanding
    
    
    Interest
    
    
    AverageBalance
    
    
    Earned/Paid
    
    
    Yield/Rate
    
    
    Balance
    
    
    Earned/Paid
    
    
    Yield/Rate(Dollars in thousands)Interest-earning assets:Interest-bearing deposits
    
    $
    19,039
    
    
    $
    452
    
    
    
    3.17
    %
    
    $
    20,346
    
    
    $
    545
    
    
    
    3.57
    %Repurchase agreements and Fed Funds
    
    
    7,732
    
    
    
    162
    
    
    
    2.79
    %
    
    
    
    
    
    
    
    
    
    
    Securities available-for-sale (1)
    
    
    236,034
    
    
    
    8,130
    
    
    
    4.59
    %
    
    
    441,337
    
    
    
    14,541
    
    
    
    4.39
    %Securities held-to-maturity
    
    
    1,428,165
    
    
    
    51,715
    
    
    
    4.83
    %
    
    
    1,650,542
    
    
    
    59,062
    
    
    
    4.77
    %Net loans
    
    
    3,893,275
    
    
    
    166,777
    
    
    
    5.71
    %
    
    
    3,204,120
    
    
    
    131,906
    
    
    
    5.49
    %Stock in FHLB
    
    
    43,145
    
    
    
    2,364
    
    
    
    7.31
    %
    
    
    42,903
    
    
    
    2,248
    
    
    
    6.99
    %Total
interest-earning
assets
    
    
    5,627,390
    
    
    
    229,600
    
    
    
    5.44
    %
    
    
    5,359,248
    
    
    
    208,302
    
    
    
    5.18
    %Non-interest-earning assets
    
    
    176,401
    
    
    
    
    
    
    
    
    
    
    
    159,065Total assets
    
    $
    5,803,791
    
    
    
    
    
    
    
    
    
    
    $
    5,518,313Interest-bearing liabilities:Savings
    
    $
    324,851
    
    
    
    5,471
    
    
    
    2.25
    %
    
    $
    247,467
    
    
    
    2,740
    
    
    
    1.48
    %Interest-bearing checking
    
    
    338,648
    
    
    
    5,920
    
    
    
    2.33
    %
    
    
    303,209
    
    
    
    5,452
    
    
    
    2.40
    %Money market accounts
    
    
    201,230
    
    
    
    3,889
    
    
    
    2.58
    %
    
    
    189,401
    
    
    
    2,658
    
    
    
    1.87
    %Certificates of deposit
    
    
    2,851,958
    
    
    
    101,619
    
    
    
    4.75
    %
    
    
    2,633,313
    
    
    
    89,617
    
    
    
    4.54
    %Borrowed funds
    
    
    1,170,464
    
    
    
    41,414
    
    
    
    4.72
    %
    
    
    1,165,815
    
    
    
    42,744
    
    
    
    4.89
    %Total
interest-bearing
liabilities
    
    
    4,887,151
    
    
    
    158,313
    
    
    
    4.32
    %
    
    
    4,539,205
    
    
    
    143,211
    
    
    
    4.21
    %Non-interest-bearing liabilities
    
    
    97,620
    
    
    
    
    
    
    
    
    
    
    
    83,321Total liabilities
    
    
    4,984,771
    
    
    
    
    
    
    
    
    
    
    
    4,622,526Stockholders equity
    
    
    819,020
    
    
    
    
    
    
    
    
    
    
    
    895,787Total liabilities
and stockholders
equity
    
    $
    5,803,791
    
    
    
    
    
    
    
    
    
    
    $
    5,518,313Net interest income
    
    
    
    
    
    $
    71,287
    
    
    
    
    
    
    
    
    
    
    $
    65,091Net interest rate spread (2)
    
    
    
    
    
    
    
    
    
    
    1.12
    %
    
    
    
    
    
    
    
    
    
    
    0.97
    %Net interest-earning assets (3)
    
    $
    740,239
    
    
    
    
    
    
    
    
    
    
    $
    820,043Net interest margin (4)
    
    
    
    
    
    
    
    
    
    
    1.69
    %
    
    
    
    
    
    
    
    
    
    
    1.62
    %Ratio of interest-earning assets to total interest-
bearing liabilities
    
    
    1.15
    X
    
    
    
    
    
    
    
    
    
    
    1.18
    X
 
 (1)
    
    Securities available-for-sale are stated at amortized cost, adjusted for unamortized purchase
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. 
 18




---



##### Table of Contents



Comparison of Operating Results for the Three Months Ended March 31, 2008 and 2007
 Net Income .
 Net Interest Income .
 Interest and Dividend Income .
   Interest Expense.
 19




---



##### Table of Contents



Provision for Loan Losses. Comparison of Financial Condition at March 31, 2008 and June 30, 2007.
 Non-interest Income.
 Non-interest Expenses .
 Income Taxes.
 Comparison of Operating Results for the Nine Months Ended March 31, 2008 and 2007
 Net Income .
 20




---



##### Table of Contents



Net Interest Income.
 Interest and Dividend Income .
   Interest Expense.
  21




---



##### Table of Contents



Provision for Loan Losses. Comparison of Financial Condition at March 31, 2008 and June 30,
2007.
 Non-interest Income.
 Non-interest Expenses.
 Income Taxes.
 Liquidity and Capital Resources
  22




---



##### Table of Contents



As of March 31, 2008Actual
    
    RequiredAmount
    
    Ratio
    
    Amount
    
    Ratio(Dollars in thousands)Total capital (to risk-weighted assets)
    
    $
    714,675
    
    
    
    23.1
    %
    
    $
    247,194
    
    
    
    8.0
    %Tier I capital (to risk-weighted assets)
    
    
    704,838
    
    
    
    22.8
    
    
    
    123,597
    
    
    
    4.0Tier I capital (to average assets)
    
    
    704,838
    
    
    
    12.0
    
    
    
    234,335
    
    
    
    4.0
 23




---



##### Table of Contents



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)
    
    $
    1,155,589
    
    
    
    325,000
    
    
    
    260,000
    
    
    
    175,000
    
    
    
    395,589Commitments to originate and purchase loans
    
    $
    298,126
    
    
    
    298,126
    
    
    
    
    
    
    
    
    
    
    
    Commitments to sell loans
    
    $
    24,982
    
    
    
    24,982
    
    
    
    
    
    
    
    
    
    
    
    
      Critical Accounting Policies
  Allowance for Loan Losses.
 24




---



##### Table of Contents



25




---



##### Table of Contents



Deferred Income Taxes.
 Asset Impairment Judgments.
 26




---



##### Table of Contents



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




---



##### Table of Contents



28




---



##### Table of Contents



Quantitative Analysis
 Net Portfolio Value (1),(2)
    
    Net Interest Income (3)Increase (Decrease) in EstimatedChange in
    

    
    
    
    
    Estimated Increase (Decrease)
    

    
    
    
    
    Net Interest IncomeInterest Rates
    
    
    
    
    
    
    
    
    
    
    
    
    
    Estimated Net(basis points)
    
    Estimated NPV
    
    Amount
    
    Percent
    
    Interest Income
    
    Amount
    
    Percent(Dollars in thousands)+200bp
    
    $
    338,981
    
    
    $
    (300,954
    )
    
    
    (47.0
    )%
    
    $
    119,890
    
    
    $
    (16,180
    )
    
    
    (11.9
    )%0bp
    
    
    639,935
    
    
    
    
    
    
    
    
    
    
    
    136,070
    
    
    
    
    
    
    
    -200bp
    
    
    721,022
    
    
    
    81,087
    
    
    
    12.7
    %
    
    
    145,208
    
    
    
    9,138
    
    
    
    6.7
    %
 
 (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   29




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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
  30




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##### Table of Contents



Total Number of
    
    
    Maximum NumberShares Purchased as
    
    
    of Shares that MayTotal Number of
    
    
    
    
    
    
    Part of Publicly
    
    
    Yet Be PurchasedShares
    
    
    Average price
    
    
    Announced Plans or
    
    
    Under the Plans orPeriod
    
    Purchased
    
    
    Paid per Share
    
    
    Programs
    
    
    Programs (1)January 1, 2008
through January 31,
2008
    
    
    311,000
    
    
    $
    13.67
    
    
    
    311,000
    
    
    
    4,556,945February 1, 2008
through February
29, 2008
    
    
    40,000
    
    
    
    14.62
    
    
    
    40,000
    
    
    
    4,516,945March 1, 2008
through March 31,
2008
    
    
    50,000
    
    
    
    14.17
    
    
    
    50,000
    
    
    
    4,466,945Total
    
    
    401,000
    
    
    $
    13.83
    
    
    
    401,000
 
 (1)
    
    On April 26, 2007, the Company announced its second Share Repurchase
Program, which authorized the purchase of an additonal 10% of its publicly-held
outstanding shares of common stock, or 4,785,831 shares. This share repurchase
program commenced upon completion of the first program on May 10, 2007. This
program has no expiration date and has 159,697 shares yet to be repurchased as
of March 31, 2008.(2)
    
    On January 28, 2008, the Company announced its third Share Repurchase
Program, which authorized the purchase of an additonal 10% of its publicly-held
outstanding shares of common stock, or 4,307,248 shares. This share repurchase
program will commence upon completion of the second program. This program has
no expiration date. 
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
  3.1
    
    Certificate of Incorporation of Investors Bancorp, Inc.*3.2
    
    Bylaws of Investors Bancorp, Inc.*4
    
    Form of Common Stock Certificate of Investors Bancorp, Inc.*10.1
    
    Form of Employment Agreement between Investors Bancorp, Inc. and certain
executive officers*10.2
    
    Form of Change in Control Agreement between Investors Bancorp, Inc. and certain
executive officers *
 31




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##### Table of Contents



10.3
    
    Investors Savings Bank Director Retirement Plan*10.4
    
    Investors Savings Bank Supplemental Retirement Plan*10.5
    
    Investors Bancorp, Inc. Supplemental Wage Replacement Plan*31.1
    
    Certification of Principal Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 200231.2
    
    Certification of Principal Financial and Accounting Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 200232
    
    Certification of Principal Executive Officer and Principal Financial and
accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 *
    
    Filed as exhibits to the Companys Registration Statement on Form S-1, and any amendments
thereto, with the Securities and Exchange Commission (Registration No. 333-125703) 32




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##### Table of Contents



SIGNATURES
  Investors Bancorp, Inc.Dated:      May 9, 2008
    /s/ Kevin CummingsKevin CummingsPresident and Chief Executive Officer
(Principal      Executive Officer)Dated:      May 9, 2008
    /s/ Thomas F. Splaine, Jr.Thomas F. SplaineSenior Vice President and Chief Financial Officer

      (Principal Financial and Accounting Officer) 33