##### 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: December 31, 2007
 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 December 31, 2007 (unaudited) and June 30, 2007
    
    
    1Consolidated Statements of Income for the Three and Six Months Ended December 31, 2007 and 2006 (unaudited)
    
    
    2Consolidated Statements of Stockholders Equity for the Six Months Ended December 31, 2007 and 2006 (unaudited)
    
    
    3Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2007 and 2006 (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
    
    
    26Item 4.
    
    Controls and Procedures
    
    
    28Part II. Other InformationItem 1.
    
    Legal Proceedings
    
    
    29Item 1A.
    
    Risk Factors
    
    
    29Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    29Item 3.
    
    Defaults upon Senior Securities
    
    
    29Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    29Item 5.
    
    Other Information
    
    
    30Item 6.
    
    Exhibits
    
    
    30Signature Page
    
    
    32EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32: CERTIFICATION




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##### Table of Contents



Part I. Financial Information
 
 Item 1. Financial Statements
 
 INVESTORS BANCORP, INC. AND SUBSIDIARY
 December 31,
    
    
    June 30,2007
    
    
    2007(In thousands)AssetsCash and cash equivalents
    
    $
    14,588
    
    
    
    24,810Securities available-for-sale, at estimated fair value
    
    
    224,749
    
    
    
    251,970Securities held-to-maturity, net (estimated fair value of
$1,374,358 and $1,472,385 at December 31, 2007
and June 30, 2007, respectively)
    
    
    1,401,088
    
    
    
    1,517,664Loans receivable, net
    
    
    3,996,885
    
    
    
    3,589,373Loans held-for-sale
    
    
    7,143
    
    
    
    3,410Stock in the Federal Home Loan Bank
    
    
    46,148
    
    
    
    33,887Accrued interest receivable
    
    
    26,383
    
    
    
    24,300Office properties and equipment, net
    
    
    27,926
    
    
    
    27,155Net deferred tax asset
    
    
    37,055
    
    
    
    39,399Bank owned life insurance contract
    
    
    89,995
    
    
    
    88,018Other assets
    
    
    1,509
    
    
    
    1,102Total assets
    
    $
    5,873,469
    
    
    
    5,601,088Liabilities and Stockholders EquityLiabilities:Deposits
    
    $
    3,793,972
    
    
    
    3,664,966Borrowed funds
    
    
    1,211,195
    
    
    
    1,038,710Advance payments by borrowers for taxes and insurance
    
    
    17,798
    
    
    
    17,671Other liabilities
    
    
    32,684
    
    
    
    36,376Total liabilities
    
    
    5,055,649
    
    
    
    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; 108,399,923 and 111,468,952 outstanding
at December 31, 2007 and June 30, 2007, respectively
    
    
    532
    
    
    
    532Additional paid-in capital
    
    
    511,026
    
    
    
    506,016Retained earnings
    
    
    460,860
    
    
    
    453,751Treasury stock, at cost; 7,875,765 and 4,806,736 shares at
December 31, 2007 and June 30, 2007, respectively
    
    
    (113,349
    )
    
    
    (70,973
    )Unallocated common stock held by the employee stock
ownership plan
    
    
    (38,287
    )
    
    
    (38,996
    )Accumulated other comprehensive loss
    
    
    (2,962
    )
    
    
    (6,965
    )Total stockholders equity
    
    
    817,820
    
    
    
    843,365Total liabilities and
stockholders equity
    
    $
    5,873,469
    
    
    
    5,601,088
  1




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##### Table of Contents



INVESTORS BANCORP, INC. AND SUBSIDIARY
 For the Three Months
    
    
    For the Six MonthsEnded December 31,
    
    
    Ended December 31,2007
    
    
    2006
    
    
    2007
    
    
    2006(Dollars in thousands, except per share data)Interest and dividend income:Loans receivable and loans held-for-sale
    
    $
    56,688
    
    
    
    44,126
    
    
    
    109,654
    
    
    
    86,038Securities:Government-sponsored enterprise obligations
    
    
    1,335
    
    
    
    1,339
    
    
    
    2,672
    
    
    
    2,678Mortgage-backed securities
    
    
    15,783
    
    
    
    20,649
    
    
    
    32,439
    
    
    
    42,702Equity securities available-for-sale
    
    
    
    
    
    
    472
    
    
    
    
    
    
    
    927Municipal bonds and other debt
    
    
    3,050
    
    
    
    2,412
    
    
    
    6,146
    
    
    
    4,818Interest-bearing deposits
    
    
    141
    
    
    
    222
    
    
    
    301
    
    
    
    391Federal Home Loan Bank stock
    
    
    800
    
    
    
    753
    
    
    
    1,393
    
    
    
    1,450Total interest and dividend income
    
    
    77,797
    
    
    
    69,973
    
    
    
    152,605
    
    
    
    139,004Interest expense:Deposits
    
    
    39,617
    
    
    
    34,044
    
    
    
    78,919
    
    
    
    64,794Secured borrowings
    
    
    14,424
    
    
    
    14,935
    
    
    
    28,527
    
    
    
    30,749Total interest expense
    
    
    54,041
    
    
    
    48,979
    
    
    
    107,446
    
    
    
    95,543Net interest income
    
    
    23,756
    
    
    
    20,994
    
    
    
    45,159
    
    
    
    43,461Provision for loan losses
    
    
    1,750
    
    
    
    100
    
    
    
    1,950
    
    
    
    325Net interest income after provision
for loan losses
    
    
    22,006
    
    
    
    20,894
    
    
    
    43,209
    
    
    
    43,136Non-interest income (loss)Fees and service charges
    
    
    768
    
    
    
    659
    
    
    
    1,479
    
    
    
    1,319Income on bank owned life insurance contract
    
    
    1,045
    
    
    
    924
    
    
    
    1,977
    
    
    
    1,719Gain (loss) on sales of mortgage loans, net
    
    
    151
    
    
    
    (129
    )
    
    
    232
    
    
    
    (46
    )Gain (loss) on securities transactions
    
    
    18
    
    
    
    (3,666
    )
    
    
    18
    
    
    
    (3,666
    )Other income
    
    
    66
    
    
    
    21
    
    
    
    130
    
    
    
    42Total non-interest income (loss)
    
    
    2,048
    
    
    
    (2,191
    )
    
    
    3,836
    
    
    
    (632
    )Non-interest expenseCompensation and fringe benefits
    
    
    11,361
    
    
    
    12,258
    
    
    
    24,351
    
    
    
    22,558Advertising and promotional expense
    
    
    728
    
    
    
    858
    
    
    
    1,230
    
    
    
    1,758Office occupancy and equipment expense
    
    
    2,590
    
    
    
    2,515
    
    
    
    5,138
    
    
    
    4,938Federal insurance premiums
    
    
    109
    
    
    
    108
    
    
    
    214
    
    
    
    218Stationery, printing, supplies and telephone
    
    
    439
    
    
    
    380
    
    
    
    840
    
    
    
    773Legal, audit, accounting, and supervisory examination fees
    
    
    545
    
    
    
    257
    
    
    
    974
    
    
    
    1,047Data processing service fees
    
    
    975
    
    
    
    972
    
    
    
    1,985
    
    
    
    1,908Other operating expenses
    
    
    1,153
    
    
    
    899
    
    
    
    2,165
    
    
    
    2,134Total non-interest expenses
    
    
    17,900
    
    
    
    18,247
    
    
    
    36,897
    
    
    
    35,334Income before income tax expense (benefit)
    
    
    6,154
    
    
    
    456
    
    
    
    10,148
    
    
    
    7,170Income tax expense (benefit)
    
    
    2,197
    
    
    
    (11,564
    )
    
    
    3,339
    
    
    
    (9,201
    )Net income
    
    $
    3,957
    
    
    
    12,020
    
    
    
    6,809
    
    
    
    16,371Earnings per shareBasic
    
    
    0.04
    
    
    
    0.11
    
    
    
    0.07
    
    
    
    0.15Diluted
    
    
    0.04
    
    
    
    0.11
    
    
    
    0.06
    
    
    
    0.15Weighted average shares outstandingBasic
    
    
    104,168,521
    
    
    
    110,985,701
    
    
    
    104,617,202
    
    
    
    111,403,344Diluted
    
    
    104,349,612
    
    
    
    110,988,728
    
    
    
    104,829,316
    
    
    
    111,403,344
  2




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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, 2006
    
    $
    532
    
    
    
    524,962
    
    
    
    426,233
    
    
    
    
    
    
    
    (40,414
    )
    
    
    (11,126
    )
    
    
    900,187Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    16,371
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,371Unrealized gain on securities available-
for-sale, net of tax expense of $6,210
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,496
    
    
    
    9,496Reclassification adjustment for losses
included in net income, net of tax benefit
of $1,347
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,951
    )
    
    
    (1,951
    )Total comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,916Cummulative effect of change in accounting
for bank owned life insurance
    
    
    
    
    
    
    
    
    
    
    5,564
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,564Purchase of treasury stock (1,972,588 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (30,502
    )
    
    
    
    
    
    
    
    
    
    
    (30,502
    )Treasury stock allocated to
restricted stock plan
    
    
    
    
    
    
    (25,421
    )
    
    
    (312
    )
    
    
    25,733
    
    
    
    
    
    
    
    
    
    
    
    Compensation cost for stock
options and restricted stock
    
    
    
    
    
    
    1,096
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,096ESOP shares allocated or committed
to be released
    
    
    
    
    
    
    325
    
    
    
    
    
    
    
    
    
    
    
    709
    
    
    
    
    
    
    
    1,034Balance at December 31, 2006
    
    $
    532
    
    
    
    500,962
    
    
    
    447,856
    
    
    
    (4,769
    )
    
    
    (39,705
    )
    
    
    (3,581
    )
    
    
    901,295Balance at June 30, 2007
    
    $
    532
    
    
    
    506,016
    
    
    
    453,751
    
    
    
    (70,973
    )
    
    
    (38,996
    )
    
    
    (6,965
    )
    
    
    843,365Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    6,809
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,809Change in funded status of postretirement
plan due to plan curtailment and
settlement, net of tax expense of $969
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,450
    
    
    
    1,450Amortization related to post-retirement
obligations, net of tax expense of $47
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    69
    
    
    
    69Unrealized gain on securities available-
for-sale, net of tax expense of $1,716
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,484
    
    
    
    2,484Total comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,812Cummulative effect adjustment
upon adoption of FIN 48
    
    
    
    
    
    
    
    
    
    
    300
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    300Purchase of treasury stock (3,069,029 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (42,376
    )
    
    
    
    
    
    
    
    
    
    
    (42,376
    )Compensation cost for stock
options and restricted stock
    
    
    
    
    
    
    4,725
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,725ESOP shares allocated or committed
to be released
    
    
    
    
    
    
    285
    
    
    
    
    
    
    
    
    
    
    
    709
    
    
    
    
    
    
    
    994Balance at December 31, 2007
    
    $
    532
    
    
    
    511,026
    
    
    
    460,860
    
    
    
    (113,349
    )
    
    
    (38,287
    )
    
    
    (2,962
    )
    
    
    817,820
  3




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##### Table of Contents



INVESTORS BANCORP, INC. AND SUBSIDIARY
   For the Six Months EndedDecember 31,2007
    
    
    2006(In thousands)Cash flows from operating activities:Net income
    
    $
    6,809
    
    
    
    16,371Adjustments to reconcile net income to net cash provided by operating activities:ESOP and stock-based compensation expense
    
    
    5,719
    
    
    
    2,130Amortization of premiums and accretion of discounts on securities, net
    
    
    565
    
    
    
    891Amortization of premium and accretion of fees and costs on loans, net
    
    
    778
    
    
    
    933Provision for loan losses
    
    
    1,950
    
    
    
    325Depreciation and amortization of office properties and equipment
    
    
    1,415
    
    
    
    1,453(Gain) loss on securities transactions
    
    
    (18
    )
    
    
    3,666Mortgage loans originated for sale
    
    
    (34,116
    )
    
    
    (21,833
    )Proceeds from mortgage loan sales
    
    
    30,615
    
    
    
    19,411(Gain) loss on sales of mortgage loans, net
    
    
    (232
    )
    
    
    46Income on bank owned life insurance contract
    
    
    (1,977
    )
    
    
    (1,719
    )Increase in accrued interest receivable
    
    
    (2,083
    )
    
    
    (1,382
    )Deferred tax benefit
    
    
    (388
    )
    
    
    (12,135
    )Increase in other assets
    
    
    (407
    )
    
    
    (171
    )Decrease in other liabilities
    
    
    (857
    )
    
    
    (597
    )Total adjustments
    
    
    964
    
    
    
    (8,981
    )Net cash provided by operating activities
    
    
    7,773
    
    
    
    7,390Cash flows from investing activities:Purchases of loans receivable
    
    
    (346,336
    )
    
    
    (375,208
    )Net (originations) repayments of loans receivable
    
    
    (63,904
    )
    
    
    60,087Purchases of mortgage-backed securities held-to-maturity
    
    
    
    
    
    
    (8,933
    )Purchases of debt securities held-to-maturity
    
    
    (10,000
    )
    
    
    (3,500
    )Proceeds from paydowns/maturities on mortgage-backed securities held-to-maturity
    
    
    116,413
    
    
    
    154,410Proceeds from calls/maturities on debt securities held-to-maturity
    
    
    9,569
    
    
    
    1,639Proceeds from paydowns/maturities on mortgage-backed securities available-for-sale
    
    
    31,468
    
    
    
    53,132Proceeds from sale of mortgage-backed securities held-to-maturity
    
    
    
    
    
    
    22,942Proceeds from sale of equity securities available-for-sale
    
    
    
    
    
    
    161,112Proceeds from redemptions of Federal Home Loan Bank stock
    
    
    11,036
    
    
    
    22,230Purchases of Federal Home Loan Bank stock
    
    
    (23,297
    )
    
    
    (16,650
    )Purchases of office properties and equipment
    
    
    (2,186
    )
    
    
    (852
    )Net cash (used in) provided by investing
activities
    
    
    (277,237
    )
    
    
    70,409Cash flows from financing activities:Net increase in deposits
    
    
    129,006
    
    
    
    149,023Net decrease in funds borrowed under short-term repurchase agreements
    
    
    (28,500
    )
    
    
    (250,000
    )Proceeds from funds borrowed under other repurchase agreements
    
    
    395,000
    
    
    
    260,000Repayments of funds borrowed under other repurchase agreements
    
    
    (50,000
    )
    
    
    (235,000
    )Net (decrease) increase in other borrowings
    
    
    (144,015
    )
    
    
    25,985Net increase (decrease) in advance payments by borrowers for taxes and insurance
    
    
    127
    
    
    
    (746
    )Purchase of treasury stock
    
    
    (42,376
    )
    
    
    (30,502
    )Net cash provided by (used in) financing
activities
    
    
    259,242
    
    
    
    (81,240
    )Net decrease in cash and cash equivalents
    
    
    (10,222
    )
    
    
    (3,442
    )Cash and cash equivalents at beginning of the period
    
    
    24,810
    
    
    
    39,824Cash and cash equivalents at end of the period
    
    $
    14,588
    
    
    
    36,382Supplemental cash flow information:Cash paid during the period for:Interest
    
    
    104,449
    
    
    
    96,104Income 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 December 31,2007
    
    
    2006Per
    
    
    
    
    
    
    
    
    
    
    PerShare
    
    
    
    
    
    
    
    
    
    
    ShareIncome
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount(In thousands, except per share data)Net Income
    
    $
    3,957
    
    
    
    
    
    
    
    
    
    
    $
    12,020Basic earnings per share:Income available to common stockholders
    
    $
    3,957
    
    
    
    104,168,521
    
    
    $
    0.04
    
    
    $
    12,020
    
    
    
    110,985,701
    
    
    $
    0.11Effect of dilutive common stock
equivalents
    
    
    
    
    
    
    181,091
    
    
    
    
    
    
    
    
    
    
    
    3,027Diluted earnings per share:Income available to common stockholders
    
    $
    3,957
    
    
    
    104,349,612
    
    
    $
    0.04
    
    
    $
    12,020
    
    
    
    110,988,728
    
    
    $
    0.11
 5




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##### Table of Contents



For the Six Months Ended December 31,2007
    
    
    2006Per
    
    
    
    
    
    
    
    
    
    
    PerShare
    
    
    
    
    
    
    
    
    
    
    ShareIncome
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    Amount(In thousands, except per share data)Net Income
    
    $
    6,809
    
    
    
    
    
    
    
    
    
    
    $
    16,371Basic earnings per share:Income available to common stockholders
    
    $
    6,809
    
    
    
    104,617,202
    
    
    $
    0.07
    
    
    $
    16,371
    
    
    
    111,403,344
    
    
    $
    0.15Effect of dilutive common stock
equivalents
    
    
    
    
    
    
    212,114
    
    
    
    
    
    
    
    
    
    
    
    Diluted earnings per share:Income available to common stockholders
    
    $
    6,809
    
    
    
    104,829,316
    
    
    $
    0.06
    
    
    $
    16,371
    
    
    
    111,403,344
    
    
    $
    0.15
 3. Loans Receivable, Net
  December 31,
    
    
    June 30,2007
    
    
    2007(In thousands)Residential mortgage loans
    
    $
    3,434,549
    
    
    
    3,153,212Multi-family and commercial
    
    
    147,702
    
    
    
    107,350Construction loans
    
    
    228,621
    
    
    
    152,670Consumer and other loans
    
    
    170,159
    
    
    
    161,395Total loans
    
    
    3,981,031
    
    
    
    3,574,627Premiums and deferred costs
    
    
    27,105
    
    
    
    23,587Deferred loan fees
    
    
    (2,393
    )
    
    
    (1,924
    )Allowance for loan losses
    
    
    (8,858
    )
    
    
    (6,917
    )Net loans
    
    $
    3,996,885
    
    
    
    3,589,373
 4. Deposits
  December 31,
    
    
    June 30,2007
    
    
    2007(In thousands)Savings accounts
    
    $
    309,911
    
    
    
    320,880Checking accounts
    
    
    374,105
    
    
    
    388,215Money market accounts
    
    
    219,103
    
    
    
    182,274Total core deposits
    
    
    903,119
    
    
    
    891,369Certificates of deposit
    
    
    2,890,853
    
    
    
    2,773,597$
    3,793,972
    
    
    
    3,664,966
 6




---



##### Table of Contents



5. Equity Incentive Plan
   Six months ended December 31,2007
    
    
    2006Weighted
    
    
    
    
    
    
    WeightedNumber of
    
    
    Average
    
    
    Number of
    
    
    AverageStock
    
    
    Exercise
    
    
    Stock
    
    
    ExerciseOptions
    
    
    Price
    
    
    Options
    
    
    PriceOutstanding at beginning of period
    
    
    4,437,401
    
    
    $
    15.26
    
    
    
    
    
    
    $
    Granted
    
    
    
    
    
    
    
    
    
    
    4,447,401
    
    
    
    15.26Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at end of period
    
    
    4,437,401
    
    
    $
    15.26
    
    
    
    4,447,401
    
    
    $
    15.26Exercisable at end of period
    
    
    887,480
    
    
    $
    15.26
    
    
    
    
    
    
    $
    
  Six months ended December 31,2007
    
    
    2006Weighted
    
    
    
    
    
    
    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
    
    
    
    
    
    
    
    
    
    
    4,447,401
    
    
    
    4.17Vested
    
    
    (887,480
    )
    
    
    4.17
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-vested at end of period
    
    
    3,549,921
    
    
    $
    4.17
    
    
    
    4,447,401
    
    
    $
    4.17
  7




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##### Table of Contents



Six months ended December 31,2007
    
    
    2006Weighted
    
    
    
    
    
    
    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
    
    
    
    
    
    
    
    
    
    
    1,666,959
    
    
    
    15.25Vested
    
    
    (333,389
    )
    
    
    15.25
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-vested at end of period
    
    
    1,333,570
    
    
    $
    15.25
    
    
    
    1,666,959
    
    
    $
    15.25
   6. Net Periodic Benefit Plans Expense
     8




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##### Table of Contents



Three months ended December 31,SERP and directors plan
    
    
    Other Benefits2007
    
    
    2006
    
    
    2007
    
    
    2006(In thousands)Service cost
    
    $
    135
    
    
    
    296
    
    
    
    4
    
    
    
    40Interest cost
    
    
    252
    
    
    
    225
    
    
    
    77
    
    
    
    135Amortization of:Transition obligation
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    50Prior service cost
    
    
    (25
    )
    
    
    5
    
    
    
    
    
    
    
    Net loss
    
    
    49
    
    
    
    37
    
    
    
    1
    
    
    
    Total net periodic
benefit expense
    
    $
    411
    
    
    
    563
    
    
    
    89
    
    
    
    225
 Six months ended December 31,SERP and directors plan
    
    
    Other Benefits2007
    
    
    2006
    
    
    2007
    
    
    2006(In thousands)Service cost
    
    $
    270
    
    
    
    592
    
    
    
    47
    
    
    
    80Interest cost
    
    
    505
    
    
    
    449
    
    
    
    217
    
    
    
    270Amortization of:Transition obligation
    
    
    
    
    
    
    
    
    
    
    57
    
    
    
    100Prior service cost
    
    
    (49
    )
    
    
    10
    
    
    
    
    
    
    
    Net loss
    
    
    107
    
    
    
    75
    
    
    
    1
    
    
    
    Total net periodic
benefit expense
    
    $
    833
    
    
    
    1,126
    
    
    
    322
    
    
    
    450
   7. Income Taxes
  9




---



##### Table of Contents



8. Stock Repurchase Program
   10




---



##### Table of Contents



9. Recent Accounting Pronouncements
     "
 11




---



##### Table of Contents



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




---



##### Table of Contents



Comparison of Financial Condition at December 31, 2007 and June 30, 2007
 Total Assets .
 Securities.
 13




---



##### Table of Contents



Net Loans.
      14




---



##### Table of Contents



Deferred Tax Asset. Comparison of
Operating Results  Non-interest Expense
 Bank Owned Life Insurance, Stock in the Federal Home Loan Bank and Other Assets.
 Deposits .
 Borrowed Funds .
 Stockholders Equity .
 Average Balance Sheets for the Three and Six Months ended December 31, 2007 and 2006
  15




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##### Table of Contents



For Three Months EndedDecember 31, 2007
    
    
    
    
    
    
    December 31, 2006Average Outstanding
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Average OutstandingBalance
    
    
    Interest Earned/Paid
    
    
    Average Yield/Rate
    
    
    
    
    
    
    Balance
    
    
    Interest Earned/Paid
    
    
    Average Yield/Rate(Dollars in thousands)Interest-earning assets:Interest-bearing deposits
    
    $
    14,097
    
    
    $
    141
    
    
    
    4.00
    %
    
    
    
    
    
    $
    22,758
    
    
    $
    222
    
    
    
    3.90
    %Securities available-for-sale (1)
    
    
    234,917
    
    
    
    2,693
    
    
    
    4.59
    %
    
    
    
    
    
    
    470,134
    
    
    
    5,175
    
    
    
    4.40
    %Securities held-to-maturity
    
    
    1,433,401
    
    
    
    17,475
    
    
    
    4.88
    %
    
    
    
    
    
    
    1,648,891
    
    
    
    19,697
    
    
    
    4.78
    %Net loans
    
    
    3,940,812
    
    
    
    56,688
    
    
    
    5.75
    %
    
    
    
    
    
    
    3,217,045
    
    
    
    44,126
    
    
    
    5.49
    %Stock in FHLB
    
    
    45,850
    
    
    
    800
    
    
    
    6.98
    %
    
    
    
    
    
    
    45,252
    
    
    
    753
    
    
    
    6.66
    %Total interest-earning assets
    
    
    5,669,077
    
    
    
    77,797
    
    
    
    5.49
    %
    
    
    
    
    
    
    5,404,080
    
    
    
    69,973
    
    
    
    5.18
    %Non-interest-earning assets
    
    
    178,738
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    154,837Total assets
    
    $
    5,847,815
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    5,558,917Interest-bearing liabilities:Savings
    
    $
    306,873
    
    
    
    1,642
    
    
    
    2.14
    %
    
    
    
    
    
    $
    243,693
    
    
    
    907
    
    
    
    1.49
    %Interest-bearing checking
    
    
    331,306
    
    
    
    1,877
    
    
    
    2.27
    %
    
    
    
    
    
    
    298,288
    
    
    
    1,790
    
    
    
    2.40
    %Money market accounts
    
    
    207,385
    
    
    
    1,425
    
    
    
    2.75
    %
    
    
    
    
    
    
    186,335
    
    
    
    929
    
    
    
    1.99
    %Certificates of deposit
    
    
    2,880,878
    
    
    
    34,673
    
    
    
    4.81
    %
    
    
    
    
    
    
    2,633,188
    
    
    
    30,418
    
    
    
    4.62
    %Borrowed funds
    
    
    1,201,523
    
    
    
    14,424
    
    
    
    4.80
    %
    
    
    
    
    
    
    1,210,038
    
    
    
    14,935
    
    
    
    4.94
    %Total interest-bearing liabilities
    
    
    4,927,965
    
    
    
    54,041
    
    
    
    4.39
    %
    
    
    
    
    
    
    4,571,542
    
    
    
    48,979
    
    
    
    4.29
    %Non-interest-bearing liabilities
    
    
    100,018
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    83,732Total liabilities
    
    
    5,027,983
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,655,274Stockholders equity
    
    
    819,832
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    903,643Total liabilities and stockholders equity
    
    $
    5,847,815
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    5,558,917Net interest income
    
    
    
    
    
    $
    23,756
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    20,994Net interest rate spread (2)
    
    
    
    
    
    
    
    
    
    
    1.10
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.89
    %Net interest-earning assets (3)
    
    $
    741,112
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    832,538Net interest margin (4)
    
    
    
    
    
    
    
    
    
    
    1.68
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.55
    %Ratio of interest-earning assets to total interest-
bearing liabilities
    
    
    1.15
    X
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.18
    X
 16




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##### Table of Contents



For Six Months EndedDecember 31, 2007
    
    
    
    
    
    
    December 31, 2006Average Outstanding
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Average OutstandingBalance
    
    
    Interest Earned/Paid
    
    
    Average Yield/Rate
    
    
    
    
    
    
    Balance
    
    
    Interest Earned/Paid
    
    
    Average Yield/Rate(Dollars in thousands)Interest-earning assets:Interest-bearing deposits
    
    $
    15,152
    
    
    $
    301
    
    
    
    3.97
    %
    
    
    
    
    
    $
    21,398
    
    
    $
    391
    
    
    
    3.65
    %Securities available-for-sale (1)
    
    
    243,094
    
    
    
    5,573
    
    
    
    4.59
    %
    
    
    
    
    
    
    502,636
    
    
    
    10,897
    
    
    
    4.34
    %Securities held-to-maturity
    
    
    1,464,307
    
    
    
    35,684
    
    
    
    4.87
    %
    
    
    
    
    
    
    1,688,919
    
    
    
    40,228
    
    
    
    4.76
    %Net loans
    
    
    3,829,687
    
    
    
    109,654
    
    
    
    5.73
    %
    
    
    
    
    
    
    3,149,672
    
    
    
    86,038
    
    
    
    5.46
    %Stock in FHLB
    
    
    42,674
    
    
    
    1,393
    
    
    
    6.53
    %
    
    
    
    
    
    
    46,531
    
    
    
    1,450
    
    
    
    6.23
    %Total interest-earning assets
    
    
    5,594,914
    
    
    
    152,605
    
    
    
    5.46
    %
    
    
    
    
    
    
    5,409,156
    
    
    
    139,004
    
    
    
    5.14
    %Non-interest-earning assets
    
    
    176,406
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    152,013Total assets
    
    $
    5,771,320
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    5,561,169Interest-bearing liabilities:Savings
    
    $
    310,505
    
    
    
    3,457
    
    
    
    2.23
    %
    
    
    
    
    
    $
    233,447
    
    
    
    1,433
    
    
    
    1.23
    %Interest-bearing checking
    
    
    342,535
    
    
    
    4,325
    
    
    
    2.53
    %
    
    
    
    
    
    
    302,959
    
    
    
    3,635
    
    
    
    2.40
    %Money market accounts
    
    
    197,475
    
    
    
    2,664
    
    
    
    2.70
    %
    
    
    
    
    
    
    196,799
    
    
    
    1,802
    
    
    
    1.83
    %Certificates of deposit
    
    
    2,837,637
    
    
    
    68,473
    
    
    
    4.83
    %
    
    
    
    
    
    
    2,594,289
    
    
    
    57,924
    
    
    
    4.47
    %Borrowed funds
    
    
    1,160,360
    
    
    
    28,527
    
    
    
    4.92
    %
    
    
    
    
    
    
    1,246,699
    
    
    
    30,749
    
    
    
    4.93
    %Total interest-bearing liabilities
    
    
    4,848,512
    
    
    
    107,446
    
    
    
    4.43
    %
    
    
    
    
    
    
    4,574,193
    
    
    
    95,543
    
    
    
    4.18
    %Non-interest-bearing liabilities
    
    
    99,927
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    83,478Total liabilities
    
    
    4,948,439
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,657,671Stockholders equity
    
    
    822,881
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    903,498Total liabilities and
stockholders equity
    
    $
    5,771,320
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    5,561,169Net interest income
    
    
    
    
    
    $
    45,159
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    43,461Net interest rate spread (2)
    
    
    
    
    
    
    
    
    
    
    1.03
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.96
    %Net interest-earning assets (3)
    
    $
    746,402
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    834,963Net interest margin (4)
    
    
    
    
    
    
    
    
    
    
    1.61
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.61
    %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
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. 17




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##### Table of Contents



Comparison of Operating Results for the Three Months Ended December 31, 2007 and 2006
 Net Income .
 Net Interest Income .
 Interest and Dividend Income .
   Interest Expense.
 18




---



##### Table of Contents



Provision for Loan Losses. Comparison of Financial Condition at December 31, 2007 and
June 30, 2007.
 Non-interest Income.
 Non-interest Expenses .
 19




---



##### Table of Contents



Income Taxes.
 Comparison of Operating Results for the Six Months Ended December 31, 2007 and 2006
 Net Income .
 Net Interest Income.
 Interest and Dividend Income .
   20




---



##### Table of Contents



Interest Expense.
   Provision for Loan Losses. Comparison of Financial Condition at December 31, 2007 and June 30,
2007.
 Non-interest Income.
 21




---



##### Table of Contents



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




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##### Table of Contents



As of December 31, 2007Actual
    
    RequiredAmount
    
    Ratio
    
    Amount
    
    Ratio(Dollars in thousands)Total capital (to risk-weighted assets)
    
    $
    704,284
    
    
    
    23.4
    %
    
    $
    240,932
    
    
    
    8.0
    %Tier I capital (to risk-weighted assets)
    
    
    695,426
    
    
    
    23.1
    
    
    
    120,466
    
    
    
    4.0Tier I capital (to average assets)
    
    
    695,426
    
    
    
    11.9
    
    
    
    233,676
    
    
    
    4.0
 Critical Accounting Policies
  Allowance for Loan Losses.
  23




---



##### Table of Contents



24




---



##### Table of Contents



Deferred Income Taxes.
 Asset Impairment Judgments.
  25




---



##### Table of Contents



Stock-Based Compensation.
   
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Qualitative Analysis
  26




---



##### Table of Contents



Quantitative Analysis
 27




---



##### Table of Contents



Net Interest Income (3)Increase (Decrease) inNet Portfolio Value (1),(2)
    
    
    
    
    
    Estimated Net InterestChange in
    
    
    
    
    
    Estimated Increase (Decrease)
    
    Estimated Net
    
    IncomeInterest Rates
    
    Estimated NPV
    
    Amount
    
    Percent
    
    Interest Income
    
    Amount
    
    Percent(basis points)
    
    (Dollars in thousands)+200bp
    
    
    510,604
    
    
    
    (257,643
    )
    
    
    (33.54
    )%
    
    
    97,663
    
    
    $
    (13,704
    )
    
    
    (12.31
    )%0bp
    
    
    768,247
    
    
    
    
    
    
    
    
    
    
    
    111,367
    
    
    
    
    
    
    
    -200bp
    
    
    769,252
    
    
    
    1,005
    
    
    
    0.13
    %
    
    
    122,766
    
    
    
    11,399
    
    
    
    10.24
    %
 
 (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
  28




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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
  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)October 1, 2007 through October 31, 2007
    
    
    20,500
    
    
    $
    14.25
    
    
    
    20,500
    
    
    
    2,214,026November 1, 2007 through November 30, 2007
    
    
    944,301
    
    
    
    14.45
    
    
    
    944,301
    
    
    
    1,269,725December 1, 2007 through December 31, 2007
    
    
    709,028
    
    
    
    14.36
    
    
    
    709,028
    
    
    
    560,697Total
    
    
    1,673,829
    
    
    $
    14.41
    
    
    
    1,673,829
 
 (1)
    
    On April 26, 2007, the Company announced its second Share Repurchase
Program, which authorized the purchase of an additonal 10% of its publicly-held
outstanding shares of common stock, or 4,785,831 shares. This stock repurchase
program commenced upon completion of the first program on May 10, 2007. This
program has no expiration date and has 560,697 shares yet to be purchased as of
December 31, 2007. 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
stock repurchase program will commenced 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
 29




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##### Table of Contents



Proposal 1:
 Robert M. Cashill
    
    For: 102,564,698
    
    Withheld: 1,510,023Brian D. Dittenhafer
    
    For: 101,856,875
    
    Withheld: 2,217,846Vincent D. Manahan III
    
    For: 101,741,606
    
    Withheld: 2,333,115
 Proposal 2:
 For:
    
    
    103,271,737Against:
    
    
    617,622Abstain:
    
    
    185,362
 
 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*
 30




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##### Table of Contents



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) 31




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##### Table of Contents



SIGNATURES
  Investors Bancorp, Inc.Dated: February 11, 2008
    /s/ Kevin CummingsKevin CummingsPresident and Chief Executive Officer
(Principal Executive Officer)Dated: February 11, 2008
    /s/ Thomas F. Splaine, Jr.Thomas F. SplaineSenior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer) 32