Edgar Filing: Investors Bancorp Inc

e10vq

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2010

Commission file number: 0-51557

Investors Bancorp, Inc.

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		22-3493930 (I.R.S. Employer Identification No.)

101 JFK Parkway, Short Hills, New Jersey 07078
(Address of principal executive offices)

(973) 924-5100
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all the reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such report), and (2) has been subject to such filing requirements for the past 90 days. YES þ NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.


Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes o No þ

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

As of April 30, 2010 there were 114,893,587 shares of the Registrant’s common stock, par value $0.01 per share, outstanding, of which 64,844,373 shares, or 56.44% of the Registrant’s outstanding common stock, were held by Investors Bancorp, MHC, the Registrant’s mutual holding company.

Investors Bancorp, Inc.
FORM 10-Q

Index


	Page
Part I. Financial Information

Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 2010 (unaudited) and December 31, 2009		2
Consolidated Statements of Operations for the Three Months Ended March 31, 2010 and 2009 (unaudited)		3
Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2010 and 2009 (unaudited)		4
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2010 and 2009 (unaudited)		5
Notes to Consolidated Financial Statements		6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		22
Item 3. Quantitative and Qualitative Disclosures About Market Risk		37
Item 4. Controls and Procedures		40

Part II. Other Information

Item 1. Legal Proceedings		40
Item 1A. Risk Factors		40
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		40
Item 3. Defaults upon Senior Securities		41
Item 4. [Reserved]		41
Item 5. Other Information		41
Item 6. Exhibits		41
Signature Page
EX-31.1
EX-31.2
EX-32

INVESTORS BANCORP, INC. AND SUBSIDIARY

Consolidated Balance Sheets
March 31, 2010 (unaudited) and December 31, 2009


	March 31,			December 31,
	2010			2009
	(In thousands)
Assets
Cash and cash equivalents	$	284,540			73,606
Securities available-for-sale, at estimated fair value		522,346			471,243
Securities held-to-maturity, net (estimated fair value of $696,512 and $753,405 at March 31, 2010 and December 31, 2009, respectively)		658,706			717,441
Loans receivable, net		6,800,429			6,615,459
Loans held-for-sale		22,616			27,043
Stock in the Federal Home Loan Bank		74,077			66,202
Accrued interest receivable		37,594			36,942
Office properties and equipment, net		50,746			49,384
Net deferred tax asset		117,736			117,143
Bank owned life insurance		115,063			114,542
Intangible assets		31,400			31,668
Other assets		33,512			37,143

Total assets	$	8,748,765			8,357,816

Liabilities and Stockholders’ Equity
Liabilities:
Deposits	$	6,012,964			5,840,643
Borrowed funds		1,775,535			1,600,542
Advance payments by borrowers for taxes and insurance		33,494			29,675
Other liabilities		58,543			36,743

Total liabilities		7,880,536			7,507,603

Stockholders’ equity:
Preferred stock, $0.01 par value, 50,000,000 authorized shares; none issued		—			—
Common stock, $0.01 par value, 200,000,000 shares authorized; 118,020,280 issued; 114,893,587 and 114,448,888 outstanding at March 31, 2010 and December 31, 2009, respectively		532			532
Additional paid-in capital		526,275			530,133
Retained earnings		434,560			422,211
Treasury stock, at cost; 3,126,693 and 3,571,392 shares at March 31, 2010 and December 31, 2009		(38,183	)		(44,810	)
Unallocated common stock held by the employee stock ownership plan		(35,096	)		(35,451	)
Accumulated other comprehensive loss		(19,859	)		(22,402	)

Total stockholders’ equity		868,229			850,213

Total liabilities and stockholders’ equity	$	8,748,765			8,357,816

See accompanying notes to consolidated financial statements.

INVESTORS BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Operations

(Unaudited)


	For the Three Months
	Ended March 31,
	2010			2009
	(Dollars in thousands, except per share data)
Interest and dividend income:
Loans receivable and loans held-for-sale	$	91,028			76,723
Securities:
Government-sponsored enterprise obligations		198			304
Mortgage-backed securities		10,046			11,946
Equity securities available-for-sale		—			1
Municipal bonds and other debt		795			2,986
Interest-bearing deposits		73			119
Federal Home Loan Bank stock		928			670

Total interest and dividend income		103,068			92,749

Interest expense:
Deposits		23,760			33,900
Secured borrowings		17,378			17,691

Total interest expense		41,138			51,591

Net interest income		61,930			41,158
Provision for loan losses		13,050			8,000

Net interest income after provision for loan losses		48,880			33,158

Non-interest income
Fees and service charges		1,590			906
Income on bank owned life insurance		521			256
Gain on sales of loans, net		1,747			2,163
(Loss) gain on securities transactions		(48	)		2
Other income		123			90

Total non-interest income		3,933			3,417

Non-interest expense
Compensation and fringe benefits		17,136			15,670
Advertising and promotional expense		872			640
Office occupancy and equipment expense		4,356			2,998
Federal insurance premiums		3,225			1,800
Stationery, printing, supplies and telephone		635			488
Professional fees		1,082			599
Data processing service fees		1,431			1,113
Other operating expenses		1,689			1,147

Total non-interest expenses		30,426			24,455

Income before income tax expense		22,387			12,120
Income tax expense		9,077			5,042

Net income	$	13,310			7,078

Basic and diluted earnings per share	$	0.12			0.07
Weighted average shares outstanding
Basic		110,146,888			104,192,971
Diluted		110,201,851			104,228,891

See accompanying notes to consolidated financial statements.

INVESTORS BANCORP, INC.

Consolidated Statements of Stockholder’s Equity

Three months ended March 31, 2010 and 2009

(Unaudited)


															Accumulated
			Additional									Unallocated			other			Total
	Common		paid-in			Retained			Treasury			Common Stock			comprehensive			stockholders’
	stock		capital			earnings			stock			Held by ESOP			loss			equity
	(In thousands)
Balance at December 31, 2008	$	532		518,457			408,534			(128,121	)		(36,869	)		(8,734	)		753,799
Comprehensive income:
Net income		—		—			7,078			—			—			—			7,078
Change in funded status of retirement obligations, net of tax expense of $39		—		—			—			—			—			58			58
Unrealized gain on securities available- for-sale, net of tax expense of $1,380		—		—			—			—			—			1,900			1,900

Total comprehensive income																			9,036


Compensation cost for stock options and restricted stock		—		3,684			—			—			—			—			3,684
ESOP shares allocated or committed to be released		—		(15	)		—			—			355			—			340

Balance at March 31, 2009	$	532		522,126			415,612			(128,121	)		(36,514	)		(6,776	)		766,859


Balance at December 31, 2009	$	532		530,133			422,211			(44,810	)		(35,451	)		(22,402	)		850,213
Comprehensive income:
Net income		—		—			13,310			—			—			—			13,310
Change in funded status of retirement obligations, net of tax expense of $36		—		—			—			—			—			53			53
Unrealized gain on securities available- for-sale, net of tax expense of $1,138		—		—			—			—			—			1,910			1,910
Other-than-temporary impairment accretion on debt securities, net of tax expense of $401		—		—			—			—			—			580			580

Total comprehensive income																			15,853


Purchase of treasury stock (50,500 shares)		—		—			—			(608	)		—			—			(608	)
Treasury stock allocated to restricted stock plan		—		(6,272	)		(961	)		7,233			—			—			—
Compensation cost for stock options and restricted stock		—		2,335			—			—			—			—			2,335
ESOP shares allocated or committed to be released		—		79			—			2			355			—			436

Balance at March 31, 2010	$	532		526,275			434,560			(38,183	)		(35,096	)		(19,859	)		868,229

See accompanying notes to consolidated financial statements.

INVESTORS BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows

(Unaudited)


	For the Three Months Ended
	March 31,
	2010			2009
	(In thousands)
Cash flows from operating activities:
Net income	$	13,310			7,078
Adjustments to reconcile net income to net cash provided by operating activities
ESOP and stock-based compensation expense		2,769			4,024
Amortization of premiums and accretion of discounts on securities, net		1,903			(1,153	)
Amortization of premium and accretion of fees and costs on loans, net		1,489			2,506
Amortization of intangible assets		183			—
Provision for loan losses		13,050			8,000
Depreciation and amortization of office properties and equipment		1,016			624
Loss (gain) on securities transactions		48			(2	)
Mortgage loans originated for sale		(118,700	)		(233,414	)
Proceeds from mortgage loan sales		124,323			215,292
Gain on sales of loans, net		(1,196	)		(2,163	)
Income on bank owned life insurance contract		(521	)		(255	)
(Increase) decrease in accrued interest		(652	)		396
Deferred tax benefit		(2,169	)		(928	)
Decrease (increase) in other assets		3,717			(3,122	)
Increase in other liabilities		21,890			8,622

Total adjustments		47,150			(1,573	)

Net cash provided by operating activities		60,460			5,505

Cash flows from investing activities:
Purchases of loans receivable		(245,869	)		(151,725	)
Net repayments of loans receivable		43,927			198,726
Mortgage-backed securities available for sale received in like-kind exchange		—			3,911
Proceeds from sale of non performing loan		2,984			—
Gain on sale of loan		(551	)		—
Purchases of mortgage-backed securities available-for-sale		(98,944	)		—
Proceeds from paydowns/maturities on mortgage-backed securities held-to-maturity		59,611			53,643
Proceeds from calls/maturities on debt securities held-to-maturity		(244	)		31
Proceeds from paydowns/maturities on mortgage-backed securities available-for-sale		34,288			13,131
Proceeds from maturities of US Government and agency obligations available-for-sale		15,000			—
Redemption of equity securities available-for-sale		—			(3,911	)
Proceeds from redemptions of Federal Home Loan Bank stock		5,940			20,184
Purchases of Federal Home Loan Bank stock		(13,815	)		(3,173	)
Purchases of office properties and equipment		(2,378	)		(2,008	)

Net cash (used in) provided by investing activities		(200,051	)		128,809

Cash flows from financing activities:
Net increase in deposits		172,321			537,540
Repayments of funds borrowed under other repurchase agreements		(75,000	)		(25,000	)
Net increase (decrease) in other borrowings		249,993			(353,007	)
Net increase in advance payments by borrowers for taxes and insurance		3,819			1,930
Purchase of treasury stock		(608	)		—

Net cash provided by financing activities		350,525			161,463

Net increase in cash and cash equivalents		210,934			295,777
Cash and cash equivalents at beginning of the period		73,606			26,692

Cash and cash equivalents at end of the period	$	284,540			322,469


Supplemental cash flow information:
Cash paid during the year for:
Interest	$	41,136			52,621
Income taxes		2,600			1,600

See accompanying notes to consolidated financial statements

INVESTORS BANCORP, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

1. Basis of Presentation

The consolidated financial statements are comprised of the accounts of Investors Bancorp, Inc. and its wholly owned subsidiary, Investors Savings Bank “Bank” (collectively, the “Company”) and the Bank’s wholly-owned subsidiaries.

In the opinion of management, all the adjustments (consisting of normal and recurring adjustments) necessary for the fair presentation of the consolidated financial condition and the consolidated results of operations for the unaudited periods presented have been included. The results of operations and other data presented for the three-month period ended March 31, 2010 are not necessarily indicative of the results of operations that may be expected for subsequent periods.

Certain information and note disclosures usually included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for the preparation of the Form 10-Q. The consolidated financial statements presented should be read in conjunction with the Company’s audited consolidated financial statements and notes to consolidated financial statements included in the Company’s December 31, 2009 Annual Report on Form 10-K.

2. Earnings Per Share

The following is a summary of our earnings per share calculations and reconciliation of basic to diluted earnings per share.


	For the Three Months Ended March 31,
	2010						2009
					Per Share						Per Share
	Income		Shares		Amount		Income		Shares		Amount
	(Dollars in thousands, except per share data)
Net Income	$	13,310					$	7,078

Basic earnings per share:
Income available to common stockholders	$	13,310		110,146,888	$	0.12	$	7,078		104,192,971	$	0.07

Effect of dilutive common stock equivalents		—		54,963				—		35,920

Diluted earnings per share:
Income available to common stockholders	$	13,310		110,201,851	$	0.12	$	7,078		104,228,891	$	0.07

There were 5.1 million anti-dilutive common stock options excluded from the earnings per share calculation at March 31, 2010 and at March 31, 2009.

3. Securities

The amortized cost, gross unrealized gains and losses and estimated fair value of securities available-for-sale and held-to-maturity for the dates indicated are as follows:


	March 31, 2010
			Gross		Gross
	Amortized		unrealized		unrealized		Estimated
	cost		gains		losses		fair value
	(In thousands)
Available-for-sale:
Equity securities	$	1,825		483		—		2,308
Debt securities:
Government-sponsored enterprises		10,001		2		—		10,003
Mortgage-backed securities:
Federal Home Loan Mortgage Corporation		209,907		3,757		526		213,138
Federal National Mortgage Association		223,893		2,891		308		226,476
Government National Mortgage Association		10,238		109		—		10,347
Non-agency securities		62,384		778		3,088		60,074

		506,422		7,535		3,922		510,035

Total securities available-for-sale		518,248		8,020		3,922		522,346


Held-to-maturity:
Debt securities:
Government-sponsored enterprises		15,219		642		—		15,861
Municipal bonds		10,258		144		3		10,399
Corporate and other debt securities		22,383		18,427		2,304		38,506

		47,860		19,213		2,307		64,766

Mortgage-backed securities:
Federal Home Loan Mortgage Corporation		320,695		10,837		77		331,455
Federal National Mortgage Association		220,437		10,445		4		230,878
Government National Mortgage Association		3,716		269		—		3,985
Federal housing authorities		2,495		230		—		2,725
Non-agency securities		63,503		140		940		62,703

		610,846		21,921		1,021		631,746

Total securities held-to-maturity		658,706		41,134		3,328		696,512


Total securities	$	1,176,954		49,154		7,250		1,218,858


	December 31, 2009
			Gross		Gross
	Amortized		unrealized		unrealized		Estimated
	cost		gains		losses		fair value
	(In thousands)
Available-for-sale:
Equity securities	$	1,832		221		—		2,053
Debt securities:
Government-sponsored enterprises		25,013		26		—		25,039
Mortgage-backed securities:
Federal Home Loan Mortgage Corporation		206,877		2,725		80		209,522
Federal National Mortgage Association		158,678		2,197		448		160,427
Government National Mortgage Association		10,504		25		79		10,450
Non-agency securities		67,290		284		3,822		63,752

		443,349		5,231		4,429		444,151

Total securities available-for-sale		470,194		5,478		4,429		471,243


Held-to-maturity:
Debt securities:
Government-sponsored enterprises		15,226		731		1		15,956
Municipal bonds		10,259		196		4		10,451
Corporate and other debt securities		21,411		18,015		1,617		37,809

		46,896		18,942		1,622		64,216

Mortgage-backed securities:
Federal Home Loan Mortgage Corporation		358,998		10,565		159		369,404
Federal National Mortgage Association		236,109		9,268		24		245,353
Government National Mortgage Association		3,880		277		—		4,157
Federal housing authorities		2,549		231		—		2,780
Non-agency securities		69,009		47		1,561		67,495

		670,545		20,388		1,744		689,189

Total securities held-to-maturity		717,441		39,330		3,366		753,405


Total securities	$	1,187,635		44,808		7,795		1,224,648

Gross unrealized losses on securities available-for-sale and held-to-maturity and the estimated fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2010 and December 31, 2009, was as follows:


	March 31, 2010
	Less than 12 months				12 months or more				Total
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
	fair value		losses		fair value		losses		fair value		losses
	(In thousands)
Available-for-sale:
Mortgage-backed securities:
Federal Home Loan Mortgage Association	$	22,168		526		—		—		22,168		526
Federal National Mortgage Association		56,610		308		—		—		56,610		308
Non-agency securities		109		99		25,898		2,989		26,007		3,088

		78,887		933		25,898		2,989		104,785		3,922


Total available-for-sale:		78,887		933		25,898		2,989		104,785		3,922


Held-to-maturity:
Debt securities:
Government-sponsored enterprises		—		—		—		—		—		—
Municipal bonds		—		—		1,035		3		1,035		3
Corporate and other debt securities		803		2,304		—		—		803		2,304

		803		2,304		1,035		3		1,838		2,307

Mortgage-backed securities:
Federal Home Loan Mortgage Corporation		13,549		77		—		—		13,549		77
Federal National Mortgage Association		4,526		2		1,096		2		5,622		4
Non-agency securities		10,716		106		39,638		834		50,354		940

		28,791		185		40,734		836		69,525		1,021


Total held-to-maturity		29,594		2,489		41,769		839		71,363		3,328


Total	$	108,481		3,422		67,667		3,828		176,148		7,250


	December 31, 2009
	Less than 12 months				12 months or more				Total
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
	fair value		losses		fair value		losses		fair value		losses
	(In thousands)
Available-for-sale:
Mortgage-backed securities:
Federal Home Loan Mortgage Corporation	$	33,595		80		—		—		33,595		80
Federal National Mortgage Association		63,527		446		16		2		63,543		448
Government National Mortgage Association		10,168		79		—		—		10,168		79
Non-agency securities		4,563		370		26,736		3,452		31,299		3,822

		111,853		975		26,752		3,454		138,605		4,429


Total available-for-sale:		111,853		975		26,752		3,454		138,605		4,429


Held-to-maturity:
Debt securities:
Government-sponsored enterprises		—		—		225		1		225		1
Municipal bonds		—		—		1,035		4		1,035		4
Corporate and other debt securities		1,024		1,617		—		—		1,024		1,617

		1,024		1,617		1,260		5		2,284		1,622

Mortgage-backed securities:
Federal Home Loan Mortgage Corporation		5,860		159		—		—		5,860		159
Federal National Mortgage Association		2,699		5		5,392		19		8,091		24
Non-agency securities		16,352		257		42,308		1,304		58,660		1,561

		24,911		421		47,700		1,323		72,611		1,744


Total held-to-maturity:		25,935		2,038		48,960		1,328		74,895		3,366


Total	$	137,788		3,013		75,712		4,782		213,500		7,795

For our securities that have a estimated fair value less than the amortized cost basis, the gross unrealized losses were primarily in our non-agency mortgage-backed securities and our corporate and other debt securities portfolios, which accounted for 87.3% of the gross unrealized losses at March 31, 2010. The total estimated fair value of our non-agency mortgage-backed securities and our corporate and other debt securities portfolios represented 13.2% of our total investment portfolio at March 31, 2010. The estimated fair value of our non-agency mortgage-backed and our corporate and other debt securities portfolios have been adversely impacted by the current economic environment and credit deterioration subsequent to the purchase of these securities. As such, the Company has previously recognized credit related other-than-temporary impairment charges on certain non-agency mortgage backed and corporate debt securities.

Our non-agency mortgage-backed securities are not guaranteed by GSE entities and complied with the investment and credit standards set at the time of purchase in the investment policy of the Company. At March 31, 2010, the significant portion of the portfolio was comprised of 28 non-agency mortgage-backed securities with an amortized cost of $124.7 million and an estimated fair value of $121.6 million. These securities were originated in the period 2002-2004

and are performing largely in accordance with contractual terms. For securities with larger decreases in fair values, management estimates the loss projections for each security by stressing the individual loans collateralizing the security with a range of expected default rates, loss severities, and prepayment speeds, in conjunction with the underlying credit enhancement (if applicable) for each security. Based on those specific assumptions, a range of possible cash flows were identified to determine whether other-than-temporary impairment existed as of March 31, 2010. Under certain stress scenarios estimated future losses may arise. Management determined that no additional other-than-temporary impairment existed as of March 31, 2010.

Our corporate and other debt securities portfolio consists of 33 pooled trust preferred securities, (TruPS) principally issued by banks, of which 3 securities were rated AAA and 30 securities were rated A at the date of purchase and at June 30, 2008. At March 31, 2010, the amortized cost and estimated fair values of the trust preferred portfolio was $22.4 million and $38.5 million, respectively. The Company engaged an independent valuation firm to value our TruPS portfolio and prepare our OTTI analysis. The independent valuation firm assisted us in evaluating the credit and performance of each underlying issuer by deriving probabilities and assumptions for default, recovery and prepayment/ amortization for the expected cashflows for each security. At March 31, 2010, management deemed that the present value of projected cashflows for each security was greater than the book value and did not recognize any OTTI charges for the three months ended March 31, 2010. The Company has no intent to sell, nor is it more likely than not that the Company will be required to sell, the debt securities before the recovery of their amortized cost basis or maturity.

The following table summarizes the Company’s pooled trust preferred securities which are at least one rating below investment grade as of March 31, 2010. In addition, at March 31, 2009 the Company held 2 pooled trust preferred securities with a book value of $4.2 million and a fair value of $6.2 million which are investment grade. The Company does not own any single-issuer trust preferred securities.


											Current			Expected			Excess
									Number of		Deferrals and			Deferrals and			Subordination
						Unrealized			Issuers		Defaults as a			Defaults as %			as a % of			Moody’s/
(Dollars in 000’s)						Gains			Currently		% of Total			of Remaining			Performing			Fitch Credit
Description	Class	Book Value		Fair Value		(Losses)			Performing		Collateral (1)			Collateral (2)			Collateral (3)			Ratings
Alesco PF II	B1	$	158.6		353.4		194.8			34		23.6	%		13.1	%		0.0	%	Ca / C
Alesco PF III	B1		325.5		527.6		202.1			36		25.5			22.8			0.0		Ca / C
Alesco PF III	B2		130.2		211.0		80.8			36		25.5			22.8			0.0		Ca / C
Alesco PF IV	B1		228.9		232.4		3.5			47		24.3			21.8			0.0		Ca / C
Alesco PF VI	C2		283.5		495.5		212.1			47		29.9			19.2			0.0		Ca / C
MM Comm III	B		1,541.5		4,091.2		2,549.7			8		20.2			36.8			12.8		Baa3 / B /*
MM Comm IX	B1		45.1		86.6		41.5			20		28.6			32.5			0.0		Caa3 / C
MMCaps XVII	C1		651.8		1,870.0		1,218.2			44		10.6			16.8			0.0		Ca / C
MMCaps XIX	C		397.5		7.5		(390.0	)		34		30.9			24.9			0.0		Ca / C
Tpref I	B		1,287.1		2,891.2		1,604.1			15		37.4			18.0			0.0		Caa3 / C
Tpref II	B		2,138.8		4,716.8		2,578.0			21		26.9			25.0			0.0		Caa3 / C
US Cap I	B2		478.4		1,184.1		705.7			37		11.4			14.7			0.0		Caa1 / C
US Cap I	B1		1,413.4		3,552.3		2,138.9			37		11.4			14.7			0.0		Caa1 / C
US Cap II	B1		675.8		2,147.5		1,471.7			49		11.7			18.8			0.0		Ca / C
US Cap III	B1		861.7		1,886.3		1,024.6			37		17.1			18.0			0.0		Ca / C
US Cap IV	B1		731.1		143.0		(588.1	)		48		30.3			22.5			0.0		Ca / D
Trapeza XII	C1		684.2		309.0		(375.2	)		36		23.6			19.5			0.0		Ca / C
Trapeza XIII	C1		616.1		157.9		(458.1	)		42		21.4			28.2			0.0		Ca / C
Pretsl IV	Mezzanine		106.5		118.7		12.2			5		27.1			26.0			19.0		Ca / CCC
Pretsl V	Mezzanine		21.2		40.4		19.1			2		43.1			43.8			0.0		Ba3 / C
Pretsl VII	Mezzanine		1,007.6		1,515.6		508			8		43.6			52.3			0.0		Ca / C
Pretsl XV	B1		549.8		928.6		378.9			60		20.0			20.9			0.0		Ca / C
Pretsl XVII	C		306.3		384.8		78.4			46		18.9			18.7			0.0		Ca / C
Pretsl XVIII	C		626.9		1,125.4		498.5			64		18.9			15.1			0.0		Ca / C
Pretsl XIX	C		214.8		342.1		127.3			59		19.3			16.4			0.0		Ca / C
Pretsl XX	C		151.0		42.1		(108.9	)		50		22.8			20.1			0.0		Ca / C
Pretsl XXI	C1		170.1		229.8		59.7			58		23.8			20.9			0.0		Ca / C
Pretsl XXIII	A-FP		1,744.1		2,450.5		706.4			104		18.0			21.9			18.3		B1 / BB /*
Pretsl XXIV	C1		398.4		59.2		(339.3	)		69		23.8			25.0			0.0		Ca / C
Pretsl XXV	C1		128.8		83.8		(45.0	)		56		25.0			21.4			0.0		Ca / C
Pretsl XXVI	C1		104.0		137.2		33.1			58		22.1			22.9			0.0		C / C

		$	18,178.9	$	32,321.8	$	14,142.9


(1)		At March 31, 2010, assumed recoveries for current deferrals and defaulted issuers ranged from 0% to 10.0%.

(2)		At March 31, 2010, assumed recoveries for expected deferrals and defaulted issuers ranged from 10.0% to 14.7%.

(3)		Excess subordination represents the amount of remaining performing collateral that is in excess of the amount needed to payoff a specified class of bonds and all classes senior to the specified class. Excess subordination reduces an investor’s potential risk of loss on their investment as excess subordination absorbs principal and interest shortfalls in the event underlying issuers are not able to make their contractual payments.

*		Ratings watch negative

The following table presents the changes in the credit loss component of the amortized cost of debt securities that the Company has written down for such loss as an other-than-temporary impairment recognized in earnings.


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

Balance, end of period	$	122,410

The credit loss component of the amortized cost represents the difference between the present value of expected future cash flows and the amortized cost basis of the security prior to considering credit losses. The beginning balance represents the credit loss component for debt securities for which other-than-temporary impairment occurred prior to the period presented. If other-than-temporary impairment is recognized in earnings for credit impaired debt securities, they would be presented as additions in two components based upon whether the current period is the first time the debt security was credit impaired (initial credit impairment) or is not the first time the debt security was credit impaired (subsequent credit impairments). The credit loss component is reduced if the Company sells, intends to sell or believes it will be required to sell previously credit impaired debt securities. Additionally, the credit loss component is reduced if (i) the Company receives the cash flows in excess of what it expected to receive over the remaining life of the credit impaired debt security, (ii) the security matures or (iii) the security is fully written down.

There were no sales from the securities portfolio during the quarter ended March 31, 2010.

Noncredit-related OTTI of $34.0 million ($20.1 million after-tax) on securities not expected to be sold, and for which it is not more likely than not that we will be required to sell the securities before recovery of their amortized cost basis. As of April 1, 2009, we reclassified $21.1 million after-tax as a cumulative effect adjustment for the noncredit-related portion of OTTI losses previously recognized in earnings.

A portion of the Company’s securities are pledged to secure borrowings.

The contractual maturities of mortgage-backed securities generally exceed 20 years; however, the effective lives are expected to be shorter due to anticipated prepayments. Expected maturities may differ from contractual maturities due to prepayment or early call privileges of the issuer. The amortized cost and estimated fair value of debt securities at March 31, 2010, by contractual maturity, are shown below.


	March 31, 2010
	Amortized		Estimated
	cost		fair value
	(In thousands)
Due in one year or less	$	10,001		10,003
Due after one year through five years		20,108		20,791
Due after five years through ten years		239		239
Due after ten years		27,513		43,736

Total	$	57,861		74,769

4. Loans Receivable, Net

Loans receivable, net are summarized as follows:


	March 31,			December 31,
	2010			2009
	(In thousands)
Residential mortgage loans	$	4,847,200			4,773,556
Multi-family loans		650,466			612,743
Commercial real estate loans		809,242			730,012
Construction loans		340,487			334,480
Commercial and industrial loans		22,893			23,159
Consumer and other loans		174,000			178,177

Total loans		6,844,288			6,652,127

Premiums on purchased loans		24,478			22,958
Deferred loan fees, net		(5,394	)		(4,574	)
Allowance for loan losses		(62,943	)		(55,052	)

Net loans	$	6,800,429			6,615,459

An analysis of the allowance for loan losses is summarized as follows:


	March 31, 2010
	(In thousands)
Balance at December 31, 2009	$	55,052

Charge offs:
Residential mortgage loans		(1,446	)
Multi-family loans		(454	)
Construction		(3,250	)
Consumer and other loans		(10	)

Loan charged off		(5,160	)
Recoveries:		1

Net charge-offs		(5,159	)
Provision for loan losses		13,050

Balance at March 31, 2010	$	62,943

5. Deposits

Deposits are summarized as follows:


	March 31,		December 31,
	2010		2010
	(In thousands)
Savings accounts	$	884,543		877,421
Checking accounts		1,104,051		927,675
Money market accounts		682,407		742,618

Total core deposits		2,671,001		2,547,714
Certificates of deposit		3,341,963		3,292,929

	$	6,012,964		5,840,643

6. Equity Incentive Plan

During the three months ended March 31, 2010, the Company recorded $2.3 million of share-based expense, comprised of stock option expense of $954,000 and restricted stock expense of $1.4 million.

During the three months ended March 31, 2010, no options were forfeited and 5,000 options with a weighted average grant date fair value of $4.40 were granted. At March 31, 2010, 5,151,752 options, with a weighted average exercise price of $15.00 and a weighted average grant date fair value of $4.09 were outstanding, of which 2,001,193 were unvested. Expected future expense relating to the unvested options outstanding as of March 31, 2010 is $6.5 million over a weighted average period of 2.0 years.

During the three months ended March 31, 2010, 495,000 shares of restricted stock with a weighted average grant date fair value of $12.67 were granted. At March 31, 2010, 1,234,880 shares of restricted stock, with a weighted average grant date fair value of $14.19, are unvested. Expected future compensation expense relating to the unvested restricted shares at March 31, 2010 is $14.7 million over a weighted average period of 4.0 years.

7. Net Periodic Benefit Plans Expense

The Company has a Supplemental Employee Retirement Plan (SERP). The SERP is a nonqualified, defined benefit plan which provides benefits to employees of the Company if their benefits and/or contributions under the pension plan are limited by the Internal Revenue Code. For the Company’s active directors as of December 31, 2006, the Company has a non-qualified, defined benefit plan which provides pension benefits. The SERP and the Directors’ plan are unfunded and the costs of the plans are recognized over the period that services are provided.

The components of net periodic benefit expense are as follows:


	Three months ended March 31,
	SERP and Directors’ Plan
	2010		2009
	(In thousands)
Service cost	$	179		136
Interest cost		221		263
Amortization of:
Prior service cost		25		24
Net loss		14		35

Total net periodic benefit expense	$	439		458

Due to the unfunded nature of these plans, no contributions are expected to be made to the SERP and Directors’ plans during the year ending December 31, 2010.

The Company also maintains a defined benefit pension plan. Since it is a multiemployer plan, costs of the pension plan are based on contributions required to be made to the pension plan. We did not contribute to the defined benefit pension plan during the quarter ended March 31, 2010. We anticipate contributing funds to the plan to meet any minimum funding requirements.

Summit Federal, at the time of merger, had a funded non-contributory defined benefit pension plan covering all eligible employees and an unfunded, non-qualified defined benefit SERP for the benefit of certain key employees. At March 31, 2010 and December 31, 2009, the pension plan had an accrued liability of $865,000 and $990,000, respectively. At March 31, 2010 and December 31, 2009, the charges recognized in accumulated other comprehensive loss for the pension plan were $1.2 million and $1.2 million, respectively. At March 31, 2010 and December 31, 2009, the SERP plan had an accrued liability of $883,000 and $911,000, respectively. At March 31, 2010 and December 31, 2009, the charges recognized in accumulated other comprehensive loss for the SERP plan were $93,000 and $98,000, respectively. For the three-month periods ended March 31, 2010 and 2009, the expense related to these plans was $74,000 and $74,000, respectively.

8. Fair Value Measurements

We use fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Our securities available-for-sale are recorded at fair value on a recurring basis. Additionally, from time to time, we may be required to record at fair value other assets or liabilities on a non-recurring basis, such as held-to-maturity securities, mortgage servicing rights, or MSR, loans receivable and real estate owned, or REO. These non-recurring fair value adjustments involve the application of lower-of-cost-or-market accounting or write-downs of individual assets. Additionally, in connection with our mortgage banking activities we have commitments to fund loans held for sale and commitments to sell loans, which are considered free-standing derivative instruments, the fair values of which are not material to our financial condition or results of operations.

In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, we group our assets and

liabilities at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value. These levels are:

•		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.

We base our fair values on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The following is a description of valuation methodologies used for assets measured at fair value on a recurring basis.

Securities available-for-sale

Our available-for-sale portfolio is carried at estimated fair value on a recurring basis, with any unrealized gains and losses, net of taxes, reported as accumulated other comprehensive income/loss in stockholders’ equity. Approximately 99% of our securities available-for-sale portfolio consists of mortgage-backed and government-sponsored enterprise securities. The fair values of these securities are obtained from an independent nationally recognized pricing service, which is then compared to a second independent pricing source for reasonableness. Our independent pricing service provides us with prices which are categorized as Level 2, as quoted prices in active markets for identical assets are generally not available for the majority of securities in our portfolio. Various modeling techniques are used to determine pricing for our mortgage-backed and government sponsored enterprise securities, including option pricing and discounted cash flow models. The inputs to these models include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data. The remaining 1% of our securities available-for-sale portfolio is comprised primarily of private fund investments for which the issuer provides us prices which are categorized as Level 2, as quoted prices in active markets for identical assets are generally not available.

The following table provides the level of valuation assumptions used to determine the carrying value of our assets measured at fair value on a recurring basis at March 31, 2010.


	Carrying Value at March 31, 2010
	Total		Level 1		Level 2		Level 3
			(In thousands)
Securities available for sale:
Mortgage-backed securities	$	510,035	$	—	$	510,035	$	—
Government-sponsored enterprises		10,003		—		10,003		—
Equity securities		2,308		—		2,308		—

	$	522,346	$	—	$	522,346	$	—

The following is a description of valuation methodologies used for assets measured at fair value on a non-recurring basis.

Securities held-to-maturity

Our held-to-maturity portfolio, consisting primarily of mortgage backed securities and other debt securities for which we have a positive intent and ability to hold to maturity, is carried at amortized cost. We conduct a periodic review and evaluation of the held-to-maturity portfolio to determine if the value of any security has declined below its cost or amortized cost, and whether such decline is other-than-temporary. Management utilizes various inputs to determine the fair value of the portfolio. To the extent they exist, unadjusted quoted market prices in active markets (level 1) or quoted prices on similar assets (level 2) are utilized to determine the fair value of each investment in the portfolio. In the absence of quoted prices and in an illiquid market, valuation techniques, which require inputs that are both significant to the fair value measurement and unobservable (level 3), are used to determine fair value of the investment. Valuation techniques are based on various assumptions, including, but not limited to cash flows, discount rates, rate of return, adjustments for nonperformance and liquidity, and liquidation values. If a determination is made that a debt security is other-than-temporarily impaired, the Company will estimate the amount of the unrealized loss that is attributable to credit and all other non-credit related factors. The credit related component will be recognized as an other-than-temporary impairment charge in non-interest income as a component of gain (loss) on securities, net. The non-credit related component will be recorded as an adjustment to accumulated other comprehensive income, net of tax.

Mortgage Servicing Rights, net

Mortgage Servicing Rights are carried at the lower of cost or estimated fair value. The estimated fair value of MSR is obtained through independent third party valuations through an analysis of future cash flows, incorporating estimates of assumptions market participants would use in determining fair value including market discount rates, prepayment speeds, servicing income, servicing costs, default rates and other market driven data, including the market’s perception of future interest rate movements and, as such, are classified as Level 3.

Loans Receivable

Loans which meet certain criteria are evaluated individually for impairment. A loan is deemed to be impaired if it is a commercial real estate, multi-family or construction loan with an outstanding balance greater than $3.0 million and on non-accrual status. Our impaired loans are generally collateral dependent and, as such, are carried at the estimated fair value of the collateral less estimated selling costs. In order to estimate fair value, once interest or principal payments are 90 days delinquent or when the timely collection of such income is considered doubtful an updated appraisal is obtained. Thereafter, in the event the most recent appraisal does

not reflect the current market conditions due to the passage of time and other factors, management will obtain an updated appraisal or make downward adjustments to the existing appraised value based on their knowledge of the property, local real estate market conditions, recent real estate transactions, and for estimated selling costs, if applicable. Therefore, these adjustments are generally classified as Level 3.

The following table provides the level of valuation assumptions used to determine the carrying value of our assets measured at fair value on a non-recurring basis at March 31, 2010.


	Total		Level 1		Level 2		Level 3
	(In thousands)
Impaired loans	$	33,906	$	—	$	—	$	33,906

9. Fair Value of Financial Instruments

Fair value estimates, methods and assumptions for the Company’s financial instruments are set forth below.

Cash and Cash Equivalents

For cash and due from banks, the carrying amount approximates fair value.

Securities

The fair values of securities are estimated based on market values provided by an independent pricing service, where prices are available. If a quoted market price was not available, the fair value was estimated using quoted market values of similar instruments, adjusted for differences between the quoted instruments and the instruments being valued.

FHLB Stock

The fair value of FHLB stock is its carrying value, since this is the amount for which it could be redeemed. There is no active market for this stock and the Bank is required to hold a minimum investment based upon the unpaid principal of home mortgage loans and/or FHLB advances outstanding.

Loans

Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as residential mortgage and consumer. Each loan category is further segmented into fixed and adjustable rate interest terms and by performing and nonperforming categories.

The fair value of performing loans, except residential mortgage loans, is calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk inherent in the loan. For performing residential mortgage loans, fair value is estimated by discounting contractual cash flows adjusted for prepayment estimates using discount rates based on secondary market sources adjusted to reflect differences in servicing and credit costs, if applicable. Fair value for significant nonperforming loans is based on recent external appraisals of collateral securing such loans, adjusted for the timing of anticipated cash flows. Fair values estimated in this manner do not fully incorporate an exit price approach to fair value, but instead are based on a comparison to current market rates for comparable loans.

Deposit Liabilities

The fair value of deposits with no stated maturity, such as savings, checking accounts and money market accounts, is equal to the amount payable on demand. The fair value of certificates of deposit is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates which approximate currently offered for deposits of similar remaining maturities.

Borrowings

The fair value of borrowings are based on securities dealers’ estimated market values, when available, or estimated using discounted contractual cash flows using rates which approximate the rates offered for borrowings of similar remaining maturities.

Commitments to Extend Credit

The fair value of commitments to extend credit is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For commitments to originate fixed rate loans, fair value also considers the difference between current levels of interest rates and the committed rates. Due to the short-term nature of our outstanding commitments, the fair values of these commitments are immaterial to our financial condition.

The carrying amounts and estimated fair values of the Company’s financial instruments are presented in the following table.


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

Limitations

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing on- and off-balance-sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Significant assets that are not considered financial assets include deferred tax assets, premises and equipment and bank owned life insurance. Liabilities for pension and other postretirement benefits are not considered financial liabilities. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.

10. Recent Accounting Pronouncements

In June 2009, the FASB issued ASC 860, an amendment to the accounting and disclosure requirements for transfers of financial assets. The guidance defines the term “participating interest” to establish specific conditions for reporting a transfer of a portion of a financial asset as a sale. If the transfer does not meet those conditions, a transferor should account for the transfer as a sale only if it transfers an entire financial asset or a group of entire financial assets and surrenders control over the entire transferred asset(s). The guidance requires that a transferor recognize and initially measure at fair value all assets obtained (including a transferor’s beneficial interest) and liabilities incurred as a result of a transfer of financial assets accounted for as a sale. This Statement is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. The adoption of ASC 860 did not have a material impact on the Company’s financial condition, results of operations or financial statement disclosures.

In January 2010, the FASB issued Accounting Standards Update (“ASU”) 2010-06 to improve disclosures about fair value measurements. This guidance requires new disclosures on transfers into and out of Level 1 and 2 measurements of the fair value hierarchy and requires separate disclosures about purchases, sales, issuances, and settlements relating to Level 3 measurements. It also clarifies existing fair value disclosures relating to the level of disaggregation and inputs and valuation techniques used to measure fair value. It is effective for the first reporting period (including interim periods) beginning after December 15, 2009, except for the requirement to provide the Level 3 activity of purchases, sales, issuances, and settlements on a gross basis, which will be effective for fiscal years beginning after December 15, 2010. The adoption of this pronouncement did not have a material impact on the Company’s financial condition, results of operations or financial statement disclosures.

In February 2010, the FASB issued ASU 2010-09, which amended the subsequent events pronouncement issued in May 2009. The amendment removed the requirement to disclose the date through which subsequent events have been evaluated. This pronouncement became effective immediately upon issuance and is to be applied prospectively. The adoption of this pronouncement did not have a material impact on the Company’s financial condition, results of operations or financial statement disclosures.

In April 2010, the FASB issued ASU 2010-18, which states that modifications of loans that are accounted for within a pool under ASC 310-30 do not result in the removal of those loans from the pool even if the modification of those loans would otherwise be considered a troubled debt restructuring. An entity will continue to be required to consider whether the pool of assets in which the loan is included is impaired if expected cash flows for the pool change. The amendments do not affect the accounting for loans under the scope of ASC 310-30 that are not

accounted for within pools. Loans accounted for individually under ASC 310-30 continue to be subject to the troubled debt restructuring accounting provisions within ASC 310-40, “Receivables—Troubled Debt Restructurings by Creditors”. The amendments are effective for modifications of loans accounted for within pools under Subtopic 310-30 occurring in the first interim or annual period ending on or after July 15, 2010. The Company does not expect that the adoption of this pronouncement will have a material impact on the Company’s financial condition, results of operations or financial statement disclosures.

11. Subsequent Events

As defined in FASB ASC 855-10, “Subsequent Events”, subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued or available to be issued. Financial statements are considered issued when they are widely distributed to shareholders and other financial statement users for general use and reliance in a form and format that compiles with GAAP. The Company has evaluated subsequent events through November 9, 2009, which is the date that the Company’s financial statements are being issued.

Based on the evaluation, the Company did not identify any recognized subsequent events that would have a required an adjustment to the financial statements.

12. Purchase and Assumption Agreement

The Company announced on March 30, 2010 that it has signed a Purchase and Assumption Agreement with Millennium bcpbank (“Millennium”) to acquire approximately $575 million of deposits and seventeen branch offices in New Jersey, New York and Massachusetts for a deposit premium of 0.11%. Under the purchase and assumption agreement the parties intend to enter into a Loan Purchase Agreement in which Investors will purchase a portion of Millennium’s performing loan portfolio. Also, under the Purchase and Assumption Agreement, the parties will negotiate a Loan Servicing Agreement for Investors to service those loans it does not purchase. The Company is evaluating its options for the Massachusetts branch offices. This transaction has received approvals from the boards of directors of both companies, and remains subject to regulatory approval. The acquisition is expected to close during the quarter ending September 2010.


Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

Certain statements contained herein are not based on historical facts and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may be identified by reference to a future period or periods or by the use of forward-looking terminology, such as “may,” “will,” “believe,” “expect,” “estimate,” “anticipate,” “continue,” or similar terms or variations on those terms, or the negative of those terms. Forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, those related to the economic environment, particularly in the market areas in which Investors Bancorp, Inc. (the Company) operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations or interpretations of regulations affecting financial institutions, changes in prevailing interest rates, acquisitions and the integration of acquired

businesses, credit risk management, asset-liability management, the financial and securities markets and the availability of and costs associated with sources of liquidity.

The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company wishes to advise that the factors listed above could affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company does not undertake and specifically declines any obligation to publicly release the result of any revisions, which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Critical Accounting Policies

We consider accounting policies that require management to exercise significant judgment or discretion or to make significant assumptions that have, or could have, a material impact on the carrying value of certain assets or on income, to be critical accounting policies. We consider the following to be our critical accounting policies.

Allowance for Loan Losses. The allowance for loan losses is the estimated amount considered necessary to cover credit losses inherent in the loan portfolio at the balance sheet date. The allowance is established through the provision for loan losses that is charged against income. In determining the allowance for loan losses, we make significant estimates and, therefore, have identified the allowance as a critical accounting policy. The methodology for determining the allowance for loan losses is considered a critical accounting policy by management because of the high degree of judgment involved, the subjectivity of the assumptions used, and the potential for changes in the economic environment that could result in changes to the amount of the recorded allowance for loan losses.

The allowance for loan losses has been determined in accordance with U.S. generally accepted accounting principles, under which we are required to maintain an allowance for probable losses at the balance sheet date. We are responsible for the timely and periodic determination of the amount of the allowance required. We believe that our allowance for loan losses is adequate to cover specifically identifiable losses, as well as estimated losses inherent in our portfolio for which certain losses are probable but not specifically identifiable.

Management performs a quarterly evaluation of the adequacy of the allowance for loan losses. The analysis of the allowance for loan losses has two components: specific and general allocations. Specific allocations are made for loans determined to be impaired. A loan is deemed to be impaired if it is a commercial real estate, multi-family or construction loan with an outstanding balance greater than $3.0 million and on non-accrual status. Impairment is measured by determining the present value of expected future cash flows or, for collateral-dependent loans, the fair value of the collateral adjusted for market conditions and selling expenses. The general allocation is determined by segregating the remaining loans, including those loans not meeting the Company’s definition of an impaired loan, by type of loan, risk weighting (if applicable) and payment history. We also analyze historical loss experience, delinquency trends, general economic conditions, geographic concentrations, and industry and peer comparisons. This analysis establishes factors that are applied to the loan groups to determine the amount of the general allocations. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revisions based upon changes in economic and real estate

market conditions. Actual loan losses may be significantly more than the allowance for loan losses we have established which could have a material negative effect on our financial results.

On a quarterly basis, management’s Allowance for Loan Loss Committee reviews the current status of various loan assets in order to evaluate the adequacy of the allowance for loan losses. In this evaluation process, specific loans are analyzed to determine their potential risk of loss. This process includes all loans, concentrating on non-accrual and classified loans. Each non-accrual or classified loan is evaluated for potential loss exposure. Any shortfall results in a recommendation of a specific allowance if the likelihood of loss is evaluated as probable. To determine the adequacy of collateral on a particular loan, an estimate of the fair market value of the collateral is based on the most current appraised value available. This appraised value is then reduced to reflect estimated liquidation expenses.

The results of this quarterly process are summarized along with recommendations and presented to Executive and Senior Management for their review. Based on these recommendations, loan loss allowances are approved by Executive and Senior Management. All supporting documentation with regard to the evaluation process, loan loss experience, allowance levels and the schedules of classified loans are maintained by the Lending Administration Department. A summary of loan loss allowances is presented to the Board of Directors on a quarterly basis.

Our primary lending emphasis has been the origination and purchase of residential mortgage loans and commercial real estate mortgages. We also originate home equity loans and home equity lines of credit. These activities resulted in a loan concentration in residential mortgages. We also have a concentration of loans secured by real property located in New Jersey. As a substantial amount of our loan portfolio is collateralized by real estate, appraisals of the underlying value of property securing loans are critical in determining the amount of the allowance required for specific loans. Assumptions for appraisal valuations are instrumental in determining the value of properties. Overly optimistic assumptions or negative changes to assumptions could significantly impact the valuation of a property securing a loan and the related allowance determined. The assumptions supporting such appraisals are carefully reviewed by management to determine that the resulting values reasonably reflect amounts realizable on the related loans.

For commercial real estate, construction and multi-family loans, the Company obtains an appraisal for all collateral dependent loans upon origination and an updated appraisal in the event interest or principal payments are 90 days delinquent or when the timely collection of such income is considered doubtful. Thereafter, in the event the most recent appraisal does not reflect the current market conditions due to the passage of time and other factors, management will obtain an updated appraisal or make downward adjustments to the existing appraised value based on their knowledge of the property, local real estate market conditions, recent real estate transactions, and for estimated selling costs, if applicable.

For homogeneous residential mortgage loans, the Company’s policy is to obtain an appraisal upon the origination of the loan and an updated appraisal in the event a loan becomes 90 days delinquent. Thereafter, the appraisal is updated every two years if the loan remains in non-performing status and the foreclosure process has not been completed. Management does not typically make adjustments to the appraised value of residential loans other than to reduce the value for estimated selling costs, if applicable.

In determining the allowance for loan losses, management believes the potential for outdated appraisals has been mitigated for impaired loans and other non-performing loans, as the loans are individually assessed to determine that the loan’s carrying value is not in excess of the fair value of the collateral.

Based on the composition of our loan portfolio, we believe the primary risks are increases in interest rates, a decline in the general economy, and a decline in real estate market values in New Jersey and surrounding states. Any one or combination of these events may adversely affect our loan portfolio resulting in increased delinquencies, loan losses and future levels of loan loss provisions. We consider it important to maintain the ratio of our allowance for loan losses to total loans at an adequate level given current economic conditions, interest rates, and the composition of the portfolio.

Our allowance for loan losses reflects probable losses considering, among other things, the actual growth and change in composition of our loan portfolio, the level of our non-performing loans and our charge-off experience. We believe the allowance for loan losses reflects the inherent credit risk in our portfolio.

Although we believe we have established and maintained the allowance for loan losses at adequate levels, additions may be necessary if the current operating environment continues or deteriorates. Management uses the best information available; however, the level of the allowance for loan losses remains an estimate that is subject to significant judgment and short-term change. In addition, the Federal Deposit Insurance Corporation and the New Jersey Department of Banking and Insurance, as an integral part of their examination process, will periodically review our allowance for loan losses. Such agencies may require us to recognize adjustments to the allowance based on their judgments about information available to them at the time of their examination.

Deferred Income Taxes. The Company records income taxes in accordance with ASC 740, “Income Taxes,” as amended, using the asset and liability method. Accordingly, deferred tax assets and liabilities: (i) are recognized for the expected future tax consequences of events that have been recognized in the financial statements or tax returns; (ii) are attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases; and (iii) are measured using enacted tax rates expected to apply in the years when those temporary differences are expected to be recovered or settled. Where applicable, deferred tax assets are reduced by a valuation allowance for any portions determined not likely to be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period of enactment. The valuation allowance is adjusted, by a charge or credit to income tax expense, as changes in facts and circumstances warrant.

Asset Impairment Judgments. Certain of our assets are carried on our consolidated balance sheets at cost, fair value or at the lower of cost or fair value. Valuation allowances or write-downs are established when necessary to recognize impairment of such assets. We periodically perform analyses to test for impairment of such assets. In addition to the impairment analyses related to our loans discussed above, another significant impairment analysis is the determination of whether there has been an other-than-temporary decline in the value of one or more of our securities.

Our available-for-sale portfolio is carried at estimated fair value, with any unrealized gains or losses, net of taxes, reported as accumulated other comprehensive income or loss in

stockholders’ equity. The Company does not intend to sell these securities and it is more likely than not that we will not be required to sell these securities before their anticipated recovery of the remaining amortized cost basis. Our held-to-maturity portfolio, consisting primarily of mortgage backed securities and other debt securities for which we have a positive intent and ability to hold to maturity, is carried at amortized cost. We conduct a periodic review and evaluation of the securities portfolio to determine if the value of any security has declined below its cost or amortized cost, and whether such decline is other-than-temporary.

Management utilizes various inputs to determine the fair value of the portfolio. To the extent they exist, unadjusted quoted market prices in active markets (level 1) or quoted prices on similar assets (level 2) are utilized to determine the fair value of each investment in the portfolio. In the absence of quoted prices and in an illiquid market, valuation techniques, which require inputs that are both significant to the fair value measurement and unobservable (level 3), are used to determine fair value of the investment. Valuation techniques are based on various assumptions, including, but not limited to cash flows, discount rates, rate of return, adjustments for nonperformance and liquidity, and liquidation values. Management is required to use a significant degree of judgment when the valuation of investments includes inputs. The use of different assumptions could have a positive or negative effect on our consolidated financial condition or results of operations.

The market values of our securities are also affected by changes in interest rates. When significant changes in interest rates occur, we evaluate our intent and ability to hold the security to maturity or for a sufficient time to recover our recorded investment balance.

If a determination is made that a debt security is other-than-temporarily impaired, the Company will estimate the amount of the unrealized loss that is attributable to credit and all other non-credit related factors. The credit related component will be recognized as an other-than-temporary impairment charge in non-interest income as a component of gain (loss) on securities, net. The non-credit related component will be recorded as an adjustment to accumulated other comprehensive income, net of tax.

Goodwill Impairment. Goodwill is presumed to have an indefinite useful life and is tested, at least annually, for impairment at the reporting unit level. Impairment exists when the carrying amount of goodwill exceeds its implied fair value. For purposes of our goodwill impairment testing, we have identified a single reporting unit. We consider the quoted market price of our common stock on our impairment testing date as an initial indicator of estimating the fair value of our reporting unit. In addition, we consider our average stock price, both before and after our impairment test date, as well as market-based control premiums in determining the estimated fair value of our reporting unit. If the estimated fair value of our reporting unit exceeds its carrying amount, further evaluation is not necessary. However, if the fair value of our reporting unit is less than its carrying amount, further evaluation is required to compare the implied fair value of the reporting unit’s goodwill to its carrying amount to determine if a write-down of goodwill is required.

Valuation of Mortgage Servicing Rights (MSR). The initial asset recognized for originated MSR is measured at fair value. The fair value of MSR is estimated by reference to current market values of similar loans sold servicing released. MSR are amortized in proportion to and over the period of estimated net servicing income. We apply the amortization method for measurements of our MSR. MSR are assessed for impairment based on fair value at each reporting date. MSR impairment, if any, is recognized in a valuation allowance through charges

to earnings. Increases in the fair value of impaired MSR are recognized only up to the amount of the previously recognized valuation allowance.

We assess impairment of our MSR based on the estimated fair value of those rights with any impairment recognized through a valuation allowance. The estimated fair value of the MSR is obtained through independent third party valuations through an analysis of future cash flows, incorporating estimates of assumptions market participants would use in determining fair value including market discount rates, prepayment speeds, servicing income, servicing costs, default rates and other market driven data, including the market’s perception of future interest rate movements. The allowance is then adjusted in subsequent periods to reflect changes in the measurement of impairment. All assumptions are reviewed for reasonableness on a quarterly basis to ensure they reflect current and anticipated market conditions.

The fair value of MSR is highly sensitive to changes in assumptions. Changes in prepayment speed assumptions generally have the most significant impact on the fair value of our MSR. Generally, as interest rates decline, mortgage loan prepayments accelerate due to increased refinance activity, which results in a decrease in the fair value of MSR. As interest rates rise, mortgage loan prepayments slow down, which results in an increase in the fair value of MSR. Thus, any measurement of the fair value of our MSR is limited by the conditions existing and the assumptions utilized as of a particular point in time, and those assumptions may not be appropriate if they are applied at a different point in time.

Stock-Based Compensation. We recognize the cost of employee services received in exchange for awards of equity instruments based on the grant-date fair value of those awards in accordance with ASC 718, Compensation-Stock Compensation.

We estimate the per share fair value of option grants on the date of grant using the Black-Scholes option pricing model using assumptions for the expected dividend yield, expected stock price volatility, risk-free interest rate and expected option term. These assumptions are subjective in nature, involve uncertainties and, therefore, cannot be determined with precision. The Black-Scholes option pricing model also contains certain inherent limitations when applied to options that are not traded on public markets.

The per share fair value of options is highly sensitive to changes in assumptions. In general, the per share fair value of options will move in the same direction as changes in the expected stock price volatility, risk-free interest rate and expected option term, and in the opposite direction as changes in the expected dividend yield. For example, the per share fair value of options will generally increase as expected stock price volatility increases, risk-free interest rate increases, expected option term increases and expected dividend yield decreases. The use of different assumptions or different option pricing models could result in materially different per share fair values of options.

Executive Summary

Investors Bancorp’s fundamental business strategy is to be a well capitalized, full service, community bank which provides high quality customer service and competitively priced products and services to individuals and businesses in the communities we serve.

Our results of operations depend primarily on net interest income, which is directly impacted by the market interest rate environment. Net interest income is the difference between the interest

income we earn on our interest-earning assets, primarily mortgage loans and investment securities, and the interest we pay on our interest-bearing liabilities, primarily time deposits, interest-bearing transaction accounts and borrowed funds. Net interest income is affected by the shape of the market yield curve, the timing of the placement and re-pricing of interest-earning assets and interest-bearing liabilities on our balance sheet, and the prepayment rate on our mortgage-related assets. The Company’s results of operations are also significantly affected by general economic conditions.

The financial services industry continues to be negatively impacted by adverse economic conditions which include mounting credit losses, illiquidity in certain areas of the capital and credit markets, depressed property values in real estate markets, and additional bank failures.

The Federal Reserve has maintained short term interest rates at historically low levels resulting in a steep yield curve. Lower short term interest rates have helped us reduce the cost of our interest-bearing liabilities contributing to a $20.8 million increase in our net interest income to $61.9 million for the three months ended March 31, 2010 from $41.2 million for the three months ended March 31, 2009.

While the interest rate environment is important to our net interest income, so is the composition of our balance sheet. The recent turmoil in the financial markets has created uncertainty and volatility for many financial institutions. This created an opportunity for us to add more loans and increase the size of our balance sheet. Net loans increased to $6.80 billion at March 31, 2010 from $6.62 billion at December 31, 2009, an increase of 2.8%. Diversification of the loan portfolio remains an important goal and during the three months ended March 31, 2010 commercial real estate loans increased $79.2 million, or 10.9%, to $809.2 million and multi-family loans increased $37.7 million, or 6.2% to $650.5 million. This may provide us with an opportunity to increase net interest income and improve our interest rate risk position. As we add more loans to our balance sheet we remain focused on maintaining our historically strict underwriting standards. We have never originated any sub-prime loans, negative amortization loans or option ARM loans.

With the continued growth in our loan portfolio and the increase in the amount of commercial real estate loans, we believe higher loan loss provisions are prudent and necessary especially in light of the current economic environment. During the three months ended March 31, 2010, we recorded a $13.1 million provision for loan losses. It is difficult to determine how the economy will fare as we are faced with a forecast of higher levels of unemployment in our lending area through the remainder of 2010. We will continue to monitor our loan portfolio carefully and maintain our conservative loan underwriting practices.

Total non-performing loans, defined as non-accruing loans, increased slightly to $124.7 million, or 1.82% of total loans at March 31, 2010, compared to $120.2 million, or 1.81% of total loans at December 31, 2009. For the quarter ended March 31, 2010, the Company recorded $5.2 million in charge-offs. Although we have resolved a number of non-performing loans, the current economic environment continues to negatively impact several large construction loan borrowers. Additionally, residential loan delinquency has risen as unemployment in our lending area has steadily increased over the past year.

The current economic conditions have had a negative impact on certain of our investment securities. Our securities portfolio includes non-agency mortgage backed securities with an amortized cost of $125.9 million and a fair value of $122.8 million. The fair values of certain of

these securities are being adversely impacted by higher loan delinquency rates, rising projected loss rates, and the securities re-pricing to lower interest rates. Our securities portfolio also includes pooled trust preferred securities, principally issued by banks and to a lesser extent insurance companies. These securities which were written down through an other-than-temporary impairment charge in the prior fiscal year, continue to be negatively impacted by an increase in payment deferrals by issuers and the absence of an orderly and liquid market. The trust preferred securities portfolio has a book value of $22.4 million and a fair value of $38.5 million. We continue to closely monitor all of these securities and will continue to evaluate them for possible other-than-temporary impairment, which could result in future non-cash charges to earnings in upcoming quarters.

During the quarter, core deposits increased $123.3 million, or 4.8%, while total deposits increased by $172.3 million to $6.01 billion at March 31, 2010. Increasing core deposits remains one of our primary goals.

We are a well capitalized bank with a tangible capital ratio of 9.6%. Given our strong capital and liquidity positions, we believe we will be able to take advantage of opportunities to grow and enhance our franchise value.

Comparison of Financial Condition at March 31, 2010 and December 31, 2009

Total Assets. Total assets increased by $390.9 million, or 4.7%, to $8.75 billion at March 31, 2010 from $8.36 billion at December 31, 2009. This increase was largely the result of a $210.9 million increase in our cash and cash equivalents at March 31, 2010 from $73.6 million at December 31, 2009 to $284.5 million at March 31, 2010 and a $180.5 million increase in net loans, including loans held for sale.

Net Loans. Net loans, including loans held for sale, increased by $180.5 million, or 2.7%, to $6.82 billion at March 31, 2010 from $6.64 billion at December 31, 2009. This increase in loans reflects our continued focus on loan originations and purchases, which was partially offset by paydowns and payoffs of loans. The loans we originate and purchase are on properties in New Jersey and states in close proximity to New Jersey. We do not originate or purchase, and our loan portfolio does not include, any sub-prime loans or option ARMs.

We originate residential mortgage loans directly and through our mortgage subsidiary, ISB Mortgage Co. During the three month period ended March 31, 2010 we originated $144.9 million in residential mortgage loans. In addition, we purchase mortgage loans from correspondent entities including other banks and mortgage bankers. Our agreements with these correspondent entities require them to originate loans that adhere to our underwriting standards. During the three month period ended March 31, 2010, we purchased loans totaling $231.1 million from these entities. We also purchase, on a “bulk purchase” basis, pools of mortgage loans that meet our underwriting criteria from several well-established financial institutions in the secondary market. During the three month period ended March 31, 2010, we purchased $14.8 million of residential mortgage loans on a “bulk purchase” basis.

Additionally, for the three month period ended March 31, 2010, we originated $40.4 million in multi-family loans, $86.9 million in commercial real estate loans, $27.0 million in construction loans, $14.5 in consumer and other loans, and $2.0 million in commercial and industrial loans. This activity is consistent with our strategy to diversify our loan portfolio by adding more multi-family and commercial real estate loans.

The Company also originates interest-only one-to four-family mortgage loans in which the borrower makes only interest payments for the first five, seven or ten years of the mortgage loan term. This feature will result in future increases in the borrower’s loan repayment when the contractually required repayments increase due to the required amortization of the principal amount. These payment increases could affect the borrower’s ability to repay the loan. The amount of interest-only one-to four-family mortgage loans at March 31, 2010 was $552.1 million compared to $560.7 million at December 31, 2009. The ability of borrowers to repay their obligations are dependent upon various factors including the borrowers’ income and net worth, cash flows generated by the underlying collateral, value of the underlying collateral and priority of the Company’s lien on the property. Such factors are dependent upon various economic conditions and individual circumstances beyond the Company’s control. The Company is, therefore, subject to risk of loss.

The Company maintains stricter underwriting criteria for these interest-only loans than it does for its amortizing loans. The Company believes these criteria adequately minimize the potential exposure to such risks and that adequate provisions for loan losses are provided for all known and inherent risks.

The comparative table below details non-performing loans and allowance for loan loss coverage ratios over the last four quarters.


	March 31,					December 31,					September 30,					June 30,
	2010					2009					2009					2009
	# of					# of					# of					# of
	loans		Amount			loans		Amount			loans		Amount			loans		Amount
						(Dollars in millions)
Residential and consumer		199	$	57.1			185	$	51.2			164	$	41.0			112	$	30.0
Multi-family		2		2.5			4		0.6			4		0.6			4		20.1
Commercial		9		3.5			10		3.4			9		3.4			8		2.8
Construction		22		61.6			22		65.0			22		70.5			19		68.8

Total Non-Performing Loans		232	$	124.7			221	$	120.2			199	$	115.5			143	$	121.7


Non-performing loans to total loans				1.82	%				1.81	%				1.82	%				1.97	%
Allowance for loan loss as a percent of non-performing				50.47	%				45.80	%				46.35	%				38.30	%
Allowance for loan losses as a percent of total loans				0.92	%				0.83	%				0.84	%				0.76	%

Total non-performing loans, defined as non-accruing loans, increased by $4.5 million to $124.7 million at March 31, 2010 from $120.2 million at December 31, 2009. Although we have had resolution on a number of non-performing loans, the current economic environment continues to cause financial difficulties for several large construction loans. Additionally, residential loan delinquency has risen as unemployment in our lending area has steadily increased.

At March 31, 2010 loans meeting the Company’s definition of an impaired loan were primarily collateral-dependent and totaled $42.1 million of which $34.2 million of impaired loans had a related allowance for credit losses of $8.2 million and $7.9 million of impaired loans had no related allowance for credit losses. At December 31, 2009, loans meeting the Company’s definition of an impaired loan were primarily collateral dependent and totaled $48.4 million, of

which $35.7 million of impaired loans had a related allowance for credit losses of $8.9 million and $12.7 million of impaired loans had no related allowance for credit losses.

In addition to non-performing loans we continue to monitor our portfolio for potential problem loans. Potential problem loans are defined as loans about which we have concerns as to the ability of the borrower to comply with the present loan repayment terms and which may cause the loan to be placed on non-accrual status. As of March 31, 2010, there are 3 loans totaling $28.9 million that the Company has deemed as potential problem loans. Management is actively monitoring these loans.

The following table sets forth the allowance for loan losses at March 31, 2010 and December 31, 2009 allocated by loan category and the percent of loans in each category to total loans at the dates indicated. The allowance for loan losses allocated to each category is not necessarily indicative of future losses in any particular category and does not restrict the use of the allowance to absorb losses in other categories.


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

Total allowance	$	62,943		100.00	%	$	55,052		100.00	%

The allowance for loan losses increased by $7.9 million to $62.9 million at March 31, 2010 from $55.1 million at December 31, 2009. The increase in the allowance was primarily attributable to the higher current year loan loss provision which reflects the overall growth in the loan portfolio, particularly residential and commercial real estate loans; the increased inherent credit risk in our overall portfolio, particularly the credit risk associated with commercial real estate lending; the increase in non-performing loans; and the continued adverse economic environment, offset partially by net charge offs of $5.2 million.

The ratio of non-performing loans to total loans was 1.82% at March 31, 2010 compared to 1.81% at December 31, 2009. The allowance for loan losses as a percentage of non-performing loans was 50.47% at March 31, 2010 compared with 45.80% at December 31, 2009. At March 31, 2010 our allowance for loan losses as a percentage of total loans was 0.92% compared with 0.83% at December 31, 2009. Future increases in the allowance for loan losses may be necessary based on the growth of the loan portfolio, the change in composition of the loan portfolio, possible future increases in non-performing loans and charge-offs, and the possible continuation of the current adverse economic environment. Although we use the best information available, the level of allowance for loan losses remains an estimate that is subject to significant judgment and short-term change. See “Critical Accounting Policies.”

Securities. Securities, in the aggregate, decreased by $7.6 million, or 0.6%, to $1.18 billion at March 31, 2010, from $1.19 billion at December 31, 2009. The decrease in the portfolio was due to paydowns, calls or maturities and was partially offset by the purchase of $98.9 million of agency issued mortgage backed securities during the three months ended March 31, 2010.

Stock in the Federal Home Loan Bank, Other Assets. The amount of stock we own in the Federal Home Loan Bank (FHLB) increased by $7.9 million from $66.2 million at December 31, 2009 to $74.1 million at March 31, 2010 as a result of a increase in our level of borrowings at March 31, 2010. Other assets decreased $3.6 million as prepaid FDIC insurance decreased in relation to our FDIC insurance expense.

Deposits. Deposits increased by $172.3 million, or 3.0%, to $6.01 billion at March 31, 2010 from $5.84 billion at December 31, 2009. Core deposits increased by $123.3 million, or 4.8% and certificate of deposits increased $49.0 million, or 1.5%. Our deposit gathering efforts continue to be successful in our markets.

Borrowed Funds. Borrowed funds increased $175.0 million, or 10.9%, to $1.78 billion at March 31, 2010 from $1.60 billion at December 31, 2009.

Stockholders’ Equity. Stockholders’ equity increased $18.0 million to $868.2 million at March 31, 2010 from $850.2 million at December 31, 2009. The increase is primarily attributed to the $13.3 million net income for the period.

Average Balance Sheets for the Three Months ended March 31, 2010 and 2009

The following table presents certain information regarding Investors Bancorp, Inc.’s financial condition and net interest income for the three months ended March 31, 2010 and 2009. The table presents the annualized average yield on interest-earning assets and the annualized average cost of interest-bearing liabilities. We derived the yields and costs by dividing annualized income or expense by the average balance of interest-earning assets and interest-bearing liabilities, respectively, for the periods shown. We derived average balances from daily balances over the periods indicated. Interest income includes fees that we consider adjustments to yields.


	For the three months ended March 31,
	2010							2009
	Average							Average
	Outstanding		Interest		Average			Outstanding		Interest		Average
	Balance		Earned/Paid		Yield/Rate			Balance		Earned/Paid		Yield/Rate
					(Dollars in thousands)
Interest-earning assets:
Interest-bearing deposits	$	159,194	$	73		0.18	%	$	205,083	$	119		0.23	%
Securities available-for-sale(1)		464,673		3,203		2.76	%		179,298		2,083		4.65	%
Securities held-to-maturity		690,495		7,836		4.54	%		960,946		13,154		5.48	%
Net loans(2)		6,715,435		91,028		5.42	%		5,631,836		76,723		5.45	%
Stock in FHLB		74,254		928		5.00	%		73,062		670		3.67	%

Total interest-earning assets		8,104,051		103,068		5.09	%		7,050,225		92,749		5.26	%

Non-interest earning assets		386,967							258,737

Total assets	$	8,491,018						$	7,308,962


Interest-bearing Liabilities:
Savings	$	876,737	$	3,429		1.56	%	$	555,319	$	3,242		2.34	%
Interest-bearing checking		729,200		1,672		0.92	%		711,075		4,082		2.30	%
Money market accounts		702,781		1,962		1.12	%		294,927		1,558		2.11	%
Certificates of deposit		3,309,288		16,697		2.02	%		3,025,100		25,018		3.31	%
Borrowed funds		1,781,260		17,378		3.90	%		1,836,931		17,691		3.85	%

Total interest-bearing liabilities		7,399,266		41,138		2.22	%		6,423,352		51,591		3.21	%

Non-interest bearing liabilities		237,332							134,248

Total liabilities		7,636,598							6,557,600

Stockholders’ equity		854,420							751,362

Total liabilities and stockholders’ equity	$	8,491,018						$	7,308,962


Net interest income			$	61,930						$	41,158


Net interest rate spread(3)						2.87	%						2.05	%


Net interest earning assets(4)	$	704,785						$	626,873


Net interest margin(5)						3.06	%						2.34	%


Ratio of interest-earning assets to total interest- bearing liabilities		1.10 X							1.10 X


(1)		Securities available-for-sale are stated at amortized cost, adjusted for unamortized purchased premiums and discounts.

(2)		Net loans include loans held-for-sale and non-performing loans.

(3)		Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.

(4)		Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(5)		Net interest margin represents net interest income divided by average total interest-earning assets.

Comparison of Operating Results for the Three Months Ended March 31, 2010 and 2009

Net Income. Net income was $13.3 million for the three months ended March 31, 2010 compared to net income of $7.1 million for the three months ended March 31, 2009.

Net Interest Income. Net interest income increased by $20.8 million, or 50.5%, to $61.9 million for the three months ended March 31, 2010 from $41.2 million for the three months ended March 31, 2009. The increase was caused primarily by a 99 basis point decrease in our cost of interest-bearing liabilities to 2.22% for the three months ended March 31, 2010 from 3.21% for the three months ended March 31, 2009. This was partially offset by a 17 basis point decrease in our yield on interest-earning assets to 5.09% for the three months ended March 31, 2010 from 5.26% for the three months ended March 31, 2009. Short term interest rates remaining at historically low levels resulted in many of our deposits repricing downward. This had a positive impact on our net interest margin which improved by 72 basis points from 2.34% for the three months ended March 31, 2009 to 3.06% for the three months ended March 31, 2010.

Interest and Dividend Income. Total interest and dividend income increased by $10.3 million, or 11.1%, to $103.1 million for the three months ended March 31, 2010 from $92.7 million for the three months ended March 31, 2009. This increase is attributed to the average balance of interest-earning assets increasing $1.05 billion, or 14.9%, to $8.10 billion for the three months ended March 31, 2010 from $7.05 billion for the three months ended March 31, 2009. This was partially offset by a 17 basis point decrease in the weighted average yield on interest-earning assets to 5.09% for the three months ended March 31, 2010 compared to 5.26% for the three months ended March 31, 2009.

Interest income on loans increased by $14.3 million, or 18.6%, to $91.0 million for the three months ended March 31, 2010 from $76.7 million for the three months ended March 31, 2009, reflecting a $1.08 billion, or 19.2%, increase in the average balance of net loans to $6.72 billion for the three months ended March 31, 2010 from $5.63 billion for the three months ended March 31, 2009. The increase is primarily attributed to an increase of $533.7 million and $378.9 million in the average balance of commercial real estate loans and multi-family loans, respectively, which is consistent with our strategic plan to diversify the loan portfolio. This was partially offset by a 3 basis point decrease in the average yield on loans to 5.42% for the three months ended March 31, 2010 from 5.45% for the three months ended March 31, 2009.

Interest income on all other interest-earning assets, excluding loans, decreased by $4.0 million, or 24.9%, to $12.0 million for the three months ended March 31, 2010 from $16.0 million for the three months ended March 31, 2009. This decrease reflected a 105 basis point decrease in the average yield on all other interest-earning assets, excluding loans, to 3.47% for the three months ended March 31, 2010 from 4.52% for the three months ended March 31, 2009. The decrease in yield is primarily attributed to the repricing of our adjustable rate securities and the purchase of additional securities at lower yields.

Interest Expense. Total interest expense decreased by $10.5 million, or 20.3%, to $41.1 million for the three months ended March 31, 2010 from $51.6 million for the three months ended March 31, 2009. This decrease is attributed to the weighted average cost of total interest-bearing liabilities decreasing 99 basis points to 2.22% for the three months ended March 31, 2010 compared to 3.21% for the three months ended March 31, 2009. This was partially offset by the average balance of total interest-bearing liabilities increasing by $975.9 million, or 15.2%, to $7.40 billion for the three months ended March 31, 2010 from $6.42 billion for the three months ended March 31, 2009.

Interest expense on interest-bearing deposits decreased $10.1 million, or 29.9% to $23.8 million for the three months ended March 31, 2010 from $33.9 million for the three months ended March 31, 2009. This decrease is attributed to a 127 basis point decrease in the average cost of interest-

bearing deposits to 1.69% for the three months ended March 31, 2010 from 2.96% for the three months ended March 31, 2009 as we were able to reduce the rates paid on deposits. This was partially offset by the average balance of total interest-bearing deposits increasing $1.03 billion, or 22.5% to $5.62 billion for the three months ended March 31, 2010 from $4.59 billion for the three months ended March 31, 2009. Core deposits growth represented 72.5%, or $747.4 million of the increase in the average balance of total interest-bearing deposits.

Interest expense on borrowed funds decreased by $313,000, or 1.8%, to $17.4 million for the three months ended March 31, 2010 from $17.7 million for the three months ended March 31, 2009. This decrease is attributed to the average balance of borrowed funds decreasing by $55.7 million or 3.0%, to $1.78 billion for the three months ended March 31, 2010 from $1.84 billion for the three months ended March 31, 2009. This was partially offset by the average cost of borrowed funds increasing 5 basis points to 3.90% for the three months ended March 31, 2010 from 3.85% for the three months ended March 31, 2009 as we extended some of our borrowings.

Provision for Loan Losses. The provision for loan losses was $13.1 million for the three months ended March 31, 2010 compared to $8.0 million for the three months ended March 31, 2009. Net charge-offs were $5.2 million for the three months ended March 31, 2010 compared to eight thousand for the three months ended March 31, 2009. See discussion of the allowance for loan losses and non-accrual loans in “Comparison of Financial Condition at March 31, 2010 and December 31, 2009.”

Non-interest Income. Total non-interest income was $3.9 million for the three months ended March 31, 2010 compared to $3.4 million for the three months ended March 31, 2009. The increase is primarily attributed to a $684,000 increase in fees and service charges to $1.6 million and a $265,000 increase in the cash surrender value of bank owned life insurance to $521,000 for the three months ended March 31, 2010. This was partially offset by a $416,000 decrease on gain on loan sales to $1.7 million for the three months ended March 31, 2010, attributed to less refinancing activity during the current quarter compared to the prior year quarter, resulting in fewer sales to the secondary market.

Non-interest Expenses. Total non-interest expenses increased by $6.0 million, or 24.4%, to $30.4 million for the three months ended March 31, 2010 from $24.5 million for the three months ended March 31, 2009. Compensation and fringe benefits increased $1.5 million as a result of staff additions in our retail banking areas due to the acquisition of American Bancorp of New Jersey in May 2009 and the Banco Popular branch acquisition in October 2009, staff additions in our mortgage company and commercial real estate lending department, as well as normal merit increases. The FDIC insurance premiums increased $1.4 million as a result of an increase in our deposits and an increase in the FDIC premium rate. Occupancy expense increased $1.4 million as a result of the costs associated with expanding our branch network.

Income Taxes. Income tax expense was $9.1 million for the three months ended March 31, 2010, representing a 40.55% effective tax rate. For the three months ended March 31, 2009, there was an income tax expense of $5.0 million representing a 41.6% effective tax rate

Liquidity and Capital Resources

The Company’s primary sources of funds are deposits, principal and interest payments on loans and mortgage-backed securities, proceeds from the sale of loans, Federal Home Loan Bank (“FHLB”) and other borrowings and, to a lesser extent, investment maturities. While scheduled amortization of

loans is a predictable source of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition. The Company has other sources of liquidity if a need for additional funds arises, including an overnight line of credit and other borrowings from the FHLB and other correspondent banks.

At March 31, 2010 and December 31, 2009 the Company had no overnight borrowings outstanding. The Company utilizes the overnight line from time to time to fund short-term liquidity needs. The Company had total borrowings of $1.78 billion at March 31, 2010, an increase from $1.60 billion at December 31, 2009.

In the normal course of business, the Company routinely enters into various commitments, primarily relating to the origination of loans. At March 31, 2010, outstanding commitments to originate loans totaled $412.5 million; outstanding unused lines of credit totaled $405.7 million; standby letters of credit totaled $4.8 million and outstanding commitments to sell loans totaled $51.0 million. The Company expects to have sufficient funds available to meet current commitments in the normal course of business.

Time deposits scheduled to mature in one year or less totaled $2.31 billion at March 31, 2010. Based upon historical experience management estimates that a significant portion of such deposits will remain with the Company.

The Board of Directors approved a third share repurchase program at their January 2008 meeting, which authorizes the repurchase of an additional 10% of the Company’s outstanding common stock. The third share repurchase program commenced upon completion of the first program on May 7, 2008. Under this program, up to 10% of its publicly—held outstanding shares of common stock, or 4,307,248 shares of Investors Bancorp, Inc. common stock may be purchased in the open market and through other privately negotiated transactions in accordance with applicable federal securities laws. During the three month period ended March 31, 2010, the Company repurchased 50,500 shares of its common stock. Under the current share repurchase program, 2,828,304 shares remain available for repurchase. As March 31, 2010, a total of 11,582,365 shares have been purchased under Board authorized share repurchase programs, of which 2,428,701 shares were allocated to fund the restricted stock portion of the Company’s 2006 Equity Incentive Plan. The remaining shares are held for general corporate use.

As of March 31, 2010 the Bank exceeded all regulatory capital requirements as follows:


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

Off-Balance Sheet Arrangements and Contractual Obligations

In the normal course of operations, the Company engages in a variety of financial transactions that, in accordance with generally accepted accounting principles, are not recorded in the financial statements. These transactions primarily relate to lending commitments.

The following table shows the contractual obligations of the Company by expected payment period as of March 31, 2010:


			Less than		One-Two		Two-Three		More than
Contractual Obligations	Total		One Year		Years		Years		Three Years

Debt obligations (excluding capitalized leases)	$	1,775,535		330,000		610,000		240,535		595,000
Commitments to originate and purchase loans	$	412,472		412,472		—		—		—
Commitments to sell loans	$	50,982		50,982		—		—		—

Additionally, March 31, 2010, the Company’s commitments to fund unused lines of credit totaled $405.7 million.

Debt obligations include borrowings from the FHLB and other borrowings. The borrowings have defined terms and, under certain circumstances, $665.0 million of the borrowings are callable at the option of the lender.

Commitments to originate loans and commitments to fund unused lines of credit are agreements to lend additional funds to customers as long as there have been no violations of any of the conditions established in the agreements. Commitments generally have a fixed expiration or other termination clauses which may or may not require a payment of a fee. Since some of these loan commitments are expected to expire without being drawn upon, total commitments do not necessarily represent future cash requirements.

In addition to the contractual obligations previously discussed, we have other liabilities and capitalized and operating lease obligations. The Company has also entered into an advance with the FHLB to borrow $100.0 million beginning on May 28, 2010 at a rate of 3.70% to be repaid after a period of 5 years. These contractual obligations as of March 31, 2010 have not changed significantly from December 31, 2009.

For further information regarding our off-balance sheet arrangements and contractual obligations, see Part II, Item 6, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our December 31, 2009 Annual Report on Form 10-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Qualitative Analysis. We believe our most significant form of market risk is interest rate risk. Interest rate risk results from timing differences in the maturity or re-pricing of our assets, liabilities and off-balance sheet contracts (i.e., loan commitments); the effect of loan prepayments, deposits and withdrawals; the difference in the behavior of lending and funding rates arising from the uses of different indices; and “yield curve risk” arising from changing interest rate relationships across the spectrum of maturities for constant or variable credit risk investments. Besides directly affecting our net interest income, changes in market interest rates can also affect the amount of new loan originations, the ability of borrowers to repay variable rate loans, the volume of loan prepayments and refinancings, the carrying value of securities classified as available for sale and the mix and flow of deposits.

The general objective of our interest rate risk management is to determine the appropriate level of risk given our business model and then manage that risk in a manner consistent with our policy to reduce, to the extent possible, the exposure of our net interest income to changes in

market interest rates. Our Interest Rate Risk Committee, which consists of senior management, evaluates the interest rate risk inherent in certain assets and liabilities, our operating environment and capital and liquidity requirements and modifies our lending, investing and deposit gathering strategies accordingly. On a quarterly basis, our Board of Directors reviews the Interest Rate Risk Committee report, the aforementioned activities and strategies, the estimated effect of those strategies on our net interest margin and the estimated effect that changes in market interest rates may have on the economic value of our loan and securities portfolios, as well as the intrinsic value of our deposits and borrowings.

We actively evaluate interest rate risk in connection with our lending, investing and deposit activities. Historically, our lending activities have emphasized one- to four-family fixed- and variable- rate first mortgages. Our variable-rate mortgage related assets have helped to reduce our exposure to interest rate fluctuations and is expected to benefit our long-term profitability, as the rate earned in the mortgage loans will increase as prevailing market rates increase. However, the current interest rate environment, and the preferences of our customers, has resulted in more of a demand for fixed-rate products. This may adversely impact our net interest income, particularly in a rising rate environment. To help manage our interest rate risk, we have increased our focus on the origination of commercial real estate mortgage loans and adjustable-rate construction loans. In addition, we primarily invest in shorter-to-medium duration securities, which generally have shorter average lives and lower yields compared to longer term securities. Shortening the average lives of our securities, along with originating more adjustable-rate mortgages and commercial real estate mortgages, will help to reduce interest rate risk.

We retain two independent, nationally recognized consulting firms who specialize in asset and liability management to complete our quarterly interest rate risk reports. They use a combination of analyses to monitor our exposure to changes in interest rates. The economic value of equity analysis is a model that estimates the change in net portfolio value (“NPV”) over a range of immediately changed interest rate scenarios. NPV is the discounted present value of expected cash flows from assets, liabilities, and off-balance sheet contracts. In calculating changes in NPV, assumptions estimating loan prepayment rates, reinvestment rates and deposit decay rates that seem most likely based on historical experience during prior interest rate changes are used.

The net interest income analysis uses data derived from a dynamic asset and liability analysis, described below, and applies several additional elements, including actual interest rate indices and margins, contractual limitations and the U.S. Treasury yield curve as of the balance sheet date. In addition we apply consistent parallel yield curve shifts (in both directions) to determine possible changes in net interest income if the theoretical yield curve shifts occurred gradually. Net interest income analysis also adjusts the dynamic asset and liability repricing analysis based on changes in prepayment rates resulting from the parallel yield curve shifts.

Our dynamic asset and liability analysis determines the relative balance between the repricing of assets and liabilities over multiple periods of time (ranging from overnight to five years). This dynamic asset and liability analysis includes expected cash flows from loans and mortgage-backed securities, applying prepayment rates based on the differential between the current interest rate and the market interest rate for each loan and security type. This analysis identifies mismatches in the timing of asset and liability but does not necessarily provide an accurate indicator of interest rate risk because the assumptions used in the analysis may not reflect the actual response to market changes.

Quantitative Analysis. The table below sets forth, as of March 31, 2010 the estimated changes in our NPV and our annual net interest income that would result from the designated changes in the interest rates. Such changes to interest rates are calculated as an immediate and permanent change for the purposes of computing NPV and a gradual change over a one year period for the purposes of computing net interest income. Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions including relative levels of market interest rates, loan prepayments and deposit decay, and should not be relied upon as indicative of actual results. We did not estimate changes in NPV or net interest income for an interest rate decrease of greater than 100 basis points or increase of greater than 200 basis points.


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


(1)		NPV is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts.

(2)		Assumes an instantaneous uniform change in interest rates at all maturities.

(3)		Assumes a gradual change in interest rates over a one year period at all maturities

The table set forth above indicates at March 31, 2010 in the event of a 200 basis points increase in interest rates, we would be expected to experience a 32.4% decrease in NPV and an $11.0 million or 4.0% decrease in annual net interest income. In the event of a 100 basis points decrease in interest rates, we would be expected to experience a 0.1% decrease in NPV and a $3.0 million or 1.1% increase in annual net interest income. These data do not reflect any future actions we may take in response to changes in interest rates, such as changing the mix of our assets and liabilities, which could change the results of the NPV and net interest income calculations.

As mentioned above, we retain two nationally recognized firms to compute our quarterly interest rate risk reports. Although we are confident of the accuracy of the results, certain shortcomings are inherent in any methodology used in the above interest rate risk measurements. Modeling changes in NPV and net interest income require certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. The NPV and net interest income table presented above assumes the composition of our interest-rate sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and, accordingly, the data do not reflect any actions we may take in response to changes in interest rates. The table also assumes a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or the repricing characteristics of specific assets and liabilities. Accordingly, although the NPV and net interest income table provide an indication of our sensitivity to interest rate changes at a particular point in time, such measurement is not intended to and does not provide a precise forecast of the effects of changes in market interest rates on our NPV and net interest income.

Item 4. Controls and Procedures

Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective.

There were no changes made in the Company’s internal controls over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II — Other Information

Item 1. Legal Proceedings

The Company and its subsidiaries are subject to various legal actions arising in the normal course of business. In the opinion of management, the resolution of these legal actions is not expected to have a material adverse effect on the Company’s financial condition or results of operations.

Item 1A. Risk Factors

There have been no material changes in the “Risk Factors” disclosed in the Company’s December 31, 2010 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table reports information regarding repurchases of our common stock during quarter ended March 31, 2010 and the stock repurchase plan approved by our Board of Directors.


					Total Number of		Maximum Number
					Shares Purchased as		of Shares that May
	Total Number				Part of Publicly		Yet Be Purchased
	of Shares		Average price		Announced Plans or		Under the Plans or
Period	Purchased		Paid per Share		Programs		Programs (1)
January 1, 2010 through January 31, 2010		—	$	0.00		—		2,878,804
February 1, 2010 through February 28, 2010		40,500		11.71		40,500		2,838,304
March 1, 2010 through March 31, 2010		10,000		13.39		10,000		2,828,304

Total		50,500	$	12.04		50,500


(1)		On January 22, 2008, the Company announced its third Share Repurchase Program, which authorized the purchase of an additional 10% of its publicly-held outstanding shares of common stock, or 4,307,248 shares. This stock repurchase program commenced upon the completion of the second program on May 7, 2008. This program has no expiration date and has 2,828,304 shares yet to be purchased as of March 31, 2010.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. [Reserved]

Item 5. Other Information

Not applicable

Item 6. Exhibits

The following exhibits are either filed as part of this report or are incorporated herein by reference:


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		Investors Savings Bank Deferred Directors Fee Plan*

10.7		Investors Bancorp, Inc. Deferred Directors Fee Plan*

10.8		Executive Officer Annual Incentive Plan**

10.9		Agreement and Plan of Merger by and Between Investors Bancorp, Inc and American Bancorp of New Jersey, Inc.***

14		Code of Ethics****

21		Subsidiaries of Registrant*

23.1		Consent of Independent Registered Public Accounting Firm

31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32		Certification of Principal Executive Officer and Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


*		Incorporated by reference to the Registration Statement on Form S-1 of Investors Bancorp, Inc. (file no. 333-125703), originally filed with the Securities and Exchange Commission on June 10, 2005.

**		Incorporated by reference to Appendix A of the Company’s definitive proxy statement filed with the Securities and Exchange Commission on September 26, 2008.

***		Incorporated by reference to Form 8-Ks originally filed with the Securities and Exchange Commission on December 15, 2008 and March 18, 2009.

****		Available on our website www.isbnj.com

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Investors Bancorp, Inc.
Dated: May 10, 2010	/s/ Kevin Cummings
	Kevin Cummings
	President and Chief Executive Officer (Principal Executive Officer)


Dated: May 10, 2010	/s/ Thomas F. Splaine, Jr.
	Thomas F. Splaine, Jr.
	Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)