Kevin Cummings, the president and chief executive officer of Investors Bancorp Inc. in Short Hills, N.J., refers to his company as a start-up, even though it opened 82 years ago.

"The idea is we're remaking ourselves," he said.

Investors' transformation from a sleepy thrift company, with most of its assets in securities, started five years ago, when it brought in Mr. Cummings to help develop a retail strategy. Since then it has revamped its management team, raised $500 million in a public offering, adopted a sales culture — prompting many longtime branch employees to leave — and hired several dozen lenders.

Though the challenging environment muted its progress, the payoff is becoming apparent. During its first fiscal quarter, which ended Sept. 30, loans increased 14% from the previous quarter, and its net interest margin of 2.4% was the highest in at least six years, offsetting a bigger provision and an impairment charge on its securities. Its earnings rose 44% from a year earlier, to $5.5 million.

Citing the formerly flat yield curve, Domenick Cama, its chief operating officer, said: "For the longest time we felt like hamsters running in the cage. We were making a lot of changes, but we couldn't show the earnings for it."

Mr. Cummings joined Investors as its COO and was promoted to president and CEO in January. (Mr. Cama, who had been the chief financial officer since joining the company in 2003, took Mr. Cumming's old job.)

When the two executives arrived at Investors, securities made up 80% of its $5.5 billion of assets, Mr. Cummings said. "So we weren't even a thrift yet." By last quarter securities had shrunk to 20% of the assets.

His goal is to have $10 billion of assets within five years. Ideally, by then commercial loans would make up about 30% of Investors' portfolio, which is now dominated by mortgages, he said.

"It's an evolution, not a revolution," Mr. Cummings said.

The $500 million Investors raised in its public offering in October 2005 gave it the resources to ramp up in mortgages, commercial real estate loans, and commercial and industrial loans.

In June it closed its first acquisition since 1991. By absorbing the $112 million-asset Summit Federal Bankshares Inc., Investors added five branches and $95 million of deposits.

Mr. Cummings said his company would remain "opportunistic" about making acquisitions.

Theodore Kovaleff, an analyst at Granta Capital LLC who owns stock in Investors, applauded the changes. "When you are a mutual, you can afford to be sleepy," Mr. Kovaleff said. "They were one of the most unlevered companies around."

Damon DelMonte, an analyst at KBW Inc.'s Keefe, Bruyette & Woods Inc., said the Federal Reserve Board's rate cuts and loan growth have helped Investors expand its margin and improve its interest income. Last quarter the margin widened 31 basis points from the previous quarter and 118 basis points from a year earlier. That helped soften the impact of a 24-fold increase in its loan-loss provision from a year earlier, to $5 million, and a $3.9 million other-than-temporary impairment charge on its securities.

In the last five years Investors brought on new people to fill a dozen of the 18 top positions, Mr. Cummings said. In addition to Mr. Cummings and Mr. Cama, the hirings include the CFO, the chief lending officer, the head of retail banking, the head of bank operations, the head of marketing, and the head of training.

Mr. Cummings said there was resistance to the cultural shift, and many employees retired or quit. "One of the frequent comments was 'I wasn't hired to do this.' "

Now more than half of the 52 branch managers are new to their jobs, hired away from commercial banks, he said. Instead of staying at the branches, they spend most of their time out calling on local businesses.

Investors divided its market into four regions, adding eight business development officers, 10 commercial real estates lenders, and four commercial and industrial lenders, Mr. Cummings said.

It also is pouncing on the opportunity to increase its mortgage lending. It added 17 lenders at its ISB Mortgage Co. LLC unit in May, bringing the total to 40. The new lenders had been at First Horizon National Corp., which sold its national mortgage operations to MetLife Inc.

Mark Fitzgibbon, the head of research at Sandler O'Neill & Partners LP, said that even though Investors is a conservative lender, it has grown quickly over the past few quarters, because it has capitalized as competitors have pulled back — a trend he expects to continue. "I think they'll probably do well in this environment. I think they'll continue to grow while other people are retrenching."

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