Compliance costs weighed heavily on quarterly profit at Investors Bancorp in Short Hills, N.J.
The $24 billion-asset company said in a press release late Thursday that its second-quarter earnings fell 12% from a year earlier to $39.6 million, or 14 cents a share.
Investors said expenses tied to resolving an informal agreement with regulators were to blame. The company is addressing concerns about its Bank Secrecy Act and anti-money-laundering compliance.
Noninterest expenses rose 17% to $106.3 million. Professional fees more than tripled to $14.6 million.
About $7 million of the increase in professional fees was tied to the regulatory order, Kevin Cummings, Investors’ president and CEO, said in the release. “Resolving these matters continues to be a top priority,” he said.
Net interest income increased by 6% to $167.1 million. Total loans rose by 13% to $19.6, while the net interest margin narrowed by 17 basis points to 2.87%.
Noninterest income fell by 19% to $9.3 million after the company reported fewer gains from the sale of loans and securities.