Investors Bancorp in Short Hills, N.J., swung to a loss in the fourth quarter on costs associated with the new federal tax law and with its effort to close branches.
The $25 billion-asset company’s net loss was $4.8 million, compared to net income of $52.5 million a year ago. The loss amounted to 2 cents per share.
Those results included $49.2 million of expenses to devalue the bank’s deferred tax asset. The company also incurred $5.9 million in severance benefits and costs related to the branch closures.
Excluding the tax-related and branch-closure items, Investors’ net income fell 8% to $48.2 million. Earnings per share of 17 cents came in two cents higher than the mean estimate of analysts compiled by FactSet Research Systems.
“Although our fourth-quarter results were impacted by tax reform and expenses related to our plan to reduce operating expenses, the lower corporate tax rate and our expense control efforts will benefit our shareholders going forward,” CEO Kevin Cummings said in a news release.
Net interest income rose 4% to $170.2 million on growth in loan originations and higher yields on average earning assets. Multifamily loans increased 5% to $7.8 billion. Commercial and industrial loans rose 27% to $1.6 billion.
Investors Bank also purchased a total of $442 million in residential mortgage loans from correspondent entities during the quarter.
Noninterest income fell 3% to $8.2 million on a loss from the sale of foreclosed real estate and lower gains on loan sales.
Noninterest expenses increased 23% to $109.5 million on higher salaries and data processing costs. The total also included $3.1 million in professional fees tied to the remediation of the company’s anti-money laundering compliance processes.