ISBC 2017 Form 10-K & 2018 Proxy Statement

FORM 10-K INVESTORS BANCORP, INC. AND SUBSIDIARY Notes to Consolidated Financial Statements The following is a summary of the Company’s stock option activity and related information for its option plan for the year ended December 31, 2017: Number of Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at December 31, 2016 13,165,333 $11.74 8.2 $29,101 Granted 93,800 13.24 9.5 Exercised (1,068,103) 8.56 3.7 Forfeited (704,470) 12.53 Expired (17,143) 12.54 Outstanding at December 31, 2017 11,469,417 $12.00 7.0 $21,587 Exercisable at December 31, 2017 4,514,219 $11.18 6.3 $12,186 The weighted average grant date fair value of options granted during the years ended December 31, 2017, 2016 and 2015 were $2.91, $2.80 and $3.12 per share, respectively. Expected future expense relating to the non-vested options outstanding as of December 31, 2017 is $20.7 million over a weighted average period of 3.74 years. 11. Commitments and Contingencies The Company is a defendant in certain claims and legal actions arising in the ordinary course of business. Management and the Company’s legal counsel are of the opinion that the ultimate disposition of these matters will not have a material adverse effect on the Company’s financial condition, results of operations or liquidity. At December 31, 2017, the Company was obligated under various non-cancelable operating leases on buildings and land used for office space and banking purposes. These operating leases contain escalation clauses which provide for increased rental expense, based primarily on increases in real estate taxes and cost-of-living indices. Rental expense under these leases aggregated approximately $23.7 million, $22.3 million and $19.2 million for the years ended December 31, 2017, 2016 and 2015, respectively. The projected annual minimum rental commitments are as follows: Amount (In thousands) 2018 $ 24,017 2019 23,527 2020 22,001 2021 20,481 2022 18,838 Thereafter 113,675 $222,539 Financial Transactions with Off-Balance-Sheet Risk and Concentrations of Credit Risk The Company is a party to transactions with off-balance-sheet risk in the normal course of business in order to meet the financing needs of its customers. These transactions consist of commitments to extend credit. These transactions involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the accompanying consolidated balance sheets. 119