ISBC 2017 Form 10-K & 2018 Proxy Statement

FORM 10-K INVESTORS BANCORP, INC. AND SUBSIDIARY Notes to Consolidated Financial Statements 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 values and estimated fair values of the Company’s financial instruments are presented in the following table. December 31, 2017 Carrying value Estimated Fair Value Total Level 1 Level 2 Level 3 (In thousands) Financial assets: Cash and cash equivalents $ 618,394 618,394 618,394 — — Securities available-for-sale 1,987,727 1,987,727 5,701 1,982,026 — Securities held-to-maturity 1,796,621 1,820,125 — 1,738,906 81,219 Stock in FHLB 231,544 231,544 231,544 — — Loans held for sale 5,185 5,185 — 5,185 — Net loans 19,852,101 20,003,717 — — 20,003,717 Financial liabilities: Deposits, other than time deposits $13,897,435 13,897,435 13,897,435 — — Time deposits 3,460,262 3,438,673 — 3,438,673 — Borrowed funds 4,461,533 4,437,346 — 4,437,346 — Derivative financial instruments (1) 613 613 — 613 — December 31, 2016 Carrying value Estimated Fair Value Total Level 1 Level 2 Level 3 (In thousands) Financial assets: Cash and cash equivalents $ 164,178 164,178 164,178 — — Securities available-for-sale 1,660,433 1,660,433 6,660 1,653,773 — Securities held-to-maturity 1,755,556 1,782,801 — 1,703,559 79,242 Stock in FHLB 237,878 237,878 237,878 — — Loans held for sale 38,298 38,298 — 38,298 — Net loans 18,569,855 18,391,018 — — 18,391,018 Derivative financial instruments 12,550 12,550 — 12,550 — Financial liabilities: Deposits, other than time deposits $12,333,273 12,333,273 12,333,273 — — Time deposits 2,947,560 2,938,137 — 2,938,137 — Borrowed funds 4,546,251 4,545,745 — 4,545,745 — (1) In accordance with the CME rulebook change effective January 3, 2017, the gross amounts recognized are inclusive of accrued interest variation margin posted by the CME. 129