ISBC 2017 Form 10-K & 2018 Proxy Statement

Over the last decade, Investors Bank has achieved significant growth in both assets and net income through its transformation from a wholesale thrift business to a retail commercial bank. Throughout this journey, we have remained dedicated to keeping the “community” in banking. Our transformation has been and continues to be a direct result of our organic growth, de novo branch strategy and acquisitions while being ever mindful of our need to be a good corporate citizen. We strive to be a bank that makes a difference first and foremost with our employees and customers and the communities that we serve. 2017 marked another milestone in our evolution as our total assets exceeded $25 billion. During the year, we continued on our path of continuous improvement and dedicated significant resources to enhancing our infrastructure to support our future growth. Aligning our efforts around our vision, mission, and values on which Investors Bank’s foundation is built, resulted in Forbes Magazine recognizing us as one of the “Best Banks in America,” for the seventh consecutive year and the highest rated bank headquartered in New Jersey. 1 In 2017 loan originations of $3.60 billion helped increase net loans to $19.85 billion at December 31, 2017. Our strategic plan remains focused on commercial loan growth in order to diversify our loan portfolio. Commercial loans represented 72% of our total loan portfolio. Commercial and Industrial loans, which are included in Commercial loans, account for 8% of our total loan portfolio and have grown $1.08 billion, or 199%, in the last three years. We remain focused on this segment of the market as we continue to diversify our loan portfolio and expand our products and services. The launch of our Equipment Finance Group in early 2018, targeting middle market companies, will further enhance our efforts to grow this portfolio. We believe that the addition of this capital equipment finance team will provide expanded financing and leasing capabilities, and open up numerous cross selling opportunities. Funding our continued growth is also a key component of our business plan. Deposits increased to $17.36 billion in 2017, from $15.28 billion at December 31, 2016; this represents an increase of 13.6%, or $2.08 billion. In response to the current interest rate environment and our customer needs, a portion of this increase has been in time deposits, however, we continue to focus on the growth of core deposits, especially non-interest bearing deposits, as they are a stable source of low cost funding and less sensitive to change in interest rates. During the last two years, non-interest deposits have increased $534 million or 28%. The current economic and political landscape continues to be challenging and clouded with uncertainty in both Trenton and Washington. In December 2017, the President signed into law H.R. 1, the “Tax Cuts and Jobs Act,” the most significant tax legislation in over three decades. A new chairman was recently appointed to lead the Federal Reserve Board and Congress is currently evaluating legislation to relieve some aspects of the regulatory burden on community banks. We have a new administration in New Jersey which is evaluating additional taxes on high net income individuals and the formation of a state sponsored bank. While the full impact of these changes and initiatives are subject to further evaluation and analysis, it is likely to have both positive and negative effects on our financial results. Dear Fellow Shareholder , investorsbank.com • 3 1 Forbes Magazine, January 10, 2018, “America’s Best Banks 2018”