ISBC 2017 Form 10-K & 2018 Proxy Statement

FORM 10-K INVESTORS BANCORP, INC. AND SUBSIDIARY Notes to Consolidated Financial Statements At December 31, 2017 Amortized cost Net unrealized losses (1) Carrying value Gross unrecognized gains (2) Gross unrecognized losses (2) Estimated fair value (In thousands) Held-to-maturity: Debt securities: Government-sponsored enterprises $ 43,281 — 43,281 — 685 42,596 Municipal bonds 40,595 — 40,595 1,251 — 41,846 Corporate and other debt securities 68,232 20,145 48,087 38,207 — 86,294 Total debt securities held-to-maturity 152,108 20,145 131,963 39,458 685 170,736 Mortgage-backed securities: Federal Home Loan Mortgage Corporation 474,314 969 473,345 530 5,439 468,436 Federal National Mortgage Association 1,102,242 1,149 1,101,093 2,787 12,280 1,091,600 Government National Mortgage Association 90,220 — 90,220 — 867 89,353 Total mortgage- backed securities held-to-maturity 1,666,776 2,118 1,664,658 3,317 18,586 1,649,389 Total held-to-maturity securities $1,818,884 22,263 1,796,621 42,775 19,271 1,820,125 (1) Net unrealized losses of held-to-maturity corporate and other debt securities represent the other than temporary charge related to other non-credit factors and is being amortized through accumulated other comprehensive income (loss) over the remaining life of the securities. For mortgage-backed securities, it represents the net loss on previously designated available-for sale securities transferred to held-to-maturity at fair value and is being amortized through accumulated other comprehensive income (loss) over the remaining life of the securities. (2) Unrecognized gains and losses of held-to-maturity securities are not reflected in the financial statements, as they represent fair value fluctuations from the later of: (i) the date a security is designated as held-to-maturity; or (ii) the date that an other than temporary impairment charge is recognized on a held-to-maturity security, through the date of the balance sheet. At December 31, 2016 Carrying value Gross unrealized gains Gross unrealized losses Estimated fair value (In thousands) Available-for-sale: Equity securities $ 5,825 918 83 6,660 Mortgage-backed securities: Federal Home Loan Mortgage Corporation 603,774 1,971 7,306 598,439 Federal National Mortgage Association 1,022,383 2,678 16,474 1,008,587 Government National Mortgage Association 47,538 — 791 46,747 Total mortgage-backed securities available-for-sale 1,673,695 4,649 24,571 1,653,773 Total available-for-sale securities $1,679,520 5,567 24,654 1,660,433 91