INVESTORS BANK CORP. REPORTS CONTINUED STRONG QUARTERLY AND YEAR-TO-DATE EARNINGS; THIRD QUARTER EARNINGS UP 21 PERCENT TO $.80 PER SHARE

    WAYZATA, Minn., Oct. 21 /PRNewswire/ -- Investors Bank Corp. (NASDAQ: INVS), the parent company of Investors Savings Bank, F.S.B., reported third quarter earnings were up 21 percent to $2.4 million or $.80 per share, from $2.0 million or $.68 per share from the same period last year.  For the first nine months of 1993, Investors reported earnings were up 29 percent to $7.5 million, or $2.48 per share, from earnings of $5.8 million or $1.95 per share for the first nine months last year.
    "The company has enjoyed another excellent quarter with all of the fundamentals of our core businesses of retail and mortgage banking performing very well," said James M. Burkholder, president and CEO of the company.  "The company's performance was led by another outstanding quarter in noninterest income which was driven by our mortgage banking operation.  Not only did the company see another quarter of very strong originations of mortgage loans, resulting in gains on the sale of these loans, but it also had a sizable increase in loan servicing fees as the portfolio of loans serviced for others grew to $1.3 billion," said Burkholder.
    Net interest income for the quarter was $6.3 million, up from $5.8 million for the 1992 third quarter.  This increase was due to an expanding interest-earning asset base which was up 40 percent to $890 million from the September quarter last year.  The net interest margin has retreated for the most recent quarter to a more normal 2.87 percent, down from 3.39 percent for the same period last year.  For the first nine months of the year, net interest income and net interest margin were $18.7 million and 3.01 percent, respectively, compared with $16.1 million and 3.45 percent for the first nine months of 1992.
    Noninterest income increased 34 percent to $4.8 million and 26 percent to $13.3 million for the quarter and nine months, respectively, compared with the same periods last year.  The majority of the increases for both periods related to gain on sale of mortgage loans which was up 60 percent to $2.6 million for the quarter and 90 percent to $6.5 million for the nine months from previous year periods.  Gains on the sale of loan servicing were down 43 percent to $505 thousand for the quarter and 40 percent to $2.3 million for the nine months as the company continues to retain more of the servicing rights that are being created.  The bank retained the majority of the servicing rights it generated during the quarter, selling only $37 million of loan servicing rights compared to $71 million in the September quarter last year.  The total of loans serviced for others increased by $111 million during the quarter even though the bank continues to experience heavy prepayment activity.
    The prepayment activity resulted in an additional charge of $333 thousand to capitalized servicing rights during the quarter which resulted in reduced loan servicing fees.  Even with this additional charge, loan servicing fees were $802 thousand, up 35 percent for the quarter compared to the previous year.  This is a reflection of the much larger loan servicing portfolio which has increased by $477 million, a 60 percent increase from the portfolio at Sept. 30, 1992.  Capitalized loan servicing rights which remain on the books continued to decrease during the quarter and were $4.8 million at Sept. 30, down $1.0 million since the beginning of the year.
    Other noninterest income was positively impacted by fee income of $273 thousand from title insurance activities in the bank's insurance agency during the current quarter compared to only $24 thousand in the September quarter last year, its first quarter of operations.
    The company's mortgage operations continue at a brisk pace as individuals take advantage of the low interest rate environment and refinance their existing mortgages.  For the September quarter, loan closings were up 14 percent to $287 million and loan application volume was up 3 percent to $364 million compared to the previous year.  For the first nine months of the year, loan closings were up 19 percent to $790 million.
    Nonperforming assets decreased to $8.1 million at Sept. 30 which is down $1.1 million from June 30 and $1.3 million from Sept. 30 last year. The company's assets continue to perform exceptionally well.
    On an annualized basis, the company achieved a return on average assets of 1.05 percent and a return on average common equity of 23.7 percent for the quarter.  Total assets continued to grow and were at $964 million at Sept. 30, an increase of $148 million from Dec. 31, 1992.  Deposits at Sept. 30 were $574 million, up $62 million from the beginning of the year.
    The bank continues to expand its retail banking operation opening three more banks.  In the month of October, offices were opened in the IDS building; St. Louis Park, Minn. (Knollwood Shopping Center); and the Cub Foods store in Minnetonka, Minn., the bank's first supermarket location.
    The board of directors declared the payment of the company's regular quarterly cash dividend on its common stock.  Shareholders of record as of Nov. 15, 1993, will receive a cash dividend of $.125 per share to be paid on Dec. 15, 1993.
    The board of directors is also pleased to announce that George Maas has been appointed to the board of directors of both Investors Bank Corp. and Investors Savings Bank, FSB.  Maas is the past chairman and president of Simon-Telelect, Inc.
    Investors Bank Corp. is a savings and loan holding company whose principal asset is Investors Savings Bank, F.S.B, a federally chartered savings bank with 12 retail banking offices and six residential mortgage production offices in the Twin Cities metropolitan area; one residential mortgage production office in Duluth, Minn.; three residential mortgage production offices in suburban Chicago; and one residential mortgage production office in suburban Milwaukee.  Investors Bank Corp. shares are traded on the NASDAQ stock market under the symbol INVS.
                            INVESTORS BANK CORP.
                           Financial Information
                        (Dollars in 000s except EPS)
                                   Three Months Ended  Nine Months Ended
                                  9/30/93     9/30/92  9/30/93   9/30/92
    Net interest income (a)        $6,332      $5,758  $18,725   $16,139
    Noninterest income (b)          4,768       3,558   13,300    10,585
    Total revenue (c)              19,445      17,029   56,027    49,229
    Earnings before income
     tax expense and cumulative
     effect of accounting change    4,268       3,336   12,482     9,630
    Income tax expense              1,844       1,337    5,137     3,860
    Cumulative effect of
     accounting change (d)            --          --       125       --
    Net earnings                   $2,424      $1,999   $7,470    $5,770
    Earnings per common share:
     Before cumulative effect of
      accounting change              $.80        $.68    $2.43     $1.95
     Cumulative effect of
      accounting change               --          --       .05       --
    Net                              $.80        $.68    $2.48     $1.95
    Net interest rate spread (pct.)  2.64        3.20     2.78      3.25
    Net interest margin (pct.)       2.87        3.39     3.01      3.45
    Notes:
    (a) Net interest income is the difference between interest earned on the bank's loan and investment portfolios and interest paid on its deposits and borrowings.
    (b) Noninterest income includes the mortgage banking revenues, loan servicing fees, fees on annuity sales and other income.
    (c) Total revenue is the total of all interest earned and all noninterest income.
    (d) During 1993, the bank adopted Statement of Financial Accounting Standards No. 109 which requires a change in the method of accounting for income taxes.
    -0-                       10/22/93
    /CONTACT:  James M. Burkholder of Investors Bank Corp., 612-475-8500/
    (INVS)

CO: Investors Bank Corp. ST: Minnesota IN: FIN SU: ERN

AL-DS -- MN013 -- 5148 10/21/93 11:35 EDT