Filed Pursuant to Rule 424b3

Registration No. 333-157444

To the Stockholders of American Bancorp of New Jersey, Inc.:

A Merger Proposal — Your Vote Is Very Important

On December 14, 2008, as amended on March 9, 2009, the board of directors of American Bancorp of New Jersey, Inc. unanimously approved a merger agreement between American Bancorp of New Jersey, Inc. and Investors Bancorp, Inc. pursuant to which American Bancorp of New Jersey, Inc. will be merged with and into Investors Bancorp, Inc. American Bancorp of New Jersey, Inc. is sending you this document to ask you to vote on the adoption of the merger agreement with Investors Bancorp, Inc.

If the merger agreement is adopted and the merger is subsequently completed, each outstanding share of American Bancorp of New Jersey, Inc. common stock will be converted into the right to receive either:

Stockholders may elect to receive all cash, all Investors Bancorp, Inc. common stock, or a combination of both for their American Bancorp of New Jersey, Inc. common stock. You will have the opportunity to elect the form of consideration to be received for your shares, subject to allocation procedures set forth in the merger agreement which are intended to ensure that 65% of the outstanding shares of American Bancorp of New Jersey, Inc. common stock will be converted into the right to receive shares of Investors Bancorp, Inc. common stock and the remaining 35% of the outstanding shares of American Bancorp of New Jersey, Inc. common stock will be converted into the right to receive cash. Therefore, your ability to receive all stock, all cash or the allocation of both that you elect may depend on the elections of other American Bancorp of New Jersey, Inc. stockholders. Investors Bancorp, Inc. common stock trades on the Nasdaq Global Select Market under the symbol “ISBC” and American Bancorp of New Jersey, Inc. trades on the Nasdaq Global Market under the symbol “ABNJ.”

In the event that by May 31, 2009, Investors Bancorp, Inc. has not received the required regulatory approvals to issue shares of Investors Bancorp, Inc. common stock in the merger, Investors Bancorp, Inc. may elect to proceed with the merger on an all cash basis and merge a newly created merger subsidiary with and into American Bancorp of New Jersey.

American Bancorp of New Jersey, Inc. has scheduled an annual meeting so its stockholders can vote on the merger agreement, as well as vote on the election of one director and ratify the appointment of American Bancorp of New Jersey, Inc.’s independent auditors for the year ending September 30, 2009. American Bancorp of New Jersey, Inc. board of directors unanimously recommends that its stockholders vote “FOR” the merger agreement, vote “FOR” American Bancorp of New Jersey, Inc.’s nominee to the American Bancorp of New Jersey, Inc. board of directors and vote “FOR” the ratification of Crowe Horwath LLP as its independent auditors for the year ending September 30, 2009.

This document serves two purposes. It is the proxy statement being used by the American Bancorp of New Jersey, Inc. board of directors to solicit proxies for use at its annual meeting. It is also the prospectus of Investors Bancorp, Inc. regarding Investor Bancorp, Inc. common stock to be issued if the merger is completed. This document describes the merger in detail and includes a copy of the merger agreement as Appendix A.

The merger cannot be completed unless a majority of the issued and outstanding shares of common stock of American Bancorp of New Jersey, Inc. vote to adopt the merger agreement. Whether or not you plan to attend the annual meeting of stockholders, please take the time to vote by completing the enclosed proxy card and mailing it in the enclosed envelope. If you sign, date and mail your proxy card without indicating how you want to vote, your proxy will be counted as a vote “FOR” adoption of the merger agreement. If you fail to vote, or you do not instruct your broker how to vote any shares held for you in “street name,” it will have the same effect as voting “AGAINST” the merger agreement.

This proxy statement-prospectus gives you detailed information about the annual meeting of stockholders to be held on May 19, 2009, the merger and other related matters. You should carefully read this entire document, including the appendices. In particular, you should carefully consider the discussion in the section entitled “Risk Factors” on page 18.

On behalf of the board of directors, I thank you for your prompt attention to this important matter.

 

Joseph Kliminski

Chief Executive Officer

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued in connection with the merger or determined if this document is accurate or complete. Any representation to the contrary is a criminal offense.

The securities to be issued in connection with the merger are not savings accounts, deposits or other obligations of any bank or savings association and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

This document is dated April 10, 2009, and is first being mailed on or about April 13, 2009.

 

Both Investors Bancorp, Inc. and American Bancorp of New Jersey, Inc. file annual, quarterly and annual reports, proxy statements and other information with the Securities and Exchange Commission. You may obtain copies of these documents by mail from the public reference room of the Securities and Exchange Commission at 100 F Street, N.E., Room 1580, Washington, D.C. 20549, at prescribed rates. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the public reference room. In addition, Investors Bancorp, Inc. and American Bancorp of New Jersey, Inc. file reports and other information with the Securities and Exchange Commission electronically, and the Securities and Exchange Commission maintains a web site located at http://www.sec.gov containing this information.

 

This document incorporates important business and financial information about Investors Bancorp, Inc. and American Bancorp of New Jersey, Inc. from documents that are not included in or delivered with this proxy statement-prospectus. These documents are available without charge to you upon written or oral request at the applicable company’s address and telephone number listed below:

 

 

To obtain timely delivery, you must request the information no later than May 12, 2009.

 

Investors Bancorp, Inc. has filed a registration statement on Form S-4 to register with the Securities and Exchange Commission up to 7,007,325 shares of Investors Bancorp, Inc. common stock. This document is a part of that registration statement. As permitted by Securities and Exchange Commission rules, this document does not contain all of the information included in the registration statement or in the exhibits or schedules to the registration statement. You may read and copy the registration statement, including any amendments, schedules and exhibits at the addresses set forth above. Statements contained in this document as to the contents of any contract or other documents referred to in this document are not necessarily complete. In each case, you should refer to the copy of the applicable contract or other document filed as an exhibit to the registration statement. This document incorporates by reference documents that Investors Bancorp, Inc. and American Bancorp of New Jersey, Inc. have previously filed with the Securities and Exchange Commission. They contain important information about the companies and their financial condition. See “Incorporation of Certain Documents by Reference” on page 99.

 

Investors Bancorp, Inc. common stock is traded on the Nasdaq Global Select Market under the symbol “ISBC” and American Bancorp of New Jersey, Inc. common stock is traded on the Nasdaq Global Market under the symbol “ABNJ.”

AMERICAN BANCORP OF NEW JERSEY, INC.
365 BROAD STREET
BLOOMFIELD, NEW JERSEY 07003-2798

 

NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MAY 19, 2009

 

NOTICE IS HEREBY GIVEN that the annual meeting of the stockholders of American Bancorp of New Jersey, Inc. will be held at The Wilshire Grand Hotel, 350 Pleasant Valley Way, West Orange, New Jersey, at 8:30 a.m. local time, on May 19, 2009, for the following purposes:

 

1. To adopt the Agreement and Plan of Merger by and between Investors Bancorp, Inc., and American Bancorp of New Jersey, Inc., dated as of December 14, 2008, as amended, and the transactions contemplated by the merger agreement, as discussed in the attached proxy statement-prospectus;

 

2. To elect one director of American Bancorp of New Jersey, Inc. for a four-year term;

 

3. To ratify the appointment of Crowe Horwath LLP, as American Bancorp of New Jersey, Inc.’s independent auditors for the fiscal year ending September 30, 2009; and

 

4. To transact any other business that properly comes before the annual meeting of stockholders, or any adjournments or postponements of the annual meeting, including, without limitation, a motion to adjourn the annual meeting to another time or place for the purpose of soliciting additional proxies in order to approve the merger agreement and the merger.

 

The proposed merger is described in more detail in this proxy statement-prospectus, which you should read carefully in its entirety before voting. A copy of the merger agreement is attached as Appendix A to this document. Only American Bancorp of New Jersey, Inc. stockholders of record as of the close of business on March 31, 2009, are entitled to notice of and to vote at the annual meeting of stockholders or any adjournments of the annual meeting.

 

Your vote is very important. To ensure your representation at the annual meeting of stockholders, please complete, execute and promptly mail your proxy card in the return envelope enclosed. This will not prevent you from voting in person, but it will help to secure a quorum and avoid added solicitation costs. Your proxy may be revoked at any time before it is voted.

 

BY ORDER OF THE BOARD OF DIRECTORS

 

Joseph Kliminski

Chief Executive Officer

 

Bloomfield, New Jersey

April 10, 2009

 

AMERICAN BANCORP OF NEW JERSEY, INC.’S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” ADOPTION OF THE MERGER AGREEMENT, ITS DIRECTOR NOMINEE AND ITS INDEPENDENT AUDITORS.

 

PLEASE MARK, SIGN, DATE AND RETURN YOUR PROXY CARD PROMPTLY, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING OF STOCKHOLDERS.

 

DO NOT SEND STOCK CERTIFICATES WITH THE PROXY CARD.  UNDER SEPARATE COVER, WHICH IS BEING SENT ON OR ABOUT THE DATE THIS PROXY STATEMENT-PROSPECTUS IS BEING MAILED, YOU WILL RECEIVE AN ELECTION FORM WITH INSTRUCTIONS FOR DELIVERING YOUR STOCK CERTIFICATES.

TABLE OF CONTENTS

 

 

 

 

 

 

 

 

 

ANNUAL MEETING SUMMARY

The American Bancorp of New Jersey, Inc. Annual Meeting

Date, Time and Place		American Bancorp of New Jersey, Inc. will hold its annual meeting of stockholders on May 19, 2009, 8:30 a.m. local time, at The Wilshire Grand Hotel, 350 Pleasant Valley Way, West Orange, New Jersey.
Record Date		March 31, 2009.
Shares Entitled to Vote		10,855,529 shares of American Bancorp of New Jersey, Inc. common stock were outstanding on the Record Date and entitled to vote at the American Bancorp of New Jersey, Inc. annual meeting.
Purpose of the Annual Meeting		To consider and vote on the merger agreement, the election of one director and the ratification of Crowe Horwath LLP as American Bancorp of New Jersey, Inc.’s independent auditors for the year ending September 30, 2009.
Vote Required		A majority of the outstanding shares of American Bancorp of New Jersey, Inc. common stock entitled to vote must be cast in favor of adoption of the merger agreement. Directors are elected by a plurality of votes cast, without regard to either broker non-votes or proxies as to which authority to vote for the nominees being proposed is withheld. The ratification of Crowe Horwath LLP as independent auditors is determined by a majority of the votes cast, without regard to broker non-votes or proxies marked “ABSTAIN.”
		As of the record date, the directors and executive officers of American Bancorp of New Jersey, Inc. and their affiliates beneficially owned 2,181,580 shares, or approximately 18.7% of the outstanding shares, of American Bancorp of New Jersey, Inc. common stock, and all such persons have indicated their intention to vote their shares in favor of the adoption of the merger agreement with Investors Bancorp, Inc. In addition, at the time the merger agreement with Investors Bancorp, Inc. was signed, each director

		and executive officer of American Bancorp of New Jersey, Inc. entered into a separate letter agreement with Investors Bancorp, Inc., pursuant to which, among other things, they agreed to vote or cause to be voted all shares over which they maintain sole or shared voting power in favor of adoption of the merger agreement.
The American Bancorp of New Jersey, Inc. Board Recommends You Vote in Favor of the Proposals		American Bancorp of New Jersey, Inc.’s directors have unanimously approved the merger agreement and unanimously recommend that American Bancorp of New Jersey, Inc. stockholders vote “FOR” adoption of the merger agreement, “FOR” the nominee listed in this Proxy Statement/Prospectus for the American Bancorp of New Jersey, Inc. board and “FOR” the ratification of Crowe Horwath LLP as independent auditors for the year ending September 30, 2009.

 

MERGER SUMMARY

	•	$12.50 in cash, assuming payment solely of cash in exchange for American Bancorp of New Jersey, Inc. common stock; or
	•	0.9218 shares of Investors Bancorp, Inc. common stock for each share of American Bancorp of New Jersey, Inc. common stock, assuming payment solely of Investors Bancorp, Inc. common stock in exchange for American Bancorp of New Jersey, Inc. common stock.

										Equivalent Value,
										Including the Cash
										Consideration, for
										Each American
						American Bancorp of				Bancorp of
		Investors Bancorp, Inc.				New Jersey, Inc.				New Jersey,
Date		Common Stock				Common Stock				Inc. Share
December 12, 2008		$	13.56			$	8.75			$	12.50
March 13, 2009		$	7.81			$	8.72			$	9.05
April 3, 2009		$	8.60			$	9.48			$	9.53

	•	American Bancorp of New Jersey, Inc. stockholders must have adopted the merger agreement;
	•	with respect to each of American Bancorp of New Jersey, Inc. and Investors Bancorp, Inc., the representations and warranties of the other party to the merger agreement must be materially true and correct;
	•	the Federal Deposit Insurance Corporation, the New Jersey Department of Banking and Insurance and the Federal Reserve Board of Governors each has approved or not objected to the merger and all statutory waiting periods must have expired;
	•	there must be no statute, rule, regulation, order, injunction or decree in existence which prohibits or makes completion of the merger illegal;
	•	there must be no litigation, statute, law, regulation, order or decree by which the merger is restrained or enjoined;
	•	Investors Bancorp, Inc.’s registration statement of which this document is a part shall have become effective and no stop order suspending its effectiveness shall have been issued and no proceedings for that purpose shall have been initiated or threatened by the Securities and Exchange Commission;
	•	the shares of Investors Bancorp, Inc. common stock to be issued to American Bancorp of New Jersey, Inc. stockholders in the merger must have been approved for listing on the Nasdaq Global Select Market;
	•	neither American Bancorp of New Jersey, Inc. nor Investors Bancorp, Inc. shall have suffered a material adverse effect since September 30, 2007 or June 30, 2008, respectively;
	•	Investors Bancorp, Inc. must have received a legal opinion from its legal counsel that the merger will qualify as a tax-free reorganization under United States federal income tax laws; and
	•	all necessary third party consents shall have been obtained.

 

SELECTED HISTORICAL FINANCIAL DATA FOR INVESTORS BANCORP, INC. AND
AMERICAN BANCORP OF NEW JERSEY, INC.

		At December 31,								At June 30,
		2008				2007				2008				2007				2006				2005				2004
										(In thousands)
Selected Financial Condition Data:
Total assets		$	7,183,786			$	5,988,487			$	6,419,142			$	5,722,026			$	5,631,809			$	5,142,575			$	5,478,750
Loans receivable, net			5,618,185				4,030,724				4,670,150				3,624,998				2,995,435				2,028,045				1,135,782
Loans held-for-sale			16,935				7,143				9,814				3,410				974				3,412				1,428
Securities held to maturity, net			982,952				1,454,233				1,255,054				1,578,922				1,835,581				2,128,944				2,610,374
Securities available for sale, at estimated fair value			176,351				230,712				203,032				257,939				538,526				683,701				1,430,903
Bank owned life insurance			98,153				94,264				96,170				92,198				82,603				79,779				75,975
Deposits			4,232,638				3,891,674				3,970,275				3,768,188				3,419,361				3,373,291				3,411,267
Borrowed funds			2,133,569				1,211,195				1,563,583				1,038,710				1,245,740				1,313,769				1,604,798
Stockholders’ equity			753,799				832,754				828,538				858,859				916,291				423,704				417,041

		Six Months
		Ended December 31,(1)								Years Ended June 30,
		2008				2007				2008				2007(2)				2006(3)				2005(4)				2004
		(In thousands)
Selected Operating Data:
Interest and dividend income		$	181,947			$	155,191			$	312,807			$	285,223			$	252,050			$	232,594			$	215,784
Interest expense			100,299				108,338				207,695				195,263				143,594				128,286				129,159
Net interest income			81,648				46,853				105,112				89,960				108,456				104,308				86,625
Provision for loan losses			13,000				1,949				6,646				729				600				604				593
Net interest income after provision for loan losses			68,648				44,904				98,466				89,231				107,856				103,704				86,032
Non-interest (loss) income			(154,258	)			3,820				7,373				3,175				5,972				(2,080	)			4,200
Non-interest expenses			45,181				39,465				80,780				77,617				90,877				107,173				58,545
(Loss) income before income tax (benefit) expense			(130,791	)			9,259				25,059				14,789				22,951				(5,549	)			31,687
Income tax (benefit) expense			(53,323	)			3,244				9,030				(7,477	)			7,610				(2,986	)			11,728
Net (loss) income			(77,468	)			6,015			$	16,029			$	22,266			$	15,341			$	(2,563	)		$	19,959
Basic (loss) earnings per share(5)		$	(0.75	)		$	0.06			$	0.15			$	0.20			$	0.07				n/a				n/a
Diluted earnings per share(5)			n/a				0.06				0.15				0.20				0.07				n/a				n/a

(1)		Six months ended December 31, 2008 results reflect a $156.7 million pre-tax ($92.9 million after tax) non-cash other-than-temporary impairment charge on our pooled bank trust preferred CDOs.
(2)		June 30, 2007 year end results reflect a $9.9 million reversal of previously established valuation allowances for deferred tax assets.
(3)		June 30, 2006 year end results reflect a pre-tax expense of $20.7 million for the charitable contribution made to the Investors Savings Bank Charitable Foundation as part of our initial public offering.
(4)		June 30, 2005 year end results reflect pre-tax expense of $54.0 million attributable to the March 2005 balance sheet restructuring.
(5)		Basic and diluted earnings per share for the year ended June 30, 2006 include the results of operations from October 11, 2005, the date Investors Bancorp, Inc. completed its initial public offering.

		At or for the
		Six Months Ended
		December 31,								At or for the Years Ended June 30,
		2008				2007				2008				2007				2006				2005				2004
Selected Financial Ratios and Other Data:
Performance Ratios:
Return on assets (ratio of net income or loss to average total assets)			(2.24	)%			0.20	%			0.27	%			0.39	%			0.28	%			(0.05	)%			0.36	%
Return on equity (ratio of net income or loss to average equity)			(18.75	)%			1.44	%			1.92	%			2.47	%			2.00	%			(0.62	)%			4.85	%
Net interest rate spread(1)			2.05	%			1.06	%			1.28	%			1.02	%			1.65	%			1.82	%			1.45	%
Net interest margin(2)			2.42	%			1.64	%			1.81	%			1.65	%			2.06	%			2.00	%			1.60	%
Efficiency ratio(3)			(62.22	)%			77.88	%			71.81	%			83.34	%			79.42	%			104.84	%			64.46	%
Non-interest expenses to average total assets			1.30	%			1.34	%			1.35	%			1.38	%			1.68	%			2.00	%			1.06	%
Average interest-earning assets to average interest-bearing liabilities			1.13	x			1.15	x			1.15	x			1.18	x			1.15	x			1.07	x			1.07	x
Asset Quality Ratios:
Non-performing assets to total assets			0.67	%			0.09	%			0.30	%			0.09	%			0.06	%			0.15	%			0.17	%
Non-performing loans to total loans			0.85	%			0.14	%			0.42	%			0.14	%			0.11	%			0.39	%			0.80	%
Allowance for loan losses to non-performing loans			55.53	%			158.26	%			70.03	%			135.00	%			193.06	%			72.77	%			57.56	%
Allowance for loan losses to total loans			0.47	%			0.22	%			0.29	%			0.19	%			0.21	%			0.28	%			0.46	%
Capital Ratios:
Risk-based capital (to risk-weighted assets)(4)			17.35	%			23.63	%			21.77	%			25.18	%			26.63	%			21.72	%			26.64	%
Tier I risk-based capital (to risk-weighted assets)(4)			16.67	%			23.34	%			21.37	%			24.93	%			26.38	%			21.44	%			26.32	%
Total capital (to average assets)(4)			9.04	%			11.97	%			11.93	%			12.52	%			12.25	%			8.35	%			7.74	%
Equity to total assets			10.49	%			13.91	%			12.91	%			15.01	%			16.27	%			8.24	%			7.61	%
Average equity to average assets			11.92	%			14.23	%			13.94	%			15.97	%			14.21	%			7.75	%			7.43	%
Tangible capital (to tangible assets)			10.48	%			13.91	%			12.89	%			15.01	%			16.26	%			8.24	%			7.59	%
Book value per common share		$	7.15			$	7.83			$	7.87			$	7.86			$	8.04				n/a				n/a
Other Data:
Number of full service offices			52				51				52				51				51				51				50
Full time equivalent employees			554				526				537				509				510				493				486

(1)		The net interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted- average cost of interest-bearing liabilities for the period.
(2)		The net interest margin represents net interest income as a percent of average interest-earning assets for the period.
(3)		The efficiency ratio represents non-interest expenses divided by the sum of net interest income and non-interest income.
(4)		Ratios are for Investors Savings Bank and do not include capital retained at the holding company level.

		At December 31,								At September 30,
		2008				2007				2008				2007				2006				2005				2004
		(In thousands)
SELECTED FINANCIAL DATA:
Total assets		$	628,827			$	568,700			$	621,633			$	573,738			$	514,319			$	555,860			$	424,944
Cash and cash equivalents			17,933				31,880				20,375				37,421				7,165				125,773				8,034
Securities available-for-sale			79,316				47,673				81,163				58,093				74,523				62,337				89,495
Securities held-to-maturity			7,718				7,564				7,509				6,730				10,547				7,824				2,794
Loans held for sale			—				—				—				1,243				—				280				—
Loans receivable, net			491,405				449,093				478,574				437,883				398,624				341,006				308,970
Federal Home Loan Bank stock			2,473				2,508				2,743				2,553				3,356				3,119				2,890
Cash surrender value of life insurance			13,910				13,347				13,761				13,214				8,747				7,512				6,242
Deposits			459,218				428,988				447,687				428,600				327,147				340,925				322,716
Stock subscriptions received			—				—				—				—				—				115,201				—
Borrowings			69,530				36,596				75,547				37,612				56,075				53,734				57,491
Total stockholders’ equity			92,421				96,518				90,848				100,593				124,861				39,506				39,314

		Three Months Ended
		December 31,								Years Ended September 30,
		2008				2007				2008				2007				2006				2005				2004
		(In thousands)
SELECTED OPERATING DATA:
Total interest income		$	8,042			$	7,834			$	31,437			$	29,029			$	25,344			$	20,601			$	18,204
Total interest expense			4,070				4,732				17,397				16,731				11,802				9,546				8,105
Net interest income			3,972				3,102				14,040				12,298				13,542				11,055				10,099
Provision for loan losses			153				139				501				445				465				81				207
Net interest income after provision for loan losses			3,819				2,963				13,539				11,853				13,077				10,974				9,892
Noninterest income			440				395				1,791				1,422				1,021				1,196				1,298
Noninterest expense			3,413				3,276				13,542				12,544				10,657				8,924				7,657
Income before income tax expense			846				82				1,788				731				3,441				3,246				3,533
Income tax expense (benefit)			291				(11	)			560				174				1,308				1,203				1,371
Net income		$	555			$	93			$	1,228			$	557			$	2,133			$	2,043			$	2,162

		At or for the
		Three Months Ended December 31,								At or for the Years Ended September 30,
		2008				2007				2008				2007				2006				2005				2004
SELECTED FINANCIAL DATA*:
Performance Ratios:
Return on average assets(1)			0.36	%			0.07	%			0.21	%			0.10	%			0.42	%			0.46	%			0.54	%
Return on average equity(2)			2.47				0.38				1.31				0.51				1.68				5.30				5.77
Net interest rate spread(3)			2.15				1.50				1.87				1.44				1.80				2.28				2.28
Net interest margin(4)			2.68				2.31				2.50				2.39				2.73				2.60				2.60
Operating (noninterest) expense to average total assets			2.18				2.30				2.27				2.31				2.08				2.02				1.92
Efficiency ratio(5)			77.35				93.68				85.54				91.43				73.18				72.84				67.18
Average interest-earning assets to average interest-bearing liabilities			119.44				122.87				120.39				129.35				139.21				114.30				115.67
Capital Ratios:
Equity to total assets at end of period			14.70				16.97				14.61				17.53				24.28				7.11				9.25
Average equity to average assets			14.37				17.26				15.65				20.23				24.72				8.74				9.37
Asset Quality Ratios:
Non-performing loans to total loans(6)			0.39				0.17				0.24				0.28				0.52				0.34				0.17
Non-performing assets to total assets(6)			0.30				0.14				0.18				0.22				0.41				0.21				0.12
Net charge-offs to average loans outstanding			0.02				0.00				0.01				0.00				0.00				0.00				0.00
Allowance for loan losses to non-performing loans(6)			163.03				347.98				266.97				205.56				101.64				142.62				304.05
Allowance for loan losses to total loans			0.63				0.60				0.63				0.58				0.53				0.48				0.50
PER SHARE DATA:
Earnings per share:
Basic		$	0.06			$	0.01			$	0.12			$	0.05			$	0.16			$	0.15			$	0.16
Diluted		$	0.06			$	0.01			$	0.12			$	0.05			$	0.16			$	0.15			$	0.16
Cash Dividends Paid(7)		$	0.05			$	0.04			$	0.18			$	0.16			$	0.16			$	0.36			$	0.00
Dividend Payout Ratio			89.37	%			461.29	%			149.67	%			335.19	%			99.02	%			70.09	%			—	%

*		Certain ratios were significantly affected by stock subscriptions received pending completion of American Bancorp of New Jersey, Inc.’s first and second public offerings. At September 30, 2005, stock subscriptions received relating to American Bancorp of New Jersey Inc.’s second public offering which closed October 5, 2005 totaled $115.2 million. At the time of closing, approximately $91.3 million, less offering expenses, became capital of American Bancorp of New Jersey Inc. with the remainder returned on oversubscriptions.
(1)		Net income divided by average total assets.
(2)		Net income divided by average total equity.
(3)		Difference between weighted average yield on interest-earning assets and weighted average cost of interest-bearing liabilities.
(4)		Net interest income as a percentage of average interest-earning assets.
(5)		Noninterest expense divided by the sum of net interest income and noninterest income.
(6)		Nonperforming loans consist of nonaccrual loans and loans greater than 90 days delinquent and still accruing.
(7)		Cash dividends paid in fiscal 2005 include a special dividend of $0.294 per share paid in December 2004 and regular quarterly dividends paid in June 2005 and September 2005 of $0.035 each. American Savings, MHC waived receipt of all dividends in 2005. Consequently, cash dividends were paid only to public shareholders during fiscal 2005.

 

Comparative Pro Forma Per Share Data

														Combined
														Pro Forma
										Pro Forma				Amounts for
										American				Investors
										Bancorp of				Bancorp,
						American				New Jersey, Inc.				Inc./American
						Bancorp of New				Equivalent				Bancorp of
		Investors Bancorp,				Jersey, Inc.				Shares				New Jersey,
		Inc. Historical				Historical				(1)				Inc.
		(Shares in thousands)
Book value per share at December 31, 2008		$	7.15			$	8.51							$	7.18
Shares outstanding at December 31, 2008			109,052,929				10,859,692				6,506,802				115,559,731
Cash dividends paid per common share for the twelve months ended December 31, 2008		$	—			$	0.19							$	—
Basic (loss) earnings per share from continuing operations:
For the twelve months ended December 31, 2008		$	(0.65	)		$	0.17							$	(0.59	)
Diluted earnings per share from continuing operations:
For the twelve months ended December 31, 2008			n/a				0.17								n/a

(1)		Calculated by multiplying amounts in the American Bancorp of New Jersey, Inc. historical column by 65% for the stock portion of the merger consideration and then multiplied by a 0.9218 exchange ratio which represents the number of shares of Investors Bancorp, Inc. common stock an American Bancorp of New Jersey, Inc. shareholder will receive for each share of stock owned.

														Combined
														Pro Forma
										Pro Forma				Amounts for
										American				Investors
						American				Bancorp of				Bancorp,
						Bancorp of New				New Jersey, Inc.				Inc./American
		Investors Bancorp,				Jersey, Inc.				Equivalent				Bancorp of
		Inc. Historical				Historical				Shares				New Jersey, Inc.
		(Shares in thousands)
Book value per share at December 31, 2008		$	7.15			$	8.51							$	6.79
Shares outstanding at December 31, 2008			109,052,929				10,859,692				—				109,052,929
Cash dividends paid per common share for the twelve months ended December 31, 2008		$	—			$	0.19
Basic earnings (loss) per share from continuing operations:
For the twelve months ended December 31, 2008		$	(0.65	)		$	0.17							$	(0.63	)
Diluted earnings (loss) per share from continuing operations:
For the twelve months ended December 31, 2008			n/a				0.17								n/a

										Equivalent Value,
										Including the Cash
						American Bancorp of				Consideration for Each
		Investors Bancorp, Inc.				New Jersey, Inc.				American Bancorp of
Date		Common Stock				Common Stock				New Jersey, Inc. Share
December 12, 2008		$	13.56			$	8.75			$	12.50
March 13, 2009		$	7.81			$	8.72			$	9.05
April 3, 2009		$	8.60			$	9.48			$	9.53

 

In addition to the other information contained in or incorporated by reference into this proxy statement-prospectus, including the matters addressed under the caption “Forward-Looking Statements,” you should carefully consider the following risk factors in deciding whether to vote for adoption of the merger agreement.

 

Risks Related To The Merger.

 

You May Not Receive the Form of Merger Consideration that you Elect.

 

The merger agreement contains provisions that are designed to ensure that the actual form of merger consideration that each American Bancorp of New Jersey, Inc. stockholder will receive will be subject to proration so that 65% of the outstanding American Bancorp of New Jersey, Inc. common stock will be exchanged for shares of Investors Bancorp, Inc. common stock and 35% of the outstanding American Bancorp of New Jersey, Inc. common stock will be exchanged for cash. Therefore, if American Bancorp of New Jersey, Inc. stockholders elect to receive cash for more than 35% of the outstanding shares of American Bancorp of New Jersey, the amount of cash that each such stockholder would receive from Investors Bancorp, Inc. will be reduced on a pro rata basis. Instead, these stockholders will receive Investors Bancorp, Inc. common stock as consideration for any American Bancorp of New Jersey, Inc. shares for which they do not receive cash. Similarly, if American Bancorp of New Jersey, Inc. stockholders elect to receive Investors Bancorp, Inc. common stock for more than 65% of the outstanding shares of American Bancorp of New Jersey, Inc., the amount of Investors Bancorp, Inc. common stock that each such stockholder would receive from Investors Bancorp, Inc. will be reduced on a pro rata basis. Instead, such stockholders will receive cash as consideration for any American Bancorp of New Jersey, Inc. shares for which they do not receive Investors Bancorp, Inc. common stock. Accordingly, there is a risk that you will not receive a portion of the merger consideration in the form that you elect, which could result in, among other things, tax consequences that differ from those that would have resulted had you received the form of consideration you elected. In the event that by May 31, 2009, Investors Bancorp, Inc. has not received the required regulatory approvals to issue shares of Investors Bancorp, Inc. common stock in the merger, Investors Bancorp, Inc. may elect to proceed with the merger on an all cash basis and merge a newly created merger subsidiary with and into American Bancorp of New Jersey, Inc.

 

An American Bancorp of New Jersey, Inc. stockholder’s allocation of the consideration to be received for his or her shares of American Bancorp of New Jersey, Inc. may also be adjusted if the aggregate value of the Investors Bancorp, Inc. common stock to be delivered as of the effective time of the merger minus the amount of cash paid in lieu of fractional shares of Investors Bancorp, Inc. common stock (the “Stock Value”) is less than 42.5% of the sum of (i) the aggregate value of the Investors Bancorp, Inc. common stock and cash to be delivered as of the effective time of the merger, plus (ii) the value of any consideration described in Treasury Regulations Section 1.368-1(e)(1)(ii), plus (iii) cash paid to holders of dissenting shares, plus (iv) the value of any consideration paid by Investors Bancorp, Inc. or any of its subsidiaries (or any “related person” of either within the meaning of Treasury Regulations Section 1.368-1(e)(3)) to acquire shares of American Bancorp of New Jersey, Inc. common stock prior to the effective time of the merger (such sum, the “Aggregate Value”), then Investors Bancorp, Inc. may reduce the number of shares of outstanding American Bancorp of New Jersey, Inc. common stock entitled to receive cash, and correspondingly increase the number of shares of American Bancorp of New Jersey, Inc. common stock entitled to receive Investors Bancorp, Inc. common stock by the minimum amount necessary to cause the Stock Value to equal 42.5% of the Aggregate Value.

 

You May Not Receive the Value of Merger Consideration that You Anticipate.

 

The stock portion of the merger consideration is subject to a fixed exchange ratio, the value of which will depend upon the value of the common stock of Investors Bancorp, Inc. as of the closing of the transaction. The value of Investors Bancorp, Inc. common stock has fluctuated significantly over the last several months, as have the stocks of many financial services companies.

The following table shows trading information for American Bancorp of New Jersey, Inc. common stock and Investors Bancorp, Inc. common stock as of market close on December 12, 2008, March 13, 2009 and April 3, 2009. December 12, 2008 was the last trading date before the parties announced the merger and March 13, 2009 was the last trading date before the parties announced the first amendment to the merger agreement. April 3, 2009 is a recent date before this proxy statement-prospectus was finalized.

 

 

Investors Bancorp, Inc.’s common stock has decreased significantly in value since December 12, 2008. During the period of December 12, 2008 through April 3, 2009, the value of Investors Bancorp, Inc. common stock has ranged from a low of $6.86 to a high of $13.56. Therefore, given the fixed exchange ratio of 0.9218 and a total allocation between stock and cash of 65% and 35%, respectively, stockholders of American Bancorp of New Jersey, Inc. would have received merger consideration ranging in value from $8.49 to $12.50 for each share of American Bancorp of New Jersey, Inc. owned. We note that the value of the total cash and stock consideration ultimately received by stockholders of American Bancorp of New Jersey, Inc. could be less than the book value of American Bancorp of New Jersey, Inc. and may be less than the trading value of American Bancorp of New Jersey, Inc. common stock.

 

Investors Bancorp, Inc. May Fail to Realize the Anticipated Benefits of the Merger.

 

The success of the merger will depend on, among other things, Investors Bancorp, Inc.’s ability to realize anticipated cost savings and to combine the businesses of Investors Savings and American Bank of New Jersey in a manner that permits growth opportunities and does not materially disrupt the existing customer relationships of American Bank of New Jersey nor result in decreased revenues resulting from any loss of customers. If Investors Bancorp, Inc. is not able to successfully achieve these objectives, the anticipated benefits of the merger may not be realized fully or at all or may take longer to realize than expected.

 

Investors Bancorp, Inc. and American Bancorp of New Jersey, Inc. have operated and, until the completion of the merger, will continue to operate, independently. Certain employees of American Bancorp of New Jersey, Inc. will not be employed by Investors Bancorp, Inc. after the merger. In addition, employees of American Bancorp of New Jersey, Inc. that Investors Bancorp, Inc. wishes to retain may elect to terminate their employment as a result of the merger, which could delay or disrupt the integration process. It is possible that the integration process could result in the disruption of American Bancorp of New Jersey, Inc.’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the ability of Investors Bancorp, Inc. to maintain relationships with customers and employees or to achieve the anticipated benefits of the merger.

 

Stockholders Who Make Stock Elections Will be Unable to Sell Their Shares in the Market Pending the Merger.

 

American Bancorp of New Jersey, Inc. stockholders may elect to receive cash or stock in the merger. Elections will require that stockholders making the election turn in their American Bancorp of New Jersey, Inc. stock certificates. During the time between when the election is made and the merger is completed, American Bancorp of New Jersey, Inc. stockholders will be unable to sell their American Bancorp of New Jersey, Inc. common stock. If the merger is unexpectedly delayed, this period could extend for a significant period of time. American Bancorp of New Jersey, Inc. stockholders can shorten the period during which they cannot sell their shares by delivering their election shortly before the close of the election period. However, elections received after the close of the election period will not be accepted or honored.

American Bancorp of New Jersey, Inc. Directors and Officers Have Interests in the Merger Besides Those of a Stockholder.

 

American Bancorp of New Jersey, Inc.’s directors and officers have various interests in the merger besides being American Bancorp of New Jersey, Inc. stockholders. These interests include:

 

 

Risks About Investors Bancorp, Inc.

 

Our Liabilities Reprice Faster Than Our Assets and Future Increases in Interest Rates Will Reduce Our Profits.

 

Our ability to make a profit largely depends on our net interest income, which could be negatively affected by changes in interest rates. Net interest income is the difference between:

 

 

The interest income we earn on our assets and the interest expense we pay on our liabilities are generally fixed for a contractual period of time. Our liabilities generally have shorter contractual maturities than our assets. This imbalance can create significant earnings volatility, because market interest rates change over time. In a period of rising interest rates, the interest income earned on our assets may not increase as rapidly as the interest paid on our liabilities.

 

In addition, changes in interest rates can affect the average life of loans and mortgage-backed and related securities. A reduction in interest rates causes increased prepayments of loans and mortgage-backed and related securities as borrowers refinance their debt to reduce their borrowing costs. This creates reinvestment risk, which is the risk that we may not be able to reinvest the funds from faster prepayments at rates that are comparable to the rates we earned on the prepaid loans or securities. Conversely, an increase in interest rates generally reduces prepayments. Additionally, increases in interest rates may decrease loan demand and/or make it more difficult for borrowers to repay adjustable-rate loans.

 

Changes in interest rates also affect the current market value of our interest-earning securities portfolio. Generally, the value of securities moves inversely with changes in interest rates. At December 31, 2008, the fair value of our total securities portfolio was $1.16 billion. Unrealized net losses on securities-available-for-sale are reported as a separate component of equity. To the extent interest rates increase and the value of our available-for-sale portfolio decreases, our stockholders’ equity will be adversely affected.

 

We evaluate interest rate sensitivity using models that estimate the change in our net portfolio value over a range of interest rate scenarios. Net portfolio value is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts. At December 31, 2008, in the event of a 200 basis point

increase in interest rates, whereby rates ramp up evenly over a twelve-month period, and assuming management took no action to mitigate the effect of such change, the model projects that we would experience an 5.9%, or $10.6 million, decrease in net interest income.

 

Because We Intend to Continue to Increase Our Commercial Originations, Our Lending Risk Will Increase.

 

At December 31, 2008, our portfolio of commercial real estate, multi-family and construction loans totaled $757.4 million, or 13.5% of our total loans. We intend to increase our originations of commercial real estate, multi-family and construction loans. In addition, we recently began offering commercial and industrial (“C&I”) loans. Commercial real estate, multi-family, construction and C&I loans generally have more risk than one-to-four-family residential mortgage loans. As the repayment of commercial real estate loans depends on the successful management and operation of the borrower’s properties or related businesses, repayment of such loans can be affected by adverse conditions in the real estate market or the local economy. We anticipate that several of our borrowers will have more than one commercial real estate loan outstanding with us. Consequently, an adverse development with respect to one loan or one credit relationship can expose us to significantly greater risk of loss compared to an adverse development with respect to a one-to-four-family residential mortgage loan. Finally, if we foreclose on a commercial real estate loan, our holding period for the collateral, if any, typically is longer than for one-to-four-family residential mortgage loans because there are fewer potential purchasers of the collateral. Because we plan to continue to increase our originations of these loans, it may be necessary to increase the level of our allowance for loan losses because of the increased risk characteristics associated with these types of loans. Any such increase to our allowance for loan losses would adversely affect our earnings.

 

The Financial Sector Is Experiencing An Economic Downturn. A Deterioration of Our Current Non-performing Loans or An Increase In The Number of Non-performing Loans Will Have An Adverse Effect On Our Operations.

 

Both nationally and in the state of New Jersey we are experiencing an economic downturn that is having a significant impact on the prices of real estate and related assets. The residential and commercial real estate sectors have been adversely affected by weakening economic conditions and may negatively impact our loan portfolio. Total non-performing assets increased from $19.4 million at June 30, 2008 to $47.8 million at December 31, 2008, and total non-performing loans as a percentage of total assets increased to 0.67% at December 31, 2008 as compared to 0.30% at June 30, 2008. If loans that are currently non-performing further deteriorate or loans that are currently performing become non-performing loans, we may need to increase our allowance for loan losses, which would have an adverse impact on our financial condition and results of operations.

 

Further Decline In Value In Certain Investment Securities Held By Investors Bancorp, Inc. Could Require Write-Downs, Which Would Reduce Our Earnings.

 

Our securities portfolio includes pooled trust preferred securities backed by banks, insurance companies, and real estate investment trusts. During the six months ended December 31, 2008, Investors Bancorp, Inc. recorded a $156.7 million pre-tax non-cash other-than-temporary impairment charge on our pooled bank trust preferred Collateralized Debt Obligations (“CDOs”) which resulted in an amortized cost of $20.8 million for these securities. Continued adverse economic conditions could impact our securities portfolio and result in additional other-than-temporary impairment write-downs which would reduce our earnings.

 

Our Expenses Will Increase as a Result of Increases in FDIC Insurance Premiums.

 

The FDIC imposes an assessment against all depository institutions for deposit insurance. This assessment is based on the risk category of the institution and, prior to 2009, ranged from 5 to 43 basis points of the institution’s deposits. On February 27, 2009, the FDIC published a final rule raising the current deposit insurance assessment rates to a range from 12 to 45 basis points beginning April 1, 2009. Additionally, the FDIC issued an interim final rule that would impose a special 20 basis points special assessment on all insured

deposits as of June 30, 2009, which would be payable on September 30, 2009. Investors Bancorp, Inc. estimates that this special assessment will be approximately $9.4 million for Investors Bancorp, Inc. and approximately $10.4 million including American Bank of New Jersey on a pro forma basis.

 

The Emergency Economic Stabilization Act of 2008 (EESA) temporarily increased the limit on FDIC insurance coverage for deposits to $250,000 through December 31, 2009. In addition, the FDIC announced the Temporary Liquidity Guarantee (“TLG”) Program. The TLG Program covers two programs: the Transaction Account Guarantee Program and the Debt Guarantee program. Investors Bancorp, Inc. has elected to participate in the Transaction Account Guarantee Program, which will increase the insurance coverage for the following deposit accounts in excess of $250,000: all non-interested bearing accounts, NOW accounts (as long as the interest rate paid is equal to or below 50 basis points) and IOLTA accounts. The cost of the program to Investors Bancorp, Inc. will be 10 basis points annualized and the expiration of the program is December 31, 2009.

 

These actions will significantly increase Investors Bancorp, Inc.’s non-interest expense in 2009 and in future years as long as the increased premiums are in place.

 

If Our Allowance for Loan Losses is Not Sufficient to Cover Actual Loan Losses, Our Earnings Could Decrease.

 

We make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans. In determining the amount of the allowance for loan losses, we review our loans and our loss and delinquency experience, and we evaluate economic conditions. If our assumptions are incorrect, our allowance for loan losses may not be sufficient to cover losses inherent in our loan portfolio, resulting in additions to our allowance. Material additions to our allowance would materially decrease our net income. Our allowance for loan losses of $26.5 million was 0.47% of total loans and 55.53% of non-performing loans at December 31, 2008.

 

In addition, bank regulators periodically review our allowance for loan losses and may require us to increase our provision for loan losses or recognize further loan charge-offs. A material increase in our allowance for loan losses or loan charge-offs as required by these regulatory authorities would have a material adverse effect on our financial condition and results of operations.

 

There Is No Assurance That Our Strategy to Change the Mix of Our Assets and Liabilities Will Succeed.

 

We previously emphasized investments in government agency and mortgage-backed securities, funded with wholesale borrowings. This policy was designed to achieve profitability by allowing asset growth with low overhead expense, although securities generally have lower yields than loans, resulting in a lower interest rate spread and lower interest income. In October 2003, we implemented a strategy to change the mix of our assets and liabilities to one more focused on loans and retail deposits. As a result of this strategy, at December 31, 2008, our mortgage-backed and other securities accounted for 16.1% of total assets, while our loan portfolio accounted for 78.2% of our total assets.

 

Our Inability to Achieve Profitability on New Branches May Negatively Affect Our Earnings.

 

We have expanded our presence throughout our market area, and we intend to pursue further expansion through de novo branching. The profitability of our expansion strategy will depend on whether the income that we generate from the new branches will offset the increased expenses resulting from operating these branches. We expect that it may take a period of time before these branches become profitable, especially in areas in which we do not have an established presence. During this period, the expense of operating these branches may negatively affect our net income.

Our Return on Equity Has Been Low Compared to Other Financial Institutions. This Could Negatively Affect the Price of Our Common Stock.

 

Net income divided by average equity, known as “return on equity,” is a ratio many investors use to compare the performance of a financial institution to its peers. For the year ended June 30, 2008, our return on average equity was 1.92% compared to a return on average equity of 3.01% for all publicly traded savings institutions organized in the mutual holding company form. We expect our return on equity to remain below the industry average until we are able to further leverage the additional capital we received from our 2005 stock offering. Our return on equity has been low principally because of the amount of capital raised in the offering, higher expenses from the costs of being a public company, and added expenses associated with our employee stock ownership plan and the stock-based incentive plan. Until we can increase our net interest income and other income, we expect our return on equity to be below the industry average.

 

Strong Competition Within Our Market Area May Limit Our Growth and Profitability.

 

Competition in the banking and financial services industry is intense. In our market area, we compete with numerous commercial banks, savings institutions, mortgage brokerage firms, credit unions, finance companies, mutual funds, insurance companies, and brokerage and investment banking firms operating locally and elsewhere. Some of our competitors have substantially greater resources and lending limits than we have, have greater name recognition and market presence that benefit them in attracting business, and offer certain services that we do not or cannot provide. In addition, larger competitors may be able to price loans and deposits more aggressively than we do. Our profitability depends upon our continued ability to successfully compete in our market area. The greater resources and deposit and loan products offered by some of our competitors may limit our ability to increase our interest-earning assets.

 

If We Declare Dividends on Our Common Stock, Investors Bancorp, MHC Will be Prohibited From Waiving the Receipt of Dividends by Current Federal Reserve Board Policy, Which May Result in Lower Dividends for All Other Stockholders.

 

The Board of Directors of Investors Bancorp, Inc. has the authority to declare dividends on its common stock, subject to statutory and regulatory requirements. So long as Investors Bancorp, MHC is regulated by the Federal Reserve Board, if Investors Bancorp, Inc. pays dividends to its stockholders, it also will be required to pay dividends to Investors Bancorp, MHC, unless Investors Bancorp, MHC is permitted by the Federal Reserve Board to waive the receipt of dividends. The Federal Reserve Board’s current policy does not permit a mutual holding company to waive dividends declared by its subsidiary. Accordingly, because dividends will be required to be paid to Investors Bancorp, MHC along with all other stockholders, the amount of dividends available for all other stockholders will be less than if Investors Bancorp, MHC were permitted to waive the receipt of dividends.

 

Investors Bancorp, MHC Exercises Voting Control Over Investors Bancorp, Inc.; Public Stockholders Own a Minority Interest.

 

Investors Bancorp, MHC owns a majority of Investors Bancorp, Inc.’s common stock and, through its Board of Directors, exercises voting control over the outcome of all matters put to a vote of stockholders (including the election of directors), except for matters that require a vote greater than a majority. Public stockholders own a minority of the outstanding shares of Investors Bancorp, Inc.’s common stock. The same directors and officers who manage Investors Bancorp, Inc. and Investors Savings Bank also manage Investors Bancorp, MHC. In addition, regulatory restrictions applicable to Investors Bancorp, MHC prohibit the sale of Investors Bancorp, Inc. unless the mutual holding company first undertakes a second-step conversion. Following the completion of the merger, the depositors and borrowers of American Bank of New Jersey will have no rights as such to participate in any secondary offering by Investors Bancorp, MHC.

We operate in a highly regulated industry, which limits the manner and scope of our business activities.

 

We are subject to extensive supervision, regulation and examination by the New Jersey Department of Banking and Insurance and by the FDIC. As a result, we are limited in the manner in which we conduct our business, undertake new investments and activities and obtain financing. This regulatory structure is designed primarily for the protection of the Deposit Insurance Fund (“DIF”) and our depositors, and not to benefit our stockholders. This regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to capital levels, the timing and amount of dividend payments, the classification of assets and the establishment of adequate loan loss reserves for regulatory purposes. In addition, we must comply with significant anti-money laundering and anti-terrorism laws. Government agencies have substantial discretion to impose significant monetary penalties on institutions which fail to comply with these laws.

 

If Our Investment in the Federal Home Loan Bank of New York is Classified as Other-Than-Temporarily Impaired or as Permanently Impaired, Our Earnings and Stockholders’ Equity Could Decrease.

 

We own common stock of the Federal Home Loan Bank of New York (“FHLB-NY”). We hold the FHLB-NY common stock to qualify for membership in the Federal Home Loan Bank System and to be eligible to borrow funds under the FHLB-NY’s advance program. The aggregate cost and fair value of our FHLB-NY common stock as of December 31, 2008 was $86.6 million, based on its par value. There is no market for our FHLB-NY common stock.

 

Recent published reports indicate that certain member banks of the Federal Home Loan Bank System may be subject to accounting rules and asset quality risks that could result in materially lower regulatory capital levels. In an extreme situation, it is possible that the capitalization of a Federal Home Loan Bank, including the FHLB-NY, could be substantially diminished or reduced to zero. Consequently, we believe that there is a risk that our investment in FHLB-NY common stock could be deemed other-than-temporarily impaired at some time in the future, and if this occurs, it would cause our earnings and stockholders’ equity to decrease by the after-tax amount of the impairment charge.

 

Future Acquisition Activity Could Dilute Book Value.

 

Both nationally and in New Jersey, the banking industry is undergoing consolidation marked by numerous mergers and acquisitions. From time to time we may be presented with opportunities to acquire institutions and/or bank branches and we may engage in discussions and negotiations. Acquisitions typically involve the payment of a premium over book and trading values, and therefore, may result in the dilution of Investors Bancorp’s book value and net income per share.

 

American Bancorp of New Jersey, Inc. is mailing this proxy statement-prospectus to you as an American Bancorp of New Jersey, Inc. stockholder on or about April 13, 2009. With this document, American Bancorp of New Jersey, Inc. is sending you a notice of the American Bancorp of New Jersey, Inc. annual meeting of stockholders and a form of proxy that is solicited by the American Bancorp of New Jersey, Inc. board of directors. The annual meeting will be held on May 19, 2009 at 8:30 a.m. local time, at The Wilshire Grand Hotel, 350 Pleasant Valley Way, West Orange, New Jersey.

 

Matter to be Considered

 

The purposes of the annual meeting of stockholders are to vote on the adoption of the Agreement and Plan of Merger by and between Investors Bancorp, Inc. and American Bancorp of New Jersey, Inc. and American Bank of New Jersey, dated as of December 14, 2008, as amended as of March 9, 2009, by which American Bancorp of New Jersey, Inc. and American Bank of New Jersey will be acquired by Investors Bancorp, Inc., as well as the election of one director to the American Bancorp of New Jersey, Inc. Board of Directors and ratify the appointment of Crowe Horwath LLP as American Bancorp of New Jersey, Inc.’s independent auditors for the fiscal year ending September 30, 2009.

 

You may also be asked to vote upon a proposal to adjourn or postpone the annual meeting of stockholders. American Bancorp of New Jersey, Inc. could use any adjournment or postponement for the purpose, among others, of allowing additional time to solicit proxies.

 

Proxy Card, Revocation of Proxy

 

You should complete and return the proxy card accompanying this document to ensure that your vote is counted at the annual meeting of stockholders, regardless of whether you plan to attend. You can revoke your proxy at any time before the vote is taken at the annual meeting by:

 

 

If your shares are held in street name, you should follow the instructions of your broker regarding revocation of proxies.

 

All shares represented by valid and unrevoked proxies will be voted in accordance with the instructions on the proxy card. If you sign your proxy card, but make no specification on the card as to how you want your shares voted, your proxy card will be voted “FOR” approval of the foregoing proposals. The board of directors of American Bancorp of New Jersey, Inc. is presently unaware of any other matter that may be presented for action at the annual meeting of stockholders. If any other matter does properly come before the annual meeting, the board of directors of American Bancorp of New Jersey, Inc. intends that shares represented by properly submitted proxies will be voted, or not voted, by and at the discretion of the persons named as proxies on the proxy card.

 

Solicitation of Proxies

 

The cost of solicitation of proxies will be borne by American Bancorp of New Jersey, Inc. American Bancorp of New Jersey, Inc. will reimburse brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending proxy materials to the beneficial owners of common stock. American Bancorp of New Jersey, Inc. has retained Regan & Associates, Inc., to assist in the solicitation of proxies for a fee of $7,500, which includes out-of-pocket expenses. In addition to solicitations by mail, American Bancorp of New Jersey, Inc.’s directors, officers and regular employees may solicit proxies personally or by telephone without additional compensation.

Record Date

 

The close of business on March 31, 2009 has been fixed as the record date for determining the American Bancorp of New Jersey, Inc. stockholders entitled to receive notice of and to vote at the annual meeting of stockholders. At that time, 10,855,529 shares of American Bancorp of New Jersey, Inc. common stock were outstanding, and were held by approximately 818 holders of record.

 

Voting Rights, Quorum Requirements and Vote Required

 

The presence, in person or by properly executed proxy, of the holders of a majority of the outstanding shares of American Bancorp of New Jersey, Inc. common stock entitled to vote is necessary to constitute a quorum at the annual meeting of stockholders. Abstentions and broker non-votes will be counted for the purpose of determining whether a quorum is present but will be counted as votes cast against the merger agreement.

 

Adoption of the merger agreement requires the affirmative vote of the holders of a majority of the shares of American Bancorp of New Jersey, Inc. common stock issued and outstanding on the record date. Accordingly, a failure to vote or an abstention will have the same effect as a vote against the merger agreement. As of the record date, the directors and executive officers of American Bancorp of New Jersey, Inc. beneficially owned 2,181,580 shares of American Bancorp of New Jersey, Inc. common stock entitled to vote at the annual meeting of stockholders. This represents approximately 18.7% of the total votes entitled to be cast at the annual meeting. These individuals have entered into voting agreements pursuant to which they have agreed to vote “FOR” adoption of the merger agreement. Directors are elected by a plurality of votes cast, without regard to either broker non-votes or proxies as to which authority to vote for the nominees being proposed is withheld. The ratification of Crowe Horwath LLP as independent auditors is determined by a majority of the votes cast, without regard to broker non-votes or proxies marked “ABSTAIN.”

 

Recommendation of the Board of Directors

 

The American Bancorp of New Jersey, Inc. board of directors has unanimously approved the merger agreement and the transactions contemplated by the merger agreement. The board of directors of American Bancorp of New Jersey, Inc. believes that the merger is fair to American Bancorp of New Jersey, Inc. stockholders and is in the best interest of American Bancorp of New Jersey, Inc. and its stockholders and recommends that you vote “FOR” the adoption of the merger agreement, as well as the other proposals. See “The Proposed Merger — Recommendation of the American Bancorp of New Jersey, Inc. Board of Directors and Reasons for the Merger.”

 

The description of the merger and the merger agreement contained in this proxy statement-prospectus describes the material terms of the merger agreement; however, it does not purport to be complete. It is qualified in its entirety by reference to the merger agreement. We have attached a copy of the merger agreement as Appendix A.

 

Pursuant to the merger agreement, American Bancorp of New Jersey, Inc. will merge into Investors Bancorp, Inc., with Investors Bancorp, Inc. as the surviving entity. Outstanding shares of American Bancorp of New Jersey, Inc. common stock will be converted into the right to receive cash or shares of Investors Bancorp, Inc. common stock, or a combination thereof. Cash will be paid in lieu of any fractional share of American Bancorp of New Jersey, Inc. common stock. See “Merger Consideration; Cash or Stock Election” below. As a result of the merger, the separate corporate existence of American Bancorp of New Jersey, Inc. will cease and Investors Bancorp, Inc. will succeed to all the rights and be responsible for all the obligations of American Bancorp of New Jersey, Inc. Immediately after the merger of American Bancorp of New Jersey, Inc. into Investors Bancorp, Inc., American Bank of New Jersey will merge into Investors Savings Bank and the separate corporate existence of American Bank of New Jersey shall cease to exist.

 

Investors Bancorp, Inc.

 

Investors Bancorp, Inc. is a Delaware corporation that was organized on January 21, 1997 for the purpose of being a holding company for Investors Savings Bank, a New Jersey chartered savings bank. On October 11, 2005, Investors Bancorp, Inc. completed its initial public stock offering in which it sold 51,627,094 shares, or 44.40% of its outstanding common stock, to subscribers in the offering, including 4,254,072 shares purchased by the Investors Savings Bank Employee Stock Ownership Plan (the “ESOP”). Upon completion of the initial public offering, Investors Bancorp, MHC (the “MHC”), Investors Bancorp, Inc.’s New Jersey chartered mutual holding company parent, held 63,099,781 shares, or 54.27% of Investors Bancorp, Inc.’s outstanding common stock. Additionally, Investors Bancorp, Inc. contributed $5,163,000 in cash and issued 1,548,813 shares of common stock, or 1.33% of its outstanding shares, to the Investors Savings Bank Charitable Foundation.

 

On June 6, 2008, Investors Bancorp, Inc. completed its merger of Summit Federal Bankshares, Inc. (“Summit Federal”), the federally-chartered holding company for Summit Federal Savings Bank. At the date of merger, Summit Federal operated five branches in Union, Middlesex, Hunterdon and Warren counties, New Jersey, and had assets of $110.1 million, deposits of $95.0 million and equity of $14.0 million. Each Summit Federal branch office has become a branch office of Investors Savings Bank. This transaction involved the combination of mutual enterprises and, therefore, was accounted for as a pooling of interests. All financial information has been restated to include amounts for Summit Federal, based on historical costs, for all periods presented.

 

In connection with the Summit Federal merger, Investors Bancorp, Inc. issued 1,744,592 additional shares of its common stock to the MHC, based on the pro forma market value of $25.0 million for Summit Federal and the average closing price of a share of Investors Bancorp, Inc.’s common stock, as reported on the NASDAQ Stock Market, for twenty (20) consecutive trading days ending on June 4, 2008. As of December 31, 2008, the MHC held 64,844,373 shares, or 59.46% of Investors Bancorp, Inc.’s outstanding common stock.

 

Since the formation of Investors Bancorp, Inc., in 1997, our primary business has been that of holding the common stock of Investors Savings Bank and since our stock offering, a loan to the ESOP. Investors Bancorp, Inc., as the holding company of Investors Savings Bank, is authorized to pursue other business activities permitted by applicable laws and regulations for bank holding companies.

 

Our cash flow depends on dividends received from Investors Savings Bank. Investors Bancorp, Inc. neither owns nor leases any property, but instead uses the premises, equipment and furniture of Investors Savings Bank. At the present time, we employ as officers only certain persons who are also officers of

Investors Savings Bank and we use the support staff of Investors Savings Bank from time to time. These persons are not separately compensated by Investors Bancorp, Inc. Investors Bancorp, Inc. may hire additional employees, as appropriate, to the extent it expands its business in the future.

 

Investors Savings Bank is a New Jersey-chartered savings bank headquartered in Short Hills, New Jersey. Originally founded in 1926 as a New Jersey-chartered mutual savings and loan association, we have grown through acquisitions and internal growth, including de novo branching. In 1992, we converted our charter to a mutual savings bank, and in 1997 we converted our charter to a New Jersey-chartered stock savings bank. We conduct business from our main office located at 101 JFK Parkway, Short Hills, New Jersey, and with the addition of Summit Federal, 52 branch offices located in Essex, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Somerset, Union and Warren Counties, New Jersey. The telephone number at our main office is (973) 924-5100. At December 31, 2008, our assets totaled $7.2 billion and our deposits totaled $4.2 billion.

 

We are in the business of attracting deposits from the public through our branch network and borrowing funds in the wholesale markets to originate loans and to invest in securities. We originate mortgage loans secured by one-to-four-family residential real estate and consumer loans, the majority of which are home equity loans and home equity lines of credit. In recent years, we expanded our lending activities to include commercial real estate, construction, multi-family loans and more recently commercial and industrial loans. Securities, primarily U.S. Government and Federal Agency obligations, mortgage-backed and other securities represent a large but declining percentage of our assets. We offer a variety of deposit accounts and emphasize exceptional customer service. Investors Savings Bank is subject to comprehensive regulation and examination by both the New Jersey Department of Banking and Insurance and the Federal Deposit Insurance Corporation and we are subject to regulations as a bank holding company by the Federal Reserve Board.

 

Investors Bancorp, Inc. maintains a website at www.isbnj.com. Its annual reports on Form 10-K, quarterly reports on From 10-Q, current reports on Form 8-K, and all amendments to those reports, are made available, free of charge, through the Investor Relations portion of our website, as soon as reasonably practicable after it electronically file them or furnish them to the Securities and Exchange Commission. You may also obtain copies, without charge, by writing to our Investor Relations Department, 101 JFK Parkway, Short Hills, New Jersey 07078.

 

The principal executive office of Investors Bancorp, Inc. is located at 101 JFK Parkway, Short Hills, New Jersey 07078, and the telephone number is (973) 924-5100.

 

American Bancorp of New Jersey, Inc.

 

American Bank of New Jersey

 

On October 5, 2005, American Savings, MHC (the “American MHC”) completed its reorganization into stock form and American Bancorp of New Jersey, Inc. succeeded to the business of ASB Holding Company, the American MHC’s former stock holding company subsidiary. Each outstanding share of common stock of the former mid-tier stock holding company (other than shares held by the American MHC which were canceled) was converted into 2.55102 shares of common stock of American Bancorp of New Jersey, Inc. As part of the second-step mutual to stock conversion transaction, American Bancorp of New Jersey, Inc. sold a total of 9,918,750 shares to eligible depositors of American Bank of New Jersey and others in a subscription offering at $10.00 per share, including 793,500 shares purchased by American Bank of New Jersey’s employee stock ownership plan with funds borrowed from American Bancorp of New Jersey, Inc.

 

American Bancorp of New Jersey, Inc is a New Jersey corporation that was incorporated in May 2005 for the purpose of being a holding company for American Bank of New Jersey, a federally-chartered stock savings bank. American Bancorp of New Jersey, Inc. is a unitary savings and loan holding company and conducts no significant business or operations of its own. References to American Bancorp of New Jersey, Inc. generally

refer to the consolidated entity, which includes American Bank of New Jersey, unless the context indicates otherwise.

 

American Bank of New Jersey was originally founded in 1919 as the American-Polish Building & Loan Association of Bloomfield, New Jersey. It became a state-chartered savings and loan association in 1948 and converted to a federally chartered savings bank in 1995. American Bank of New Jersey’s deposits are insured by the Federal Deposit Insurance Corporation up to the maximum amount permitted by law. American Bank of New Jersey is regulated by the Office of Thrift Supervision and the Federal Deposit Insurance Corporation. As of December 31, 2008, American Bank of New Jersey had total assets of $628.8 million, total deposits of $459.2 million and total loans of $491.4 million.

 

Our core business is using retail deposits in order to fund a variety of mortgage and consumer loan products. We operate as a traditional community bank, offering retail banking services, one-to-four-family residential mortgage loans, including first mortgages, home equity loans and lines of credit, commercial loans, including multi-family and non-residential mortgage loans, construction loans and business loans and lines of credit, as well as consumer loans. We also invest in mortgage-related securities, including mortgage-backed pass through securities and collateralized mortgage obligations, and other investment securities. The principal source of funds for our lending and investing activities is retail deposits, supplemented with Federal Home Loan Bank advances and other borrowings.

 

Our results of operations depend primarily on our net interest income. Net interest income is the difference between the interest income we earn on our interest-earning assets and the interest we pay on interest-bearing liabilities. It is a function of the average balances of loans and investments versus deposits and borrowed funds outstanding in any one period and the yields earned on those loans and investments and the cost of those deposits and borrowed funds. Our interest-earning assets consist primarily of one-to-four-family residential mortgage loans, commercial loans and consumer loans, as well as residential mortgage-related securities and U.S. Agency debentures. Interest-bearing liabilities consist primarily of retail deposits and borrowings.

 

American Bancorp of New Jersey, Inc. maintains a website at www.americansavingsnj2.com. American Bancorp of New Jersey, Inc. makes available through its website, free of charge, its annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after these reports are electronically filed with or furnished to the Securities and Exchange Commission. These reports can be accessed at American Bancorp of New Jersey, Inc.’s website by clicking on “SEC Filings.” Copies of these reports can also be obtained, free of charge, by written request to American Bancorp of New Jersey, Inc.’s Investor Relations Department, 365 Broad Street, Bloomfield, New Jersey 07003-2798.

 

Under the terms of the merger agreement, each outstanding share of American Bancorp of New Jersey, Inc. common stock (other than dissenting shares) will be given the opportunity to convert into the right to receive either:

 

 

Stockholders of American Bancorp of New Jersey, Inc. may elect to receive all cash, all Investors Bancorp, Inc. common stock, or a combination of both for their American Bancorp of New Jersey, Inc. common stock. No fractional shares of Investors Bancorp, Inc. will be issued in connection with the merger. Instead, Investors Bancorp, Inc. will make a cash payment to each American Bancorp of New Jersey, Inc. stockholder who would otherwise receive a fractional share. Each share of American Bancorp of New Jersey, Inc. common stock that is exchanged for Investors Bancorp, Inc. common stock would be converted into

0.9218 shares of Investors Bancorp, Inc. common stock. Based upon the closing price of Investors Bancorp, Inc. on April 3, 2009 of $8.60, each 0.9218 shares of Investors Bancorp, Inc. would have a value of $7.93.

 

It is possible that the consideration may be adjusted prior to the effective date of the merger. The merger agreement provides that if the average closing price of Investors Bancorp, Inc. common stock during the five consecutive trading days immediately preceding the first date on which all bank regulatory approvals (and waivers, if applicable) necessary for consummation of the merger have been received (disregarding any waiting period) is less than $9.49 and Investors Bancorp, Inc.’s common stock has under-performed the SNL Thrift index of financial institutions by more than 30% during the five day period after all bank regulatory approvals necessary for consummation of the merger are received compared to a measurement period prior to the announcement of the merger agreement, then American Bancorp of New Jersey, Inc. may elect to terminate the merger agreement unless Investors Bancorp, Inc. elects to increase the merger consideration. See “The Proposed Merger — Termination; Amendment; Waiver.” If under these circumstances, Investors Bancorp, Inc. elected to increase the merger consideration, it would have the option of paying the additional merger consideration by adjusting the exchange ratio of 0.9218 (“Exchange Ratio”) to one of the following quotients at its sole discretion: (i) a quotient, the numerator of which is equal to the product of the initial Investors market value of $13.56 (“Initial Investor Market Value”), the Exchange Ratio (as then in effect), and the Index Ratio minus 0.30, and the denominator of which is equal to the average of the daily closing sales prices of a share of Investors Bancorp, Inc. common stock for the five consecutive trading days immediately preceding the first date on which all regulatory approvals (and waivers, if applicable) necessary for consummation of the merger have been received (disregarding any waiting period) (“Determination Date”) (“Investors Market Value”); or (ii) the quotient determined by dividing the Initial Investors Market Value by the Investors Market Value on the Determination Date, and multiplying the quotient by the product of the Exchange Ratio (as then in effect) and 0.70.

 

Please note that approval by American Bancorp of New Jersey, Inc. stockholders authorize its Board of Directors to terminate the merger agreement or proceed therewith at its sole discretion. If the Board of Directors of American Bancorp of New Jersey, Inc. terminates the merger agreement pursuant to this provision, Investors Bancorp, Inc. may increase the merger consideration pursuant to this prescribed formula and compel American Bancorp of New Jersey, Inc. to complete the merger.

 

Stockholders of American Bancorp of New Jersey, Inc. will have the opportunity to elect the form of consideration to be received for shares of American Bancorp of New Jersey, Inc., subject to allocation procedures set forth in the merger agreement which are intended to ensure that 65% of the outstanding shares of American Bancorp of New Jersey, Inc. common stock will be converted into the right to receive shares of Investors Bancorp, Inc. common stock and the remaining 35% of the outstanding shares of American Bancorp of New Jersey, Inc. common stock will be converted into the right to receive cash. In the event that by May 31, 2009, Investors Bancorp, Inc. has not received the required regulatory approvals to issue shares of Investors Bancorp, Inc. common stock in the merger, Investors Bancorp, Inc. may elect to proceed with the merger on an all cash basis and merge a newly created merger subsidiary with and into American Bancorp of New Jersey, Inc.

 

It is unlikely that elections will be made in the exact proportions provided for in the merger agreement. As a result, the merger agreement describes procedures to be followed if American Bancorp of New Jersey, Inc. stockholders in the aggregate elect to receive more or less of the Investors Bancorp, Inc. common stock than Investors Bancorp, Inc. has agreed to issue. These procedures are summarized below.

 

 

 

Notwithstanding these allocation procedures, in order for the transaction to qualify as a tax-free reorganization, the allocation of the consideration may also be adjusted if the aggregate value of the Investors Bancorp, Inc. common stock to be delivered as of the effective time of the merger minus the amount of cash paid in lieu of fractional shares of Investors Bancorp, Inc. common stock (the “Stock Value”) is less than 42.5% of the sum of (i) the aggregate value of the Investors Bancorp, Inc. common stock and cash to be delivered as of the effective time of the merger, plus (ii) the value of any consideration described in Treasury Regulations Section 1.368-1(e)(1)(ii), plus (iii) cash paid to holders of dissenting shares, plus (iv) the value of any consideration paid by Investors Bancorp, Inc. or any of its subsidiaries (or any “related person” of either within the meaning of Treasury Regulations Section 1.368-1(e)(3)) to acquire shares of American Bancorp of New Jersey, Inc. common stock prior to the effective time of the merger (such sum, the “Aggregate Value”), then Investors Bancorp, Inc. may reduce the number of shares of outstanding American Bancorp of New Jersey, Inc. common stock entitled to receive cash, and correspondingly increase the number of shares of American Bancorp of New Jersey, Inc. common stock entitled to receive Investors Bancorp, Inc. common stock by the minimum amount necessary to cause the Stock Value to equal 42.5% of the Aggregate Value.

 

No guarantee can be made that you will receive the amounts of cash or stock you elect. As a result of the allocation procedures and other limitations outlined in this document and in the merger agreement, you may

receive Investors Bancorp, Inc. common stock or cash in amounts that vary from the amounts you elect to receive.

 

American Bancorp of New Jersey, Inc. is not making any recommendation as to whether American Bancorp of New Jersey, Inc. stockholders should elect to receive cash or Investors Bancorp, Inc. common stock in the merger. Each American Bancorp of New Jersey, Inc. stockholder must make his or her own decision with respect to such election.

 

An election form will be provided to you under separate cover. The election form entitles the record holder of American Bancorp of New Jersey, Inc. common stock to elect to receive cash, Investors Bancorp, Inc. common stock, or a combination of cash and stock, or make no election with respect to the merger consideration you wish to receive.

 

To make an effective election, a stockholder of record must submit a properly completed election form to Registrar & Transfer Company on or before 5:00 p.m., New York time, on May 18, 2009. Registrar & Transfer Company will act as exchange agent in the merger and in that role will process the exchange of American Bancorp of New Jersey, Inc. common stock certificates for cash and/or Investors Bancorp, Inc. common stock. Shortly after the merger, the exchange agent will allocate cash and stock among American Bancorp of New Jersey, Inc. stockholders, consistent with their elections and the allocation and proration procedures. If you do not submit an election form, you will receive instructions from the exchange agent on where to surrender your American Bancorp of New Jersey, Inc. stock certificates after the merger is completed. Please do not forward your American Bancorp of New Jersey, Inc. stock certificates and election form with your proxy cards. Stock certificates and election forms should be returned to the exchange agent in accordance with the instructions contained in the election form.

 

An election form will be deemed properly completed only if accompanied by stock certificates representing all shares of American Bancorp of New Jersey, Inc. common stock covered by the election form (or an appropriate guarantee of delivery). You may change your election at any time prior to the election deadline by written notice accompanied by a properly completed and signed, revised election form received by the exchange agent prior to the election deadline. You may revoke your election by written notice received by the exchange agent prior to the election deadline. All elections will be revoked automatically if the merger agreement is terminated. If you have a preference for receiving either Investors Bancorp, Inc. common stock and/or cash for your American Bancorp of New Jersey, Inc. common stock, you should complete and return the election form. If you do not make an election, you will be allocated Investors Bancorp, Inc. common stock and/or cash depending on the elections made by other stockholders.

 

If stock certificates for American Bancorp of New Jersey, Inc. common stock are not immediately available or time will not permit the election form and other required documents to reach the exchange agent prior to the election deadline, American Bancorp of New Jersey, Inc. shares may be properly exchanged provided that:

 

1. such exchanges are made by or through a member firm of the Financial Industry Regulatory Authority or another registered national securities exchange, or by a commercial bank or trust company having an office, branch or agency in the United States;

 

2. the exchange agent receives, prior to the election deadline, a properly completed and duly executed notice of guaranteed delivery substantially in the form provided with the election form (delivered by hand, mail, telegram, telex or facsimile transmission); and

 

3. the exchange agent receives by the election deadline, the certificates for all exchanged American Bancorp of New Jersey, Inc. shares, or confirmation of the delivery of all such certificates into the exchange agent’s account with the Depository Trust Company in accordance with the proper procedures for such transfer, together with a properly completed and duly executed election form and any other documents required by the election form.

American Bancorp of New Jersey, Inc. stockholders who do not submit a properly completed election form or revoke their election form prior to the election deadline will have their shares of American Bancorp of New Jersey, Inc. common stock designated as non-election shares. American Bancorp of New Jersey, Inc. stock certificates represented by elections that have been revoked will be returned without charge.

 

American Bancorp of New Jersey, Inc. stockholders who hold their shares of common stock in “street name” through a bank, broker or other financial institution, and who wish to make an election, should seek instructions from the institution holding their shares concerning how to make the election.

 

Investors Bancorp, Inc. will deposit with the exchange agent the certificates representing Investors Bancorp, Inc.’s common stock and cash to be issued to American Bancorp of New Jersey, Inc. stockholders in exchange for American Bancorp of New Jersey, Inc.’s common stock. Within five business days after the completion of the merger, the exchange agent will mail to American Bancorp of New Jersey, Inc. stockholders who do not submit election forms or who have revoked such forms a letter of transmittal, together with instructions for the exchange of their American Bancorp of New Jersey, Inc. stock certificates for the merger consideration. Upon surrendering his or her certificate(s) representing shares of American Bancorp of New Jersey, Inc.’s common stock, together with the signed letter of transmittal, the American Bancorp of New Jersey, Inc. stockholder shall be entitled to receive, as applicable (i) certificate(s) representing a number of whole shares of Investors Bancorp, Inc. common stock (if any) determined in accordance with the exchange ratio or, (ii) a check representing the amount of cash (if any) to which such holder shall have become entitled to and (iii) a check representing the amount of cash in lieu of fractional shares, if any. Until you surrender your American Bancorp of New Jersey, Inc. stock certificates for exchange after completion of the merger, you will not be paid dividends or other distributions declared after the merger with respect to any Investors Bancorp, Inc. common stock into which your shares have been converted. No interest will be paid or accrued to American Bancorp of New Jersey, Inc. stockholders on the cash consideration, cash in lieu of fractional shares or unpaid dividends and distributions, if any. After the completion of the merger, there will be no further transfers of common stock. American Bancorp of New Jersey, Inc. stock certificates presented for transfer will be canceled and exchanged for the merger consideration.

 

If your stock certificates have been lost, stolen or destroyed, you will have to prove your ownership of these certificates and that they were lost, stolen or destroyed before you receive any consideration for your shares. Upon request, the exchange agent will send you instructions on how to provide evidence of ownership.

 

If any certificate representing shares of Investors Bancorp, Inc.’s common stock is to be issued in a name other than that in which the certificate for shares surrendered in exchange is registered, or cash is to be paid to a person other than the registered holder, it will be a condition of issuance or payment that the certificate so surrendered be properly endorsed or otherwise be in proper form for transfer and that the person requesting the exchange either:

 

 

Any portion of the purchase price made available to the exchange agent that remains unclaimed by American Bancorp of New Jersey, Inc. stockholders for six months after the effective time of the merger will be returned to Investors Bancorp, Inc.’s transfer agent. Any American Bancorp of New Jersey, Inc. stockholder who has not exchanged shares of American Bancorp of New Jersey, Inc.’s common stock for the purchase price in accordance with the merger agreement before that time may look only to Investors Bancorp, Inc. for payment of the purchase price for these shares and any unpaid dividends or distributions after that time. Nonetheless, Investors Bancorp, Inc., American Bancorp of New Jersey, Inc., the exchange agent or any other person will not be liable to any American Bancorp of New Jersey, Inc. stockholder for any amount properly delivered to a public official under applicable abandoned property, escheat or similar laws.

 

In accordance with the merger agreement, American Bancorp of New Jersey, Inc. shall terminate its stock option plans prior to the effective time of the merger, and each option to purchase shares of American Bancorp of New Jersey, Inc. common stock outstanding and unexercised immediately prior to the effective time of the merger will become vested, to the extent not already vested, and immediately exercisable. At the effective time of the merger, each holder of an option to purchase shares of American Bancorp of New Jersey, Inc. common stock will receive a cash payment equal to $12.50 less the exercise price per share of the stock option, multiplied by the number of shares of American Bancorp of New Jersey, Inc. common stock subject to the stock option, less any required tax withholding. Prior to the effective time of the merger, American Bancorp of New Jersey, Inc. shall obtain the written consent of each option holder to the cancellation of the American Bancorp of New Jersey, Inc. options in exchange for the cash option payment.

 

In accordance with the restricted stock plans of American Bancorp of New Jersey, Inc., all outstanding shares of American Bancorp of New Jersey, Inc., restricted stock that are not vested at the time of the merger will become vested in full, and each holder of restricted stock of American Bancorp of New Jersey, Inc. will be entitled to receive the merger consideration in exchange therefore, on the same basis as all other shares of American Bancorp of New Jersey, Inc. common stock.

 

Investors Bancorp, Inc. will be entitled to deduct and withhold from the consideration otherwise payable pursuant to the merger agreement to any American Bancorp of New Jersey, Inc. stockholder any amount that Investors Bancorp, Inc. is required to deduct and withhold under any provision of federal, state, local or foreign tax law. Any withheld amounts will be treated for all purposes of the merger agreement as having been paid to the American Bancorp of New Jersey, Inc. stockholder in respect of which the deduction and withholding were made by Investors Bancorp, Inc.

 

From time to time over the last few years, the Board of Directors of American Bancorp of New Jersey, Inc. received updates from various industry professionals on the state of the bank and thrift equity market as well as the merger and acquisition market. Since its second-step conversion and offering of common stock in October 2005, American Bancorp of New Jersey, Inc. has embarked on a plan to enhance shareholder value by further developing its retail franchise. In this regard, American Bancorp of New Jersey, Inc. added three branches over the last three years and grew assets from $517 million at the completion of the second-step offering to $622 million as of September 30, 2008. Further, American Bancorp of New Jersey, Inc. also paid a regularly quarterly dividend of $0.04 per share to $0.05 per share since its second-step offering and has repurchased 3,678,673 shares of common stock at a weighted average price of $11.38 for a total cash outlay of $41.8 million. Partially as a result of the costs of opening the three new branch offices, American Bancorp of New Jersey, Inc.’s earnings remained below its peers, with a return on average assets of 0.21% for the fiscal year ended September 30, 2008, compared to a median return on average assets of 0.30% for a peer group of publicly traded Mid-Atlantic thrifts between $250 million and $750 million in assets. In addition, notwithstanding its stock repurchase program and common stock dividend, the trading price of American Bancorp of New Jersey, Inc.’s common stock increased from $10.16 per share at October 6, 2005, the closing price on the first day of trading following American Bancorp of New Jersey, Inc.’s second-step conversion, to $10.30 per share at September 30, 2008. The Board of Directors of American Bancorp of New Jersey, Inc. felt it prudent to explore a strategic alliance as a way to further enhance shareholder value.

 

On September 12, 2008, representatives of Keefe Bruyette & Woods met with the Board of Directors of American Bancorp of New Jersey, Inc. to review alternative strategic directions, including remaining independent and seeking a possible strategic affiliation with another entity. Discussions included: (1) an analysis of the current banking market; (2) valuation of American Bancorp of New Jersey, Inc. stock; and (3) detailed pro forma analyses examining multiple strategic partners. Keefe Bruyette & Woods met again with the Board of Directors of American Bancorp of New Jersey, Inc. on October 8, 2008 to further assess the benefit to shareholders of a strategic partnership. Discussions at this meeting included: (1) process and timing of a transaction; (2) examination of historic comparable transaction pricing; (3) identification of potential

aquirors and their ability to pay; and (4) financial detail on potential strategic partners. All of these issues were analyzed in conjunction with American Bancorp of New Jersey, Inc.’s goal to continue to increase shareholder value. On October 8, 2008, American Bancorp of New Jersey, Inc. officially engaged Keefe Bruyette & Woods to provide investment banking services in connection with exploring a possible strategic alliance.

 

Keefe Bruyette & Woods, working with American Bancorp of New Jersey, Inc., prepared financial and operating information about American Bancorp of New Jersey, Inc. In mid-October, 2008, Keefe Bruyette & Woods, on behalf of American Bancorp of New Jersey, Inc., began a confidential inquiry and contacted 12 potential candidates. Five of those candidates executed confidentiality agreements, including Investors Bancorp, Inc., and received the information package. In late October, two financial institutions submitted preliminary, non-binding indications of interest to acquire American Bancorp of New Jersey, Inc. Following receipt of the preliminary indications of interest, on November 5, 2008, Keefe Bruyette & Woods reviewed with the Board of Directors of American Bancorp of New Jersey, Inc. the pricing and terms of each proposal. After discussing the proposals, the Board of Directors of American Bancorp of New Jersey, Inc. invited both parties to conduct further due diligence to allow each to refine or strengthen its proposal. The potential acquirors were given access to additional information and management of American Bancorp of New Jersey, Inc. met with both parties to answer questions about the operations of American Bancorp of New Jersey, Inc.

 

In a letter dated December 2, 2008, Investors Bancorp, Inc. confirmed its interest in a merger with American Bancorp of New Jersey, Inc. at $12.50 per share, stating that the consideration would be a mixture of cash and stock, the mix of which was to be discussed further to ensure maximum benefit to both parties’ shareholders. Circumstances in the market over the due diligence period negatively impacted the other party’s stock price and consequently its ability to submit a competitive proposal, and no revised bid was submitted. On December 5, 2008, the Board of Directors of American Bancorp of New Jersey, Inc. met to consider the Investors Bancorp, Inc. proposal. At that meeting, the Board was informed by Keefe Bruyette & Woods that it had been informally contacted by a third institution that had not elected to conduct due diligence or submit a preliminary indication of interest. This third party indicated an interest in considering a merger at $10.00 per share. The Board determined not to take any action with regard to this third party. Keefe Bruyette & Woods then made a detailed presentation to the American Bancorp of New Jersey, Inc. Board regarding the Investors Bancorp, Inc. proposal. The Board voted to proceed with its due diligence of and negotiation of a definitive merger agreement with Investors Bancorp, Inc., but stated that if another party submitted a competitive bid before a definitive merger agreement is executed, the Board would consider the proposal.

 

On December 12, 2008, the American Bancorp of New Jersey, Inc. board met with Keefe Bruyette & Woods and American Bancorp of New Jersey, Inc.’s legal counsel. Approximately three days prior to this meeting, a preliminary draft of the merger agreement was distributed to the Board of Directors of American Bancorp of New Jersey, Inc. for its review.

 

At the December 12 meeting, legal counsel reviewed the merger agreement with the Board, highlighting the changes that had been made to the draft initially sent to the Board. Counsel reviewed with the Board the deal structure and timing, discussed the representations, warranties, covenants and responsibilities of the parties, discussed the provisions related to the treatment of employees of American Bancorp of New Jersey, Inc. and American Bank of New Jersey and the conditions to approval of the agreement. Counsel also specifically discussed the definition of material adverse effect and its import on the transaction given the significant volatility in the banking industry and the market for bank and bank holding company stocks. The Board asked numerous questions of counsel, including the mechanics of American Bancorp of New Jersey’s ability to terminate the agreement if the provisions of the double trigger walk away were met, and counsel explained the reasons for and the functioning of this provision. Counsel also explained the Board’s fiduciary responsibilities in the event a superior proposal is received, and how the provisions of the agreement work to allow the Board to fulfill its fiduciary responsibilities. Lastly, counsel informed the Board that the final details of the merger agreement were still being negotiated, and were expected to be completed within 36 hours.

 

Keefe Bruyette & Woods then discussed with the Board the results of American Bancorp of New Jersey, Inc.’s due diligence investigation of Investors Bancorp, Inc. Management of American Bancorp of New Jersey,

Inc. joined in this discussion, as senior management participated in the due diligence investigation. Both Keefe Bruyette & Woods and senior management of American Bancorp of New Jersey, Inc. advised the Board that nothing was discovered that would cause Keefe Bruyette & Woods or management to recommend against proceeding with the transaction.

 

Keefe Bruyette & Woods then gave an updated financial analysis of the proposed merger and delivered its oral opinion that, as of that date, the merger consideration to be received by the holders of American Bancorp of New Jersey, Inc. common stock was fair to such holders from a financial point of view.

 

The Board then adjourned the meeting without taking any action, pending final completion of the merger agreement.

 

The Board of Directors of American Bancorp of New Jersey, Inc. met again on December 14, 2008. At this meeting, counsel discussed the final changes to the merger agreement and Keefe Bruyette & Woods delivered its updated fairness opinion. The Board voted unanimously to authorize the execution of the merger agreement and related documents. In reaching its decision to approve and adopt the merger agreement and recommend that American Bancorp of New Jersey, Inc. stockholders adopt the merger agreement, the American Bancorp of New Jersey, Inc. Board of Directors consulted with American Bancorp of New Jersey, Inc.’s management, as well as its financial and legal advisors, and considered a number of factors, including:

 

 

 

Given the significant volatility in the stock market, particularly as it relates to financial services companies, the parties agreed to increase the aggregate amount of cash consideration that will be paid to the stockholders of American Bancorp of New Jersey, Inc. from 30% to 35% of the total merger consideration. In addition, and in conjunction with the above, the provision enabling American Bancorp of New Jersey, Inc. to terminate the merger in the event the price of Investors Bancorp, Inc.’s stock declines and declines by more than the decline in a peer group index, as well as the formula that Investors Bancorp, Inc. can use to increase the merger consideration under certain circumstances, were also revised. Under the amended merger agreement, American Bancorp of New Jersey, Inc. may terminate the merger agreement if Investors Bancorp, Inc. stock price declines by more than 30% from $13.56 and this decline is more than 30% greater than the decline in the SNL Thrift Index.

 

The foregoing discussion of the information and factors considered by the Board of Directors of American Bancorp of New Jersey, Inc. is not intended to be exhaustive, but constitutes the material factors considered by the Board. In reaching its determination to approve and recommend the merger agreement, the Board did not assign any relative or specific weights to the foregoing factors, and individual directors may have weighed factors differently. The terms of the merger agreement were the product of arm’s length negotiations between representatives of American Bancorp of New Jersey, Inc. and Investors Bancorp, Inc.

 

On December 12, 2008, the Board of Directors of Investors Bancorp, Inc. held a meeting for the purpose of approving the proposed merger.

On December 14, 2008, the Agreement and Plan of Merger by and between Investors Bancorp, Inc. and American Bancorp of New Jersey, Inc. was executed.

 

On December 15, 2008, a joint press release of Investors Bancorp, Inc. and American Bancorp of New Jersey, Inc. was issued publicly announcing the merger transaction.

 

On February 24, 2009, March 6, March 10 and March 13, 2009, the Board of Directors of American Bancorp of New Jersey, Inc. met to consider requesting Investors Bancorp, Inc. to increase the cash portion of the merger consideration. The provisions of the amended merger agreement were negotiated during this period and on March 13, 2009 the amended merger agreement was adopted, effective as of March 9, 2009, the date the revised terms of the amendment were agreed upon by the parties.

 

American Bancorp of New Jersey, Inc.’s Board of Directors reviewed and discussed the merger with American Bancorp of New Jersey, Inc.’s management and its outside legal and financial advisors in determining that the merger is fair to, and in the best interests of, American Bancorp of New Jersey, Inc. and its stockholders. In reaching its conclusion to adopt the merger agreement, the American Bancorp of New Jersey, Inc. board of directors considered a number of factors, including, among others, the following factors that supported a decision to proceed with the merger:

 

 

FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS OF AMERICAN BANCORP OF NEW JERSEY, INC. HAS APPROVED AND ADOPTED THE MERGER AGREEMENT AS ADVISABLE AND IN THE BEST INTERESTS OF AMERICAN BANCORP OF NEW JERSEY, INC. AND ITS STOCKHOLDERS AND RECOMMENDS THAT THE STOCKHOLDERS OF AMERICAN BANCORP OF NEW JERSEY. INC. VOTE FOR THE ADOPTION OF THE MERGER AGREEMENT.

 

THE COMPLETE TEXT OF THE KEEFE BRUYETTE & WOODS, INC. WRITTEN OPINION THAT WAS DELIVERED TO THE AMERICAN BANCORP OF NEW JERSEY, INC. BOARD OF DIRECTORS IS INCLUDED AS APPENDIX B TO THIS PROXY STATEMENT-PROSPECTUS. AMERICAN BANCORP OF NEW JERSEY, INC. STOCKHOLDERS ARE URGED TO READ THE KEEFE BRUYETTE & WOODS, INC. OPINION IN ITS ENTIRETY.

The American Bancorp of New Jersey, Inc. board of directors also considered several factors that did not support a decision to proceed with the merger, including, among others, the following:

 

 

The American Bancorp of New Jersey, Inc. board of directors determined that the factors supporting the merger were substantially more persuasive than the factors not supporting the merger.

 

The discussion of the information and factors considered by the American Bancorp of New Jersey, Inc. board of directors is not exhaustive, but includes all material factors considered by the American Bancorp of New Jersey, Inc. Board of Directors. The American Bancorp of New Jersey, Inc. Board of Directors evaluated the factors described above, including asking questions of American Bancorp of New Jersey’s management and American Bancorp of New Jersey, Inc.’s legal and financial advisors, and reached the unanimous decision that the merger was in the best interests of American Bancorp of New Jersey, Inc. and its stockholders. The American Bancorp of New Jersey, Inc. Board of Directors considered these factors as a whole, and overall considered them to be favorable to, and to support its determination. It should be noted that this explanation of the American Bancorp of New Jersey, Inc. Board’s reasoning and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the heading “Forward-Looking Statements.”

 

The American Bancorp of New Jersey, Inc. Board of Directors determined that the merger, the merger agreement and the transactions contemplated thereby are advisable, fair to and in the best interests of American Bancorp of New Jersey, Inc. and its stockholders. Accordingly, the American Bancorp of New Jersey, Inc. Board of Directors unanimously approved the merger agreement and unanimously recommends that American Bancorp of New Jersey, Inc. stockholders vote “FOR” the adoption of the merger agreement.

 

On the basis of these considerations, the merger agreement was unanimously approved by American Bancorp of New Jersey, Inc.’s Board of Directors.

 

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS ADOPTION OF THE AGREEMENT AND PLAN OF MERGER BY THE STOCKHOLDERS OF AMERICAN BANCORP OF NEW JERSEY, INC.

 

On October 8, 2008, Keefe Bruyette & Woods, Inc. was retained by American Bancorp of New Jersey, Inc. to evaluate American Bancorp of New Jersey’s strategic alternatives and to evaluate any specific proposals that might be received regarding a business combination involving American Bancorp of New Jersey. Keefe Bruyette & Woods, Inc., as part of its investment banking business, is regularly engaged in the evaluation of businesses and securities in connection with mergers and acquisitions, negotiated underwritings, and distributions of listed and unlisted securities. The Board of Directors of American Bancorp of New Jersey, Inc. selected Keefe Bruyette & Woods, Inc. on the basis of the firm’s reputation and its experience and expertise in transactions similar to the merger.

 

Pursuant to its engagement, Keefe Bruyette & Woods, Inc. was asked to render an opinion as to the fairness, from a financial point of view, of the merger consideration to shareholders of American Bancorp of New Jersey, Inc. Keefe Bruyette & Woods, Inc. delivered its opinion to the Board of Directors of American

Bancorp of New Jersey, Inc. that, as of December 14, 2008 the merger consideration is fair, from a financial point of view, to the shareholders of American Bancorp of New Jersey, Inc. No limitations were imposed by the Board of Directors of American Bancorp of New Jersey, Inc. upon Keefe Bruyette & Woods, Inc. with respect to the investigations made or procedures followed by it in rendering its opinion. Keefe Bruyette & Woods, Inc. has consented to the inclusion herein of the summary of its opinion to the American Bancorp of New Jersey, Inc. board of directors and to the reference to the entire opinion attached hereto as Appendix B.

 

The full text of the opinion of Keefe Bruyette & Woods, Inc., which is attached as Appendix B of this Proxy Statement, sets forth certain assumptions made, matters considered and limitations on the review undertaken by Keefe Bruyette & Woods, Inc., and should be read in its entirety. The summary of the opinion of Keefe Bruyette & Woods, Inc. set forth in this Proxy Statement is qualified in its entirety by reference to the opinion.

 

In connection with its opinion Keefe Bruyette & Woods, Inc. reviewed certain financial and other business data, including:

 

(i) the Agreement and Plan of Merger;

 

(ii) Certain publicly available information concerning American Bancorp of New Jersey, Inc., including Annual Reports for the years ended September 30, 2008, 2007 and 2006, 10-Q reports for the quarters ended June 30, 2008, March 31, 2008, December 31, 2007 and June 30, 2007;

 

(iii) Certain publicly available information concerning Investors Bancorp, Inc., including Annual Reports for the years ended June 30, 2008, 2007 and 2006, 10-Q reports for the quarters ended September 30, 2008, March 31, 2008, December 31, 2007 and September 30, 2007;

 

(iv) and other information Keefe Bruyette & Woods, Inc. deemed relevant.

 

Keefe Bruyette & Woods, Inc. also discussed with senior management and directors of American Bancorp of New Jersey, Inc. the current position and prospective outlook for American Bancorp of New Jersey, Inc. Keefe Bruyette & Woods, Inc. reviewed financial and stock market data of other thrifts and the financial and structural terms of several other recent transactions involving mergers and acquisitions of thrifts or proposed changes of control of comparably situated companies.

 

Analysis of Recent Comparable Acquisition Transactions

 

In rendering its opinion, Keefe Bruyette & Woods, Inc. analyzed two sets of comparable merger and acquisition transactions: Recent Thrift Transactions of Comparably Profitable Companies and Recent Thrift Transactions of Comparable Size.

 

Comparable Transactions by Profitability

 

Keefe Bruyette & Woods, Inc. analyzed certain comparable merger and acquisition transactions of both pending and completed thrift deals, comparing the acquisition price relative to tangible book value, last twelve months earnings, and premium to core deposits. All comparative metrics were as of each respective deal’s announcement date. The analysis included a comparison of the minimum, median and maximum of the above ratios for pending and completed acquisitions where the seller was a thrift and pricing metrics were available, based on the following three criteria:

 

(i) Deal is pending or was completed on or after September 30, 2007;

 

(ii) Target had assets less than $1.0 billion at announcement; and

 

(iii) Target had a Return on Average Assets Ratio between 0.2% and 1.0% at announcement.

The selected comparable transactions that the three criteria produced were as follows: