Investors Bank’s Plan for Growth
About nine years ago right around St. Patrick’s Day, Kevin Cummings did something he always told people he mentored never to do.
“I changed my career because I took a call from a headhunter,” he said.
Mr. Cummings, who had spent 26 years at the independent accounting firm KPMG LLP, was asked if he could refer anyone for a chief operating officer position at Investors Savings Bank. Familiar as he was with the bank—it was one of his clients during his time as an audit partner in KPMG’s financial services practice and in the New Jersey community bank practice—he decided the best candidate he could nominate would be himself.
After the events of 9/11 and reflecting on his career, which included 14 years as a partner at KPMG, he had an epiphany.
“My attitude changed, and I thought going to a smaller organization where you can be more of an impact player and spend more time working in the community would be the right move,” he said recently at the bank’s Short Hills, N.J. headquarters.
This year, Mr. Cummings was celebrating again on St. Patrick’s Day—this time as the grand marshal of Newark’s parade, part of his latest step in an effort to transform a small community bank into one of the biggest players in the region.
Investors Bank, founded in 1926, has long been a staple in many New Jersey towns and communities. But when Mr. Cummings rose from COO to president and CEO of the bank in 2008, he had hopes for something more.
So far, the bank’s long-standing role has performed well—it has expanded from 46 branches to 87 branches, from more than $1 billion in core deposits to more than $4 billion today.
However, the bank was still primarily a residential lender, and following its 2005 IPO and a few personal changes, Investors entered the commercial real estate market, albeit in an inauspicious debut.
“Well I had black hair,” Mr. Cummings said with a laugh as he pointed to his hair today, more of a light gray.
Between 2006 and 2007, the bank had issued $379 million in commercial real estate loans—9 percent of its total loan portfolio—with between $250 and $270 million of that going to construction loans, Mr. Cummings said. It was a large volume for the bank and, unfortunately, an ill-timed one.
“The good thing is we started in 2006,” he explained. And then: “The bad thing is, we started in 2006.” According to Mr. Cummings, most of the bank’s non-performing loans were in fact originated during that time period.
However, Investors followed those loan originations up with a much better decision—investing heavily in the multifamily market. “That’s our bread and butter,” Mr. Cummings explained. At the end of 2007, the bank had $44 million in loans and today the bank has more than $2 billion.
“Delinquencies are very low, and it’s a hot asset class right now,” he said. “Our timing couldn’t have been better.”