SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended September 30, 2003
or
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition period from to
0-26996
(Commission File Number)
INVESTORS FINANCIAL SERVICES CORP.
(Exact name of registrant as specified in its charter)
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Delaware |
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04-3279817 |
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(State or other jurisdiction of |
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(IRS Employer Identification No.) |
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incorporation or organization) |
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200 Clarendon Street, |
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P.O. Box 9130, Boston, MA |
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02117-9130 |
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(Address of principal executive offices) |
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(Zip Code) |
(617)
937-6700
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate
by check mark whether the registrant is an accelerated filer (as defined in
Exchange Act Rule
12b-2). Yes ý No o
As of October 31, 2003 there were 65,295,258 shares of Common Stock outstanding.
INVESTORS FINANCIAL SERVICES CORP.
INDEX
2
Item 1. Unaudited Condensed Consolidated Financial Statements
INVESTORS
FINANCIAL SERVICES CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2003 and December 31, 2002
(Dollars in thousands, except share data)
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September 30, |
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December 31, |
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2003 |
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2002 |
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Assets |
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Cash and due from banks |
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$ |
41,494 |
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$ |
14,568 |
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Securities held to maturity (approximate fair value of $4,000,873 and $3,460,754 at September 30, 2003 and December 31, 2002, respectively) |
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3,995,519 |
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3,438,689 |
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Securities available for sale |
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3,964,129 |
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3,272,465 |
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Nonmarketable equity securities |
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50,000 |
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50,000 |
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Loans, less allowance for loan losses of $100 at September 30, 2003 and December 31, 2002 |
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166,788 |
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143,737 |
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Accrued interest and fees receivable |
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68,567 |
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67,261 |
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Equipment and leasehold improvements, less accumulated depreciation of $40,931 and $25,402 at September 30, 2003 and December 31, 2002, respectively |
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78,125 |
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74,869 |
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Goodwill, net |
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79,969 |
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79,969 |
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Other assets |
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110,990 |
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73,916 |
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Total Assets |
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$ |
8,555,581 |
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$ |
7,215,474 |
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Liabilities and Stockholders’ Equity |
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Liabilities: |
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Deposits: |
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Demand |
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$ |
352,702 |
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$ |
384,461 |
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Savings |
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3,507,061 |
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2,858,457 |
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Time |
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100,000 |
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90,000 |
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Total deposits |
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3,959,763 |
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3,332,918 |
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Securities sold under repurchase agreements |
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3,348,458 |
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2,301,974 |
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Short-term and other borrowings |
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615,732 |
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741,107 |
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Due to brokers for open trades payable |
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— |
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286,843 |
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Company-obligated, mandatorily redeemable, preferred securities of subsidiary trust holding solely junior subordinated deferrable interest debentures of the Company |
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24,000 |
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— |
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Other liabilities |
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99,447 |
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85,676 |
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Total liabilities |
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8,047,400 |
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6,748,518 |
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Commitments and contingencies |
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— |
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— |
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Company-obligated, mandatorily redeemable, preferred securities of subsidiary trust holding solely junior subordinated deferrable interest debentures of the Company |
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— |
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24,000 |
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Stockholders’ Equity: |
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Preferred stock, par value $0.01 (shares authorized: 1,000,000; issued and outstanding: none at September 30, 2003 and December 31, 2002) |
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— |
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— |
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Common stock, par value $0.01 (shares authorized: 100,000,000 at September 30, 2003 and December 31, 2002; issued and outstanding: 65,204,690 at September 30, 2003 and 64,775,042 at December 31, 2002) |
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652 |
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648 |
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Surplus |
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238,099 |
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233,337 |
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Deferred compensation |
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(1,211 |
) |
(1,599 |
) |
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Retained earnings |
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255,193 |
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198,282 |
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Accumulated other comprehensive income, net |
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15,448 |
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12,288 |
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Treasury stock, par value $0.01 (10,814 shares at September 30, 2003 and December 31, 2002) |
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— |
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— |
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Total stockholders’ equity |
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508,181 |
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442,956 |
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Total Liabilities and Stockholders’ Equity |
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$ |
8,555,581 |
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$ |
7,215,474 |
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See Notes to Unaudited Condensed Consolidated Financial Statements.
3
INVESTORS
FINANCIAL SERVICES CORP.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Nine Months Ended September 30, 2003 and 2002
(Dollars in thousands, except per share data)
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September 30, |
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September 30, |
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2003 |
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2002 |
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Operating Revenue: |
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Interest income: |
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Federal funds sold and securities purchased under resale agreements |
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$ |
259 |
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$ |
680 |
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Investment securities held to maturity and available for sale |
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176,995 |
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181,394 |
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Loans |
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2,650 |
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2,891 |
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Total interest income |
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179,904 |
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184,965 |
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Interest expense: |
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Deposits |
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28,698 |
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31,777 |
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Short-term and other borrowings |
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39,579 |
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49,057 |
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Total interest expense |
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68,277 |
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80,834 |
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Net interest income |
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111,627 |
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104,131 |
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Noninterest income: |
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Asset servicing fees |
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239,012 |
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218,103 |
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Other operating income |
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1,864 |
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1,645 |
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Net operating revenue |
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352,503 |
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323,879 |
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Operating Expenses: |
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Compensation and benefits |
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143,309 |
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146,819 |
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Technology and telecommunications |
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29,020 |
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30,070 |
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