EPS up 27% and Loan Portfolio up 14.9%,
Year-over-Year
BofI Holding, Inc. (NASDAQ: BOFI) (“BofI”), parent company of
BofI Federal Bank (the “Bank”), today announced financial
results for the third fiscal quarter ended March 31, 2018. Net
income was a record $51.3 million, an increase of 25.0% from $41.0
million for the quarter ended March 31, 2017. Earnings
attributable to BofI’s common stockholders were $51.2 million or
$0.80 per diluted share for the third quarter of fiscal 2018, an
increase of 25.1% from $40.9 million or $0.63 per diluted share for
the third quarter ended March 31, 2017.
Third Quarter Fiscal 2018 Financial Summary:
Three Months Ended March
31
(Dollars in thousands, except per share data)
Q3 Fiscal 2018 Q3 Fiscal 2017 %
Change Net interest income $ 116,683 $ 88,559
31.8 % Non-interest income $ 23,525 $ 23,168 1.5 % Net income $
51,253 $ 40,994 25.0 % Net income attributable to common
stockholders $ 51,176 $ 40,917 25.1 % Diluted EPS $ 0.80
$ 0.63 27.0 %
“Strong loan production across our multifamily, small balance
commercial real estate, and C&I lending businesses and record
quarterly fee income resulted in a 27% year-over-year increase in
earnings per share and a 17% increase in book value per share,”
explained Greg Garrabrants, President and CEO of BofI. “Despite
ongoing investments across our organization, we maintained a strong
efficiency ratio of 32.4% and a 22.8% return on average common
stockholders’ equity this quarter.”
“We continue to deploy excess capital with the acquisition of a
specialty software and services business from Epiq in April. While
we did not acquire any deposits in this transaction, the addition
of proprietary software and the trustee and fiduciary services team
provides incremental fee income and enhances our commercial deposit
franchise going forward,” stated Mr. Garrabrants.
“We completed another successful tax season with our long-term
partner, H&R Block,” stated Andy Micheletti, Executive Vice
President and Chief Financial Officer of BofI. “This was the first
tax season that the Bank was the exclusive originator of H&R
Block-branded Refund Advance loans. Our exclusivity and growth in
Refund Advance loans led to an increased net interest margin of
4.77% for the quarter ended March 31, 2018 compared to 4.24% last
year. ”
“Overall credit quality remains strong, as evidenced by two
basis point of net charge-offs on average loans and only 39 basis
points of non-performing assets to total assets at the end of this
quarter,” stated Mr. Micheletti. “The increase in our loan loss
provision this quarter was driven almost entirely by reserves for
Refund Advance loans. The majority of Refund Advance loans have
been repaid and credit losses are tracking in line with our
expectations.”
For the nine months ended March 31, 2018, net income was a
record $115.3 million, an increase of 12.8% over net income of
$102.2 million for the nine months ended March 31, 2017.
Earnings attributable to BofI’s common stockholders were $115.1
million or $1.78 per diluted share for the nine months ended
March 31, 2018, an increase of 13.4% from $102.0 million or
$1.57 per diluted share for the nine months ended March 31,
2017. Earnings for the quarter and for the nine months ended
March 31, 2018 were primarily related to increased net
interest income from loan growth and revenues related to seasonal
H&R Block-branded products.
Other Highlights:
- Total assets reached $9,982.3 million,
up $1,282.3 million or 14.7% compared to March 31, 2017
- Loan and lease portfolio grew by
$1,044.0 million or 14.9% compared to March 31, 2017
- Loan and lease originations for the
three months ended March 31, 2018 were $2,491.3 million, up
94.0% compared to the quarter ended March 31, 2017
- Deposits grew by $1,164.1 million, or
17.1% compared to March 31, 2017
- Asset quality remains strong with total
non-performing assets of 0.39% of total assets
at March 31, 2018
- Return on average common stockholders’
equity was 22.84% for the three months ended March 31,
2018
- Efficiency ratio was 32.40% for the
quarter ended March 31, 2018
- Tangible book value increased to $14.49
per share, up $2.05 per share compared to March 31, 2017
Third Quarter Fiscal 2018 Income Statement Summary
During the quarter ended March 31, 2018, BofI earned $51.3
million or $0.80 per diluted share compared to $41.0 million, or
$0.63 per diluted share for the quarter ended March 31, 2017.
Net interest income increased $28.1 million or 31.8% for the
quarter ended March 31, 2018 compared to March 31, 2017,
due to $1,438.5 million growth in average-earning assets, interest
income from Refund Advance loans and higher interest rates.
The loan and lease loss provision was $16.9 million for the
quarter ended March 31, 2018 compared to $4.9 million for the
quarter ended March 31, 2017. The increase in the provision is
primarily the result of additional provision for Refund Advance
loans consistent with increased originations in the loan product
and overall portfolio loan growth.
For the third quarter ended March 31, 2018, non-interest
income was $23.5 million compared to $23.2 million for the three
months ended March 31, 2017. The $0.4 million increase year
over year was the result of a $1.7 million increase in mortgage
banking income, $0.2 million increase in gain on sale – other
income, a $0.1 million reduction of unrealized loss on securities,
partially offset by a $0.8 million decrease in prepayment penalty
fee income, a $0.4 million decrease in realized gain (loss) on
securities and net decreased banking service fees and other income
of $0.4 million.
Non-interest expense or operating costs increased $10.0 million
to $45.4 million for the quarter ended March 31, 2018 from
$35.4 million for the three months ended March 31, 2017. The
increase was mainly a result of an increase in salaries and related
expense of $4.6 million as a result of staffing increases to
support growth in lending and information technology infrastructure
development. Other operating expense increases include an increase
in advertising and promotional of $2.2 million and an increase of
$1.5 million in other and general expense. The increases in the
other operating costs are primarily to support loan and deposit
growth, as well as data processing, software and marketing
initiatives.
Balance Sheet Summary
BofI’s total assets increased $1,480.6 million, or 17.4%, to
$9,982.3 million, as of March 31, 2018, up from $8,501.7
million at June 30, 2017. The increase in total assets was
primarily due to an increase in cash of $847.5 million and loan
portfolio growth of $690.2 million on a net basis, primarily from
portfolio loan originations of $4,561.2 million less principal
repayments and other adjustments of $3,871.0 million. Investment
securities decreased $99.6 million primarily due to sales and
principal repayments. Total liabilities increased by $1,393.2
million, or 18.2%, to $9,060.7 million at March 31, 2018, up
from $7,667.4 million at June 30, 2017. The increase in total
liabilities resulted primarily from growth in deposits of $1,064.3
million and an increase in FHLB borrowings of $328.0 million.
Stockholders’ equity increased by $87.4 million, or 10.5%, to
$921.7 million at March 31, 2018 from $834.2 million at
June 30, 2017. The increase was primarily the result of $115.3
million in net income, $9.2 million of vesting and issuance of RSUs
and stock-based compensation expense, partially offset by $35.2
million in stock repurchases and $0.2 million of dividends declared
on preferred stock.
The Bank’s Tier 1 core capital to adjusted average assets ratio
was 9.40% at March 31, 2018.
Conference Call
A conference call and webcast will be held on Thursday,
April 26, 2018 at 5:00 PM Eastern / 2:00 PM Pacific. Analysts
and investors may dial in and participate in the question/answer
session. To access the call, please dial: 877-407-8293. The
conference call will be webcast live and may be accessed at BofI’s
website, http://www.bofiholding.com. For those unable to listen to
the live broadcast, a replay will be available until Saturday,
May 26, 2018, at BofI’s website and telephonically by dialing
toll-free number 877-660-6853, passcode 13678714.
About BofI Holding, Inc. and BofI Federal Bank
BofI Holding, Inc. is the holding company for BofI Federal Bank,
a nationwide bank that provides financing for single and
multifamily residential properties, small-to-medium size businesses
in target sectors, and selected specialty finance receivables. With
approximately $10.0 billion in assets, BofI Federal Bank provides
consumer and business banking products through its low-cost
distribution channels and affinity partners. BofI Holding, Inc.’s
common stock is listed on the NASDAQ Global Select Market under the
symbol “BOFI” and is a component of the Russell 2000® Index, the
S&P SmallCap 600® Index, and the KBW Nasdaq Financial
Technology Index. For more information on BofI Federal Bank, please
visit bofifederalbank.com.
Forward-Looking Safe Harbor Statement
This press release contains forward-looking statements that
involve risks and uncertainties, including without limitation
statements relating to BofI’s financial prospects and other
projections of its performance and asset quality, BofI’s ability to
grow and increase its business, diversify its lending, the outcome
and effects of pending class action litigation filed against the
Company, and the anticipated timing and financial performance of
offerings, initiatives or acquisitions. These forward-looking
statements are made on the basis of the views and assumptions of
management regarding future events and performance as of the date
of this press release. Actual results and the timing of events
could differ materially from those expressed or implied in such
forward-looking statements as a result of risks and uncertainties,
including without limitation changes in interest rates, inflation,
government regulation, general economic conditions, conditions in
the real estate markets in which we operate and other factors
beyond our control. These and other risks and uncertainties
detailed in BofI’s periodic reports filed with the Securities and
Exchange Commission could cause actual results to differ materially
from those expressed or implied in any forward-looking statements.
You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. All forward-looking statements are qualified in
their entirety by this cautionary statement, and BofI undertakes no
obligation to revise or update any forward-looking statements to
reflect events or circumstances after the date of this press
release.
The following tables set forth certain selected financial data
concerning the periods indicated:
BOFI HOLDING, INC. AND
SUBSIDIARY
SELECTED CONSOLIDATED FINANCIAL
INFORMATION
(Unaudited – dollars in
thousands)
March 31, 2018
June 30, 2017 March 31, 2017
Selected Balance Sheet Data: Total assets $ 9,982,320 $
8,501,680 $ 8,700,031 Loans and leases—net of allowance for loan
and lease losses 8,064,716 7,374,493 7,020,700 Loans held for sale,
at fair value 28,301 18,738 14,696 Loans held for sale, lower of
cost or fair value 6,770 6,669 7,607 Allowance for loan and lease
losses 62,054 40,832 42,525 Securities—trading — 8,327 8,421
Securities—available-for-sale 173,186 264,470 368,229 Total
deposits 7,963,757 6,899,507 6,799,631 Securities sold under
agreements to repurchase — 20,000 35,000 Advances from the FHLB
968,000 640,000 961,000 Subordinated notes and debentures and other
54,528 54,463 54,450 Total stockholders’ equity 921,653 834,247
800,304
Capital Ratios: Equity to assets at end of
period 9.23 % 9.81 % 9.20 % BofI Holding, Inc: Tier 1 leverage
(core) capital to adjusted average assets 9.36 % 9.95 % 9.47 %
Common equity tier 1 capital (to risk-weighted assets) 14.83 %
14.66 % 14.50 % Tier 1 capital (to risk-weighted assets) 14.91 %
14.75 % 14.59 % Total capital (to risk-weighted assets) 16.74 %
16.38 % 16.36 % BofI Federal Bank: Tier 1 leverage (core) capital
to adjusted average assets 9.40 % 9.60 % 9.11 % Common equity tier
1 capital (to risk-weighted assets) 14.97 % 14.25 % 14.04 % Tier 1
capital (to risk-weighted assets) 14.97 % 14.25 % 14.04 % Total
capital (to risk-weighted assets) 15.98 % 14.97 %
14.88 %
BOFI HOLDING, INC. AND
SUBSIDIARY
SELECTED CONSOLIDATED FINANCIAL
INFORMATION
(Unaudited – dollars in thousands,
except per share data)
At or for the Three Months Ended At or for
the Nine Months Ended March 31, March 31,
2018 2017 2018
2017 Selected Income Statement Data: Interest and
dividend income $ 144,880 $ 106,962 $ 356,176 $ 288,743 Interest
expense 28,197 18,403 74,730 54,044 Net
interest income 116,683 76,361 281,446 234,699 Provision for loan
and lease losses 16,900 4,862 21,900 10,862
Net interest income after provision for loan and lease
losses 99,783 72,261 259,546 223,837 Non-interest income 23,525
23,168 53,964 54,601 Non-interest expense 45,434 35,448
124,263 101,626 Income before income tax
expense 77,874 55,661 189,247 176,812 Income tax expense 26,621
30,423 73,953 74,621 Net income $
51,253 $ 32,300 $ 115,294 $ 102,191 Net
income attributable to common stock $ 51,176 $ 40,917 $ 115,062 $
101,959
Per Share Data: Net income: Basic $ 0.80 $
0.63 $ 1.78 $ 1.57 Diluted $ 0.80 $ 0.63 $ 1.78 $ 1.57 Book value
per common share $ 14.65 $ 12.55 $ 14.65 $ 12.55 Tangible book
value per common share $ 14.49 $ 12.44 $ 14.49 $ 12.44
Weighted average number of shares outstanding: Basic
64,095,777 64,982,389 64,707,940 64,809,926 Diluted 64,095,777
64,982,389 64,707,940 64,809,926 Common shares outstanding at end
of period 62,552,868 63,390,389 62,552,868 63,390,389 Common shares
issued at end of period 65,516,157 64,798,821 65,516,157 64,798,821
Performance Ratios and Other Data: Loan and lease
originations for investment $ 2,232,463 $ 1,044,107 $ 4,561,204 $
3,040,990 Loan originations for sale $ 258,840 $ 239,931 $
1,275,333 $ 1,084,387 Loan and lease purchases $ — $ 276,917 $ — $
276,917 Return on average assets 2.08 % 1.94 % 1.72 % 1.72 % Return
on average common stockholders’ equity 22.84 % 21.10 % 17.55 %
18.48 % Interest rate spread1 4.40 % 4.00 % 3.94 % 3.81 % Net
interest margin2 4.77 % 4.24 % 4.25 % 4.02 % Efficiency ratio 32.40
% 31.73 % 37.05 % 35.13 %
Asset Quality Ratios: Net
annualized charge-offs to average loans and leases 0.02 % (0.01 )%
0.01 % 0.01 % Non-performing loans and leases to total loans and
leases 0.37 % 0.47 % 0.37 % 0.47 % Non-performing assets to total
assets 0.39 % 0.39 % 0.39 % 0.39 % Allowance for loan and lease
losses to total loans and leases at end of period 0.76 % 0.65 %
0.76 % 0.65 % Allowance for loan and lease losses to non-performing
loans and leases 204.18 % 138.09 % 204.18 %
138.09 %
1. Interest rate spread represents the difference between the
annualized weighted average yield on interest-earning assets and
the annualized weighted average rate paid on interest-bearing
liabilities
2. Net interest margin represents annualized net interest income
as a percentage of average interest-earning assets
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180426006734/en/
BofI Holding, Inc.Investor Relations Contact:Johnny Lai, CFAVP,
Corporate Development & Investor
Relations858-649-2218jlai@bofifederalbank.com
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