B of I Holding, Inc. (B of I or the Company), (NASDAQ: BOFI),
parent of Bank of Internet USA (Bank), today announced that net
income was $2,594,000 for its third quarter ended March 31, 2009,
an increase of 154.8% compared to the $1,018,000 earned for the
three months ended March 31, 2008. Earnings available to the
Company's common stockholders were $2,421,000, or $0.30 per diluted
share for the current quarter compared to $940,000, or $0.11 per
diluted share for the quarter ended March 31, 2008. Diluted
earnings per share increased $0.19 or 172.7% this quarter compared
to the quarter ended March 31, 2008. The increase in quarterly net
income year over year was primarily due to 60.2% growth in the net
interest margin and 13.4% growth in average earnings assets.
For the nine months ended March 31, 2009, net income was
$3,538,000 compared to $2,416,000 in net income for the nine months
ended March 31, 2008. The U.S. government decision to put Fannie
Mae into conservatorship during the first quarter ended September
30, 2008 resulted in B of I realizing a one-time loss on the sale
of its Fannie Mae preferred stock of $7,902,000, or $4,710,000
after tax. Without the Fannie Mae preferred stock loss, the
Company's net income for the nine months ended March 31, 2009 would
have been $8,248,000.
"Bank of Internet continues to achieve strong earnings in
difficult times," remarked Greg Garrabrants, President and Chief
Executive Officer. "Our 150% year over year increase in quarterly
earnings is the result of our low cost business model and our
disciplined approach to risk and credit management." Garrabrants
added, "We are positive about the future of our bank and cautious
about the economy, increasing our loan loss allowance 91% since
March 31, 2008."
Jerry Englert, Chairman of the Board, added, "As I approach a
decade of serving as Chairman of the Board and look back at what we
have accomplished, I am pleased. I believe we have the right
business model and the right management team, not only for the
current environment, but also for the next phase of our growth. As
we have strengthened our management team over the last several
years, I have increased confidence that the Bank will continue to
prosper as I consider the role I should play on the Board in the
future. I am dedicated to ensuring that our Board remains a strong
contributor to our success."
Third Quarter Highlights:
-- Net interest margin grew to 2.82% in the current quarter, up 60.2%
over the third quarter last year.
-- Asset quality remains strong with the principal balance of non-
performing loans equal to 0.30% of the loan portfolio, and total non-
performing assets equal to 0.61% of total assets at March 31, 2009.
-- Total assets reached $1,249,189,000 at March 31, 2009, up 12.5%
compared to the third quarter last year.
-- Total deposits reached $693,983,000 at March 31, 2009, up 17.6%
compared to the third quarter last year.
Quarter Earnings Summary
For the three months ended March 31, 2009, we had net income of
$2,594,000 compared to net income of $1,018,000 for the three
months ended March 31, 2008. Total interest and dividend income
during the quarter ended March 31, 2009 increased 14.2%, to $18.5
million, compared to $16.2 million during the quarter ended March
31, 2008. The increase in interest and dividend income for the
quarter was primarily attributable to growth in the average balance
of loans and investment securities, higher rates earned on new
loans and lower rates paid on deposits. Average interest earning
assets increased $141.8 million for the quarter ended March 31,
2009 and the loan portfolio yield increased 63 basis points. Total
interest expense decreased 12.2% to $10.1 million for the quarter
ended March 31, 2009, compared with $11.5 million for the quarter
ended March 31, 2008. Interest expense decreased due to a 110 basis
point decrease in the average funding rate, including a decrease in
average rates for time deposits of 77 basis points. Similarly,
lower rates paid on FHLB advances led to a decrease in FHLB advance
funding costs of 112 basis points when comparing the three-month
periods ended March 31, 2009 and 2008.
Net interest margin, defined as net interest income divided by
average earning assets, increased by 106 basis points to 2.82% for
the quarter ended March 31, 2009, compared with 1.76% for the
quarter ended March 31, 2008. The increased net interest income for
the current quarter was partially offset by higher provisions for
loan losses. The loan loss provision was $1,200,000 for the March
2009 quarter compared to $835,000 for the quarter ended March 2008.
The increased loan loss provision was due primarily to the growth
in our loan portfolio, general declines in housing values and
declines in consumer credit resulting in increased charge-offs and
reserves for recreational vehicle loans.
Non-interest expense, which is comprised primarily of
compensation, data processing and internet expenses, occupancy and
other operating expenses, was $3.2 million for the three months
ended March 31, 2009, up slightly from $3.1 million for the three
months ended March 31, 2008. The decrease in compensation expense
this quarter was primarily the result of a one-time payment of
$352,000 made last year relating to a contract amendment for the
Bank's president. The decrease in compensation expense was offset
by an increase in other general and administrative expenses,
primarily due to additional loan processing expense and other real
estate owned.
Balance Sheet Summary
The Company's total assets increased $55.0 million, or 4.6%, to
$1,249.2 million, as of March 31, 2009, up from $1,194.2 million at
June 30, 2008. The increase in total assets was primarily due to an
increase of $52.1 million for investment securities. Total
liabilities increased $52.8 million, primarily due to an increase
in deposits of $123.3 million partially offset by a decrease of
$88.0 million in borrowings from the Federal Home Loan Bank of San
Francisco.
Conference Call
A conference call and webcast will be held on Wednesday, May 6,
2009 at 5:00 PM Eastern / 2:00 PM Pacific. To participate in the
conference call, please dial the following number five to ten
minutes prior to the scheduled conference call time: 877-795-3635.
International callers should dial: 719-325-4769. Digital replay is
available by calling 888-203-1112 and using the digital passcode
#5822594. The conference call will be webcast live and may be
accessed at BofI's website, http://www.bofiholding.com. For those
unable to participate during the live broadcast, a replay will be
available shortly after the call on the BofIholding.com website for
30 days.
About BofI Holding, Inc. and Bank of Internet USA
BofI Holding, Inc. is the holding company of Bank of Internet
USA and trades on NASDAQ under the symbol BOFI. Bank of Internet
USA is a consumer focused, FDIC insured, nationwide savings bank
operating primarily over the Internet. It offers a variety of
consumer banking services, focusing primarily on gathering retail
deposits over the Internet and originating home equity loans, as
well as originating and purchasing multifamily and single-family
mortgage loans. Bank of Internet USA offers products through its
websites at www.bankofinternet.com and www.ApartmentBank.com.
Retail deposit products include certificates of deposit, online
checking accounts with check images, bill payment, high interest
savings accounts, ATM or Visa Check Cards, money market savings
accounts, and ATM fee reimbursement anywhere in the world.
Selected Financial Data
The following tables set forth certain selected financial data
concerning the periods indicated:
BofI HOLDING, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Dollars in thousands, except per share data)
March 31, June 30, March 31,
2009 2008 2008
----------- ----------- ----------
Selected Balance Sheet
Data:
Total Assets $ 1,249,189 $ 1,194,245 $1,110,104
Loans - net of allowance
for loan losses 627,472 631,413 599,198
Allowance for loan losses 3,956 2,710 2,067
Investment securities 562,067 510,014 462,076
Total deposits 693,983 570,704 590,042
Securities sold under
agreements to repurchase 130,000 130,000 130,000
Advances from the FHLB 310,980 398,966 302,448
Federal Reserve Discount
Window and other
borrowings 25,155 5,155 5,155
Total Stockholders' equity 85,153 83,082 76,940
At or for the Three At or for the Nine
Months Ended March 31, Months Ended March 31,
----------------------- ----------------------
2009 2008 2009 2008
----------- ----------- ---------- -----------
Selected Income Statement
Data:
Interest and dividend
income $ 18,541 $ 16,174 $ 57,225 $ 44,767
Interest expense 10,066 11,513 32,169 33,714
----------- ----------- ---------- -----------
Net interest income 8,475 4,661 25,056 11,053
Provision for loan losses 1,200 835 2,830 1,104
----------- ----------- ---------- -----------
Net interest income after
provision for loan losses 7,275 3,826 22,226 9,949
Non-interest income (loss) 300 1,023 (7,610) 1,804
Non-interest expense 3,190 3,138 8,675 7,698
----------- ----------- ---------- -----------
Income before income tax
expense 4,385 1,711 5,941 4,055
Income tax expense 1,791 693 2,403 1,639
----------- ----------- ---------- -----------
Net income $ 2,594 $ 1,018 $ 3,538 $ 2,416
=========== =========== ========== ===========
Net income attributable to
common stock $ 2,421 $ 940 $ 3,021 $ 2,184
Per Share Data:
Net Income:
Basic $ 0.30 $ 0.11 $ 0.37 $ 0.26
Diluted $ 0.30 $ 0.11 $ 0.37 $ 0.26
Book value per common
share $ 9.37 $ 8.67 $ 9.37 $ 8.67
Tangible book value per
common share $ 9.37 $ 8.67 $ 9.37 $ 8.67
Weighted average number of
shares outstanding:
Basic 8,028,785 8,274,065 8,163,940 8,258,763
Diluted 8,063,107 8,376,032 8,218,843 8,374,990
Common shares outstanding
at end of period 8,035,997 8,287,590 8,035,997 8,287,590
Common shares issued at
end of period 8,642,723 8,607,090 8,642,723 8,607,090
Performance Ratios and Other
Data:
Loan originations $ 3,590 $ 8,873 $ 31,432 $ 58,603
Loan originations for sale 33,376 - 40,102 516
Loan purchases 2,237 110,416 51,862 141,018
Return on average assets 0.85% 0.38% 0.39% 0.31%
Return on average
stockholders' equity 13.18% 5.10% 5.61% 4.10%
Interest rate spread (1) 2.61% 1.44% 2.59% 1.13%
Net interest margin (2) 2.82% 1.76% 2.83% 1.45%
Efficiency Ratio (3) 36.35% 55.20% 49.72% 59.90%
Capital Ratios:
Equity to assets at end of
period 6.82% 6.93% 6.82% 6.93%
Tier 1 leverage (core)
capital to adjusted
tangible assets (4) 6.89% 7.13% 6.89% 7.13%
Tier 1 risk-based capital
ratio (4) 14.50% 13.49% 14.50% 13.49%
Total risk-based capital
ratio (4) 15.17% 13.84% 15.17% 13.84%
Tangible capital to
tangible assets (4) 6.89% 7.13% 6.89% 7.13%
Asset Quality Ratios:
Net charge-offs to average
loans outstanding 0.10% 0.05% 0.25% 0.09%
Nonperforming loans to
total loans 0.30% 0.09% 0.30% 0.09%
Allowance for loan losses
to total loans held for
investment 0.63% 0.34% 0.63% 0.34%
Allowance for loan losses
to nonperforming loans 2.1X 3.7X 2.1X 3.7X
_____________
(1) Interest rate spread represents the difference between the annualized
weighted average yield on interest-earning assets and the 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.
(3) Efficiency Ratio represents noninterest expense as a percentage of the
aggregate of net interest income and noninterest income.
For the nine months ended March 31, 2009, without the loss of $7.902
million in noninterest income due to the loss on sale of FNMA preferred
stock, the efficiency ratio would have been 34.22%.
(4) Reflects regulatory capital ratios of Bank of Internet USA only.
Contact: BofI Holding, Inc. Gregory Garrabrants CEO 858/350-6203
Email Contact
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