B of I Holding, Inc. (B of I or the Company) (NASDAQ: BOFI), parent
of Bank of Internet USA (Bank), today announced record net income
of $3,708,000 for its first quarter ended September 30, 2009,
compared to a loss of $1,817,000 for the three months ended
September 30, 2008. Earnings available to the Company's common
stockholders were $3,535,000, or $0.41 per diluted share for the
current quarter compared to a loss of $1,988,000, or $0.24 per
diluted share for the quarter ended September 30, 2008. B of I's
net interest margin for the first quarter was 3.88%, up 120 basis
points over the three-month period ended September 30, 2008 and up
26 basis points from the Company's prior best of 3.62% for the
three-month period ended June 30, 2009.
B of I's net income increased 28.2% for the first quarter ended
September 30, 2009, compared to net income of $2,893,000 for last
year's first quarter, adjusted to exclude the one-time $4,710,000
after-tax loss associated with the Company's decision in September
2008 to sell all of its Fannie Mae preferred stock immediately
after the U.S. government put Fannie Mae into conservatorship.
Diluted earnings per share were $0.41 this quarter, an increase of
24.2% compared to the $0.33 in diluted earnings per share for the
first quarter last year, excluding the loss on the sale of the
Fannie Mae preferred stock. The increase in quarterly net income
year over year was primarily due to a 60.8% growth in net interest
income resulting from the net margin improvement, as well as an
11.1% growth in average earning assets.
"We are pleased with our results this quarter because they were
driven by growth in core earnings, higher net interest income and
improved operating cost efficiency," remarked Greg Garrabrants,
President and Chief Executive Officer. "While many traditional
branch banks are struggling with deposit growth and high fixed
costs, our single location provides nationwide sourcing of retail
deposits and loans through the Internet in a cost effective manner.
Our operating efficiency ratio was 28.36% this quarter,
significantly better than the average of 68.13% published by the
FDIC last quarter for commercial banks in the $1 billion to $10
billion asset range. We continue to find strong values in the
wholesale loan purchase market and have been making steady progress
in the development of our single and multifamily retail lending
platforms. In particular, we continue to see significant
competitive exits from the multifamily lending business, providing
us a strong tailwind as we place resources towards growing our
multifamily originations. I am very optimistic that the current
market continues to provide us outstanding growth
opportunities."
First Quarter Highlights:
-- Net interest margin grew to 3.88% in the current quarter, up 44.8%
over the first quarter last year.
-- Asset quality remains strong, with the principal balance of non-
performing loans equal to 0.76% of the loan portfolio, and total non-
performing assets equal to 0.73% of total assets at September 30, 2009.
-- Total assets reached $1,324.1 million at September 30, 2009, up 13.1%
compared to the first quarter last year.
-- Total deposits reached $763.5 million at September 30, 2009, up 37.0%
compared to the first quarter last year.
Quarter Earnings Summary
For the three months ended September 30, 2009, we had net income
of $3,708,000 compared to $2,893,000 for last year's first quarter,
adjusted to exclude the one-time FNMA loss. Net interest income
increased $4.8 million during the first quarter ended September 30,
2009 compared to the first quarter last year and increased $1.3
million compared to the quarter ended June 30, 2009. Total interest
and dividend income during the quarter ended September 30, 2009
increased 13.5%, to $21.8 million, compared to $19.2 million during
the quarter ended September 30, 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
and higher rates earned on new loans and securities. Average
interest earning assets increased $129.6 million for the quarter
ended September 30, 2009 compared to the quarter ended September
30, 2008. Interest expense decreased due to a 114 basis point
decrease in the average funding rate, including a decrease in
average rates for time deposits of 78 basis points. Similarly,
lower rates paid on FHLB advances led to a decrease in FHLB advance
funding costs of 50 basis points when comparing the three-month
periods ended September 30, 2009 and 2008. The improvement in the
net interest margin has resulted from specific actions the Bank has
taken to manage its assets and liabilities, as well as general
changes in the U.S. Treasury yield curve and loan risk premiums.
The Bank's specific actions include selling agency mortgage-backed
securities and replacing them with higher yielding loans and
non-agency mortgage backed securities. In addition, the Bank
lowered its deposit offering rates with the decline in U.S.
Treasury rates allowing it to grow checking and savings accounts
and re-price time deposits at lower average rates.
For the first quarter ended September 30, 2009, non-interest
income was a loss of $1.0 million, primarily due to unrealized loss
of $1.4 million associated with other-than-temporary impairment on
mortgage-backed securities, partially offset by mortgage banking
and other fee income. Excluding the FNMA loss, non-interest income
was $22,000 for the three months ended September 30, 2008. The Bank
has increased its allowance for loan loss from 45 basis points on
loans at September 30, 2008 to 87 basis points on loans at
September 30, 2009. The provision for loan loss was $2,000,000 in
the first quarter ended September 30, 2009, up from $505,000 in the
first quarter ended September 30, 2008 and up from $1,900,000 for
the quarter ended June 30, 2009. The increased provisions for the
quarter ended September 30, 2009 were the result of changes in the
loan portfolio mix and higher estimated losses from our
recreational vehicle portfolio and real estate loan portfolio.
Non-interest expense, which is comprised primarily of
compensation, data processing and internet expenses, occupancy and
other operating expenses, was $3.3 million for the three months
ended September 30, 2009, up from $2.5 million for the three months
ended September 30, 2008. Excluding a one-time charge of $352,000
recorded in 2008 related to a change in the employment agreement
with the Bank's president, total compensation increased $497,000
for the quarter ended September 30, 2009, primarily related to
staffing changes in the lending business and a 3.7% average
increase to salaries and wages. The other significant contributors
to the increase in operating expense were the Bank's cost for FDIC
insurance premiums and other administrative expenses. The FDIC and
OTS standard regulatory charges increased $230,000 for the
three-month period ended September 30, 2009 compared to the three
months ended September 30, 2008. This was due to higher average
deposit balances and higher assessment rates for the period ended
September 30, 2009. Other general and administrative expenses
increased $314,000, primarily due to additional loan processing
expense and other real estate operating losses and valuation
adjustments.
Balance Sheet Summary
The Company's total assets increased $21.9 million, or 1.7%, to
$1,324.1 million, as of September 30, 2009, up from $1,302.2
million at June 30, 2009. The increase in total assets was
primarily due to purchases of agency debt and agency
mortgage-backed securities, as well as non agency mortgage-backed
securities. Securities available for sale and held to maturity grew
a net $41.5 million and the loan portfolio declined a net $20.3
million between September 30, 2009 and June 30, 2009. Total
liabilities increased $17.8 million, primarily due to an increase
in deposits of $115.0 million, partially offset by a decrease of
$97.0 million in borrowings from the Federal Home Loan Bank of San
Francisco and the Federal Reserve Discount Window.
Conference Call
A conference call and webcast will be held on Tuesday, November
3, 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: 800-458-9009.
International callers should dial: 719-325-2273. Digital replay is
available by calling 888-203-1112 and using the digital passcode
#7478700. 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 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)
September June 30, September
30, 2009 2009 30, 2008
----------- ----------- -----------
Selected Balance Sheet Data:
Total assets $ 1,324,069 $ 1,302,208 $ 1,170,915
Loans - net of allowance for
loan losses 595,140 615,463 622,119
Loans held for sale 3,365 3,190 -
Allowance for loan losses 5,270 4,754 2,809
Securities - trading 5,299 5,445 7,361
Securities - available for sale 275,720 265,807 188,922
Securities - held to maturity 382,481 350,898 305,441
Total deposits 763,513 648,524 557,496
Securities sold under agreements
to repurchase 130,000 130,000 130,000
Advances from the FHLB 225,988 262,984 392,973
Federal Reserve Discount Window
and other borrowings 105,155 165,155 5,155
Total Stockholders' equity 93,016 88,939 79,250
BofI HOLDING, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Dollars in thousands, except per share data)
At or for the Three Months
Ended September 30,
---------------------------
2009 2008
------------ ------------
Selected Income Statement Data:
Interest and dividend income $ 21,777 $ 19,177
Interest expense 9,212 11,365
------------ ------------
Net interest income 12,565 7,812
Provision for loan losses 2,000 505
------------ ------------
Net interest income after provision
for loan losses 10,565 7,307
Non-interest income (loss) (1,009) (7,924)
Non-interest expense 3,277 2,477
------------ ------------
Income (loss) before income tax expense 6,279 (3,094)
Income tax expense (benefit) 2,571 (1,277)
------------ ------------
Net income (loss) $ 3,708 $ (1,817)
============ ============
Net income (loss) attributable to
common stock $ 3,535 $ (1,988)
Per Share Data:
Net income (loss):
Basic $ 0.43 $ (0.24)
Diluted $ 0.41 $ (0.24)
Book value per common share $ 10.19 $ 8.36
Tangible book value per common share $ 10.19 $ 8.36
Weighted average number of shares
outstanding:
Basic 8,262,471 8,421,274
Diluted 8,873,191 8,421,274
Common shares outstanding at end of period 8,164,914 8,299,563
Common shares issued at end of period 8,791,068 8,627,840
Performance Ratios and Other Data:
Loan originations for investment $ 8,436 $ 12,029
Loan originations for sale 25,005 213
Loan purchases 1,633 15,349
Return on average assets 1.12% -0.61%
Return on average stockholders' equity 17.20% -11.19%
Interest rate spread (1) 3.71% 2.42%
Net interest margin (2) 3.88% 2.68%
Efficiency ratio (3) 28.36% N/A
Capital Ratios:
Equity to assets at end of period 7.03% 6.77%
Tier 1 leverage (core) capital to adjusted
tangible assets (4) 7.20% 6.90%
Tier 1 risk-based capital ratio (4) 15.51% 14.03%
Total risk-based capital ratio (4) 16.37% 14.52%
Tangible capital to tangible assets (4) 7.20% 6.90%
Asset Quality Ratios:
Net annualized charge-offs to average
loans outstanding 0.98% 0.26%
Nonperforming loans to total loans 0.76% 0.42%
Nonperforming assets to total assets 0.73% 0.38%
Allowance for loan losses to total loans
at end of period 0.87% 0.45%
Allowance for loan losses to nonperforming
loans 114.57% 107.75%
(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 three
months ended September 30, 2008, 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 31.8%.
(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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