BofI Holding, Inc. Announces Record Second Quarter Net Income, Up
34.7%
Diluted EPS Increases 30.0%; Assets Increase to $3,568
Million
SAN DIEGO, CA--(Marketwired - Feb 5, 2014) - BofI Holding, Inc.
(NASDAQ: BOFI) ("BofI"), parent company of BofI Federal Bank (the
"Bank"), today announced financial results for the second fiscal
quarter ended December 31, 2013. Net income was a record $13.2
million, an increase of 34.7% over net income of $9.8 million for
the quarter ended December 31, 2012. Earnings attributable to
BofI's common stockholders were $13.1 million or $0.91 per diluted
share for the second quarter of fiscal 2014, an increase of 38.6%
from $9.4 million or $0.70 per diluted share for the second quarter
ended December 31, 2012.
Core earnings, which exclude the after-tax impact of gains and
losses associated with our securities portfolio, increased 36.8% to
$13.8 million for the quarter ended December 31, 2013 compared to
$10.1 million for the quarter ended December 31, 2012.
|
|
Second Quarter Fiscal 2014 Financial Summary: |
|
|
Three Months Ended December 31, |
|
|
|
(Dollars in thousands) |
|
Q2 Fiscal 2014 |
|
Q2 Fiscal 2013 |
|
% Change |
|
Net Interest Income |
|
$ |
32,827 |
|
$ |
24,936 |
|
31.6 |
% |
Non-Interest Income |
|
$ |
5,543 |
|
$ |
6,249 |
|
(11.3 |
)% |
Net Income |
|
$ |
13,154 |
|
$ |
9,768 |
|
34.7 |
% |
Core Earnings1 |
|
$ |
13,786 |
|
$ |
10,080 |
|
36.8 |
% |
Net Income Attributable to Common Stockholders |
|
$ |
13,077 |
|
$ |
9,436 |
|
38.6 |
% |
Diluted EPS |
|
$ |
0.91 |
|
$ |
0.70 |
|
30.0 |
% |
|
|
|
|
|
|
|
|
|
|
1 Core earnings
is a non-GAAP measure that excludes realized and unrealized gains
and losses, net of taxes, associated with our securities
portfolios. |
|
|
"Year over year our diluted earnings per share increased 30% for
the quarter ended December 31, 2013, the eighth consecutive quarter
of record earnings," noted Mr. Greg Garrabrants, President and
Chief Executive Officer. "Our continued success is based on the
strength and diversity of our deposit, lending and fee income
businesses. This quarter our net interest margin reached 4.01% as
our cost of funds continues to decline due to growth in core
deposits and declines in higher-cost CDs and borrowings. Our strong
asset quality became stronger as annualized net charge offs to
average loans declined to 5 basis points for the second quarter of
fiscal 2014, down from 13 basis points for the second quarter of
fiscal 2013. Non-performing assets to total assets decreased to 49
basis points, down from 79 basis points at December 31, 2012 and
down from 55 basis points at September 30, 2013. Our Bank's Tier 1
Leverage Ratio was 9.01% at December 31, 2013, up 51 basis points
from the ratio at September 30, 2013 as a result of contributions
to capital from quarterly earnings and our at-the-market issuance
of $17.3 million of BOFI common stock at a weighted average price
of $73.12 per share before commissions. We believe our Bank is well
positioned for continued success in 2014."
Other Highlights:
- Total assets reached $3,568.3 million, up $694.0 million or
24.1% compared to December 31, 2012
- Loan portfolio grew by $622.0 million or 28.9% compared to
December 31, 2012
- Loan originations for the three months ended December 31, 2013
were $787.6 million, up 28.6% compared to the quarter ended
December 31, 2012
- Deposits grew by $434.8 million, or 22.1% compared to December
31, 2012
- Asset quality remains strong with total non-performing assets
of 0.49% of total assets and non-performing loans equal to 0.58% of
total loans at December 31, 2013
- Tangible book value increased to $21.82 per share, up $4.74 per
share compared to December 31, 2012
- No material impact expected on the securities portfolio from
implementation of the Volcker Rule
Second Quarter Fiscal 2014 Income Statement Summary During the
quarter ended December 31, 2013, BofI earned $13.2 million or $0.91
per diluted share compared to $9.8 million, or $0.70 per diluted
share for the quarter ended December 31, 2012. Net interest income
increased $7.9 million or 31.6% for the quarter ended December 31,
2013 compared to December 31, 2012. Average earning assets
grew year over year by $660.1 million and our net interest margin
was 4.01% compared to 3.81% for the quarters ended December 31,
2013 and 2012, respectively.
Loan loss provision was $1.0 million for the quarter ended
December 31, 2013 as compared to $2.0 million for the quarter ended
December 31, 2012. The decrease was the result of lower charge-offs
and improvements in non-performing loans and delinquencies this
quarter compared to the second quarter of fiscal 2013 and was
partially offset by additional provisions needed for growth in the
loan portfolio.
For the second quarter ended December 31, 2013, non-interest
income was $5.5 million compared to $6.2 million for the three
months ended December 31, 2012. The decrease quarter over quarter
was primarily the result of a decline of $2.4 million in mortgage
banking income and an unrealized loss of $0.5 million in trading
securities. The decrease was partially offset by a $1.0 million
increase in gain on sale - other, a $0.7 million increase in
prepayment penalty fee income and a $0.6 million increase in
banking service fees and other income.
Non-interest expense or operating costs increased $2.5 million
to $15.3 million for the quarter ended December 31, 2013 from $12.8
million for the three months ended December 31, 2012. The increase
was mainly a result of an increase in compensation expense of $1.0
million related to additional staffing added since December 31,
2012, an increase in professional services of $0.5 million, and an
increase of $0.7 million in data processing and internet expenses.
The increases in staffing and data processing and internet expenses
are primarily due to growth of the Bank's lending and deposit
operations.
Balance Sheet Summary BofI's total assets increased $477.5
million, or 15.5%, to $3,568.3 million, as of December 31, 2013, up
from $3,090.8 million at June 30, 2013. The loan portfolio
increased a net $520.4 million, primarily from portfolio loan
originations of $1,067.7 million less principal repayments and
other adjustments of $547.3 million. Loans held for sale increased
$10.4 million. Investment securities increased $9.4 million as new
security investments exceeded principal repayments. Total
liabilities increased by $434.1 million, or 15.4%, to $3,256.6
million at December 31, 2013, up from $2,822.5 million at June 30,
2013. The increase in total liabilities resulted primarily from
growth in demand and savings deposits of $504.6 million partially
offset by a decline in time deposits of $193.5 million.
Stockholders' equity increased by $43.4 million, or 16.2%, to
$311.7 million at December 31, 2013 from $268.3 million at June 30,
2013. The increase was primarily the result of $25.3 million in net
income and sale of common stock of $16.7 million, net of
commissions and fees.
The Bank's Tier 1 capital was 9.01% at December 31, 2013,
compared to 8.52% at December 31, 2012.
Conference Call A conference call and webcast will be held on
Wednesday, February 5, 2014 at 4:30 PM Eastern / 1:30 PM Pacific.
Analysts and investors may dial in and participate in the
question/answer session. To access the call, please dial:
888-539-3696,
passcode 2290039. 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 shortly after the call on BofI's website for 30 days.
About BofI Holding, Inc. and BofI Federal Bank BofI Holding,
Inc. ("BofI") 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 $3.6 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 3000 Index.
Use of Non-GAAP Financial Measures In addition to the results
presented in accordance with GAAP, this report includes non-GAAP
financial measures such as core earnings. Core earnings exclude
realized and unrealized gains and losses associated with our
securities portfolios. Excluding these gains and losses provides
investors with an understanding of BofI's core lending and mortgage
banking business. Non-GAAP financial measures that have inherent
limitations, are not required to be uniformly applied and are not
audited. Readers should be aware of these limitations and should be
cautious as to their use of such measures. Although BofI believes
the non-GAAP financial measures disclosed in this report enhance
investors' understanding of its business and performance, these
non-GAAP measures should not be considered in isolation, or as a
substitute for GAAP basis financial measures. Below is a
reconciliation of GAAP net income to core earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
December 31, |
|
|
December 31, |
|
(Dollars in thousands) |
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|
Net Income |
|
$ |
13,154 |
|
|
$ |
9,768 |
|
|
$ |
25,336 |
|
|
$ |
18,757 |
|
|
Realized securities gains |
|
|
-- |
|
|
|
-- |
|
|
|
(208 |
) |
|
|
-- |
|
|
Unrealized securities losses |
|
|
1,061 |
|
|
|
525 |
|
|
|
1,010 |
|
|
|
797 |
|
|
Tax provision |
|
|
(429 |
) |
|
|
(213 |
) |
|
|
(320 |
) |
|
|
(324 |
) |
|
|
Core earnings |
|
$ |
13,786 |
|
|
$ |
10,080 |
|
|
$ |
25,818 |
|
|
$ |
19,230 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, and the anticipated timing and
financial performance of new initiatives. 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) |
|
|
|
December 31, 2013 |
|
June 30, 2013 |
|
December 31, 2012 |
Selected Balance Sheet Data: |
|
|
|
|
|
|
|
|
|
Total
assets |
|
$ |
3,568,299 |
|
$ |
3,090,771 |
|
$ |
2,874,322 |
Loans--net of allowance for loan losses |
|
|
2,777,325 |
|
|
2,256,918 |
|
|
2,155,306 |
Loans
held for sale, at fair value |
|
|
24,467 |
|
|
36,665 |
|
|
57,498 |
Loans
held for sale, lower of cost or market |
|
|
62,895 |
|
|
40,326 |
|
|
39,684 |
Allowance for loan losses |
|
|
15,200 |
|
|
14,182 |
|
|
11,449 |
Securities--trading |
|
|
7,546 |
|
|
7,111 |
|
|
6,735 |
Securities--available-for-sale |
|
|
211,328 |
|
|
185,607 |
|
|
167,167 |
Securities--held-to-maturity |
|
|
258,955 |
|
|
275,691 |
|
|
288,452 |
Total
deposits |
|
|
2,403,089 |
|
|
2,091,999 |
|
|
1,968,265 |
Securities sold under agreements to repurchase |
|
|
95,000 |
|
|
110,000 |
|
|
115,000 |
Advances from the Federal Home Loan Bank |
|
|
729,000 |
|
|
590,417 |
|
|
527,000 |
Subordinated debentures and other borrowings |
|
|
5,155 |
|
|
5,155 |
|
|
5,155 |
Total
stockholders' equity |
|
|
311,670 |
|
|
268,262 |
|
|
242,613 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 Six Months Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|
Selected Income Statement Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and dividend income |
|
$ |
41,227 |
|
|
$ |
33,567 |
|
|
$ |
77,573 |
|
|
$ |
64,556 |
|
Interest expense |
|
|
8,400 |
|
|
|
8,631 |
|
|
|
16,635 |
|
|
|
17,135 |
|
Net interest income |
|
|
32,827 |
|
|
|
24,936 |
|
|
|
60,938 |
|
|
|
47,421 |
|
Provision for loan losses |
|
|
1,000 |
|
|
|
1,950 |
|
|
|
1,500 |
|
|
|
4,500 |
|
Net interest income after provision for loan
losses |
|
|
31,827 |
|
|
|
22,986 |
|
|
|
59,438 |
|
|
|
42,921 |
|
Non-interest income |
|
|
5,543 |
|
|
|
6,249 |
|
|
|
12,520 |
|
|
|
13,010 |
|
Non-interest expense |
|
|
15,304 |
|
|
|
12,781 |
|
|
|
29,820 |
|
|
|
24,313 |
|
Income before income tax expense |
|
|
22,066 |
|
|
|
16,454 |
|
|
|
42,138 |
|
|
|
31,618 |
|
Income tax expense |
|
|
8,912 |
|
|
|
6,686 |
|
|
|
16,802 |
|
|
|
12,861 |
|
Net income |
|
$ |
13,154 |
|
|
$ |
9,768 |
|
|
$ |
25,336 |
|
|
$ |
18,757 |
|
Net income attributable to common stock |
|
$ |
13,077 |
|
|
$ |
9,436 |
|
|
$ |
25,181 |
|
|
$ |
18,348 |
|
Per Share Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.92 |
|
|
$ |
0.71 |
|
|
$ |
1.77 |
|
|
$ |
1.44 |
|
|
Diluted |
|
$ |
0.91 |
|
|
$ |
0.70 |
|
|
$ |
1.77 |
|
|
$ |
1.37 |
|
|
Book
value per common share |
|
$ |
21.82 |
|
|
$ |
17.08 |
|
|
$ |
21.82 |
|
|
$ |
17.08 |
|
|
Tangible book value per common share |
|
$ |
21.82 |
|
|
$ |
17.08 |
|
|
$ |
21.82 |
|
|
$ |
17.08 |
|
Weighted average number of shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
14,275,705 |
|
|
|
13,224,612 |
|
|
|
14,189,568 |
|
|
|
12,707,837 |
|
Diluted |
|
|
14,350,224 |
|
|
|
13,824,440 |
|
|
|
14,266,718 |
|
|
|
13,538,503 |
|
Common shares outstanding at end of period |
|
|
14,052,446 |
|
|
|
12,824,195 |
|
|
|
14,052,446 |
|
|
|
12,824,195 |
|
Common shares issued at end of period |
|
|
14,986,263 |
|
|
|
13,665,957 |
|
|
|
14,986,263 |
|
|
|
13,665,957 |
|
Performance Ratios and Other Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan originations for investment |
|
$ |
597,072 |
|
|
$ |
331,999 |
|
|
$ |
1,067,741 |
|
|
$ |
611,696 |
|
Loan originations for sale |
|
$ |
190,558 |
|
|
$ |
280,569 |
|
|
$ |
377,254 |
|
|
$ |
535,365 |
|
Loan purchases |
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
-- |
|
|
$ |
1,541 |
|
Return on average assets |
|
|
1.58 |
% |
|
|
1.45 |
% |
|
|
1.60 |
% |
|
|
1.45 |
% |
Return on average common stockholders' equity |
|
|
17.69 |
% |
|
|
17.32 |
% |
|
|
17.71 |
% |
|
|
17.85 |
% |
Interest rate spread1 |
|
|
3.87 |
% |
|
|
3.69 |
% |
|
|
3.80 |
% |
|
|
3.63 |
% |
Net interest margin2 |
|
|
4.01 |
% |
|
|
3.81 |
% |
|
|
3.94 |
% |
|
|
3.76 |
% |
Efficiency ratio |
|
|
39.89 |
% |
|
|
40.98 |
% |
|
|
40.59 |
% |
|
|
40.23 |
% |
Capital Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity to assets at end of period |
|
|
8.73 |
% |
|
|
8.44 |
% |
|
|
8.73 |
% |
|
|
8.44 |
% |
Tier 1 leverage (core) capital to adjusted tangible
assets3 |
|
|
9.01 |
% |
|
|
8.52 |
% |
|
|
9.01 |
% |
|
|
8.52 |
% |
Tier 1 risk-based capital ratio3 |
|
|
15.03 |
% |
|
|
13.95 |
% |
|
|
15.03 |
% |
|
|
13.95 |
% |
Total risk-based capital ratio3 |
|
|
15.73 |
% |
|
|
14.60 |
% |
|
|
15.73 |
% |
|
|
14.60 |
% |
Tangible capital to tangible assets3 |
|
|
9.01 |
% |
|
|
8.52 |
% |
|
|
9.01 |
% |
|
|
8.52 |
% |
Asset Quality Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net annualized charge-offs to average loans
outstanding |
|
|
0.05 |
% |
|
|
0.13 |
% |
|
|
0.04 |
% |
|
|
0.28 |
% |
Non-performing loans to total loans |
|
|
0.58 |
% |
|
|
0.95 |
% |
|
|
0.58 |
% |
|
|
0.95 |
% |
Non-performing assets to total assets |
|
|
0.49 |
% |
|
|
0.79 |
% |
|
|
0.49 |
% |
|
|
0.79 |
% |
Allowance for loan losses to total loans at end of
period |
|
|
0.54 |
% |
|
|
0.52 |
% |
|
|
0.54 |
% |
|
|
0.52 |
% |
Allowance for loan losses to non-performing loans |
|
|
93.35 |
% |
|
|
54.92 |
% |
|
|
93.35 |
% |
|
|
54.92 |
% |
|
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. |
3. Reflects
regulatory capital ratios of BofI Federal Bank. |
|
|
Investor Relations Contact: MZ Group, Inc. Johnny Lai, CFA
Senior Analyst 949-259-4989
jlai@mzgroup.us
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