FY 2016 Net Income Increases 44.3% to $119.3
million
BofI Holding, Inc. (NASDAQ: BOFI) (“BofI”), parent company of
BofI Federal Bank (the “Bank”), today announced financial
results for the fourth fiscal quarter ended June 30, 2016. Net
income was $29.7 million, an increase of 21.9% over net income of
$24.4 million for the quarter ended June 30, 2015. Earnings
attributable to BofI’s common stockholders were $29.7 million or
$0.46 per diluted share for the fourth quarter of fiscal 2016, an
increase of 21.9% from $24.3 million or $0.39 per diluted share for
the fourth quarter ended June 30, 2015.
Adjusted earnings, a non-GAAP measure, which excludes the
after-tax impact of gains and losses associated with our securities
portfolio, increased 26.5% to $29.7 million for the quarter ended
June 30, 2016 compared to $23.5 million for the quarter ended
June 30, 2015.
Fourth Quarter Fiscal 2016 Financial Summary:
Three Months EndedJune 30,
(Dollars in thousands, except per share data)
2016 2015 %
Change Net interest income $ 69,155 $
55,294 25.1 % Non-interest income $ 17,015 $ 10,278 65.5 % Net
income $ 29,727 $ 24,395 21.9 % Adjusted earnings1 $ 29,677 $
23,467 26.5 % Net income attributable to common stockholders $
29,650 $ 24,318 21.9 % Diluted EPS2 $ 0.46
$ 0.39 17.9 %
1 See “Use of Non-GAAP Financial Measures”2 Per share amounts
have been retroactively restated for all prior periods presented to
reflect the four-for-one forward split of the Company’s common
stock affected in the form of a stock dividend that was distributed
on November 17, 2015.
For the fiscal year ended June 30, 2016, net income was a
record $119.3 million, an increase of 44.3% over net income of
$82.7 million for the twelve months ended June 30, 2015.
Earnings attributable to BofI’s common stockholders were $119.0
million or $1.85 per diluted share for the twelve months ended
June 30, 2016, an increase of 44.4% from $82.4 million or
$1.34 per diluted share for the twelve months ended June 30,
2015. Record earnings for the fiscal year ended June 30, 2016
were primarily the result of growth in both the Bank’s loan and
lease portfolio and its fee income businesses.
“We finished fiscal 2016 with positive momentum,” stated Greg
Garrabrants, President and Chief Executive Officer of BofI. “Loan
growth was solid across several of our lending groups, including
jumbo single family, multifamily, commercial real estate and
C&I lender finance. Strong fee income growth was a key driver
in us achieving 1.75% ROA and 19.43% ROE for the full year.” Mr.
Garrabrants continued, “Our disciplined credit underwriting and low
loan-to-value strategy has resulted in impeccable credit quality,
as reflected in our 2 basis points of annualized net charge-offs
during the fourth quarter. Our strong capital position and diverse
set of businesses across consumer and commercial platforms enable
us to invest in our systems, partnerships and personnel to ensure
we remain a leader in the next generation of digital banking.”
Other Highlights:
- Total assets reached $7,601.4 million,
up $1,777.6 million or 30.5% compared to June 30, 2015
- Loan and lease portfolio grew by
$1,426.1 million or 28.9% compared to June 30, 2015
- Loan and lease originations for
investment for the three months ended June 30, 2016 were
$960.3 million, up 12.0%, or 48.0% annualized, compared to the
quarter ended March 31, 2016
- Deposits grew by $1,592.1 million or
35.8% compared to June 30, 2015
- Asset quality remains strong with total
non-performing assets of 0.42% of total assets and non-performing
loans and leases equal to 0.50% of total loans at June 30,
2016
- Net interest margin was 3.72%;
excluding average balances associated with short-term H&R Block
products the net interest margin was 3.87%
- Tangible book value increased to $10.67
per share, up $2.19 per share compared to June 30, 2015
Fourth Quarter Fiscal 2016 Income Statement Summary
During the quarter ended June 30, 2016, BofI earned $29.7
million or $0.46 per diluted share compared to $24.4 million, or
$0.39 per diluted share for the quarter ended June 30, 2015.
Net interest income increased $13.9 million or 25.1% for the
quarter ended June 30, 2016 compared to June 30, 2015,
due to the $1,855.5 million growth in average-earning assets.
The loan and lease loss provision was $1.9 million for the
quarter ended June 30, 2016 compared to $2.9 million for the
quarter ended June 30, 2015. The decrease was primarily due to
a change in the loan and lease mix during the quarter ended
June 30, 2016.
For the fourth quarter ended June 30, 2016, non-interest
income was $17.0 million compared to $10.3 million for the three
months ended June 30, 2015. The increase year over year was
the result of an increase in banking service fees and other income
of $6.4 million, primarily due to H&R Block-branded products
and service fee income and an increase in gain on sale - other of
$3.8 million, primarily from sales of structured settlements and
lottery receivables.
Non-interest expense or operating costs increased $12.2 million
to $33.0 million for the quarter ended June 30, 2016 from
$20.8 million for the three months ended June 30, 2015. The
increase was mainly a result of an increase in compensation expense
of $6.8 million related to staffing added since June 30, 2015,
an increase in data processing and internet expense of $1.2 million
and an increase of $0.9 million in other general and administrative
costs. The increases in staffing, data processing and internet
expense, and other general and administrative expenses were
incurred to support the growth of the Bank’s operations.
“Our average interest-earning loans grew $471.0 million during
the three months ended June 30, 2016 compared to our last quarter
ended March 31, 2016,” said Andy Micheletti, Executive Vice
President and Chief Financial Officer of BofI. “This quarter,
excluding the impact from excess liquidity investments related to
H&R Block products, our net interest margin was 3.87%, in line
with our targeted range of 3.8% to 4.0%. We continued to make
investments across a variety of strategic growth initiatives,
including C&I lending, consumer lending, specialty deposits and
our universal digital banking infrastructure. Despite more
volatility in our quarterly efficiency ratio as a result of
volatility in tax product revenues, we remain confident we can
maintain a best-in-class efficiency ratio.”
Full Year Fiscal 2016 Highlights
- Net income reached a record $119.3
million, an increase of 44.3% compared to the fiscal year ended
June 30, 2015
- Loan and lease originations and
purchases for the fiscal year ended June 30, 2016 were
$5,137.4 million up $814.1 million or 18.8% compared to the year
ended June 30, 2015
- Return on average common stockholders’
equity was 19.43%, up from 18.34% for fiscal year 2015
- Net annualized charge-offs to average
loans was a recovery of 1 basis point compared to 3 basis points of
net charge-offs for fiscal year 2015
- Completed a $51 million public offering
of 6.25% Subordinated Notes on March 24, 2016
- BofI was named the top performing large
thrift in the U.S. for a fourth consecutive year by SNL
Financial/S&P Global Market Intelligence
Balance Sheet Summary
BofI’s total assets increased $1,777.6 million, or 30.5%, to
$7,601.4 million, as of June 30, 2016, up from $5,823.7
million at June 30, 2015. The loan and lease portfolio
increased $1,426.1 million on a net basis, primarily from portfolio
loan and lease originations and purchases of $3,774.4 million less
principal repayments and other adjustments of $2,348.3 million.
Loans held for sale decreased $48.9 million. Investment securities
increased $75.5 million primarily due to purchases. Total
liabilities increased by $1,627.6 million, or 30.8%, to $6,917.8
million at June 30, 2016, up from $5,290.2 million at
June 30, 2015. The increase in total liabilities resulted
primarily from growth in deposits of $1,592.1 million.
Stockholders’ equity increased by $150.1 million, or 28.1%, to
$683.6 million at June 30, 2016 from $533.5 million at
June 30, 2015. The increase was primarily the result of $119.3
million in net income and sales of common stock of $21.1 million,
net of commissions and fees.
The Bank’s Tier 1 core capital to adjusted average assets ratio
was 8.78% at June 30, 2016.
Conference Call
A conference call and webcast will be held on Tuesday, August 2,
2016 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: 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 Thursday, September 1,
2016, at Bofi's website and telephonically by dialing toll-free
number 877-660-6853, passcode 13640821.
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 $7.6 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 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.
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 adjusted
earnings. Adjusted earnings, previously labeled as “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 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 adjusted earnings:
Three Months Ended Fiscal
Year Ended June 30, June 30,
(Dollars in thousands) 2016
2015 2016 2015 Net income
$ 29,727 $ 24,395 $ 119,291 $ 82,682 Realized
securities losses (gains) (508 ) — (1,427 ) (587 ) FHLB one-time
dividend — (1,662 ) — (1,662 ) Unrealized securities losses (gains)
421 67 813 2,599 Tax (provision) benefit 37 667 257
(145 ) Adjusted earnings $ 29,677
$ 23,467 $ 118,934 $
82,887
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 recently filed
against the Company, 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)
(Dollars in thousands) June 30,
2016 June 30, 2015
June 30, 2014 Selected Balance Sheet
Data: Total assets $ 7,601,354 $ 5,823,719 $ 4,402,999 Loans
and leases—net of allowance for loan and lease losses 6,354,679
4,928,618 3,532,841 Loans held for sale, at fair value 20,871
25,430 20,575 Loans held for sale, lower of cost or fair value
33,530 77,891 114,796 Allowance for loan and lease losses 35,826
28,327 18,373 Securities—trading 7,584 7,832 8,066
Securities—available-for-sale 265,447 163,361 214,778
Securities—held-to-maturity 199,174 225,555 247,729 Total deposits
6,044,051 4,451,917 3,041,536 Securities sold under agreements to
repurchase 35,000 35,000 45,000 Advances from the FHLB 727,000
753,000 910,000 Subordinated notes and debentures and other 58,066
5,155 5,155 Total stockholders’ equity 683,590 533,526 370,778
Capital Ratios: Equity to assets at end of period
8.99 % 9.16 % 8.42 % BofI Holding, Inc: Tier 1 leverage (core)
capital to adjusted average assets 9.12 % 9.59 % * Common equity
tier 1 capital (to risk-weighted assets) 14.42 % 14.98 % * Tier 1
capital (to risk-weighted assets) 14.53 % 15.12 % * Total capital
(to risk-weighted assets) 16.36 % 15.91 % * BofI Federal Bank: Tier
1 leverage (core) capital to adjusted average assets 8.78 % 9.25 %
* Tier 1 leverage (core) capital to adjusted tangible assets1 n/a
n/a 8.66 % Common equity tier 1 capital (to risk-weighted assets)
14.00 % 14.58 % * Tier 1 capital (to risk-weighted assets) 14.00 %
14.58 % 14.42 % Total capital (to risk-weighted assets)
14.75 % 15.38 %
15.11 %
* Selected regulatory capital ratios were not applicable prior
to January 1, 2015.1. Reflects regulatory capital ratios of BofI
Federal Bank. Effective January 1, 2015, the Bank's capital
requirements changed the tier 1 leverage ratio from using end of
period adjusted tangible assets to using adjusted average assets
for the quarter and added a common equity tier 1 capital ratio.
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
Fiscal year ending June 30, June 30, (Dollars in
thousands, except per share data)
2016
2015 2016 2015
Selected Income Statement Data: Interest and
dividend income $ 86,261 $ 67,567 $ 317,707 $ 244,364 Interest
expense 17,106 12,273 56,696 45,419 Net
interest income 69,155 55,294 261,011 198,945 Provision for loan
losses 1,900 2,900 9,700 11,200 Net
interest income after provision for loan losses 67,255 52,394
251,311 187,745 Non-interest income 17,015 10,278 66,340 30,590
Non-interest expense 32,985 20,752 112,756
77,478 Income before income tax expense 51,285 41,920
204,895 140,857 Income tax expense 21,558 17,525
85,604 58,175 Net income $ 29,727 $ 24,395
$ 119,291 $ 82,682 Net income attributable to
common stock $ 29,650 $ 24,318 $ 118,982 $ 82,373
Per
Share Data: Net income: Basic1 $ 0.46 $ 0.39 $ 1.85 $ 1.35
Diluted1 $ 0.46 $ 0.39 $ 1.85 $ 1.34 Book value per common share1 $
10.73 $ 8.51 $ 10.73 $ 8.51 Tangible book value per common share1 $
10.67 $ 8.48 $ 10.67 $ 8.48
Weighted average number of
shares outstanding: Basic1 64,474,329 62,830,818 64,265,207
61,177,908 Diluted1 64,474,864 63,027,386 64,271,052 61,404,364
Common shares outstanding at end of period1 63,219,392 62,075,004
63,219,392 62,075,004 Common shares issued at end of period1
64,513,494 63,145,364 64,513,494 63,145,364
Performance
Ratios and Other Data: Loan and lease originations for
investment $ 960,334 $ 851,889 $ 3,633,911 $ 3,271,911 Loan
originations for sale $ 207,696 $ 327,202 $ 1,363,025 $ 1,048,982
Loan and lease purchases $ — $ 2,306 $ 140,493 $ 2,452 Return on
average assets 1.57 % 1.73 % 1.75 % 1.61 % Return on average common
stockholders’ equity 17.91 % 18.86 % 19.43 % 18.34 % Interest rate
spread2 3.52 % 3.82 % 3.70 % 3.79 % Net interest margin3 3.72 %
3.97 % 3.91 % 3.92 % Efficiency ratio 38.28 % 31.65 % 34.44 % 33.75
%
Asset Quality Ratios: Net annualized charge-offs to
average loans and leases 0.02 % — % (0.01 )% 0.03 % Non-performing
loans and leases to total loans and leases 0.50 % 0.62 % 0.50 %
0.62 % Non-performing assets to total assets 0.42 % 0.55 % 0.42 %
0.55 %
Allowance for loan and lease losses to
total loans and leases
0.56 % 0.57 % 0.56 % 0.57 % Allowance for loan and lease losses to
non-performing loans and leases 112.45 % 91.88
% 112.45 % 91.88 %
1. Share and per share amounts have been retroactively restated
for all prior periods presented to reflect the four-for-one
forward split of the Company’s common stock effected in the form of
a stock dividend that was distributed on November 17, 20152.
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
liabilities3. Net interest margin represents annualized net
interest income as a percentage of average interest-earning
assets
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160802006871/en/
BofI Holding, Inc.Investor Relations Contact:Johnny Lai, CFAVP,
Corporate Development & Investor
Relations858-649-2218jlai@bofi.com
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