BofI Holding, Inc. (NASDAQ: BOFI) (“BofI”), parent company of
BofI Federal Bank (the “Bank”), today announced financial
results for the first fiscal quarter ended September 30, 2016.
Net income was $28.9 million, an increase of 13.3% over net income
of $25.5 million for the quarter ended September 30, 2015.
Earnings attributable to BofI’s common stockholders were $28.8
million or $0.45 per diluted share for the first quarter of fiscal
2017, an increase of 13.4% from $25.4 million or $0.40 per diluted
share for the first quarter ended September 30, 2015.
Adjusted earnings, a non-GAAP measure, which excludes the
after-tax impact of gains and losses associated with our securities
portfolio, increased 11.0% to $28.3 million for the quarter ended
September 30, 2016 compared to $25.5 million for the quarter
ended September 30, 2015.
First Quarter Fiscal 2017 Financial Summary:
Three Months EndedSeptember 30,
(Dollars in thousands, except per share data) Q1
Fiscal 2017 Q1 Fiscal 2016 % Change
Net interest income $ 69,780 $ 59,128 18.0% Non-interest
income $ 14,732 $ 9,789 50.5% Net income $ 28,897 $ 25,501 13.3%
Adjusted earnings1 $ 28,327 $ 25,529 11.0% Net income attributable
to common stockholders $ 28,820 $ 25,424 13.4% Diluted EPS2
$ 0.45 $ 0.40 12.5%
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 effected in the form of a stock dividend that was distributed
on November 17, 2015
“We delivered solid operating results while continuing to invest
in our future,” stated Greg Garrabrants, President and Chief
Executive Officer. “Net loan growth of 25.3% was led by strong loan
production in C&I, warehouse, and auto lending and factoring.
Investments we have made over the past several years continue to
diversify our revenue streams and funding, as reflected in the
50.5% increase in non-interest income and 33.0% increase in our
deposits this quarter. We have many exciting new business and
strategic initiatives underway that will enable us to maintain
strong growth in earnings and industry-leading returns and credit
performance,” Mr. Garrabrants concluded.
Other Highlights:
- Total assets reached $7,855.0 million,
up $1,595.4 million or 25.5% compared to September 30,
2015
- Loan portfolio grew by $1,324.4 million
or 25.3% compared to September 30, 2015
- Loan originations and purchases for the
three months ended September 30, 2016 were $1,160.3 million,
up 5.7% compared to the quarter ended September 30, 2015
- Deposits grew by $1,568.5 million, or
33.0% compared to September 30, 2015
- Asset quality remains strong with 1
basis point of net annualized charge-offs to average loans and
leases and total non-performing assets of 0.55% of total assets at
September 30, 2016
- Return on average common stockholders’
equity was 16.59% for the three months ended September 30,
2016
- Tangible book value increased to $11.25
per share, up $2.17 per share compared to September 30,
2015
First Quarter Fiscal 2017 Income Statement Summary
During the quarter ended September 30, 2016, BofI earned
$28.9 million or $0.45 per diluted share compared to $25.5 million,
or $0.40 per diluted share for the quarter ended September 30,
2015. Net interest income increased $10.7 million or 18.0% for the
quarter ended September 30, 2016 compared to
September 30, 2015, due to the $1.5 billion growth in
average-earning assets.
The loan and lease loss provision was $1.9 million for the
quarter ended September 30, 2016 compared to $2.4 million for
the quarter ended September 30, 2015. The decrease in the
provision is primarily the result of changes in loan mix, slower
loan growth, and lower outstanding balances associated with certain
older vintage loans that carried increased allocations of the
allowance for loan and lease losses.
For the first quarter ended September 30, 2016,
non-interest income was $14.7 million compared to $9.8 million for
the three months ended September 30, 2015. The increase year
over year was the result of an increase in mortgage banking income
of $3.3 million and banking service fees and other income of $2.2
million, primarily due to H&R Block-branded products and
service fee income.
Non-interest expense or operating costs increased $10.0 million
to $32.9 million for the quarter ended September 30, 2016 from
$22.9 million for the three months ended September 30, 2015.
The increase was mainly a result of an increase in salaries and
related expense of $5.1 million related to staffing added since
September 30, 2015, an increase in data processing and
internet expense of $1.3 million, an increase in professional
services of $1.0 million, an increase in advertising and
promotional of $0.9 million and an increase of $0.6 million in
other general and administrative costs. The increases in staffing
primarily support loan, deposit, data processing and software
initiatives.
“Net interest margin improved to 3.78% this quarter from 3.72%
for the quarter ended June 30, 2016,” added Andy Micheletti,
Executive Vice President and Chief Financial Officer. “Without the
impact of higher than expected liquidity from our H&R Block
partnership, our net interest margin would have been 3.84% in the
first quarter of 2017. Our 2017 first quarter efficiency ratio is
higher than the annual efficiency ratio that we expect to achieve
in the fiscal year because of the seasonality of our tax-related
revenue. Our efficiency ratio will be lower in quarters when we
receive increased seasonal tax-related fee income.”
Balance Sheet Summary
BofI’s total assets increased $255.7 million, or 3.4%, to
$7,855.0 million, as of September 30, 2016, up from $7,599.3
million at June 30, 2016. The loan portfolio increased $195.1
million on a net basis, primarily from portfolio loan originations
and purchases of $925.2 million less principal repayments and other
adjustments of $730.1 million. Loans held for sale decreased $3.0
million. Investment securities decreased $20.0 million primarily
due to securities principal receipts and sales. Total liabilities
increased by $215.4 million, or 3.1%, to $7,133.2 million at
September 30, 2016, up from $6,917.8 million at June 30,
2016. The increase in total liabilities resulted primarily from
growth in deposits of $279.8 million. Stockholders’ equity
increased by $38.3 million, or 5.6%, to $721.9 million at
September 30, 2016 from $683.6 million at June 30, 2016.
The increase was primarily the result of $28.9 million in net
income and $7.9 million in unrealized gain in available-for-sale
securities in other comprehensive income.
The Bank’s Tier 1 core capital to adjusted average assets ratio
was 9.2% at September 30, 2016.
Conference Call
A conference call and webcast will be held on Thursday,
October 27, 2016 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, November 26, 2016, at BofI’s website and
telephonically by dialing toll-free number 877-660-6853, passcode
13646093.
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 $7.9 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 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 September 30, (Dollars
in thousands) 2016 2015 Net income
$ 28,897 $ 25,501 Realized securities losses (gains) (990 )
— Unrealized securities losses (gains) 9 48 Tax (provision) benefit
411 (20 ) Adjusted earnings $ 28,327 $
25,529
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 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) September 30,
2016 June 30, 2016 September 30,
2015 Selected Balance Sheet Data: Total assets $
7,855,043 $ 7,599,304 $ 6,259,648 Loans and leases—net of allowance
for loan and lease losses 6,549,742 6,354,679 5,225,319 Loans held
for sale, at fair value 20,611 20,871 35,252 Loans held for sale,
lower of cost or fair value 30,761 33,530 71,051 Allowance for loan
and lease losses 37,596 35,826 31,078 Securities 452,159 472,205
394,050 Total deposits 6,323,812 6,044,051 4,755,362 Securities
sold under agreements to repurchase 35,000 35,000 35,000 Advances
from the FHLB 655,000 727,000 821,000 Subordinated notes and
debentures and other 56,511 56,016 5,155 Total stockholders’ equity
721,859 683,590 578,217
Capital Ratios: Equity to
assets at end of period 9.19 % 8.99 % 9.24 % BofI Holding, Inc:
Tier 1 leverage (core) capital to adjusted average assets 9.55 %
9.12 % 9.75 % Common equity tier 1 capital (to risk-weighted
assets) 14.43 % 14.42 % 15.58 % Tier 1 capital (to risk-weighted
assets) 14.53 % 14.53 % 15.72 % Total capital (to risk-weighted
assets) 16.32 % 16.36 % 16.55 % BofI Federal Bank: Tier 1 leverage
(core) capital to adjusted average assets 9.20 % 8.78 % 9.26 %
Common equity tier 1 capital (to risk-weighted assets) 14.01 %
14.00 % 14.94 % Tier 1 capital (to risk-weighted assets) 14.01 %
14.00 % 14.94 % Total capital (to risk-weighted assets)
14.77 % 14.75 % 15.77 %
BOFI
HOLDING, INC. AND SUBSIDIARY SELECTED CONSOLIDATED FINANCIAL
INFORMATION (Unaudited – dollars in thousands, except per
share data) At or for the Three Months Ended
September 30, 2016 2015
Selected Income Statement Data: Interest and dividend income
$ 87,480 $ 71,229 Interest expense 17,700 12,101 Net
interest income 69,780 59,128 Provision for loan and lease losses
1,900 2,400 Net interest income after provision for
loan and lease losses 67,880 56,728 Non-interest income 14,732
9,789 Non-interest expense 32,878 22,918 Income
before income tax expense 49,734 43,599 Income tax expense 20,837
18,098 Net income $ 28,897 $ 25,501 Net
income attributable to common stock $ 28,820 $ 25,424
Per
Share Data: Net income: Basic1 $ 0.45 $ 0.40 Diluted1 $ 0.45 $
0.40 Book value per common share1 $ 11.32 $ 9.13 Tangible book
value per common share1 $ 11.25 $ 9.08
Weighted average
number of shares outstanding: Basic1 64,589,333 63,671,516
Diluted1 64,589,333 63,692,836 Common shares outstanding at end of
period1 63,299,014 62,816,504 Common shares issued at end of
period1 64,664,045 63,905,626
Performance Ratios and
Other Data: Loan and lease originations for investment $
925,170 $ 825,072 Loan originations for sale $ 235,095 $ 272,291
Return on average assets 1.53 % 1.70 % Return on average common
stockholders’ equity 16.59 % 18.34 % Interest rate spread2 3.61 %
3.89 % Net interest margin3 3.78 % 4.02 % Efficiency ratio 38.90 %
33.25 %
Asset Quality Ratios: Net annualized
charge-offs to average loans and leases 0.01 % (0.03 )%
Non-performing loans and leases to total loans and leases 0.64 %
0.57 % Non-performing assets to total assets 0.55 % 0.50 %
Allowance for loan and lease losses to total loans and leases at
end of period 0.57 % 0.59 % Allowance for loan and lease losses to
non-performing loans and leases 89.45 % 102.38 %
_________________________
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/20161027006750/en/
BofI Holding, Inc.Johnny Lai, CFAVP, Corporate Development &
Investor Relations858-649-2218jlai@bofifederalbank.com
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