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, 2016.
Net income was $32.3 million, an increase of 14.7% over net income
of $28.1 million for the quarter ended December 31, 2015.
Earnings attributable to BofI’s common stockholders were $32.2
million or $0.50 per diluted share for the second quarter of fiscal
2017, an increase of 14.8% from $28.1 million or $0.44 per diluted
share for the second quarter ended December 31, 2015.
Adjusted earnings, a non-GAAP measure, which excludes the
after-tax impact of gains and losses associated with our securities
portfolio, increased 14.9% to $31.9 million for the quarter ended
December 31, 2016 compared to $27.7 million for the quarter
ended December 31, 2015.
Second Quarter Fiscal 2017 Financial Summary:
Three Months EndedDecember 31,
(Dollars in thousands, except per share data) Q2
Fiscal 2017 Q2 Fiscal 2016 % Change
Net interest income $ 76,361 $ 63,171 20.9% Non-interest
income $ 16,700 $ 16,220 3.0% Net income $ 32,300 $ 28,149 14.7%
Adjusted earnings1 $ 31,878 $ 27,735 14.9% Net income attributable
to common stockholders $ 32,222 $ 28,071 14.8% Diluted EPS $
0.50 $ 0.44 13.6%
1 See “Use of Non-GAAP Financial Measures”
“We had another solid quarter, with sequential improvements in
loan growth, net interest margin and operating efficiency,” stated
Greg Garrabrants, President and Chief Executive Officer. “Our loan
originations were well balanced with contributions from commercial
and industrial, multifamily and small balance commercial real
estate, and jumbo single family lending. With our continued
success diversifying our lending, consumer and commercial deposit,
and fee-based businesses, we are well positioned for profitable
growth,” Mr. Garrabrants concluded.
Other Highlights:
- Total assets reached $8,167.9 million,
up $1,505.7 million or 22.6% compared to December 31,
2015
- Loan and lease portfolio grew by
$1,166.2 million or 20.7% compared to December 31, 2015
- Deposits grew by $1,410.7 million, or
27.1% compared to December 31, 2015
- Asset quality remains strong with total
non-performing assets of 0.43% of total assets at December 31,
2016
- Return on average common stockholders’
equity was 17.49% for the three months ended December 31,
2016
- Tangible book value increased to $11.72
per share, up $2.12 per share compared to December 31,
2015
Second Quarter Fiscal 2017 Income Statement Summary
During the quarter ended December 31, 2016, BofI earned
$32.3 million or $0.50 per diluted share compared to $28.1 million,
or $0.44 per diluted share for the quarter ended December 31,
2015. Net interest income increased $13.2 million or 20.9% for the
quarter ended December 31, 2016 compared to December 31,
2015, due to the $1.5 billion growth in average-earning assets.
The loan and lease loss provision was $4.1 million for the
quarter ended December 31, 2016 compared to $3.4 million for
the quarter ended December 31, 2015. The increase in the
provision is primarily the result of growth in the loan portfolio
and changes in the loan mix during the quarter ended December 31,
2016.
For the second quarter ended December 31, 2016,
non-interest income was $16.7 million compared to $16.2 million for
the three months ended December 31, 2015. The increase year
over year was the result of increases in mortgage banking income of
$1.9 million and in banking service fees and other income of $2.2
million, primarily due to increased fees related to individual
retirement accounts, partially offset by a $3.5 million decrease in
gain on sale – other due to decreased sales of structured
settlements.
Non-interest expense or operating costs increased $5.9 million
to $33.3 million for the quarter ended December 31, 2016 from
$27.4 million for the three months ended December 31, 2015.
The increase was mainly a result of an increase in salaries and
related expense of $3.5 million related to staffing added since
December 31, 2015, an increase in data processing and internet
expense of $0.6 million, an increase in occupancy and equipment of
$0.4 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.
Balance Sheet Summary
BofI’s total assets increased $568.6 million, or 7.5%, to
$8,167.9 million, as of December 31, 2016, up from $7,599.3
million at June 30, 2016. The loan portfolio increased $456.8
million on a net basis, primarily from portfolio loan originations
and purchases of $1,996.9 million less principal repayments and
other adjustments of $1,540.1 million. Loans held for sale
decreased $4.5 million. Investment securities decreased $84.3
million primarily due to sales and principal repayments. Total
liabilities increased by $498.5 million, or 7.2%, to $7,414.2
million at December 31, 2016, up from $6,917.8 million at
June 30, 2016. The increase in total liabilities resulted
primarily from growth in deposits of $566.6 million. Stockholders’
equity increased by $70.1 million, or 10.3%, to $753.7 million at
December 31, 2016 from $683.6 million at June 30, 2016.
The increase was primarily the result of $61.2 million in net
income and $4.8 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 9.36% at December 31, 2016.
Conference Call
A conference call and webcast will be held on Monday,
January 30, 2017 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 Tuesday, February 28, 2017, at BofI’s website and
telephonically by dialing toll-free number 877-660-6853, passcode
13652290.
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 $8.2 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 Six Months Ended
December 31, December 31, (Dollars in
thousands) 2016 2015
2016 2015 Net income $ 32,300 $ 28,149
$ 61,197 $ 53,650 Realized securities losses (gains) (1,622
) (933 ) (2,612 ) (933 ) Unrealized securities losses (gains) 894
219 903 267 Tax (provision) benefit 306 300 717
278
Adjusted earnings1
$ 31,878 $ 27,735 $ 60,205
$ 53,262
1. The non-GAAP adjusted earnings calculation does not exclude
FHLB special dividends due to their repeated occurrence.
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)
December 31, 2016
June 30, 2016 December 31, 2015
Selected Balance Sheet Data: Total assets $ 8,167,876 $
7,599,304 $ 6,662,215 Loans and leases—net of allowance for loan
and lease losses 6,811,470 6,354,679 5,645,272 Loans held for sale,
at fair value 33,990 20,871 24,730 Loans held for sale, lower of
cost or fair value 15,905 33,530 65,429 Allowance for loan and
lease losses 40,928 35,826 35,071 Securities 387,885 472,205
452,058 Total deposits 6,610,674 6,044,051 5,199,966 Securities
sold under agreements to repurchase 35,000 35,000 35,000 Advances
from the FHLB 665,000 727,000 758,000 Subordinated notes and
debentures and other 56,408 56,016 5,155 Total stockholders’ equity
753,671 683,590 613,330
Capital Ratios: Equity to
assets at end of period 9.23 % 8.99 % 9.21 % BofI Holding, Inc:
Tier 1 leverage (core) capital to adjusted average assets 9.71 %
9.12 % 9.75 % Common equity tier 1 capital (to risk-weighted
assets) 14.51 % 14.42 % 14.86 % Tier 1 capital (to risk-weighted
assets) 14.61 % 14.53 % 14.98 % Total capital (to risk-weighted
assets) 16.39 % 16.36 % 15.83 % BofI Federal Bank: Tier 1 leverage
(core) capital to adjusted average assets 9.36 % 8.78 % 9.34 %
Common equity tier 1 capital (to risk-weighted assets) 14.08 %
14.00 % 14.36 % Tier 1 capital (to risk-weighted assets) 14.08 %
14.00 % 14.36 % Total capital (to risk-weighted assets)
14.88 % 14.75 % 15.20 %
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,
2016 2015 2016
2015 Selected Income Statement Data: Interest and
dividend income $ 94,301 $ 75,935 $ 181,781 $ 147,164 Interest
expense 17,940 12,764 35,640 24,865 Net
interest income 76,361 63,171 146,141 122,299 Provision for loan
and lease losses 4,100 3,400 6,000 5,800
Net interest income after provision for loan and lease
losses 72,261 59,771 140,141 116,499 Non-interest income 16,700
16,220 31,432 26,009 Non-interest expense 33,300 27,445
66,178 50,363 Income before income tax expense
55,661 48,546 105,395 92,145 Income tax expense 23,361
20,397 44,198 38,495 Net income $ 32,300
$ 28,149 $ 61,197 $ 53,650 Net income
attributable to common stock $ 32,222 $ 28,071 $ 61,042 $ 53,495
Per Share Data: Net income: Basic $ 0.50 $ 0.44 $
0.94 $ 0.84 Diluted $ 0.50 $ 0.44 $ 0.94 $ 0.84 Book value per
common share $ 11.82 $ 9.65 $ 11.82 $ 9.65 Tangible book value per
common share $ 11.72 $ 9.60 $ 11.72 $ 9.60
Weighted
average number of shares outstanding: Basic 64,861,540
64,431,333 64,724,972 64,050,839 Diluted 64,861,540 64,432,656
64,724,972 64,061,821 Common shares outstanding at end of period
63,359,001 63,029,161 63,359,001 63,029,161 Common shares issued at
end of period 64,761,369 64,142,556 64,761,369 64,142,556
Performance Ratios and Other Data: Loan and lease
originations for investment $
1,071,713
$ 990,948 $
1,996,883
$ 1,816,020 Loan originations for sale $ 609,361 $ 632,162 $
844,456 $ 904,453 Loan and lease purchases $ — $ 384 $ — $ 384
Return on average assets 1.66 % 1.77 % 1.60 % 1.73 % Return on
average common stockholders’ equity 17.49 % 18.81 % 17.05 % 18.55 %
Interest rate spread1 3.82 % 3.96 % 3.71 % 3.92 % Net interest
margin2 4.00 % 4.10 % 3.89 % 4.07 % Efficiency ratio 35.78 % 34.57
% 37.27 % 33.96 %
Asset Quality Ratios: Net
annualized charge-offs to average loans and leases 0.05 % (0.04 )%
0.03 % (0.04 )% Non-performing loans and leases to total loans and
leases 0.50 % 0.46 % 0.50 % 0.46 % Non-performing assets to total
assets 0.43 % 0.40 % 0.43 % 0.40 % Allowance for loan and lease
losses to total loans and leases at end of period 0.60 % 0.61 %
0.60 % 0.61 % Allowance for loan and lease losses to non-performing
loans and leases 118.42 % 132.45 % 118.42 %
132.45 %
_________________________
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
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170130006040/en/
BofI Holding, Inc.Johnny Lai, CFAVP, Corporate Development &
Investor Relations858-649-2218jlai@bofifederalbank.com
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