Net Income for the Fourth Quarter of Fiscal
2018 up 14.0% Year-over-Year
BofI Holding, Inc. (NASDAQ: BOFI) (“BofI”), parent company of
BofI Federal Bank (the “Bank”), today announced unaudited
financial results for the fourth fiscal quarter ended June 30,
2018. Net income was $37.1 million, an increase of 14.0% over net
income of $32.5 million for the quarter ended June 30, 2017.
Earnings attributable to BofI’s common stockholders were $37.0
million or $0.58 per diluted share for the fourth quarter of fiscal
2018, an increase of 14.1% from $32.5 million or $0.50 per diluted
share for the fourth quarter ended June 30, 2017.
Fourth Quarter Fiscal 2018 Financial Summary:
Three Months EndedJune 30, (Dollars
in thousands, except per share data) 2018
2017 % Change Net interest income $ 87,048
$ 78,527 10.9 % Non-interest income $ 16,977 $ 13,533 25.4 %
Net income $ 37,117 $ 32,548 14.0 % Net income attributable to
common stockholders $ 37,040 $ 32,471 14.1 % Diluted EPS $
0.58 $ 0.50 16.0 %
For the fiscal year ended June 30, 2018, net income was a
record $152.4 million, an increase of 13.1% over net income of
$134.7 million for the twelve months ended June 30, 2017.
Earnings attributable to BofI’s common stockholders were $152.1
million or $2.36 per diluted share for the twelve months ended
June 30, 2018, an increase of 13.1% from $134.4 million or
$2.07 per diluted share for the twelve months ended June 30,
2017. Record earnings for the fiscal year ended June 30, 2018
were the result of growth in the Bank’s loan and lease portfolio,
growth in fee income and a reduced income tax rate. Operating
expenses increased due to higher levels of loan originations and
deposit activities and due to non-operating expenses including
re-branding and purchase accounting amortization.
“We generated strong loan growth in the fourth quarter, led by
robust loan originations in jumbo single family mortgage,
multifamily, and C&I lending,” stated Greg Garrabrants,
President and Chief Executive Officer of BofI. “Our multi-year
investments to diversify of our lending are paying off, as
reflected in ending loan balances increasing $368 million in the
fourth quarter and $1.06 billion in fiscal 2018. Demand for loans
remains strong, as evidenced by our $1.2 billion loan pipeline at
June 30, 2018.”
“Non-interest expense for the quarter was elevated due to
expenses related to Epiq, expenses related to RSUs, deal-related
expenses, and investments in rebranding, technology, and
personnel,” said Andy Micheletti, Executive Vice President and
Chief Financial Officer of BofI. “Our efficiency ratio for fiscal
2018 was 39.58%.”
He continued, “Credit quality remains healthy. Non-performing
loans to total loans was 37 basis points at June 30, 2018,
down from 38 basis points at June 30, 2017. Excluding
charge-offs related to the H&R Block tax product loans, our net
annualized charge-off ratio was 2 basis points in the fourth
quarter of 2018 and 2 basis point for fiscal year 2018.”
Other Highlights:
- Total assets reached $9,539.5 million,
up $1,037.8 million or 12.2% compared to June 30, 2017
- Loan and lease portfolio grew by
$1,057.8 million or 14.3% compared to June 30, 2017
- Loan and lease originations for
investment for the three months ended June 30, 2018 were
$1,361.6 million, up 19.3%, or 77.2% annualized, compared to the
quarter ended June 30, 2017
- Deposits grew by $1,085.8 million or
15.7% compared to June 30, 2017
- Asset quality remains strong with total
non-performing assets of 0.43% of total assets and non-performing
loans and leases equal to 0.37% of total loans at June 30,
2018
- Net interest margin was 3.71%,
excluding average excess cash balances associated with short-term
H&R Block products, the net interest margin was 3.80%
- Tangible book value increased to $13.99
per share, up 8.1% compared to June 30, 2017
Fourth Quarter Fiscal 2018 Income Statement Summary
During the quarter ended June 30, 2018, BofI earned $37.1
million or $0.58 per diluted share compared to $32.5 million, or
$0.50 per diluted share for the quarter ended June 30, 2017.
Net interest income increased $8.5 million or 10.9% for the quarter
ended June 30, 2018 compared to June 30, 2017, primarily
due to the $1,101.4 million growth in average-earning assets.
The loan and lease loss provision was $3.9 million for the
quarter ended June 30, 2018 compared to $0.2 million for the
quarter ended June 30, 2017. The increase was primarily due to
growth in the loan and lease portfolio during the quarter ended
June 30, 2018 and higher loss recoveries in the quarter ended
June 30, 2017.
For the fourth quarter ended June 30, 2018, non-interest
income was $17.0 million compared to $13.5 million for the three
months ended June 30, 2017. The increase year over year was
the result of an increase banking service fees and other income of
$3.0 million, primarily due to bankruptcy trustee services, and an
increase in gain on sale – other of $2.4 million, due to increased
sales of structured settlements and lottery receivables, partially
offset by a decrease in mortgage banking income of $1.0 million and
a decrease in realized gain on sales of securities of $1.0
million.
Non-interest expense or operating costs increased $13.7 million
to $49.7 million for the quarter ended June 30, 2018 from
$36.0 million for the three months ended June 30, 2017. The
increase was mainly a result of an increase in compensation expense
of $7.5 million related to staffing added since June 30, 2017,
an increase in advertising and promotional of $1.7 million, an
increase in other general and administrative expenses of $1.4
million, an increase in data processing and internet expense of
$1.3 million and an increase in depreciation and amortization of
$1.1 million. The increases in staffing, data processing and
internet, and depreciation expense were incurred primarily to
support growth of the Bank’s operations as well as the addition of
Epiq operations. The increase in advertising and promotional
expense were primarily related to increased deposit marketing and
lead generation costs.
Our effective tax rate was 26.43% for the three months ended
June 30, 2018 compared to 41.75% for the three months ended
June 30, 2017. The decrease in our effective income tax rate
for the three months ended June 30, 2018 was primarily due to
the tax benefit associated with the federal rate reduction under
the Tax Cuts and Job Acts of 2017 and tax credits received during
fiscal 2018.
Full Year Fiscal 2018 Highlights
- Net income reached a record $152.4
million, an increase of 13.1% compared to the fiscal year ended
June 30, 2017
- Loan and lease originations and
purchases for investment for the fiscal year ended June 30,
2018 were $5,922.8 million up 32.8% compared to the year ended
June 30, 2017
- Net interest margin increased to 4.11%
for the fiscal year ended June 30, 2018 from 3.95% for the
fiscal year ended June 30, 2017
- Return on average assets remained
strong at 1.68% for the fiscal year ended June 30, 2018
- BofI was named a top five performing
large thrift in the U.S. for the tenth consecutive year by SNL
Financial/S&P Global Market Intelligence
Balance Sheet Summary
BofI’s total assets increased $1,037.8 million, or 12.2%, to
$9,539.5 million, as of June 30, 2018, up from $8,501.7
million at June 30, 2017. The loan and lease portfolio
increased $1,057.8 million on a net basis, primarily from portfolio
loan and lease originations and purchases of $5,922.8 million less
principal repayments and other adjustments of $4,865.0 million.
Investment securities decreased $92.5 million primarily due to
sales and repays partially offset by purchases. Total liabilities
increased by $911.6 million, or 11.9%, to $8,579.0 million at
June 30, 2018, up from $7,667.4 million at June 30, 2017.
The increase in total liabilities resulted primarily from growth in
deposits of $1,085.8 million. Stockholders’ equity increased by
$126.3 million, or 15.1%, to $960.5 million at June 30, 2018
from $834.2 million at June 30, 2017. The increase was
primarily the result of $152.4 million in net income and $10.4
million of vesting and issuance of RSUs and stock-based
compensation expense, partially offset by $35.2 million of stock
repurchases, $1.1 million unrealized gain in other comprehensive
income, net of tax, and $0.3 million of dividends declared on
preferred stock.
The Bank’s Tier 1 core capital to adjusted average assets ratio
was 8.88% at June 30, 2018.
Conference Call
A conference call and webcast will be held on Tuesday,
August 7, 2018 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 Friday,
September 7, 2018, at BofI’s website and telephonically by dialing
toll-free number 877-660-6853, passcode 13681340.
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 $9.5 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.
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 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, 2018 June 30, 2017 June 30,
2016 Selected Balance Sheet Data: Total assets $
9,539,504 $ 8,501,680 $ 7,599,304 Loans and leases—net of allowance
for loan and lease losses 8,432,289 7,374,493 6,354,679 Loans held
for sale, at fair value 35,077 18,738 20,871 Loans held for sale,
lower of cost or fair value 2,686 6,669 33,530 Allowance for loan
and lease losses 49,151 40,832 35,826 Securities—trading — 8,327
7,584 Securities—available-for-sale 180,305 264,470 265,447
Securities—held-to-maturity — — 199,174 Total deposits 7,985,350
6,899,507 6,044,051 Securities sold under agreements to repurchase
— 20,000 35,000 Advances from the FHLB 457,000 640,000 727,000
Subordinated notes and debentures and other 54,552 54,463 56,016
Total stockholders’ equity 960,513 834,247 683,590
Capital Ratios: Equity to assets at end of period 10.07 %
9.81 % 8.99 % BofI Holding, Inc: Tier 1 leverage (core) capital to
adjusted average assets 9.45 % 9.95 % 9.12 % Common equity tier 1
capital (to risk-weighted assets) 13.27 % 14.66 % 14.42 % Tier 1
capital (to risk-weighted assets) 13.34 % 14.75 % 14.53 % Total
capital (to risk-weighted assets) 14.84 % 16.38 % 16.36 % BofI
Federal Bank: Tier 1 leverage (core) capital to adjusted average
assets 8.88 % 9.60 % 8.78 % Common equity tier 1 capital (to
risk-weighted assets) 12.53 % 14.25 % 14.00 % Tier 1 capital (to
risk-weighted assets) 12.53 % 14.25 % 14.00 % Total capital (to
risk-weighted assets) 13.27 % 14.97 % 14.75 %
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)
2018
2017 2018 2017 Selected Income
Statement Data: Interest and dividend income $ 118,898 $ 98,543
$ 475,074 $ 387,286 Interest expense 31,850 20,016
106,580 74,059 Net interest income 87,048 78,527
368,494 313,227 Provision for loan losses 3,900 200
25,800 11,061 Net interest income after provision for
loan losses 83,148 78,327 342,694 302,166 Non-interest income
16,977 13,533 70,941 68,132 Non-interest expense 49,673
35,980 173,936 137,605 Income before income
tax expense 50,452 55,880 239,699 232,693 Income tax expense 13,335
23,332 87,288 97,953 Net income $
37,117 $ 32,548 $ 152,411 $ 134,740 Net
income attributable to common stock $ 37,040 $ 32,471 $ 152,102 $
134,431
Per Share Data: Net income: Basic $ 0.58 $
0.50 $ 2.36 $ 2.07 Diluted $ 0.58 $ 0.50 $ 2.36 $ 2.07 Book value
per common share $ 15.24 $ 13.05 $ 15.24 $ 13.05 Tangible book
value per common share $ 13.99 $ 12.94 $ 13.99 $ 12.94
Weighted average number of shares outstanding: Basic
64,087,138 64,970,915 64,552,725 64,850,114 Diluted 64,087,138
64,970,915 64,552,725 64,850,114 Common shares outstanding at end
of period 62,688,064 63,536,244 62,688,064 63,536,244 Common shares
issued at end of period 65,796,060 65,115,932 65,796,060 65,115,932
Performance Ratios and Other Data: Loan and lease
originations for investment $ 1,361,597 $ 1,141,710 $ 5,922,801 $
4,182,701 Loan originations for sale $ 288,832 $ 291,056 $
1,564,165 $ 1,375,443 Loan and lease purchases $ — $ — $ — $
276,917 Return on average assets 1.56 % 1.55 % 1.68 % 1.68 % Return
on average common stockholders’ equity 15.67 % 15.89 % 17.05 %
17.78 % Interest rate spread1 3.34 % 3.55 % 3.79 % 3.74 % Net
interest margin2 3.71 % 3.80 % 4.11 % 3.95 % Efficiency ratio 47.75
% 39.08 % 39.58 % 36.08 %
Asset Quality Ratios: Net
annualized charge-offs to average loans and leases 0.70 % 0.20 %
0.19 % 0.06 % Non-performing loans and leases to total loans and
leases 0.37 % 0.38 % 0.37 % 0.38 % Non-performing assets to total
assets 0.43 % 0.35 % 0.43 % 0.35 % Allowance for loan and lease
losses to total loans and leases at end of period 0.58 % 0.55 %
0.58 % 0.55 % Allowance for loan and lease losses to non-performing
loans and leases 157.40 % 143.81 % 157.40 %
143.81 %
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
liabilities2. Net interest margin represents annualized net
interest income as a percentage of average interest-earning
assets
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180807005849/en/
BofI Holding, Inc.Investor Relations Contact:Johnny Lai, CFAVP,
Corporate Development & Investor
Relations858-649-2218jlai@bofi.com
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