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Actionable news in BOFI: BofI Holding, Inc.,

Bofi Holding, Inc. Announces Record Quarter Net Income, Up SAN DIEGO, CA – (MARKETWIRED) –

The following excerpt is from the company's SEC filing.

April 28, 2016

– BofI Holding, Inc. (NASDAQ: BOFI) (

), parent company of BofI

Federal Bank (the

), today announced financial results for the

fiscal quarter ended

March 31, 2016

. Net income was a record

$35.9 million

, an increase of

over net income of

$21.1 million

for the quarter ended

March 31, 2015

. Earnings attributable to BofI’s common stockholders were

$35.8 million

per diluted share for the

quarter of fiscal

$21.0 million

Adjusted earnings, a non-GAAP measur e, which excludes the after-tax impact of gains and losses associated with our securities portfolio, increased

$36.0 million

compared to

$21.6 million

Quarter Fiscal

Financial Summary:

Three Months Ended

March 31,

(Dollars in thousands, except per share data)

Q3 Fiscal 2016

Q3 Fiscal 2015

% Change

Net interest income

69,557

50,665

Non-interest income

23,316

178.7%

35,914

21,074

Adjusted Earnings

35,995

21,564

Net income attributable to common stockholders

35,837

20,997

Diluted EPS

See “Use of Non-GAAP Financial Measures”

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

For the

nine months

, net income was a record

$89.6 million

$58.3 million

$89.3 million

$58.1 million

. Record earnings for the quarter and for the

were primarily the result of growth in both the Bank’s loan and lease portfolio and its fee income businesses.

“We achieved record quarterly earnings and earnings per share as a result of robust fee income growth, balanced loan growth and solid net interest margins” stated Greg Garrabrants, President and Chief Executive Officer. “Strong growth in fee income from our H&R Block partnership was a catalyst for our best in class return on assets and return on equity. We continue to generate healthy growth in our single family, C&I and warehouse lending businesses while maintaining a strong core net interest margin and sound credit quality. We closed the acquisition of certain assets and operations of Pacific Western Equipment Finance at the end of the third quarter. The addition of an experienced equipment leasing team with a nationwide footprint further diversifies our commercial lending capabilities. With a strong balance sheet, excellent credit quality and capital flexibility, we will continue to invest in new growth initiatives and ongoing infrastructure enhancements that will further improve our customer service and user experience” Mr. Garrabrants concluded.

This quarter ended March 31, 2016 was the Bank’s first income tax preparation season since it entered into its August 2015 long-term agreement with H&R Block, Inc. to offer co-branded financial products to H&R Block customers. The seasonal impact of income tax refunds received by H&R Block customers this quarter caused an expected increase in the Bank’s fee income for the three months ended March 31, 2016 and an

expected temporary increase in assets and deposits included in the balance sheet of the Bank at March 31, 2016. Excluding the H&R Block temporary seasonal growth, consolidated assets and consolidated deposits at March 31, 2016 would have been $7.2 billion and $5.5 billion, respectively.

“The net interest margin would have been 4.02% when excluding the average balances associated with lower yielding excess cash and the average balances and yield earned on the H&R Block related loan products during the quarter, which is consistent with our strong net interest margins reported in previous quarters,” stated Andy Micheletti, Executive Vice President and Chief Financial Officer, who continued. “BofI also had strong balance sheet growth even after excluding the seasonal assets and deposits from the H&R Block agreement. Asset growth excluding the seasonal growth this quarter was 29.4% year over year and 29.5% annualized compared to the last quarter ended December 31, 2015. Similarly, deposit growth this quarter was 25.9% year over year and 23.2% annualized growth compared to the last quarter ended December 31, 2015 after excluding seasonal deposit growth.”

“Also this quarter, management and the Board took additional steps to position our business for the future,” added Mr. Micheletti. “In January, we completed our first rating process and our Bank and holding company each received investment grade debt ratings from Kroll Bond Rating Agency. The debt ratings and the overall strength of BofI’s financial position allowed us to conduct a public offering at the holding company of investment-grade 6.25% subordinated notes totaling $51 million of face amount completed in March. With significant volatility in public equity markets in the first three months of 2016, management elected to issue debt for its capital raising activities rather than issuing common equity as in the past. The proceeds of the notes are expected to be used for general corporate purposes, possible future acquisitions and growth opportunities, possible common stock share repurchases, and to provide new capital to the Bank to support its future growth. Also in March, the Board authorized a program to repurchase up to $100 million of BOFI common stock at our discretion based on our assessment of the stock trading price, general market conditions and other considerations.”

Other Highlights:

Total assets reached

$7,705.6 million

$2,177.1 million

Loan portfolio grew by

$1,393.4 million

Loan originations and purchases for the three months ended

$1,248.5 million

17.97%

compared to the quarter ended

Deposits grew by

$1,679.3 million

Asset quality remains strong with total non-performing assets of

of total assets and non-performing loans and leases equal to

of total loans and leases at

Return on average common stockholders’ equity was

22.59%

17.86%

Tangible book value increased to

$10.23

per share, up

per share compared to

Income Statement Summary

During the quarter ended

, BofI earned

per diluted share compared to

per diluted share for the quarter ended

. Net interest income increased

$18.9 million

, due to the $1.9 billion growth in average-earning assets.

The loan and lease loss provision was

$2.0 million

$2.9 million

. Non-performing loans as percentage of total loans was 39 basis points at March 31, 2016 compared to 72 basis points at March 31, 2015 and, for fiscal 2016 year to date, the Bank has experienced a net recovery of $0.8 million. As a result of the decreasing charge-off history, the additional loss provisions added for loan originations and for the equipment lease purchase this quarter have been partially reduced by lower loss rates and lower outstanding balances associated with certain older vintage loans causing a decline in the provision year over year.

, non-interest income was

$23.3 million

$8.4 million

. The increase year over year was the result of an increase in banking service fees and other income of

$16.3 million

, primarily due to seasonal H&R Block-branded products and service fee income.

Non-interest expense or operating costs increased

$9.1 million

$29.4 million

$20.3 million

. The increase was mainly a result of an increase in salaries and related expense of

$5.8 million

related to staffing added since

, an increase in data processing and internet expense of

$1.5 million

and an increase of

$1.4 million

in other general and administrative costs, partially to support seasonal H&R Block-branded products and services. The increases in staffing primarily support loan, deposit, data processing and software initiatives.

Balance Sheet Summary

BofI’s total assets increased

$1,881.9 million

, as of

, up from

$5,823.7 million

June 30, 2015

. The loan portfolio increased

$1,106.1 million

on a net basis, primarily from portfolio loan originations and purchases of

$2,814.1 million

less principal repayments and other adjustments of

$1,708.0 million

. Loans held for sale

decreased

$0.7 million

. Investment securities

$100.8 million

primarily due to securities purchases. Total liabilities increased by

$1,762.1 million

$7,052.3 million

$5,290.2 million

. The increase in total liabilities resulted primarily from growth in deposits of

$1,596.1 million

. Stockholders’ equity increased by

$119.8 million

$653.3 million

$533.5 million

. The increase was primarily the result of

in net income and sale of common stock of

, net of commissions and fees.

The Bank’s Tier 1 core capital to adjusted average assets ratio was

Conference Call

A conference call and webcast will be held on

Thursday, April 28, 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 Friday, May 27, 2016, at BofI’s website and telephonically by dialing toll-free number 877-660-6853, passcode 13634378.

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

$7.7 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 and the S&P SmallCap 600

Index. For more information on BofI Federal Bank, please visit bofifederalbank.com.

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:

Nine Months Ended

(Dollars in thousands)

89,564

58,287

Realized securities losses (gains)

Unrealized securities losses (gains)

Tax (provision) benefit

89,257

59,433

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.

Investor Relations Contact:

Johnny Lai, CFA

VP, Corporate Development & Investor Relations

858-649-2218

jlai@bofifederalbank.com

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)

Selected Balance Sheet Data:

7,705,622

5,823,719

5,528,520

Loans and leases—net of allowance for loan and lease losses

6,034,700

4,928,618

4,641,262

Loans held for sale, at fair value

42,682

25,430

22,911

Loans held for sale, lower of cost or fair value

59,988

77,891

85,571

Allowance for loan and lease losses

36,931

28,327

25,455

Securities—trading

Securities—available-for-sale

278,653

163,361

167,056

Securities—held-to-maturity

211,294

225,555

233,934

Total deposits

6,048,031

4,451,917

4,368,772

Securities sold under agreements to repurchase

35,000

Advances from the FHLB

858,000

753,000

583,000

Subordinated notes and debentures

56,155

Total stockholders’ equity

653,289

533,526

496,028

Capital Ratios:

Equity to assets at end of period

BofI Holding, Inc:

Tier 1 leverage (core) capital to adjusted average assets

Common equity tier 1 capital (to risk-weighted assets)

Tier 1 capital (to risk-weighted assets)

Total capital (to risk-weighted assets)

BofI Federal Bank:

(Unaudited – dollars in thousands, except per share data)

At or for the Three Months Ended

At or for the Nine Months Ended

Selected Income Statement Data:

Interest and dividend income

84,282

62,911

231,446

176,797

Interest expense

14,725

12,246

39,590

33,146

191,856

143,651

Provision for loan and lease losses

Net interest income after provision for loan and lease losses

67,557

47,765

184,056

135,351

49,325

20,312

29,408

20,343

79,771

56,726

Income before income tax expense

61,465

35,788

153,610

98,937

Income tax expense

25,551

14,714

64,046

40,650

89,332

58,055

Per Share Data:

Net income:

Book value per common share

Tangible book value per common share

Weighted average number of shares outstanding:

64,485,865

62,180,216

64,195,582

60,714,964

64,486,816

62,417,760

64,203,207

60,951,052

Common shares outstanding at end of period

63,060,732

61,140,320

Common shares issued at end of period

64,177,770

62,135,007

Performance Ratios and Other Data:

Loan originations for investment

857,557

804,414

2,673,577

2,420,022

Loan originations for sale

250,876

253,834

1,155,329

721,780

Loan and lease purchases

140,109

140,493

Return on average assets

Interest rate spread

Net interest margin

Efficiency ratio

Asset Quality Ratios:

Net annualized charge-offs to average loans and leases

Non-performing loans and leases to total loans and leases

Non-performing assets to total assets

Allowance for loan and lease losses to total loans and leases at end of period

Allowance for loan and lease losses to non-performing loans and leases

154.06

_________________________

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, 2015

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

Net interest margin represents annualized net interest income as a percentage of average interest-earning assets

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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Other recent filings from the company include the following:

Quarterly report [Sections 13 or 15(d)] - April 28, 2016
Bofi Holding, Inc. Issues Statement Regarding Share Price Volatility - April 18, 2016
Bofi Holding, Inc. Announces Acquisition Of Equipment Leases And Operations Of Pacific Western Equipment Finance - April 4, 2016