Form 8-K BofI Holding, Inc. For: Jan 29
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.� 20549
�
FORM 8-K
�
CURRENT REPORT
�
Pursuant to Section�13 or 15(d) of the
Securities Exchange Act of 1934
�
Date of Report (Date of earliest event reported):� January�29, 2015
BofI HOLDING, INC.
(Exact name of registrant as specified in its charter)
�
Delaware | 000-51201 | 33-0867444 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
�
4350 La Jolla Village Drive, Suite 140, San Diego, CA | 92122 |
(Address of principal executive offices) | (Zip Code) |
�
Registrant's telephone number, including area code: (858) 350-6200����������
�
Not Applicable
(Former name or former address, if changed since last report.)
�
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
�
o����������������������������������� Written communications pursuant to Rule 425 under the Securities Act
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o����������������������������������� Soliciting material pursuant to Rule 14a-12 under the Exchange Act
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o����������������������������������� Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
�
o����������������������������������� Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
Item 2.02����Results of Operations and Financial Condition
On January�29, 2015, BofI Holding, Inc. (the Registrant ), parent of BofI Federal Bank, issued a press release announcing its second quarter results of operations for the period ended December�31, 2014. The press release is set forth as Exhibit 99.1 and is incorporated by reference in this Item 2.02.
Pursuant to General Instruction B.2 of Form 8-K, the information in this Item 2.02 of Form 8-K, including Exhibit 99.1 is being furnished pursuant to Item 2.02 and shall not be deemed filed for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise be subject to the liabilities of that section, nor is it incorporated by reference into any filing of the Registrant under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Item 9.01 - Financial Statements and Exhibits
(d)����Exhibits. ��������
Exhibit | Description | |
99.1 | Press Release of BofI Holding, Inc. dated January 29, 2015 | |
SIGNATURE
�
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
� | BofI Holding, Inc. | |||
� | � | |||
Date: | January 29, 2015 | By: | /s/ Andrew J. Micheletti | � |
� | � | Andrew J. Micheletti | ||
� | � | EVP and Chief Financial Officer | ||
For Immediate Release
BofI Holding, Inc. Announces Record Second Quarter Net Income, Up 47.3%
SAN DIEGO, CA - (MARKETWIRED) - January�29, 2015 - 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, 2014. Net income was a record $19.4 million, an increase of 47.3% over net income of $13.2 million for the quarter ended December�31, 2013. Earnings attributable to BofI's common stockholders were $19.3 million or $1.26 per diluted share for the second quarter of fiscal 2015, an increase of 47.5% from $13.1 million or $0.91 per diluted share for the second quarter ended December�31, 2013.
Core earnings, a non-GAAP measure which excludes the after-tax impact of gains and losses associated with our securities portfolio, increased 40.6% to $19.4 million for the quarter ended December�31, 2014 compared to $13.8 million for the quarter ended December�31, 2013.
Second Quarter Fiscal 2015 Financial Summary:
Three Months Ended� �December 31, | |||||||||
(Dollars in thousands, except per share data) | Q2 Fiscal 2015 | Q2 Fiscal 2014 | % Change | ||||||
Net Interest Income | $ | 48,111 | $ | 32,827 | 46.6% | ||||
Non-Interest Income | $ | 6,697 | $ | 5,543 | 20.8% | ||||
Net Income | $ | 19,372 | $ | 13,154 | 47.3% | ||||
Core Earnings1 | $ | 19,386 | $ | 13,786 | 40.6% | ||||
Net Income Attributable to Common Stockholders | $ | 19,294 | $ | 13,077 | 47.5% | ||||
Diluted EPS | $ | 1.26 | $ | 0.91 | 38.5% | ||||
1 Core earnings is a non-GAAP measure that excludes realized and unrealized gains and losses, net of taxes, associated with our securities portfolios.
"We experienced another quarter of record earnings reaching a 19.1% return on equity and 34.6% efficiency ratio, noted Mr. Greg Garrabrants, President and Chief Executive Officer. Mr. Garrabrants continued, Although loan production was significantly outpaced by deposit generation this quarter, our loan production still generated strong asset and net interest income growth. Our loan pipelines are robust and we remain optimistic about our ability to generate consumer and business deposits to fund this pipeline. Over the last year, we made significant progress growing deposits, increasing total deposits by 67% compared to the same period a year ago while reducing our funding costs by 15 basis points. We continue to invest in our technology and our people to ensure that we provide excellent customer service and a differentiated digital experience to our customers."
Other Highlights:
" | Total assets reached $5,194.7 million, up $1,626.4 million or 45.6% compared to December�31, 2013 |
" | Loan portfolio grew by $1,526.3 million or 55.0% compared to December�31, 2013 |
" | Loan originations for the three months ended December�31, 2014 were $1,078.9 million, up 37.0% compared to the quarter ended December�31, 2013 |
" | Deposits grew by $1,602.3 million, or 66.7% compared to December�31, 2013 |
" | Asset quality remains strong with total non-performing assets of 0.69% of total assets and non-performing loans equal to 0.80% of total loans at December�31, 2014 |
" | Tangible book value increased to $29.58 per share, up $7.76 per share compared to December�31, 2013 |
Second Quarter Fiscal 2015 Income Statement Summary
During the quarter ended December�31, 2014, BofI earned $19.4 million or $1.26 per diluted share compared to $13.2 million, or $0.91 per diluted share for the quarter ended December�31, 2013. Net interest income increased $15.3 million or 46.6% for the quarter ended December�31, 2014 compared to December�31, 2013. Average earning assets grew year over year by $1,724.3 million and our net interest margin was 3.85% compared to 4.01% for the quarters ended December�31, 2014 and 2013, respectively.
The loan loss provision was $2.9 million for the quarter ended December�31, 2014 compared to $1.0 million for the quarter ended December�31, 2013. The increase was primarily the result of growth in the loan portfolio.
For the second quarter ended December�31, 2014, non-interest income was $6.7 million compared to $5.5 million for the three months ended December�31, 2013. The increase year over year was primarily the result of a in $0.6 million increase in realized gain on sale of securities, a $0.5 million decrease in unrealized loss on securities and a $0.4 million increase in banking service fees and other income. The increase was partially offset by a $0.2 million decrease in mortgage banking income.
Non-interest expense or operating costs increased $3.6 million to $18.9 million for the quarter ended December�31, 2014 from $15.3 million for the three months ended December�31, 2013. The increase was mainly a result of an increase in compensation expense of $2.8 million related to additional staffing added since December�31, 2013, an increase of $0.4 million in data processing and internet expenses, an increase of $0.3 million in FDIC and regulator fees and a $0.2 million increase in advertising and promotional expenses. The increases in staffing and data processing and internet expenses are primarily due to growth of the Bank's lending and deposit operations. The increase in advertising and promotional and FDIC and regulator fees is primarily correlated to the increase in deposits.
Balance Sheet Summary
BofI's total assets increased $791.7 million, or 18.0%, to $5,194.7 million, as of December�31, 2014, up from $4,403.0 million at June�30, 2014. The loan portfolio increased a net $770.8 million, primarily from portfolio loan originations of $1,615.6 million less principal repayments and other adjustments of $844.8 million. Loans held for sale decreased $4.3 million. Investment securities decreased $47.2 million primarily due to principal repayments and the sale of two securities. Total liabilities increased by $712.1 million, or 17.7%, to $4,744.3 million at December�31, 2014, up from $4,032.2 million at June�30, 2014. The increase in total liabilities resulted primarily from growth in deposits of $963.9 million partially offset by a decline in FHLB advances of $240.0 million and the maturity of $10.0 million of reverse repurchase agreements. Stockholders' equity increased by $79.6 million, or 21.5%, to $450.4 million at December�31, 2014 from $370.8 million at June�30, 2014. The increase was primarily the result of $37.2 million in net income and sale of common stock of $38.9 million, net of commissions and fees.
The Bank's Tier 1 capital ratio was 8.84% at December�31, 2014, compared to 8.66% at June�30, 2014.
Conference Call
A conference call and webcast will be held on Thursday, January�29, 2015 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: 888-428-9473, passcode 6971920. 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 shortly after the call on BofI's website for 30 days.
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 $5.2 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 and the S&P SmallCap 600� Index. For more information on BofI Federal Bank, please visit www.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 core earnings. 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 that 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 core earnings:
Three Months Ended | Six Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Net Income | $ | 19,372 | $ | 13,154 | $ | 37,213 | $ | 25,336 | |||||||
Realized securities losses (gains) | (587 | ) | (587 | ) | (208 | ) | |||||||||
Unrealized securities losses (gains) | 610 | 1,061 | 1,700 | 1,010 | |||||||||||
Tax (provision) benefit | (9 | ) | (429 | ) | (457 | ) | (320 | ) | |||||||
Core earnings | $ | 19,386 | $ | 13,786 | $ | 37,869 | $ | 25,818 | |||||||
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, 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.
Investor Relations Contact:
Johnny Lai, CFA
VP, Corporate Development & Investor Relations
858-649-2218
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) | December 31, 2014 | June 30, 2014 | December 31, 2013 | ||||||||
Selected Balance Sheet Data: | |||||||||||
Total assets | $ | 5,194,721 | $ | 4,402,999 | $ | 3,568,299 | |||||
Loansnet of allowance for loan losses | 4,303,661 | 3,532,841 | 2,777,325 | ||||||||
Loans held for sale, at fair value | 22,831 | 20,575 | 24,467 | ||||||||
Loans held for sale, lower of cost or fair value | 108,286 | 114,796 | 62,895 | ||||||||
Allowance for loan losses | 23,187 | 18,373 | 15,200 | ||||||||
Securitiestrading | 7,862 | 8,066 | 7,546 | ||||||||
Securitiesavailable-for-sale | 177,095 | 214,778 | 211,328 | ||||||||
Securitiesheld-to-maturity | 238,392 | 247,729 | 258,955 | ||||||||
Total deposits | 4,005,395 | 3,041,536 | 2,403,089 | ||||||||
Securities sold under agreements to repurchase | 35,000 | 45,000 | 95,000 | ||||||||
Advances from the FHLB | 670,000 | 910,000 | 729,000 | ||||||||
Subordinated debentures and other borrowings | 5,155 | 5,155 | 5,155 | ||||||||
Total stockholders equity | 450,422 | 370,778 | 311,670 | ||||||||
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, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Selected Income Statement Data: | |||||||||||||||
Interest and dividend income | $ | 59,081 | $ | 41,227 | $ | 113,886 | $ | 77,573 | |||||||
Interest expense | 10,970 | 8,400 | 20,900 | 16,635 | |||||||||||
Net interest income | 48,111 | 32,827 | 92,986 | 60,938 | |||||||||||
Provision for loan losses | 2,900 | 1,000 | 5,400 | 1,500 | |||||||||||
Net interest income after provision for loan losses | 45,211 | 31,827 | 87,586 | 59,438 | |||||||||||
Non-interest income | 6,697 | 5,543 | 11,946 | 12,520 | |||||||||||
Non-interest expense | 18,937 | 15,304 | 36,383 | 29,820 | |||||||||||
Income before income tax expense | 32,971 | 22,066 | 63,149 | 42,138 | |||||||||||
Income tax expense | 13,599 | 8,912 | 25,936 | 16,802 | |||||||||||
Net income | $ | 19,372 | $ | 13,154 | $ | 37,213 | $ | 25,336 | |||||||
Net income attributable to common stock | $ | 19,294 | $ | 13,077 | $ | 37,058 | $ | 25,181 | |||||||
Per Share Data: | |||||||||||||||
Net income: | |||||||||||||||
Basic | $ | 1.27 | $ | 0.92 | $ | 2.47 | $ | 1.77 | |||||||
Diluted | $ | 1.26 | $ | 0.91 | $ | 2.46 | $ | 1.77 | |||||||
Book value per common share | $ | 29.65 | $ | 21.82 | $ | 29.65 | $ | 21.82 | |||||||
Tangible book value per common share | $ | 29.58 | $ | 21.82 | $ | 29.58 | $ | 21.82 | |||||||
Weighted average number of shares outstanding: | |||||||||||||||
Basic | 15,204,812 | 14,275,705 | 14,995,794 | 14,189,568 | |||||||||||
Diluted | 15,263,567 | 14,350,224 | 15,054,598 | 14,266,718 | |||||||||||
Common shares outstanding at end of period | 15,021,759 | 14,052,446 | 15,021,759 | 14,052,446 | |||||||||||
Common shares issued at end of period | 16,015,113 | 14,986,263 | 16,015,113 | 14,986,263 | |||||||||||
Performance Ratios and Other Data: | |||||||||||||||
Loan originations for investment | $ | 802,550 | $ | 597,072 | $ | 1,615,608 | $ | 1,067,741 | |||||||
Loan originations for sale | $ | 276,316 | $ | 190,558 | $ | 467,946 | $ | 377,254 | |||||||
Loan purchases | $ | $ | $ | $ | |||||||||||
Return on average assets | 1.53 | % | 1.58 | % | 1.55 | % | 1.60 | % | |||||||
Return on average common stockholders equity | 19.08 | % | 17.69 | % | 18.85 | % | 17.71 | % | |||||||
Interest rate spread1 | 3.72 | % | 3.87 | % | 3.78 | % | 3.80 | % | |||||||
Net interest margin2 | 3.85 | % | 4.01 | % | 3.91 | % | 3.94 | % | |||||||
Efficiency ratio | 34.55 | % | 39.89 | % | 34.67 | % | 40.59 | % | |||||||
Capital Ratios: | |||||||||||||||
Equity to assets at end of period | 8.67 | % | 8.73 | % | 8.67 | % | 8.73 | % | |||||||
Tier 1 leverage (core) capital to adjusted tangible assets3 | 8.84 | % | 9.01 | % | 8.84 | % | 9.01 | % | |||||||
Tier 1 risk-based capital ratio3 | 14.95 | % | 15.03 | % | 14.95 | % | 15.03 | % | |||||||
Total risk-based capital ratio3 | 15.71 | % | 15.73 | % | 15.71 | % | 15.73 | % | |||||||
Tangible capital to tangible assets3 | 8.82 | % | 9.01 | % | 8.82 | % | 9.01 | % | |||||||
Asset Quality Ratios: | |||||||||||||||
Net annualized charge-offs to average loans outstanding | 0.02 | % | 0.05 | % | 0.03 | % | 0.04 | % | |||||||
Non-performing loans to total loans | 0.80 | % | 0.58 | % | 0.80 | % | 0.58 | % | |||||||
Non-performing assets to total assets | 0.69 | % | 0.49 | % | 0.69 | % | 0.49 | % | |||||||
Allowance for loan losses to total loans at end of period | 0.53 | % | 0.54 | % | 0.53 | % | 0.54 | % | |||||||
Allowance for loan losses to non-performing loans | 66.45 | % | 93.35 | % | 66.45 | % | 93.35 | % | |||||||
_________________________
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.
3. Reflects regulatory capital ratios of BofI Federal Bank.
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