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Form 8-K BofI Holding, Inc. For: Jul 30

July 30, 2015 9:02 AM EDT


UNITED 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):  July 30, 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
Number)
 

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
 
o                                    Soliciting material pursuant to Rule 14a-12 under the Exchange Act
 
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 July 30, 2015, BofI Holding, Inc. (the “Registrant”), parent of BofI Federal Bank, issued a press release announcing its unaudited earnings for the fourth quarter and fiscal year ended June 30, 2015. A copy of the press release and unaudited financial schedules are set forth as Exhibit 99.1 and 99.2 respectively, and are 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 and 99.2 are 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 are they 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 July 30, 2015
99.2
 
Financial Schedules






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:
July 30, 2015
By:
/s/ Andrew J. Micheletti
 
 
 
 
Andrew J. Micheletti
 
 
 
EVP and Chief Financial Officer





For Immediate Release
BofI Holding, Inc. Announces Record Fourth Quarter Net Income of $24.4 million
Q4 Diluted EPS Increases 41.3%; Full-Year Diluted EPS Increases 39.5%

SAN DIEGO, CA – (MARKETWIRED) – July 30, 2015 – BofI Holding, Inc. (NASDAQ: BOFI) (“BofI”), parent company of BofI Federal Bank (the Bank), today announced financial results for the fourth quarter and the fiscal year ended June 30, 2015. Net income was a record $24.4 million, an increase of 52.4% over net income of $16.0 million for the quarter ended June 30, 2014. Earnings attributable to BofI’s common stockholders were $24.3 million or $1.54 per diluted share for the fourth quarter of fiscal 2015, an increase of 52.6% from $15.9 million or $1.09 per diluted share for the fourth quarter of fiscal 2014.
Adjusted earnings, a non-GAAP measure previously labeled “core earnings,” which excludes the after-tax impact of gains and losses associated with the Bank’s securities portfolio, increased 45.7% to $23.5 million for the quarter ended June 30, 2015 compared to $16.1 million for the quarter ended June 30, 2014. In the fourth quarter of fiscal 2015 the Company received a one-time dividend of $1.7 million, before tax, from the FHLB as a result of the Federal Home Loan Bank’s ("FHLB") private-label mortgage-backed securities litigation settlement. Adjusted earnings in the table below excludes the after-tax impact of this one-time dividend.
Fourth Quarter Fiscal 2015 Financial Summary:
 
Three Months Ended June 30,
 
 
(Dollars in thousands, unaudited)
Q4 Fiscal 2015
 
Q4 Fiscal 2014
 
YOY Change
Net Interest Income
$
55,294

 
$
40,496

 
36.5%
Non-Interest Income
$
10,278

 
$
4,723

 
117.6%
Net Income
$
24,395

 
$
16,010

 
52.4%
Adjusted Earnings1
$
23,467

 
$
16,111

 
45.7%
Net Income Attributable to Common Stockholders
$
24,318

 
$
15,933

 
52.6%
Diluted EPS
$
1.54

 
$
1.09

 
41.3%
 
 
 
 
 
 
1 See "Use of Non-GAAP Financial Measures"

For the fiscal year ended June 30, 2015, net income was a record $82.7 million, an increase of 47.8% over net income of $56.0 million for the fiscal year ended June 30, 2014. Earnings attributable to BofI’s common stockholders were $82.4 million or $5.37 per diluted share for the fiscal year ended June 30, 2015, an increase of 48.0% from $55.6 million or $3.85 per diluted share for the fiscal year ended June 30, 2014. Record earnings for the quarter and for the year ended June 30, 2015 were primarily the result of growth in the Bank’s loan portfolio.
“We achieved our fourteenth consecutive quarter of record earnings through strong loan originations, fee income growth, and disciplined expense management,” stated Greg Garrabrants, President and Chief Executive Officer. “Continued growth in our jumbo single family mortgage portfolio, record production from our C&I lending group and strong deposit growth were contributing factors to our increased net interest income this quarter. We further diversified our funding mix, with checking and savings accounts increasing to approximately 82% of our total deposits at June 30, 2015 compared to 74% a year ago. Our net interest margin increased to 3.97% this quarter including the one-time divided received from the FHLB and would have been 3.85% without the one-time dividend, equal to last quarter and within our target range. Lastly, our efficiency ratio improved to 31.65% this quarter, or 32.47% without the one-time dividend, as our cost management program's focus shifted to vendor cost reduction and productivity improvement.”

1



Other Highlights:
Total assets reached $5,823.7 million, up $1,420.7 million or 32.3% compared to June 30, 2014
Loan portfolio grew by $1,395.8 million or 39.5% compared to June 30, 2014
Loan originations increased by $1,281.4 million, up 42.2% compared to the year ended June 30, 2014
Deposits grew by $1,410.4 million, or 46.4% compared to June 30, 2014
Net interest margin remained relatively steady with a slight decrease of 3 bps to 3.92% compared to 3.95% for the year ended June 30, 2014
Asset quality continues to be strong with total non-performing assets of 0.55% of total assets and non-performing loans equal to 0.62% of total loans at June 30, 2015
Tangible book value increased to $33.92 per share, up $8.65 per share compared to June 30, 2014

Fourth Quarter Fiscal 2015 Income Statement Summary
During the quarter ended June 30, 2015, BofI earned $24.4 million or $1.54 per diluted share compared to $16.0 million, or $1.09 per diluted share for the quarter ended June 30, 2014. Net interest income increased $14.8 million or 36.5% for the quarter ended June 30, 2015 compared to June 30, 2014. Average earning assets grew year over year by $1,547.6 million and our net interest margin was 3.97% compared to 4.02% for the quarters ended June 30, 2015 and 2014, respectively.
Loan loss provision was $2.9 million for the quarter ended June 30, 2015 as compared to $2.3 million for the quarter ended June 30, 2014. The increase was primarily the result of growth in the loan portfolio.
For the fourth quarter ended June 30, 2015, non-interest income was $10.3 million compared to $4.7 million for the three months ended June 30, 2014. The primary reasons for the increase year over year were a $2.2 million increase in mortgage banking income, a $1.9 million increase in prepayment penalty fee income, a $0.8 million increase in other gains on sale and a $0.5 million increase in banking service fees and other income.
Non-interest expense or operating costs increased $5.0 million to $20.8 million for the quarter ended June 30, 2015 from $15.8 million for the three months ended June 30, 2014. The increase was primarily a result of an increase in compensation expense of $3.3 million, related to additional staffing added since June 30, 2014, an increase in advertising and promotional expense of $0.6 million, an increase in data processing and internet expenses of $0.4 million and an increase in other and general administrative expenses of $0.6 million. The increases in staffing and other operating expenses are primarily due to growth of the Bank’s lending and deposit operations.

Balance Sheet Summary
BofI’s total assets increased $1,420.7 million, or 32.3%, to $5,823.7 million, as of June 30, 2015, up from $4,403.0 million at June 30, 2014. The loan portfolio increased a net $1,395.8 million, primarily from portfolio loan originations of $3,271.9 million less principal repayments and other adjustments of $1,876.1 million. Total securities decreased by $73.8 million. Total liabilities increased by $1,258.0 million or 31.2%, to $5,290.2 million at June 30, 2015, up from $4,032.2 million at June 30, 2014. The increase in total liabilities resulted primarily from growth in demand and savings deposits of $1,408.1 million partially offset by a decrease in FHLB borrowings of $157.0 million. Stockholders’ equity increased by $162.7 million, or 43.9%, to $533.5 million at June 30, 2015, up from $370.8 million at June 30, 2014. The increase was primarily the result of $82.7 million in net income, sale of common stock through ATM offerings of $76.0 million and vesting and issuance of RSUs and exercise of stock options of $3.4 million.
The Bank’s tier 1 core capital to adjusted average assets was 9.25% at June 30, 2015.

Conference Call
A conference call and webcast will be held on Thursday, July 30, 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: 888-337-8169, passcode 8836306. 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.

2




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 over $5.8 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 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:
 
Three Months Ended
 
Fiscal Year Ended
 
June 30,
 
June 30,
(Dollars in thousands, unaudited)
2015
 
2014
 
2015
 
2014
Net income
$
24,395

 
$
16,010

 
$
82,682

 
$
55,956

Realized securities losses (gains)

 

 
(587
)
 
(208
)
FHLB one-time dividend

(1,662
)
 

 
(1,662
)
 

Unrealized securities losses
67

 
172

 
2,599

 
1,848

Tax provision
667

 
(71
)
 
(145
)
 
(666
)
Adjusted earnings
$
23,467

 
$
16,111

 
$
82,887

 
$
56,930


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:
Johnny Lai, CFA
VP, Corporate Development & Investor Relations
858-649-2218

3



The following tables set forth certain selected financial data concerning the periods indicated:
BOFI HOLDING, INC. AND SUBSIDIARY
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
 
At June 30,
(Dollars in thousands)
2015
 
2014
Selected Balance Sheet Data:
 
 
 
Total assets
$
5,823,719

 
$
4,402,999

Loans—net of allowance for loan losses
4,928,618

 
3,532,841

Loans held for sale, at fair value
25,430

 
20,575

Loans held for sale, lower of cost or market
77,891

 
114,796

Allowance for loan losses
28,327

 
18,373

Securities—trading
7,832

 
8,066

Securities—available-for-sale
163,361

 
214,778

Securities—held-to-maturity
225,555

 
247,729

Total deposits
4,451,917

 
3,041,536

Securities sold under agreements to repurchase
35,000

 
45,000

Advances from the FHLB
753,000

 
910,000

Subordinated debentures
5,155

 
5,155

Total stockholders’ equity
533,526

 
370,778








BOFI HOLDING, INC. AND SUBSIDIARY
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
 
At or for the Three Months Ended
 
At or for the Twelve Months Ended
 
June 30,
 
June 30,
(Dollars in thousands, except per share data)
2015
 
2014
 
2015
 
2014
Selected Income Statement Data:
 
 
 
 
 
 
 
Interest and dividend income
$
67,567

 
$
50,142

 
$
244,364

 
$
172,878

Interest expense
12,273

 
9,646

 
45,419

 
35,781

Net interest income
55,294

 
40,496

 
198,945

 
137,097

Provision for loan losses
2,900

 
2,250

 
11,200

 
5,350

Net interest income after provision for loan losses
52,394

 
38,246

 
187,745

 
131,747

Non-interest income
10,278

 
4,723

 
30,590

 
22,455

Non-interest expense
20,752

 
15,766

 
77,478

 
59,933

Income before income tax expense
41,920

 
27,203

 
140,857

 
94,269

Income tax expense
17,525

 
11,193

 
58,175

 
38,313

Net income
$
24,395

 
$
16,010

 
$
82,682

 
$
55,956

Net income attributable to common stock
$
24,318

 
$
15,933

 
$
82,373

 
$
55,647

Per Share Data:
 
 
 
 
 
 
 
Net income:
 
 
 
 
 
 
 
Basic
$
1.55

 
$
1.09

 
$
5.39

 
$
3.87

Diluted
$
1.54

 
$
1.09

 
$
5.37

 
$
3.85

Book value per common share
$
34.05

 
$
25.31

 
$
34.05

 
$
25.31

Tangible book value per common share
$
33.92

 
$
25.27

 
$
33.92

 
$
25.27

Weighted average number of shares outstanding:
 
 
 
 
 
 
 
Basic
15,707,704

 
14,601,972

 
15,294,477

 
14,367,824

Diluted
15,756,846

 
14,670,848

 
15,351,091

 
14,442,692

Common shares outstanding at end of period
15,518,751

 
14,451,900

 
15,518,751

 
14,451,900

Common shares issued at end of period
16,589,111

 
15,423,822

 
16,589,111

 
15,423,822

Performance Ratios and Other Data:
 
 
 
 
 
 
 
Loan originations for investment
$
851,889

 
$
680,492

 
$
3,271,911

 
$
2,297,976

Loan originations for sale
$
327,202

 
$
217,933

 
$
1,048,982

 
$
741,494

Loan purchases
$
2,306

 
$
95

 
$
2,452

 
$
95

Return on average assets
1.73
%
 
1.57
 %
 
1.61
%
 
1.59
%
Return on average common stockholders’ equity
18.86
%
 
18.14
 %
 
18.34
%
 
17.89
%
Interest rate spread1
3.82
%
 
3.89
 %
 
3.79
%
 
3.81
%
Net interest margin2
3.97
%
 
4.02
 %
 
3.92
%
 
3.95
%
Efficiency ratio
31.65
%
 
34.87
 %
 
33.75
%
 
37.56
%
Capital Ratios:
 
 
 
 
 
 
 
Equity to assets at end of period
9.16
%
 
8.42
 %
 
9.16
%
 
8.42
%
Tier 1 leverage (core) capital to adjusted average asset3
9.25
%
 
N/A

 
9.25
%
 
N/A

Tier 1 leverage (core) capital to adjusted tangible assets3
N/A

 
8.66
 %
 
N/A

 
8.66
%
Common equity tier 1 capital (to risk-weighted assets) 3
14.58
%
 
N/A

 
14.58
%
 
N/A

Tier 1 capital (to risk-weighted assets) 3
14.58
%
 
14.42
 %
 
14.58
%
 
14.42
%
Total capital (to risk-weighted assets) 3
15.38
%
 
15.11
 %
 
15.38
%
 
15.11
%
Asset Quality Ratios:
 
 
 
 
 
 
 
Net annualized charge-offs to average loans outstanding
%
 
(0.02
)%
 
0.03
%
 
0.04
%
Non-performing loans to total loans
0.62
%
 
0.57
 %
 
0.62
%
 
0.57
%
Non-performing assets to total assets
0.55
%
 
0.46
 %
 
0.55
%
 
0.46
%
Allowance for loan losses to total loans at end of period
0.57
%
 
0.51
 %
 
0.57
%
 
0.51
%
Allowance for loan losses to non-performing loans
91.88
%
 
90.13
 %
 
91.88
%
 
90.13
%
___________________________________________
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. Effective January 1, 2015, the new capital requirements changed the Bank’s tier 1 leverage ratio from using end of period adjusted tangible assets to using adjusted average assets for the quarter and added a common equity tier 1 capital ratio.




BOFI HOLDING, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
At June 30,
(Dollars in thousands, except par and stated value)
2015
 
2014
ASSETS
 
 
 
Cash and due from banks
$
222,774

 
$
155,484

Federal funds sold
100

 
100

Total cash and cash equivalents
222,874

 
155,584

Securities:
 
 
 
Trading
7,832

 
8,066

Available for sale
163,361

 
214,778

Held to maturity—fair value of $228,323 at June 2015 and $243,966 at June 2014
225,555

 
247,729

Stock of the Federal Home Loan Bank, at cost
66,270

 
42,770

Loans held for sale, carried at fair value
25,430

 
20,575

Loans held for sale, carried at lower of cost or fair value
77,891

 
114,796

Loans—net of allowance for loan losses of $28,327 as of June 2015 and $18,373 as of June 2014
4,928,618

 
3,532,841

Accrued interest receivable
20,268

 
13,863

Furniture, equipment and software—net
8,551

 
6,707

Deferred income tax
32,955

 
25,245

Cash surrender value of life insurance
5,806

 
5,625

Mortgage servicing rights, carried at fair value
2,098

 
562

Other real estate owned and repossessed vehicles
1,240

 
75

Other assets
34,970

 
13,783

TOTAL ASSETS
$
5,823,719

 
$
4,402,999

 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Deposits:
 
 
 
Non-interest bearing
$
309,339

 
$
186,786

Interest bearing
4,142,578

 
2,854,750

Total deposits
4,451,917

 
3,041,536

Securities sold under agreements to repurchase
35,000

 
45,000

Advances from the Federal Home Loan Bank
753,000

 
910,000

Subordinated debentures
5,155

 
5,155

Accrued interest payable
1,266

 
1,350

Accounts payable and accrued liabilities and other liabilities
43,855

 
29,180

Total liabilities
5,290,193

 
4,032,221

STOCKHOLDERS’ EQUITY:
 
 
 
Preferred stock—$0.01 par value; 1,000,000 shares authorized;
 
 
 
Series A— $10,000 stated value and liquidation preference per share; 515 shares issued and outstanding as of June 2015 and June 2014
5,063

 
5,063

Common stock—$0.01 par value; 50,000,000 shares authorized, 16,589,111 shares issued and 15,518,751 shares outstanding as of June 2015, 15,423,822 shares issued and 14,451,900 shares outstanding as of June 2014
166

 
154

Additional paid-in capital
296,507

 
207,579

Accumulated other comprehensive income (loss) — net of tax
(9,399
)
 
(10,366
)
Retained earnings
265,833

 
183,460

Treasury stock, at cost; 1,070,360 shares as of June 2015 and 971,922 shares as of June 2014
(24,644
)
 
(15,112
)
Total stockholders’ equity
533,526

 
370,778

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
5,823,719

 
$
4,402,999








BOFI HOLDING, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
Year Ended June 30,
(Dollars in thousands, except earnings per share)
2015
 
2014
 
2013
INTEREST AND DIVIDEND INCOME:
 
 
 
 
 
Loans, including fees
$
220,486

 
$
147,664

 
$
113,503

Investments
23,878

 
25,214

 
22,151

Total interest and dividend income
244,364

 
172,878

 
135,654

INTEREST EXPENSE:
 
 
 
 
 
Deposits
34,733

 
24,817

 
22,868

Advances from the Federal Home Loan Bank
8,910

 
6,981

 
5,939

Other borrowings
1,776

 
3,983

 
5,219

Total interest expense
45,419

 
35,781

 
34,026

Net interest income
198,945

 
137,097

 
101,628

Provision for loan losses
11,200

 
5,350

 
7,550

Net interest income, after provision for loan losses
187,745

 
131,747

 
94,078

NON-INTEREST INCOME:
 
 
 
 
 
Realized gain (loss) on sale of mortgage-backed securities
587

 
208

 
212

Other-than-temporary loss on securities:
 
 
 
 
 
Total impairment (losses) gains
(6,805
)
 
(2,359
)
 
(8,080
)
Loss (gain) recognized in other comprehensive income (loss)
4,440

 
(443
)
 
4,579

Net impairment loss recognized in earnings
(2,365
)
 
(2,802
)
 
(3,501
)
Fair value gain (loss) on trading securities
(234
)
 
954

 
1,274

Total unrealized loss on securities
(2,599
)
 
(1,848
)
 
(2,227
)
Prepayment penalty fee income
4,695

 
2,687

 
1,742

Gain on sale - other
5,793

 
6,658

 
1,130

Mortgage banking income
15,264

 
10,170

 
22,953

Banking service fees and other income
6,850

 
4,580

 
3,900

Total non-interest income
30,590

 
22,455

 
27,710

NON-INTEREST EXPENSE:
 
 
 
 
 
Salaries and related costs
43,819

 
32,240

 
28,874

Professional services
4,122

 
5,421

 
3,531

Occupancy and equipment
3,091

 
2,324

 
2,086

Data processing and internet
6,632

 
5,373

 
2,773

Advertising and promotional
6,060

 
3,724

 
4,084

Depreciation and amortization
3,273

 
2,874

 
1,904

Real estate owned and repossessed vehicles
(120
)
 
(149
)
 
505

FDIC and regulatory fees
3,434

 
2,343

 
2,125

Other general and administrative
7,167

 
5,783

 
7,705

Total non-interest expense
77,478

 
59,933

 
53,587

INCOME BEFORE INCOME TAXES
140,857

 
94,269

 
68,201

INCOME TAXES
58,175

 
38,313

 
27,910

NET INCOME
$
82,682

 
$
55,956

 
$
40,291

NET INCOME ATTRIBUTABLE TO COMMON STOCK
$
82,373

 
$
55,647

 
$
39,456

COMPREHENSIVE INCOME
$
83,649

 
$
56,390

 
$
34,926

Basic earnings per share
$
5.39

 
$
3.87

 
$
3.00

Diluted earnings per share
$
5.37

 
$
3.85

 
$
2.89









BOFI HOLDING, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) 
 
For the Quarters Ended June 30,
(Dollars in thousands, except earnings per share)
2015
 
2014
INTEREST AND DIVIDEND INCOME:
 
 
 
Loans, including fees
$
60,670

 
$
43,391

Investments
6,897

 
6,751

Total interest and dividend income
67,567

 
50,142

INTEREST EXPENSE:
 
 
 
Deposits
9,593

 
6,923

Advances from the Federal Home Loan Bank
2,255

 
2,093

Other borrowings
425

 
630

Total interest expense
12,273

 
9,646

Net interest income
55,294

 
40,496

Provision for loan losses
2,900

 
2,250

Net interest income, after provision for loan losses
52,394

 
38,246

NON-INTEREST INCOME:
 
 
 
Realized gain (loss) on sale of mortgage-backed securities

 

Other-than-temporary loss on securities:
 
 
 
Total impairment (losses) gains
(973
)
 
(390
)
Loss (gain) recognized in other comprehensive income (loss)
812

 
(248
)
Net impairment loss recognized in earnings
(161
)
 
(638
)
Fair value gain (loss) on trading securities
94

 
466

Total unrealized loss on securities
(67
)
 
(172
)
Prepayment penalty fee income
2,311

 
401

Gain on sale - other
1,368

 
607

Mortgage banking income
4,934

 
2,687

Banking service fees and other income
1,732

 
1,200

Total non-interest income
10,278

 
4,723

NON-INTEREST EXPENSE:
 
 
 
Salaries and related costs
12,109

 
8,776

Professional services
798

 
1,096

Occupancy and equipment
803

 
609

Data processing and internet
1,718

 
1,305

Advertising and promotional
1,843

 
1,251

Depreciation and amortization
922

 
713

Real estate owned and repossessed vehicles
(272
)
 
(3
)
FDIC and regulatory fees
926

 
677

Other general and administrative
1,905

 
1,342

Total non-interest expense
20,752

 
15,766

INCOME BEFORE INCOME TAXES
41,920

 
27,203

INCOME TAXES
17,525

 
11,193

NET INCOME
$
24,395

 
$
16,010

NET INCOME ATTRIBUTABLE TO COMMON STOCK
$
24,318

 
$
15,933

COMPREHENSIVE INCOME
$
23,293

 
$
17,013

Basic earnings per share
$
1.55

 
$
1.09

Diluted earnings per share
$
1.54

 
$
1.09








BOFI HOLDING, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
Year Ended June 30,
(Dollars in thousands)
2015
 
2014
 
2013
NET INCOME
$
82,682

 
$
55,956

 
$
40,291

Net unrealized gain (loss) from available-for-sale securities, net of tax expense (benefit) of $(132), $(36) and $1,865 for the years ended June 30, 2015, 2014 and 2013, respectively.
180

 
54

 
(2,796
)
Other-than-temporary impairment on securities recognized in other comprehensive income, net of tax expense (benefit) of $(832), $(253) and $1,713 for the years ended June 30, 2015, 2014 and 2013, respectively.
1,139

 
380

 
(2,569
)
Reclassification of net (gain) loss from available-for-sale securities included in income, net of tax expense (benefit) of $235, $0 and $0 for the years ended June 30, 2015, 2014 and 2013, respectively.
(352
)
 

 

Other comprehensive income (loss)
$
967

 
$
434

 
$
(5,365
)
Comprehensive income
$
83,649

 
$
56,390

 
$
34,926







BOFI HOLDING, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
 
Preferred Stock
 
Common Stock
 
Additional
Paid-in
Capital
 
Retained
Earnings
 
Accumulated Other Comprehensive Income (Loss), Net of
Income Tax
 
Treasury
Stock
 
Total
 
 
 
 
 
Number of Shares
 
 
 
 
 
 
 
(Dollars in thousands)
Shares
 
Amount
 
Issued
 
Treasury
 
Outstanding
 
Amount
 
 
 
 
 
Balance as of June 30, 2012
20,647

 
$
24,502

 
12,321,578

 
(809,042
)
 
11,512,536

 
$
123

 
$
105,683

 
$
88,357

 
$
(5,435
)
 
$
(6,610
)
 
$
206,620

Net income

 

 

 

 

 

 

 
40,291

 

 

 
40,291

Net unrealized loss from investment securities—net of income tax expense

 

 

 

 

 

 

 

 
(5,365
)
 

 
(5,365
)
Cash dividends on preferred stock

 

 

 

 

 

 

 
(835
)
 

 

 
(835
)
Issuance of convertible preferred stock
1,857

 
18,544

 

 

 

 

 

 

 

 

 
18,544

Issuance of common stock

 

 
200,000

 

 
200,000

 
2

 
6,763

 

 

 

 
6,765

Convert preferred stock to common stock
(21,989
)
 
(37,983
)
 
1,855,411

 

 
1,855,411

 
18

 
37,965

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 
3,297

 

 

 

 
3,297

Restricted stock grants

 

 
234,105

 
(95,862
)
 
138,243

 
3

 
2,173

 

 

 
(3,647
)
 
(1,471
)
Stock option exercises and tax benefits of equity compensation

 

 
27,135

 

 
27,135

 

 
416

 

 

 

 
416

Balance as of June 30, 2013
515

 
$
5,063

 
14,638,229

 
(904,904
)
 
13,733,325

 
$
146

 
$
156,297

 
$
127,813

 
$
(10,800
)
 
$
(10,257
)
 
$
268,262

Net income

 

 

 

 

 

 

 
55,956

 

 

 
55,956

Net unrealized loss from investment securities—net of income tax expense

 

 

 

 

 

 

 

 
434

 

 
434

Cash dividends on preferred stock

 

 

 

 

 

 

 
(309
)
 

 

 
(309
)
Issuance of common stock

 

 
560,301

 

 
560,301

 
7

 
41,576

 

 

 

 
41,583

Stock-based compensation expense

 

 

 

 

 

 
4,358

 

 

 

 
4,358

Restricted stock grants

 

 
169,760

 
(67,018
)
 
102,742

 
1

 
3,470

 

 

 
(4,855
)
 
(1,384
)
Stock option exercises and tax benefits of equity compensation

 

 
55,532

 

 
55,532

 

 
1,878

 

 

 

 
1,878

Balance as of June 30, 2014
515

 
$
5,063

 
15,423,822

 
(971,922
)
 
14,451,900

 
$
154

 
$
207,579

 
$
183,460

 
$
(10,366
)
 
$
(15,112
)
 
$
370,778

Net income

 

 

 

 

 

 

 
82,682

 

 

 
82,682

Net unrealized loss from investment securities—net of income tax expense

 

 

 

 

 

 

 

 
967

 

 
967

Cash dividends on preferred stock

 

 

 

 

 

 

 
(309
)
 

 

 
(309
)
Issuance of common stock

 

 
949,089

 

 
949,089

 
9

 
75,976

 

 

 

 
75,985

Stock-based compensation expense

 

 

 

 

 

 
6,648

 

 

 

 
6,648

Restricted stock grants

 

 
129,850

 
(56,151
)
 
73,699

 
2

 
2,428

 

 

 
(5,310
)
 
(2,880
)
Stock option exercises and tax benefits of equity compensation

 

 
86,350

 
(42,287
)
 
44,063

 
1

 
3,876

 

 

 
(4,222
)
 
(345
)
Balance as of June 30, 2015
515

 
$
5,063

 
16,589,111

 
(1,070,360
)
 
15,518,751

 
$
166

 
$
296,507

 
$
265,833

 
$
(9,399
)
 
$
(24,644
)
 
$
533,526








BOFI HOLDING, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
Year Ended June 30,
(Dollars in thousands)
2015
 
2014
 
2013
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
Net income
$
82,682

 
$
55,956

 
$
40,291

Adjustments to reconcile net income to net cash provided by (used in) operating activities:
 
 
 
 
 
Accretion of discounts on securities
(5,517
)
 
(8,340
)
 
(7,687
)
Net accretion of discounts on loans
(27
)
 
(2,647
)
 
(3,443
)
Stock-based compensation expense
6,648

 
4,358

 
3,297

Tax benefit from exercise of common stock options and vesting of restricted stock grants
(5,526
)
 
(4,856
)
 
(2,332
)
Valuation of financial instruments carried at fair value
234

 
(955
)
 
(1,273
)
Net gain on sale of investment securities
(587
)
 

 
(212
)
Impairment charge on securities
2,365

 
2,802

 
3,501

Provision for loan losses
11,200

 
5,350

 
7,550

Deferred income taxes
(9,034
)
 
(2,040
)
 
(4,618
)
Origination of loans held for sale
(1,048,982
)
 
(741,494
)
 
(1,085,941
)
Unrealized (gain) loss on loans held for sale
119

 
179

 
284

Gain on sales of loans held for sale
(21,057
)
 
(17,007
)
 
(24,367
)
Proceeds from sale of loans held for sale
1,114,097

 
727,265

 
1,081,954

Change in fair value of mortgage servicing rights
265

 
(45
)
 

(Gain) loss on sale of other real estate and foreclosed assets
(283
)
 
(350
)
 
(372
)
Depreciation and amortization of furniture, equipment and software
3,273

 
2,874

 
1,904

Net changes in assets and liabilities which provide (use) cash:
 
 
 
 
 
Accrued interest receivable
(6,405
)
 
(4,100
)
 
(1,891
)
Other assets
(17,948
)
 
(1,224
)
 
3,466

Accrued interest payable
(84
)
 
(324
)
 
(128
)
Accounts payable and accrued liabilities
10,669

 
5,917

 
5,767

Net cash provided by (used) in operating activities
116,102

 
21,319

 
15,750

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
 
Purchases of investment securities
(10,464
)
 
(83,033
)
 
(79,533
)
Proceeds from sales of available-for-sale mortgage-backed securities
9,539

 

 
2,775

Proceeds from repayment of securities
80,546

 
88,086

 
88,106

Purchase of stock of the Federal Home Loan Bank
(60,870
)
 
(34,221
)
 
(14,868
)
Proceeds from redemption of stock of Federal Home Loan Bank
37,370

 
19,201

 
7,798

Origination of loans held for investment
(3,242,828
)
 
(2,297,976
)
 
(953,012
)
Origination of mortgage warehouse loans, net
(29,083
)
 

 
(101,612
)
Proceeds from sales of other real estate owned and repossessed assets
1,518

 
2,724

 
3,151

Purchases of loans, net of discounts and premiums
(2,452
)
 
(95
)
 
(1,541
)
Principal repayments on loans
1,847,665

 
990,305

 
541,076

Purchases of furniture, equipment and software
(5,117
)
 
(3,163
)
 
(3,914
)
Net cash used in investing activities
$
(1,374,176
)
 
$
(1,318,172
)
 
$
(511,574
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
Net increase in deposits
$
1,410,381

 
$
949,537

 
$
476,911

Proceeds from the Federal Home Loan Bank advances
734,000

 
950,000

 
327,417

Repayment of the Federal Home Loan Bank advances
(891,000
)
 
(630,417
)
 
(159,000
)
Repayments of other borrowings and securities sold under agreements to repurchase
(10,000
)
 
(65,000
)
 
(10,000
)
Proceeds from exercise of common stock options
781

 
500

 
260

Proceeds from issuance of common stock
75,985

 
41,576

 
6,765

Proceeds from issuance of preferred stock

 

 
18,544

Tax benefit from exercise of common stock options and vesting of restricted stock grants
5,526

 
4,856

 
2,332

Cash dividends paid on preferred stock
(309
)
 
(309
)
 
(1,137
)
Net cash provided by financing activities
1,325,364

 
1,250,743

 
662,092

NET CHANGE IN CASH AND CASH EQUIVALENTS
67,290

 
(46,110
)
 
166,268

CASH AND CASH EQUIVALENTS—Beginning of year
155,584

 
201,694

 
35,426

CASH AND CASH EQUIVALENTS—End of year
$
222,874

 
$
155,584

 
$
201,694

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
 
 
 
 
 
Interest paid on deposits and borrowed funds
$
45,503

 
$
36,104

 
$
34,154

Income taxes paid
$
68,481

 
$
37,339

 
$
35,830

Transfers to other real estate and repossessed vehicles
$
2,484

 
$
1,206

 
$
4,466

Transfers from loans held for investment to loans held for sale
$
30,000

 
$
39,799

 
$
4,654

Transfers from loans held for sale to loans held for investment
$
7,237

 
$
1,471

 
$
40,779

Transfer from preferred stock to common stock
$

 
$

 
$
18

Transfer from preferred stock to additional paid-in capital
$

 
$

 
$
37,965









LOANS 
The following table sets forth the composition of the loan portfolio as of the dates indicated:
(Unaudited)
(Dollars in thousands)
June 30, 2015
 
June 30, 2014
Single family real estate secured:
 
 
 
Mortgage
$
2,980,795

 
$
1,918,626

Home equity
3,604

 
12,690

Warehouse and other1
385,413

 
370,717

Multifamily real estate secured
1,185,531

 
978,511

Commercial real estate secured
61,403

 
24,061

Auto and RV secured
13,140

 
14,740

Factoring
122,200

 
118,945

Commercial & Industrial
248,584

 
152,619

Other
601

 
1,971

  Total gross loans
5,001,271

 
3,592,880

Allowance for loan losses
(28,327
)
 
(18,373
)
Unaccreted discounts and loan fees
(44,326
)
 
(41,666
)
  Total net loans
$
4,928,618

 
$
3,532,841


1. The balance of single family warehouse loans was $122,003 at June 30, 2015 and $92,920 at June 30, 2014. The remainder of the balance is attributable to single family lender finance loans.







SECURITIES
The amortized cost, carrying amount and fair value for the major categories of securities trading, available for sale, and held to maturity at June 30, 2015 and June 30, 2014 were:
 
June 30, 2015
 
Trading
 
Available for sale
 
Held to maturity
(Unaudited)
(Dollars in thousands)
Fair
Value
 
Amortized
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair
Value
 
Carrying
Amount
 
Unrecognized
Gains
 
Unrecognized
Losses
 
Fair
Value
Mortgage-backed securities (RMBS):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S agencies1
$

 
$
43,738

 
$
701

 
$
(948
)
 
$
43,491

 
$
41,993

 
$
1,398

 
$

 
$
43,391

Non-agency2

 
23,799

 
2,835

 
(1
)
 
26,633

 
147,586

 
10,045

 
(12,749
)
 
144,882

Total mortgage-backed securities

 
67,537

 
3,536

 
(949
)
 
70,124

 
189,579

 
11,443

 
(12,749
)
 
188,273

Other debt securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. agencies1

 

 

 

 

 

 

 

 

Municipal

 
21,731

 
390

 
(86
)
 
22,035

 
35,976

 
4,074

 

 
40,050

Non-agency
7,832

 
70,216

 
1,271

 
(285
)
 
71,202

 

 

 

 

Total other debt securities
7,832

 
91,947

 
1,661

 
(371
)
 
93,237

 
35,976

 
4,074

 

 
40,050

Total debt securities
$
7,832

 
$
159,484

 
$
5,197

 
$
(1,320
)
 
$
163,361

 
$
225,555

 
$
15,517

 
$
(12,749
)
 
$
228,323

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
June 30, 2014
 
Trading
 
Available for sale
 
Held to maturity
(Unaudited)
(Dollars in thousands)
Fair
Value
 
Amortized
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair
Value
 
Carrying
Amount
 
Unrecognized
Gains
 
Unrecognized
Losses
 
Fair
Value
Mortgage-backed securities (RMBS):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S agencies1
$

 
$
60,670

 
$
1,060

 
$
(1,850
)
 
$
59,880

 
$
47,982

 
$
1,895

 
$

 
$
49,877

Non-agency2

 
33,521

 
4,077

 
(189
)
 
37,409

 
163,695

 
6,352

 
(15,490
)
 
154,557

Total mortgage-backed securities

 
94,191

 
5,137

 
(2,039
)
 
97,289

 
211,677

 
8,247

 
(15,490
)
 
204,434

Other debt securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. agencies1

 

 

 

 

 

 

 

 

Municipal

 
28,522

 
425

 
(4
)
 
28,943

 
36,052

 
3,480

 

 
39,532

Non-agency
8,066

 
87,913

 
687

 
(54
)
 
88,546

 

 

 

 

Total other debt securities
8,066

 
116,435

 
1,112

 
(58
)
 
117,489

 
36,052

 
3,480

 

 
39,532

Total debt securities
$
8,066

 
$
210,626

 
$
6,249

 
$
(2,097
)
 
$
214,778

 
$
247,729

 
$
11,727

 
$
(15,490
)
 
$
243,966

1 U.S. government-backed or government sponsored enterprises including Fannie Mae, Freddie Mac and Ginnie Mae.
2 Private sponsors of securities collateralized primarily by pools of 1-4 family residential first mortgages. Primarily super senior securities secured by prime, Alt-A or pay-option ARM mortgages.






DEPOSITS
The following table sets for the composition of the deposit portfolio as of the dates indicated:
 (Unaudited)
June 30, 2015
 
June 30, 2014
(Dollars in thousands)
Amount
 
Rate1
 
Amount
 
Rate1
Non-interest bearing
$
309,339

 
%
 
$
186,786

 
%
Interest bearing:
 
 
 
 
 
 
 
Demand
1,224,308

 
0.48
%
 
1,129,535

 
0.63
%
Savings
2,126,792

 
0.67
%
 
935,973

 
0.73
%
       Total interest-bearing demand and savings
3,351,100

 
0.60
%
 
2,065,508

 
0.67
%
Time deposits:
 
 
 
 
 
 
 
Under $100,000
70,369

 
1.26
%
 
107,294

 
1.23
%
$100,000 or more2
721,109

 
2.06
%
 
681,948

 
1.67
%
Total time deposits
791,478

 
1.99
%
 
789,242

 
1.61
%
Total interest bearing2
4,142,578

 
0.87
%
 
2,854,750

 
0.93
%
Total deposits
$
4,451,917

 
0.81
%
 
$
3,041,536

 
0.88
%
1. Based on weighted-average stated interest rates at end of period.
2. The total interest-bearing includes brokered deposits of $661.9 million and $404.8 million as of June 30, 2015 and June 30, 2014, respectively, of which
$356.3 million and $275.4 million, respectively, are time deposits classified as $100,000 or more.


The number of deposit accounts at the end of each of the last five fiscal years is set forth below:
 
At June 30,
 (Unaudited)
2015
 
2014
 
2013
 
2012
 
2011
 
 
 
 
 
 
 
 
 
 
Checking and savings accounts
36,305

 
30,402

 
23,567

 
19,931

 
16,105

Time deposits
5,515

 
7,571

 
11,103

 
12,341

 
16,793

Total number of deposit accounts
41,820

 
37,973

 
34,670

 
32,272

 
32,898







AVERAGE BALANCES, NET INTEREST INCOME, YIELDS EARNED AND RATES PAID
The following tables set forth, for the periods indicated, information regarding (i) average balances; (ii) the total amount of interest income from interest-earning assets and the weighted average yields on such assets; (iii) the total amount of interest expense on interest-bearing liabilities and the weighted average rates paid on such liabilities; (iv) net interest income; (v) interest rate spread; and (vi) net interest margin:
 
For the Fiscal Years Ended June 30,
 
2015
 
2014
 
2013
(Unaudited)(Dollars in thousands)
Average
Balance
1
 
Interest
Income /
Expense
 
Average
Yields
Earned /
Rates Paid
 
Average
Balance
1
 
Interest
Income /
Expense
 
Average
Yields
Earned /
Rates Paid
 
Average
Balance
1
 
Interest
Income /
Expense
 
Average
Yields
Earned /
Rates Paid
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans2,3
$
4,388,336

 
$
220,486

 
5.02
%
 
$
2,850,600

 
$
147,664

 
5.18
%
 
$
2,157,974

 
$
113,503

 
5.26
%
Federal funds sold

 

 
%
 

 

 
%
 
17,017

 
30

 
0.18
%
Interest-earning deposits in other financial institutions
204,176

 
511

 
0.25
%
 
107,534

 
275

 
0.26
%
 
23,632

 
47

 
0.20
%
Mortgage-backed and other investment securities
479,767

 
23,367

 
4.87
%
 
513,055

 
24,939

 
4.86
%
 
485,540

 
22,074

 
4.55
%
Total interest-earning assets
5,072,279

 
244,364

 
4.82
%
 
3,471,189

 
172,878

 
4.98
%
 
2,684,163

 
135,654

 
5.05
%
Non-interest-earning assets
68,039

 
 
 
 
 
58,953

 
 
 
 
 
70,896

 
 
 
 
Total assets
$
5,140,318

 
 
 
 
 
$
3,530,142

 
 
 
 
 
$
2,755,059

 
 
 
 
Liabilities and Stockholders’ Equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand and savings
$
2,862,295

 
$
20,709

 
0.72
%
 
$
1,522,884

 
$
10,723

 
0.70
%
 
$
826,797

 
$
6,399

 
0.77
%
Time deposits
790,661

 
14,024

 
1.77
%
 
876,621

 
14,094

 
1.61
%
 
1,065,669

 
16,469

 
1.55
%
Securities sold under agreements to repurchase
36,562

 
1,633

 
4.47
%
 
85,726

 
3,840

 
4.48
%
 
114,247

 
5,068

 
4.44
%
Advances from the FHLB
700,805

 
8,910

 
1.27
%
 
576,307

 
6,981

 
1.21
%
 
436,383

 
5,939

 
1.36
%
Other borrowings
5,155

 
143

 
2.77
%
 
5,155

 
143

 
2.77
%
 
5,155

 
151

 
2.93
%
Total interest-bearing liabilities
4,395,478

 
45,419

 
1.03
%
 
3,066,693

 
35,781

 
1.17
%
 
2,448,251

 
34,026

 
1.39
%
Non-interest-bearing demand deposits
255,321

 
 
 
 
 
123,859

 
 
 
 
 
45,299

 
 
 
 
Other non-interest-bearing liabilities
35,219

 
 
 
 
 
23,549

 
 
 
 
 
18,681

 
 
 
 
Stockholders’ equity
454,300

 
 
 
 
 
316,041

 
 
 
 
 
242,828

 
 
 
 
Total liabilities and stockholders’ equity
$
5,140,318

 
 
 
 
 
$
3,530,142

 
 
 
 
 
$
2,755,059

 
 
 
 
Net interest income
 
 
$
198,945

 
 
 
 
 
$
137,097

 
 
 
 
 
$
101,628

 
 
Interest rate spread4
 
 
 
 
3.79
%
 
 
 
 
 
3.81
%
 
 
 
 
 
3.66
%
Net interest margin5
 
 
 
 
3.92
%
 
 
 
 
 
3.95
%
 
 
 
 
 
3.79
%
1 Average balances are obtained from daily data.
2 Loans include loans held for sale, loan premiums and unearned fees.
3 Interest income includes reductions for amortization of loan and investment securities premiums and earnings from accretion of discounts and loan fees. Loan fee income is not significant. Also includes $31.4 million, $32.1 million and $32.8 million as of June 30, 2015, 2014 and 2013, respectively, of Community Reinvestment Act loans which are taxed at a reduced rate.
4 Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate paid on interest-bearing liabilities.
5 Net interest margin represents net interest income as a percentage of average interest-earning assets.
 






AVERAGE BALANCES, NET INTEREST INCOME, YIELDS EARNED AND RATES PAID
The following table presents information regarding (i) average balances; (ii) the total amount of interest income from interest-earning assets and the weighted average yields on such assets; (iii) the total amount of interest expense on interest-bearing liabilities and the weighted average rates paid on such liabilities; (iv) net interest income; (v) interest rate spread; and (vi) net interest margin: 
 
For the three months ended June 30,
 
2015
 
2014
(Unaudited)
(Dollars in thousands)
Average
Balance
2
 
Interest
Income /
Expense
 
Average
Yields
Earned /
Rates Paid
1
 
Average
Balance
2
 
Interest
Income /
Expense
 
Average
Yields
Earned /
Rates Paid
1
Assets:
 
 
 
 
 
 
 
 
 
 
 
Loans3,4
$
4,865,501

 
$
60,670

 
4.99
%
 
$
3,390,891

 
$
43,391

 
5.12
%
Interest-earning deposits in other financial institutions
252,539

 
178

 
0.28
%
 
127,994

 
87

 
0.27
%
Mortgage-backed and other investment securities
455,425

 
6,719

 
5.90
%
 
506,986

 
6,664

 
5.26
%
Total interest-earning assets
5,573,465

 
67,567

 
4.85
%
 
4,025,871

 
50,142

 
4.98
%
Non-interest-earning assets
77,234

 
 
 
 
 
53,658

 
 
 
 
Total assets
$
5,650,699

 
 
 
 
 
$
4,079,529

 
 
 
 
Liabilities and Stockholders’ Equity:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand and savings
$
3,404,566

 
$
5,753

 
0.68
%
 
$
1,978,485

 
$
3,542

 
0.72
%
Time deposits
815,405

 
3,840

 
1.88
%
 
836,646

 
3,381

 
1.62
%
Securities sold under agreements to repurchase
35,008

 
389

 
4.44
%
 
52,759

 
594

 
4.50
%
Advances from the FHLB
528,365

 
2,255

 
1.71
%
 
667,612

 
2,093

 
1.25
%
Other borrowings
5,155

 
36

 
2.79
%
 
5,155

 
36

 
2.79
%
Total interest-bearing liabilities
4,788,499

 
12,273

 
1.03
%
 
3,540,657

 
9,646

 
1.09
%
Non-interest-bearing demand deposits
301,893

 
 
 
 
 
160,678

 
 
 
 
Other non-interest-bearing liabilities
39,371

 
 
 
 
 
21,836

 
 
 
 
Stockholders’ equity
520,936

 
 
 
 
 
356,358

 
 
 
 
Total liabilities and stockholders’ equity
$
5,650,699

 
 
 
 
 
$
4,079,529

 
 
 
 
Net interest income
 
 
$
55,294

 
 
 
 
 
$
40,496

 
 
Interest rate spread5
 
 
 
 
3.82
%
 
 
 
 
 
3.89
%
Net interest margin6
 
 
 
 
3.97
%
 
 
 
 
 
4.02
%
1 Annualized.
2 Average balances are obtained from daily data.
3 Loans include loans held for sale, loan premiums and unearned fees.
4 Interest income includes reductions for amortization of loan and investment securities premiums and earnings from accretion of discounts and loan fees. Loan fee income is not significant. Also, includes $31.4 million and $32.1 million as of June 30, 2015 and 2014 three-month periods respectively, of Community Reinvestment Act loans which are taxed at a reduced rate.
5 Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate paid on interest-bearing liabilities.
6 Net interest margin represents net interest income as a percentage of average interest-earning assets.






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