SAN DIEGO, CA -- (MARKET WIRE) -- 11/07/07 --
B of I Holding, Inc. (NASDAQ: BOFI), parent
of Bank of Internet USA ("Bank"), announced today its financial results for
its first quarter ended September 30, 2007. Net income was $747,000, or
$0.08 per diluted share, about the same as net income of $746,000, or $0.08
per diluted share, earned for the quarter ended September 30, 2006.
First Quarter Highlights:
-- Total assets of $1.025 billion, up 33.7% from last year
-- Total deposits of $601.1 million, up 38.7% from last year
-- Net interest income increased 21.6 % from last year
-- Asset quality remains strong with low levels of nonperforming loans
and write-offs
-- Tangible book value of $8.50 per share, up $0.31 per share from last
quarter
Bank President Gary Lewis Evans commented on this quarter saying, "I am
most proud of two accomplishments this quarter. First, our mortgage loan
quality has remained consistently strong during a period in which many
financial institutions disclosed higher loan losses and increased concerns
about higher levels of mortgage loan defaults. Second, we pushed past the
billion dollar asset mark, an important milestone, and we did it by
increasing our retail deposits during a period in which deposit competition
was particularly strong."
"I am also very proud of our employees and their families for their courage
and commitment to our Bank during the San Diego area wildfires. More than
50% of our employees were requested to evacuate their homes, yet our
employees managed to keep the Bank's systems up and to keep processing
transactions during the entire period of the wildfires," added Mr. Evans.
Highlighting a couple of items that impacted B of I operating results this
quarter, Mr. Evans commented, "Our net interest margin decreased this
quarter compared to last quarter primarily due to unusually high
prepayments of multifamily loans purchased at a premium in 2004 and 2005.
The premium write-off reduced our loan yield and decreased our net interest
margin by approximately 9 basis points. Also, salaries expense for this
quarter included $166,000 of recruiting and service fees, the majority of
which related to the recruitment of our new CEO."
Earnings Summary
For the first quarter ending September 30, 2007, net income was $747,000,
about equal to the quarter ended September 30, 2006. Net interest income
increased $526,000, or 21.6% in the first quarter of fiscal 2008 compared
to the first quarter of last year primarily due to growth in U.S. agency
mortgage-backed securities. Increased interest income from the growth of
mortgage-backed securities portfolio was partially offset by a decline in
the net interest margin for the quarter, which was 1.24% compared to 1.31%
for the quarter ended September 30, 2006. The decline in the net interest
margin was due primarily to deposit and borrowing interest rates which grew
faster than the yield on mortgage loans and investments. The unusually high
prepayments of multifamily loans purchased increased premium write-off,
reduced our loan yield and decreased our net interest margin by
approximately 9 basis points for the quarter ended September 30, 2007.
The provision for loan loss was $5,000 for the first quarter of fiscal 2008
compared to a benefit of $25,000 in the first quarter last year. The
provision for the 2007 quarter was the result of small net growth in our
loan portfolio and the shifting of our loan mix out of multifamily loans
and into home equity and RV loans. Non-interest income for the quarter
ended September 30, 2007 increased $81,000 compared to the quarter ended
September 30, 2006 primarily due to higher prepayment penalty fee income
and consumer loan fees. Non-interest expense, or operating expense,
increased 36.2% this quarter compared to the same quarter last year.
Salaries expense for this quarter included $166,000 of recruiting and
service fees, the majority of which related to the recruitment of our new
CEO, accounting for 29.0% of the increase in operating costs. Advertising
increases associated with our home equity loan originations increased
$150,000, representing 26.2% of the total increase in operating expenses.
The balance of the increase in operating expense related to data
processing, regulatory fees and other operating costs.
Balance Sheet Summary
Total assets increased $77.5 million, or 8.2%, to $1.025 billion, as of
September 30, 2007, up from $947.2 million at June 30, 2007 and up from
$766.2 million at September 30, 2006. The increase in total assets this
quarter was the result of purchases of adjustable rate mortgage-backed
securities. The asset growth since June 30, 2007 was funded by a net
increase in deposits totaling $53.2 million and an increase in repurchase
borrowings of $20.0 million. During the first quarter ended September 30,
2007, stockholders' equity increased $2.5 million primarily due to earnings
of $747,000 and unrealized gain of $1.8 million from marking-to-market our
available for sale U.S. agency mortgage-backed securities.
"I would like to welcome our newest executive, Greg Garrabrants, to the B
of I family," remarked Jerry Englert, Chairman of the Board of B of I.
"Greg comes to us from Indymac Bank where he led the business development
group responsible for mergers and acquisitions, joint ventures, and
strategic alliances. He previously worked as a management consultant at
McKinsey and Company and as an investment banker at Goldman Sachs. We
believe the Bank is well positioned for a variety of opportunities to
increase our earnings and improve shareholder value. I look forward to
working with Greg as he assumes the CEO role."
Conference Call
B of I Holding, Inc. will host a conference call at 2:00 p.m. PT (5:00 p.m.
ET) on Wednesday, November 7, 2007 to discuss financial results for the
first quarter ended September 30, 2007. To participate in the conference
call, please dial the following number five to ten minutes prior to the
scheduled conference call time: (866) 542-4236. International callers
should dial (416) 641-6125. When prompted by the operator, mention
Conference ID 3239070. The conference call will be webcast live and may be
accessed at B of I's website, http://www.bofiholding.com.
For those unable to participate during the live broadcast, a replay will
be available shortly after the call on B of I's website for 90 days.
About B of I Holding, Inc. and Bank of Internet USA
BofI Holding, Inc. is the holding company of Bank of Internet USA and
trades on NASDAQ under the symbol BOFI.
Bank of Internet USA is a consumer focused, FDIC insured, nationwide
savings bank operating primarily over the Internet. It offers a variety of
consumer banking services, focusing primarily on gathering retail deposits
over the Internet and originating home equity
loans, auto
loans and RV
loans, as well as originating and purchasing multifamily and single-
family mortgage loans. Bank of Internet USA offers products through its
websites at www.BofI.com, www.ApartmentBank.com, and www.RVBank.com. Retail deposit products
include certificates of deposit, online checking
accounts with check images, bill payment, high interest savings
accounts, ATM or Visa Check Cards, money market
savings accounts, and ATM fee reimbursement anywhere in the world.
Forward-looking Statements
Certain statements contained herein are not based on historical facts and
are "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Such forward-looking statements may be identified by reference to a
future period or periods, or by the use of forward-looking terminology,
such as "may," "will," "believe," "expect," "estimate," "anticipate,"
"continue," or similar terms or variations on those terms, or the negative
of those terms. Forward-looking statements are subject to numerous risks
and uncertainties, including, but not limited to, those related to the
economic environment, particularly in the market areas in which the Company
operates, competitive products and pricing, fiscal and monetary policies of
the U.S. Government, the economic effect of international markets and
international events such as terrorism, changes in government regulations
affecting financial institutions, including regulatory fees and capital
requirements, changes in prevailing interest rates, risks associated with
the conduct of the Company's business over the internet, credit risk
management, asset-liability management, the financial and securities
markets and the availability of and costs associated with sources of
liquidity.
The Company wishes to caution readers not to place undue reliance on any
such forward-looking statements, which speak only as of the date made. The
Company wishes to advise readers that the factors listed above could affect
its financial performance and could cause the Company's actual results for
future periods to differ materially from any opinions or statements
expressed with respect to future periods in any current statements. The
Company does not undertake and specifically disclaims any obligation to
publicly release the result of any revisions that may be made to any
forward-looking statements to reflect events or circumstances after the
date of such statements or to reflect the occurrence of anticipated or
unanticipated events.
All information in this release is as of November 7, 2007. The Company
undertakes no duty to update any forward-looking statement to conform the
statement to actual results or changes in the Company's expectations.
BofI HOLDING, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Dollars in thousands, except per share data)
September 30, June 30, September 30,
2007 2007 2006
----------- ---------- -----------
Selected Balance Sheet Data:
Total assets $ 1,024,713 $ 947,163 $ 766,223
Loans - net of allowance for loan
losses 508,438 507,906 535,319
Allowance for loan losses 1,430 1,450 1,450
Mortgage-backed securities available
for sale 378,382 296,068 162,151
Investment securities held to maturity 72,619 61,902 17,303
Total deposits 601,079 547,949 443,394
Securities sold under agreements to
repurchase 110,000 90,000 -
Advances from the FHLB 227,412 227,292 243,206
Junior subordinated debentures 5,155 5,155 5,155
Total stockholders’ equity 75,333 72,750 70,849
At or For the Three Months
Ended September 30,
-------------------
2007 2006
----------- ----------
Selected Income Statement Data:
Interest and dividend income 13,622 9,972
Interest expense 10,660 7,536
----------- ----------
Net interest income 2,962 2,436
Provision for loan losses 5 (25)
----------- ----------
Net interest income after provision for
loan losses 2,957 2,461
Non-interest income 448 367
Non-interest expense 2,150 1,578
----------- ----------
Income before income tax expense 1,255 1,250
Income tax expense 508 504
----------- ----------
Net income $ 747 $ 746
=========== ==========
Net income attributable to common stock 670 668
Per Share Data:
Net income:
Basic 0.08 0.08
Diluted 0.08 0.08
Book value per common share 8.50 7.93
Tangible book value per common share 8.50 7.93
Weighted average number of common
shares outstanding:
Basic 8,248,158 8,347,608
Diluted 8,374,558 8,471,542
Common shares outstanding at end of
period 8,267,590 8,308,825
Common shares issued at end of period 8,587,090 8,577,825
BofI HOLDING, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Dollars in thousands, except per share data)
At or For the Three Months
Ended September 30,
--------------------------
2007 2006
------------ ------------
Performance Ratios and Other Data:
Loan originations $ 35,302 $ 2,811
Loan originations for sale 516 1,597
Loan purchases 929 24,397
Return on average assets 0.31% 0.40%
Return on average common stockholders’ equity 3.92% 4.08%
Interest rate spread(1) 0.93% 0.93%
Net interest margin(2) 1.24% 1.31%
Efficiency ratio(3) 63.00% 56.30%
Capital Ratios:
Equity to assets at end of period 7.35% 9.25%
Tier 1 leverage (core) capital to adjusted
tangible assets(4) 7.50% 8.98%
Tier 1 risk-based capital ratio(4) 14.78% 16.61%
Total risk-based capital ratio(4) 15.05% 16.96%
Tangible capital to tangible assets (4) 7.50% 8.98%
Asset Quality Ratios:
Net charge-offs to average loans outstanding(5) - -
Nonperforming loans to total loans ($) (5) 0.03% -
Allowance for loan losses to total loans at end
of period 0.28% 0.27%
Allowance for loan losses to nonperforming
loans(5) 10.7 X --
(1) Interest rate spread represents the difference between the annualized
weighted average yield on interest-earning assets and the 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) Efficiency ratio represents non-interest expense as a percentage of the
aggregate of net interest income and non-interest income.
(4) Reflects regulatory capital ratios of Bank of Internet USA only.
(5) Net charge-offs total $25,000 for the quarter ended September 30, 2007,
less than 0.01%. There were no charge-offs in any quarters prior to
September 30, 2007.
Contacts:
Gary Lewis Evans
Bank President & COO
858-350-6213
Email ContactGregory Garrabrants
CEO
858-350-6203
Email Contact