SAN DIEGO, CA -- (MARKET WIRE) -- 08/10/07 --
B of I Holding, Inc. (B of I or the Company),
(NASDAQ: BOFI), parent of Bank of Internet USA (Bank), today announced
unaudited financial results for its fourth quarter and year ended June 30,
2007. Net income for the fourth quarter increased to $904,000, the second
consecutive quarter of record net income posted by B of I since opening in
2000. Earnings for the fourth quarter of fiscal 2007 were up 7.4% compared
to the $842,000 earned for fourth quarter of fiscal 2006. Diluted earnings
per share were $0.10 for the fourth quarter of 2007, up $0.01 or 11.1%
compared to the $0.09 earned in the fourth quarter of fiscal 2006. Net
income for the year ended June 30, 2007 increased to $3,319,000, up $53,000
compared to $3,266,000 for the year ended June 30, 2006. Diluted earnings
per share were $0.36 for fiscal year 2007, up $0.02 or 5.9% compared to the
$0.34 earned for fiscal year 2006.
Fourth Quarter Highlights:
-- Total assets were $947.2 million, up 28.4% from June 30, 2006.
-- Total deposits were $547.9 million, up 29.2% from June 30, 2006.
-- Asset quality remains strong with two nonperforming loans at June 30,
2007, one with a specific loss reserve of $7,000.
-- Net interest income was $3.0 million, up 24.0% from the quarter ended
June 30, 2006.
-- Indirect recreational vehicle (RV) loan originations, which started in
March of 2007, were $33.9 million for the quarter ended June 30, 2007.
-- Online originations of home equity loans were $10.6 million for the
quarter ended June 30, 2007.
"We are proud of our fourth quarter results, particularly our improved
earnings and our strong loan credit quality," stated Gary Lewis Evans,
President and Chief Executive Officer. "Recent announcements by other banks
and mortgage companies confirm that residential mortgage underwriting
standards have been too liberal in recent years and are now leading to
increased mortgage loan losses," he continued. "Several years ago we
recognized the deterioration of credit standards and decided to replace a
large portion of our mortgage loan growth with high quality U.S. government
agency mortgage-backed securities."
Other accomplishments during the quarter were:
Home Equity and RV Loan Volumes -- During the quarter, the Bank closed and
funded 1,070 consumer loans, more than two and one-half times the number of
consumer loans closed in the first nine months of fiscal 2007. The home
equity loan count was 322 loans originated during the quarter with an
average balance of approximately $33,000 and weighted averages for FICO and
combined loan to value of 774 and 57.3%, respectively. The RV loan count
was 748 loans originated during the quarter with an average balance of
$45,000 and an average FICO of 730.
Deposit Growth -- The Bank increased its deposits to $547.9 million at June
30, 2007, up 18.7% from $461.5 million at March 31, 2007. The increase was
driven primarily by new time deposit growth from online retail customers.
During the quarter, the Bank processed 3,488 or $114.5 million in time
deposits accounts for new customers (and existing customers changing terms)
at an average cost of 5.24% and an average term of 33 months.
Product Initiatives -- In June, the Bank began offering online auto loans
in California capitalizing on the new back office process and technology
recently built for RV loans. The auto loan offering is a test program,
currently limited to the California used auto refinance market, which the
Bank will evaluate over the next quarter. Also this quarter, the Bank
booked its first group of new loan and deposit accounts through RVBank.com
under the Camping World marketing agreement signed at the beginning of last
quarter.
"Looking ahead, we are excited about our Bank's opportunities," remarked
Mr. Evans. "Despite adverse market conditions including an inverted yield
curve and declining housing values, we believe our Bank is well positioned.
We executed our plan to build a new consumer loan origination business. We
executed our plan to reduce our mortgage credit risk by investing in high
quality mortgage-backed securities. As risk premiums start to increase in
the higher quality residential mortgage markets, we look forward to
increased opportunities to originate and purchase more mortgage loans.
Finally, reacting to change is important in today's economy and we believe
we have the right banking model, a nationwide Internet-only bank with the
efficiencies to meet the growing consumer demand for online self-service
banking."
Quarter Earnings Summary
For the fourth quarter ending June 30, 2007, net income was $904,000, an
increase of 7.4% from the fourth quarter of last year. Net interest income
increased $589,000 in the fourth quarter of fiscal 2007 compared to the
fourth quarter of last year as a result of increased interest-earning
assets, primarily mortgage-backed securities, partially offset by a decline
in the net interest margin. The net interest margin for the quarter ended
June 30, 2007 was 1.39% compared to 1.40% for the quarter ended June 30,
2006. The decline in the net interest margin year over year was due to
both the continued inversion of the yield curve and the Bank's decision to
increase long-term time deposits during the fourth quarter of fiscal 2007
ahead of growth in consumer loans. The provision for loan loss for the
quarter was $80,000 in the fourth quarter of fiscal 2007 compared to a
benefit of $100,000 recorded in the fourth quarter of the prior year. The
loan loss benefit recorded in fiscal 2006 was the result of a decline in
the loan portfolio as the Bank shifted out of whole loans and into
investing in government-sponsored mortgage-backed securities. Non-interest
income for the quarter ended June 30, 2007 compared to the quarter ended
June 30, 2006 decreased $56,000, due to lower mortgage loan prepayment
penalty income and mortgage banking fee income. Non-interest expense, or
operating expense, increased 16.6% this quarter compared to the same period
last year, primarily due to employees hired for consumer loan operations.
Balance Sheet Summary
Total assets increased $209.3 million, or 28.4%, to $947.2 million, as of
June 30, 2007, up from $737.8 million at June 30, 2006 and up 11.8% from
$847.0 million at March 31, 2007. The increase in total assets this quarter
of $100.2 million was primarily the result of origination of consumer loans
($44.5 million), purchase of single-family loans ($10.7 million) and
purchase of mortgage-backed securities ($62.5 million), partially offset by
loan and mortgage-backed security payoffs. The asset growth this quarter
was generally funded by an increase in deposits of $86.4 million and a
$30.0 million increase in borrowings under agreement to repurchase. During
the fourth quarter ended June 30, 2007, stockholders equity decreased $0.2
million primarily due to a $1.1 million unrealized loss from our available
for sale securities due to market increases in interest rates, partially
offset by net income of $0.9 million.
Conference Call
B of I Holding, Inc. will host a conference call at 9:00 a.m. PT (12:00
p.m. ET) on Friday, August 10, 2007 to discuss financial results for the
fourth quarter and the year ended June 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 3231230. 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
B of I 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.SeniorBofI.com, www.ApartmentBank.com, www.RVBank.com and www.BofIEquityDirect.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 account, 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 August 10, 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
(Unaudited - Dollars in thousands, except per share data)
June 30,
-------------------
Selected Balance Sheet Data: 2007 2006
--------- ---------
Total assets $ 947,163 $ 737,835
Loans held for investment, net of allowance for loan
losses 507,906 533,641
Loans held for sale, at cost - -
Allowance for loan losses 1,450 1,475
Mortgage-backed securities available for sale 296,068 127,261
Investment securities held to maturity 61,902 12,375
Total deposits 547,949 424,204
Securities sold under agreements to repurchase 90,000 -
Advances from the FHLB 227,292 236,177
Note payable - -
Junior subordinated debentures 5,155 5,155
Total stockholders’ equity 72,750 70,246
At or For the Quarter At or For the Year
Ended June 30, Ended June 30,
-------------------- ---------------------
2007 2006 2007 2006
---------- --------- --------- ----------
Selected Income Statement Data:
Interest and dividend income $ 12,550 $ 9,084 $ 44,586 $ 32,713
Interest expense 9,511 6,634 33,738 22,758
---------- --------- --------- ----------
Net interest income 3,039 2,450 10,848 9,955
Provision for loan losses 80 (100) (25) 60
---------- --------- --------- ----------
Net interest income after
provision for loan losses 2,959 2,550 10,873 9,895
Non-interest income 209 265 1,180 1,342
Non-interest expense 1,656 1,420 6,450 5,789
---------- --------- --------- ----------
Income before income tax
expense 1,512 1,395 5,603 5,448
Income tax expense 608 553 2,284 2,182
---------- --------- --------- ----------
Net income $ 904 $ 842 $ 3,319 $ 3,266
========== ========= ========= ==========
Net income attributable to
common stock $ 827 $ 763 $ 3,007 $ 2,906
Per Share Data:
Net income (loss):
Basic $ 0.10 $ 0.09 $ 0.36 $ 0.35
Diluted $ 0.10 $ 0.09 $ 0.36 $ 0.34
Book value per common share $ 8.19 $ 7.77 $ 8.19 $ 7.77
Tangible book value per common
share $ 8.19 $ 7.77 $ 8.19 $ 7.77
Weighted average number of
common shares outstanding:
Basic 8,252,801 8,418,236 8,283,098 8,340,973
Diluted 8,378,800 8,564,206 8,405,215 8,516,278
Common shares outstanding at
end of period 8,267,590 8,380,725 8,267,590 8,380,725
Common shares issued at end of
period 8,587,090 8,561,725 8,587,090 8,561,725
BofI HOLDING, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited - Dollars in thousands, except per share data)
At or For the Quarter At or For the Year
Ended June 30, Ended June 30,
-------------------- --------------------
2007 2006 2007 2006
--------- --------- --------- ---------
Performance Ratios and Other
Data:
Loan originations for
investment $ 46,131 $ 786 $ 67,449 $ 7,720
Loan originations for sale 1,794 1,037 7,579 20,762
Loan purchases 10,663 - 44,976 165,906
Return on average assets 0.41% 0.48% 0.41% 0.49%
Return on average common
stockholders’ equity 4.85% 4.67% 4.50% 4.56%
Interest rate spread(1) 1.05% 1.02% 0.98% 1.12%
Net interest margin(2) 1.39% 1.40% 1.36% 1.51%
Efficiency ratio(3) 51.0% 52.3% 53.6% 51.2%
Capital Ratios:
Equity to assets at end of
period 7.68% 9.52% 7.68% 9.52%
Tier 1 leverage (core) capital
to adjusted tangible assets(4) 7.90% 8.91% 7.90% 8.91%
Tier 1 risk-based capital
ratio(4) 14.76% 15.25% 14.76% 15.25%
Total risk-based capital ratio(4) 15.05% 15.59% 15.05% 15.59%
Tangible capital to tangible
assets(4) 7.90% 8.91% 7.90% 8.91%
Asset Quality Ratios:
Net charge-offs to average
loans outstanding(5) -- -- -- --
Nonperforming loans to total
loans(5) 0.05% -- 0.05% --
Allowance for loan losses to
total loans held for
investment 0.28% 0.28% 0.28% 0.28%
Allowance for loan losses to
nonperforming loans(5) 541.04% -- 541.04% --
(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 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) At June 30, 2007 and 2006, we had no foreclosures.
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Contacts:
B of I Holding, Inc.Gary Lewis Evans
CEO
858 350-6213
Email Contact