SAN DIEGO, CA -- (MARKET WIRE) -- 11/06/08 --
B of I Holding, Inc. (B of I or the Company),
(NASDAQ: BOFI), parent of Bank of Internet USA (Bank), today announced
financial results for its first quarter ended September 30, 2008. B of I's
after-tax earnings, before the impact of the previously announced charge
associated with the Bank's investment in Fannie Mae preferred stock,
increased to $2,893,000 for the first quarter of fiscal 2009. The U.S.
government decision to put Fannie Mae into conservatorship resulted in B of
I reporting a net loss of $1,817,000 or $0.24 per diluted share compared to
net income of $747,000, or $0.08 per diluted share, for the three months
ended September 30, 2007.
Greg Garrabrants, President and Chief Executive Officer, commented on the
Company's results saying, "Without the Fannie Mae charge, our quarterly
earnings marked a record high, increasing 287% compared to the first
quarter last year and increasing 62% compared to our fourth quarter ended
June 30, 2008. We are convinced we are headed in the right direction,
despite the disappointing decision by the government to discontinue Fannie
Mae dividends leading to our sale of all of our Fannie Mae preferred stock
at a significant loss."
First Quarter Highlights:
-- Net interest margin grew to 2.68% in the first quarter, up 116.1% over
the first quarter of 2007 and up 10.7% compared to last quarter.
-- Asset quality remains strong with total non-performing loans of 0.42%
of loan portfolio.
-- Total assets reached $1,170.9 million at September 30, 2008, up 14.3%
compared to the first quarter of 2007.
-- Our Bank's capital position at September 30, 2008 is strong with 38.0%
more Tier 1 capital than the amount required to be considered "well
capitalized" under government regulations.
Quarter Earnings Summary
For the three months ended September 30, 2008, we had a net loss of
$1,817,000 or $0.24 per diluted share compared to net income of $747,000,
or $0.08 per diluted share, for the three months ended September 30, 2007.
On September 7, 2008, the U.S. Treasury, the Federal Reserve and the
Federal Housing Finance Agency (FHFA) announced that the FHFA was putting
Fannie Mae and Freddie Mac under conservatorship and giving management
control to their regulator, the FHFA. The U.S. Treasury also announced that
dividends on Fannie Mae and Freddie Mac common and preferred stock were
eliminated. Based upon the government's decision, we sold our investment
in Fannie Mae Preferred stock on September 8, 2008 for a
pre-tax loss of $7,902,000 and an after tax loss of $4,710,000 or $0.57
per diluted share.
Total interest and dividend income during the quarter ended September 30,
2008 increased 41.2% to $19.2 million, compared to $13.6 million during the
quarter ended September 30, 2007. The increase in interest and dividend
income for the quarter was attributable primarily to growth in average
earning assets, primarily investment securities and loans. During the
quarter ended September 30, 2008, the average balance of investment
securities (primarily mortgage-backed securities) increased 32.7% when
compared to the average for the quarter ended September 30, 2007. The
increase in interest income was also the result of our higher rates earned
on new loans originated and purchased as well as new
non-agency
mortgage-backed securities purchased. The loan portfolio yield for the
quarter ended September 30, 2008 increased 38 basis points and the
investment security portfolio yield increased 148 basis points when
compared to the quarter ended September 30, 2007. The net growth in average
earning assets for the three-month period ended September 30, 2008 was
funded largely by increased short-term borrowings, which account for the
majority of the increase in interest expense. Total interest expense
increased 6.5% to $11.4 million for the quarter ended September 30, 2008
compared with $10.7 million for the quarter ended September 30, 2007. The
cost of funds increased due to 22.7% growth in average balances, partially
offset by a 62 basis point decrease in the average funding rate.
Contributing to the decrease in the average funding rate were decreases in
average rates for time deposits and reverse repurchase agreements of 27 and
10 basis points, respectively. Similarly, lower rates paid on FHLB
advances used to replace maturing advances and new advances used to
purchase whole loan pools and
mortgage-backed securities led to a decrease in FHLB advance funding cost
of 90 basis points during the quarter ended September 30, 2008 compared to
the quarter ended September 30, 2007.
Net interest margin, defined as net interest income divided by average
earning assets, increased by 144 basis points to 2.68% for the quarter
ended September 30, 2008, compared with 1.24% for the quarter ended
September 30, 2007.
Non-interest expense, which is comprised primarily of compensation, data
processing and internet expenses, occupancy and other operating expenses,
was $2.5 million for the three months ended September 30, 2008 up from $2.2
million for the three months ended September 30, 2007. The increase in
operating expense this quarter compared to the quarter last year was
primarily the result of adding our chief executive officer, granting
restricted stock units and increasing professional services fees, partially
offset by lower advertising costs.
Balance Sheet Summary
Our total assets decreased $23.3 million, or 2.0%, to $1,170.9 million, as
of September 30, 2008, down from $1,194.2 million at June 30, 2008. The
decrease in total assets was primarily due to a decrease in fed funds of
$10.5 million, the sale of $9.1 million in book value of Fannie Mae
Preferred stock and principal repayments on our loans and investment
securities. Our liabilities decreased a total of $19.5 million due largely
to a decrease in deposits of $13.2 million and a decrease of $6.0 million
in borrowings from the Federal Home Loan Bank of San Francisco.
Stockholders' equity decreased $3.8 million to $79.3 million at September
30, 2008, compared to $83.1 million at June 30, 2008. The decrease was
primarily the result of our net loss for the three months of $1.8 million
and a $2.1 million cumulative effect adjustment for our election to adopt
Financial Accounting Standard No. 159 for investments in trust preferred
collateralize debt.
Conference Call
A conference call and webcast will be held on Thursday, November 6, 2008 at
5:00 PM Eastern / 2:00 PM Pacific. To participate in the conference call,
please dial the following number five to ten minutes prior to the scheduled
conference call time: 800/310-1961. International callers should dial:
719/457-2622. Digital replay is available by calling
888/203-1112 and using the digital pass code #4899402. The conference call
will be webcast live and may be accessed at BofI'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 the
BofIholding.com website for 90 days.
About BofI 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.bankofinternet.com and www.ApartmentBank.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.
Selected Financial Data
The following tables set forth certain selected financial data
concerning the periods indicated:
BofI HOLDING, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Dollars in thousands, except per share data)
September June September
30, 30, 30,
2008 2008 2007
----------- ----------- -----------
Selected Balance Sheet Data:
Total assets $ 1,170,915 $ 1,194,245 $ 1,024,713
Loans - net of allowance for loan
losses 622,119 631,413 508,438
Allowance for loan losses 2,809 2,710 1,430
Investment securities 501,724 510,014 451,001
Total deposits 557,496 570,704 601,079
Securities sold under agreements to
repurchase 130,000 130,000 110,000
Advances from the FHLB 392,973 398,966 227,412
Junior subordinated debentures 5,155 5,155 5,155
Total stockholders' equity 79,250 83,082 75,333
At or For the Three
Months Ended
September 30,
---------------------
2008 2007
--------- ----------
Selected Income Statement Data:
Interest and dividend income $ 19,177 $ 13,622
Interest expense 11,365 10,660
--------- ----------
Net interest income 7,812 2,962
Provision for loan losses 505 5
--------- ----------
Net interest income after provision for loan losses 7,307 2,957
Non-interest income (loss) (7,924) 448
Non-interest expense 2,477 2,150
--------- ----------
Income (loss) before income tax expense (3,094) 1,255
Income tax expense (benefit) (1,277) 508
--------- ----------
Net income (loss) $ (1,817) $ 747
========= ==========
Net income (loss) attributable to common stock $ (1,988) $ 670
Per Share Data:
Net income (loss):
Basic $ (0.24) $ 0.08
Diluted $ (0.24) $ 0.08
Book value per common share $ 8.36 $ 8.50
Tangible book value per common share $ 8.36 $ 8.50
Weighted average number of common shares outstanding:
Basic 8,279,465 8,248,158
Diluted 8,279,465 8,374,558
Common shares outstanding at end of period 8,299,563 8,267,590
Common shares issued at end of period 8,627,840 8,587,090
BofI HOLDING, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Dollars in thousands, except per share data)
At or For the Three
Months Ended September 30,
------------------------
2008 2007
---------- ----------
Performance Ratios and Other Data:
Loan originations $ 12,029 $ 35,302
Loan originations for sale 213 516
Loan purchases 15,349 929
Return (loss) on average assets (0.61%) 0.31%
Return (loss) on average common stockholders'
equity (11.19%) 3.92%
Interest rate spread[1] 2.42% 0.93%
Net interest margin[2] 2.68% 1.24%
Efficiency ratio[3] N/A 63.0%
Capital ratios:
Equity to assets at end of period 6.77% 7.35%
Tier 1 leverage (core) capital to adjusted
tangible assets[4] 6.90% 7.50%
Tier 1 risk-based capital ratio[4] 14.03% 14.78%
Total risk-based capital ratio[4] 14.52% 15.05%
Tangible capital to tangible assets[4] 6.90% 7.50%
Asset Quality Ratios:
Net charge-offs to average loans outstanding 0.06% -
Nonperforming loans to total loans 0.42% 0.03%
Allowance for loan losses to total loans held for
investment 0.45% 0.28%
Allowance for loan losses to nonperforming loans 107.75% 10.7X
[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 noninterest expense as a percentage of the
aggregate of net interest income and noninterest income. Due to the
loss on sale of FNMA preferred stock this ratio is not meaningful.
Without the loss of $7.902 million in noninterest income, the
efficiency ratio would have been 31.8%.
[4] Reflects regulatory capital ratios of Bank of Internet USA only.
Contact:
BofI Holding, Inc.Gregory Garrabrants, CEO
858/350-6203
Email Contact