SAN DIEGO, CA -- (MARKET WIRE) -- 02/05/08 --
B of I Holding, Inc. (NASDAQ: BOFI), parent
of Bank of Internet USA ("Bank"), announced today its financial results for
its second quarter ended December 31, 2007. Net income was $651,000, or
$0.07 per diluted share, down $156,000, from net income of $807,000, or
$0.09 per diluted share, earned for the quarter ended December 31, 2006.
Operating results for the quarter ended December 31, 2007 included a
$169,000 pretax, one-time charge associated with recruiting a new chief
executive officer in the second quarter.
For the six months ended December 31, 2007 net income was $1,398,000 or
$0.15 per diluted share, compared to $1,553,000, or $0.17 per diluted share
for the six-month period ended December 31, 2006.
Second Quarter Highlights:
-- Total assets of $1.04 billion, up 29.5% from last year
-- Total deposits of $600.2 million, up 28.7% from last year
-- Net interest income for quarter increased 37.0% from last year; net
interest margin up 5 basis points from last year
-- Asset quality remains strong with total nonperforming loans of 0.05%
of loan portfolio
-- Tangible book value of $8.67 per share, up $0.17 per share from last
quarter
B of I's new Chief Executive Officer Greg Garrabrants commented saying,
"After three months on the job, I am very encouraged by B of I's
opportunities to improve its operating results. Widening credit spreads and
limited liquidity in the whole loan and mortgage-backed securities markets
have significantly increased our ability to add high credit quality assets
at attractive yields. Concurrent with this increased opportunity, our loan
portfolio credit quality has remained strong and our mortgage-backed
securities portfolio has maintained or increased in value during a period
in which many financial institutions have disclosed higher loan losses and
write-downs in their securities portfolios. Additionally, the recent rate
cuts will reduce future funding costs through lower deposit and borrowing
rates. Most importantly, the Bank is making strong progress in the
development of several new strategic relationships, enhancement of its
product offerings, and refinement of its marketing strategy. Improvements
in the operational capabilities of the Bank will drive sustainable
improvements in profitability and reduce the Bank's dependence on market
conditions."
Commenting on BofI operating results this quarter, Mr. Garrabrants
continued, "Our core business, net interest income increased 37% this
quarter compared to the second quarter last year. We believe we will
continue to increase our net interest income in the next several quarters."
Quarter Earnings Summary
During the quarter ended December 31, 2007, B of I earned $651,000 or $0.07
per diluted share compared to $807,000, or $0.09 per diluted share for the
three months ended December 31, 2006. Net interest income increased
$927,000 during the 2007 quarter compared to the 2006 quarter due to a
31.9% increase in average earning assets generally resulting from increased
investment in mortgage-backed securities. The net interest margin increased
5 basis points to 1.34%, up from 1.29%. Loan loss provisions were
$264,000 this quarter due to loan portfolio growth and an approximately
$110,000 increased allocation to the loan loss reserve for recreational
vehicle loans, based upon loss experience through December 2007. An $80,000
benefit provision was reported in the 2006 quarter due to B of I's decision
to shift assets away from loans and into government agency mortgage-backed
securities, reducing loan loss allowance requirements. Non-interest expense
or operating costs for the 2007 quarter increased $797,000, primarily due
to a $608,000 increase in salaries and benefits and stock compensation, due
to increased bank staffing, from 28 to 47 full time employees between
December 31, 2006 and 2007, primarily from increased staffing in B of I 's
new consumer lending group. Also included in the increased compensation
this quarter was $169,000 of expense for the moving allowance and other one-
time fees associated with the hiring of the new chief executive officer.
Advertising and promotion expense increased $65,000 in the 2007 quarter due
to increased activity for Internet advertising and lead acquisitions for
our home equity loan program. Other general and administrative expense
increased $140,000 in the 2007 quarter primarily due to higher standard
regulatory fees and increased loan processing expense related to home
equity loan originations.
Balance Sheet Summary
Total assets increased to $1,040.2 million, up 29.5% from total assets of
$803.4 million at December 31, 2006, and up from $947.2 million at June 30,
2007. The increase in total assets this quarter was the result of purchases
of single-family mortgage loans and originations of home equity and
recreational vehicle loans. The asset growth since June 30, 2007 was funded
by a net increase in deposits totaling $52.2 million and an increase in
repurchase borrowings of $35.0 million. For the six months ended December
31, 2007, stockholders' equity increased $4.1 million primarily due to
earnings of $1.4 million and unrealized gain of $2.5 million from
marking-to-market our available for sale government agency mortgage-backed
securities.
Conference Call
B of I Holding, Inc. will host a conference call at 2:00 p.m. PT (5:00 p.m.
ET) on February 12, 2008 to discuss financial results for the second
quarter ended December 31, 2007. To participate in the conference call,
please dial the following number five to ten minutes prior to the scheduled
conference call time: (866) 300-7687. International callers should dial
(416) 641-6136. When prompted by the operator, mention Conference ID
#3243482. 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 February 5, 2008. 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)
December 31, June 30, December 31,
2007 2007 2006
----------- ----------- -----------
Selected Balance Sheet Data:
Total assets $ 1,040,184 $ 947,163 $ 803,368
Loans - net of allowance for loan
losses 517,345 507,906 512,935
Allowance for loan losses 1,502 1,450 1,370
Investment securities available for
sale 383,720 296,068 198,532
Investment securities held to maturity 56,499 61,902 40,027
Total deposits 600,168 547,949 466,418
Securities sold under agreements to
repurchase 125,000 90,000 15,000
Advances from the FHLB 227,430 227,292 242,235
Junior subordinated debentures 5,155 5,155 5,155
Total stockholders' equity 76,904 72,750 71,428
At or For the At or For the
Three Months Ended Six Months Ended
December 31, December 31,
2007 2006 2007 2006
---------- --------- ---------- ---------
Selected Income Statement Data:
Interest and dividend income $ 14,971 $ 10,731 $ 28,593 $ 20,703
Interest expense 11,541 8,228 22,201 15,764
---------- --------- ---------- ---------
Net interest income 3,430 2,503 6,392 4,939
Provision for loan losses 264 (80) 269 (105)
---------- --------- ---------- ---------
Net interest income after
provision for loan losses 3,166 2,583 6,123 5,044
Non-interest income 333 378 781 745
Non-interest expense 2,410 1,613 4,560 3,191
---------- --------- ---------- ---------
Income before income tax
expense 1,089 1,348 2,344 2,598
Income tax expense 438 541 946 1,045
---------- --------- ---------- ---------
Net income $ 651 $ 807 $ 1,398 $ 1,553
========== ========= ========== =========
Net income attributable to
common stock $ 574 $ 728 $ 1,244 $ 1,396
Per Share Data:
Net income:
Basic $ 0.07 $ 0.09 $ 0.15 $ 0.17
Diluted $ 0.07 $ 0.09 $ 0.15 $ 0.17
Book value per common share $ 8.67 $ 8.01 $ 8.67 $ 8.01
Tangible book value per common
share $ 8.67 $ 8.01 $ 8.67 $ 8.01
Weighted average number of
common shares outstanding:
Basic 8,254,065 8,276,926 8,251,112 8,312,267
Diluted 8,374,380 8,391,284 8,374,469 8,431,413
Common shares outstanding at
end of period 8,287,590 8,268,825 8,287,590 8,268,825
Common shares issued at end of
period 8,607,090 8,577,825 8,607,090 8,577,825
BofI HOLDING, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Dollars in thousands, except per share data)
At or For the At or For the Six
Three Months Ended Months Ended
December 31, December 31,
2007 2006 2007 2006
-------- -------- -------- --------
Performance Ratios and Other Data:
Loan originations $ 14,428 $ 2,716 $ 49,730 $ 5,527
Loan originations for sale - 2,363 516 3,960
Loan purchases 29,673 6,117 30,602 30,514
Return on average assets 0.25% 0.41% 0.28% 0.40%
Return on average common
stockholders' equity 3.24% 4.39% 3.57% 4.24%
Interest rate spread[1] 1.02% 0.90% 0.97% 0.91%
Net interest margin[2] 1.34% 1.29% 1.29% 1.30%
Efficiency ratio[3] 64.0% 56.0% 63.6% 56.1%
Capital ratios:
Equity to assets at end of period 7.39% 8.89% 7.39% 8.89%
Tier 1 leverage (core) capital to
adjusted tangible assets[4] 7.48% 8.69% 7.48% 8.69%
Tier 1 risk-based capital ratio[4] 15.39% 17.38% 15.39% 17.38%
Total risk-based capital ratio[4] 15.69% 17.72% 15.69% 17.72%
Tangible capital to tangible
assets[4] 7.48% 8.69% 7.48% 8.69%
Asset Quality Ratios:
Net charge-offs to average loans
outstanding 0.04% - 0.04% -
Nonperforming loans to total loans 0.05% - 0.05% -
Allowance for loan losses to total
loans held for investment 0.29% 0.27% 0.29% 0.27%
Allowance for loan losses to
nonperforming loans 6.0 X - 6.0 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.
Contact:
Gregory Garrabrants
CEO
858-350-6203
Email Contact