BofI Holding, Inc. (NASDAQ:BOFI) Q2 2015 Earnings Conference Call - Final Transcript

Jan 29, 2015 • 04:30 pm ET

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BofI Holding, Inc. (NASDAQ:BOFI) Q2 2015 Earnings Conference Call - Final Transcript

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Q & A
Operator
operator

(Operator Instructions)

Bob Ramsey, FBR

Analyst
Bob Ramsey

First question, noticed that the portfolio loan yield dipped below 5% this quarter. I know you said at least on the jumbo side, origination yields have held up. Just kind of curious what drove the loan yield down this quarter and what I guess overall sort of complete-blended yields were on originations this quarter?

Executive
Gregory Garrabrants

In general, the single-family jumbo yield was very consistent with what it's been over the last several years. Multi-family yields on new originations have definitely been lower and they've been pulling down average loan yields. The other issue is that the net balances on the C&I side didn't increase as much as they normally have done in prior quarters, and those are always ending up pulling us up a little bit from a balance perspective. So I think those are the primary reasons there. But I think that on the good side, we don't see pressure on pricing on the single-family side. We still have a good business at reasonable yields on the multi-family side.

Executive
Unidentified Speaker

On the multi-family side, the pipeline right now is basically where -- it's very close to -- from a WAC perspective to where the current portfolio yield is, but I think that volume is a bit of an issue there. And then, I think -- and then C&I pipeline looks pretty good at pretty good rates, but those loans tend to be lumpy. We had a pretty big payoff early this quarter. That was one of our largest relationships. And so sometimes those things -- that's really, I think, the main way to look at that. If you had anything to add, Andy.

Executive
Andrew J. Micheletti

No, I think, it's a good summary.

Analyst
Bob Ramsey

Okay, that's helpful. And I think, if I heard you right earlier on the call too, Greg, you said that the outlook is for your margin to stay north of 3.8% on a go-forward basis. Did I hear you correctly?

Executive
Gregory Garrabrants

That's right. I mean, definitely, when we look at even with conservative assumptions for this quarter, we've kind of tried to forecast that out and we think that is a pretty reasonable forecast. I think we've done a pretty good job of migrating our deposit rates down pretty well and really being able to try to provide some different value propositions to customers.

With the delay in the Block deal and some of that on the acquisition side, we felt like we really needed to push and just make sure we raised deposit levels and we also extended borrowings quite a bit from an interest-rate reduction perspective. And so some of those things, although we did have a reduction in our deposit, the overall cost of funds, it would have been significantly greater, if we had brought on the deposits that we were expecting from our acquisitions

and that also had some impact on some of the interest rate risk metrics, which we basically normalized for now as if that wasn't occurring. So I think that, as