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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Presentation
Executive
Andrew J. Micheletti

of increased loan sales.

Non-interest expense or operating costs for the second quarter ended December 31, 2014 was $18,937,000 compared to $15,304,000 in operating costs in the second quarter of fiscal 2014, and compared to $17,446,000 in operating costs for the first quarter of fiscal 2015.

For the second quarter, year-over-year, salaries and related costs were up $2,804,000 due to additional staffing added since December 31, 2013. Professional services decreased $445,000 due to lower volume of legal fees and increased insurance reimbursements. Data processing

Executive
Unidentified Speaker

processing and Internet expenses were up $362,000, and FDIC and regulatory fees increased $281,000. These increases are primarily due to the growth of the bank's lending and deposit operations. For the second quarter ended December 31, 2014 compared to the first quarter ended, salaries and related costs were up $1,067,000. Advertising and promotion increased $143,000.

Data processing and Internet expense increased $169,000 and occupancy and equipment increased $111,000. The increases were primarily to support the growth of bank's lending and deposit operations. Our efficiency ratio was 34.55% for the second quarter of 2015 compared to 39.89% recorded in the second quarter of 2014 and compared to 34.81% for the first quarter of fiscal 2015. The efficiency ratio was calculated by dividing our operating expenses by the sum of our net interest income and our non-interest income.

Shifting to the balance sheet, our total assets increased $791.7 million or 18% to $5,195,000,000 as of December 31, 2014, up from $4,403,000,000 at June 30, 2014. The increase in total assets was primarily due to an increase of $770.8 million in loans held for investments.

Total liabilities increased $712.1 million, primarily due to an increase of deposits of $963.9 million, partially offset by a decrease in borrowings of $250 million. Stockholders' equity increased $79.6 million or 21.5% to $450.4 million at December 31, 2014, up from $370.8 million at June 30, 2014. The increase was primarily the result of our net income for the six months ended December 31, 2014, of $37.2 million and sale of common stock of $38.9 million as well as vesting and issuance of RSUs and options of $2.2 million, less $1.4 million in unrealized gains on incomprehensive income and net of $0.2 million in dividends declared on our preferred stock.

At December 31, 2014, our Tier 1 core capital ratio for the bank was 8.84% with $199.9 million of capital in excess of the regulatory definition of well capitalized.

With that, I'll turn the call back over to Johnny.

Executive
Johnny Y. Lai

Great. Operator, we are ready to take questions.