Interesting to see INBK on your list of recent purchases. You must have put some thought into that since you recently said you were not interested in them. What changed your mind.
Hi tdonb,
First people were discussing it on this board, and then their results came out, which I thought were excellent. Improving in just about every statistic, except earnings which were down because of refinancing drying up, but probably now at a bottom and about to turn up. My hope, of course, is that this could become another BOFI
Here are my notes. NOTE THAT THERE IS VERY LOW VOLUME and WIDE SPREADS BETWEEN BID AND ASKED so it’s hard to take a position.
Saul
Apr 2014 - Mar quarter results
We are off to a strong start in 2014, with net loans receivable increasing 49% over a year ago. Despite increased competition in the marketplace, we have been highly successful in winning new commercial loan relationships which continue to drive increased interest income. We anticipate continued growth in revenue, total assets, and core earnings throughout the remainder of 2014.
Overview for the quarter
Net interest income up 25% to $4.87 million from $3.89 million.
Net income was $0.6 million, or 13 cents per share, down from $1.49 million, or 52 cents per share a year ago. The decline in net income was primarily due to a 70% decrease in mortgage banking income, reflecting the nationwide slowdown of residential mortgage refinancing activity that began in the second half of 2013. Per share net income was also impacted by the 1.62 million increase in diluted shares following our fourth quarter 2013 public offering.
Total assets up 30% to $848 million, from $651 million.
Net loans receivable were up 49% to $527 million from $353 million.
Total commercial loans up 111% to $230 million from $109 million.
Nonperforming assets to total assets declined to 0.81% from 1.57%. The cushion for potential losses to total nonperforming loans increased to 400%, up from 150% in the prior year period.
Total deposits up 33% to $728 million from $547 million.
We have worked to protect shareholder value by addressing interest rate risk. We have maintained a growing and solid base of variable rate loans. We have complemented that initiative by taking actions in our securities portfolio to reduce exposure to longer term investments.
Income Statement Highlights
Net interest income was $4.87 million, up 25% from $3.89 million. The increase reflected greater revenue from mortgage loans as well as a 12% decrease in interest expense. Our cost of funds declined to 1.22% from 1.39% as longer-term maturing CDs were replaced at lower rates.
Our net interest margin was 2.51% in the first quarter 2014 compared to 2.60% in the first quarter 2013. This was because the timing of loans and the repositioning of the securities portfolio to address interest rate risk left above-average cash on the balance sheet, which had a negative impact on net interest margin. We expect net interest margin to improve in future periods.
Total noninterest expense in first quarter 2014 was $5.44 million compared with $4.55 million in first quarter 2013. The increase in noninterest expense reflected the Company’s continued investment in strategic initiatives and hiring of revenue-producing lending teams in key markets. In the past year, the Company added experienced talent in commercial banking and lending and launched loan production offices to support its asset-generating efforts.
Noninterest expense as a percentage of average assets was down 23 basis points, from 2.92% in first quarter 2013 to 2.69% in first quarter 2014.
Asset and loan quality remained strong.
Nonperforming assets as a percentage of total assets decreased to 0.81% from 1.57%.
Nonperforming loans to total loans receivable was 0.26% down from 1.06%.
The allowance for loan loss to total nonperforming loans was 398.52% and the allowance for loan loss to total loans receivable was 1.02%