Axos Financial (AX) 8-K BofI Holding, Inc. Announces Record Fourth Quarter Net Income of $24.4 million

BOFI HOLDING, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (Unaudited)
	At June 30,
(Dollars in thousands, except par and stated value)	2015			2014
ASSETS
Cash and due from banks	$	222,774		$	155,484
Federal funds sold	100			100
Total cash and cash equivalents	222,874			155,584
Securities:
Trading	7,832			8,066
Available for sale	163,361			214,778
Held to maturity—fair value of $228,323 at June 2015 and $243,966 at June 2014	225,555			247,729
Stock of the Federal Home Loan Bank, at cost	66,270			42,770
Loans held for sale, carried at fair value	25,430			20,575
Loans held for sale, carried at lower of cost or fair value	77,891			114,796
Loans—net of allowance for loan losses of $28,327 as of June 2015 and $18,373 as of June 2014	4,928,618			3,532,841
Accrued interest receivable	20,268			13,863
Furniture, equipment and software—net	8,551			6,707
Deferred income tax	32,955			25,245
Cash surrender value of life insurance	5,806			5,625
Mortgage servicing rights, carried at fair value	2,098			562
Other real estate owned and repossessed vehicles	1,240			75
Other assets	34,970			13,783
TOTAL ASSETS	$	5,823,719		$	4,402,999
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Non-interest bearing	$	309,339		$	186,786
Interest bearing	4,142,578			2,854,750
Total deposits	4,451,917			3,041,536
Securities sold under agreements to repurchase	35,000			45,000
Advances from the Federal Home Loan Bank	753,000			910,000
Subordinated debentures	5,155			5,155
Accrued interest payable	1,266			1,350
Accounts payable and accrued liabilities and other liabilities	43,855			29,180
Total liabilities	5,290,193			4,032,221
STOCKHOLDERS’ EQUITY:
Preferred stock—$0.01 par value; 1,000,000 shares authorized;
Series A— $10,000 stated value and liquidation preference per share; 515 shares issued and outstanding as of June 2015 and June 2014	5,063			5,063
Common stock—$0.01 par value; 50,000,000 shares authorized, 16,589,111 shares issued and 15,518,751 shares outstanding as of June 2015, 15,423,822 shares issued and 14,451,900 shares outstanding as of June 2014	166			154
Additional paid-in capital	296,507			207,579
Accumulated other comprehensive income (loss) — net of tax	(9,399		)	(10,366		)
Retained earnings	265,833			183,460
Treasury stock, at cost; 1,070,360 shares as of June 2015 and 971,922 shares as of June 2014	(24,644		)	(15,112		)
Total stockholders’ equity	533,526			370,778
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	5,823,719		$	4,402,999

BOFI HOLDING, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
	Year Ended June 30,
(Dollars in thousands, except earnings per share)	2015			2014			2013
INTEREST AND DIVIDEND INCOME:
Loans, including fees	$	220,486		$	147,664		$	113,503
Investments	23,878			25,214			22,151
Total interest and dividend income	244,364			172,878			135,654
INTEREST EXPENSE:
Deposits	34,733			24,817			22,868
Advances from the Federal Home Loan Bank	8,910			6,981			5,939
Other borrowings	1,776			3,983			5,219
Total interest expense	45,419			35,781			34,026
Net interest income	198,945			137,097			101,628
Provision for loan losses	11,200			5,350			7,550
Net interest income, after provision for loan losses	187,745			131,747			94,078
NON-INTEREST INCOME:
Realized gain (loss) on sale of mortgage-backed securities	587			208			212
Other-than-temporary loss on securities:
Total impairment (losses) gains	(6,805		)	(2,359		)	(8,080		)
Loss (gain) recognized in other comprehensive income (loss)	4,440			(443		)	4,579
Net impairment loss recognized in earnings	(2,365		)	(2,802		)	(3,501		)
Fair value gain (loss) on trading securities	(234		)	954			1,274
Total unrealized loss on securities	(2,599		)	(1,848		)	(2,227		)
Prepayment penalty fee income	4,695			2,687			1,742
Gain on sale - other	5,793			6,658			1,130
Mortgage banking income	15,264			10,170			22,953
Banking service fees and other income	6,850			4,580			3,900
Total non-interest income	30,590			22,455			27,710
NON-INTEREST EXPENSE:
Salaries and related costs	43,819			32,240			28,874
Professional services	4,122			5,421			3,531
Occupancy and equipment	3,091			2,324			2,086
Data processing and internet	6,632			5,373			2,773
Advertising and promotional	6,060			3,724			4,084
Depreciation and amortization	3,273			2,874			1,904
Real estate owned and repossessed vehicles	(120		)	(149		)	505
FDIC and regulatory fees	3,434			2,343			2,125
Other general and administrative	7,167			5,783			7,705
Total non-interest expense	77,478			59,933			53,587
INCOME BEFORE INCOME TAXES	140,857			94,269			68,201
INCOME TAXES	58,175			38,313			27,910
NET INCOME	$	82,682		$	55,956		$	40,291
NET INCOME ATTRIBUTABLE TO COMMON STOCK	$	82,373		$	55,647		$	39,456
COMPREHENSIVE INCOME	$	83,649		$	56,390		$	34,926
Basic earnings per share	$	5.39		$	3.87		$	3.00
Diluted earnings per share	$	5.37		$	3.85		$	2.89

BOFI HOLDING, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited) 

	For the Quarters Ended June 30,
(Dollars in thousands, except earnings per share)	2015			2014
INTEREST AND DIVIDEND INCOME:
Loans, including fees	$	60,670		$	43,391
Investments	6,897			6,751
Total interest and dividend income	67,567			50,142
INTEREST EXPENSE:
Deposits	9,593			6,923
Advances from the Federal Home Loan Bank	2,255			2,093
Other borrowings	425			630
Total interest expense	12,273			9,646
Net interest income	55,294			40,496
Provision for loan losses	2,900			2,250
Net interest income, after provision for loan losses	52,394			38,246
NON-INTEREST INCOME:
Realized gain (loss) on sale of mortgage-backed securities	—			—
Other-than-temporary loss on securities:
Total impairment (losses) gains	(973		)	(390		)
Loss (gain) recognized in other comprehensive income (loss)	812			(248		)
Net impairment loss recognized in earnings	(161		)	(638		)
Fair value gain (loss) on trading securities	94			466
Total unrealized loss on securities	(67		)	(172		)
Prepayment penalty fee income	2,311			401
Gain on sale - other	1,368			607
Mortgage banking income	4,934			2,687
Banking service fees and other income	1,732			1,200
Total non-interest income	10,278			4,723
NON-INTEREST EXPENSE:
Salaries and related costs	12,109			8,776
Professional services	798			1,096
Occupancy and equipment	803			609
Data processing and internet	1,718			1,305
Advertising and promotional	1,843			1,251
Depreciation and amortization	922			713
Real estate owned and repossessed vehicles	(272		)	(3		)
FDIC and regulatory fees	926			677
Other general and administrative	1,905			1,342
Total non-interest expense	20,752			15,766
INCOME BEFORE INCOME TAXES	41,920			27,203
INCOME TAXES	17,525			11,193
NET INCOME	$	24,395		$	16,010
NET INCOME ATTRIBUTABLE TO COMMON STOCK	$	24,318		$	15,933
COMPREHENSIVE INCOME	$	23,293		$	17,013
Basic earnings per share	$	1.55		$	1.09
Diluted earnings per share	$	1.54		$	1.09

BOFI HOLDING, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Year Ended June 30,
(Dollars in thousands)	2015			2014		2013
NET INCOME	$	82,682		$	55,956	$	40,291
Net unrealized gain (loss) from available-for-sale securities, net of tax expense (benefit) of $(132), $(36) and $1,865 for the years ended June 30, 2015, 2014 and 2013, respectively.	180			54		(2,796		)
Other-than-temporary impairment on securities recognized in other comprehensive income, net of tax expense (benefit) of $(832), $(253) and $1,713 for the years ended June 30, 2015, 2014 and 2013, respectively.	1,139			380		(2,569		)
Reclassification of net (gain) loss from available-for-sale securities included in income, net of tax expense (benefit) of $235, $0 and $0 for the years ended June 30, 2015, 2014 and 2013, respectively.	(352		)	—		—
Other comprehensive income (loss)	$	967		$	434	$	(5,365	)
Comprehensive income	$	83,649		$	56,390	$	34,926

BOFI HOLDING, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)
	Preferred Stock					Common Stock						Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss), Net of Income Tax			Treasury Stock			Total
						Number of Shares
(Dollars in thousands)	Shares		Amount			Issued	Treasury		Outstanding	Amount
Balance as of June 30, 2012	20,647		$	24,502		12,321,578	(809,042	)	11,512,536	$	123	$	105,683	$	88,357		$	(5,435	)	$	(6,610	)	$	206,620
Net income	—		—			—	—		—	—		—		40,291			—			—			40,291
Net unrealized loss from investment securities—net of income tax expense	—		—			—	—		—	—		—		—			(5,365		)	—			(5,365		)
Cash dividends on preferred stock	—		—			—	—		—	—		—		(835		)	—			—			(835		)
Issuance of convertible preferred stock	1,857		18,544			—	—		—	—		—		—			—			—			18,544
Issuance of common stock	—		—			200,000	—		200,000	2		6,763		—			—			—			6,765
Convert preferred stock to common stock	(21,989	)	(37,983		)	1,855,411	—		1,855,411	18		37,965		—			—			—			—
Stock-based compensation expense	—		—			—	—		—	—		3,297		—			—			—			3,297
Restricted stock grants	—		—			234,105	(95,862	)	138,243	3		2,173		—			—			(3,647		)	(1,471		)
Stock option exercises and tax benefits of equity compensation	—		—			27,135	—		27,135	—		416		—			—			—			416
Balance as of June 30, 2013	515		$	5,063		14,638,229	(904,904	)	13,733,325	$	146	$	156,297	$	127,813		$	(10,800	)	$	(10,257	)	$	268,262
Net income	—		—			—	—		—	—		—		55,956			—			—			55,956
Net unrealized loss from investment securities—net of income tax expense	—		—			—	—		—	—		—		—			434			—			434
Cash dividends on preferred stock	—		—			—	—		—	—		—		(309		)	—			—			(309		)
Issuance of common stock	—		—			560,301	—		560,301	7		41,576		—			—			—			41,583
Stock-based compensation expense	—		—			—	—		—	—		4,358		—			—			—			4,358
Restricted stock grants	—		—			169,760	(67,018	)	102,742	1		3,470		—			—			(4,855		)	(1,384		)
Stock option exercises and tax benefits of equity compensation	—		—			55,532	—		55,532	—		1,878		—			—			—			1,878
Balance as of June 30, 2014	515		$	5,063		15,423,822	(971,922	)	14,451,900	$	154	$	207,579	$	183,460		$	(10,366	)	$	(15,112	)	$	370,778
Net income	—		—			—	—		—	—		—		82,682			—			—			82,682
Net unrealized loss from investment securities—net of income tax expense	—		—			—	—		—	—		—		—			967			—			967
Cash dividends on preferred stock	—		—			—	—		—	—		—		(309		)	—			—			(309		)
Issuance of common stock	—		—			949,089	—		949,089	9		75,976		—			—			—			75,985
Stock-based compensation expense	—		—			—	—		—	—		6,648		—			—			—			6,648
Restricted stock grants	—		—			129,850	(56,151	)	73,699	2		2,428		—			—			(5,310		)	(2,880		)
Stock option exercises and tax benefits of equity compensation	—		—			86,350	(42,287	)	44,063	1		3,876		—			—			(4,222		)	(345		)
Balance as of June 30, 2015	515		$	5,063		16,589,111	(1,070,360	)	15,518,751	$	166	$	296,507	$	265,833		$	(9,399	)	$	(24,644	)	$	533,526

BOFI HOLDING, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
	Year Ended June 30,
(Dollars in thousands)	2015			2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	82,682		$	55,956		$	40,291
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Accretion of discounts on securities	(5,517		)	(8,340		)	(7,687		)
Net accretion of discounts on loans	(27		)	(2,647		)	(3,443		)
Stock-based compensation expense	6,648			4,358			3,297
Tax benefit from exercise of common stock options and vesting of restricted stock grants	(5,526		)	(4,856		)	(2,332		)
Valuation of financial instruments carried at fair value	234			(955		)	(1,273		)
Net gain on sale of investment securities	(587		)	—			(212		)
Impairment charge on securities	2,365			2,802			3,501
Provision for loan losses	11,200			5,350			7,550
Deferred income taxes	(9,034		)	(2,040		)	(4,618		)
Origination of loans held for sale	(1,048,982		)	(741,494		)	(1,085,941		)
Unrealized (gain) loss on loans held for sale	119			179			284
Gain on sales of loans held for sale	(21,057		)	(17,007		)	(24,367		)
Proceeds from sale of loans held for sale	1,114,097			727,265			1,081,954
Change in fair value of mortgage servicing rights	265			(45		)	—
(Gain) loss on sale of other real estate and foreclosed assets	(283		)	(350		)	(372		)
Depreciation and amortization of furniture, equipment and software	3,273			2,874			1,904
Net changes in assets and liabilities which provide (use) cash:
Accrued interest receivable	(6,405		)	(4,100		)	(1,891		)
Other assets	(17,948		)	(1,224		)	3,466
Accrued interest payable	(84		)	(324		)	(128		)
Accounts payable and accrued liabilities	10,669			5,917			5,767
Net cash provided by (used) in operating activities	116,102			21,319			15,750
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investment securities	(10,464		)	(83,033		)	(79,533		)
Proceeds from sales of available-for-sale mortgage-backed securities	9,539			—			2,775
Proceeds from repayment of securities	80,546			88,086			88,106
Purchase of stock of the Federal Home Loan Bank	(60,870		)	(34,221		)	(14,868		)
Proceeds from redemption of stock of Federal Home Loan Bank	37,370			19,201			7,798
Origination of loans held for investment	(3,242,828		)	(2,297,976		)	(953,012		)
Origination of mortgage warehouse loans, net	(29,083		)	—			(101,612		)
Proceeds from sales of other real estate owned and repossessed assets	1,518			2,724			3,151
Purchases of loans, net of discounts and premiums	(2,452		)	(95		)	(1,541		)
Principal repayments on loans	1,847,665			990,305			541,076
Purchases of furniture, equipment and software	(5,117		)	(3,163		)	(3,914		)
Net cash used in investing activities	$	(1,374,176	)	$	(1,318,172	)	$	(511,574	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits	$	1,410,381		$	949,537		$	476,911
Proceeds from the Federal Home Loan Bank advances	734,000			950,000			327,417
Repayment of the Federal Home Loan Bank advances	(891,000		)	(630,417		)	(159,000		)
Repayments of other borrowings and securities sold under agreements to repurchase	(10,000		)	(65,000		)	(10,000		)
Proceeds from exercise of common stock options	781			500			260
Proceeds from issuance of common stock	75,985			41,576			6,765
Proceeds from issuance of preferred stock	—			—			18,544
Tax benefit from exercise of common stock options and vesting of restricted stock grants	5,526			4,856			2,332
Cash dividends paid on preferred stock	(309		)	(309		)	(1,137		)
Net cash provided by financing activities	1,325,364			1,250,743			662,092
NET CHANGE IN CASH AND CASH EQUIVALENTS	67,290			(46,110		)	166,268
CASH AND CASH EQUIVALENTS—Beginning of year	155,584			201,694			35,426
CASH AND CASH EQUIVALENTS—End of year	$	222,874		$	155,584		$	201,694
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid on deposits and borrowed funds	$	45,503		$	36,104		$	34,154
Income taxes paid	$	68,481		$	37,339		$	35,830
Transfers to other real estate and repossessed vehicles	$	2,484		$	1,206		$	4,466
Transfers from loans held for investment to loans held for sale	$	30,000		$	39,799		$	4,654
Transfers from loans held for sale to loans held for investment	$	7,237		$	1,471		$	40,779
Transfer from preferred stock to common stock	$	—		$	—		$	18
Transfer from preferred stock to additional paid-in capital	$	—		$	—		$	37,965

LOANS 

The following table sets forth the composition of the loan portfolio as of the dates indicated:

(Unaudited) (Dollars in thousands)	June 30, 2015			June 30, 2014
Single family real estate secured:
Mortgage	$	2,980,795		$	1,918,626
Home equity	3,604			12,690
Warehouse and other1	385,413			370,717
Multifamily real estate secured	1,185,531			978,511
Commercial real estate secured	61,403			24,061
Auto and RV secured	13,140			14,740
Factoring	122,200			118,945
Commercial & Industrial	248,584			152,619
Other	601			1,971
Total gross loans	5,001,271			3,592,880
Allowance for loan losses	(28,327		)	(18,373		)
Unaccreted discounts and loan fees	(44,326		)	(41,666		)
Total net loans	$	4,928,618		$	3,532,841

1. The balance of single family warehouse loans was $122,003 at June 30, 2015 and $92,920 at June 30, 2014. The remainder of the balance is attributable to single family lender finance loans.

SECURITIES

The amortized cost, carrying amount and fair value for the major categories of securities trading, available for sale, and held to maturity at June 30, 2015 and June 30, 2014 were:

	June 30, 2015
	Trading		Available for sale									Held to maturity
(Unaudited) (Dollars in thousands)	Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Carrying Amount		Unrecognized Gains		Unrecognized Losses			Fair Value
Mortgage-backed securities (RMBS):
U.S agencies1	$	—	$	43,738	$	701	$	(948	)	$	43,491	$	41,993	$	1,398	$	—		$	43,391
Non-agency2	—		23,799		2,835		(1		)	26,633		147,586		10,045		(12,749		)	144,882
Total mortgage-backed securities	—		67,537		3,536		(949		)	70,124		189,579		11,443		(12,749		)	188,273
Other debt securities:
U.S. agencies1	—		—		—		—			—		—		—		—			—
Municipal	—		21,731		390		(86		)	22,035		35,976		4,074		—			40,050
Non-agency	7,832		70,216		1,271		(285		)	71,202		—		—		—			—
Total other debt securities	7,832		91,947		1,661		(371		)	93,237		35,976		4,074		—			40,050
Total debt securities	$	7,832	$	159,484	$	5,197	$	(1,320	)	$	163,361	$	225,555	$	15,517	$	(12,749	)	$	228,323
	June 30, 2014
	Trading		Available for sale									Held to maturity
(Unaudited) (Dollars in thousands)	Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Carrying Amount		Unrecognized Gains		Unrecognized Losses			Fair Value
Mortgage-backed securities (RMBS):
U.S agencies1	$	—	$	60,670	$	1,060	$	(1,850	)	$	59,880	$	47,982	$	1,895	$	—		$	49,877
Non-agency2	—		33,521		4,077		(189		)	37,409		163,695		6,352		(15,490		)	154,557
Total mortgage-backed securities	—		94,191		5,137		(2,039		)	97,289		211,677		8,247		(15,490		)	204,434
Other debt securities:
U.S. agencies1	—		—		—		—			—		—		—		—			—
Municipal	—		28,522		425		(4		)	28,943		36,052		3,480		—			39,532
Non-agency	8,066		87,913		687		(54		)	88,546		—		—		—			—
Total other debt securities	8,066		116,435		1,112		(58		)	117,489		36,052		3,480		—			39,532
Total debt securities	$	8,066	$	210,626	$	6,249	$	(2,097	)	$	214,778	$	247,729	$	11,727	$	(15,490	)	$	243,966

¹U.S. government-backed or government sponsored enterprises including Fannie Mae, Freddie Mac and Ginnie Mae.

²Private sponsors of securities collateralized primarily by pools of 1-4 family residential first mortgages. Primarily super senior securities secured by prime, Alt-A or pay-option ARM mortgages.

DEPOSITS

The following table sets for the composition of the deposit portfolio as of the dates indicated:

(Unaudited)	June 30, 2015				June 30, 2014
(Dollars in thousands)	Amount		Rate1		Amount		Rate1
Non-interest bearing	$	309,339	—	%	$	186,786	—	%
Interest bearing:
Demand	1,224,308		0.48	%	1,129,535		0.63	%
Savings	2,126,792		0.67	%	935,973		0.73	%
Total interest-bearing demand and savings	3,351,100		0.60	%	2,065,508		0.67	%
Time deposits:
Under $100,000	70,369		1.26	%	107,294		1.23	%
$100,000 or more2	721,109		2.06	%	681,948		1.67	%
Total time deposits	791,478		1.99	%	789,242		1.61	%
Total interest bearing2	4,142,578		0.87	%	2,854,750		0.93	%
Total deposits	$	4,451,917	0.81	%	$	3,041,536	0.88	%

1. Based on weighted-average stated interest rates at end of period.

2. The total interest-bearing includes brokered deposits of $661.9 million and $404.8 million as of June 30, 2015 and June 30, 2014, respectively, of which

$356.3 million and $275.4 million, respectively, are time deposits classified as $100,000 or more.

The number of deposit accounts at the end of each of the last five fiscal years is set forth below:

	At June 30,
(Unaudited)	2015	2014	2013	2012	2011
Checking and savings accounts	36,305	30,402	23,567	19,931	16,105
Time deposits	5,515	7,571	11,103	12,341	16,793
Total number of deposit accounts	41,820	37,973	34,670	32,272	32,898

AVERAGE BALANCES, NET INTEREST INCOME, YIELDS EARNED AND RATES PAID

The following tables set forth, for the periods indicated, information regarding (i) average balances; (ii) the total amount of interest income from interest-earning assets and the weighted average yields on such assets; (iii) the total amount of interest expense on interest-bearing liabilities and the weighted average rates paid on such liabilities; (iv) net interest income; (v) interest rate spread; and (vi) net interest margin:

	For the Fiscal Years Ended June 30,
	2015						2014						2013
(Unaudited)(Dollars in thousands)	Average Balance1		Interest Income / Expense		Average Yields Earned / Rates Paid		Average Balance1		Interest Income / Expense		Average Yields Earned / Rates Paid		Average Balance1		Interest Income / Expense		Average Yields Earned / Rates Paid
Assets:
Loans2,3	$	4,388,336	$	220,486	5.02	%	$	2,850,600	$	147,664	5.18	%	$	2,157,974	$	113,503	5.26	%
Federal funds sold	—		—		—	%	—		—		—	%	17,017		30		0.18	%
Interest-earning deposits in other financial institutions	204,176		511		0.25	%	107,534		275		0.26	%	23,632		47		0.20	%
Mortgage-backed and other investment securities	479,767		23,367		4.87	%	513,055		24,939		4.86	%	485,540		22,074		4.55	%
Total interest-earning assets	5,072,279		244,364		4.82	%	3,471,189		172,878		4.98	%	2,684,163		135,654		5.05	%
Non-interest-earning assets	68,039						58,953						70,896
Total assets	$	5,140,318					$	3,530,142					$	2,755,059
Liabilities and Stockholders’ Equity:
Interest-bearing demand and savings	$	2,862,295	$	20,709	0.72	%	$	1,522,884	$	10,723	0.70	%	$	826,797	$	6,399	0.77	%
Time deposits	790,661		14,024		1.77	%	876,621		14,094		1.61	%	1,065,669		16,469		1.55	%
Securities sold under agreements to repurchase	36,562		1,633		4.47	%	85,726		3,840		4.48	%	114,247		5,068		4.44	%
Advances from the FHLB	700,805		8,910		1.27	%	576,307		6,981		1.21	%	436,383		5,939		1.36	%
Other borrowings	5,155		143		2.77	%	5,155		143		2.77	%	5,155		151		2.93	%
Total interest-bearing liabilities	4,395,478		45,419		1.03	%	3,066,693		35,781		1.17	%	2,448,251		34,026		1.39	%
Non-interest-bearing demand deposits	255,321						123,859						45,299
Other non-interest-bearing liabilities	35,219						23,549						18,681
Stockholders’ equity	454,300						316,041						242,828
Total liabilities and stockholders’ equity	$	5,140,318					$	3,530,142					$	2,755,059
Net interest income			$	198,945					$	137,097					$	101,628
Interest rate spread4					3.79	%					3.81	%					3.66	%
Net interest margin5					3.92	%					3.95	%					3.79	%

¹Average balances are obtained from daily data.

² Loans include loans held for sale, loan premiums and unearned fees.

³Interest income includes reductions for amortization of loan and investment securities premiums and earnings from accretion of discounts and loan fees. Loan fee income is not significant. Also includes $31.4 million, $32.1 million and $32.8 million as of June 30, 2015, 2014 and 2013, respectively, of Community Reinvestment Act loans which are taxed at a reduced rate.

⁴ Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate paid on interest-bearing liabilities.

⁵Net interest margin represents net interest income as a percentage of average interest-earning assets.

AVERAGE BALANCES, NET INTEREST INCOME, YIELDS EARNED AND RATES PAID

The following table presents information regarding (i) average balances; (ii) the total amount of interest income from interest-earning assets and the weighted average yields on such assets; (iii) the total amount of interest expense on interest-bearing liabilities and the weighted average rates paid on such liabilities; (iv) net interest income; (v) interest rate spread; and (vi) net interest margin:

	For the three months ended June 30,
	2015						2014
(Unaudited) (Dollars in thousands)	Average Balance2		Interest Income / Expense		Average Yields Earned / Rates Paid1		Average Balance2		Interest Income / Expense		Average Yields Earned / Rates Paid1
Assets:
Loans3,4	$	4,865,501	$	60,670	4.99	%	$	3,390,891	$	43,391	5.12	%
Interest-earning deposits in other financial institutions	252,539		178		0.28	%	127,994		87		0.27	%
Mortgage-backed and other investment securities	455,425		6,719		5.90	%	506,986		6,664		5.26	%
Total interest-earning assets	5,573,465		67,567		4.85	%	4,025,871		50,142		4.98	%
Non-interest-earning assets	77,234						53,658
Total assets	$	5,650,699					$	4,079,529
Liabilities and Stockholders’ Equity:
Interest-bearing demand and savings	$	3,404,566	$	5,753	0.68	%	$	1,978,485	$	3,542	0.72	%
Time deposits	815,405		3,840		1.88	%	836,646		3,381		1.62	%
Securities sold under agreements to repurchase	35,008		389		4.44	%	52,759		594		4.50	%
Advances from the FHLB	528,365		2,255		1.71	%	667,612		2,093		1.25	%
Other borrowings	5,155		36		2.79	%	5,155		36		2.79	%
Total interest-bearing liabilities	4,788,499		12,273		1.03	%	3,540,657		9,646		1.09	%
Non-interest-bearing demand deposits	301,893						160,678
Other non-interest-bearing liabilities	39,371						21,836
Stockholders’ equity	520,936						356,358
Total liabilities and stockholders’ equity	$	5,650,699					$	4,079,529
Net interest income			$	55,294					$	40,496
Interest rate spread5					3.82	%					3.89	%
Net interest margin6					3.97	%					4.02	%

¹Annualized.

²Average balances are obtained from daily data.

³Loans include loans held for sale, loan premiums and unearned fees.

⁴Interest income includes reductions for amortization of loan and investment securities premiums and earnings from accretion of discounts and loan fees. Loan fee income is not significant. Also, includes $31.4 million and $32.1 million as of June 30, 2015 and 2014 three-month periods respectively, of Community Reinvestment Act loans which are taxed at a reduced rate.

⁵Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate paid on interest-bearing liabilities.

⁶Net interest margin represents net interest income as a percentage of average interest-earning assets.