EX-99.2 3 financialschedulesforpress.htm EXHIBIT 99.2 Exhibit


AXOS FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
At June 30,
(Dollars in thousands, except par and stated value)
2019
 
2018
ASSETS
 
 
 
Cash and due from banks
$
511,125

 
$
622,750

Cash segregated for regulatory purposes
346,143

 
—

Federal funds sold
100

 
100

Total cash and cash equivalents
857,368

 
622,850

Securities - available for sale
227,513

 
180,305

Stock of regulatory agencies, at cost
20,276

 
17,250

Loans held for sale, carried at fair value
33,260

 
35,077

Loans held for sale, carried at lower of cost or fair value
4,800

 
2,686

Loans and leases—net of allowance of $57,085 as of June 2019 and $49,151 as of June 2018
9,382,124

 
8,432,289

Mortgage servicing rights, carried at fair value
9,784

 
10,752

Other real estate owned and repossessed vehicles
7,485

 
9,591

Securities borrowed
144,706

 
—

Customer, broker-dealer and clearing receivables
203,192

 
—

Goodwill and other intangible assets—net
134,893

 
67,788

Other assets
194,837

 
160,916

TOTAL ASSETS
$
11,220,238

 
$
9,539,504

 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Deposits:
 
 
 
Non-interest bearing
$
1,441,930

 
$
1,015,355

Interest bearing
7,541,243

 
6,969,995

Total deposits
8,983,173

 
7,985,350

Advances from the Federal Home Loan Bank
458,500

 
457,000

Borrowings, subordinated notes and debentures
168,929

 
54,552

Securities loaned
198,356

 
—

Customer, broker-dealer and clearing payables
238,604

 
—

Accounts payable and accrued liabilities and other liabilities
99,626

 
82,089

Total liabilities
10,147,188

 
8,578,991

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 2019 and June 2018
5,063

 
5,063

Common stock—$0.01 par value; 150,000,000 shares authorized, 66,563,922 shares issued and 61,128,817 shares outstanding as of June 2019, 65,796,060 shares issued and 62,688,064 shares outstanding as of June 2018
666

 
658

Additional paid-in capital
389,945

 
366,515

Accumulated other comprehensive income (loss)—net of tax
16

 
(613
)
Retained earnings
826,170

 
671,348

Treasury stock, at cost; 5,435,105 shares as of June 2019 and 3,107,996 shares as of June 2018
(148,810
)
 
(82,458
)
Total stockholders’ equity
1,073,050

 
960,513

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
11,220,238

 
$
9,539,504


S-1


AXOS FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
For the Quarters Ended June 30,
(Dollars in thousands, except earnings per share)
2019
 
2018
INTEREST AND DIVIDEND INCOME:
 
 
 
Loans and leases, including fees
$
128,268

 
$
111,481

Securities borrowed and customer receivables
4,776

 
—

Investments
8,599

 
7,417

Total interest and dividend income
141,643

 
118,898

INTEREST EXPENSE:
 
 
 
Deposits
32,695

 
22,689

Advances from the Federal Home Loan Bank
5,986

 
8,243

Securities loaned
376

 
—

Other borrowings
2,149

 
918

Total interest expense
41,206

 
31,850

Net interest income
100,437

 
87,048

Provision for loan and lease losses
2,800

 
3,900

Net interest income, after provision for loan and lease losses
97,637

 
83,148

NON-INTEREST INCOME:
 
 
 
Realized gain (loss) on sale of securities
842

 
—

Prepayment penalty fee income
1,774

 
754

Gain on sale - other
549

 
2,846

Mortgage banking income
2,308

 
1,903

Broker-dealer fee income
6,701

 
—

Banking and service fees
11,050

 
11,474

Total non-interest income
23,224

 
16,977

NON-INTEREST EXPENSE:
 
 
 
Salaries and related costs
33,909

 
28,665

Data processing and internet
7,358

 
5,209

Advertising and promotional
3,445

 
4,408

Depreciation and amortization
5,123

 
2,855

Broker-dealer clearing charges
1,727

 
—

Occupancy and equipment
2,588

 
1,602

Professional services
3,427

 
1,326

FDIC and regulatory fees
2,418

 
1,522

Real estate owned and repossessed vehicles
8

 
309

General and administrative expense
5,533

 
3,777

Total non-interest expense
65,536

 
49,673

INCOME BEFORE INCOME TAXES
55,325

 
50,452

INCOME TAXES
14,691

 
13,335

NET INCOME
$
40,634

 
$
37,117

NET INCOME ATTRIBUTABLE TO COMMON STOCK
$
40,557

 
$
37,040

COMPREHENSIVE INCOME
$
41,168

 
$
37,645

Basic earnings per share
$
0.66

 
$
0.59

Diluted earnings per share
$
0.66

 
$
0.58




S-2


AXOS FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
Year Ended June 30,
(Dollars in thousands, except earnings per share)
2019
 
2018
 
2017
INTEREST AND DIVIDEND INCOME:
 
 
 
 
 
Loans and leases, including fees
$
525,317

 
$
446,991

 
$
358,849

Securities borrowed and customer receivables
8,746

 
—

 
—

Investments
30,824

 
28,083

 
28,437

Total interest and dividend income
564,887

 
475,074

 
387,286

INTEREST EXPENSE:
 
 
 
 
 
Deposits
117,080

 
79,851

 
56,494

Advances from the Federal Home Loan Bank
32,834

 
22,848

 
12,403

Securities loaned
748

 
—

 
—

Other borrowings
5,620

 
3,881

 
5,162

Total interest expense
156,282

 
106,580

 
74,059

Net interest income
408,605

 
368,494

 
313,227

Provision for loan and lease losses
27,350

 
25,800

 
11,061

Net interest income, after provision for loan and lease losses
381,255

 
342,694

 
302,166

NON-INTEREST INCOME:
 
 
 
 
 
Realized gain (loss) on sale of securities
709

 
(18
)
 
3,920

Other-than-temporary loss on securities:
 
 
 
 
 
Total impairment losses
(1,666
)
 
(6,271
)
 
(10,937
)
Loss (gain) recognized in other comprehensive income
845

 
6,115

 
8,973

Net impairment loss recognized in earnings
(821
)
 
(156
)
 
(1,964
)
Fair value gain (loss) on trading securities
—

 
—

 
743

Total unrealized loss on securities
(821
)
 
(156
)
 
(1,221
)
Prepayment penalty fee income
5,851

 
3,862

 
4,574

Gain on sale - other
6,160

 
5,734

 
4,487

Mortgage banking income
5,267

 
13,755

 
14,284

Broker-dealer fee income
11,737

 
—

 
—

Banking and service fees
53,854

 
47,764

 
42,088

Total non-interest income
82,757

 
70,941

 
68,132

NON-INTEREST EXPENSE:
 
 
 
 
 
Salaries and related costs
127,433

 
100,975

 
81,821

Data processing and internet
24,150

 
17,400

 
13,323

Advertising and promotional
14,710

 
15,500

 
9,367

Depreciation and amortization
16,471

 
8,574

 
6,094

Occupancy and equipment
8,571

 
6,063

 
5,612

Broker-dealer clearing charges
2,822

 
—

 
—

Professional services
11,916

 
5,280

 
4,980

FDIC and regulatory fees
9,005

 
4,860

 
4,330

Real estate owned and repossessed vehicles
913

 
260

 
498

General and administrative expense
35,215

 
15,024

 
11,580

Total non-interest expense
251,206

 
173,936

 
137,605

INCOME BEFORE INCOME TAXES
212,806

 
239,699

 
232,693

INCOME TAXES
57,675

 
87,288

 
97,953

NET INCOME
$
155,131

 
$
152,411

 
$
134,740

NET INCOME ATTRIBUTABLE TO COMMON STOCK
$
154,822

 
$
152,102

 
$
134,431

COMPREHENSIVE INCOME
$
155,760

 
$
151,311

 
$
142,531

Basic earnings per share
$
2.50

 
$
2.41

 
$
2.11

Diluted earnings per share
$
2.48

 
$
2.37

 
$
2.10


S-3


AXOS FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
Year Ended June 30,
(Dollars in thousands)
2019
 
2018
 
2017
NET INCOME
$
155,131

 
$
152,411

 
$
134,740

Net unrealized gain (loss) from available-for-sale securities, net of tax expense (benefit) of $562, $(2,449), and $3,363 for the years ended June 30, 2019, 2018 and 2017, respectively.
1,741

 
(5,493
)
 
5,218

Other-than-temporary impairment on securities recognized in other comprehensive income, net of tax expense (benefit) of $(251), $1,918 and $3,195 for the years ended June 30, 2019, 2018 and 2017, respectively.
(594
)
 
4,197

 
4,957

Reclassification of net (gain) loss from available-for-sale securities included in income, net of tax expense (benefit) of $191, $(104) and $1,536 for the years ended June 30, 2019, 2018 and 2017, respectively.
(518
)
 
196

 
(2,384
)
Other comprehensive income (loss)
$
629

 
$
(1,100
)
 
$
7,791

Comprehensive income
$
155,760

 
$
151,311

 
$
142,531



S-4


AXOS FINANCIAL, INC. AND SUBSIDIARIES
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, 2016
515

 
$
5,063

 
64,513,494

 
(1,294,102
)
 
63,219,392

 
$
645

 
$
331,156

 
$
384,815

 
$
(7,304
)
 
$
(30,785
)
 
$
683,590

Net income
—

 
—

 
—

 
—

 
—

 
—

 
—

 
134,740

 
—

 
—

 
134,740

Other comprehensive income (loss)
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
7,791

 
—

 
7,791

Cash dividends on preferred stock
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(309
)
 
—

 
—

 
(309
)
Stock-based compensation expense and restricted stock unit vesting
—

 
—

 
602,438

 
(285,586
)
 
316,852

 
6

 
14,961

 
—

 
—

 
(6,532
)
 
8,435

Balance as of June 30, 2017
515

 
$
5,063

 
65,115,932

 
(1,579,688
)
 
63,536,244

 
$
651

 
$
346,117

 
$
519,246

 
$
487

 
$
(37,317
)
 
$
834,247

Net income
—

 
—

 
—

 
—

 
—

 
—

 
—

 
152,411

 
—

 
—

 
152,411

Other comprehensive income (loss)
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(1,100
)
 
—

 
(1,100
)
Cash dividends on preferred stock
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(309
)
 
—

 
—

 
(309
)
Issuance of common stock
—

 
—

 
—

 
(1,233,491
)
 
(1,233,491
)
 
—

 
—

 
—

 
—

 
(35,183
)
 
(35,183
)
Stock-based compensation expense and restricted stock unit vesting
—

 
—

 
680,128

 
(294,817
)
 
385,311

 
7

 
20,398

 
—

 
—

 
(9,958
)
 
10,447

Balance as of June 30, 2018
515

 
$
5,063

 
65,796,060

 
(3,107,996
)
 
62,688,064

 
$
658

 
$
366,515

 
$
671,348

 
$
(613
)
 
$
(82,458
)
 
$
960,513

Net income
—

 
—

 
—

 
—

 
—

 
—

 
—

 
155,131

 
—

 
—

 
155,131

Other comprehensive income (loss)
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
629

 
—

 
629

Cash dividends on preferred stock
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(309
)
 
—

 
—

 
(309
)
Purchase of treasury stock
—

 
—

 
—

 
(2,009,352
)
 
(2,009,352
)
 
—

 
—

 
—

 
—

 
(56,437
)
 
(56,437
)
Stock-based compensation expense and restricted stock unit vesting
—

 
—

 
767,862

 
(317,757
)
 
450,105

 
8

 
23,430

 
—

 
—

 
(9,915
)
 
13,523

Balance as of June 30, 2019
515

 
$
5,063

 
66,563,922

 
(5,435,105
)
 
61,128,817

 
$
666

 
$
389,945

 
$
826,170

 
$
16

 
$
(148,810
)
 
$
1,073,050



S-5


AXOS FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
Year Ended June 30,
(Dollars in thousands)
2019
 
2018
 
2017
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
Net income
$
155,131

 
$
152,411

 
$
134,740

Adjustments to reconcile net income to net cash provided by (used in) operating activities:
 
 
 
 
 
Accretion of discounts on securities
(264
)
 
(624
)
 
(2,766
)
Net accretion of discounts on loans and leases
(30,176
)
 
(29,381
)
 
(4,859
)
Amortization of borrowing costs
208

 
208

 
208

Stock-based compensation expense
23,439

 
20,399

 
14,535

Valuation of financial instruments carried at fair value
—

 
—

 
(743
)
Net gain on sale of investment securities
(709
)
 
18

 
(3,920
)
Impairment charge on securities
821

 
156

 
1,964

Provision for loan and lease losses
27,350

 
25,800

 
11,061

Broker-dealer reserve for bad debt
15,298

 
—

 
—

Deferred income taxes
(8,686
)
 
17,034

 
(2,220
)
Origination of loans held for sale
(1,471,906
)
 
(1,564,165
)
 
(1,375,443
)
Unrealized (gain) loss on loans held for sale
(252
)
 
(253
)
 
222

Gain on sales of loans held for sale
(11,427
)
 
(19,489
)
 
(18,771
)
Proceeds from sale of loans held for sale
1,481,911

 
1,576,353

 
1,433,068

Change in fair value of mortgage servicing rights
3,362

 
83

 
(31
)
(Gain) loss on sale of other real estate and foreclosed assets
(283
)
 
(258
)
 
(42
)
Depreciation and amortization
16,471

 
8,574

 
6,094

Net changes in assets and liabilities which provide (use) cash:
 
 
 
 
 
Accrued interest receivable
(12,300
)
 
(6,082
)
 
4,511

Securities borrowed
13,192

 
—

 
—

Customer, broker-dealer and clearing receivables
13,684

 
—

 
—

Other assets
(15,264
)
 
(40,988
)
 
807

Securities loaned
(4,685
)
 
—

 
—

Customer, broker-dealer and clearing payables
(1,506
)
 
—

 
—

Accrued interest payable
1,129

 
469

 
(383
)
Accounts payable and accrued liabilities
9,883

 
27,650

 
466

Net cash provided by (used) in operating activities
$
204,421

 
$
167,915

 
$
198,498

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
 
Purchases of investment securities
(146,886
)
 
(100,503
)
 
(249,909
)
Proceeds from sales of securities
15,863

 
52,714

 
161,048

Proceeds from repayment of securities
93,779

 
139,338

 
307,456

Purchase of stock of regulatory agencies
(204,206
)
 
(33,966
)
 
(66,294
)
Proceeds from redemption of stock of regulatory agencies
203,611

 
79,923

 
60,210

Origination of loans and leases held for investment
(6,756,832
)
 
(5,895,902
)
 
(4,068,990
)
Proceeds from sale of loans and leases held for investment
119,881

 
20,719

 
31,918

Origination of mortgage warehouse loans, net
(126,491
)
 
(26,899
)
 
(113,711
)
Proceeds from sales of other real estate owned and repossessed assets
2,202

 
1,832

 
367

Cash paid for deposit acquisition
(14,747
)
 
—

 
—

Cash paid for acquisition
—

 
(70,002
)
 
—

Acquisition of business activity, net of cash paid
67,343

 
—

 
—

Purchases of loans and leases, net of discounts and premiums
(11,525
)
 
—

 
(269,886
)
Principal repayments on loans and leases
5,846,349

 
4,818,558

 
3,427,818

Purchases of furniture, equipment and software
(20,082
)
 
(11,817
)
 
(8,758
)
Net cash used in investing activities
$
(931,741
)
 
$
(1,026,005
)
 
$
(788,731
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
Net increase in deposits
$
997,823

 
$
1,085,843

 
$
855,456

Repayment of the Federal Home Loan Bank term advances
(147,500
)
 
(30,000
)
 
(95,000
)
Net (repayment) proceeds of Federal Home Loan Bank other advances
149,000

 
(153,000
)
 
8,000

Net (repayment) proceeds of other borrowings
21,700

 
(20,000
)
 
(15,000
)
Tax payments related to settlement of restricted stock units
(9,916
)
 
(9,952
)
 
(6,532
)
Repurchase of treasury stock
(56,437
)
 
(35,183
)
 
—

Tax benefit from exercise of common stock options and vesting of restricted stock grants
—

 
—

 
432

Cash dividends paid on preferred stock
(232
)
 
(309
)
 
(309
)
Net proceeds from issuance of subordinated notes
7,400

 
—

 
—

Net cash provided by financing activities
$
961,838

 
$
837,399

 
$
747,047

NET CHANGE IN CASH AND CASH EQUIVALENTS
234,518

 
(20,691
)
 
156,814

CASH AND CASH EQUIVALENTS—Beginning of year
622,850

 
643,541

 
486,727

CASH AND CASH EQUIVALENTS—End of year
$
857,368

 
$
622,850

 
$
643,541

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
 
 
 
 
 
Interest paid on deposits and borrowed funds
$
152,756

 
$
106,112

 
$
74,442

Income taxes paid
$
64,117

 
$
79,628

 
$
102,482

Transfers from loans and leases held for investment to loans held for sale
$
106,911

 
$
31,207

 
$
2,935

Loans held for investment sold, cash not received
$
—

 
$
17,742

 
$
—

Securities transferred from held-to-maturity to available for sale portfolio
$
—

 
$
—

 
$
194,153

Preferred stock dividends declared but not paid
$
77

 
$
—

 
$
—





S-6


LOANS AND LEASES
The following table sets forth the composition of the loan and lease portfolio as of the dates indicated:
(Unaudited)
(Dollars in thousands)
June 30, 2019
 
June 30, 2018
Single family real estate secured:
 
 
 
Mortgage
$
4,278,822

 
$
4,198,941

Home equity
2,258

 
2,306

Warehouse and other1
820,559

 
412,085

Multifamily real estate secured
1,948,513

 
1,800,919

Commercial real estate secured
326,154

 
220,379

Auto and RV secured
290,894

 
213,522

Factoring
93,091

 
169,885

Commercial & Industrial
1,653,314

 
1,481,051

Other
35,705

 
18,598

  Total gross loans and leases
9,449,310

 
8,517,686

Allowance for loan and lease losses
(57,085
)
 
(49,151
)
Unaccreted discounts and loan and lease fees
(10,101
)
 
(36,246
)
  Total net loans and leases
$
9,382,124

 
$
8,432,289

1. The balance of single family warehouse loans was $301,999 at June 30, 2019 and $175,508 at June 30, 2018. The remainder of the balance was attributable to commercial specialty and lender finance loans secured by single family real estate.



S-7


SECURITIES
The amortized cost, carrying amount and fair value for the major categories of trading and available for sale securities at June 30, 2019 and June 30, 2018 were:
 
June 30, 2019
 
Available for sale
(Unaudited)
(Dollars in thousands)
Amortized
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair
Value
Mortgage-backed securities (RMBS):
 
 
 
 
 
 
 
U.S agencies1
$
9,486

 
$
179

 
$
(79
)
 
$
9,586

Non-agency2
13,489

 
226

 
(690
)
 
13,025

Total mortgage-backed securities
22,975

 
405

 
(769
)
 
22,611

Other debt securities:
 
 
 
 
 
 
 
U.S. agencies1
1,682

 
3

 
—

 
1,685

Municipal
21,974

 
16

 
(828
)
 
21,162

Non-agency
179,976

 
2,088

 
(9
)
 
182,055

Total other debt securities
203,632

 
2,107

 
(837
)
 
204,902

Total debt securities
$
226,607

 
$
2,512

 
$
(1,606
)
 
$
227,513

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
June 30, 2018
 
Available for sale
(Unaudited)
(Dollars in thousands)
Amortized
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair
Value
Mortgage-backed securities (RMBS):
 
 
 
 
 
 
 
U.S agencies1
$
13,102

 
$
152

 
$
(328
)
 
$
12,926

Non-agency2
19,384

 
116

 
(2,057
)
 
17,443

Total mortgage-backed securities
32,486

 
268

 
(2,385
)
 
30,369

Other debt securities:
 
 
 
 
 
 
 
Municipal
20,953

 
2

 
(743
)
 
20,212

Non-agency
127,558

 
2,267

 
(101
)
 
129,724

Total other debt securities
148,511

 
2,269

 
(844
)
 
149,936

Total debt securities
$
180,997

 
$
2,537

 
$
(3,229
)
 
$
180,305

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


S-8


DEPOSITS
The following table sets forth the composition of the deposit portfolio as of the dates indicated:
 (Unaudited)
June 30, 2019
 
June 30, 2018
(Dollars in thousands)
Amount
 
Rate1
 
Amount
 
Rate1
Non-interest bearing
$
1,441,930

 
—
%
 
$
1,015,355

 
—
%
Interest bearing:
 
 
 
 
 
 
 
Demand
2,709,014

 
2.06
%
 
2,519,845

 
1.60
%
Savings
2,466,214

 
1.48
%
 
2,482,430

 
1.31
%
       Total interest-bearing demand and savings
5,175,228

 
1.78
%
 
5,002,275

 
1.46
%
Time deposits:
 
 
 
 
 
 
 
$250 and under
1,866,811

 
2.47
%
 
1,837,274

 
2.34
%
Greater than $250
499,204

 
2.27
%
 
130,446

 
2.05
%
Total time deposits
2,366,015

 
2.43
%
 
1,967,720

 
2.32
%
Total interest bearing2
7,541,243

 
1.99
%
 
6,969,995

 
1.70
%
Total deposits
$
8,983,173

 
1.67
%
 
$
7,985,350

 
1.48
%
1. Based on weighted-average stated interest rates at end of period.
2. The total interest-bearing includes brokered deposits of $1,124.0 million and $2,055.9 million as of June 30, 2019 and June 30, 2018, respectively, of which $796.7 million and $1,692.8 million, respectively, are time deposits classified as $250 and under.


The number of deposit accounts at the end of each of the last five fiscal years is set forth below:
 
At June 30,
 
2019
 
2018
 
2017
 
2016
 
2015
Non-interest-bearing, prepaid and other
3,743,334

 
3,535,904

 
3,113,128

 
1,816,266

 
553,245

Checking and savings accounts
311,067

 
270,082

 
274,962

 
292,012

 
31,461

Time deposits
23,447

 
2,309

 
2,748

 
4,807

 
5,515

Total number of deposit accounts
4,077,848

 
3,808,295

 
3,390,838

 
2,113,085

 
590,221




S-9


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,
 
2019
 
2018
(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:
 
 
 
 
 
 
 
 
 
 
 
Loans and leases3,4
$
9,234,461

 
$
128,268

 
5.56
%
 
$
8,278,746

 
$
111,481

 
5.39
%
Interest-earning deposits in other financial institutions
710,703

 
4,333

 
2.44
%
 
860,052

 
3,788

 
1.76
%
Investment securities4
226,523

 
3,778

 
6.67
%
 
180,843

 
2,681

 
5.93
%
Securities borrowed and margin lending
350,413

 
4,776

 
5.45
%
 
—

 
—

 
—
%
Stock of the regulatory agencies, at cost
31,054

 
488

 
6.29
%
 
54,176

 
948

 
7.00
%
Total interest-earning assets
10,553,154

 
141,643

 
5.37
%
 
9,373,817

 
118,898

 
5.07
%
Non-interest-earning assets
325,078

 
 
 
 
 
145,478

 
 
 
 
Total assets
$
10,878,232

 
 
 
 
 
$
9,519,295

 
 
 
 
Liabilities and Stockholders’ Equity:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand and savings
$
4,119,350

 
$
16,921

 
1.64
%
 
$
4,406,649

 
$
14,867

 
1.35
%
Time deposits
2,625,852

 
15,774

 
2.40
%
 
1,220,332

 
7,822

 
2.56
%
Securities loaned
478,196

 
376

 
0.31
%
 
—

 
—

 
—
%
Advances from the FHLB
963,062

 
5,986

 
2.49
%
 
1,676,439

 
8,243

 
1.97
%
Borrowings, subordinated notes and debentures
154,749

 
2,149

 
5.55
%
 
54,571

 
918

 
6.73
%
Total interest-bearing liabilities
8,341,209

 
41,206

 
1.98
%
 
7,357,991

 
31,850

 
1.73
%
Non-interest-bearing demand deposits
1,385,750

 
 
 
 
 
1,138,226

 
 
 
 
Other non-interest-bearing liabilities
98,741

 
 
 
 
 
72,693

 
 
 
 
Stockholders’ equity
1,052,532

 
 
 
 
 
950,385

 
 
 
 
Total liabilities and stockholders’ equity
$
10,878,232

 
 
 
 
 
$
9,519,295

 
 
 
 
Net interest income
 
 
$
100,437

 
 
 
 
 
$
87,048

 
 
Interest rate spread5
 
 
 
 
3.39
%
 
 
 
 
 
3.34
%
Net interest margin6
 
 
 
 
3.81
%
 
 
 
 
 
3.71
%
1 Annualized.
2 Average balances are obtained from daily data.
3 Loans include loans held for sale, loan premiums and unearned fees.
4 Interest 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 $28.4 million and $29.1 million as of June 30, 2019 and 2018 three-month periods respectively, of Community Reinvestment Act loans which are taxed at a reduced rate.
5 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.
6 Net interest margin represents net interest income as a percentage of average interest-earning assets.



S-10


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,
 
2019
 
2018
 
2017
(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:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans and leases2,3
$
8,974,820

 
$
525,317

 
5.85
%
 
$
7,893,072

 
$
446,991

 
5.66
%
 
$
6,819,102

 
$
358,849

 
5.26
%
Interest-earning deposits in other financial institutions
631,228

 
13,495

 
2.14
%
 
807,348

 
12,450

 
1.54
%
 
658,580

 
5,204

 
0.79
%
Investment securities3
210,189

 
13,943

 
6.63
%
 
209,434

 
11,335

 
5.41
%
 
393,334

 
16,889

 
4.29
%
Securities borrowed and margin lending
173,829

 
8,746

 
5.03
%
 
—

 
—

 
—
%
 
—

 
—

 
—
%
Stock of the regulatory agencies, at cost
41,078

 
3,386

 
8.24
%
 
61,222

 
4,298

 
7.02
%
 
55,577

 
6,344

 
11.41
%
Total interest-earning assets
10,031,144

 
564,887

 
5.63
%
 
8,971,076

 
475,074

 
5.30
%
 
7,926,593

 
387,286

 
4.89
%
Non-interest-earning assets
234,993

 
 
 
 
 
100,380

 
 
 
 
 
116,545

 
 
 
 
Total assets
$
10,266,137

 
 
 
 
 
$
9,071,456

 
 
 
 
 
$
8,043,138

 
 
 
 
Liabilities and Stockholders’ Equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand and savings
$
3,906,833

 
$
61,391

 
1.57
%
 
$
4,706,238

 
$
54,013

 
1.15
%
 
$
4,619,769

 
$
34,556

 
0.75
%
Time deposits
2,322,039

 
55,689

 
2.40
%
 
990,635

 
25,838

 
2.61
%
 
941,919

 
21,938

 
2.33
%
Securities loaned
221,469

 
748

 
0.34
%
 
—

 
—

 
—
%
 
—

 
—

 
—
%
Securities sold under agreements to repurchase
—

 
—

 
—
%
 
5,575

 
229

 
4.11
%
 
33,068

 
1,465

 
4.43
%
Advances from the FHLB
1,397,460

 
32,834

 
2.35
%
 
1,296,120

 
22,848

 
1.76
%
 
798,982

 
12,403

 
1.55
%
Borrowings, subordinated notes and debentures
104,287

 
5,620

 
5.39
%
 
54,522

 
3,652

 
6.70
%
 
55,873

 
3,697

 
6.62
%
Total interest-bearing liabilities
7,952,088

 
156,282

 
1.97
%
 
7,053,090

 
106,580

 
1.51
%
 
6,449,611

 
74,059

 
1.15
%
Non-interest-bearing demand deposits
1,227,285

 
 
 
 
 
1,052,944

 
 
 
 
 
774,411

 
 
 
 
Other non-interest-bearing liabilities
76,651

 
 
 
 
 
68,361

 
 
 
 
 
58,040

 
 
 
 
Stockholders’ equity
1,010,113

 
 
 
 
 
897,061

 
 
 
 
 
761,076

 
 
 
 
Total liabilities and stockholders’ equity
$
10,266,137

 
 
 
 
 
$
9,071,456

 
 
 
 
 
$
8,043,138

 
 
 
 
Net interest income
 
 
$
408,605

 
 
 
 
 
$
368,494

 
 
 
 
 
$
313,227

 
 
Interest rate spread4
 
 
 
 
3.66
%
 
 
 
 
 
3.79
%
 
 
 
 
 
3.74
%
Net interest margin5
 
 
 
 
4.07
%
 
 
 
 
 
4.11
%
 
 
 
 
 
3.95
%
1 Average balances are obtained from daily data.
2 Loans include loans held for sale, loan premiums and unearned fees.
3 Interest 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 $28.7 million, $29.3 million and $30.3 million as of June 30, 2019, 2018 and 2017, 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.
5 Net interest margin represents net interest income as a percentage of average interest-earning assets.


S-11


AVERAGE BALANCES, NET INTEREST INCOME, YIELDS EARNED AND RATES PAID
BANKING BUSINESS
The following table presents our Banking segment’s 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, 2019 and 2018:
 
For the Three Months Ended
 
June 30,
 
2019
 
2018
(Dollars in thousands)
Average
Balance1
 
Interest
Income/
Expense
 
Average Yields
Earned/Rates
Paid2
 
Average
Balance1
 
Interest
Income/
Expense
 
Average Yields
Earned/Rates
Paid2
Assets:
 
 
 
 
 
 
 
 
 
 
 
Loans and leases3, 4
$
9,234,449

 
$
128,268

 
5.56
%
 
$
8,278,725

 
$
111,481

 
5.39
%
Interest-earning deposits in other financial institutions
524,403

 
3,128

 
2.39
%
 
860,052

 
3,788

 
1.76
%
Investment securities4
224,828

 
3,779

 
6.72
%
 
180,843

 
2,681

 
5.93
%
Stock of the regulatory agencies, at cost
28,414

 
486

 
6.84
%
 
54,176

 
948

 
6.98
%
Total interest-earning assets
10,012,094

 
135,661

 
5.42
%
 
9,373,796

 
118,898

 
5.07
%
Non-interest-earning assets
188,959

 
 
 
 
 
137,014

 
 
 
 
Total assets
$
10,201,053

 
 
 
 
 
$
9,510,810

 
 
 
 
Liabilities and Stockholders’ Equity:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand and savings
$
4,143,734

 
$
16,964

 
1.64
%
 
$
4,448,942

 
$
14,957

 
1.34
%
Time deposits
2,625,852

 
15,774

 
2.40
%
 
1,220,332

 
7,822

 
2.56
%
Advances from the FHLB
963,062

 
5,987

 
2.49
%
 
1,676,439

 
8,243

 
1.97
%
Borrowings, subordinated notes and debentures
22

 
—

 
—
%
 
68

 
1

 
5.88
%
Total interest-bearing liabilities
7,732,670

 
38,725

 
2.00
%
 
7,345,781

 
31,023

 
1.69
%
Non-interest-bearing demand deposits
1,389,998

 
 
 
 
 
1,143,704

 
 
 
 
Other non-interest-bearing liabilities
70,848

 
 
 
 
 
70,349

 
 
 
 
Stockholders’ equity
1,007,537

 
 
 
 
 
950,976

 
 
 
 
Total liabilities and stockholders’ equity
$
10,201,053

 
 
 
 
 
$
9,510,810

 
 
 
 
Net interest income
 
 
$
96,936

 
 
 
 
 
$
87,875

 
 
Interest rate spread5
 
 
 
 
3.42
%
 
 
 
 
 
3.38
%
Net interest margin6
 
 
 
 
3.87
%
 
 
 
 
 
3.75
%
1 
Average balances are obtained from daily data.
2 
Annualized.
3 
Loans and leases include loans held for sale, loan premiums and unearned fees.
4 
Interest 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 $28.4 million and $29.1 million as of June 30, 2019 and 2018 three-month periods respectively, of Community Reinvestment Act loans which are taxed at a reduced rate.
5 
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.
6 
Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.


S-12


SECURITIES BUSINESS
The following table sets forth certain selected information concerning the Securities Business segment:
(Dollars in thousands)
Three months ended June 30, 2019
Compensation as a % of net revenue
35.0
%
FDIC insured program balances at banks (end of period)
$
341,576

Customer margin balances (end of period)
$
189,193

Customer funds on deposit, including short credits (end of period)
$
206,469

 
 
Clearing:
 
Total tickets
595,962

Correspondents (end of period)
62

 
 
Securities lending:
 
Interest-earning assets – stock borrowed (end of period)
$
144,706

Interest-bearing liabilities – stock loaned (end of period)
$
198,356



S-13