Axos Financial, Inc. · NYSE:AX
Axos Financial — BofI Holding — Investor Presentation (November 2016)
28 slides from Axos Financial's investor presentation, Nov 10, 2016
Slide 1: BofI Holding, Inc. Investor Presentation
BOFI HOLDING, INC. Investor Presentation November 2016 NASDAQ: BOFI0
Slide 2: Safe Harbor
Safe Harbor This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). The words “believe,” “expect,” “anticipate,” “estimate,” “project,” or the negation thereof or similar expressions constitute forward-looki
Slide 3: Fiscal 2017 First Quarter Highlights Compared with Fiscal 2016 First Quarter
Fiscal 2017 First Quarter Highlights Compared with Fiscal 2016 First Quarter Asset Growth Deposit Growth $ Millions $ Millions 10,000 8,000 7,855 6,324 8,000 25.5% 6,000 33.0% 6,260 4,755 6,000 4,000 4,000 2,000 2,000 0 0 Q1 2016 Q1 2017 Q1 2016 Q1 2017 Net Income Diluted EPS $ Millions $ Diluted EP
Slide 4: Fiscal 2016 Highlights Compared with Fiscal 2015
Fiscal 2016 Highlights Compared with Fiscal 2015 Asset Growth Deposit Growth $ Millions $ Millions 8,000 7,601 8,000 30.5% 6,044 5,824 6,000 6,000 4,452 35.8% 4,000 4,000 2,000 2,000 0 0 FY 2015 FY 2016 FY 2015 FY 2016 Net Income Diluted EPS $ Millions Diluted EPS 150 2 1.85 119.3 38.1% 44.3% 2 1.34
Slide 5: Diluted EPS and Return on Equity Have Been Consistently Strong
Diluted EPS and Return on Equity Have Been Consistently Strong Despite Significant Increase in Tier 1 Capital Ratios Diluted EPS (FY) Return On Average Equity (FY) $ per share % 2.0 20 19.43 1.85 18.34 17.57 17.89 16.95 15.17 1.5 15 32% CAGR 1.35 1.0 0.97 10 0.75 0.61 0.5 0.47 5 0.0 0 2011 2012 2013
Slide 6: Diverse Lending Business
Diverse Lending Business Gain-on-sale Mortgage Banking Pilot to be launched in January 2017 Single family Jumbo Warehouse Lending Multifamily Commercial Real Estate Small Balance Commercial Lender Finance Lending ABL C&I Lending Factoring Bank Loans Large Balance Commercial/Specialty Real Estate Sma
Slide 7: Loan Diversity – September 30, 2016
Loan Diversity – September 30, 2016 Loan Portfolio1 100% = $6,606 Million Factoring 2% Multifamily 21% CRE/Home Equity/Consumer and Other 4% C&I – SF Lender SF – Residential Finance 60% 5% C&I 8% 1. Gross loans and leases before premiums, discounts and allowances 6
Slide 8: Our Asset Growth has been Driven by Strong and Profitable Organic Loan Production
Our Asset Growth has been Driven by Strong and Profitable Organic Loan Production Net Loan Portfolio – End of Last Five Quarters ($ in Thousands) $7,000,000 $6,605,747 $6,354,679 $6,034,700 $6,000,000 $5,645,272 $5,225,319 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $‐ Q1 2016 Q2 2016 Q3
Slide 9: Loan Pipeline Remains Strong
Loan Pipeline Remains Strong FY 2017 Q1 $M 1,200 $1,105 $135 1,000 $970 $113 800 $180 600 $132 $545 400 200 0 Jumbo Single Agency Commercial Multifamily / Primary Single Family Total Family Single Family & Industral Small Balance Pipeline Warehouse Lending Commercial 8
Slide 10: Loan Origination Growth
Loan Origination Growth Fiscal Year Loan Originations Future Plans $ Billions • Organic growth in existing business 5.0 lines 5 4.3 o Multifamily geographic 1.4 expansion 4 43.3% 5-yr CAGR 1.0 o Agency and jumbo 3.0 mortgage channel 3 0.7 expansion 2.1 2 o Small Balance Commercial 3.6 Real Estate ex
Slide 11: Deposit Growth in Checking, Business, and Savings While Transforming the Mix of Deposits
Deposit Growth in Checking, Business, and Savings Was Achieved While Transforming the Mix of Deposits June 30, 2013 September 30, 2016 100% of Deposits = $2.1 billion 100% of Deposits = $6.3 billion Checking and Savings – IRA other demand Time deposits deposits 17% 5% 19% Checking and other demand 4
Slide 12: Our Business Banking Vertical has Fueled our Deposit Growth
Our Business Banking Vertical has Fueled our Deposit Growth while Generating Significant Fee Income Business Deposits by Account Type* Business Banking Deposits Percent (%) ($MM) 3,300 3,162 3,067 Time Deposits 3,000 2,700 11% 2,486 2,400 Checking and other 2,100 demand deposits 25% 1,800 Savings &
Slide 13: BofI Customer Base and Deposit Volume is Well Distributed Throughout the United States
BofI Customer Base and Deposit Volume is Well Distributed Throughout the United States Number of Accounts Average Deposit Balance BofI Deposits Have National Reach With Customers in Every State 12
Slide 14: BofI Customers are Highly Engaged
BofI Customers are Highly Engaged Customer Engagement Results Engagement Low Activity High Activity Attributes Low Activity User Basic User Engaged Elite Engaged Engagement Score 0s 0 < S < 30 30 ≤ S < 60 ≥ 60 (0-100) Average Lifetime $100 $4000 $6,000 $50,000 Balance Average # of Services - <5 7 10
Slide 15: Core Deposit Growth Was Sufficiently Strong To Grow Overall Deposits
Core Deposit Growth Was Sufficiently Strong To Grow Overall Deposits While Changing The Deposit Mix Deposit Growth Future Plans $ Thousands • Enhanced digital marketing automation 7,000,000 integrated to outbound sales group 6,044,051 6,000,000 35.2% • Products and technology integration 5-yr CAGR t
Slide 16: Over the Last Five Years, BofI Has Successfully Started New Products and Channels
Over the Last Five Years, BofI Has Successfully Started New Products, Added Distribution Channels, and Completed Acquisitions 2010 2011 2012 2013 2014 2015 2016 2017 New product • Agency • Business • Warehouse • Treasury/ • Small • Auto • HRB • Retail mortgage banking Lending cash balance franchisin
Slide 17: Universal Digital Bank Consumer Platform
Universal Digital Bank Consumer Platform Product Development Cross-sell (In-House Apps) • Robo-advisor • Auto • Trusts • IRA Consumer Online • Mortgage • Personal loan Banking Platform App Store Personalization Management & Segmentation • Third party • Real-time retention services/payments • Next-be
Slide 18: Advanced Data Analytics Provides Key Insights Into Customer Engagement
Advanced Data Analytics Provides Key Insights Into Customer Engagement, Profitability, and Retention to Enhance Customer Lifetime Throughout the Bank Framework for Data Analysis Key Learnings Retention & Attrition Drivers to Boost Long-Term Customer Engagement Customer Segmentation Methodology to Un
Slide 19: Leveraging Our API Stack to Integrate into H&R Block's Tax Software
We are Also Leveraging Our API Stack to Integrate Our Consumer Enrollment Platform into H&R Block’s Tax Software H&R Block Overview Key Steps for Tax Season 2017 • Approximately 10,000 U.S branches • Accelerate cross-selling strategies on • Files 1 in every 7 U.S. tax returns new and existing IRAs •
Slide 20: Omni Channel Approach for BofI's 2017 Digital Marketing Strategy
Omni Channel Approach for BofI’s 2017 Digital Marketing Strategy Marketing automation implementation Organizational commitment to user experience Infrastructure Digital personas for User personalized interactions Experience Personalization & Data DIGITAL Social employee Paid, STRATEGY engagement Soc
Slide 21: Bank of Internet Website Upgrade
Bank of Internet Website Upgrade Visual Design Research Combined with Improved UI/UX - Usability Backend Performance • Redesigned Bank Of Internet USA website awarded Best-In-Class Website by Interactive Media Awards (IMA) in 2016 • The result has been a significant increase in the organic traffic t
Slide 22: Consumer Unsecured
Consumer Unsecured Website and Product • On-line loan application • Lead integration via API’s with lead aggregators • Loan amounts between $5,000 and $35,000 • Terms between 36 and 60 months • Anticipated average credit score between 710 and 725 • Healthy Origination Fees and Interest Rates 21
Slide 23: What makes BofI different compared to other lenders?
What makes BofI different compared to other lenders? We ask more Foundation While speed We have We will price questions of the model is important, lower cost of our loans and interact built on it is not the funds and properly for with the Credit, sole driver to origination the risk that applicant. C
Slide 24: Bank Provides Appropriate Resources to Manage Credit and Compliance Risk
Bank Provides Appropriate Resources to Manage Credit and Compliance Risk June 30, June 30, June 30, June 30, Department FTEs 2013 2014 2015 2016 Credit and Quality Control 27 41 57 65 Risk, Internal Asset Review, Compliance, Audit 16 26 35 44 and BSA 23
Slide 25: Monitoring & Management Oversight: Core Products
Monitoring & Management Oversight: Core Products Single Family Residential Income Property Lending • Portfolio level monitoring with individual loan reviews • Risk based annual loan review process, with 4 levels completed on an exception basis (i.e. delinquency, depending on financial performance &
Slide 26: Best-in-Class Loan Quality
Best-in-Class Loan Quality Loans in non-accrual to Total Net Charge-Offs Annualized 1 total loans1 (%) (%) 1 2 1.04 1 0.49 0.22 0.02 0 0 BofI Banks $1-10 bn BofI Bank $1-10 bn 1. As reported in FDIC SDI report at 06/30/16. Total charge-offs annualized for BofI reflects only net charge-offs and does
Slide 27: Investment Summary
Investment Summary Full service branchless banking platform with structural cost advantages vs. traditional banks Superior growth and ROE relative to large and small competitors Solid track record of allocating capital to businesses with best risk-adjusted returns New business initiatives will gener
Slide 28: Contact Information
Contact Information Greg Garrabrants, President and CEO Andy Micheletti, EVP/CFO investors@bofi.com www.bofiholding.com Johnny Lai, VP Corporate Development and Investor Relations Phone: 858.649.2218 Mobile: 858.245.1442 jlai@bofi.com 27