Axos Financial, Inc. · NYSE:AX
Axos Financial — BofI Holding — Investor Presentation (April 2013)
27 slides from Axos Financial's investor presentation, Apr 9, 2013
Slide 1: BofI Holding, Inc. Investor Presentation
BofI Holding, Inc. Investor Presentation Greg Garrabrants President and Chief Executive Officer NASDAQ: BOFI April 8, 2013
Slide 2: Safe Harbor
1 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-loo
Slide 3: Q2 Fiscal 2013 Financial Highlights
2 Q2 Fiscal 2013 Financial Highlights Q2 2013 vs. Q2 2012 $650.5 $415.0 $628.8 $200.0 78 bps $9.8 $0.71 29.3% 26.7% 41.2% 151.2% 14 bps 46.7% 26.8% Asset growth Deposit growth Loan portfolio growth Loan portfolio origination growth Non-performing assets to total assets Q2 Net Income Diluted EPS Amou
Slide 4: BofI Consistently Ranked among the Best of the Biggest Thrifts by SNL Financial
3 BofI is Consistently Ranked among the Best of the Biggest Thrifts by SNL Financial … BofI Holding, Inc. (BOFI) 2 CA 127.12 1,736 1.29 15.44 15.16 39.43 1.51 0.45 BofI Holding, Inc. (BOFI) 3 5 CA 89.40 1,401.1 1.16 15.87 13.14 32.23 1.21 0.80 2010 The Best of the Biggest Thrifts 2009 The Best of th
Slide 5: Top Performer among the Broader Universe of All Public Banks and Thrifts
4 … and is also a Top Performer among the Broader Universe of All Public Banks and Thrifts 2012 rank 2011 rank Total assets ($000) 2011 ROAE (%) 2011 ROAA (%) Non-interest income/total revenue (%) Capital ratio (%) Efficiency ratio (%) Non- performing loans/total loans (%) 1 1 Bank of the Ozarks, Li
Slide 6: BofI is a Top Quartile Performer Versus Bank Peer Group
5 BofI is a Top Quartile Performer Versus Bank Peer Group BofI Federal Bank Peer Group Percentile ROAA 1.55% 0.98% 83% Return on equity 17.83% 7.26% 90% G&A 1.60% 2.97% 16% Efficiency ratio 34.27% 65.26% 5% Note: Peer group is all savings banks with assets greater than $1 billion for quarter ended D
Slide 7: Our Business Model is More Profitable Because Our Costs are Lower
6 Our Business Model is More Profitable Because Our Costs are Lower… Salaries and benefits Premises and equipment BofI1 (%) 0.86 0.13 Other non-interest expense 0.70 Total non-interest expense 1.69 Core business margin 2.09 1.50 0.37 1.31 3.18 0.40 Banks $1-$10bn2 (%) Net interest income 3.78 3.58 A
Slide 8: Efficiency Ratio One of the Industry's Lowest
7 Efficiency Ratio (BofI Federal Bank, for the fiscal quarter ended) 32.74 34.85 36.32 64.79 0 20 40 60 80 (%) Banks1 Q2 ‘13 Q1 ‘13 Q4 ’12 One of the lowest rates in the industry 1. Reported by FDIC – 446 commercial banks with $1-$10 billion in assets for the quarter ended 12/31/12 Source: FDIC Stat
Slide 9: Corporate Profile and Vision
8 Corporate Profile and Vision • $2.9 billion asset savings and loan holding company1 • 12-year operating history, publicly traded on NASDAQ (BOFI) since 2005 • Headquartered in single branch location in San Diego, CA • 40,000 deposit and loan customers1 • 280 employees ($10 million in assets per em
Slide 10: Diversified Branchless Deposit Businesses
9 Diversified Branchless Deposit Businesses Key Elements Deposit Consumer direct internet brands Affinity BIN sponsorship • Demographically targeted brands • Differentiated products with turn-down product options Business banking • Exclusive relationships with significant brands, groups, or employee
Slide 11: Affinity and Distribution Partners
10 Affinity and Distribution Partners Focus Current Partner Direct Marketing Retail Event-Based Issuance
Slide 12: The Tipping Point for Consumer and Business Banking Customers
The Tipping Point for Consumer and Business Banking Customers • Consumers are disenchanted with traditional banks • Cost structure of business and consumer accounts are significant concerns • Technology has removed final barriers to branchless banking (remote deposit capture, reload networks, enhanc
Slide 13: Branch Transaction Activity Migrating to Mobile/Online Channels
Branch Transaction Activity Migrating to Mobile/Online Channels U.S. Banking Transactions by Channel (Billions)1 U.S. Branch Transaction Activity2 (average annual change – 2008-11) Deposit Withdrawal Check cashing Total -7% to -9% -3% to -6% -17% to -19% -4% to -5% 100 75 50 25 0 2013 2012 2011 2010
Slide 14: Bank Deposit Revenue Sources Reduced; Branch Transaction Cost 40 Times Call Center
Bank Deposit Revenue Sources have been Significantly Reduced and Cost per Branch Transaction is 40 Times that of a Call Center Service Charges/Total Deposits (%) Source: FCIC; Baird estimates; PNC population Cost Per Transaction % 0.40 2002 2012 0.2 0.65 0.0 0.8 0.4 0.6 0.56 Call center Online/ mobi
Slide 15: Branch Banks Cannot Cost Effectively Serve Most Customers
Branch Banks Cannot Cost Effectively Serve Most Customers Chase 23 23 23 19 12 United States 32 20 21 19 8 Segment 1 (<$5K D&I) Segment 2 ($5K-$25K D&I) Segment 3 ($25-$100K D&I) Segment 4 ($100-$500K D&I) Segment 5 ($500K+ D&I) >30% of Chase households have >$100K in D&I and make up ~55% of revenue
Slide 16: Branch Traffic has Declined Approximately 4.0% per Year
15 Branch Traffic has Declined Approximately 4.0% per Year for an Aggregated Decline of 90% Over the Last 16 Years Source: FMSI 2011 Teller Line Study; ICBA Independent Banker Magazine, March 2011 "Branch foot-traffic is plummeting and branches are largely idle, except for the activities of the empl
Slide 17: BofI Deposit Products in the News
16 MarketWire Bank of Internet Eliminates Overdraft Fees for Rewards Checking Account NetBanker Bank of Internet Launches No- Overdraft Fee Checking Account BofI Deposit Products in the News
Slide 18: BofI's Vision for Multi-Channel Customer Service and Transaction
BofI's Vision for Multi-Channel Customer Service and Transaction • Aggressive outbound − Segmented call lists based upon behavioral segmentation (e.g., usage) • Utilization of third party and internal data • Coordinated multichannel marketing • Utilize third party infrastructure (e.g., ATMs to depos
Slide 19: Enhanced Value Proposition for Consumer Deposit Customers
18 Enhanced Value Proposition for Consumer Deposit Customers Product Customer Service Platform Features • Free checking with unlimited ATM reimbursement • Rate rewards features • Merchant/purchase rewards • Enhanced call center representatives training • Call center representative extended hours • O
Slide 20: Key Areas of Growth
19 Key Areas of Growth Growth: 12/11-12/12 Checking balance 132.97% MMS balance 105.27% Savings balance -13.53% CD balance -27.31% Transaction account balance 113.83% Gen Y (1978-1994) 1 34.4% of accounts, 34.3% of account bal Gen X (1965-1977) 1 15.6% of accounts, 9.7% of account bal Key Growth 1 T
Slide 21: Primary Business – Lending
20 Primary Business – Lending Lending Single family Multifamily C&I Lending Gain-on-sale Mortgage Banking Wholesale Jumbo Retail Wholesale Lender Finance Healthcare Finance • Internet and affinity lead sources • Self-service operation • Low-fixed costs • High-end portfolio lender – “Common Sense" un
Slide 22: Rapid Asset Growth Driven by Organic Loan Production
21 Our Rapid Asset Growth has been Driven by Strong and Profitable Organic Loan Production Loan Portfolio – End of Last Five Quarters Multifamily Single family 52% 54% 54% 55% 55% 52% 54% 54% 54% 54% Average Loan to Value 1,526,523 1,595,704 1,720,563 1,912,999 2,155,306 0 500,000 1,000,000 1,500,00
Slide 23: Loan Origination Group Production Year Over Year
22 Loan Origination Group Production Year Over Year 1. Applications in as of 3/31/13 2. Includes C&I - Single Family Lender Finance of $48.0 and $22.2 million for Q2 2013 and 2012, respectively ($ Millions) Q2-2013 Production Q2-2012 Production Pipeline1 Single Family – Gain on Sale $232.3 $132.8 $8
Slide 24: Best-in-Class Asset Quality
23 .92 2.81 0 1 2 3 4 (%) BofI1 Banks $1-10 bn Non-current (30 days+) loans to total loans1 Assets in non-accrual to total assets1 0.73 1.30 0 1 2 3 4 (%) BofI1 Bank $1-10 bn 1. As reported in FDIC SDI report at 12/31/12. Total of 446 institutions included in the $1-$10 billion group. Best-in-Class
Slide 25: Loan Diversity – December 31, 2012
24 Loan Portfolio1 100% = $2,186 Million SF - Residential 51% C&I 1% C&I - SF Lender Finance 5% CRE 1% Multifamily 35% Home Equity 1% Factoring 5% Consumer and Other 1% 1. Gross loans before premiums, discounts and allowances Loan Diversity – December 31, 2012
Slide 26: Investment Summary
25 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 generate incremental
Slide 27: Contact Information
26 COMPANY Greg Garrabrants, President and CEO BofI Holding, Inc. investors@bofi.com www.bofiholding.com Investor Relations Mark A. McPartland, Senior Vice President MZ Group Phone: +1-646-593-7140 Mobile: +1-910-297-6442 markmcp@mzgroup.us www.mzgroup.com Contact Information