Slide 1: BofI Holding, Inc. Investor Presentation
BofI Holding, Inc. Investor Presentation Greg Garrabrants President and Chief Executive Officer August 2013 NASDAQ: BOFI
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: Q4 Fiscal 2013 Financial Highlights
Q4 Fiscal 2013 Financial Highlights Amount Increase Q4 2013 vs. Q4 2012 ($M or %) (%) Asset growth $703.9 29.5% Deposit growth $476.9 29.5% 31.2% Return on Loan portfolio growth $536.4 Equity: 16.6% Loan portfolio origination growth $321.8 43.9% Return on Assets: 1.44% Non-performing assets to 66 bp
Slide 4: BofI is Consistently Ranked among the Best of the Biggest Thrifts by SNL Financial
BofI is Consistently Ranked among the Best of the Biggest Thrifts by SNL Financial... 2012 The Best of the Biggest Thrifts #1 1 BofI Holding, Inc. (BOFI) CA 154.986 2,874.3 1.44 17.72 14.33 38.05 1.11 0.29 2011 The Best of the Biggest Thrifts #2 2 BofI Holding, Inc. (BOFI) CA 134.61 2,224 1.24 16.09
Slide 5: Top Performer among the Broader Universe of All Public Banks and Thrifts
...and is also a Top Performer among the Broader Universe of All Public Banks and Thrifts Non- 2012 2013 Non-interest Capital performing 2013 2012 Total assets ROAE ROAA income/total ratio Efficiency loans/total rank rank ($000) (%) (%) revenue (%) (%) ratio (%) loans (%) 1 N/A HomeStreet, Seattle,
Slide 6: BofI is a Top Quartile Performer Versus Bank Peer Group
BofI is a Top Quartile Performer Versus Bank Peer Group The 93% on ROE means that the Bank outperformed 93% of all Banks. The 18% G&A ranking means that only 18% of Banks spend less on G&A than BofI. Peer group includes savings banks greater than $1 billion dollars. BofI Federal Bank Peer Group Perc
Slide 7: Our Business Model is More Profitable Because Our Costs are Lower
Our Business Model is More Profitable Because Our Costs are Lower Banks BofI1 $1-$10bn2 As % of average assets (%) (%) Net interest income 3.72 3.52 Salaries and benefits 0.88 1.53 Premises and equipment 0.14 0.37 Other non-interest 0.71 1.22 expense Total non-interest 1.73 3.12 expense Core busines
Slide 8: Corporate Profile and Vision
Corporate Profile and Vision Vision We aspire to be the most innovative branchless bank in the United States providing products and services superior to our branch based competitors Key Facts • $3.1 billion asset savings and loan holding company1 • 13-year operating history, publicly traded on NASDA
Slide 9: Diversified Branchless Deposit Businesses
Diversified Branchless Deposit Businesses Key Elements Consumer • Demographically targeted brands direct internet • Differentiated products with turn-down product brands options • Exclusive relationships with significant brands, Distribution groups, or employees Partners • Exclusive relationships wi
Slide 10: Distribution Partners
Distribution Partners Focus Current Partner Direct Marketing Retail Event-Based Issuance 9
Slide 11: Diversified and Improving Deposit Mix Including Rapidly Increasing Business Banking Deposits
Diversified and Improving Deposit Mix Including Rapidly Increasing Business Banking Deposits Rapid Business Banking Diversified Deposit Base Deposit Growth Percent Dollars ($MM) 400 Checking 340 25.1 314 300 CD’s 49.8 200 185 124 17.7 100 Money 78 Market 21 7.4 0 Savings Q4 12 Q1 13 Q2 13 Q3 13 Q4 1
Slide 12: Key Growth Areas
Key Growth Areas Growth: Key Areas of Growth 06/12-06/13 Checking balance 228.4% MMS balance 53.4% Savings balance -23.2% CD balance -4.5% Transaction account balance 109.0% Gen Y (1978-1994) 27.0% of accounts, 30.6% of account bal Gen X (1965-1977) 9.0% of accounts, 14.5% of account bal 11
Slide 13: Overview of Acquisition of Principal Bank Non-Trust Deposits
Overview of Acquisition of Principal Bank Non-Trust Deposits • Approximately $200MM dollar of deposits • 10,000 accounts − 5,000 Checking − 3,000 Savings − 1,000 CDs − 1,000 Money Market • No deposit premium • Minimal transaction cost • Affinity relationship negotiation ongoing 12
Slide 14: 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) Voice • Utilization of third party and ATM internal data • Coordinated multichannel Direct marketing Email • Utilize third party Banker infra
Slide 15: The Tipping Point for Consumer and Business Banking Customers
The Tipping Point for Consumer and Business Banking Customers Internet Banking/ New Preferred Method • Consumers are disenchanted with traditional banks % 80 • Cost structure of business and consumer accounts are significant concerns 67 64 60 58 • Technology has removed final barriers to branchless
Slide 16: Branch Transaction Activity Migrating to Mobile/Online Channels
Branch Transaction Activity Migrating to Mobile/Online Channels U.S. Banking Transactions by Channel U.S. Branch Transaction Activity2 (Billions)1 (average annual change – 2008-11) 100 15% of transactions Deposit -7% to -9% at branches 75 ~85% of Withdrawal -3% to -6% transactions 50 non-branch Chec
Slide 17: 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 (%) Cost Per Transaction % $ 3.97 0.8 4 0.65 0.6 3 0.40 0.4 2 0.2 1 0.59 0.56 0.10 0.0 0 2002 2012 Branch ATM Online/ Call mobile center Sourc
Slide 18: Branch Traffic has Declined Approximately 4.0% per Year
Branch Traffic has Declined Approximately 4.0% per Year for an Aggregated Decline of 90% Over the Last 16 Years Average Branch Monthly Volume – Teller Transactions Thousands "Branch foot-traffic is 15 plummeting and branches 13.0 ~4.0% CAGR are largely idle, except for 11.4 the activities of the 10.
Slide 19: Branch Banks Cannot Cost Effectively Serve Most Customers
Branch Banks Cannot Cost Effectively Serve Most Customers Segment 5 ($500K+ D&I) 8 >30% of 12 Chase households Segment 4 ($100-$500K D&I) 19 have >$100K 19 in D&I and make up ~55% of revenue Segment 3 ($25-$100K D&I) 21 23 Of the remaining Segment 2 ($5K-$25K D&I) 20 70%, Chase 23 has publically sta
Slide 20: Primary Business – Lending
Primary Business – Lending Gain-on-sale • Internet and affinity lead sources Mortgage • Self-service operation • Low-fixed costs Banking • High-end portfolio lender Wholesale – “Common Sense" underwriting Single family Jumbo – Quarter to date average LTV of 58% • Product provides vertical integratio
Slide 21: Asset Growth Driven by Strong and Profitable Organic Loan Production
Our Asset Growth has been Driven by Strong and Profitable Organic Loan Production Loan Portfolio – End of Last Five Quarters 2,500,000 2,195,331 2,256,918 2,155,306 2,000,000 1,912,999 1,720,563 1,500,000 1,000,000 500,000 0 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Average Multifamily 54% 55% 55% 55%
Slide 22: Non-Interest Income Is Diversified
Non-Interest Income Is Diversified With Significant Growth Outside of Single Family Agency Mortgage Banking FY 2013 FY 2013 $ in thousands Q3 Q4 • Mortgage loan sales − Single family agency eligible $3,081 $3,202 − Single family jumbo (TPO) 1,077 1,245 − Multifamily 1,050 1,376 • Other sales – lendi
Slide 23: Moderate Reduction in Single Family Agency Production Compensated By Other Loan Production
Moderate Reduction in Single Family Agency Production From Prior Quarter Compensated By Other Loan Production Areas Loan Pipeline –Last Four Quarters and Current C&I has significant potential for $MM increasing production 595 600 489 119 468 473 77 90 84 118 400 367 66 57 106 253 250 284 200 217 204
Slide 24: Loan Origination Group Production Year-Over-Year And Current Pipeline
Loan Origination Group Production Year-Over-Year And Current Pipeline FY Q4-2013 FY Q4-2012 ($ Millions) Production Production Pipeline1 Single Family – Gain on Sale $236.7 $107.4 $74.2 Single Family – Jumbo Portfolio 141.1 141.2 283.8 Multifamily – Portfolio 62.5 89.2 117.6 C&I2 77.3 19.2 119.0 Tot
Slide 25: Best-in-Class Asset Quality
Best-in-Class Asset Quality Non-current (30 days+) loans Assets in non-accrual to to total loans1 total assets1 (%) (%) 4 4 3 3 2.60 2 2 1.24 1 0.83 1 0.65 0 0 BofI1 Banks $1-10 bn BofI1 Bank $1-10 bn 1. As reported in FDIC SDI report at 3/31/13. Total of 447 institutions included in the $1-$10 bill
Slide 26: Loan Diversity – June 30, 2013
Loan Diversity – June 30, 2013 Loan Portfolio1 100% = $2,301 Million Factoring 6% Consumer and Home Equity Other 1% 1% SF - Residential Multifamily 50% 34% CRE 1% C&I - SF Lender Finance C&I 5% 2% 1. Gross loans before premiums, discounts and allowances 25
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 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 27