Axos Financial, Inc. · NYSE:AX
Axos Financial — BofI Holding — Raymond James 34th Annual Institutional Investors Conference 2013
25 slides from Axos Financial's conference presentation, Mar 6, 2013
Slide 1: BofI Holding, Inc. Investor Presentation
BofI Holding, Inc. Investor Presentation Greg Garrabrants President and Chief Executive Officer RAYMOND JAMES 34th Annual Institutional Investors Conference March 3-6, 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: Q2 Fiscal 2013 Financial Highlights
Q2 Fiscal 2013 Financial Highlights Q2 2013 vs. Q2 2012 Amount ($M or %) Increase (%) Asset growth $650.5 29.3% Deposit growth $415.0 26.7% Return on Loan portfolio growth $628.8 41.2% Equity: 17.3% 151.2% Return on Loan portfolio origination growth $200.0 Assets: 1.45% Non-performing assets to 78 b
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 … 2011 The Best of the Biggest Thrifts #2 2 BofI Holding, Inc. (BOFI) CA 134.61 2,224 1.24 16.09 14.33 42.04 1.20 0.39 2010 The Best of the Biggest Thrifts #2 2 BofI Holding, Inc. (BOFI) CA 127.12 1,736 1.29 15.44 15.
Slide 5: … and is also a 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- 2011 2011 Non-interest Capital performing 2012 2011 Total assets ROAE ROAA income/total ratio Efficiency loans/total rank rank ($000) (%) (%) revenue (%) (%) ratio (%) loans (%) 1 1 Bank of the Ozarks, Litt
Slide 6: BofI is a Top Quartile Performer Versus Bank Peer Group
BofI is a Top Quartile Performer Versus Bank Peer Group The 94% on ROE means that the Bank outperformed 94% of all Banks. The 16% G&A ranking means that only 16% 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 3.69 3.60 Salaries and benefits 0.87 1.53 Premises and equipment 0.14 0.37 Other non-interest 0.66 1.27 expense Total non-interest 1.67 3.17 expense Core busine
Slide 8: … Resulting in an Efficiency Ratio That is Consistently One of the Industry’s Lowest
… Resulting in an Efficiency Ratio That is Consistently One of the Industry’s Lowest Efficiency Ratio (BofI Federal Bank, for the fiscal quarter ended) (%) 80 One of the lowest rates in the industry 63.11 60 40 32.62 32.74 34.85 20 0 Q3 ’12 Q4 ‘12 Q1 ‘13 Banks1 1. Reported by FDIC – 437 commercial b
Slide 9: 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 $2.9 billion asset savings and loan holding company1 12-year operating history, publicly traded on NASDA
Slide 10: Diversified Branchless Customer Acquisition Channels
Diversified Branchless Customer Acquisition Channels Affinity Bank brands Description Partners Description • Value-oriented • 65 million members consumer Consumer online brands • High-end/older demographic • Airline rewards • 12 million members oriented • Wider demographic • 2 million members • Seco
Slide 11: Preference Toward Delivery has Shifted Rapidly Toward the Internet Over the Last Four Years
Preference Toward Delivery has Shifted Rapidly Toward the Internet Over the Last Four Years Preferred Banking Method Preferred Banking Method (2007) (2011) Other Internet Other Banking 10% ATM 20% 23% 8% Branches 20% 21% 62% ATM Internet 36% Banking Branches Source: American Banker Association 10
Slide 12: With the Need For Branches to Deposit Checks Dropping Quickly
With the Need For Branches to Deposit Checks Dropping Quickly Avg. deposits per day per branch 300 Check decline without 250 remote deposit capture • 45% decline from 200 2006 to 2011 • Additional decline 150 by 2014 of 90% with Remote 100 Deposit Capture With remote deposit Implementation capture 5
Slide 13: Branch Traffic has Declined Approximately 4.0% per Year for an Aggregated Decline of 90%
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 14: Branch Banks are Losing Sources of Revenue that Supported "Free" Checking
Branch Banks are Losing Sources of Revenue that Supported "Free" Checking Interchange Income Average Transaction Fee Cents • Interchange is roughly 20% on non- 0.6 interest income 0.44 -55% • $27.5 billion per year of lost 0.4 interchange income 0.21 • Under $10 billion asset size banks 0.2 unaffect
Slide 15: Banks over $50 Billion Dollars in Assets Offering Free Checking Dropped to Less than 35% from 96%
Banks over $50 Billion Dollars in Assets Offering Free Checking Dropped to Less than 35% from 96% in One Year Banks greater than $50 billion in assets that offer free checking Thousands 100 96.0% -61.2% 80 Represents a secular trend toward less competitive products at banks 60 with branch-based cost
Slide 16: Enhanced Value Proposition for Deposit Customers
Enhanced Value Proposition for Deposit Customers • Free checking with unlimited ATM reimbursement • Rate rewards features Product • Merchant/purchase rewards • Enhanced call center representatives training Customer • Call center representative extended hours Service • Outbound calling for setup and
Slide 17: CNN Money Recently Highlighted the Bank’s Checking Account
CNN Money Recently Highlighted the Bank’s Checking Account in its Article Describing the Bank as “One of 7 Banks That Is Still Awesome” Note: Information as of October 2011 16
Slide 18: Key Growth
Key Growth Growth: Key Areas of Growth 12/11-12/12 Checking balance 132.97% MMS balance 105.27% Savings balance -13.53% CD balance -27.31% Transaction account balance 113.83% 1 Gen Y (1978-1994) 34.4% of accounts, 34.3% of account bal 1 Gen X (1965-1977) 15.6% of accounts, 9.7% of account bal 1 Thes
Slide 19: Primary Business – Lending
Primary Business – Lending Gain-on-sale • Internet and affinity lead sources Mortgage • Self-service operation • Low-fixed costs Banking • High-end portfolio lender Wholesale – “Common Sense" underwriting Single family Jumbo – Quarter to date average LTV of 54% 80%1 • Product provides vertical integ
Slide 20: Our Rapid Asset Growth has been Driven by Strong and Profitable Organic Loan Production
Our Rapid Asset Growth has been Driven by Strong and Profitable Organic Loan Production Loan Portfolio – End of Last Five Quarters 2,500,000 2,155,306 2,000,000 1,912,999 1,720,563 1,595,704 1,526,523 1,500,000 1,000,000 500,000 0 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Average Multifamily 52% 54% 5
Slide 21: Loan Origination Group Production Year over Year
Loan Origination Group Production Year over Year Q2-2013 Q2-2012 1 ($ Millions) Production Production Pipeline Single Family – Gain on Sale $232.3 $132.8 $93.3 Single Family – Jumbo Portfolio 174.9 121.5 216.6 Single Family – Warehouse 80.4 0.0 121.4 Multifamily – Portfolio 92.7 78.4 56.9 Total $580
Slide 22: 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 3.09 3 3 1.42 2 2 1.03 1 1 0.79 0 0 BofI1 Banks $1-10 bn BofI1 Bank $1-10 bn 1. As reported in FDIC SDI report at 9/30/12. Total of 437 institutions included in the $1-$10 bill
Slide 23: Loan Diversity – December 31, 2012
Loan Diversity – December 31, 2012 Loan Portfolio1 100% = $2,186 Million Consumer and other Commercial 1 7 SF residential 35 56 Multifamily 1 Home equity 1. Gross loans before premiums, discounts and allowances 22
Slide 24: 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 25: 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 24
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