Axos Financial, Inc. · NYSE:AX
Axos Financial — BofI Holding — 24th Annual Roth Conference 2012
23 slides from Axos Financial's conference presentation, Mar 12, 2012
Slide 1: 24th Annual Roth Conference
24th Annual Roth Conference March 12, 2012 Greg Garrabrants President and Chief Executive Officer
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 2012 Financial Highlights
2 Q2 Fiscal 2012 Financial Highlights Q2 2012 vs Q2 2011 $567.3 $436.9 $523.3 $175.9 64 bps $6.7 33.9% 39.1% 52.2% 84.2% -61 bps 35.2% Asset growth Deposit growth Loan portfolio growth Loan origination growth Non-performing assets to total assets Q2 Net Income Amount ($M or %) Increase (%) Return on
Slide 4: BofI is 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 the
Slide 5: Comparison of the 2010 SNL Number 1 Thrift and Number 2 Ranked Thrift
4 2011 ROE (%) 2011 Asset Growth ($MM) 2011 Loan Growth ($MM) 2010 SNL Thrift Ranking Bank of Internet1 Malaga Bank2 15.2 12.5 519 5 550 11 #2 #1 1. Including BofI Holding, Inc. 2. Malaga reports on calendar year . Data derived from FDIC reports. For The Year Ended June 30, 2011 Comparison of the 20
Slide 6: BofI is a Top Quartile Performer Versus Thrift Peer Group
5 BofI is a Top Quartile Performer Versus Thrift Peer Group Bank of Internet Peer Group Percentile ROAA 1.35% .58% 86% Return on equity 16.93% 5.28% 93% G&A 1.53% 2.48% 15% Efficiency ratio 42.68 69.92 14% Mortgage loans originated1 17.40% 2.95% 90% 1. Percent of assets at start of the period Note:
Slide 7: BOFI Trades At An Earnings Multiple Lower Than Our Competitors
6 BOFI Trades At An Earnings Multiple Lower Than Our Competitors Price/ Ticker Company State Share price 11/30/11 Price 1-mo. (%) LTM EPS (x) T. Book (%) Div yield (%) ROAA (%) ROAE (%) Equity/ assets (%) NPAs/ assets (%) Total assets ($M) CFFC Community Financial Corporation VA 2.60 (13.3) 7.2 29.6
Slide 8: Our Business Model is More Profitable Because Our Costs are Lower
7 Our Business Model is More Profitable Because Our Costs are Lower… Salaries and benefits Premises and equipment BofI1 (%) 0.85 0.22 Other non-interest expense 0.43 Total non-interest expense 1.50 Core business margin 2.06 1.44 0.37 1.33 3.14 0.49 Banks $1-$10bn2 (%) Net interest income 3.56 3.63 A
Slide 9: Resulting In An Efficiency Ratio That Is Consistently One of the Industry's Lowest
8 Efficiency Ratio (BofI Federal Bank, for the fiscal quarter ended) 41.35 35.19 35.45 63.74 0 20 40 60 80 (%) Banks1 Q2 ‘12 Q1 ‘12 Q4 ’11 One of the lowest rates in the industry 1. Reported by FDIC – 429 commercial banks with $1-$10 billion in assets for the quarter ended 12/31/11. Source: FDIC Sta
Slide 10: Corporate Profile and Vision
9 Corporate Profile and Vision $2.2 billion asset savings and loan holding company1 11 years operating history, publicly traded on NASDAQ (BOFI) since 2005 Headquartered in single branch location in San Diego, CA 38,000 deposit and loan customers1 200 employees ($11 million in assets per e
Slide 11: Diversified Branchless Customer Acquisition Channels
10 Diversified Branchless Customer Acquisition Channels Co n s u m e r o n lin e b ra n d s Description • Value-oriented consumer • High-end/older demographic • Airline rewards oriented • Wider demographic • Business checking • Products tailored to financial planning advisors and customers Bank bran
Slide 12: Preference Toward Delivery has Shifted Rapidly Toward the Internet
11 Preference Toward Delivery has Shifted Rapidly Toward the Internet Over the Last Four Years Preferred Banking Method (2011) Preferred Banking Method (2007) Other 20% ATM 21% Branches 36% Internet Banking 23% Other 10% ATM 8% Branches 20% Internet Banking 62% Source: American Banker Association
Slide 13: With the Need For Branches to Deposit Checks Dropping Quickly
12 With the Need For Branches to Deposit Checks Dropping Quickly Avg. deposits per day per branch 250 50 0 2012 2010 2014 300 100 150 2008 200 2006 Check decline only With RDC • 45% decline from 2006 to 2011 • Additional decline by 2014 of 90% with Remote Deposit Capture Implementation Check decline
Slide 14: Branch Traffic has Declined Approximately 4.0% Per Year
13 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 15: Branch Banks are Losing Sources of Revenue that Supported Free Checking
14 Branch Banks are Losing Sources of Revenue that Supported "Free" Checking Interchange Income Average Transaction Fee Bank Service Charges 0.4 0.2 0.0 -55% Post-Durbin 0.21 Pre-Durbin 0.44 Cents 0.6 $ Billions 2.70 2 1 Q4 2009 3 0 -20% Q4 2010 2.30 • Interchange is roughly 20% on non- interest inc
Slide 16: Banks over $50 Billion In Assets Offering Free Checking Dropped
15 Banks over $50 Billion Dollars In Assets Offering Free Checking Dropped to Less than 35% from 96% in One Year Source: American Banker 80 Thousands 60 20 2010 100 40 0 34.8% 2009 96.0% -61.2% Represents a secular trend toward less competitive products at banks with branch-based cost structures Ban
Slide 17: Enhanced Value Proposition For Deposit Customers
16 Enhanced Value Proposition For 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 • Outbound c
Slide 18: CNN Money Highlighted The Bank's Checking Account
17 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.
Slide 19: Primary Business – Lending
18 Primary Business – Lending 1. Percent of total originations and purchases for quarter ended December 31, 2011. Lending Single family Multifamily Capital Markets Gain-on-sale Mortgage Banking Wholesale Jumbo Retail Wholesale Loan Purchases Loan Originations • Internet and affinity lead sources • S
Slide 20: Our Rapid Asset Growth Has Been Driven by Strong Organic Loan Production
19 Our Rapid Asset Growth Has Been Driven by Strong and Profitable Organic Loan Production Loan Portfolio - End of Last Five Quarters Q2 2011 Q2 2012 0 $ 1,325,301 Q3 2011 1,000,000 $ 1,003,250 $ 1,443,860 500,000 1,500,000 Q4 2011 $ 1,113,813 Q1 2012 Multifamily Avg LTV Single family Avg LTV 52% 53
Slide 21: Loan Origination Group Production Year over Year
20 Loan Origination Group Production Year over Year Single Family – Jumbo Portfolio Multifamily – Portfolio 53.0 74.0 Total $207.0 163.8 56.8 $326.9 Pipeline1 Single Family – Gain on Sale $80.0 $106.3 ($ Millions) Q2-2011 Production 121.5 78.4 $332.7 $132.8 Q2-2012 Production 1. Applications in as o
Slide 22: Best in Class Asset Quality
21 0.61 0.70 0 1 2 3 (%) BofI1 Bank $1-10bn2 Assets 30-89 days delinquent Assets in non-accrual 0.48 1.79 0 1 2 3 (%) BofI1 Bank $1-10bn2 1. BofI Federal Bank only at 12/31/11 (excludes BofI Holding, Inc. to compare to FDIC data) . 2. Commercial banks by asset size. FDIC reported at 12/31/11. Total
Slide 23: Loan Diversity – December 31, 2011
22 Loan Portfolio1 100% = $1,540 Million 43 2 43 3 9 Multifamily SF residential Home equity Commercial Consumer and other 1. Gross loans before premiums, discounts and allowances. Loan Diversity – December 31, 2011