Axos Financial, Inc. · NYSE:AX
Axos Financial — BofI Holding — 13th Annual B. Riley & Co. Investor Conference (May 2012)
21 slides from Axos Financial's conference presentation, May 22, 2012
Slide 1: 13th Annual B. Riley & Co. Investor Conference
13th Annual B. Riley & Co. Investor Conference May 22, 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: Q3 Fiscal 2012 Financial Highlights
2 Q3 Fiscal 2012 Financial Highlights Q3 2012 vs Q3 2011 $541.9 $309.7 $481.9 $149.1 76 bps $7.7 31.2% 24.5% 43.3% 84.9% -35 bps 46.3% Asset growth Deposit growth Loan portfolio growth Loan origination growth Non-performing assets to total assets Q3 Net Income Amount ($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: BofI is a Top Quartile Performer Versus Thrift Peer Group
4 BofI is a Top Quartile Performer Versus Thrift Peer Group Bank of Internet Peer Group Percentile ROAA 1.33% .60% 85% Return on equity 16.39% 5.64% 93% G&A 1.49% 2.42% 20% Efficiency ratio 41.96 69.90 12% Mortgage loans originated1 15.88% 3.73% 87% 1. Percent of assets at start of the period Note:
Slide 6: Our Business Model is More Profitable Because Our Costs are Lower
5 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 7: Resulting in an Efficiency Ratio That Is Consistently One of the Industry's Lowest
6 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 8: Corporate Profile and Vision
7 Corporate Profile and Vision $2.3 billion asset savings and loan holding company1 11-year operating history, publicly traded on NASDAQ (BOFI) since 2005 Headquartered in single branch location in San Diego, CA 37,000 deposit and loan customers1 209 employees ($11 million in assets per em
Slide 9: Diversified Branchless Customer Acquisition Channels
8 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 brand
Slide 10: Preference Toward Delivery has Shifted Rapidly Toward the Internet Over the Last Four Years
9 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 11: With the Need For Branches to Deposit Checks Dropping Quickly
10 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 12: Branch Traffic has Declined Approximately 4.0% Per Year for an Aggregated Decline of 90%
11 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 13: Branch Banks are Losing Sources of Revenue that Supported Free Checking
12 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 14: Banks over $50 Billion In Assets Offering Free Checking Dropped to Less than 35%
13 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 15: Enhanced Value Proposition For Deposit Customers
14 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 16: CNN Money Recently Highlighted the Bank's Checking Account
15 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 17: Primary Business – Lending
16 Primary Business – Lending 1. Percent of total originations and purchases for quarter ended March 31, 2012. Lending Single family Multifamily Capital Markets Gain-on-sale Mortgage Banking Wholesale Jumbo Retail Wholesale Loan Purchases and Sales Loan Originations • Internet and affinity lead sour
Slide 18: Our Rapid Asset Growth Has Been Driven by Strong and Profitable Organic Loan Production
17 Our Rapid Asset Growth Has Been Driven by Strong and Profitable Organic Loan Production Loan Portfolio – End of Last Five Quarters 1,000,000 2,000,000 1,113,813 1,500,000 500,000 0 Q3 2012 Q2 2012 1,325,301 Q1 2012 1,443,860 Q4 2011 1,526,523 Q3 2011 1,595,704 Multifamily Single family 53% 54% 54
Slide 19: Loan Origination Group Production Year over Year
18 Loan Origination Group Production Year over Year Single Family – Jumbo Portfolio Multifamily – Portfolio 73.6 78.7 Total $175.6 168.7 120.9 $404.0 Pipeline1 Single Family – Gain on Sale $23.3 $114.4 ($ Millions) Q3-2011 Production 103.3 57.3 $303.9 $143.3 Q3-2012 Production 1. Applications in as
Slide 20: Best in Class Asset Quality
19 .65 1.60 0 1 2 3 (%) BofI1 Thrifts $1-5 bn Non-Performing Loans1 Assets in non-accrual2 0.48 1.79 0 1 2 3 (%) BofI1 Bank $1-10 bn 1. BofI Federal Bank only at 12/31/11 (excludes BofI Holding, Inc. to compare to Uniform Thrift Performance Report data). 2. Commercial banks by asset size. FDIC repor
Slide 21: Loan Diversity – March 31, 2012
20 Loan Portfolio1 100% = $1,612 Million 45 2 41 2 10 Multifamily SF residential Home equity Commercial Consumer and other 1. Gross loans before premiums, discounts and allowances. Loan Diversity – March 31, 2012
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