Axos Financial, Inc. · NYSE:AX
Axos Financial — BofI Holding — Investor Presentation (May 2013)
27 slides from Axos Financial's investor presentation, May 10, 2013
Slide 1: BofI Holding, Inc. Investor Presentation
BofI Holding, Inc. Investor Presentation Andy Micheletti Executive Vice President and Chief Financial Officer May 9, 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: Q3 Fiscal 2013 Financial Highlights
Q3 Fiscal 2013 Financial Highlights Q3 2013 vs. Q3 2012 Amount ($M or %) Increase (%) Asset growth $683.6 30.0% Deposit growth $527.5 33.5% Loan portfolio growth Return on $599.6 37.6% Equity: 17.8% Loan portfolio origination growth $248.2 46.8% Return on Assets: 1.45% Non-performing assets to 71 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- 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 90% on ROE means that the Bank outperformed 90% 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 3.78 3.58 Salaries and benefits 0.86 1.50 Premises and equipment 0.13 0.37 Other non-interest 0.70 1.31 expense Total non-interest 1.69 3.18 expense Core busine
Slide 8: Efficiency Ratio 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) (%) One of the lowest 80 rates in the industry 64.79 60 40 32.74 34.85 36.32 20 0 Q4 ’12 Q1 ‘13 Q2 ‘13 Banks1 1. Reported by FDIC – 446 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 • $2.96 billion asset savings and loan holding company1 • 12-year operating history, publicly traded on NASD
Slide 10: 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, groups, or employees Affinity • Exclusive relationships with financial
Slide 11: Affinity and Distribution Partners
Affinity and Distribution Partners Focus Current Partner Direct Marketing Retail Event-Based Issuance 10
Slide 12: 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 13: 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 14: Bank Deposit Revenue Sources Reduced; Branch Transaction Cost vs 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 center mobile Sourc
Slide 15: 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 16: 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 17: BofI Deposit Products in the News
BofI Deposit Products in the News NetBanker Bank of Internet Launches No- Overdraft Fee Checking Account MarketWire Bank of Internet Eliminates Overdraft Fees for Rewards Checking Account 16
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 Voice segmentation (e.g., usage) ATM • Utilization of third party and internal data Direct • Coordinated multichannel Email Banker marketing • Utilize third party Video
Slide 19: Enhanced Value Proposition for Consumer Deposit Customers
Enhanced Value Proposition for Consumer Deposit Customers • Free checking with unlimited ATM reimbursement Product • Rate rewards features • Merchant/purchase rewards • Enhanced call center representatives training Customer • Call center representative extended hours Service • Outbound calling for s
Slide 20: Key Growth
Key Growth Growth: Key Areas of Growth 03/12-03/13 Checking balance 130.07% MMS balance 74.38% Savings balance -16.69% CD balance -11.79% Transaction account balance 92.53% Gen Y (1978-1994) 40.23% of accounts, 36.99% of account bal Gen X (1965-1977) 19.42% of accounts, 13.61% of account bal 19
Slide 21: 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 22: Rapid Asset Growth Driven by 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 2,195,331 2,000,000 1,912,999 1,720,563 1,595,704 1,500,000 1,000,000 500,000 0 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Average Multifamily 54% 54% 5
Slide 23: Loan Origination Group Production Year Over Year
Loan Origination Group Production Year Over Year Q3-2013 Q3-2012 ($ Millions) Production Production Pipeline1 Single Family – Gain on Sale $231.9 $119.7 $164.3 Single Family – Jumbo Portfolio 97.4 118.2 140.3 Multifamily – Portfolio 68.2 57.4 55.0 C&I2 71.8 12.4 80.6 Total $469.3 $307.7 $440.2 1. Ap
Slide 24: 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 2.81 3 2 2 1.30 .92 1 1 0.73 0 0 BofI1 Banks $1-10 bn 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 bill
Slide 25: Loan Diversity – March 31, 2013
Loan Diversity – March 31, 2013 Loan Portfolio1 100% = $2,231 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 24
Slide 26: 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 27: 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 26