Axos Financial, Inc. · NYSE:AX
Axos Financial — BofI Holding — Shareholder Meeting (October 2011)
23 slides from Axos Financial's shareholder meeting presentation, Oct 24, 2011
Slide 1: 2011 Fiscal Year Annual Shareholder Meeting
2011 Fiscal Year Annual Shareholder Meeting October 20, 2011 Greg Garrabrants President & 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: 2011 Fiscal Year Financial Highlights
2 2011 Fiscal Year Financial Highlights 2011 Fiscal Year $519.0 $372.1 $550.2 $636.2 99 bps 36.5% 38.4% 71.0% 335.7% -2 bps Asset growth Deposit growth Loan portfolio growth Loan origination growth Non-performing assets to total assets Amount ($M or %) Increase (%) Return on Equity: 15.2% 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 2. Malaga reports on calendar year . Data derived from FDIC reports. For The Year Ended June 30, 2011 Comparison of the 2010 SNL
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: Our Business Model is More Profitable Because Our Costs are Lower
6 Our Business Model is More Profitable Because Our Costs are Lower… Salaries and benefits Premises and equipment BofI1 (%) 0.82 0.16 Other non-interest expense 0.55 Total non-interest expense 1.53 Core business margin 2.05 1.36 0.36 1.31 3.03 0.55 Banks $1-$10bn2 (%) Net interest income 3.58 3.58 A
Slide 8: Resulting In An Efficiency Ratio That Is Consistently One of the Industry's Lowest
7 Efficiency Ratio (Bank of Internet USA, for the fiscal quarter ended) 59.94 41.3540.11 34.49 30.67 0 20 40 60 80 (%) Banks1 Q4 „11 Q3 „11 Q2 „11 Q1 ‟11 One of the lowest rates in the industry 1. Reported by FDIC – 432 commercial banks with $1-$10 billion in assets for the quarter ended 6/30/11 Sou
Slide 9: Corporate Profile and Vision
8 Corporate Profile and Vision $2.0 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 36,000 deposit and loan customers1 190 employees ($10 million in assets per em
Slide 10: Diversified Branchless Customer Acquisition Channels
9 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 11: Preference Toward Delivery Has Shifted Rapidly Toward the Internet Over Last Four Years
10 Preference Toward Delivery Has Shifted Rapidly Toward the Internet Over 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 12: With the Need For Branches to Deposit Checks Dropping Quickly
11 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 13: Branch Traffic Has Declined Approximately 4.0% Per Year
12 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; Independent Banker, March 2011 "Branch foot-traffic is plummeting and branches are largely idle, except for the activities of the employees" "Check
Slide 14: Branch Banks are Losing Sources of Revenue that Supported Free Checking
13 Branch Banks are Losing Sources of Revenue that Supported "Free" Checking Interchange Income Average Transaction Fee Service Account Charge FDIC Deposit Accounts 0.4 0.2 0.0 -55% Post-Durdin 0.21 Pre-Durdin 0.44 Cents 0.6 $ Billions 2.70 2 1 Q4 2009 3 0 -20% Q4 2010 2.30 • Interchange is roughly
Slide 15: Banks over $50 Billion In Assets Offering Free Checking Dropped to Less than 35%
14 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 16: Enhanced Value Proposition For Deposit Customers
15 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 17: CNN Money Recently Highlighted The Bank's Checking Account
16 CNN Money Recently Highlighted The Bank’s Checking Account In Its Article Describing The Bank As “One of 7 Banks That Is Still Awesome”
Slide 18: Primary Business – Lending
17 Primary Business – Lending 1. Percent of total originations and purchases for Fiscal 2011. Lending Single family Multifamily Capital Markets Gain-on-sale Mortgage Banking Wholesale Jumbo Retail Wholesale Loan Purchases Loan Originations • Internet-focused lend sources • Self-service operation • L
Slide 19: Our Rapid Asset Growth Has Been Driven by Strong and Profitable Organic Loan Production
18 Our Rapid Asset Growth Has Been Driven by Strong and Profitable Organic Loan Production Loan Portfolio 2011FY Q4 2010 Q4 2011 0 $1,003,250 Q1 2011 1,000,000 $774,899 $1,113,813 500,000 1,500,000 Q2 2011 $876,934 Q3 2011 Multifamily Avg LTV Single family Avg LTV 52% 51% 52% 53% 54% 53% 54% 54% 54%
Slide 20: Loan Origination Group Production
19 Loan Origination Group Production Single Family – Jumbo Portfolio Multifamily – Portfolio 73.6 78.7 Total $175.6 102 92 $312 Pipeline1 Single Family – Gain on Sale $23.3 $118 ($ Millions) Q3-2011 Production 141.3 105.6 $300.8 $53.9 Q4-2011 Production 1. Applications in as of 9/30/11
Slide 21: Multifamily and Single Family Production are a Reliable Asset Generation Platform
20 Multifamily Loan Production (year ended 6/30/11) Single Family Jumbo (year ended 6/30/11) 0 53 29 80 20 74 141 100 Q4 Q2 Q1 Q3 ($M) 40 60 79 20 Q1 Q2 106 100 0 Q4 74 Q3 27 ($M) 40 60 80 Multi Family and Single Family Production are a Reliable Asset Generation Platform for the Bank
Slide 22: Best in Class Asset Quality
21 0.68 0.27 0 1 2 3 (%) BofI1 Bank $1-10bn2 Assets 30-89 days delinquent Assets in non-accrual 2.12 0.45 0 1 2 3 (%) BofI1 Bank $1-10bn2 1. Bank of Internet USA only at 6/30/11 (excludes BofI Holding, Inc. to compare to FDIC data) 2. Commercial banks by asset size. FDIC reported at 6/30/11. Total o
Slide 23: Loan Diversity – June 30, 2011
22 Loan Portfolio1 100% = $1,336 Million 39 3 48 3 7 Multifamily SF residential Home equity Commercial Consumer and other 1. Gross loans before premiums, discounts and allowances Loan Diversity – June 30, 2011