“BofI Holding, Inc. (BOFI, $23), a fast-growing bank operating mostly via the Internet, serves more than 38,000 retail deposit and loan customers across 50 states. The bank offers home financing and loans for small and midsized businesses in select markets. An expanding online presence reduces operating costs, helping BofI offer attractive interest rates and low fees on its products. Rapid asset growth reflects strong loan production. Over the last five years, assets have increased at a 20% annualized rate.
“In fiscal 2012 ended June, per-share earnings soared 25% to $2.33, aided by a 28% increase in the June quarter. On June 30, total assets were $2.3 billion, up 23%. Asset quality was strong, with nonperforming assets only 0.77% of total assets. For fiscal 2013 ending June, the two-analyst consensus calls for per-share earnings of $2.67, implying 15% growth. Yet shares trade at only 10 times trailing earnings, versus an average P/E of 13 for the industry group. The Quadrix Overall score is 97, reflecting above-average scores in all six categories. BofI is being initiated as a Buy.”
- Richard J. Moroney, CFA, Upside, August 28, 2012