BofI Holding - Value
November 25 2012 - 7:00PM
Zacks
BofI Holding, Inc. (BOFI) became a Zacks #1 Rank (Strong
Buy) on November 15, a week after this financial services provider
announced strong fiscal first quarter results. In addition, a P/B
multiple of just 1.4 should make this stock attractive for value
investors.
Impressive Fiscal First Quarter Results
On November 8, BofI Holding earned 67 cents per share in the
fiscal first quarter, topping the Zacks Consensus Estimate by 4.7%
and the year-ago performance by 15.5%. The company has now reported
a positive surprise in 3 out of the last 4 quarters. The advance
was aided by increased net interest income and non-interest income,
partially offset by enhanced non-interest expenses.
Net Interest income climbed 23.6% year over year to $22.5
million, driven by strong growth in average earnings assets. Net
interest margin expanded 5 basis points on a year-over-year basis
to 3.70%. Additionally, the company's non-interest income surged
58.1% to $6.8 million. However, non-interest expenses escalated
19.8% to $11.5 million, mainly due to increased compensation
expenses.
BofI Holding’s capital position improved in the quarter. Total
assets came in at $2.6 billion, up 23.8% year over year. Total
deposits also surged 26.7% to $1.9 billion. Moreover, Tier 1
capital ratio stood at 8.20%, up 12 basis points on a
year-over-year basis.
Earnings Momentum on an Upswing
The Zacks Consensus Estimate for fiscal 2013 is up 5.3% in the
past 30 days to $2.80, reflecting year-over-year growth of about
20.0%. The Zacks Consensus Estimate for fiscal 2014 has increased
6.5% to $3.12 over the same time frame, implying a year-over-year
increase of about 11.6%.
Reasonable Valuation
In addition to its low P/B, BofI Holding has a P/E multiple at
9.3 (a P/E ratio under 15.0 and a P/B ratio below 3.0 generally
indicate value). The company has a trailing 12-month return on
equity (ROE) of 17.1%, compared with the peer group average of
9.5%. This signifies the efficient reinvestment efforts by the
company compared to its peers.
![](http://www.zacks.com/images/upload_dir/1353687245.jpg)
Headquartered in San Diego, California, BofI Holding, Inc., the
holding company for BofI Federal Bank, provides various financial
services to consumers through Internet in the United States. The
company was founded in 1999 and serves about 40,000 retail deposit
and loan customers across 50 states. With a market capital of about
$302.2 million, BofI Holding competes with Central Valley Community
Bancorp (CVCY), among others.
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