Earnings estimates for
BofI Holding Inc.
) have been advancing since this bank holding company posted robust
fourth quarter and fiscal 2012 results. The company reached Zacks
#1 Rank (Strong Buy) status on August 11 and hit its 52 week high
on September 17. In addition, a P/B multiple of just 1.63 makes
this stock an attractive value investment.
Impressive Q4 Results
On August 9, BofI Holding recorded fiscal fourth quarter 2012
(ended June 30) earnings per share of 64 cents, outpacing the Zacks
Consensus Estimate of 58 cents by 10.3% and last year's earnings of
50 cents by 28.0%. Results improved mainly due to significant
growth in the top line, partially offset by a rise in operating
Net interest income surged 31.5% from the year-ago quarter to $21.6
million. Furthermore, net interest margin increased 11 basis points
(bps) to 3.80%. Likewise, non-interest income also reported a
significant jump and stood at $5.0 million, primarily driven by the
sale of mortgage loans. Nevertheless, non-interest expenses rose
30.6% to $10.0 million on the back of higher compensation expense.
BofI Holding also witnessed an improvement in its asset quality. As
of June 30, 2012, allowance for loan losses declined 29.9% to $9.6
million. Similarly, non-performing assets as a percentage of total
assets fell 22 bps to 0.77%.
Surge in Earnings Estimates
Over the last 60 days, the Zacks Consensus Estimate for fiscal 2013
increased 10.8% to $2.66 per share. For 2014, the Zacks Consensus
Estimate improved 4.6% to $2.93 over the same time frame.
The estimates reflect year-over-year improvements of about 14.2%
for 2013 and 10.3% for 2014.
Valuation Looks Reasonable Along with a low P/B multiple, BofI
Holding has a forward P/E ratio as low as 9.7 (A P/E ratio under
15.0 and P/B ratio below 3.0 generally indicate value). The company
has a trailing 12-month ROE of 17.2%, compared with the peer group
average of 9.3%.
Based in San Diego, California, BofI Holding is the bank holding
company for BofI Federal Bank. The company offers innovative
banking and lending products and services across the nation. With a
market capitalization of about $298.9 million, BofI Holding
competes with Pacific Continental Corp. (
) and Heritage Commerce Corp. (
), among others.
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