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Axos Financial Gets OCC Nod for Nationwide's Deposit Buyout


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Recently, BofI Federal Bank - the banking subsidiary of Axos Financial, Inc.BOFI - received the regulatory nod from the Office of the Comptroller of the Currency (OCC) for the completion of Nationwide's Deposits acquisition. Notably, BofI Holding, Inc. has been renamed as Axos Financial, Inc. earlier this month.

Last month, BofI Federal Bank entered into a deal with Nationwide Bank to acquire $3 billion of the bank's deposits. BofI Federal Bank has signed a deposit purchase and assumption agreement ("DAA") with Nationwide Bank, per which, the $3 billion of deposits will consist of $1 billion in checking, savings and money market accounts, and $2 billion in time-deposit accounts.

The transaction is likely to close by Nov 16, after obtaining all required regulatory approvals.

Terms of the Deal

The above-mentioned deal will involve the transfer of around one lakh deposit customers from Nationwide Bank to BofI Federal Bank. The bank will use its excess capital to fund the deposit premium which will be in proportion to the fair market value of deposits acquired. The deal will likely be accretive to the company's earnings and tangible book value.

After-Effects of the Deal

For Nationwide Bank, this deal is part of a series of steps to transfer all of its retail deposits to other financial institutions. The bank had earlier announced a plan to shift its focus and resources from retail banking to property, casualty, financial services and other emerging businesses.

Further, Axos Financial has prior experience of successfully undertaking similar transactions which will enable the company to make a smooth transition and expand its customer base. In addition, this deposit acquisition is anticipated to strengthen the company's balance-sheet position.

Conclusion

Axos Financial's inorganic growth activities highlight its capital strength and efforts to boost performance. Also, it has diversified revenue sources, which are likely to support the bank's financials. Additionally, the company will benefit from improving conditions in the domestic economy.

Axos Financial's shares have gained around 18.7% year to date against the industry 's decline of 11.7%.



The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Stocks
Referenced Symbols: TCBI , SEIC , LAZ



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