BOFI

I posted this on RBS BOFI board:

“Lots of metrics posted but I haven’t seen any comment on the 41% y-o-y increase in quarterly non-interest expenses.
That would be 45.6% increase in salaries, 9.9% data and internet, 118% advertising, 24.8% occupancy and 22% professional services.
That’s an increase of $6 million. O.k., average loan balance increased 52% so loans are increasing more than expenses, but quarterly pre tax income was $35.8 million so the $6 million increase is significant. Would like to see a bit larger spread between growth rate and expense increase rate.”

Actually, I increased my BOFI holdings by 7% after earnings came out. My last previous purchase was in March 2014 and the value point is much better now. I think the non-interest expense growth is worth watching though. After all, the ultra-lean staffing at BOFI is one of the rule-breaking features.

KC

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I think the non-interest expense growth is worth watching though. After all, the ultra-lean staffing at BOFI is one of the rule-breaking features.

Efficiency ratio.

Fletch
Long BOFI

Hello,

I shared your concern until I realized that BOFI is intelligently investing profits into new business initiatives. They are holding the efficiency ratio at near 35% while new business ventures are rolled out in a disciplined, measured manner. They do not chase growth without regard to cost or risk, but carefully and doggedly lay the foundation for the future while persistently exercising improvement in the current operation. They could probably take the efficiency ration down to 30% or even lower were it not for this sensible approach that bodes well for shareholders long into the future.

Best regards,

Mike

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