The Wall Street Transcript Interview With Gary Evans

BofI Holding, Inc., is the holding company for Bank of Internet USA, a consumer-focused, nationwide savings bank operating primarily over the Internet. Its mission is to lower the cost of banking. For retail consumers that means higher deposit rates and lower mortgage rates. The bank generates retail deposits in all 50 states and originates loans for customers directly through its websites, including www.bankofinternet.com, www.bofi.com and www.apartmentbank.com. It is a unitary savings and loan holding company and, along with Bank of Internet USA, is subject to primary federal regulation by the OTS. In June 2005 the bank re-located to new office space that allows growth for many years.

Bank of Internet USA started with a management team and board of directors that have extensive banking and business experience. The bank’s President and CEO, Gary Lewis Evans, has been a banker since 1971 and is considered an Internet banking pioneer. His history as an Internet banker goes back to the early days of the Internet: 1994.

BofI Holding, Inc. was incorporated in the State of Delaware on July 6, 1999 for the purpose of organizing and launching an Internet-based savings bank. The Bank of Internet USA (the "Bank") opened for business on the Internet July 4, 2000, and is subject to regulation and examination by the Office of Thrift Supervision ("OTS"), its primary regulator. The Federal Deposit Insurance Corporation ("FDIC") insures the Bank’s deposit accounts up to the maximum allowable amount of $100,000 per account.

The bank’s deposits are acquired exclusively over the Internet. Using online applications from the bank’s websites, customers apply for all deposit products, including time deposits, interest-bearing checking accounts and savings accounts. If there are questions, customers can call the bank’s toll free number for help. BofI USA specializes in originating and purchasing home loans and small- to medium-size multifamily mortgage loans.

The bank’s ability to increase assets is limited primarily by capital that it is required to maintain by regulation. The bank must maintain certain minimum ratios of capital to assets. To enable it to increase the rate at which the bank grows, it has raised capital in four separate private placements and an initial public offering in March 2005. Following each of these private placements and IPO, total assets were increased. Other than the constraints of these capital requirements, management and directors believe that the bank’s business model is highly scalable, allowing asset growth while maintaining a significantly slower growth rate of noninterest expenses and fixed assets.

As an example, on June 30, 2004, the bank had $405.0 million in assets, or $16.9 million in assets per full time equivalent employee. At June 30, 2005, it had $609 million in assets, or $24 million in assets per full time equivalent employee.