Bank of Internet Records New High In Profits; Annual Pre-tax Income Jumps 176%

SAN DIEGO, CA - Bank of Internet USA (BofI) announced record earnings of $2,265,000 for its fiscal year ended June 30, 2003, up 60% from the $1,416,000 earned in fiscal 2002. On a pre-tax basis, earnings improved 176%, from $1,200,000 for 2002 to $3,314,000 for 2003.

Increased earnings were primarily due to growth in the Bank's residential real estate loan portfolio and higher income from mortgage banking activities. Net interest income improved by 43% and non-interest income increased 354% during fiscal 2003.

Pre-tax earnings for the fourth quarter ended June 30, 2003 were $801,000 up $239,000 or 43% from the same period last year. Growth in the Bank's residential real estate loan portfolio and increased income from mortgage banking activities accounted for the better earnings. The quarter ended June 30, 2003 is the eighth consecutive quarter of profits for the Bank, which opened in July 2000 and reached profitability in just 14 months.

Jerry Englert, Chairman of the Bank, said, "While we are very proud of the bank's performance to date, we feel the opportunities are much greater in the future. We have one of the lowest cost banking operations in the industry and require only about 200 basis points in interest rate spread to be profitable. And we have just started our efficiencies. As we grow, the profitability should get better."

Gary Lewis Evans, the President, added, "We are pleased with our growth in mortgage banking this year and are most proud of the growth in our real estate loan portfolio. We've achieved increased net interest income during a period of squeezing interest rate spreads and record real estate loan payoffs. We have maintained an extremely high credit quality in the loan portfolio based upon minimal delinquencies and no charge offs throughout our history. We are growing and our focus is always maintaining our low-cost structure."

• Assets of $273.2 million, up 26% from the $217.4 million in assets at the end of the last fiscal year, June 30, 2002.
• Net loans of $249.5 million, up 49% from the $167.4 million in loans at June 30, 2002. No non-performing loans during the quarter or the year.
• Deposits of $194.5 million, up 16% from the $168.1 million in deposits at June 30. 2002.
• Equity increased from $18.8 million at June 30, 2002 to $22.1 million or 8.1% of total assets at June 30, 2003.
• Capital ratios at June 30, 2003 exceeded federal regulatory requirements for classification as a "well-capitalized" institution, the highest regulatory standard.

Gary Lewis Evans said in conclusion, "The bank's growth in loans and deposits originated nationwide demonstrates that delivery of self -service banking products over the Internet is profitable, safe and economical for consumers."

About Bank of Internet USA

The Bank of Internet USA offers a comprehensive line of consumer banking and mortgage lending products delivered nationwide through the Internet at www.BofI.com. and www.ApartmentBank.com. Customers enjoy free interest-bearing checking accounts with online paid check copies, bill payment, account statements, ATM or Visa® Check Card and ATM Fee reimbursement anywhere in the world.

Bank of Internet USA is a federally chartered savings bank and is wholly-owned by BofI Holding, Inc., a privately-held savings and loan holding company.

Safe Harbor statement under the Private Securities Litigation Reform Act of 1995: This release contains forward looking statements that are subject to risks and uncertainties, including, but not limited to, the economic impact of international events such as war and terrorist attacks, changes in economic conditions in the Company's market areas, changes in policies by regulatory agencies, the impact of competitive loan products, loan demand risks, the quality or composition of the loan or investment portfolios, including levels of non-performing assets, fluctuations in interest rates, and changes in the relative differences between short and long term interest rates, and operating results and other risks attendant to the banking business. The Company cautions readers not to place undue reliance on any forward-looking statements. The Company does not undertake and specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These risks could cause the Company's actual results for 2003 and beyond to differ materially from those expressed in any forward looking statements by, or on behalf of, the Company.

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