SAN DIEGO – Bank of Internet USA (BofI) announced its second quarter earnings of $525,000, up from $505,000 from the same quarter last year. Six-month earnings of $1,194,000 were an improvement on $1,172,000 for the same period last year. For the six months ended December 31, 2003, pre-tax earnings grew 14%. In six months, BofI assets expanded 16%, reaching $316.8 million at December 31, 2003. Net loans increased $34.2 million during the first six months of the fiscal year. Loans were funded by net growth in savings and checking accounts, totaling $47.8 million for the same six-month period.

• Assets of $316.8 million, up 25% from 2002 and up 16% since the end of the last fiscal year, June 30, 2003.
• Net loans of $283.8 million, up 40% from 2002 and up 14% since June 30, 2003.
• Deposits of $221.5 million, up 14% since June 30. 2003.
• Equity was 8.9% of total assets at December 31, 2003. In December 2003, the parent company of BofI contributed $5 million in equity.
• Capital ratios at December 31, 2003 exceeded federal regulatory requirements for classification as a "well-capitalized" institution, the highest regulatory standard.
• At December 31, 2003, B of I had $316 million in assets and 21 employees. BofI opened in July 2000 and reached profitability in 14 months with $180 million in assets and 20 employees.

"I am particularly proud of the BofI's growing efficiency", remarked Gary Lewis Evans, President & CEO. "Many banks were impacted by the nation-wide slow-down in mortgage originations and low interest rates, but our bank improved its operating results, year over year, by growing its net interest income and improving operating efficiency. By originating Internet-based loans and deposits, we leverage our operating costs and drive increased earnings from the relative cost savings, rather than increasing service fees paid by consumers."

Jerry Englert, BofI Chairman remarked, "We believe Internet self-service banking will likely be the dominant consumer choice in the near future." He added, "The trends in online banking adoption are analogous to the growth exhibited by online bookings found in the airline industry, where research shows that more than 50% of airline tickets are now purchased on-line. Just as consumers buy airline tickets online to save time and money, we feel more and more consumers will choose BofI for online banking when they realize our services save them time and money."

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.bankofinternet.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 (BofI) 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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