BofI Holding Up to Strong Buy on Robust Fiscal Q4 - Analyst Blog

On Sep 25, Zacks Investment Research upgraded BofI Holding, Inc. (BOFI) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

BofI Holding has been witnessing rising earnings estimates following the announcement of strong fiscal fourth-quarter 2014 results. Shares of this consumer and business banking products provider recorded a one-year return of 14.6%. Further, BofI Holding has outpaced the Zacks Consensus Estimate in three of the last four quarters, with an average beat of 6.56%.

Impressive net interest income and a strong capital position drove BofI Holding's fourth-quarter 2014 results reported on Aug 7. The company reported earnings per share of $1.09, beating the Zacks Consensus Estimate by 7.92% and marking the third consecutive earnings beat. Also, earnings came in higher than the prior-year quarter figure by 39.7%.

Asset quality continued to show improvement. Nonperforming assets as a percentage of total assets decreased 20 basis points from the prior-year quarter to 0.46%. Nonperforming loans as a percentage of total loans decreased 23 basis points from the prior-year quarter to 0.57%.

During Jul 2014, BofI Holding completed the at-the-market common stock offering (ATM) worth $50 million, which had commenced in Mar 2013, while it also initiated a second $50 million ATM. Such offerings increase capital strength of the company and aid in loan and deposit growth.

Analysts' bullish stance on the stock was reflected in the estimate revisions over the past 60 days. For 2014, the Zacks Consensus Estimate advanced around 1% to $5.42 per share. It moved up 6.6% to $5.97 per share for 2015.

Other Stocks to Consider

Some other stocks in the same sector worth considering include Sierra Bancorp (BSRR), Northrim Bancorp Inc. (NRIM) and Cathay General Bancorp (CATY). All three carry a Zacks Rank #1.