Axos Financial (AX) 8-K B of I Holding, Inc. Announces Record Net Income for Fourth Quarter of Fiscal 2008

Exhibit 99.2

BofI HOLDING, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(Unaudited, dollars in thousands)

	June 30,
	2008			2007
ASSETS
Cash and due from banks	$	4,214		$	1,233
Federal funds sold		12,050			38,475
Total cash and cash equivalents		16,264			39,708
Time deposits in financial institutions		1,980			12,082
Investment securities available for sale		209,119			296,068
Investment securities held to maturity		300,895			61,902
Stock of the Federal Home Loan Bank, at cost		19,395			12,659
Loans —net of allowance for loan losses of $2,710 in 2008; $1,450 in 2007		631,413			507,906
Accrued interest receivable		5,740			6,013
Furniture, equipment and software—net		391			242
Deferred income tax		918			431
Bank-owned life insurance—cash surrender value		4,547			4,364
Other assets		3,583			5,788
TOTAL	$	1,194,245		$	947,163
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Non-interest bearing	$	5,509		$	993
Interest bearing		565,195			546,956
Total deposits		570,704			547,949
Securities sold under agreements to repurchase		130,000			90,000
Advances from the Federal Home Loan Bank		398,966			227,292
Junior subordinated debentures		5,155			5,155
Accrued interest payable		2,366			2,712
Accounts payable and accrued liabilities		3,972			1,305
Total liabilities		1,111,163			874,413
STOCKHOLDERS’ EQUITY:
Preferred stock—1,000,000 shares authorized;
Series A—$10,000 stated value; 515 (2008) and 515 (2007) shares issued and outstanding		5,063			5,063
Series B—$1,000 stated value; 3,750 (2008) and none (2007) shares issued and outstanding		3,750			—
Common stock—$0.01 par value; 25,000,000 shares authorized;
8,627,840 shares issued and 8,299,563 shares outstanding (2008);
8,587,090 shares issued and 8,267,590 shares outstanding (2007);		86			86
Additional paid-in capital		60,684			59,803
Accumulated other comprehensive income/(loss) —net of tax		1,017			(865	)
Retained earnings		14,975			11,091
Treasury stock		(2,493	)		(2,428	)
Total stockholders’ equity		83,082			72,750
TOTAL	$	1,194,245		$	947,163

BofI HOLDING, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited, dollars in thousands, except earnings per share)

	Three Months Ended June 30,					Year Ended Ended June 30,
	2008			2007		2008		2007
INTEREST AND DIVIDEND INCOME:
Loans, including fees	$	9,719		$	7,519	$	33,499	$	29,370
Investments		8,815			5,031		29,802		15,216
Total interest and dividend income		18,534			12,550		63,301		44,586
INTEREST EXPENSE:
Deposits		6,675			5,960		28,358		21,567
Advances from the Federal Home Loan Bank		3,429			2,615		11,417		10,406
Other borrowings		1,463			936		5,506		1,765
Total interest expense		11,567			9,511		45,281		33,738
Net interest income		6,967			3,039		18,020		10,848
Provision (benefit) for loan losses		1,122			80		2,226		(25	)
Net interest income, after provision for loan losses		5,845			2,959		15,794		10,873
NON-INTEREST INCOME:
Prepayment penalty fee income		57			115		287		399
Mortgage banking income		—			87		2		93
Gain (loss) on available for sale securities		(596	)		—		711		403
Banking service fees and other income		114			7		379		285
Total non-interest income		(425	)		209		1,379		1,180
NON-INTEREST EXPENSE:
Salaries, employee benefits and stock-based compensation		1,388			758		5,426		2,993
Professional services		189			80		654		537
Occupancy and equipment		95			94		373		363
Data processing and internet		179			141		656		586
Advertising and promotional		45			202		750		584
Depreciation and amortization		40			23		132		88
Other general and administrative		528			358		2,171		1,299
Total non-interest expense		2,464			1,656		10,162		6,450
INCOME BEFORE INCOME TAXES		2,956			1,512		7,011		5,603
INCOME TAXES		1,176			608		2,815		2,284
NET INCOME	$	1,780		$	904	$	4,196	$	3,319
NET INCOME ATTRIBUTABLE TO COMMON STOCK	$	1,700		$	827	$	3,884	$	3,007
Basic earnings per share	$	0.21		$	0.10	$	0.47	$	0.36
Diluted earnings per share	$	0.20		$	0.10	$	0.46	$	0.36

BofI HOLDING, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME

(Unaudited, dollars in thousands)

																Accumulated Other Comprehensive Income (Loss), Net of Tax			Treasury Stock			Total
	Convertible Preferred Stock			Common Stock						Additional Paid in Capital			Retained Earnings
				Number of Shares
	Shares	Amount		Issued	Treasury		Outstanding	Amount
BALANCE — July 1, 2007	515	$	5,063	8,587,090	(319,500	)	8,267,590	$	86	$	59,803		$	11,091		$	(865	)	$	(2,428	)	$	72,750
Comprehensive income:
Net income	—		—	—	—		—		—		—			4,196			—			—			4,196
Net unrealized gain from available for sale securities — net of income tax benefit and reclassifications	—		—	—	—		—		—		—			—			1,882			—			1,882
Total comprehensive income																						$	6,078
Cash dividends on convertible preferred stock	—		—	—	—		—		—		—			(312	)		—			—			(312	)
Preferred stock “B” issued	3,750		3,750	—	—		—		—		—			—			—			—			3,750
Restricted stock Units isssued	—		—	20,750	(8,777	)	11,973		—		—			—			—			(65	)		(65	)
Stock-based compensation expense	—		—	—	—		—		—		776			—			—			—			776
Stock options exercises	—		—	20,000	—		20,000		—		91			—			—			—			91
Tax effect of stock options exercised	—		—	—	—		—		—		25			—			—			—			25
Tax effect of stock options cancelled	—		—	—	—		—		—		(11	)		—			—			—			(11	)
BALANCE — June 30, 2008	4,265	$	8,813	8,627,840	(328,277	)	8,299,563	$	86	$	60,684		$	14,975		$	1,017		$	(2,493	)	$	83,082

BofI HOLDING, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, dollars in thousands)

	Year Ended June 30,
	2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	4,196		$	3,319
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Amortization (accretion) of premiums (discounts) on securities		(1,845	)		427
Amortization of premiums and deferred loan fees		1,942			1,587
Amortization of borrowing costs		74			115
Stock-based compensation expense		776			491
Gain on sale of available for sale securities		(1,711	)		(403	)
Unrealized loss on available for sale securities		1,000			—
Provision (benefit) for loan losses		2,226			(25	)
Deferred income taxes		(1,741	)		418
Origination of loans held for sale		(516	)		(7,579	)
Gain on sales of loans held for sale		(2	)		(30	)
Proceeds from sale of loans held for sale		518			7,609
Depreciation and amortization		132			88
Stock dividends from the Federal Home Loan Bank		(697	)		(624	)
(Gain) loss on disposal of fixed assets		—			—
Net changes in assets and liabilities which provide (use) cash:
Accrued interest receivable		273			(2,586	)
Other assets		2,506			(2,945	)
Accrued interest payable		(346	)		1,557
Accounts payable and accrued liabilities		2,587			407
Net cash provided by operating activities		9,372			1,826
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of mortgage-backed securities available for sale		(210,032	)		(303,384	)
Purchases of held to maturity investments and time deposits		(286,319	)		(75,027	)
Proceeds from sale of mortgage-backed securities		212,329			74,746
Proceeds from repayment of available for sale securities		87,635			59,843
Repayments of investments held to maturity and time deposits		60,141			29,857
Purchase of stock of the Federal Home Loan Bank		(6,258	)		(924	)
Proceeds from redemption of stock of Federal Home Loan Bank		219			—
Origination of loans		(64,888	)		(67,449	)
Purchases of loans, net of discounts and premiums		(201,010	)		(44,976	)
Principal repayments on loans		137,739			136,598
Purchases of furniture, equipment and software		(281	)		(108	)
Net cash used in investing activities		(270,725	)		(190,824	)

BofI HOLDING, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, dollars in thousands)

	Year Ended June 30,
	2008			2007
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits	$	22,755		$	123,745
Proceeds from the Federal Home Loan Bank advances		257,000			38,000
Repayment of the Federal Home Loan Bank advance		(85,400	)		(47,000	)
Proceeds from reverse repurchases		40,000			90,000
Purchase of treasury stock		—			(1,103	)
Proceeds from exercise of common stock options		91			6
Proceeds from issuance of convertible preferred stock — Series B		3,750			—
Tax benefit from exercise of common stock options		25			82
Cash dividends on convertible preferred stock		(312	)		(312	)
Net cash provided by financing activities		237,909			203,418
NET CHANGE IN CASH AND CASH EQUIVALENTS		(23,444	)		14,420
CASH AND CASH EQUIVALENTS—Beginning of year		39,708			25,288
CASH AND CASH EQUIVALENTS—End of year	$	16,264		$	39,708
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid on deposits and borrowed funds	$	45,552		$	32,066
Income taxes paid	$	2,675		$	1,710

LOANS

The following table sets forth the composition of the portfolio of loans held for investment at June 30:

	2008					2007
	Amount			Percent		Amount			Percent
	(Unaudited, dollars in thousands)
Mortgage loans on real estate:
Residential single family (one to four units)	$	165,473		26.2	%	$	104,960		20.8	%
Home equity		41,977		6.6	%		18,815		3.8	%
Residential multifamily (five units or more)		330,778		52.2	%		325,880		64.6	%
Commercial and land		33,731		5.3	%		11,256		2.2	%
Consumer - Recreational vehicle		56,968		9.0	%		42,327		8.4	%
Other		4,439		0.7	%		981		0.2	%
Total		633,366		100	%		504,219		100	%
Allowance for loan losses		(2,710	)				(1,450	)
Unamortized premiums—net of deferred loan fees		757					5,137
	$	631,413				$	507,906

DEPOSITS

Deposit accounts are summarized as follows at June 30:

	2008				2007
	Amount		Rate*		Amount		Rate*
	(Unaudited, dollars in thousands)
Non-interest bearing	$	5,509	0.00	%	$	993	0.00	%
Interest bearing:
Demand		61,616	3.22	%		48,575	3.52	%
Savings		56,202	3.38	%		22,840	3.75	%
Time deposits:
Under $100		268,747	4.84	%		298,767	5.06	%
$100 or more		178,630	4.91	%		176,774	5.09	%
Total time deposits		447,377	4.87	%		475,541	5.07	%
Total interest bearing		565,195	4.54	%		546,956	4.88	%
Total deposits	$	570,704	4.50	%	$	547,949	4.87	%

* Based on weighted-average stated interest rates at period end.

The following table sets forth the number of deposit accounts by type at the date indicated:

	June 30, 2008		June 30, 2007		June 30, 2006
Checking and savings accounts		9,415		8,315		8,195
Time deposits		15,490		17,502		14,303
Total number of deposit accounts		24,905		25,817		22,498

Average Balances, Net Interest Income, Yields Earned and Rates Paid

The following tables presents information regarding (i) average balances; (ii) the total amount of interest income from interest-earning assets and the weighted average yields on such assets; (iii) the total amount of interest expense on interest-bearing liabilities and the weighted average rates paid on such liabilities; (iv) net interest income; (v) interest rate spread; and (vi) net interest margin for the three months and twelve months ended June 30, 2008 and 2007:

	For the Three Months Ended June 30,
	2008						2007
	Average Balance		Interest Income / Expense		Rates Earned / Paid 1		Average Balance		Interest Income / Expense		Rates Earned / Paid 1
	(Unaudited, dollars in thousands)
Assets
Loans2,3	$	625,144	$	9,719	6.22	%	$	503,074	$	7,519	5.98	%
Federal funds sold		3,396		16	1.88	%		8,185		106	5.18	%
Interest-bearing deposits in other financial institutions		2,975		38	5.11	%		12,958		193	5.96	%
Investment securities3,4		500,323		8,493	6.79	%		336,866		4,592	5.45	%
Stock of FHLB, at cost		17,854		268	6.00	%		12,615		140	5.44	%
Total interest-earning assets		1,149,692		18,534	6.45	%		873,698		12,550	5.75	%
Non-interest earning assets		15,329						13,764
Total assets	$	1,165,021					$	887,462
Liabilities and Stockholders’ Equity
Interest-bearing demand and savings	$	107,017	$	860	3.21	%	$	57,399	$	511	3.56	%
Time deposits		473,594		5,815	4.91	%		434,477		5,449	5.02	%
Securities sold under agreements to repurchase		129,916		1,391	4.28	%		75,293		834	4.43	%
Advances from FHLB		363,218		3,429	3.78	%		236,838		2,615	4.42	%
Other borrowings		5,155		72	5.59	%		5,155		102	7.99	%
Total interest-bearing liabilities		1,078,900		11,567	4.29	%		809,162		9,511	4.70	%
Noninterest-bearing demand deposits		899						1,041
Other interest-free liabilities		6,050						3,938
Stockholders’ equity		79,172						73,321
Total liabilities and stockholders’ equity	$	1,165,021					$	887,462
Net interest income			$	6,967					$	3,039
Net interest spread5					2.16	%					1.05	%
Net interest margin6					2.42	%					1.39	%

¹ Annualized

² Loans include loans held for sale, loan premiums and unearned fees.

³ Interest income includes reductions for amortization of loan and investment securities premiums and earnings from accretion of discounts and loan fees. Loan fee income is not significant. The rate earned on loans does not include loan prepayment penalty income, which is classified as non-interest income.

⁴ All investments are taxable.

⁵ Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate paid on interest-bearing liabilities.

⁶ Net interest margin represents net interest income annualized as a percentage of average interest-earning assets.

	For the Year Ended June 30,
	2008						2007
	Average Balance		Interest Income / Expense		Rates Earned / Paid1		Average Balance		Interest Income / Expense		Rates Earned / Paid1
	(Unaudited, dollars in thousands)
Assets
Loans2,3	$	550,307	$	33,499	6.09	%	$	512,599	$	29,370	5.73	%
Federal funds sold		23,147		1,013	4.38	%		11,755		614	5.22	%
Interest-bearing deposits in other financial institutions		7,821		457	5.84	%		14,333		791	5.52	%
Investment securities3,4		451,846		27,524	6.09	%		249,128		13,164	5.28	%
Stock of FHLB, at cost		14,205		808	5.69	%		12,084		647	5.35	%
Total interest-earning assets		1,047,326		63,301	6.04	%		799,899		44,586	5.57	%
Non-interest earning assets		14,681						11,738
Total assets	$	1,062,007					$	811,637
Liabilities and Stockholders’ Equity
Interest-bearing demand and savings	$	76,028	$	2,726	3.59	%	$	60,007	$	2,025	3.37	%
Time deposits		506,761		25,632	5.06	%		399,855		19,542	4.89	%
Securities sold under agreements to repurchase		118,497		5,137	4.34	%		30,648		1,352	4.41	%
Advances from FHLB		270,022		11,417	4.23	%		239,742		10,406	4.34	%
Other borrowings		5,155		369	7.16	%		5,155		413	8.01	%
Total interest-bearing liabilities		976,463		45,281	4.64	%		735,407		33,738	4.59	%
Noninterest-bearing demand deposits		3,144						1,052
Other interest-free liabilities		5,553						3,219
Stockholders’ equity		76,847						71,959
Total liabilities and stockholders’ equity	$	1,062,007					$	811,637
Net interest income			$	18,020					$	10,848
Net interest spread5					1.40	%					0.98	%
Net interest margin6					1.72	%					1.36	%

¹ Annualized

² Loans include loans held for sale, loan premiums and unearned fees.

³ Interest income includes reductions for amortization of loan and investment securities premiums and earnings from accretion of discounts and loan fees. Loan fee income is not significant. The rate earned on loans does not include loan prepayment penalty income, which is classified as non-interest income.

⁴ All investments are taxable.

⁵ Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate paid on interest-bearing liabilities.

⁶ Net interest margin represents net interest income as a percentage of average interest-earning assets.