Axos Financial (AX) 8-K BofI Holding, Inc. Announces Record Net Income of $21.1 Million for Fiscal 2010

Exhibit 99.2

BofI HOLDING, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share data)

	June 30,
UNAUDITED	2010			2009
ASSETS
Cash and due from banks	$	5,834		$	3,441
Federal funds sold		12,371			4,965
Total cash and cash equivalents		18,205			8,406
Securities:
Trading		4,402			5,445
Available for sale		242,430			265,807
Held to maturity		320,807			350,898
Stock of the Federal Home Loan Bank, at cost		18,148			18,848
Loans held for sale		5,511			3,190
Loans - net of allowance for loan losses of
$5,893 in 2010; $4,754 in 2009		774,899			615,463
Accrued interest receivable		5,040			5,868
Furniture, equipment and software - net		621			436
Deferred income tax		6,153			3,214
Cash surrender value of life insurance		4,911			4,730
Other real estate owned and repossessed vehicles		2,701			5,651
Other assets		17,253			14,252
TOTAL	$	1,421,081		$	1,302,208
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Non-interest bearing	$	5,441		$	3,509
Interest bearing		962,739			645,015
Total deposits		968,180			648,524
Securities sold under agreements to repurchase		130,000			130,000
Advances from the Federal Home Loan Bank		182,999			262,984
Federal Reserve Discount Window and other borrowings		5,155			165,155
Accrued interest payable		1,979			2,108
Accounts payable and accrued liabilities		2,960			4,498
Total liabilities		1,291,273			1,213,269
STOCKHOLDERS’ EQUITY:
Preferred stock - 1,000,000 shares authorized;
Series A - $10,000 stated value; 515 (2010) and 515 (2009) shares issued and outstanding		5,063			5,063
Series B - $1,000 stated value; 4,790 (2009) shares issued and outstanding		—			4,767
Common stock - $0.01 par value; 25,000,000 shares authorized; 10,827,673 shares issued and 10,184,975 shares outstanding (2010); 8,706,075 shares issued and 8,082,768 shares outstanding (2009);		108			87
Additional paid-in capital		84,605			61,320
Accumulated other comprehensive income - net of tax		4,043			1,926
Retained earnings		39,882			19,365
Treasury stock		(3,893	)		(3,589	)
Total stockholders’ equity		129,808			88,939
TOTAL	$	1,421,081		$	1,302,208

BofI HOLDING, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except earnings per share)

	Three Months Ended June 30,						Year Ended June 30,
UNAUDITED	2010			2009			2010			2009
INTEREST AND DIVIDEND INCOME:
Loans, including fees	$	11,849		$	10,641		$	43,697		$	41,782
Investments		8,873			9,912			41,875			35,996
Total interest and dividend income		20,722			20,553			85,572			77,778
INTEREST EXPENSE:
Deposits		5,094			5,337			21,254			23,983
Advances from the Federal Home Loan Bank		1,692			2,358			7,725			11,385
Other borrowings		1,467			1,555			5,974			6,051
Total interest expense		8,253			9,250			34,953			41,419
Net interest income		12,469			11,303			50,619			36,359
Provision for loan losses		925			1,900			5,775			4,730
Net interest income, after provision for loan losses		11,544			9,403			44,844			31,629
NON-INTEREST INCOME:
Realized gain (loss) on securities:
Sale of FNMA preferred stock		—			—			—			(7,902	)
Sale of mortgage-backed securities		544			2,810			13,037			2,816
Total realized gain (loss) on securities		544			2,810			13,037			(5,086	)
Unrealized loss on securities:
Total impairment losses		(108	)		(13,831	)		(6,910	)		(13,831	)
Loss recognized in other comprehensive loss		43			12,377			872			12,377
Net impairment loss recognized in earnings		(65	)		(1,454	)		(6,038	)		(1,454	)
Fair value loss on trading securities		(14	)		(1,360	)		(1,039	)		(2,055	)
Total unrealized loss on securities		(79	)		(2,814	)		(7,077	)		(3,509	)
Prepayment penalty fee income		36			14			122			64
Mortgage banking income		246			798			1,694			1,381
Banking service fees and other income		152			115			540			463
Total non-interest income (loss)		899			923			8,316			(6,687	)
NON-INTEREST EXPENSE:
Salaries, employee benefits and stock-based compensation		2,327			1,603			7,371			5,579
Professional services		303			439			1,519			1,419
Occupancy and equipment		121			117			419			442
Data processing and internet		252			216			891			796
Advertising and promotional		150			106			444			560
Depreciation and amortization		65			46			235			171
Real estate owned and repossessed vehicles		640			232			2,661			667
FDIC and OTS regulatory fees		341			1,025			1,562			1,658
Other general and administrative		610			435			2,181			1,602
Total non-interest expense		4,809			4,219			17,283			12,894
INCOME BEFORE INCOME TAXES		7,634			6,107			35,877			12,048
INCOME TAXES		2,937			2,503			14,749			4,906
NET INCOME	$	4,697		$	3,604		$	21,128		$	7,142
NET INCOME ATTRIBUTABLE TO COMMON STOCK	$	4,605		$	3,431		$	20,517		$	6,452
Basic earnings per share	$	0.45		$	0.42		$	2.31		$	0.78
Diluted earnings per share	$	0.44		$	0.40		$	2.22		$	0.77

BofI HOLDING, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME

(Dollars in thousands)

	Convertible Preferred Stock					Common Stock
						Number of Shares
UNAUDITED	Shares		Amount			Issued	Treasury		Outstanding	Amount		Additional Paid-in  Capital		Retained Earnings			Accumulated  Other Comprehensive Income (Loss), Net of Income Tax		Treasury Stock			Comprehensive Income		Total
BALANCE—June 30, 2009	5,305		$	9,830		8,706,075	(623,307	)	8,082,768	$	87	$	61,320	$	19,365		$	1,926	$	(3,589	)			$	88,939
Comprehensive income:
Net income	—			—		—	—		—		—		—		21,128			—		—		$	21,128		21,128
Net unrealized gain from investment securities—net of income tax expense	—			—		—	—		—		—		—		—			2,117		—			2,117		2,117
Total comprehensive income	—			—		—	—		—		—		—		—			—		—		$	23,245
Cash dividends on preferred stock	—			—		—	—		—		—		—		(611	)		—		—					(611	)
Issuance of common stock	—			—		1,226,276	—		1,226,276		13		15,082		—			—		—					15,095
Convert preferred stock to common stock	(4,790	)		(4,767	)	531,690	—		531,690		5		4,762		—			—		—					—
Stock-based compensation expense	—			—		—	—		—		—		866		—			—		—					866
Restricted stock grants	—			—		56,575	(17,328	)	39,247		—		279		—			—		(289	)				(10	)
Stock option exercises and tax benefits of equity compensation	—			—		307,057	(2,063	)	304,994		3		2,296		—			—		(15	)				2,284
BALANCE—June 30, 2010	515		$	5,063		10,827,673	(642,698	)	10,184,975	$	108	$	84,605	$	39,882		$	4,043	$	(3,893	)			$	129,808

BofI HOLDING, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

	Year Ended June 30,
UNAUDITED	2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	21,128		$	7,142
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Accretion of discounts on securities		(24,059	)		(13,741	)
Accretion of discounts on deferred loan fees		(3,840	)		(1,906	)
Amortization of borrowing costs		15			18
Stock-based compensation expense		866			651
Net (gain) loss on sale of investment securities		(13,037	)		5,102
Valuation of financial instruments carried at fair value		1,039			2,055
Impairment charge on securities held to maturity		6,038			1,454
Provision for loan losses		5,775			4,730
Deferred income taxes		(4,166	)		(1,459	)
Origination of loans held for sale		(116,412	)		(83,741	)
Gain on sales of loans held for sale		(1,694	)		(1,381	)
Proceeds from sale of loans held for sale		115,785			81,932
Depreciation and amortization		235			171
Stock dividends from the Federal Home Loan Bank		—			(464	)
Net changes in assets and liabilities which provide (use) cash:
Accrued interest receivable		828			(128	)
Other assets		5,123			(7,541	)
Accrued interest payable		(129	)		(258	)
Accounts payable and accrued liabilities		(8,588	)		(2,782	)
Net cash used in operating activities		(15,093	)		(10,146	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investment securities		(223,004	)		(310,559	)
Proceeds from sales of mortgage-backed securities		27,118			90,195
Proceeds from repayment of securities		283,760			113,346
Purchase of stock of the Federal Home Loan Bank		—			(2,068	)
Proceeds from redemption of stock of the Federal Home Loan Bank		700			3,079
Origination of loans		(74,702	)		(33,170	)
Proceeds from sales of repossessed assets		6,650			3,124
Purchases of loans, net of discounts and premiums		(185,812	)		(57,410	)
Principal repayments on loans		93,788			94,744
Purchases of furniture, equipment and software		(420	)		(216	)
Net cash used in investing activities		(71,922	)		(98,935	)

(Continued)

BofI HOLDING, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

	Year Ended June 30,
UNAUDITED	2010			2009
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits	$	319,656		$	77,820
Proceeds from the Federal Home Loan Bank advances		161,000			113,000
Repayment of the Federal Home Loan Bank advances		(241,000	)		(249,000	)
Proceeds from borrowing at the Fed Discount Window		125,000			205,000
Repayment of borrowing at the Fed Discount Window		(285,000	)		(45,000	)
Purchase of treasury stock		—			(1,006	)
Proceeds from exercise of common stock options		1,822			1
Proceeds from issuance of convertible preferred stock - Series B		—			1,017
Proceeds from issuance of common stock		15,095			—
Tax benefit from exercise of common stock options		756			(15	)
Cash dividends on preferred stock		(515	)		(594	)
Net cash provided by financing activities		96,814			101,223
NET CHANGE IN CASH AND CASH EQUIVALENTS		9,799			(7,858	)
CASH AND CASH EQUIVALENTS—Beginning of year		8,406			16,264
CASH AND CASH EQUIVALENTS—End of year	$	18,205		$	8,406
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid on deposits and borrowed funds	$	35,066		$	41,660
Income taxes paid	$	20,174		$	6,737
Transfers to other real estate	$	5,467		$	8,962
Adoption of fair value: securities transferred from HTM to trading	$	—		$	11,055
Securities transferred from held-to-maturity to available for sale portfolio	$	1,245		$	—
Preferred stock dividends declared but not paid	$	—		$	96

LOANS

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

	At June 30,
UNAUDITED	2010					2009
	(Dollars in thousands)
	Amount			Percent		Amount			Percent
Residential real estate loans:
Single Family (one to four units)	$	259,790		32.9	%	$	165,405		26.3	%
Home equity		22,575		2.9	%		32,345		5.1	%
Multifamily (five units or more)		370,469		46.9	%		326,938		52.0	%
Commercial real estate and land loans		33,553		4.3	%		30,002		4.8	%
Consumer – Recreational vehicle		39,842		5.0	%		50,056		8.0	%
Other		62,875		8.0	%		23,872		3.8	%
Total loans held for investment		789,104		100.0	%		628,618		100.0	%
Allowance for loan losses		(5,893	)				(4,754	)
Unamortized discounts and deferred loan fees		(8,312	)				(8,401	)
Net loans held for investment	$	774,899				$	615,463

INVESTMENT SECURITIES

The amortized cost, carrying amount and fair value for the major categories of investment securities trading, available for sale, and held to maturity were:

	Trading		Available for sale									Held to maturity
	Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Carrying Amount		Unrecognized Gains		Unrecognized Losses			Fair Value
UNAUDITED	June 30, 2010
	Dollars in thousands
Mortgage-backed securities (RMBS) :
U.S. agencies1	$	—	$	56,933	$	1,346	$	—		$	58,279	$	35,317	$	528	$	(229	)	$	35,616
Non-agency2		—		109,659		13,527		—			123,186		285,490		16,222		(10,461	)		291,251
Total mortgage-backed securities		—		166,592		14,873		—			181,465		320,807		16,750		(10,690	)		326,867
Other debt securities:
U.S. agencies1		—		60,966		2		(3	)		60,965		—		—		—			—
Non-agency		4,402		—		—		—			—		—		—		—			—
Total other debt securities		4,402		60,966		2		(3	)		60,965		—		—		—			—
Total debt securities	$	4,402	$	227,558	$	14,875	$	(3	)	$	242,430	$	320,807	$	16,750	$	(10,690	)	$	326,867
	June 30, 2009
	Dollars in thousands
Mortgage-backed securities (RMBS) :
U.S. agencies1	$	—	$	79,579	$	1,471	$	(3	)	$	81,047	$	18,928	$	538	$	(5	)	$	19,461
Non-agency2		—		111,620		14,139		—			125,759		331,970		18,248		(25,067	)		325,151
Total mortgage-backed securities		—		191,199		15,610		(3	)		206,806		350,898		18,786		(25,072	)		344,612
Other debt securities:
U.S. agencies1		—		59,018		—		(17	)		59,001		—		—		—			—
Non-agency		5,445		—		—		—			—		—		—		—			—
Total other debt securities		5,445		59,018		—		(17	)		59,001		—		—		—			—
Total debt securities	$	5,445	$	250,217	$	15,610	$	(20	)	$	265,807	$	350,898	$	18,786	$	(25,072	)	$	344,612

¹ U.S. government-backed or government sponsored enterprises including Fannie Mae, Freddie Mac and Ginnie Mae.

² Private sponsors of securities collateralized primarily by pools of 1-4 family residential first mortgages. Primarily supersenior securities secured by prime, Alt-A or pay-option ARM mortgages.

DEPOSITS

Deposit accounts are summarized as follows:

	2010				2009
UNAUDITED	Amount		Rate*		Amount		Rate*
Non-interest bearing	$	5,441	0.00	%	$	3,509	0.00	%
Interest bearing:
Demand		58,542	0.82	%		59,151	1.22	%
Savings		363,713	0.91	%		192,781	1.94	%
Time deposits:
Under $100		200,859	3.23	%		191,021	4.39	%
$100 or more		339,625	2.95	%		202,062	3.85	%
Total time deposits		540,484	3.05	%		393,083	4.11	%
Total interest bearing		962,739	2.11	%		645,015	3.20	%
Total deposits	$	968,180	2.10	%	$	648,524	3.18	%

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

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

	At June 30,
	2010	2009	2008
Checking and savings accounts	17,192	10,685	9,415
Time deposits	10,554	12,757	15,490
Total number of deposit accounts	27,746	23,442	24,905

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, 2010 and 2009:

	For the Three Months Ended June 30,
	2010						2009
UNAUDITED	(Dollars in thousands)
	Average Balance2		Interest Income / Expense		Average Yields Earned / Rates  Paid1		Average Balance2		Interest Income / Expense		Average Yields Earned / Rates  Paid1
Assets:
Loans3,4	$	744,457	$	11,849	6.37	%	$	630,134	$	10,641	6.75	%
Federal funds sold		30,135		9	0.12	%		4,470		2	0.18	%
Interest-earning deposits in other financial institutions		109		—	0.00	%		127		—	0.00	%
Mortgage-backed and other investment securities5		581,401		8,852	6.09	%		594,532		9,910	6.67	%
Stock of the FHLB, at cost		18,480		12	0.26	%		18,850		—	0.00	%
Total interest-earning assets		1,374,582		20,722	6.03	%		1,248,113		20,553	6.59	%
Noninterest-earning assets		37,691						31,518
Total assets	$	1,412,273					$	1,279,631
Liabilities and Stockholders’ Equity:
Interest-bearing demand and savings	$	510,953	$	1,349	1.06	%	$	243,750	$	1,059	1.74	%
Time deposits		459,806		3,745	3.26	%		410,640		4,278	4.17	%
Securities sold under agreements to repurchase		130,000		1,430	4.40	%		130,000		1,421	4.37	%
Advances from the FHLB		167,641		1,692	4.04	%		260,841		2,358	3.62	%
Other borrowings		5,297		37	2.79	%		136,562		134	0.39	%
Total interest-bearing liabilities		1,273,697		8,253	2.59	%		1,181,793		9,250	3.13	%
Noninterest-bearing demand deposits		7,189						4,416
Other noninterest-bearing liabilities		6,068						5,258
Stockholders’ equity		125,319						88,164
Total liabilities and stockholders’ equity	$	1,412,273					$	1,279,631
Net interest income			$	12,469					$	11,303
Interest rate spread6					3.44	%					3.46	%
Net interest margin7					3.63	%					3.62	%

¹ Annualized

² Average balances are obtained from daily data.

³ Loans include loans held for sale, loan premiums and unearned fees.

⁴ 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.

⁵ All investments are taxable.

⁶ 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.

⁷ Net interest margin represents net interest income as a percentage of average interest-earning assets.

	For the Twelve Months Ended June 30,
	2010						2009
UNAUDITED	(Dollars in thousands)
	Average Balance1		Interest Income / Expense		Average Yields Earned / Rates  Paid		Average Balance1		Interest Income / Expense		Average Yields Earned / Rates  Paid
Assets:
Loans2,3	$	670,013	$	43,697	6.52	%	$	635,780	$	41,782	6.57	%
Federal funds sold		23,529		31	0.13	%		4,008		34	0.85	%
Interest-earning deposits in other financial institutions		232		—	0.00	%		442		15	3.39	%
Mortgage-backed and other investment securities4		609,697		41,780	6.85	%		535,918		35,753	6.67	%
Stock of the FHLB, at cost		18,756		64	0.34	%		19,036		194	1.02	%
Total interest-earning assets		1,322,227		85,572	6.47	%		1,195,184		77,778	6.51	%
Noninterest-earning assets		30,133						24,930
Total assets	$	1,352,360					$	1,220,114
Liabilities and Stockholders’ Equity:
Interest-bearing demand and savings	$	447,305	$	6,374	1.42	%	$	186,309	$	4,583	2.46	%
Time deposits		413,999		14,880	3.59	%		433,410		19,400	4.48	%
Securities sold under agreements to repurchase		130,000		5,726	4.40	%		130,000		5,677	4.37	%
Advances from the FHLB		199,288		7,725	3.88	%		333,327		11,385	3.42	%
Other borrowings		44,141		248	0.56	%		43,679		374	0.86	%
Total interest-bearing liabilities		1,234,733		34,953	2.83	%		1,126,725		41,419	3.68	%
Noninterest-bearing demand deposits		5,533						4,170
Other noninterest-bearing liabilities		6,362						6,014
Stockholders’ equity		105,732						83,205
Total liabilities and stockholders’ equity	$	1,352,360					$	1,220,114
Net interest income			$	50,619					$	36,359
Interest rate spread5					3.64	%					2.83	%
Net interest margin6					3.83	%					3.04	%

¹ Average balances are obtained from daily data.

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.

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.