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BofI Holding in advanced talks over a 'material acquisition'

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BofI Holding in advanced talks over a 'material acquisition'

BofI Holding Inc. is in advanced talks with an undisclosed entity regarding a "material acquisition."

The San Diego-based company rescheduled its fiscal fourth-quarter earnings call to Aug. 7 from July 26 due to the deal talks. It previously hoped the timing to complete the purchase agreement would coincide with its previously scheduled fiscal fourth-quarter 2018 earnings announcement.

The company did not reveal any details about the proposed deal but said it will "provide the financial impact and strategic implications" on its earnings call. It also added that there is no guarantee that it will finalize the deal or finalize it by the date of the rescheduled earnings call.

Executives had previously telegraphed their intent to do a deal, wrote Compass Point analyst Scott Valentin in a July 27 report. Management said in its most recent earnings call that they were interested in deploying excess capital into accretive M&A in the near future.

Valentin pointed out that the bank has acquired four deposit-related platforms or segments over the last five years, and believes investors may be concerned about the bank's deposit beta given its online deposit base. While BofI could strike a deal for low-cost deposits, it could also add asset generators.

"Although BOFI has strong national origination platforms in mortgage, CRE and C&I, acquisition of an online personal and/or small business originator would accelerate BOFI's effort in those areas," he wrote.

Separately, BofI Federal Bank has renewed its agreement with H&R Block Inc. to be the exclusive provider of interest-free refund advance loans to their customers during the 2019 tax season.