BofI Holding Inc.: A Bank Below Book

BOFI is the ticker symbol of an internet bank that competes by translating its savings from not having branches into higher cash yields and lower lending rates. The bank's awkward looking name "BofI Holding, Inc." suggests that branding is another area where management tried to save money.

BOFI is a small company with a market cap of $62 million. It views home equity lending and indirect RV lending as two key growth areas. Heavy insider ownership (46% according to Yahoo Finance) means that there are folks motivated to make this thing work.

What sparked my interest in BOFI is the low price/book ratio of 0.9. Shares are currently trading around $7.50, up from the 52 week low of $6.09 reached last November, but still way off the $11+ it reached in April 2005. It's rare for banks to trade this cheaply relative to book value without some humongous problem clouding the stock.

I'm picky about what I buy and am not sufficiently interested in the BOFI story to consider it further. If you like statistically cheap stocks, BOFI might be worth a look.

I have several other small banks currently on my research list.