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Axos Financial Gets OCC Nod for Nationwide's Deposit Buyout
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Recently, BofI Federal Bank — the banking subsidiary of Axos Financial, Inc. — received the regulatory nod from the Office of the Comptroller of the Currency (OCC) for the completion of Nationwide's Deposits acquisition. Notably, BofI Holding, Inc. has been renamed as Axos Financial, Inc. earlier this month.
Last month, BofI Federal Bank entered into a deal with Nationwide Bank to acquire $3 billion of the bank’s deposits. BofI Federal Bank has signed a deposit purchase and assumption agreement (“DAA”) with Nationwide Bank, per which, the $3 billion of deposits will consist of $1 billion in checking, savings and money market accounts, and $2 billion in time-deposit accounts.
The transaction is likely to close by Nov 16, after obtaining all required regulatory approvals.
Terms of the Deal
The above-mentioned deal will involve the transfer of around one lakh deposit customers from Nationwide Bank to BofI Federal Bank. The bank will use its excess capital to fund the deposit premium which will be in proportion to the fair market value of deposits acquired. The deal will likely be accretive to the company’s earnings and tangible book value.
After-Effects of the Deal
For Nationwide Bank, this deal is part of a series of steps to transfer all of its retail deposits to other financial institutions. The bank had earlier announced a plan to shift its focus and resources from retail banking to property, casualty, financial services and other emerging businesses.
Further, Axos Financial has prior experience of successfully undertaking similar transactions which will enable the company to make a smooth transition and expand its customer base. In addition, this deposit acquisition is anticipated to strengthen the company’s balance-sheet position.
Conclusion
Axos Financial’s inorganic growth activities highlight its capital strength and efforts to boost performance. Also, it has diversified revenue sources, which are likely to support the bank’s financials. Additionally, the company will benefit from improving conditions in the domestic economy.
Axos Financial’s shares have gained around 18.7% year to date against the industry’s decline of 11.7%.
Lazard Ltd (LAZ - Free Report) has been witnessing upward estimate revisions for the past 60 days. Also, the company’s shares have climbed nearly 13.6% in the past year. It carries a Zacks Rank of 2 (Buy), at present.
SEI Investments Company (SEIC - Free Report) has been witnessing upward estimate revisions for the past 60 days. Additionally, the stock has jumped more than 3% in a year’s time. It also carries a Zacks Rank #2.
Texas Capital Bancshares, Inc. (TCBI - Free Report) has been witnessing upward estimate revisions for the past 90 days. Additionally, the stock has rallied more than 4% over the past year. It currently carries a Zacks Rank of 2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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Axos Financial Gets OCC Nod for Nationwide's Deposit Buyout
Recently, BofI Federal Bank — the banking subsidiary of Axos Financial, Inc. — received the regulatory nod from the Office of the Comptroller of the Currency (OCC) for the completion of Nationwide's Deposits acquisition. Notably, BofI Holding, Inc. has been renamed as Axos Financial, Inc. earlier this month.
Last month, BofI Federal Bank entered into a deal with Nationwide Bank to acquire $3 billion of the bank’s deposits. BofI Federal Bank has signed a deposit purchase and assumption agreement (“DAA”) with Nationwide Bank, per which, the $3 billion of deposits will consist of $1 billion in checking, savings and money market accounts, and $2 billion in time-deposit accounts.
The transaction is likely to close by Nov 16, after obtaining all required regulatory approvals.
Terms of the Deal
The above-mentioned deal will involve the transfer of around one lakh deposit customers from Nationwide Bank to BofI Federal Bank. The bank will use its excess capital to fund the deposit premium which will be in proportion to the fair market value of deposits acquired. The deal will likely be accretive to the company’s earnings and tangible book value.
After-Effects of the Deal
For Nationwide Bank, this deal is part of a series of steps to transfer all of its retail deposits to other financial institutions. The bank had earlier announced a plan to shift its focus and resources from retail banking to property, casualty, financial services and other emerging businesses.
Further, Axos Financial has prior experience of successfully undertaking similar transactions which will enable the company to make a smooth transition and expand its customer base. In addition, this deposit acquisition is anticipated to strengthen the company’s balance-sheet position.
Conclusion
Axos Financial’s inorganic growth activities highlight its capital strength and efforts to boost performance. Also, it has diversified revenue sources, which are likely to support the bank’s financials. Additionally, the company will benefit from improving conditions in the domestic economy.
Axos Financial’s shares have gained around 18.7% year to date against the industry’s decline of 11.7%.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Picks
Lazard Ltd (LAZ - Free Report) has been witnessing upward estimate revisions for the past 60 days. Also, the company’s shares have climbed nearly 13.6% in the past year. It carries a Zacks Rank of 2 (Buy), at present.
SEI Investments Company (SEIC - Free Report) has been witnessing upward estimate revisions for the past 60 days. Additionally, the stock has jumped more than 3% in a year’s time. It also carries a Zacks Rank #2.
Texas Capital Bancshares, Inc. (TCBI - Free Report) has been witnessing upward estimate revisions for the past 90 days. Additionally, the stock has rallied more than 4% over the past year. It currently carries a Zacks Rank of 2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>