Business Context and Reporting Period
This Form 8-K is filed by BofI Holding, Inc. (not Axos Financial, Inc.) on April 10, 2013. The report details the mandatory conversion of the Company's 6.0% Series C Non-cumulative Perpetual Convertible Preferred Stock into Common Stock.
Key Financial Metrics and Transaction Details
- Trigger Event: The Common Stock closed at $35.79 on April 4, 2013, marking the 20th trading day in the prior 30-day period above $35.00.
- Conversion Ratio: 327.86885 shares of Common Stock for each share of Preferred Stock.
- Implied Conversion Price: Approximately $30.50 per share (based on the $10,000 initial issuance price).
- Shares Outstanding: 1,857 shares of Preferred Stock.
- Shares to be Issued: Approximately 608,852 shares of Common Stock.
- Dividends: The last dividend on the Preferred Stock will be paid on April 15, 2013, for the quarter ended March 31, 2013. No dividends will be declared for the interim period between April 1, 2013, and the Mandatory Conversion Date.
Material Changes
Effective April 24, 2013 (the Mandatory Conversion Date), all outstanding Preferred Stock will be converted. Following this date, no shares of Preferred Stock will be issued or outstanding, and all rights of the Preferred Stock holders will terminate, except for the right to receive the converted Common Stock and cash in lieu of fractional shares.
Guidance, Outlook, and Management Commentary
Management states that the Mandatory Conversion will not impact the Company's future diluted earnings per common share, as the dilutive effect of this conversion was already assumed in the calculation of diluted earnings per share reported in previous quarters. The issuance of Common Stock relies on the exemption set forth in Section 3(a)(9) of the Securities Act of 1933.
Investor Verification Checklist
- Verify the exact number of Common Stock shares issued upon the April 24, 2013 conversion.
- Confirm the payment of the final Preferred Stock dividend on April 15, 2013.
- Review the updated capitalization table to ensure Preferred Stock is removed and Common Stock is increased by approximately 608,852 shares.
- Check subsequent filings for any cash payments made in lieu of fractional shares.