Business Context and Reporting Period
This Form 8-K is filed by BofI Holding, Inc. (not Axos Financial, Inc.) on November 8, 2011. The report covers two primary events: the entry into a material definitive agreement for a registered direct public offering of preferred stock and the announcement of unaudited financial results for the first quarter ended September 30, 2011.
Key Financial Metrics and Capital Structure
The filing details a capital raise rather than providing a full income statement within the text body. Key metrics include:
- Capital Raised: The Company entered into agreements to sell 7,000 shares of 6.0% Series B Non-Cumulative Perpetual Convertible Preferred Stock for a gross aggregate purchase price of $7,000,000.
- Total Series B Issuance: This tranche brings the total Series B Preferred Stock sold to date to 20,182 shares (including prior sales in September and October 2011).
- Dividend Rate: 6.0% on the $1,000 liquidation preference per share.
- Conversion Terms: Convertible at the holder's option into approximately 61.92 shares of common stock (approximate conversion price of $16.15 per share).
- Redemption Terms: Redeemable by the Company at its option no earlier than three years from issuance at a price of $1,080 (Year 3), $1,050 (Year 4), or $1,030 (Year 5+).
- Operating Results: Specific revenue, profit, cash flow, and margin figures for the quarter ended September 30, 2011, are not provided in the text of this filing. They are referenced as being contained in Exhibits 99.1 (Press Release) and 99.2 (Financial Schedules).
Material Changes and Corporate Actions
- Authorized Shares Increase: The Company amended its Certificate of Designations to increase the authorized shares of Series B Preferred Stock from 18,000 to 22,000 shares.
- Dividend Restrictions: The issuance imposes restrictions on the Company's ability to declare or pay dividends on Junior Securities or repurchase common stock if full dividends are not paid on the Series B Preferred Stock.
- Automatic Conversion Trigger: If the common stock closing price exceeds $20.50 for 20 trading days within a 30-day period, the Company may force automatic conversion of the preferred stock.
Guidance, Outlook, and Risks
The filing does not contain forward-looking guidance, management commentary on future operations, or specific risk factors beyond the structural terms of the preferred stock. The primary contingency noted is the closing of the $7 million sale, which was expected to be completed on or before November 15, 2011. The filing explicitly states that the description of the stock terms is a summary and is qualified by the full legal documents filed as exhibits.
Investor Verification Checklist
- Verify the actual closing date of the $7,000,000 Series B Preferred Stock sale (expected by Nov 15, 2011).
- Review Exhibit 99.1 (Press Release) and Exhibit 99.2 (Financial Schedules) for the specific revenue, net income, and cash flow figures for the quarter ended September 30, 2011, as these are not in the main text.
- Confirm the current trading price of BofI Holding, Inc. common stock relative to the $16.15 conversion price and the $20.50 automatic conversion trigger.
- Assess the impact of the 6.0% dividend obligation on future cash flows and the restriction on common stock dividends.