Safe and Sound

Bofi Federal Bank

San Diego, CA
Star Rating
Bofi Federal Bank is an FDIC-insured bank started in 2000 and currently based in San Diego, CA. As of June 30, 2017, the bank had equity of $804.8 million on assets of $8.50 billion.

Thanks to the efforts of 681 full-time employees in 2 offices in multiple states, the bank currently holds loans and leases worth $7.40 billion, including $6.56 billion worth of real estate loans. The bank currently holds $6.98 billion in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, Bofi Federal Bank exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the bank faired on the three key criteria Bankrate used to evaluate U.S. banks on safety and soundness.


Find out


Capital Score

Capital works as a bulwark against losses and as protection for accountholders when a bank is experiencing financial trouble. Therefore, when it comes to measuring an a bank's financial fortitude, capital is important. When it comes to safety and soundness, the higher the capital, the better.
Bofi Federal Bank received a score of 10 out of a possible 30 points on our test to measure the adequacy of a bank's capital, failing to reach the national average of 13.38.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Bofi Federal Bank's Tier 1 capital ratio was 14.25 percent, above the 6 percent level considered adequate by regulators, but less than the national average of 25.16 percent. A higher capital ratio means the bank will be better able to weather economic challenges.

Overall, Bofi Federal Bank held equity amounting to 9.47 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

In this test, Bankrate tries to determine the impact of problem assets, such as past-due loans, on the bank's capitalization and allocated loan loss reserves.

A bank with large numbers of these types of assets could eventually have to use capital to absorb losses, diminishing its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, pushing down earnings and increasing the risk of a future failure.

Bofi Federal Bank scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating the national average of 37.62.

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of June 30, 2017, 0.38 percent of Bofi Federal Bank's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.04 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . Comparing the that reserve's size to the total amount of at-risk loans can be a handy indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Bofi Federal Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. Earnings may be retained by the bank, expanding its capital buffer, or be used to address problematic loans, likely making the bank more resilient in times of trouble. Obviously, banks that are losing money are less able to do those things.

On Bankrate's test of earnings, Bofi Federal Bank scored 28 out of a possible 30, beating the national average of 16.52.

One important way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. Bofi Federal Bank's most recent annualized quarterly return on equity was 20.79 percent, above the national average of 9.28 percent.

The bank recorded net income of $79.7 million on total equity of $804.8 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 1.89 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.

WHAT IS SAFE & SOUND?'s Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.