10 Cheapest Bank Stocks for 2011

1. BOFI Holding, Inc.

Company Profile

The cheapest actively traded bank stock among the group with a forward price-to-earnings ratio of 6.18, based on the consensus 2011 earnings-per-share estimate among analysts polled by Thomson Reuters, was BOFI Holding (BOFI) of San Diego, Calif. Shares rose 22% year-to-date through Friday, to close at $12.15.

Income Statement

BOFI reported second-quarter net income of $4.7 million or 44 cents a share, following net income in the first quarter of $7.2 million or 77 cents a share and $3.6 million or 46 cents a share in the second quarter of 2009.

First-quarter earnings were boosted by $5.9 million in gains on the sale of mortgage-backed securities.

Balance Sheet

BOFI Holding had $1.4 billion in total assets as of June 30. For main subsidiary Bank of Internet USA, asset quality was good, with a nonperforming assets ratio of 1.10% and a net charge-off ratio staying below 1% over the past year.

The thrift subsidiary was well capitalized with a tier 1 leverage ratio of 8.79% and a total risk-based capital ratio of 15.25% as of June 30.

The holding company raised $15 million through a common offering completed in April.

Stock Ratios

Shares were trading just below tangible book value. The forward P/E of 6.18 looks very low when compared to the P/E exceeding 18 at the end of 2005, 2006 and 2007.

Analyst Ratings

The one analyst covering the shares rates them a buy.

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-- Written by Philip van Doorn in Jupiter, Fla.

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