Bank of Internet USA is an American federally chartered direct bank headquartered in San Diego, California. It is the main consumer brand of BofI Holding. It is the oldest Internet-only bank in the United States.
It provides consumer banking solutions including checking accounts, savings, money markets, certificates of deposits, IRAs, mortgage lending, refinancing and home equity loans.
History
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Bank of Internet USA was founded in 1999 by Jerry Englert, the founder of Bank of Del Mar, and Gary Lewis Evans, who was president of La Jolla Bank at the time. The bank’s holding company, BofI Holding, Inc., was incorporated in the State of Delaware in July 1999 for the stated purpose of organizing and opening an Internet-based bank. The opening day of the bank was on July 4 for three reasons. One, Mr Englert wanted its customers to realize that although traditionally July 4 is a bank holiday, people would still be able to access the bank due to its online format. Second, he wanted to pay homage to his oldest daughter's birthday. Finally, the theme of the bank "Independence from traditional banking" jibed with the holiday's history.
The bank was launched with $14 million in startup capital and was profitable within 14 months. The bank’s thrift charter allowed it, and continues to allow it, to operate within all 50 states. The number of employees running and managing the bank has grown from 35 in 2007 to 534 as of December 31, 2015.
In October 2011, Bank of Internet USA changed its name to BofI Federal Bank. However, BofI Federal Bank continued to use the Bank of Internet USA brand for its online consumer direct banking. The goal of Bank of Internet USA remained to provide banking services more cost-effectively by eliminating the overhead costs of branches. According to Andrew Micheletti, CFO and VP of BofI Holding, Inc., “We are taking advantage of the Internet for both efficiency in the back office and efficiency in the distribution and delivery of banking products.â€
From 2013 to the end of 2015, Bank of Internet USA saw a 327% growth in the number of savings deposits. Part of that growth may be attributed to Bank of Internet acquiring a portion of H&R Block’s banking business in 2014, including 300,000 individual retirement accounts (IRAs).
Services and Products
Personal Banking
Bank of Internet USA offers a wide range of personal banking services and products.
The bank’s personal banking products also feature access to Popmoney, a person-to-person money transfer service; FinanceWorks, a money management and budgeting tool; Mobile Deposit, a mobile check deposit app; and MyDeposit, a remote deposit solution that allows customers to submit scanned checks from their computers.
Bank of Internet also offers savings options like High Yield Savings, money markets, certificates of deposit (CDs) and individual retirement accounts (IRAs).
Mortgage
The bank offers customized mortgage options that include purchase loans, refinance loans, conventional loans, FHA loans, VA loans, jumbo loans, home equity loans, and portfolio loans.
Bank of Internet USA’s custom built portfolio loans offer loan amounts up to $5Milion (and higher on a case-by-case basis) for borrowers with complex financial situations. This innovative program offers, interest only options, 90% financing through cross collateralization, vesting title in entities such as an LLC, trusts, partnerships and sub S corporations and qualification using asset utilization. Financing is also available to Foreign Nationals.
The bank uses an underwriting approach with localized decision making and simplified origination process through an online application to allows the bank to close loans quickly.
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