UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 001-37709 AXOS FINANCIAL, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Delaware 33-0867444 (I.R.S. Em ...

Loan Growth and Deposits - Axos reported a loan growth of $3.6 billion in Q3 Fiscal 2025, representing a 16% increase year-over-year[2]. - Total deposits amount to $20.4 billion, with 90% being FDIC-insured or collateralized[12]. - Approximately $3.5 billion of deposits adjust with the Federal Funds rate, enhancing deposit rate optionality[11]. - As of March 31, 2025, the total loans outstanding amounted to $2,729 million, with non-accrual loans at $185 million[19]. - The commercial mortgage loans outstanding were $3,341 million, with a non-accrual amount of $44 million[19]. Credit Quality and Allowance for Credit Losses - The allowance for credit losses (ACL) and unfunded loan commitments reserve (UCL) stands at $6.2 million[15]. - The total ACL as of March 31, 2025, was $207 million, reflecting a 14% increase compared to the previous year[17]. - The allowance for credit losses (ACL) by loan category showed a year-over-year increase of 4.19%[17]. - The overall credit quality remains strong, with a total non-accrual loans percentage of 0.63% as of March 31, 2025[19]. - The company reported a significant improvement in credit quality metrics compared to December 31, 2024, where the single-family mortgage non-accrual rate was 1.69%[19]. Financial Performance - The company reported a net income of $15.9 million for the quarter, representing a 42.87% increase compared to the previous period[23]. - Total revenue for the quarter reached $45.64 million, reflecting a 46.85% growth year-over-year[23]. - The company achieved a gross margin of 47.36%, up from 45.20% in the previous quarter, indicating improved operational efficiency[23]. - The average return on equity (ROE) was reported at 18.81%, demonstrating effective management of shareholder equity[23]. - The adjusted earnings for the period, excluding non-recurring costs, were $11.2 million, compared to $10.6 million in the previous period, indicating a 5.66% increase[28]. Capital and Equity - Total stockholders' equity rose to $2,603,900,000, up from $2,505,720,000, indicating an increase of about 3.9%[21]. - The company reported a common equity tier 1 capital ratio of 12.39%, up from 12.01%[21]. - The total capital ratio to risk-weighted assets was reported at 15.49%, compared to 14.84% previously[21]. - Tangible book value per common share was reported at $10.50, up from $10.48, representing a 0.19% increase[30]. - The company’s total stockholders' equity (non-GAAP) was $42.91, compared to $41.27 previously, indicating a growth trend[31]. Operational Efficiency and Future Outlook - The company plans to expand its market presence with new product launches expected in Q2 2024, targeting a 30% increase in market share[23]. - Research and development expenses increased to $6.00 million, highlighting the company's commitment to innovation and new technology[23]. - The company is exploring potential acquisitions to enhance its product portfolio and market reach, with a focus on strategic partnerships[23]. - The efficiency ratio improved to 0.09%, down from 0.10% in the prior period, reflecting a decrease of 1%[1]. - The company plans to expand its market presence through strategic acquisitions and new product launches in the upcoming quarters[1].

Core Insights - The article discusses Axos Financial and highlights its potential investment opportunities and market trends [1] Company Overview - Axos Financial is featured in a Motley Fool Scoreboard episode, indicating a focus on its performance and market position [1] Market Trends - The video associated with the article aims to provide insights into market trends relevant to Axos Financial, suggesting a dynamic market environment [1] Investment Opportunities - The content emphasizes the potential investment opportunities within Axos Financial, encouraging viewers to explore these prospects [1]

Company Overview - Axos Financial Inc is a regional U.S. bank headquartered in Las Vegas, Nevada, operating nationwide [1] - The bank offers a diverse range of loan products, including residential mortgages, commercial loans, auto loans, and consumer loans [1] Investment Insights - The author emphasizes a focus on the banking sector, which is often overlooked but holds significant potential for investors [1] - The investment strategy aims for safe yet substantial returns, targeting over 10% per annum [1] - The analysis seeks to enhance awareness and understanding among investors regarding the intricacies of bank stocks [1]

Core Viewpoint - Axos Financial (AX) has experienced significant selling pressure, resulting in a 9.3% decline in stock price over the past four weeks, but analysts anticipate better earnings than previously predicted, indicating potential for recovery [1] Group 1: Technical Indicators - The Relative Strength Index (RSI) is utilized to identify oversold stocks, with a reading below 30 typically indicating oversold conditions [2] - AX's current RSI reading is 28.89, suggesting that the heavy selling may be exhausting itself and a trend reversal could be imminent [5] Group 2: Fundamental Indicators - Analysts have raised earnings estimates for AX by 1.9% over the last 30 days, which often correlates with price appreciation in the near term [6] - AX holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a turnaround [7]

Core Viewpoint - Axos Financial (AX) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system reflects changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Rising earnings estimates for Axos Financial suggest an improvement in the company's underlying business, likely leading to increased stock prices [5][10]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7][9]. - Axos Financial's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10]. Earnings Estimate Revisions - For the fiscal year ending June 2025, Axos Financial is expected to earn $7.16 per share, reflecting a year-over-year decline of -6.5%, although the Zacks Consensus Estimate has increased by 2.6% over the past three months [8].

Financial Data and Key Metrics - Net interest income for Q2 2025 was $280 million, up 22.5% YoY from $228.6 million in the prior period [7][8] - Net interest margin was 4.83% for Q2 2025, up 28 basis points YoY but down from 5.17% in Q1 2025 [9] - Tangible book value per share grew 21% YoY [7] - Return on average common equity was 17%, and return on assets was 1.7% for Q2 2025 [7] - Net income was $104 million, compared to $152.8 million in the same period last year [13] - Non-GAAP adjusted EPS was $1.82 for Q2 2025 [14] Business Line Performance - Loan originations were strong at $3.5 billion, with growth in single-family mortgage warehouse and C&I loan balances [15] - Auto loan portfolio saw its first sequential increase since Q1 2023 [16] - Average loan yields for non-purchased loans were 8.08%, while purchased loans yielded 13.92% [17] - Lender finance, fund finance, and equipment leasing had strong originations and net loan growth [16] - Single-family jumbo mortgage pipeline increased from $345 million to $496 million due to competitive exits and rate reductions [15] Market Performance - Total on-balance sheet deposits increased 9.5% YoY to $19.9 billion [10] - Demand, money market, and savings accounts represented 96% of total deposits, growing 10.6% YoY [19] - Consumer and small business deposits accounted for 60% of total deposits, while commercial TM and institutions represented 20% [19] - Axos Clearing deposits grew to $1.36 billion, up $104 million from the prior quarter [36] Strategy and Industry Competition - The company is focused on reducing headwinds in single-family jumbo mortgages and expects flat to slightly up growth in multifamily hybrid ARMs [15] - The company is leveraging low-code software development and AI to enhance operational efficiency [39] - The company is exploring inorganic growth opportunities, including potential acquisitions in specialty finance businesses [44][101] - The company is actively engaging with private credit partners to leverage the growth of the ecosystem [43] Management Commentary on Operating Environment and Future Outlook - Management expects the consolidated net interest margin to remain at the high end or slightly exceed the 4.25% to 4.35% target range [25] - The company is optimistic about organic loan growth returning, with expectations of high single-digit YoY growth in the remaining quarters of fiscal 2025 [51] - Management is cautious about expense growth and is focused on maintaining discipline while investing in technology and operational efficiency [92][93] Other Important Information - The company announced a $150 million at-the-market shelf offering to capitalize on potential strategic opportunities [45] - The company is actively working on AI use cases to enhance efficiency and reduce project timelines [39] - The company is realigning back-office servicing functions in its clearing and custody business to improve efficiency [38] Q&A Summary Question: Deposit Cost Trends - The company has successfully repriced higher-cost deposits and expects further opportunities to improve deposit mix over time [55][56] - Management believes the company can offset declines in interest income by repricing deposits, as demonstrated in Q2 2025 [57] Question: Net Interest Margin Drivers - The company attributes the strong net interest margin to a combination of asset-side growth (e.g., competitive exits in mortgage lending) and deposit repricing [58][59] - Excess liquidity has been a drag on net interest margin, but the company expects to grow into this liquidity with improved loan growth [62] Question: Crypto Engagement - The company is awaiting clearer regulatory guidance before reengaging in the crypto space [66][67] - Management emphasized the need for comprehensive regulatory clarity from both the SEC and primary regulators [67] Question: Non-Performing Assets (NPAs) - The increase in NPAs was attributed to specific idiosyncratic circumstances, particularly in real estate-backed loans [70][71] - Management is confident in the credit quality of the loan book and does not anticipate material losses from current non-performing loans [30][74] Question: Loan Demand and Growth Opportunities - The company sees strong demand in cap call, real estate lender finance, and other segments, with a $2.1 billion loan pipeline as of January 22, 2025 [50][83] - Management expects to stem runoff in single-family jumbo and multifamily loans, with potential for growth in these areas [81][89] Question: Expense Management and Operating Leverage - The company is focused on maintaining expense discipline while investing in technology and operational efficiency [92][93] - Management highlighted the use of AI and low-code platforms to drive productivity and reduce project timelines [94] Question: Capital Deployment and M&A - The company is exploring inorganic growth opportunities, particularly in specialty finance businesses [101] - The $150 million ATM offering is a proactive step to position the company for potential strategic acquisitions [102] Question: Provision for Credit Losses - The provision for credit losses was $12 million in Q2 2025, down from $13.5 million YoY, driven by lower net loan growth [48] - The company's allowance for credit losses to total loans held for investment was 1.37%, up slightly from 1.34% in Q1 2025 [49] Question: Fee Income Growth - The company expects fee income growth to be driven by its securities business, particularly Axos Advisory Services [123] - Management is optimistic about net new asset growth in the custody and clearing businesses [124] Question: Share Repurchases - The company remains disciplined in capital deployment, prioritizing organic growth and opportunistic share repurchases [133] - Management is optimistic about loan growth but remains cautious about capital allocation [131]

Axos Q2 Fiscal 2025 Earnings Supplement January 28, 2025 NYSE: AX Loan Growth by Category | | | | | | | $ Millions | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | Q2 FY25 | | Q1 FY25 | | Inc (Dec) | | | Single Family Mortgage & | Jumbo Mortgage | $ | 3,641 | $ | 3,807 | $ | (166) | | | Warehouse | SF Warehouse Lending | | 509 | | 345 | | 164 | | | Multifamily & Commercial | Multifamily | | 2,148 | | 2,363 | | (215) | | | Mortgage | Small Balance Commercial | | 1,283 | | 1,284 | | (1) ...

Core Insights - Axos Financial reported a revenue of $307.9 million for the quarter ended December 2024, which is a decrease of 12.7% compared to the same period last year [1] - The earnings per share (EPS) for the quarter was $1.82, an increase from $1.60 in the year-ago quarter [1] - The reported revenue exceeded the Zacks Consensus Estimate of $303.64 million, resulting in a surprise of +1.40% [1] - The company also delivered an EPS surprise of +3.41%, with the consensus EPS estimate being $1.76 [1] Financial Metrics - The efficiency ratio was reported at 47.2%, better than the four-analyst average estimate of 48.4% [4] - The net interest margin stood at 4.8%, slightly above the average estimate of 4.7% based on four analysts [4] - Net annualized charge-offs to average loans were 0.1%, matching the three-analyst average estimate [4] - Total non-interest income was reported at $27.80 million, below the average estimate of $31.91 million based on four analysts [4] - Net interest income was $280.10 million, exceeding the average estimate of $272 million from four analysts [4] Stock Performance - Over the past month, shares of Axos Financial have returned +2.3%, outperforming the Zacks S&P 500 composite's +0.8% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating it may perform in line with the broader market in the near term [3]

Core Insights - Axos Financial reported quarterly earnings of $1.82 per share, exceeding the Zacks Consensus Estimate of $1.76 per share, and showing an increase from $1.60 per share a year ago, resulting in an earnings surprise of 3.41% [1] - The company achieved revenues of $307.9 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.40%, although this represents a decline from year-ago revenues of $352.74 million [2] - Axos Financial has consistently outperformed consensus EPS estimates over the last four quarters, achieving this four times [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.72 on revenues of $303.05 million, while for the current fiscal year, the estimate is $7.08 on revenues of $1.23 billion [7] - The estimate revisions trend for Axos Financial is currently mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Financial - Miscellaneous Services industry, to which Axos Financial belongs, is currently ranked in the bottom 49% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Axos Financial's stock performance [5]