Core Insights - Axos Financial reported mixed results for Q2 of fiscal 2025, with adjusted EPS of $1.82 exceeding analyst expectations of $1.75, while revenue of $280.1 million fell short of the $303 million estimate [1][6]. Financial Performance - Adjusted EPS increased by 13.8% year-over-year from $1.60 in Q2 2024 [3]. - Revenue grew by 22.5% year-over-year, but non-interest income (NII) saw a significant decline of 77.6% compared to Q2 2024 due to losses in mortgage banking and broker-dealer fees [3][6]. - Net interest income was reported at $280.1 million, up from $228.6 million in the previous year [3][6]. - The net interest margin improved to 4.83%, an increase of 28 basis points from 4.55% a year earlier [3][7]. - Book value per share rose by 20.9% to $44.17, while tangible book value per share increased by 23.4% to $41.27 [3]. Business Overview - Axos Financial operates as a technology-driven financial institution, focusing on digital platforms for retail banking and investment advisory services, which reduces reliance on physical branches [4]. - The company aims to enhance customer experiences through scalable technology solutions and has been expanding its digital banking capabilities [4][5]. Operational Efficiency - The company maintained strong operational efficiency, with non-interest expenses slightly declining to $145.3 million [7]. - Loan growth in commercial, industrial, and auto sectors contributed to a stable deposit base, achieving a 5.9% annualized growth in deposits [8]. Credit Quality and Provisions - The provision for credit losses was $12.2 million, an improvement from $13.5 million in Q2 2024, although issues with credit quality in the commercial sector and increased non-performing assets were noted [9]. Future Outlook - Management did not provide specific forward guidance but indicated expectations for positive loan growth and a focus on expanding the digital platform [10]. - The company targets high single-digit annual growth rates for loans, supported by strategic hiring and new asset acquisition strategies [11].

Financial Performance - For the three months ended December 31, 2024, net income was $104.7 million, while adjusted earnings were $105.8 million [129]. - The diluted EPS for the three months ended December 31, 2024, was $1.80, and the adjusted EPS was $1.82 [129]. - For the three months ended December 31, 2024, net income was $104.7 million, or $1.80 per diluted share, compared to $151.8 million, or $2.62 per diluted share for the same period in 2023 [133]. - Non-interest income for the three months ended December 31, 2024, was $27.8 million, a significant decrease from $124.1 million in the same period of 2023 [132]. - The efficiency ratio for the three months ended December 31, 2024, was 47.20%, compared to 34.54% for the same period in 2023, indicating increased operational costs relative to income [132]. - The return on average assets for the three months ended December 31, 2024, was 1.74%, down from 2.90% in the same period of 2023 [132]. - Income before income taxes for the Banking Business Segment was $152.9 million for the three months ended December 31, 2024, down from $214.6 million in the prior year [157]. Assets and Deposits - The company has approximately $23.7 billion in assets and $37.7 billion in assets under custody and/or administration at Axos Clearing LLC [115]. - Total assets increased to $23.7 billion as of December 31, 2024, up from $22.9 billion as of June 30, 2024, and $21.6 billion as of December 31, 2023 [131]. - Total deposits reached $19.9 billion as of December 31, 2024, compared to $19.4 billion as of June 30, 2024, and $18.2 billion as of December 31, 2023 [131]. - The total number of deposit accounts increased to 580,151 at December 31, 2024, from 555,538 at June 30, 2024 [174]. Income and Expenses - Net interest income for the three months ended December 31, 2024, was $280.1 million, compared to $228.6 million for the same period in 2023, reflecting a growth of 22.5% [132]. - Total interest expense increased by 6.0% for the three months ended December 31, 2024, mainly due to an $11.3 million rise in interest expense on demand and savings deposits [146]. - Total non-interest expense increased by $23.5 million, or 19.3%, for the three months ended December 31, 2024, primarily due to higher salaries and related costs [152]. - Non-interest income decreased by $96.3 million, or 77.6%, for the three months ended December 31, 2024, primarily due to the absence of the gain on the FDIC Loan Purchase in the prior year [152]. Capital and Liquidity - The common equity tier 1 capital ratio was 12.42% as of December 31, 2024, compared to 12.01% as of June 30, 2024, indicating improved capital strength [131]. - The Tier 1 leverage ratio was 10.02% as of December 31, 2024, exceeding the minimum requirement of 5.00% [191]. - The company and Bank met all capital adequacy requirements as of December 31, 2024, and were classified as "well capitalized" under regulatory standards [189]. - As of December 31, 2024, the Company had $2,839.1 million available immediately and $4,812.6 million available with additional collateral from the FHLB, indicating strong liquidity [181]. Interest Income and Rate Sensitivity - The average yield on loans increased to 8.37% for the three months ended December 31, 2024, compared to 8.18% for the same period in 2023 [134]. - The interest rate spread improved to 3.91% for the three months ended December 31, 2024, compared to 3.58% for the same period in 2023 [134]. - A 200 basis points increase in interest rates is projected to result in a 5.5% increase in net interest income for the first 12 months [202]. - The sensitivity of market value of equity (MVE) to a 200 basis points increase in interest rates is estimated at a decrease of 1.2% [203]. Regulatory Compliance - The company is subject to regulation by the Federal Reserve and the Office of the Comptroller of the Currency [116][118]. - The company emphasizes the importance of non-GAAP financial measures, with adjusted earnings providing insight into core business performance [128]. Business Segments - The banking business segment focuses on providing a wide range of banking services, including online banking and various lending products [122]. - The securities business segment includes clearing broker-dealer and registered investment advisor custody services [123]. - The company generates non-interest income from various sources, including fees from loans originated for sale and technology transaction processing fees [115].

Loan Growth and Deposits - Loan growth in Q2 Fiscal 2025 reached $3.61 billion, a decrease of 1.66% compared to Q1 Fiscal 2025[2] - Total deposits as of December 31, 2024, amounted to $11.9 billion in consumer direct deposits[12] - $3 billion of deposits adjust with the Federal Funds rate, enhancing deposit rate optionality[10] - Approximately 90% of deposits are FDIC-insured or collateralized, indicating strong risk management[11] - The diversified deposit gathering business lines include $1.1 billion in fiduciary services and $3.5 billion in commercial and treasury management[12] - The company has $450 million of off-balance sheet deposits from Axos Securities, contributing to liquidity[10] Credit Quality and Allowance for Credit Losses - The allowance for credit losses (ACL) and unfunded loan commitments reserve (UCL) totaled $5.8 million[15] - As of December 31, 2024, the Allowance for Credit Losses (ACL) by loan category shows a total of $2,026 million, with a percentage of 1.3% based on gross unpaid principal balance[18] - The credit quality report indicates that non-accrual loans totaled $1,826 million, representing 0.65% of total loans outstanding[19] - The ACL percentage for commercial real estate loans was reported at 1.26%[18] - The allowance for credit losses to loans held for investment was 1.37%, consistent with the previous quarter, indicating stable asset quality[23] Loan Performance - The total loans outstanding as of December 31, 2024, were $18,860 million[19] - Single-family mortgage loans accounted for $409 million, with a non-accrual percentage of 1.33%[19] - Multi-family and commercial mortgage loans were reported at $406 million, with a non-accrual percentage of 0.92%[19] - Commercial real estate loans stood at $604 million, with a non-accrual percentage of 0.43%[19] - Consumer loans, including auto loans, totaled $483 million, with a non-accrual percentage of 0.41%[19] Financial Performance Metrics - Net interest income for the three months ended December 31, 2024, was $280.1 million, compared to $292.0 million for the previous quarter, reflecting a decrease of 6.5%[23] - Net income for the three months ended December 31, 2024, was $104.7 million, compared to $112.3 million in the previous quarter, representing a decline of 5.1%[23] - The efficiency ratio improved to 47.20% from 45.99% in the previous quarter, indicating enhanced operational efficiency[24] - Return on average assets was 1.74%, down from 1.92% in the previous quarter, reflecting a decrease of 18.8%[23] - Return on average common stockholders' equity was 16.97%, compared to 19.12% in the previous quarter, a decline of 11.2%[23] - The net interest margin was 4.83%, down from 5.17% in the previous quarter, indicating a contraction of 6.6%[24] - Non-interest expense was $145.3 million, compared to $147.5 million in the previous quarter, showing a decrease of 1.5%[23] Asset and Equity Growth - Total assets increased to $23,709,422 from $23,569,084, reflecting a growth of 0.6%[21] - Total stockholders' equity rose to $2,521,962 from $2,405,728, representing an increase of 4.8%[21] - Book value per common share improved to $44.17 from $42.14, a growth of 4.8%[21] - Total stockholders' equity as of December 31, 2024, was $2.52 billion, compared to $2.40 billion as of December 31, 2023, reflecting a year-over-year increase of 5%[29] - Tangible book value per common share (non-GAAP) increased to $2.35 as of December 31, 2024, from $2.23 as of December 31, 2023, representing a growth of 5.4%[29] Future Outlook and Strategic Initiatives - The company aims to enhance its credit quality metrics through strategic initiatives in risk management and loan underwriting[20] - Future outlook includes a focus on expanding into new markets and enhancing product offerings to improve overall financial performance[20] - The company is focused on expanding its market presence and enhancing its product offerings through strategic initiatives and potential acquisitions[30] - The management team emphasized ongoing investments in new technologies and product development to drive future growth[30] - Future guidance indicates a positive outlook for revenue growth driven by increased customer acquisition and retention strategies[30] - The company plans to leverage its existing infrastructure to support new product launches and market expansion efforts[30]

Wall Street analysts expect Axos Financial (AX) to post quarterly earnings of $1.76 per share in its upcoming report, which indicates a year-over-year increase of 10%. Revenues are expected to be $303.03 million, down 14.1% from the year-ago quarter.Over the past 30 days, the consensus EPS estimate for the quarter has remained unchanged. This demonstrates the covering analysts' collective reassessment of their initial projections during this period.Prior to a company's earnings release, it is of utmost impo ...

Axos Financial, Inc. (NYSE: AX ), incorporated in 1999 and headquartered in Las Vegas, NV, is a financial services company that primarily offers deposit accounts and mortgage loans through an online banking model.I am a self-taught value investor focusing on Equity REITs, ETFs, special-situation opportunities, portfolio management, and factor investing. My goal is to generate above-average returns with below-average volatility. My ideas are usually long-term but I will respond appropriately to unexpected ev ...

For the quarter ended September 2024, Axos Financial (AX) reported revenue of $320.66 million, up 30.5% over the same period last year. EPS came in at $1.96, compared to $1.41 in the year-ago quarter. The reported revenue represents a surprise of +7.03% over the Zacks Consensus Estimate of $299.59 million. With the consensus EPS estimate being $1.80, the EPS surprise was +8.89%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to deter ...

Axos Q1 Fiscal 2025 Earnings Supplement October 30, 2024 NYSE: AX Loan Growth by Category $ Millions Q1 FY25 Q4 FY24 Inc (Dec) $ 3,807 $ 3,922 $ (115) | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-------|--------------------------------|------------------------------------|-------|-------|-------|-------|-------|-------| | | | | | | | | | | | | Single Family | Jumbo Mortgage | $ | | | | | | | | Mortgage & Warehouse | SF Warehouse Lending | | 345 | | | 257 | 88 | | | Multifamily & | Multifamily | ...

Financial Data and Key Metrics - Net income for Q1 2025 was $112 million, up 36% YoY from $82.7 million [10] - Earnings per share grew 40% YoY to $1.93 [10] - Return on average common equity was 19.1% for the quarter [7] - Tangible book value per share grew 28% YoY [7] - Net interest margin increased to 5.17%, up 81 bps YoY and 52 bps QoQ [8] - Loan balances grew 0.3% QoQ and 13.7% YoY to $19.3 billion [6] - Deposits grew by $614 million QoQ, with 96% coming from interest-bearing demand and savings accounts [6][19] Business Line Performance - Single-family mortgage warehouse and C&I loan balances grew, offset by declines in single-family jumbo mortgage, multifamily, and auto loans [10] - Average loan yields increased to 9.01%, up 47 bps QoQ and 116 bps YoY [11] - Non-performing assets increased in single-family jumbo mortgages ($13.3 million) and commercial real estate ($14.5 million) [13][14] - C&I asset-based and cash flow lending saw a $40 million increase in non-performing assets [16] - Axos Clearing deposits remained flat at $1.3 billion, with $800 million on the balance sheet and $450 million at partner banks [30] Market and Geographic Performance - Consumer and small business deposits represented 60% of total deposits, while treasury management accounted for 20% [20] - Axos Fiduciary Services and Axos Security (custody and clearing) represented 6% and 4% of deposits, respectively [20] - Client cash sorting stabilized at 3% of assets under custody, down from the historic range of 6%-7% [21] Strategy and Industry Competition - The company is focused on growing assets under custody and cash balances by adding new assets from existing and new advisors [21] - Axos is managing interest rate risk by adjusting deposit pricing and extending the duration of liabilities [22][23] - The company is optimistic about returning to high single-digit to low-teens loan growth, driven by strong demand in fund finance, ABL, and select C&I lending businesses [29] - Axos is leveraging its white-label banking platform to attract new clients and enhance deposit and lending product offerings [33] Management Commentary on Operating Environment and Outlook - Management highlighted strong demand in C&I lending but noted increased pricing pressure and competition [43] - The company expects to maintain its net interest margin within the 4.25%-4.35% range, excluding the FDIC loan benefit [24] - Management remains confident in the credit quality of the loan book, despite some idiosyncratic increases in non-performing assets [15][17] Other Important Information - The company allocated a $10 million specific loan provision for a C&I loan classified as nonaccrual [17] - Non-interest expenses increased by $6.9 million QoQ, driven by higher salaries and benefits related to new hires [39] - The loan pipeline remains strong at $1.9 billion, with growth expected in SFR jumbo mortgages, multifamily, and commercial loans [40] Q&A Session Summary Question: Competition and Loan Pricing - Management noted increased pricing pressure in certain verticals, particularly in C&I lending, but remains confident in achieving loan growth [43] Question: Fee Income and Rate Sensitivity - Fee income was impacted by prepayment penalty fees and a mark on the servicing book due to rate declines [44][45] - Management expects fee income growth in the securities business as net new assets increase [46] Question: Deposit Repricing and Growth Opportunities - The company has successfully repriced deposits ahead of rate cuts and sees growth opportunities in C&I verticals and middle-market lending [65][66] Question: Commercial Real Estate Exposure - Axos remains interested in growing its commercial real estate book but faces challenges due to fewer deals and early repayments by bridge lenders [84] Question: Loan Pricing and Margin Outlook - Management expects some pricing concessions to maintain loan growth but remains optimistic about the margin outlook, supported by loan repricing and deposit cost management [81][98] Question: Loan Underwriting and Participation - The company emphasized its strong underwriting standards, particularly in commercial real estate, and noted variations in loan participation across different business lines [89][92]

Axos Financial (AX) came out with quarterly earnings of $1.96 per share, beating the Zacks Consensus Estimate of $1.80 per share. This compares to earnings of $1.41 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 8.89%. A quarter ago, it was expected that this bank holding company would post earnings of $1.80 per share when it actually produced earnings of $1.83, delivering a surprise of 1.67%.Over the last four quarters, the ...

The following tables set forth the Company's financial assets and liabilities measured at fair value on a recurring basis at September 30, 2024 and June 30, 2024. Assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement: | --- | --- | --- | --- | --- | --- | --- | |-------------------------------------------------------------------------|-------|---------------------------------------------------|-----------|------------------------ ...