Axos Financial(US:AX)2020-04-29 20:22Financial Performance - Axos Financial, Inc. reported net income of $56.057 million for the three months ended March 31, 2020, compared to $38.821 million for the same period in 2019, representing a 44.3% increase[176]. - Adjusted earnings for the three months ended March 31, 2020, were $57.652 million, up from $51.518 million in the prior year, reflecting a 11.0% increase[176]. - For the three months ended March 31, 2020, net income was $56.1 million, an increase from $38.8 million for the same period in 2019, representing a growth of 44.0%[187]. - Net income attributable to common stockholders for the three months ended March 31, 2020, was $56.0 million or $0.91 per diluted share, compared to $38.7 million or $0.63 per diluted share in 2019[187]. - For the nine months ended March 31, 2020, net income was $138.1 million, up from $114.5 million in the same period in 2019, reflecting a growth of 20.6%[187]. - For the nine months ended March 31, 2020, net income was $211.2 million, compared to $195.2 million for the same period in 2019, reflecting an increase of 8.5%[227]. Asset and Deposit Growth - The Company has approximately $12.2 billion in assets, providing a range of consumer and business banking products through online channels[155]. - Total assets as of March 31, 2020, were $12.16 billion, an increase from $11.22 billion as of June 30, 2019, reflecting a growth of 8.4%[182]. - Total deposits increased to $9.57 billion as of March 31, 2020, compared to $8.98 billion as of June 30, 2019, marking a growth of 6.5%[182]. - Total assets reached $11,112,312, an increase from $9,870,240, marking a growth of 12.6% year-over-year[233]. - Deposits increased by $584.2 million, or 6.5%, to $9,567.3 million at March 31, 2020, driven by a 61.5% increase in non-interest bearing deposits[267]. Income and Expense Analysis - Net interest income for the three months ended March 31, 2020, was $148.6 million, compared to $129.2 million in the same period of 2019, indicating an increase of 15.0%[184]. - Non-interest income for the three months ended March 31, 2020, was $31.5 million, up from $26.1 million in 2019, representing a growth of 20.0%[184]. - Total non-interest expenses decreased by $10.0 million to $71.8 million for the three months ended March 31, 2020, compared to $81.8 million for the same period in 2019[209]. - Non-interest expense for the three months ended March 31, 2020, was $56.7 million, compared to $52.2 million for the same period in 2019, reflecting an increase of 8.6%[227]. Loan and Lease Provisions - The Company increased provisions for loan and lease losses due to a weakening economy, reflecting proactive risk management in response to COVID-19[167]. - The allowance for loan and lease losses was $87.1 million as of March 31, 2020, compared to $57.1 million as of June 30, 2019, indicating a significant increase of 52.6%[182]. - The provision for loan and lease losses was $28.5 million for the three months ended March 31, 2020, compared to $19.0 million for the same period in 2019, indicating a 50% increase[202]. - The loan and lease loss provision for the three months ended March 31, 2020, was $28.5 million, up from $19.0 million for the same period in 2019, primarily due to economic conditions related to the COVID-19 pandemic[264]. Regulatory and Capital Position - Axos Bank is regulated by the OCC and FDIC, and as a depository institution with over $10 billion in assets, it is subject to direct supervision by the CFPB[156]. - The company met all capital adequacy requirements and was classified as "well capitalized" under regulatory frameworks as of March 31, 2020[294]. - Tier 1 capital ratio was 11.39% and total capital ratio was 12.96% as of March 31, 2020, exceeding the minimum requirements[295]. - The company had average adjusted assets of $12.39 billion and total risk-weighted assets of $9.30 billion as of March 31, 2020[295]. Market and Interest Rate Risk - The company manages interest rate risk by setting limits on the size and duration of positions in interest-sensitive financial instruments[310]. - A 200 basis point increase in interest rates is projected to increase net interest income by 8.6% over the next 12 months[306]. - The net present value of equity is expected to increase by 8.7% with a 300 basis point rise in interest rates, reaching $1,412,896,000[307]. - The Securities Business is exposed to market risk due to fluctuations in interest rates and market prices, impacting the value of financial instruments[308]. Operational Efficiency - Efficiency ratio improved to 39.85% for the three months ended March 31, 2020, compared to 52.69% in the same period of 2019, indicating enhanced operational efficiency[184]. - The efficiency ratio improved to 33.21% for the three months ended March 31, 2020, compared to 35.26% for the same period in 2019[228]. Legal and Compliance Matters - The company is actively defending against multiple class action lawsuits and shareholder derivative actions[284].