Axos Financial(AX) - 2025 Q4 - Annual Results

Report Overview This document is the Axos Q4 Fiscal 2025 Earnings Supplement, released on July 30, 2025 - This document is the Axos Q4 Fiscal 2025 Earnings Supplement, released on July 30, 2025[1] Loan Portfolio & Asset Quality This section analyzes the company's loan portfolio growth, credit loss allowances, and overall credit quality across various loan categories Loan Growth by Category The company's loan portfolio shows changes across various categories from Q2 FY25 to Q4 FY25, with specific figures for single-family mortgage, multi-family and commercial mortgage, commercial real estate, commercial & industrial, and auto & consumer loans Loan Growth by Category (Q2 FY25 to Q4 FY25, $ millions) | Loan Category | Q2 FY25 ($ millions) | Q3 FY25 ($ millions) | Q4 FY25 ($ millions) | Q3-Q4 FY25 Change ($ millions) | | :-------------------------------- | :------------------- | :------------------- | :------------------- | :----------------------------- | | Single Family Mortgage | 3,863 | 3,698 | 3,977 | 279 | | Multi-family & Commercial Mortgage | 1,729 | 2,059 | 2,330 | 271 | | Commercial Real Estate | 1,212 | 1,281 | 1,269 | (69) | | Commercial & Industrial - Non-RE | 2,567 | 2,519 | 2,633 | 316 | | Auto & Consumer | 430 | 400 | 400 | 30 | | Total Loans | 20,298 | 21,557 | 22,823 | 1,557 | Allowance for Credit Losses (ACL) & Unfunded Loan Commitments Reserve (UCL) This section details the changes in the Allowance for Credit Losses (ACL) and Unfunded Loan Commitments Reserve (UCL), and provides a breakdown of ACL by loan category as of June 30, 2025 Change in ACL & UCL The combined Allowance for Credit Losses (ACL) and Unfunded Loan Commitments Reserve (UCL) experienced a $9.0 million decrease - The combined Allowance for Credit Losses (ACL) and Unfunded Loan Commitments Reserve (UCL) experienced a change of ($9.0 million)[7] ACL by Loan Category As of June 30, 2025, the Allowance for Credit Losses (ACL) is distributed across various loan categories, with specific percentages and amounts allocated to single-family mortgage, multi-family and commercial mortgage, commercial real estate, commercial & industrial, and auto & consumer loans Allowance for Credit Losses (ACL) by Loan Category (as of June 30, 2025, $ millions) | Loan Category | ACL ($ millions) | % of Loan Balance | | :-------------------------------- | :--------------- | :---------------- | | Single Family Mortgage | 439 | 51.20% | | Multi-family & Commercial Mortgage | 41 | 4.71% | | Commercial Real Estate | 69 | 6.93% | | Commercial & Industrial - Non-RE | 69 | 6.12% | | Auto & Consumer | 48 | 3.16% | | Total | 215 | 55.22% | Credit Quality Overview This section provides a snapshot of credit quality, detailing loans outstanding and non-accrual loans across various categories for June 30, 2025, March 31, 2025, and June 30, 2024 Credit Quality ($ millions) | Loan Category | Loans O/S (Jun 30, 2025) | Non-Accrual Loans (Jun 30, 2025) | % Non-Accrual (Jun 30, 2025) | Loans O/S (Mar 31, 2025) | Non-Accrual Loans (Mar 31, 2025) | % Non-Accrual (Mar 31, 2025) | Loans O/S (Jun 30, 2024) | Non-Accrual Loans (Jun 30, 2024) | % Non-Accrual (Jun 30, 2024) | | :-------------------------------- | :----------------------- | :--------------------------- | :--------------------------- | :----------------------- | :--------------------------- | :--------------------------- | :----------------------- | :--------------------------- | :--------------------------- | | Single Family Mortgage | 3,954 | 44 | 1.00% | 4,195 | 44 | 1.05% | 4,179 | 46 | 1.10% | | Multi-family & Commercial Mortgage | 2,941 | 33 | 1.12% | 3,341 | 34 | 1.02% | 3,862 | 35 | 0.91% | | Commercial Real Estate | 6,937 | 29 | 0.42% | 6,356 | 34 | 0.53% | 6,089 | 26 | 0.43% | | Commercial & Industrial - Non-RE | 796 | 6 | 0.91% | 790 | 7 | 1.11% | 5,241 | 4 | 0.08% | | Auto & Consumer | 483 | 2 | 0.41% | 447 | 2 | 0.45% | 432 | 2 | 0.47% | | Total | 25,521 | 170 | 0.79% | 27,290 | 185 | 0.89% | 19,803 | 113 | 0.57% | Deposit Gathering & Business Lines This section examines Axos's diversified deposit sources and strategic business lines, highlighting deposit safety and market reach Diversified Deposit Gathering Sources Axos maintains a diversified deposit base, with a significant portion being FDIC-insured or collateralized, sourced from various business lines including Fiduciary Services, Consumer Direct, Specialty Deposits, and Commercial & Treasury Management - Approximately 90% of Axos's deposits are FDIC-insured or collateralized, indicating strong deposit safety[3] Diversified Deposit Gathering Business Lines (as of Q4 FY25, $ billions) | Business Line | Deposits ($ billions) | | :-------------------------------- | :-------------------- | | Fiduciary Services | 1.1 | | Consumer Direct | 11.6 | | Specialty Deposits | 2.2 | | Distribution Partners | 0.4 | | Axos Securities | 1.0 | | Small Business Banking | 0.6 | | Commercial & Treasury Management | 3.9 | - Axos serves approximately 40% of U.S. Chapter 7 bankruptcy trustees through exclusive relationships and offers full-service digital banking, wealth management, and securities trading[4] - The company focuses on bank and securities cross-sell strategies to enhance business[5] Selected Financial Information This section presents key financial data, including balance sheet, capital ratios, income statement, and performance ratios, across multiple reporting periods Balance Sheet Highlights As of June 30, 2025, Axos Financial's balance sheet highlights total assets, loans, deposits, and stockholders' equity across several quarters Selected Balance Sheet Data ($ thousands) | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :-------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Total Assets | 24,783,078 | 23,981,154 | 23,709,422 | 23,569,084 | 22,855,334 | | Loans, net of ACL | 21,049,610 | 20,193,630 | 19,486,720 | 19,280,609 | 19,231,380 | | Total Deposits | 20,829,543 | 20,136,714 | 19,934,904 | 19,973,329 | 19,359,217 | | Total Stockholders' Equity | 2,680,677 | 2,603,900 | 2,521,962 | 2,407,280 | 2,290,596 | Capital Ratios Axos Financial maintains robust capital ratios, with Common Equity Tier 1, Tier 1 Capital, and Total Capital ratios consistently above regulatory minimums for both the company and Axos Bank Capital Ratios (%) | Capital Ratio | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :-------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Axos Financial, Inc.: | | | | | | | Common Equity Tier 1 (average assets) | 10.82% | 10.86% | 10.64% | 10.21% | 10.02% | | Tier 1 Capital (average assets) | 10.72% | 10.45% | 10.02% | 9.78% | 9.43% | | Common Equity Tier 1 (risk-weighted assets) | 12.51% | 12.39% | 12.42% | 12.44% | 12.01% | | Tier 1 Capital (risk-weighted assets) | 12.51% | 12.39% | 12.42% | 12.44% | 12.01% | | Total Capital (risk-weighted assets) | 15.39% | 15.21% | 15.23% | 15.29% | 14.84% | | Axos Bank: | | | | | | | Common Equity Tier 1 (average assets) | 10.24% | 10.14% | 9.85% | 9.82% | 9.74% | | Common Equity Tier 1 (risk-weighted assets) | 12.45% | 12.31% | 12.67% | 12.87% | 12.74% | | Total Capital (risk-weighted assets) | 13.74% | 13.49% | 13.86% | 14.06% | 13.81% | Income Statement Highlights For the three months ended June 30, 2025, Axos Financial reported net interest income, provision for credit losses, non-interest income, and net income, along with basic and diluted EPS Selected Income Statement Data ($ thousands) | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :-------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Interest income | 442,413 | 432,722 | 456,068 | 484,262 | 453,428 | | Interest expense | 162,252 | 157,258 | 175,969 | 192,214 | 193,366 | | Net interest income | 280,161 | 275,464 | 280,099 | 292,048 | 260,062 | | Provision for credit losses | 14,997 | 14,500 | 12,248 | 14,000 | 6,000 | | Net interest income after provision | 265,164 | 260,964 | 267,851 | 278,048 | 254,062 | | Non-interest income | 41,285 | 33,373 | 27,799 | 28,609 | 30,861 | | Non-interest expense | 150,652 | 146,261 | 143,200 | 144,610 | 140,530 | | Income tax expense | 45,122 | 42,870 | 45,643 | 46,852 | 39,516 | | Net income | 110,675 | 105,206 | 104,687 | 112,340 | 104,872 | | Basic EPS | 1.96 | 1.84 | 1.83 | 1.97 | 1.84 | | Diluted EPS | 1.92 | 1.81 | 1.80 | 1.93 | 1.80 | Performance Ratios Key performance indicators for Axos Financial include return on average assets, return on average common stockholders' equity, interest rate spread, net interest margin, and efficiency ratios for both the company and its banking segment Selected Performance Ratios (%) | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :-------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Return on average assets | 1.85% | 1.77% | 1.74% | 1.92% | 1.81% | | Return on average common stockholders' equity | 16.85% | 16.44% | 16.97% | 19.12% | 18.81% | | Interest rate spread | 3.97% | 3.91% | 3.91% | 4.13% | 3.63% | | Net interest margin | 4.84% | 4.78% | 4.83% | 5.10% | 4.68% | | Efficiency ratio | 46.87% | 47.36% | 47.20% | 45.99% | 48.31% | | Banking Business Segment – Efficiency ratio | 40.94% | 41.53% | 40.95% | 39.83% | 41.39% | | Net annualized charge-offs to average loans | 0.16% | 0.09% | 0.10% | 0.11% | 0.09% | | Non-accrual loans to total loans | 0.79% | 0.89% | 1.26% | 0.89% | 0.57% | | Non-performing assets to total assets | 0.71% | 0.79% | 1.06% | 0.75% | 0.51% | | Allowance for credit losses to total loans | 1.36% | 1.39% | 1.39% | 1.39% | 1.34% | | Allowance for credit losses to non-accrual loans | 170.23% | 151.28% | 108.75% | 149.32% | 229.84% | - The decrease in the Allowance for credit losses - loans to nonaccrual loans is primarily attributable to the change in nonaccrual loans[16] Non-GAAP Financial Measures This section reconciles non-GAAP financial measures, including adjusted earnings, adjusted EPS, and tangible book value, to their most directly comparable GAAP measures Adjusted Earnings & EPS Reconciliation Adjusted earnings and adjusted EPS are non-GAAP measures that exclude the after-tax impact of non-recurring acquisition-related costs and other unusual charges, providing a clearer view of core operating performance - Adjusted earnings are defined as net income excluding the after-tax impact of non-recurring acquisition-related costs and other unusual or non-recurring charges[19] - Adjusted EPS is calculated by dividing non-GAAP adjusted earnings by the average number of diluted common shares outstanding[19] Adjusted Earnings & EPS Reconciliation ($ thousands, except per share data) | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :-------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Net income (GAAP) | 110,675 | 105,206 | 104,687 | 112,340 | 104,872 | | Acquisition-related costs | 1,604 | 1,604 | 1,645 | 2,554 | 2,554 | | Other costs | (1,879) | — | — | — | — | | Income tax effects | (46) | 80 | (503) | (2) | (699) | | Adjusted earnings (Non-GAAP) | 111,814 | 105,011 | 105,829 | 114,142 | 106,727 | | Diluted EPS (GAAP) | 1.92 | 1.81 | 1.80 | 1.93 | 1.80 | | Acquisition-related costs per share | 0.03 | 0.03 | 0.03 | 0.04 | 0.04 | | Other costs per share | (0.03) | — | — | — | — | | Income tax effects per share | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | | Adjusted EPS (Non-GAAP) | 1.94 | 1.81 | 1.82 | 1.96 | 1.83 | Tangible Book Value Reconciliation Tangible book value is a non-GAAP measure used to assess capital strength, calculated by adjusting common stockholders' equity for goodwill and other intangible assets - Tangible book value is defined as common stockholders' equity minus servicing rights, goodwill, and other intangible assets, providing insight into capital strength[21] Tangible Book Value Reconciliation ($ thousands, except per share data) | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :-------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Common stockholders' equity (GAAP) | 2,680,677 | 2,603,900 | 2,521,962 | 2,405,728 | 2,290,596 | | Less: Servicing rights, carried at fair value | 27,218 | 27,585 | 28,045 | 27,335 | 28,924 | | Less: Goodwill and other intangible assets | 134,502 | 135,966 | 137,570 | 139,215 | 141,769 | | Tangible book value (Non-GAAP) | 2,518,957 | 2,440,349 | 2,356,347 | 2,239,178 | 2,119,903 | | Book value per common share (GAAP) | 47.46 | 45.79 | 44.17 | 42.14 | 40.26 | | Less: Servicing rights per common share | 0.48 | 0.49 | 0.49 | 0.48 | 0.51 | | Less: Goodwill and other intangible assets per share | 2.38 | 2.39 | 2.41 | 2.44 | 2.49 | | Tangible book value per common share (Non-GAAP) | 44.60 | 42.91 | 41.27 | 39.22 | 37.26 | Investor Relations This section provides contact information for key investor relations personnel and general investor inquiries - Key investor relations contacts are Greg Garrabrants (President and CEO), Derrick Walsh (EVP and CFO), and Johnny Lai (SVP Corporate Development and Investor Relations)[23] - For investor inquiries, contact investors@axosfinancial.com or jlai@axosfinancial.com, or call 858.649.2218[23]