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Axos Financial EPS Surges Past Forecast
AXAxos Financial(AX) The Motley Fool·2025-01-28 22:49

Core Insights - Axos Financial reported mixed results for Q2 of fiscal 2025, with adjusted EPS of 1.82exceedinganalystexpectationsof1.82 exceeding analyst expectations of 1.75, while revenue of 280.1millionfellshortofthe280.1 million fell short of the 303 million estimate [1][6]. Financial Performance - Adjusted EPS increased by 13.8% year-over-year from 1.60inQ22024[3].−Revenuegrewby22.51.60 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 228.6millioninthepreviousyear[3][6].−Thenetinterestmarginimprovedto4.83228.6 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].BusinessOverview−AxosFinancialoperatesasatechnology−drivenfinancialinstitution,focusingondigitalplatformsforretailbankingandinvestmentadvisoryservices,whichreducesrelianceonphysicalbranches[4].−Thecompanyaimstoenhancecustomerexperiencesthroughscalabletechnologysolutionsandhasbeenexpandingitsdigitalbankingcapabilities[4][5].OperationalEfficiency−Thecompanymaintainedstrongoperationalefficiency,withnon−interestexpensesslightlydecliningto41.27 [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 12.2million,animprovementfrom12.2 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].