Axos Financial(US:AX)2024-07-31 00:15Financial Data and Key Metrics Changes - The company reported a net income of approximately $105 million for Q4 2024, representing a 20% increase year-over-year [7] - Earnings per share for the three and twelve months ended June 30, 2024, were $1.80 and $7.66, reflecting year-over-year growth of 23% and 51% respectively [7] - The tangible book value per share grew by 26% year-over-year [5] - The net interest margin was 4.65% for Q4 2024, up 46 basis points from 4.19% in Q4 2023, but down from 4.87% in Q3 2024 [6][12] Business Line Data and Key Metrics Changes - Total loan originations for investment were $2.5 billion for Q4 2024, up approximately 11% year-over-year [8] - Ending loan balances increased by 2.7% quarter-over-quarter and 16.9% year-over-year to $19.2 billion [5] - Average loan yields for Q4 2024 were 8.55%, down 10 basis points from the prior quarter but up 104 basis points year-over-year [8] Market Data and Key Metrics Changes - Total deposits increased by $256 million in Q4 2024 and by $2.2 billion for the fiscal year [11] - Non-interest bearing deposits were approximately $3 billion, up $220 million quarter-over-quarter [11] - The company maintained a diverse mix of funding, with consumer and small business deposits representing 62% of total deposits [11] Company Strategy and Development Direction - The company is focused on adding net new assets from existing and new advisors to grow assets under custody and cash balances [12] - Management emphasized the importance of integrating treasury management teams to enhance deposit growth [20] - The company plans to continue evaluating organic and inorganic growth initiatives while remaining opportunistic with capital deployment [15] Management's Comments on Operating Environment and Future Outlook - Management noted that the loan growth outlook remains consistent, expecting high single digits to low teens year-over-year growth [16] - The company anticipates that net interest margin benefits from the FDIC loan purchase will be 30 to 40 basis points for fiscal year 2025 [12] - Management expressed optimism about maintaining net interest margin and returns above long-term targets in fiscal 2025 [15] Other Important Information - Non-performing loans decreased in various segments, with non-performing loans in the commercial specialty real estate portfolio remaining unchanged at approximately $26 million [10] - The company repurchased $13.2 million of common stock in Q4 2024 at an average share price of $48, with approximately $106 million remaining in the authorized share repurchase program [7] Q&A Session Summary Question: Deposit initiatives and success areas - Management discussed investments in treasury management teams and the integration of these teams to enhance deposit growth [20] Question: Trends in funding costs - Management noted a downward trend in funding costs and the ability to cut rates slightly [22] Question: Feedback on UDB rollout and AI opportunities - Management reported positive feedback on the UDB rollout and ongoing efforts to leverage AI for operational improvements [24][25] Question: Broker dealer fee income decline - Management indicated that the decline in broker dealer fee income was likely at a low point and attributed some fluctuations to one-time items [28] Question: Competitive dynamics and regulatory impacts - Management stated that they are not currently seeing significant competitive pressures regarding cash sorting fees [31] Question: Loan growth outlook and repayments - Management acknowledged unexpected loan repayments contributing to excess liquidity but maintained a positive outlook for loan growth [49][51]