EX-99.1 2 pressrelease-axosearningsa.htm EX-99.1 Document

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Axos Financial, Inc. Announces 52% Growth in Diluted EPS to $1.46
Net Interest Income Increased 23% in Quarter Ended June 2023
LAS VEGAS, NV – (BUSINESS WIRE) – July 27, 2023 – Axos Financial, Inc. (NYSE: AX) (“Axos”), parent company of Axos Bank (the “Bank”), today announced unaudited financial results for the fourth fiscal quarter and full fiscal year ended June 30, 2023. Net income for the quarter was $87.4 million, an increase of 50.9% over net income of $57.9 million for the quarter ended June 30, 2022. Earnings per diluted share for the quarter were $1.46, an increase of $0.50, or 52.1%, as compared to earnings per diluted share of $0.96 for the quarter ended June 30, 2022.
Adjusted earnings and adjusted earnings per diluted common share (“adjusted EPS”), non-GAAP measures, which exclude non-cash amortization expenses and non-recurring costs related to mergers and acquisitions, and other non-recurring costs, increased 32.3% to $89.4 million and 33.9% to $1.50, respectively, for the quarter ended June 30, 2023 compared to $67.6 million and $1.12, respectively, for the quarter ended June 30, 2022.
Fourth Quarter Fiscal 2023 Financial Summary:
Three Months Ended June 30,
(Dollars in thousands, except per share data)20232022% Change
Net interest income$203,754 $165,410 23.2 %
Non-interest income$32,705 $27,100 20.7 %
Net income$87,356 $57,896 50.9 %
Adjusted Earnings (Non-GAAP)1
$89,431 $67,616 32.3 %
Diluted EPS$1.46 $0.96 52.1 %
Adjusted EPS (Non-GAAP)1
$1.50 $1.12 33.9 %
1 See “Use of Non-GAAP Financial Measures”
For the fiscal year ended June 30, 2023, net income was a record $307.2 million, an increase of 27.6% over net income of $240.7 million for the year ended June 30, 2022. Earnings per diluted share was $5.07, an increase of $1.10, or 27.7%, as compared to earnings per diluted share of $3.97 for the year ended June 30, 2022.

“We achieved record earnings and maintained strong credit quality and liquidity in the three and twelve months ended June 30, 2023,” stated Greg Garrabrants, President and Chief Executive Officer of Axos. “Double-digit growth in net interest income and a net interest margin above the high end of our long-term target were the primary contributors to our strong results. Our credit quality remains resilient, supported by our diverse, asset-based lending at low loan-to-values. Our strong balance sheet, with a modest unrealized loss on our securities portfolio equal to less than 0.5% of our shareholders’ equity and a growing deposit base generated by a variety of consumer and commercial banking and securities businesses, positions us well for continued growth.”

“Earnings per diluted share increased 52% year-over-year to $1.46 in the fourth quarter of fiscal 2023, which included $0.08 per diluted share primarily attributed to $5.2 million of one-time tax credits,” stated Derrick Walsh, Executive Vice President and Chief Financial Officer. Even without these non-recurring benefits, our earnings per diluted share would represent year-over-year growth of 44%. Our reported net interest margin of 4.19% and 4.35% for the three and twelve months ended June 30, 2023 was negatively impacted by approximately $1.2 billion of excess liquidity. Excluding the excess liquidity, our net interest margin would have been 4.39% and 4.42% for the fourth quarter and full year 2023, respectively.”





Other Highlights:
•Net loans for investment totaled $16.5 billion at June 30, 2023, an increase of $0.6 billion, or 15.7% annualized, from March 31, 2023
•Deposits increased $0.4 billion, or 9.2% annualized, between March 31, 2023 and June 30, 2023
•Approximately 90% of total deposits were FDIC-insured or collateralized at June 30, 2023
•Pretax income for the Securities Business was $15.5 million and $59.6 million for the three and twelve months ended June 30, 2023
•Percentage of non-performing loans relative to total loans was 0.52% at June 30, 2023, down from 0.60% at March 31, 2023
•Unrealized losses of $9.3 million on the available-for-sale securities portfolio was less than 0.5% of stockholders’ equity at June 30, 2023; no securities were classified as held-to-maturity
•Tier 1 capital to risk weighted assets was 11.63% for the Bank and 10.94% for Axos Financial, Inc. at June 30, 2023, up from 11.55% and 10.71%, respectively, at March 31, 2023
•Book value increased to $32.53 per share, up 18.4% compared to June 30, 2022
•Repurchased $17.7 million of common stock during the quarter ended June 30, 2023
Fourth Quarter Fiscal 2023 Income Statement Summary
Net income was $87.4 million and earnings per diluted share was $1.46 for the three months ended June 30, 2023 compared to net income of $57.9 million and earnings per diluted share of $0.96 for the three months ended June 30, 2022. Net interest income increased to $203.8 million, up 23.2% for the three months ended June 30, 2023 compared to the three months ended June 30, 2022, primarily due to higher rates earned and higher average balances in the loan portfolio, partially offset by higher rates paid on deposits and increased deposit balances.
The provision for credit losses was $7.0 million for the three months ended June 30, 2023 compared to $6.0 million for the three months ended June 30, 2022, primarily due to loan growth, changes in the macroeconomic environment and changes in loan product mix.
Non-interest income increased to $32.7 million, up 20.7%, for the three months ended June 30, 2023 from $27.1 million for the three months ended June 30, 2022. The net increase was primarily due to a $8.9 million increase in broker-dealer fee income and a $1.5 million increase in banking and service fees, partially offset by a $2.6 million decrease in prepayment penalty fee income and a $1.5 million decrease in mortgage banking income.
Non-interest expense, comprised of various operating expenses, increased 7.3% to $112.5 million for the three months ended June 30, 2023 from $104.8 million for the three months ended June 30, 2022. The net increase was primarily driven by an increase in salaries and related costs of $11.0 million and higher advertising and promotional expenses of $4.6 million, partially offset by lower general and administrative expenses, reflecting the absence of an $11 million charge due largely to a one-time resolution of a contractual claim in the prior year quarter.
Our effective tax rate was 25.34% for the three months ended June 30, 2023 compared to 29.15% for the three months ended June 30, 2022. The lower tax rate for the three months ended June 30, 2023, was primarily due to the impact of one-time income tax credits recognized in the current quarter.


Full Year Fiscal 2023 Highlights
•Net income reached a record $307.2 million, an increase of 27.6% compared to the fiscal year ended June 30, 2022
•Earnings per diluted share outstanding were $5.07, up 27.7% from $3.97 in the fiscal year ended June 30, 2022
•Deposits increased by $3.2 billion, or 22.8%, to $17.1 billion during the fiscal year ended June 30, 2023
•Net interest margin for the Banking Business segment increased to 4.48% for the fiscal year ended June 30, 2023 compared to 4.36% for the fiscal year ended June 30, 2022
•Efficiency ratio was 49.48% for the fiscal year ended June 30, 2023 compared to 50.25% for the fiscal year ended June 30, 2022
•Return on average assets increased to 1.64% for the fiscal year ended June 30, 2023 from 1.57% for the fiscal year ended June 30, 2022
Balance Sheet Summary
Axos’ total assets increased $2.9 billion or 16.9% to $20.3 billion at June 30, 2023 from June 30, 2022, primarily due to an increase of $2.4 billion in loans held for investment and an increase of $0.8 billion in total cash held. Total liabilities increased $2.7 billion to $18.4 billion at June 30, 2023 from June 30, 2022, primarily due to an increase of $3.2 billion in deposits, partially offset by a $0.3 billion decrease in securities loaned. Stockholders’ equity increased by $274.2 million, or 16.7%, to $1.9 billion at June 30, 2023 from $1.6 billion at June 30, 2022. The increase was primarily the result of net income of $307.2 million and $20.0 million of stock-based compensation activity, partially offset by the repurchase of $49.3 million of common stock.
The Bank’s Tier 1 capital ratio was 11.63% at June 30, 2023 compared to 11.24% at June 30, 2022.
Conference Call
A conference call and webcast will be held on Thursday, July 27, 2023 at 5:00 PM Eastern / 2:00 PM Pacific. Analysts and investors may dial in and participate in the question/answer session. To access the call, please dial: 877-407-8293. The conference call will be webcast live and both the webcast and the earnings supplement may be access at Axos’ website, http://www.axosfinancial.com. For those unable to listen to the live broadcast, a replay will be available until August 27, 2023, at the Axos Financial website and telephonically by dialing toll-free number 877-660-6853, passcode 13739708.
About Axos Financial, Inc. and Subsidiaries
The condensed consolidated financial statements include the accounts of Axos Financial, Inc. and its wholly owned subsidiaries, Axos Bank and Axos Nevada Holding, LLC (“Axos Nevada Holding” and collectively, the “Company”). Axos, the Bank and Axos Nevada Holding comprise substantially all of the Company’s assets and liabilities and revenues and expenses. Axos Nevada Holding wholly owns its subsidiary Axos Securities, LLC, which wholly owns subsidiaries Axos Clearing LLC., a clearing broker dealer, Axos Invest, Inc., a registered investment advisor, and Axos Invest, LLC., an introducing broker dealer. With approximately $20.3 billion in consolidated assets, Axos Financial, Inc., through Axos Bank, provides consumer and business banking products through its low-cost distribution channels and affinity partners. Axos Clearing LLC (including its business division AAS), with approximately $34.8 billion of assets under custody and/or administration, and Axos Invest, Inc., provide comprehensive securities clearing and custody services to introducing broker-dealers and registered investment advisor correspondents, and digital investment advisory services to retail investors, respectively. Axos Financial, Inc.’s common stock is listed on the NYSE under the symbol “AX” and is a component of the Russell 2000® Index, the S&P SmallCap 600® Index, the KBW Nasdaq Financial Technology Index, and the Travillian Tech-Forward Bank Index. For more information on Axos Financial, Inc., please visit investors.axosfinancial.com.
Segment Reporting
The Company operates through two segments: Banking Business and Securities Business. In order to reconcile the two segments to the consolidated totals, the Company includes parent-only activities and intercompany eliminations. Inter-segment transactions are eliminated in consolidation and primarily include non-interest income earned by the Securities Business segment and non-interest expense incurred by the


Banking Business segment for cash sorting fees related to deposits sourced from Securities Business segment customers, as well as interest expense paid by the Banking Business segment to each of the wholly-owned subsidiaries of the Company and to the Company itself for their operating cash held on deposit with the Business Banking segment.

The following tables present the operating results of the segments and reconciliations:
For the Three Months Ended June 30, 2023
(Dollars in thousands)Banking BusinessSecurities BusinessCorporate/EliminationsAxos Consolidated
Net interest income$201,770 $5,556 $(3,572)$203,754 
Provision for loan losses7,000 — — 7,000 
Non-interest income10,306 37,640 (15,241)32,705 
Non-interest expense95,579 27,648 (10,771)112,456 
Income (Loss) before income taxes$109,497 $15,548 $(8,042)$117,003 
For the Three Months Ended June 30, 2022
(Dollars in thousands)Banking BusinessSecurities BusinessCorporate/EliminationsAxos Consolidated
Net interest income$165,504 $3,509 $(3,603)$165,410 
Provision for loan losses6,000 — — 6,000 
Non-interest income14,004 18,864 (5,768)27,100 
Non-interest expense83,817 22,797 (1,821)104,793 
Income (Loss) before income taxes$89,691 $(424)$(7,550)$81,717 
Twelve Months Ended June 30, 2023
(Dollars in thousands)Banking BusinessSecurities BusinessCorporate/EliminationsAxos Consolidated
Net interest income$776,294 $21,042 $(14,215)$783,121 
Provision for loan losses24,750 — — 24,750 
Non-interest income42,260 141,107 (62,879)120,488 
Non-interest expense390,911 102,572 (46,368)447,115 
Income (Loss) before income taxes$402,893 $59,577 $(30,726)$431,744 
Twelve Months Ended June 30, 2022
(Dollars in thousands)Banking BusinessSecurities BusinessCorporate/EliminationsAxos Consolidated
Net interest income$597,833 $17,580 $(8,255)$607,158 
Provision for loan losses18,500 — — 18,500 
Non-interest income60,881 64,069 (11,587)113,363 
Non-interest expense274,079 84,014 3,969 362,062 
Income (Loss) before income taxes$366,135 $(2,365)$(23,811)$339,959 

Use of Non-GAAP Financial Measures
In addition to the results presented in accordance with GAAP, this release includes the non-GAAP financial measures adjusted earnings, adjusted earnings per diluted common share, and tangible book value per common share. Non-GAAP financial measures have inherent limitations, may not be comparable to similarly titled measures used by other companies and are not audited. Readers should be aware of these limitations and should be cautious as to their reliance on such measures. As noted below with respect to each measure, we believe the non-GAAP financial measures disclosed in this release enhance investors’ understanding of our business and performance, and our management uses these non-GAAP measures when it internally evaluates the performance of our business and makes operating decisions. However,


these non-GAAP measures should not be considered in isolation, or as a substitute for GAAP basis financial measures.
We define “adjusted earnings”, a non-GAAP financial measure, as net income without the after-tax impact of non-recurring acquisition-related costs (including amortization of intangible assets related to acquisitions) and other costs (unusual or non-recurring charges). Adjusted earnings per diluted common share (“adjusted EPS”), a non-GAAP financial measure, is calculated by dividing non-GAAP adjusted earnings by the average number of diluted common shares outstanding during the period. We believe the non-GAAP measures of adjusted earnings and adjusted EPS provide useful information about Axos’ operating performance. We believe excluding the non-recurring acquisition-related costs and other costs provides investors with an alternative understanding of Axos’ core business.
Below is a reconciliation of net income, the nearest comparable GAAP measure, to adjusted earnings and adjusted EPS (Non-GAAP) for the periods shown:
Three Months EndedTwelve Months Ended
June 30,June 30,
(Dollars in thousands, except per share amounts)2023202220232022
Net income$87,356 $57,896 $307,165 $240,716 
Acquisition-related costs 2,779 2,745 10,948 11,355 
Other costs1
— 10,975 16,000 10,975 
Income taxes(704)(4,000)(7,776)(6,519)
Adjusted earnings (Non-GAAP)$89,431 $67,616 $326,337 $256,527 
Average dilutive common shares outstanding59,707,871 60,508,304 60,566,854 60,610,954 
Diluted EPS$1.46 $0.96 $5.07 $3.97 
Acquisition-related costs0.05 0.05 0.18 0.19 
Other costs1
— 0.18 0.27 0.18 
Income taxes(0.01)(0.07)(0.13)(0.11)
Adjusted EPS (Non-GAAP)$1.50 $1.12 $5.39 $4.23 
1 Other costs for the twelves months ended June 30, 2023 reflect an accrual in the first quarter of 2023 as a result of adverse legal judgment that has not been finalized. Other costs for the three and twelve months ended June 30, 2022 reflect a one-time resolution of a contractual claim.


We define “tangible book value”, a non-GAAP financial measure, as book value adjusted for goodwill and other intangible assets. Tangible book value is calculated using common stockholders’ equity minus mortgage servicing rights, goodwill and other intangible assets. Tangible book value per common share, a non-GAAP financial measure, is calculated by dividing tangible book value by the common shares outstanding at the end of the period. We believe tangible book value per common share is useful in evaluating the Company’s capital strength, financial condition, and ability to manage potential losses.
Below is a reconciliation of total stockholders’ equity to tangible book value per common share (Non-GAAP) as of the dates indicated:
June 30,
(Dollars in thousands, except per share amounts)20232022
Common stockholders’ equity$1,917,159 $1,642,973 
Less: mortgage servicing rights, carried at fair value25,443 25,213 
Less: goodwill and other intangible assets152,149 156,405 
Tangible common stockholders’ equity (Non-GAAP)$1,739,567 $1,461,355 
Common shares outstanding at end of period58,943,035 59,777,949 
Book value per common share$32.53 $27.48 
Less: mortgage servicing rights, carried at fair value per common share0.44 0.42 
Less: goodwill and other intangible assets per common share2.58 2.61 
Tangible book value per common share (Non-GAAP)$29.51 $24.45 
Forward-Looking Safe Harbor Statement
This press release contains forward-looking statements that involve risks and uncertainties, including without limitation statements relating to Axos’ financial prospects and other projections of its performance and asset quality, Axos’ deposit balances and capital ratios, Axos’ ability to continue to grow profitably and increase its business, Axos’ ability to continue to diversify its lending and deposit franchises, the anticipated timing and financial performance of other offerings, initiatives, and acquisitions, expectations of the environment in which Axos operates and projections of future performance. These forward-looking statements are made on the basis of the views and assumptions of management regarding future events and performance as of the date of this press release. Actual results and the timing of events could differ materially from those expressed or implied in such forward-looking statements as a result of risks and uncertainties, including without limitation Axos’ ability to successfully integrate acquisitions and realize the anticipated benefits of the transactions, changes in the interest rate environment, monetary policy, inflation, government regulation, general economic conditions, changes in the competitive marketplace, conditions in the real estate markets in which we operate, risks associated with credit quality, our ability to attract and retain deposits and access other sources of liquidity, and the outcome and effects of litigation and other factors beyond our control. These and other risks and uncertainties detailed in Axos’ periodic reports filed with the Securities and Exchange Commission, including its 2022 Form 10-K, as supplemented by its Quarterly Report on Form 10-Q for the period ended December 31, 2022, could cause actual results to differ materially from those expressed or implied in any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Axos undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. All written and oral forward-looking statements made in connection with this press release, which are attributable to us or persons acting on Axos’ behalf are expressly qualified in their entirety by the foregoing information.

Investor Relations Contact:
Johnny Lai, CFA
SVP, Corporate Development & Investor Relations
(858) 649-2218
jlai@axosfinancial.com



The following tables set forth certain selected financial data concerning the periods and the dates indicated:
AXOS FINANCIAL, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited – dollars in thousands)
 
(Dollars in thousands)June 30,
2023		June 30,
2022		June 30,
2021
Selected Balance Sheet Data:
Total assets$20,348,469 $17,401,165 $14,265,565 
Loans—net of allowance for credit losses16,456,728 14,091,061 11,414,814 
Loans held for sale, carried at fair value23,203 4,973 29,768 
Loans held for sale, lower of cost or fair value776 10,938 12,294 
Allowance for credit losses - loans166,680 148,617 132,958 
Securities—trading758 1,758 1,983 
Securities—available-for-sale232,350 262,518 187,335 
Securities borrowed134,339 338,980 619,088 
Customer, broker-dealer and clearing receivables374,074 417,417 369,815 
Total deposits17,123,108 13,946,422 10,815,797 
Advances from the FHLB90,000 117,500 353,500 
Borrowings, subordinated notes and debentures361,779 445,244 221,358 
Securities loaned159,832 474,400 728,988 
Customer, broker-dealer and clearing payables445,477 511,654 535,425 
Total stockholders’ equity1,917,159 1,642,973 1,400,936 
Capital Ratios:
Equity to assets at end of period9.42 %9.44 %9.82 %
Axos Financial, Inc.:
Tier 1 leverage capital to adjusted average assets8.96 %9.25 %8.82 %
Common equity tier 1 capital (to risk-weighted assets)10.94 %9.86 %11.36 %
Tier 1 capital (to risk-weighted assets)10.94 %9.86 %11.36 %
Total capital (to risk-weighted assets)13.82 %12.73 %13.78 %
Axos Bank:
Tier 1 leverage capital to adjusted average assets9.68 %10.65 %9.45 %
Common equity tier 1 capital (to risk-weighted assets)11.63 %11.24 %12.28 %
Tier 1 capital (to risk-weighted assets)11.63 %11.24 %12.28 %
Total capital (to risk-weighted assets)12.50 %12.01 %13.21 %
Axos Clearing, LLC:
Net capital$35,221 $38,915 $35,950 
Excess capital$29,905 $32,665 $27,904 
Net capital as a percentage of aggregate debit items13.25 %12.45 %8.94 %
Net capital in excess of 5% aggregate debit items$21,930 $23,290 $15,836 



AXOS FINANCIAL, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited – dollars in thousands, except per share data)
At or for the Three Months EndedAt or for the Fiscal Year Ended
June 30,June 30,
(Dollars in thousands, except per share data)2023202220232022
Selected Income Statement Data:
Interest and dividend income$346,430 $184,161 $1,157,138 $659,728 
Interest expense142,676 18,751 374,017 52,570 
Net interest income203,754 165,410 783,121 607,158 
Provision for credit losses7,000 6,000 24,750 18,500 
Net interest income after provision for loan losses196,754 159,410 758,371 588,658 
Non-interest income32,705 27,100 120,488 113,363 
Non-interest expense112,456 104,793 447,115 362,062 
Income before income tax expense117,003 81,717 431,744 339,959 
Income tax expense29,647 23,821 124,579 99,243 
Net income$87,356 $57,896 $307,165 $240,716 
Per Share Data:
Net income:
Basic
$1.48 $0.97 $5.15 $4.04 
Diluted
$1.46 $0.96 $5.07 $3.97 
Adjusted earnings per common share (Non-GAAP)1
$1.50 $1.12 $5.39 $4.23 
Book value$32.53 $27.48 $32.53 $27.48 
Tangible book value per common share (Non-GAAP)1
$29.51 $24.45 $29.51 $24.45 
Weighted average number of shares outstanding:
Basic
58,981,372 59,665,041 59,691,541 59,523,626 
Diluted
59,707,871 60,508,304 60,566,854 60,610,954 
Common shares outstanding at end of period58,943,035 59,777,949 58,943,035 59,777,949 
Common shares issued at end of period69,465,446 68,859,722 69,465,446 68,859,722 
Performance Ratios and Other Data:
Loan originations for investment$2,216,764 $3,152,064 $8,452,215 $10,366,796 
Loan originations for sale$95,788 $86,873 $254,288 $656,487 
Return on average assets1.73 %1.40 %1.64 %1.57 %
Return on average common stockholders’ equity18.60 %14.13 %17.22 %15.61 %
Interest rate spread2
3.20 %3.86 %3.44 %3.91 %
Net interest margin3
4.19 %4.19 %4.35 %4.13 %
Net interest margin3 - Banking Business Segment
4.26 %4.45 %4.48 %4.36 %
Efficiency ratio4
47.56 %54.44 %49.48 %50.25 %
Efficiency ratio4 - Banking Business Segment
45.07 %46.69 %47.76 %41.61 %
Asset Quality Ratios:
Net annualized charge-offs to average loans0.04 %0.02 %0.04 %0.02 %
Non-performing loans and leases to total loans0.52 %0.83 %0.52 %0.83 %
Non-performing assets to total assets0.47 %0.68 %0.47 %0.68 %
Allowance for credit losses - loans to total loans held for investment1.00 %1.04 %1.00 %1.04 %
Allowance for credit losses - loans to non-performing loans191.23 %125.74 %191.23 %125.74 %
1     See “Use of Non-GAAP Financial Measures” herein.
2    Interest rate spread represents the difference between the annualized weighted average yield on interest-earning assets and the annualized weighted average rate paid on interest-bearing liabilities.
3    Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.
4    Efficiency ratio represents non-interest expense as a percentage of the aggregate of net interest income and non-interest income.