Axos Financial(AX) - 2025 Q2 - Quarterly Report

Financial Performance - For the three months ended December 31, 2024, net income was $104.7 million, while adjusted earnings were$105.8 million [129]. - The diluted EPS for the three months ended December 31, 2024, was $1.80, and the adjusted EPS was$1.82 [129]. - For the three months ended December 31, 2024, net income was $104.7 million, or$1.80 per diluted share, compared to $151.8 million, or$2.62 per diluted share for the same period in 2023 [133]. - Non-interest income for the three months ended December 31, 2024, was $27.8 million, a significant decrease from$124.1 million in the same period of 2023 [132]. - The efficiency ratio for the three months ended December 31, 2024, was 47.20%, compared to 34.54% for the same period in 2023, indicating increased operational costs relative to income [132]. - The return on average assets for the three months ended December 31, 2024, was 1.74%, down from 2.90% in the same period of 2023 [132]. - Income before income taxes for the Banking Business Segment was $152.9 million for the three months ended December 31, 2024, down from$214.6 million in the prior year [157]. Assets and Deposits - The company has approximately $23.7 billion in assets and$37.7 billion in assets under custody and/or administration at Axos Clearing LLC [115]. - Total assets increased to $23.7 billion as of December 31, 2024, up from$22.9 billion as of June 30, 2024, and $21.6 billion as of December 31, 2023 [131]. - Total deposits reached$19.9 billion as of December 31, 2024, compared to $19.4 billion as of June 30, 2024, and$18.2 billion as of December 31, 2023 [131]. - The total number of deposit accounts increased to 580,151 at December 31, 2024, from 555,538 at June 30, 2024 [174]. Income and Expenses - Net interest income for the three months ended December 31, 2024, was $280.1 million, compared to$228.6 million for the same period in 2023, reflecting a growth of 22.5% [132]. - Total interest expense increased by 6.0% for the three months ended December 31, 2024, mainly due to an $11.3 million rise in interest expense on demand and savings deposits [146]. - Total non-interest expense increased by$23.5 million, or 19.3%, for the three months ended December 31, 2024, primarily due to higher salaries and related costs [152]. - Non-interest income decreased by $96.3 million, or 77.6$2,839.1 million available immediately and $4,812.6 million available with additional collateral from the FHLB, indicating strong liquidity [181]. Interest Income and Rate Sensitivity - The average yield on loans increased to 8.37% for the three months ended December 31, 2024, compared to 8.18% for the same period in 2023 [134]. - The interest rate spread improved to 3.91% for the three months ended December 31, 2024, compared to 3.58% for the same period in 2023 [134]. - A 200 basis points increase in interest rates is projected to result in a 5.5% increase in net interest income for the first 12 months [202]. - The sensitivity of market value of equity (MVE) to a 200 basis points increase in interest rates is estimated at a decrease of 1.2% [203]. Regulatory Compliance - The company is subject to regulation by the Federal Reserve and the Office of the Comptroller of the Currency [116][118]. - The company emphasizes the importance of non-GAAP financial measures, with adjusted earnings providing insight into core business performance [128]. Business Segments - The banking business segment focuses on providing a wide range of banking services, including online banking and various lending products [122]. - The securities business segment includes clearing broker-dealer and registered investment advisor custody services [123]. - The company generates non-interest income from various sources, including fees from loans originated for sale and technology transaction processing fees [115].