Axos Financial(AX) - 2025 Q2 - Quarterly Results

Loan Growth and Deposits - Loan growth in Q2 Fiscal 2025 reached $3.61 billion, a decrease of 1.66$11.9 billion in consumer direct deposits[12] - $3 billion of deposits adjust with the Federal Funds rate, enhancing deposit rate optionality[10] - Approximately 90$1.1 billion in fiduciary services and $3.5 billion in commercial and treasury management[12] - The company has$450 million of off-balance sheet deposits from Axos Securities, contributing to liquidity[10] Credit Quality and Allowance for Credit Losses - The allowance for credit losses (ACL) and unfunded loan commitments reserve (UCL) totaled $5.8 million[15] - As of December 31, 2024, the Allowance for Credit Losses (ACL) by loan category shows a total of$2,026 million, with a percentage of 1.3% based on gross unpaid principal balance[18] - The credit quality report indicates that non-accrual loans totaled $1,826 million, representing 0.65$18,860 million[19] - Single-family mortgage loans accounted for $409 million, with a non-accrual percentage of 1.33$406 million, with a non-accrual percentage of 0.92%[19] - Commercial real estate loans stood at $604 million, with a non-accrual percentage of 0.43$483 million, with a non-accrual percentage of 0.41%[19] Financial Performance Metrics - Net interest income for the three months ended December 31, 2024, was $280.1 million, compared to$292.0 million for the previous quarter, reflecting a decrease of 6.5%[23] - Net income for the three months ended December 31, 2024, was $104.7 million, compared to$112.3 million in the previous quarter, representing a decline of 5.1%[23] - The efficiency ratio improved to 47.20% from 45.99% in the previous quarter, indicating enhanced operational efficiency[24] - Return on average assets was 1.74%, down from 1.92% in the previous quarter, reflecting a decrease of 18.8%[23] - Return on average common stockholders' equity was 16.97%, compared to 19.12% in the previous quarter, a decline of 11.2%[23] - The net interest margin was 4.83%, down from 5.17% in the previous quarter, indicating a contraction of 6.6%[24] - Non-interest expense was $145.3 million, compared to$147.5 million in the previous quarter, showing a decrease of 1.5%[23] Asset and Equity Growth - Total assets increased to $23,709,422 from$23,569,084, reflecting a growth of 0.6%[21] - Total stockholders' equity rose to $2,521,962 from$2,405,728, representing an increase of 4.8%[21] - Book value per common share improved to $44.17 from$42.14, a growth of 4.8%[21] - Total stockholders' equity as of December 31, 2024, was $2.52 billion, compared to$2.40 billion as of December 31, 2023, reflecting a year-over-year increase of 5%[29] - Tangible book value per common share (non-GAAP) increased to $2.35 as of December 31, 2024, from$2.23 as of December 31, 2023, representing a growth of 5.4%[29] Future Outlook and Strategic Initiatives - The company aims to enhance its credit quality metrics through strategic initiatives in risk management and loan underwriting[20] - Future outlook includes a focus on expanding into new markets and enhancing product offerings to improve overall financial performance[20] - The company is focused on expanding its market presence and enhancing its product offerings through strategic initiatives and potential acquisitions[30] - The management team emphasized ongoing investments in new technologies and product development to drive future growth[30] - Future guidance indicates a positive outlook for revenue growth driven by increased customer acquisition and retention strategies[30] - The company plans to leverage its existing infrastructure to support new product launches and market expansion efforts[30]