Axos Financial Reports Record Earnings

Axos Financial Inc. (NYSE: AX), with offices in San Diego’s University Towne Center area and Las Vegas, reported net income of $87.4 million on net interest income of $203.8 million during its fourth quarter, which ended June 30.

Axos reported its financial results on July 27.

Net income grew by 51% over the same quarter one year ago, when the business reported net income of $57.9 million.

Assets as of June 30 were $20.3 billion.

For the year, Axos reported net income of $307.2 million on net interest income of $783.1 million.

For the prior 12 months, Axos reported net income of $240.7 million. Net interest income for the year was $607.2 million.

‘Strong Results’

“We achieved record earnings and maintained strong credit quality and liquidity in the three and 12 months ended June 30, 2023,” Greg Garrabrants, president and CEO of Axos, said in a statement.

“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 attributed to $5.2 million of non-recurring tax benefits,” said Derrick Walsh, executive vice president and chief financial officer. “Even without these non-recurring benefits, our earnings per diluted share results would represent year-over-year growth of 44%. Our reported net interest margin of 4.19% and 4.35% for the three and 12 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.”

In the National Spotlight

Axos, previously known as Bank of the Internet, launched as a digital bank in 2000. Five years later, the business listed on the NASDAQ as BOFI. By 2018, the novelty of the internet was gone and the business decided to rebrand, hitting on the name Axos.

Axos Bank and Garrabrants made their way into the mainstream media last month, when the Washington Post published an extended article on how Axos Bank supplied loans to businesses run by the family of Donald Trump, the former president and presidential candidate. According to the account, the loans included a $100 million loan for Trump Tower in New York City and a $125 million loan for Trump’s Doral resort in Florida.

Assets Grew $2.9 Billion

In a statement summing up its fiscal year, Axos said its total assets increased $2.9 billion or 16.9% to $20.3 billion at June 30, 2023 from the same date one year ago, 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 business said it repurchased $17.7 million of common stock during the quarter ended June 30.

The Bank’s Tier 1 capital ratio was 11.63% at June 30, 2023 compared to 11.24% on the same date in 2022.

Axos Financial Inc.

CEO: Greg Garrabrants
HEADQUARTERS: Las Vegas (Axos Financial Inc.), San Diego (Axos Bank)
BUSINESS: Banking and financial services
NET INTEREST INCOME: $783.1 million (Fiscal 2023)
ASSETS: $20.3 billion
STOCK: AX (NYSE)
MARKET CAP: $2.38 billion
WEBSITE: investors.axosfinancial.com
CONTACT: 858-649-2218
NOTABLE: Axos says it was “born digital”; when it launched in 2000, it was known as Bank of the Internet