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0001299709false00012997092023-07-272023-07-27

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported):  July 27, 2023

axosfina26.jpg

Axos Financial, Inc.
(Exact name of registrant as specified in its charter)
Delaware 001-37709 33-0867444
(State or other jurisdiction of
incorporation)
(Commission File Number) (IRS Employer Identification
Number)
9205 West Russell Road, Ste 400
Las Vegas, NV 89148
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (858) 649-2218          
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common stock, $0.01 par value AX New York Stock Exchange

Not Applicable

(Former name or former address, if changed since last report.)

 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
☐                                    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐                                    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐                                    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐                                    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

☐                                    Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐



Item 2.02     Results of Operations and Financial Condition

On July 27, 2023, Axos Financial, Inc. (the “Registrant” or the “Company”) issued a press release announcing its fiscal fourth quarter results of operations for the period ended June 30, 2023. The press release, related financial schedules and earnings supplement presentation are furnished as Exhibits 99.1 through 99.4.

Pursuant to General Instruction B.2. of Form 8-K, the information in this Item 2.02 of Form 8-K, including Exhibit 99.1, 99.2, 99.3 and 99.4 is being furnished pursuant to Item 2.02 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise be subject to the liabilities of that section, nor is it incorporated by reference into any filing of the Registrant under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof, regardless of any general incorporation language in such filing.



Item 9.01     Financial Statements and Exhibits.

(d)    Exhibits.
Exhibit Description
99.1
99.2
99.3
99.4
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)




SIGNATURE

 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

  Axos Financial, Inc.
   
Date: July 27, 2023 By: /s/ Derrick K. Walsh  
    Derrick K. Walsh
    EVP and Chief Financial Officer


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) 2023 2022 % 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 Business Securities Business Corporate/Eliminations Axos Consolidated
Net interest income $ 201,770  $ 5,556  $ (3,572) $ 203,754 
Provision for loan losses 7,000  —  —  7,000 
Non-interest income 10,306  37,640  (15,241) 32,705 
Non-interest expense 95,579  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 Business Securities Business Corporate/Eliminations Axos Consolidated
Net interest income $ 165,504  $ 3,509  $ (3,603) $ 165,410 
Provision for loan losses 6,000  —  —  6,000 
Non-interest income 14,004  18,864  (5,768) 27,100 
Non-interest expense 83,817  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 Business Securities Business Corporate/Eliminations Axos Consolidated
Net interest income $ 776,294  $ 21,042  $ (14,215) $ 783,121 
Provision for loan losses 24,750  —  —  24,750 
Non-interest income 42,260  141,107  (62,879) 120,488 
Non-interest expense 390,911  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 Business Securities Business Corporate/Eliminations Axos Consolidated
Net interest income $ 597,833  $ 17,580  $ (8,255) $ 607,158 
Provision for loan losses 18,500  —  —  18,500 
Non-interest income 60,881  64,069  (11,587) 113,363 
Non-interest expense 274,079  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 Ended Twelve Months Ended
June 30, June 30,
(Dollars in thousands, except per share amounts) 2023 2022 2023 2022
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 outstanding 59,707,871  60,508,304  60,566,854  60,610,954 
Diluted EPS $ 1.46  $ 0.96  $ 5.07  $ 3.97 
Acquisition-related costs 0.05  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) 2023 2022
Common stockholders’ equity $ 1,917,159  $ 1,642,973 
Less: mortgage servicing rights, carried at fair value 25,443  25,213 
Less: goodwill and other intangible assets 152,149  156,405 
Tangible common stockholders’ equity (Non-GAAP) $ 1,739,567  $ 1,461,355 
Common shares outstanding at end of period 58,943,035  59,777,949 
Book value per common share $ 32.53  $ 27.48 
Less: mortgage servicing rights, carried at fair value per common share 0.44  0.42 
Less: goodwill and other intangible assets per common share 2.58  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 The following tables set forth certain selected financial data concerning the periods and the dates indicated:
(858) 649-2218
jlai@axosfinancial.com




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 losses 16,456,728  14,091,061  11,414,814 
Loans held for sale, carried at fair value 23,203  4,973  29,768 
Loans held for sale, lower of cost or fair value 776  10,938  12,294 
Allowance for credit losses - loans 166,680  148,617  132,958 
Securities—trading 758  1,758  1,983 
Securities—available-for-sale 232,350  262,518  187,335 
Securities borrowed 134,339  338,980  619,088 
Customer, broker-dealer and clearing receivables 374,074  417,417  369,815 
Total deposits 17,123,108  13,946,422  10,815,797 
Advances from the FHLB 90,000  117,500  353,500 
Borrowings, subordinated notes and debentures 361,779  445,244  221,358 
Securities loaned 159,832  474,400  728,988 
Customer, broker-dealer and clearing payables 445,477  511,654  535,425 
Total stockholders’ equity 1,917,159  1,642,973  1,400,936 
Capital Ratios:
Equity to assets at end of period 9.42  % 9.44  % 9.82  %
Axos Financial, Inc.:
Tier 1 leverage capital to adjusted average assets 8.96  % 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 assets 9.68  % 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 items 13.25  % 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 Ended At or for the Fiscal Year Ended
June 30, June 30,
(Dollars in thousands, except per share data) 2023 2022 2023 2022
Selected Income Statement Data:
Interest and dividend income $ 346,430  $ 184,161  $ 1,157,138  $ 659,728 
Interest expense 142,676  18,751  374,017  52,570 
Net interest income 203,754  165,410  783,121  607,158 
Provision for credit losses 7,000  6,000  24,750  18,500 
Net interest income after provision for loan losses 196,754  159,410  758,371  588,658 
Non-interest income 32,705  27,100  120,488  113,363 
Non-interest expense 112,456  104,793  447,115  362,062 
Income before income tax expense 117,003  81,717  431,744  339,959 
Income tax expense 29,647  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 period 58,943,035  59,777,949  58,943,035  59,777,949 
Common shares issued at end of period 69,465,446  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 assets 1.73  % 1.40  % 1.64  % 1.57  %
Return on average common stockholders’ equity 18.60  % 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 loans 0.04  % 0.02  % 0.04  % 0.02  %
Non-performing loans and leases to total loans 0.52  % 0.83  % 0.52  % 0.83  %
Non-performing assets to total assets 0.47  % 0.68  % 0.47  % 0.68  %
Allowance for credit losses - loans to total loans held for investment 1.00  % 1.04  % 1.00  % 1.04  %
Allowance for credit losses - loans to non-performing loans 191.23  % 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.

EX-99.2 3 pressrelease-financialsche.htm EX-99.2 Document

AXOS FINANCIAL, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
At June 30,
(Dollars in thousands, except par and stated value) 2023 2022
ASSETS
Cash and cash equivalents $ 2,233,027  $ 1,202,587 
Cash segregated for regulatory purposes 149,059  372,112 
Total cash, cash equivalents, cash segregated 2,382,086  1,574,699 
Securities:
Trading 758  1,758 
Available-for-sale 232,350  262,518 
Stock of regulatory agencies 21,510  20,368 
Loans held for sale, carried at fair value 23,203  4,973 
Loans held for sale, lower of cost or fair value 776  10,938 
Loans—net of allowance for credit losses of $166,680 as of June 2023 and $148,617 as of June 2022
16,456,728  14,091,061 
Mortgage servicing rights, carried at fair value 25,443  25,213 
Securities borrowed 134,339  338,980 
Customer, broker-dealer and clearing receivables 374,074  417,417 
Goodwill and other intangible assets—net 152,149  156,405 
Other assets 545,053  496,835 
TOTAL ASSETS $ 20,348,469  $ 17,401,165 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Non-interest bearing $ 2,898,150  $ 5,033,970 
Interest bearing 14,224,958  8,912,452 
Total deposits 17,123,108  13,946,422 
Advances from the Federal Home Loan Bank 90,000  117,500 
Borrowings, subordinated notes and debentures 361,779  445,244 
Securities loaned 159,832  474,400 
Customer, broker-dealer and clearing payables 445,477  511,654 
Accounts payable and other liabilities 251,114  262,972 
Total liabilities 18,431,310  15,758,192 
STOCKHOLDERS’ EQUITY:
Common stock—$0.01 par value; 150,000,000 shares authorized, 69,465,446 shares issued and 58,943,035 shares outstanding as of June 30, 2023; 68,859,722 shares issued and 59,777,949 shares outstanding as of June 30, 2022 695  689 
Additional paid-in capital 479,878  453,784 
Accumulated other comprehensive income (loss)—net of tax (6,610) (2,933)
Retained earnings 1,735,609  1,428,444 
Treasury stock, at cost; 10,522,411 shares as of June 30, 2023 and 9,081,773 shares as of June 30, 2022 (292,413) (237,011)
Total stockholders’ equity 1,917,159  1,642,973 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 20,348,469  $ 17,401,165 
S-1


AXOS FINANCIAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
  For the Quarters Ended June 30,
(Dollars in thousands, except earnings per share) 2023 2022
INTEREST AND DIVIDEND INCOME:
Loans, including fees $ 305,011  $ 174,110 
Securities borrowed and customer receivables 4,815  4,462 
Investments and other 36,604  5,589 
Total interest and dividend income 346,430  184,161 
INTEREST EXPENSE:
Deposits 137,189  11,179 
Advances from the Federal Home Loan Bank 523  1,663 
Securities loaned 356  503 
Other borrowings 4,608  5,406 
Total interest expense 142,676  18,751 
Net interest income 203,754  165,410 
Provision for credit losses 7,000  6,000 
Net interest income, after provision for credit losses 196,754  159,410 
NON-INTEREST INCOME:
Broker-dealer fee income 13,768  4,912 
Advisory fee income 7,503  8,152 
Banking and service fees 7,838  6,308 
Mortgage banking income 1,988  3,498 
Prepayment penalty fee income 1,608  4,230 
Total non-interest income 32,705  27,100 
NON-INTEREST EXPENSE:
Salaries and related costs 54,509  43,541 
Data processing 16,095  13,594 
Depreciation and amortization 5,665  6,022 
Advertising and promotional 8,095  3,449 
Professional services 5,979  7,649 
Occupancy and equipment 4,037  3,480 
FDIC and regulatory fees 4,371  3,967 
Broker-dealer clearing charges 3,509  3,940 
General and administrative expense 10,196  19,151 
Total non-interest expense 112,456  104,793 
INCOME BEFORE INCOME TAXES 117,003  81,717 
INCOME TAXES 29,647  23,821 
NET INCOME $ 87,356  $ 57,896 
COMPREHENSIVE INCOME $ 86,319  $ 56,896 
Basic earnings per share $ 1.48  $ 0.97 
Diluted earnings per share $ 1.46  $ 0.96 


S-2



AXOS FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Year Ended June 30,
(Dollars in thousands, except earnings per share) 2023 2022 2021
INTEREST AND DIVIDEND INCOME:
Loans, including fees $ 1,048,874  $ 626,628  $ 584,410 
Securities borrowed and customer receivables 18,657  20,512  20,466 
Investments and other 89,607  12,588  12,987 
Total interest and dividend income 1,157,138  659,728  617,863 
INTEREST EXPENSE:
Deposits 339,481  33,620  60,529 
Advances from the Federal Home Loan Bank 12,644  4,625  4,672 
Securities loaned 3,673  1,124  1,496 
Other borrowings 18,219  13,201  12,424 
Total interest expense 374,017  52,570  79,121 
Net interest income 783,121  607,158  538,742 
Provision for credit losses 24,750  18,500  23,750 
Net interest income, after provision for credit losses 758,371  588,658  514,992 
NON-INTEREST INCOME:
Broker-dealer fee income 46,503  22,880  26,317 
Advisory fee income 28,324  29,230  — 
Banking and service fees 32,938  28,752  29,137 
Mortgage banking income 7,101  19,198  42,641 
Prepayment penalty fee income 5,622  13,303  7,166 
Total non-interest income 120,488  113,363  105,261 
NON-INTEREST EXPENSE:
Salaries and related costs 204,271  167,390  152,576 
Data processing 60,557  50,159  40,719 
Depreciation and amortization 23,387  24,596  24,124 
Advertising and promotional 37,150  13,580  14,212 
Professional services 29,268  22,482  22,241 
Occupancy and equipment 15,647  13,745  13,402 
FDIC and regulatory fees 15,534  11,823  10,603 
Broker-dealer clearing charges 13,433  15,184  11,152 
General and administrative expense 47,868  43,103  25,481 
Total non-interest expense 447,115  362,062  314,510 
INCOME BEFORE INCOME TAXES 431,744  339,959  305,743 
INCOME TAXES 124,579  99,243  90,036 
NET INCOME $ 307,165  $ 240,716  $ 215,707 
COMPREHENSIVE INCOME $ 303,488  $ 235,276  $ 219,151 
Basic earnings per share $ 5.15  $ 4.04  $ 3.64 
Diluted earnings per share $ 5.07  $ 3.97  $ 3.56 
S-3


AXOS FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
Year Ended June 30,
(Dollars in thousands) 2023 2022 2021
NET INCOME $ 307,165  $ 240,716  $ 215,707 
Net unrealized gain (loss) from available-for-sale securities, net of tax expense (benefit) of $(1,575), $(2,416), and $1,495 for the years ended June 30, 2023, 2022 and 2021, respectively. (3,677) (5,440) 3,444 
Other comprehensive income (loss) $ (3,677) $ (5,440) $ 3,444 
COMPREHENSIVE INCOME $ 303,488  $ 235,276  $ 219,151 

S-4



AXOS FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
Preferred Stock Common Stock Additional
Paid-in
Capital
Accumulated Other Comprehensive Income (Loss), Net of
Income Tax
Retained
Earnings
Treasury
Stock
Total
    Number of Shares  
(Dollars in thousands) Shares Amount Issued Treasury Outstanding Amount
Balance as of June 30, 2020 515  $ 5,063  67,323,053  (7,710,418) 59,612,635  $ 673  $ 411,873  $ (937) $ 1,009,299  $ (195,125) $ 1,230,846 
Cumulative effect of change in accounting principle net of tax, adoption of ASU No. 2016-13 —  —  —  —  —  —  —  —  (37,088) —  (37,088)
Net income —  —  —  —  —  —  —  —  215,707  —  215,707 
Other comprehensive income (loss) —  —  —  —  —  —  —  3,444  —  —  3,444 
Cash dividends on preferred stock —  —  —  —  —  —  —  —  (103) —  (103)
Preferred stock - Series A redemption (515) (5,063) —  —  —  —  —  —  (87) —  (5,150)
Purchase of treasury stock —  —  —  (753,597) (753,597) —  —  —  —  (16,757) (16,757)
Stock-based compensation activity —  —  746,268  (287,362) 458,906  20,677  —  —  (10,648) 10,037 
Balance as of June 30, 2021 —  $ —  68,069,321  (8,751,377) 59,317,944  $ 681  $ 432,550  $ 2,507  $ 1,187,728  $ (222,530) $ 1,400,936 
Net income —  —  —  —  —  —  —  —  240,716  —  240,716 
Other comprehensive income (loss) —  —  —  —  —  —  —  (5,440) —  —  (5,440)
Stock-based compensation activity —  —  790,401  (330,396) 460,005  21,234  —  —  (14,481) 6,761 
Stock option exercises and tax benefits —  —  —  —  —  —  —  —  —  —  — 
Balance as of June 30, 2022 —  $ —  68,859,722  (9,081,773) 59,777,949  $ 689  $ 453,784  $ (2,933) $ 1,428,444  $ (237,011) $ 1,642,973 
Net income —  —  —  —  —  —  —  307,165  —  307,165 
Other comprehensive income (loss) —  —  —  —  —  —  —  (3,677) —  —  (3,677)
Purchase of treasury stock —  —  —  (1,321,161) (1,321,161) —  —  —  —  (49,258) (49,258)
Stock-based compensation activity —  —  605,724  (119,477) 486,247  26,094  —  —  (6,144) 19,956 
Balance as of June 30, 2023 —  $ —  69,465,446  (10,522,411) 58,943,035  $ 695  $ 479,878  $ (6,610) $ 1,735,609  $ (292,413) $ 1,917,159 

S-5



AXOS FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Year Ended June 30,
(Dollars in thousands) 2023 2022 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 307,165  $ 240,716  $ 215,707 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization 23,387  24,596  24,124 
Other accretion and amortization (1,616) 3,933  4,752 
Stock-based compensation expense 26,100  21,242  20,685 
Trading activity 1,000  225  (1,878)
Provision for credit losses 24,750  18,500  23,750 
Deferred income taxes (19,586) (9,400) (8,828)
Origination of loans held for sale (254,288) (656,487) (1,608,700)
Unrealized and realized gains on loans held for sale (7,999) (16,237) (41,172)
Proceeds from sale of loans held for sale 242,772  689,530  1,671,515 
Amortization and change in fair value of mortgage servicing rights 634  (2,228) 6,319 
Net change in assets and liabilities which provide (use) cash:
Securities borrowed 204,641  280,108  (396,720)
Customer, broker-dealer and clearing receivables 43,342  (43,925) (149,549)
Other Assets (13,724) (107,314) (7,460)
Securities loaned (314,568) (254,588) 473,043 
Customer, broker-dealer and clearing payables (66,177) (23,771) 187,811 
Accounts payable and other liabilities (7,874) 45,382  (817)
Net cash provided by operating activities $ 187,959  $ 210,282  $ 412,582 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale investment securities (32,669) (143,733) (122,338)
Proceeds from sale and repayment of available-for-sale investment securities 57,989  131,868  74,667 
Purchase of stock of regulatory agencies (108,724) (54,350) (305)
Proceeds from redemption of stock of regulatory agencies 108,724  54,350  920 
Origination of loans held for investment (8,346,443) (10,325,104) (5,761,303)
Proceeds from sale of loans originally classified as held for investment 14,185  106,324  80,049 
Mortgage warehouse loan activity, net 30,773  333,562  (139,806)
Proceeds from sale of other real estate owned and repossessed assets 4,167  8,654  1,586 
Proceeds from BOLI claim settlement 2,778  —  — 
Acquisition of business activity, net of cash acquired (5,531) (54,597) — 
Purchase of loans and leases, net of discounts and premiums (1,564) (33,085) (3,619)
Principal repayments on loans 5,916,179  7,220,931  5,013,817 
Purchases of furniture, equipment, software and intangibles (30,215) (21,504) (10,437)
Net cash used in investing activities $ (2,390,351) $ (2,776,684) $ (866,769)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits 3,176,686  3,130,625  (520,897)
Repayments of the Federal Home Loan Bank term advances (27,500) (50,000) (70,000)
Net (repayment) proceeds of Federal Home Loan Bank other advances —  (186,000) 181,000 
Net (repayment) proceeds of other borrowings (84,300) 75,300  14,700 
Redemption of subordinated notes —  —  (51,000)
Repayment of Paycheck Protection Program Liquidity Facility advances —  —  (151,952)
Tax payments related to settlement of restricted stock units (6,144) (14,481) (10,648)
Purchase of treasury stock (48,963) —  (16,757)
Redemption of Preferred Stock, Series A —  —  (5,150)
Cash dividends paid on preferred stock —  —  (103)
Payment of debt issuance costs —  (2,120) (2,748)
Proceeds from issuance of subordinated notes —  150,000  175,000 
Net cash provided by (used in) financing activities $ 3,009,779  $ 3,103,324  $ (458,555)
NET CHANGE IN CASH AND CASH EQUIVALENTS $ 807,387  $ 536,922  $ (912,742)
CASH AND CASH EQUIVALENTS—Beginning of year $ 1,574,699  $ 1,037,777  $ 1,950,519 
CASH AND CASH EQUIVALENTS—End of year $ 2,382,086  $ 1,574,699  $ 1,037,777 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid on interest-bearing liabilities $ 368,311  $ 50,269  $ 77,995 
Income taxes paid 131,365  99,701  92,506 
Transfers to other real estate and repossessed vehicles from loans held for investment 12,664  2,134  1,903 
Transfers from loans held for investment to loans held for sale 14,185  105,884  71,136 
Transfers from loans held for sale to loans and leases held for investment 690  3,098  29,616 
Operating lease liabilities from obtaining right of use assets 3,400  6,876  — 
Impact of adoption of ASC 326 on retained earnings —  —  37,088 
Securities transferred from available-for-sale portfolio to other assets —  —  70,751 



S-6


LOANS & ALLOWANCE FOR CREDIT LOSSES
The following table sets forth the composition of the loan portfolio as of the dates indicated:
(Unaudited)
(Dollars in thousands)
June 30, 2023 June 30, 2022
Single Family - Mortgage & Warehouse $ 4,173,833  $ 3,988,462 
Multifamily and Commercial Mortgage 3,082,225  2,877,680 
Commercial Real Estate 6,199,818  4,781,044 
Commercial & Industrial - Non-RE 2,639,650  2,028,128 
Auto & Consumer 546,264  567,228 
Other 10,236  11,134 
  Total gross loans 16,652,026  14,253,676 
Allowance for credit losses - loans (166,680) (148,617)
Unaccreted premiums (discounts) and loan fees (28,618) (13,998)
  Total net loans $ 16,456,728  $ 14,091,061 


S-7


SECURITIES
The amortized cost, carrying amount and fair value for the trading and available-for-sale securities at June 30, 2023 and June 30, 2022 were:
June 30, 2023
Trading Available-for-sale
(Unaudited)
(Dollars in thousands)
Fair
Value
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
Mortgage-backed securities (MBS):
U.S agencies1
$ —  $ 27,024  $ —  $ (3,077) $ 23,947 
Non-agency2
—  210,271  711  (5,977) 205,005 
Total mortgage-backed securities 237,295  711  (9,054) 228,952 
Non-MBS:
Municipal 758  3,656  —  (258) 3,398 
Asset-backed securities and structured notes —  —  —  —  — 
Total Non-MBS 758  3,656  —  (258) 3,398 
Total debt securities $ 758  $ 240,951  $ 711  $ (9,312) $ 232,350 
   June 30, 2022
Trading Available-for-sale
(Unaudited)
(Dollars in thousands)
Fair
Value
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
Mortgage-backed securities (MBS):
U.S agencies1
$ —  $ 27,722  $ $ (2,406) $ 25,325 
Non-agency2
—  187,616  1,832  (2,634) 186,814 
Total mortgage-backed securities —  215,338  1,841  (5,040) 212,139 
Non-MBS:
Municipal 1,758  3,529  —  (281) 3,248 
Asset-backed securities and structured notes —  47,000  131  —  47,131 
Total Non-MBS 1,758  50,529  131  (281) 50,379 
Total debt securities $ 1,758  $ 265,867  $ 1,972  $ (5,321) $ 262,518 
1 Includes securities guaranteed by Ginnie Mae, a U.S. government agency, and the government sponsored enterprises Fannie Mae and Freddie Mac.
2 Private sponsors of securities collateralized primarily by first-lien mortgage loans on commercial properties or by pools of 1-4 family residential first mortgages. Primarily super senior securities secured by Alt-A or pay-option ARM mortgages.

S-8


DEPOSITS
The following table sets forth the composition of deposits by type and weighted average interest rate as of the dates indicated:
 (Unaudited) June 30, 2023 June 30, 2022
(Dollars in thousands) Amount
Rate1
Amount
Rate1
Non-interest bearing $ 2,898,150  —  % $ 5,033,970  —  %
Interest bearing:
Demand 3,334,615  2.43  % 3,611,889  0.61  %
Savings 9,575,781  4.20  % 4,245,555  0.95  %
       Total interest-bearing demand and savings 12,910,396  3.74  % 7,857,444  0.79  %
Time deposits:
$250 and under 932,436  3.72  % 651,392  1.22  %
Greater than $250 382,126  4.36  % 403,616  1.41  %
       Total time deposits 1,314,562  3.91  % 1,055,008  1.25  %
Total interest bearing2
14,224,958  3.76  % 8,912,452  0.85  %
Total deposits $ 17,123,108  3.12  % $ 13,946,422  0.54  %
1. Based on weighted-average stated interest rates at end of period.
2. The total interest-bearing includes brokered deposits of $2,028.5 million and $1,032.7 million as of June 30, 2023 and June 30, 2022, respectively, of which $691 million and $250 million, respectively, are time deposits classified as $250,000 and under.


The number of deposit accounts at the end of each of the last two fiscal years is set forth below:
At June 30,
2023 2022
Non-interest-bearing 45,640  42,372 
Interest-bearing checking and savings accounts 427,299  344,593 
Time deposits 6,340  8,734 
Total number of deposit accounts 479,279  395,699 

S-9


AVERAGE BALANCES, NET INTEREST INCOME, YIELDS EARNED AND RATES PAID
The following table presents information regarding (i) average balances; (ii) the total amount of interest income from interest-earning assets and the weighted average yields on such assets; (iii) the total amount of interest expense on interest-bearing liabilities and the weighted average rates paid on such liabilities; (iv) net interest income; (v) interest rate spread; and (vi) net interest margin:
For the Three Months Ended
June 30,
2023 2022
(Unaudited)
(Dollars in thousands)
Average
Balance1
Interest
Income /
Expense
Average
Yields
Earned /
Rates Paid2
Average
Balance1
Interest
Income /
Expense
Average
Yields
Earned /
Rates Paid2
Assets:
Loans3,4
$ 16,242,438  $ 305,011  7.51  % $ 13,704,420  $ 174,110  5.08  %
Interest-earning deposits in other financial institutions 2,601,097  32,492  5.00  % 1,239,655  2,597  0.84  %
Mortgage-backed and other investment securities4
254,133  3,815  6.00  % 247,655  2,648  4.28  %
Securities borrowed and margin lending 355,687  4,815  5.41  % 592,234  4,462  3.01  %
Stock of the regulatory agencies 17,250  297  6.89  % 24,852  344  5.54  %
Total interest-earning assets 19,470,605  346,430  7.12  % 15,808,816  184,161  4.66  %
Non-interest-earning assets 715,554  776,659 
Total assets $ 20,186,159  $ 16,585,475 
Liabilities and Stockholders’ Equity:
Interest-bearing demand and savings $ 12,507,836  $ 123,146  3.94  % $ 7,007,335  $ 8,379  0.48  %
Time deposits 1,418,347  14,043  3.96  % 1,012,705  2,800  1.11  %
Securities loaned 184,608  356  0.77  % 408,416  503  0.49  %
Advances from the FHLB 90,000  523  2.32  % 543,247  1,663  1.22  %
Borrowings, subordinated notes and debentures 357,645  4,608  5.15  % 448,548  5,406  4.82  %
Total interest-bearing liabilities 14,558,436  142,676  3.92  % 9,420,251  18,751  0.80  %
Non-interest-bearing demand deposits 3,117,796  4,695,748 
Other non-interest-bearing liabilities 631,415  829,995 
Stockholders’ equity 1,878,512  1,639,481 
Total liabilities and stockholders’ equity $ 20,186,159    $ 16,585,475   
Net interest income $ 203,754  $ 165,410 
Interest rate spread6
3.20  % 3.86  %
Net interest margin7
    4.19  %     4.19  %
1 Average balances are obtained from daily data.
2 Annualized.
3 Loans include loans held for sale, loan premiums and unearned fees.
4 Interest income includes reductions for amortization of loan and investment securities premiums and earnings from accretion of discounts and loan fees.
5 Margin lending is the significant component of the asset titled customer, broker-dealer and clearing receivables on the unaudited condensed consolidated balance sheets.
6 Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate paid on interest-bearing liabilities.
7 Net interest margin represents net interest income as a percentage of average interest-earning assets.


S-10


AVERAGE BALANCES, NET INTEREST INCOME, YIELDS EARNED AND RATES PAID
The following tables set forth, for the periods indicated, information regarding (i) average balances; (ii) the total amount of interest income from interest-earning assets and the weighted average yields on such assets; (iii) the total amount of interest expense on interest-bearing liabilities and the weighted average rates paid on such liabilities; (iv) net interest income; (v) interest rate spread; and (vi) net interest margin:
For the Fiscal Years Ended June 30,
2023 2022 2021
(Unaudited)
(Dollars in thousands)
Average
Balance1
Interest
Income /
Expense
Average
Yields
Earned /
Rates Paid
Average
Balance1
Interest
Income /
Expense
Average
Yields
Earned /
Rates Paid
Average
Balance1
Interest
Income /
Expense
Average
Yields
Earned /
Rates Paid
Assets:
Loans2,3
$ 15,571,290  $ 1,048,874  6.74  % $ 12,576,873  $ 626,628  4.98  % $ 11,332,020  $ 584,410  5.16  %
Interest-earning deposits in other financial institutions 1,761,902  73,467  4.17  % 1,233,983  4,501  0.36  % 1,600,811  2,185  0.14  %
Mortgage-backed and other investment securities3
259,473  14,669  5.65  % 176,951  6,952  3.93  % 192,420  9,560  4.97  %
Securities borrowed and margin lending4
388,386  18,657  4.80  % 687,363  20,512  2.98  % 613,735  20,466  3.33  %
Stock of the regulatory agencies 20,936  1,471  7.03  % 21,844  1,135  5.20  % 20,588  1,242  6.03  %
Total interest-earning assets 18,001,987  1,157,138  6.43  % 14,697,014  659,728  4.49  % 13,759,574  617,863  4.49  %
Non-interest-earning assets 735,783  658,494  394,085 
Total assets $ 18,737,770  $ 15,355,508  $ 14,153,659 
Liabilities and Stockholders’ Equity:
Interest-bearing demand and savings $ 10,211,737  $ 305,655  2.99  % $ 6,773,321  $ 20,053  0.30  % $ 7,204,698  $ 29,031  0.40  %
Time deposits 1,225,537  33,826  2.76  % 1,226,774  13,567  1.11  % 1,825,795  31,498  1.73  %
Securities loaned 303,932  3,673  1.21  % 469,051  1,124  0.24  % 412,385  1,496  0.36  %
Advances from the FHLB 423,612  12,644  2.98  % 349,796  4,625  1.32  % 211,077  4,672  2.21  %
Borrowings, subordinated notes and debentures 362,733  18,219  5.02  % 302,454  13,201  4.36  % 340,699  12,424  3.65  %
Total interest-bearing liabilities 12,527,551  374,017  2.99  % 9,121,396  52,570  0.58  % 9,994,654  79,121  0.79  %
Non-interest-bearing demand deposits 3,730,524  3,927,195  2,182,009 
Other non-interest-bearing liabilities 695,617  764,542  671,581 
Stockholders’ equity 1,784,078  1,542,375  1,305,415 
Total liabilities and stockholders’ equity $ 18,737,770    $ 15,355,508    $ 14,153,659   
Net interest income $ 783,121  $ 607,158  $ 538,742 
Interest rate spread5
3.44  % 3.91  % 3.70  %
Net interest margin6
    4.35  %     4.13  %     3.92  %
1 Average balances are obtained from daily data.
2 Loans include loans held for sale, loan premiums and unearned fees.
3 Interest income includes reductions for amortization of loan and investment securities premiums and earnings from accretion of discounts and loan fees. y.
4 Margin lending is the significant component of the asset titled customer, broker-dealer and clearing receivables on the unaudited condensed consolidated balance sheets.
5 Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate paid on interest-bearing liabilities.
6 Net interest margin represents net interest income as a percentage of average interest-earning assets.

S-11


AVERAGE BALANCES, NET INTEREST INCOME, YIELDS EARNED AND RATES PAID
BANKING BUSINESS
The following table presents our Banking Business segment’s information regarding (i) average balances; (ii) the total amount of interest income from interest-earning assets and the weighted average yields on such assets; (iii) the total amount of interest expense on interest-bearing liabilities and the weighted average rates paid on such liabilities; (iv) net interest income; (v) interest rate spread; and (vi) net interest margin for the three months ended June 30, 2023 and 2022:
  For the Three Months Ended
June 30,
  2023 2022
(Dollars in thousands)
Average
Balance1
Interest
Income/
Expense
Average Yields
Earned/Rates
Paid2
Average
Balance1
Interest
Income/
Expense
Average Yields
Earned/Rates
Paid2
Assets:
Loans3, 4
$ 16,220,701  $ 304,676  7.51  % $ 13,672,947  $ 173,334  5.07  %
Interest-earning deposits in other financial institutions 2,438,379  30,693  5.03  % 929,695  1,993  0.86  %
Mortgage-backed and other investment securities4
260,538  3,850  5.91  % 265,080  2,745  4.14  %
Stock of the regulatory agencies 17,250  295  6.84  % 21,734  344  6.33  %
Total interest-earning assets 18,936,868  339,514  7.17  % 14,889,456  178,416  4.79  %
Non-interest-earning assets 371,710  298,721 
Total assets $ 19,308,578  $ 15,188,177 
Liabilities and Stockholders’ Equity:
Interest-bearing demand and savings $ 12,570,893  $ 123,178  3.92  % $ 7,148,061  $ 8,449  0.47  %
Time deposits 1,418,347  14,043  3.96  % 1,012,705  2,800  1.11  %
Advances from the FHLB 90,000  523  2.32  % 543,247  1,663  1.22  %
Borrowings, subordinated notes and debentures
34  —  —  % 33  —  —  %
Total interest-bearing liabilities 14,079,274  137,744  3.91  % 8,704,046  12,912  0.59  %
Non-interest-bearing demand deposits 3,177,475  4,770,915 
Other non-interest-bearing liabilities 192,007  139,753 
Stockholders’ equity 1,859,822  1,573,463 
Total liabilities and stockholders’ equity $ 19,308,578  $ 15,188,177 
Net interest income $ 201,770  $ 165,504 
Interest rate spread5
3.26  % 4.20  %
Net interest margin6
4.26  % 4.45  %
1. Average balances are obtained from daily data.
2. Annualized.
3. Loans include loans held for sale, loan premiums and unearned fees.
4. Interest income includes reductions for amortization of loan and investment securities premiums and earnings from accretion of discounts and loan fees.
5 Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate paid on interest-bearing liabilities.
6 Net interest margin represents net interest income as a percentage of average interest-earning assets.

S-12


SECURITIES BUSINESS
The following table provides selected information for Axos Clearing LLC as of each period indicated:
(Dollars in thousands) June 30, 2023 June 30, 2022
FDIC insured deposit program balances at banks $ 1,627,053  $ 3,452,358 
Cash reserves for the benefit of customers $ 149,059  $ 372,112 
Securities lending:
Interest-earning assets – stock borrowed $ 134,339  $ 338,980 
Interest-bearing liabilities – stock loaned $ 159,832  $ 474,400 

S-13
EX-99.3 4 junesupplement.htm EX-99.3 junesupplement
Axos Q4 Fiscal 2023 Earnings Supplement July 27, 2023 NYSE: AX


 
1 Loan Growth by Category for Third Quarter Ended June 30, 2023 $ millions Q4 FY23 Q3 FY23 Inc (Dec) $3,924 $3,925 (1) 250 162 88 2,236 2,245 (9) 846 838 8 5,346 4,952 394 854 842 12 1,696 1,598 98 116 121 (5) 828 736 92 476 518 (42) 70 77 (7) 10 6 4 $16,652 $16,020 $632 Jumbo Mortgage SF Warehouse Lending Multifamily Small Balance Commercial CRE Specialty Lender Finance RE Lender Finance Non-RE Equipment Leasing Asset-Based Lending Auto Unsecured/OD Single Family Mortgage & Warehouse Multifamily & Commercial Mortgage Commercial Real Estate Commercial & Industrial Non-RE Auto & Consumer Other Loans


 
CRE Specialty Detail as of June 30, 2023 Loan Type Balance (mm) Weighted Avg. LTV Non-Performing Loans (mm) Multifamily $1,746 41% $0 SFR 1,059 42 15 Hotel 921 41 0 Office 552 36 0 Industrial 475 43 0 Other 339 36 0 Retail 254 41 0 Total $5,346 40% $15 <=50% > 50% to 60% >60% to 65% > 65% 80% 15% 2% 3% LTV Distribution 2


 
Fixed/Hybrid Years to Maturity / Repricing*Mix of Loan Repricing Types Variable 59% Hybrid 34% Fixed 7% 409 880 2,028 2,993 5,526 6,573 6,583 6,632 - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 1/2 1 2 3 5 10 20 >20 Years $M 7% 13% 32% 49% 100%100%99%89% *Excludes SF Warehouse Lending and Equipment Leasing. The years to repricing assumes no loan prepayments and reflects only contractual terms. Interest Rate Components of Loan & Lease Portfolio At June 30, 2023 3 Of the fixed and hybrid rate loan balances in our portfolio at June 30, 2023, 49% will reprice within 3 years and 89% will reprice within 5 years


 
4 Consumer  Direct Distribution  Partners Small Business  Banking Commercial /  Treasury  Management Axos Securities Specialty  Deposits Fiduciary  Services Diversified Deposit Gathering Business Lines ‹ Full service digital banking, wealth management, and securities trading ‹ White-label banking ‹ Business banking with simple suite of cash management services ‹ Fiduciary services for trustees ‹ 1031 exchange firms ‹ Title and escrow companies ‹ HOA and property management ‹ Serves approximately 40% of U.S. Chapter 7 bankruptcy trustees in exclusive relationship ‹ Software allows servicing of SEC receivers and non-chapter 7 cases ‹ Full service treasury/cash management ‹ Team enhancements and geographic expansion ‹ Bank and securities cross-sell ‹ Broker-dealer client cash ‹ Broker-dealer reserve accounts $1.1 B $1.0 B $9.5 B $0.7 B $0.3 B $3.5 B $1.0 B Diversified Deposit Gathering Approximately 90% of deposits are FDIC-insured or collateralized *Deposit balances as of 6/30/23 1Excludes approximately $600 million of off-balance sheet deposits 2Excludes approximately $700 million of client deposits held at other banks 1 2


 
Axos Advisor Services (AAS) Cash Sorting 5 ($895) ($383) ($188) ($1,000) ($900) ($800) ($700) ($600) ($500) ($400) ($300) ($200) ($100) $0 Q2 2023 Q3 2023 Q4 2023 Pace of AAS Cash Sorting Decline Has Decelerated ($ in millions)


 
Change in Allowance for Credit Losses (ACL) & Unfunded Loan Commitments Reserve (UCL) ($ in millions) 161.3 (2.5) 0.9 7.0 166.7 10.5 10.5 120 130 140 150 160 170 March 31, 2023 ACL + UCL Gross Charge-offs Provisions for credit losses Gross Recoveries June 30, 2023 ACL + UCL UCLACL 6


 
7 Loan Balance Allowance for Credit Losses (ACL) by Loan Category as of June 30, 2023 Loans Single Family - Mortgage and Warehouse Multifamily & Commercial Mortgage Commercial Real Estate Auto & Consumer $ millions Other ACL $ ACL % Commercial & Industrial Non-RE $4,173.8 3,082.2 6,199.8 546.3 10.2 2,639.7 $16,652.0 16.8 72.8 13.2 0.1 46.3 $17.5 $166.7 1.00% 1.17% 0.55% 0.42% 0.14% 2.42% 1.76%


 
Credit Quality ($ millions) Non‐performing Loans Down Slightly from Prior Quarter 3/31/2023 Loans O/S NPLs % Single Family-Mortgage & Warehouse $4,087.5 $36.2 0.89% Multifamily and Commercial Mortgage 3,082.8 37.4 1.21 Commercial Real Estate 5,794.3 14.9 0.26 Commercial & Industrial - Non-RE 2,454.8 2.9 0.12 Auto & Consumer 594.6 2.0 0.34 Other 6.3 2.5 39.68 Total $16,020.3 $95.9 0.60% 6/30/2023 Loans O/S NPLs % Single Family-Mortgage & Warehouse $4,173.8 $30.7 0.74% Multifamily and Commercial Mortgage 3,082.2 35.1 1.14 Commercial Real Estate 6,199.8 14.9 0.24 Commercial & Industrial - Non-RE 2,639.7 3.0 0.11 Auto & Consumer 546.3 1.5 0.27 Other 10.2 2.0 19.61 Total $16,652.0 $87.2 0.52% Change at 6/30/2023 from 3/31/2023 Loans O/S NPLs Single Family-Mortgage & Warehouse $86.3 $(5.5) Multifamily and Commercial Mortgage (0.6) (2.3) Commercial Real Estate 405.5 (0.0) Commercial & Industrial - Non-RE 184.9 0.1 Auto & Consumer (48.3) (0.5) Other 3.9 (0.5) Total $631.7 $(8.7) 8


 
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12 Greg Garrabrants, President and CEO Derrick Walsh, EVP and CFO Andy Micheletti, EVP of Finance investors@axosfinancial.com www.axosfinancial.com Johnny Lai, SVP Corporate Development and Investor Relations Phone: 858.649.2218 Mobile: 858.245.1442 jlai@axosfinancial.com Contact Information