Axos Financial (AX) Q1 2025 earnings summary

Executive summary

• Net income for Q1 FY2025 rose to $112.3 million, up 35.9% year-over-year, with diluted EPS increasing 39.9% to $1.93 and adjusted EPS at $1.96.

• Total assets reached $23.6 billion, up 3.1% sequentially, and total deposits grew to $20.0 billion, with book value per share at $42.14.

• Double-digit year-over-year growth in EPS and book value per share was achieved for the 10th consecutive quarter.

• Both Banking and Securities segments contributed to growth, with the Banking segment showing strong net interest income gains.

• Adjusted earnings reached $114.1 million, up over 34% from the prior year.

Financial highlights

• Net interest income climbed 38.3% year-over-year to $292.0 million, with net interest margin up 81 bps to 5.17% (4.87% excluding FDIC loan payoff).

• Average loan yields were 9.01%, up 47 bps sequentially and 116 bps year-over-year.

• Non-interest income fell 17.1% year-over-year to $28.6 million, mainly due to lower mortgage banking and broker-dealer fees.

• Non-interest expense rose to $147.5 million, up $6.9 million sequentially, driven by higher salaries, data processing, and advertising.

• Provision for credit losses doubled to $14.0 million, with $10 million specific to a C&I loan on non-accrual.

Outlook and guidance

• Loan growth is expected in high single digits to low teens for FY2025, excluding acquisitions.

• NIM (excluding FDIC benefit) is expected to remain in the 4.25%-4.35% range.

• Management expects continued profitable growth, strong deposit and capital ratios, and ongoing business diversification.

• 64% of fixed and hybrid rate loans will reprice within 3 years, and 91% within 5 years.