Last10K.com

Axos Financial, Inc. (AX) SEC Filing 8-K Material Event for the period ending Thursday, January 27, 2022

Axos Financial, Inc.

CIK: 1299709 Ticker: AX

axosfina13a.jpg
Axos Financial, Inc. Reports Record Second Quarter Fiscal 2022 Results
Diluted Earnings Per Share in Second Quarter 2022 up 10% Year-Over-Year
LAS VEGAS, NV – (BUSINESS WIRE) – January 27, 2022 – Axos Financial, Inc. (NYSE: AX) (Axos), parent company of Axos Bank (the Bank), today announced unaudited financial results for the second fiscal quarter ended December 31, 2021. Net income was $60.8 million, an increase of 11.0% from $54.8 million for the quarter ended December 31, 2020. Earnings per diluted share was $1.00, an increase of $0.09, or 9.9%, as compared to earnings per diluted share of $0.91 for the three months ended December 31, 2020.
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 11.2% to $62.9 million and 10.6% to $1.04, respectively, for the quarter ended December 31, 2021 compared to $56.6 million and $0.94, respectively, for the quarter ended December 31, 2020.
Second Quarter Fiscal 2022 Financial Summary
  Three Months Ended December 31,
(Dollars in thousands, except per share data)20212020% Change
Net interest income$145,568 $134,092 8.6%
Non-interest income$30,787 $28,718 7.2%
Net income$60,787 $54,785 11.0%
Adjusted earnings (Non-GAAP)1
$62,917 $56,566 11.2%
Diluted EPS$1.00 $0.91 9.9%
Adjusted EPS (Non-GAAP)1
$1.04 $0.94 10.6%
1 See “Use of Non-GAAP Financial Measures”
For the six months ended December 31, 2021, net income was $121.0 million, an increase of 12.2% over net income of $107.8 million. Earnings per diluted share was $1.99 for the six months ended December 31, 2021, an increase of $0.20, or 11.2%, as compared to earnings per diluted share of $1.79 for the six months ended December 31, 2020.
“We continue to generate double-digit growth in loans, EPS and book value per share,” stated Greg Garrabrants, President and Chief Executive Officer of Axos. “Strong growth in our auto, commercial real estate and C&I lending categories and stabilization in our single family mortgage loan portfolio resulted in a 6.1% linked quarter increase in our net loan balances. Our net interest margin (“NIM”) remains above our 3.8% to 4.0% target, with consolidated and Banking Business NIM of 4.10% and 4.30% this quarter, respectively. We achieved positive operating leverage in our Banking Business, with an efficiency ratio of 39.4% compared to 40.5% in the second quarter of fiscal 2021. Our high returns and strong capital levels enable us to invest in technology, people and new businesses aimed towards continued growth.”
“We made further improvements in our deposit franchise, growing checking and savings balances by 5.9% on a linked quarter basis,” stated Derrick Walsh, Executive Vice President and Chief Financial Officer of Axos. “Non-interest bearing deposits increased by $215 million quarter-over-quarter to $3.85 billion, representing approximately 31% of total deposits at December 31, 2021. With an additional $725 million of low-cost deposits at partner banks, we are well positioned to fund organic loan growth while maintaining a strong net interest margin.”






Other Highlights
Net loans totaled $12.6 billion at December 31, 2021, an increase of $0.7 billion, or 6.0%, from $11.9 billion at September 30, 2021
Total loan originations were $2.7 billion, an increase of 13.3% from $2.4 billion in the quarter ended December 31, 2020
Net interest margin was 4.10% compared to 3.94% in the three months ended December 31, 2020; net interest margin for the Banking Business Segment was 4.30%, up from 4.11% in the three months December 31, 2020
Return on average common stockholders’ equity was 16.29% for the three months ended December 31, 2021
Net annualized charge-offs to average loans was 1 basis point, down from 16 basis points for the three months ended December 31, 2020
Book value increased to $25.60 per share, up from $21.79, or 17.5% at December 31, 2020

Second Quarter Fiscal 2022 Income Statement Summary
For the three months ended December 31, 2021, Axos net income attributable to common stockholders was $60.8 million or $1.00 per diluted common share compared to $54.7 million, or $0.91 per diluted share for the three months ended December 31, 2020. Net interest income increased $11.5 million or 8.6% for the three months ended December 31, 2021 compared to the three months ended December 31, 2020, due to an increase in average earning assets and a reduction in the rates paid on interest-bearing demand, savings, and time deposits due to decreases in market deposit rates across the industry.
The provision for credit losses was $4.0 million for the three months ended December 31, 2021 compared to $8.0 million for the three months ended December 31, 2020 primarily due to changes in the macro economic environment and loan mix.
For the three months ended December 31, 2021, non-interest income was $30.8 million compared to $28.7 million for the three months ended December 31, 2020. The net increase was primarily due to an increase of $8.1 million in broker-dealer fee income driven by custody and mutual fund fees added from the acquisition of AAS and an increase of $1.7 million in prepayment penalty fee income, partially offset by a decrease of $6.0 million in mortgage banking income due to year-over-year decline in mortgage refinance volume and a decrease of $1.6 million in banking and service fees.
Non-interest expense, comprised of various operating expenses, increased $9.7 million to $86.0 million for the three months ended December 31, 2021 from $76.3 million for the three months ended December 31, 2020. The net increase was primarily driven by increases of $3.2 million in other general and administrative, $2.5 million in data processing, $1.8 million in salary and payroll costs and $1.2 million in broker-dealer clearing charges. These increases largely result from growth at the Bank as well as the addition of AAS operations.
Balance Sheet Summary
Axos’ total assets increased $1.2 billion, or 9.0%, to $15.5 billion, at December 31, 2021, from $14.3 billion at June 30, 2021, primarily due to an increase of $1.2 billion in loans held for investment. Total liabilities increased by $1.1 billion, or 9.0%, to $14.0 billion at December 31, 2021, from $12.9 billion at June 30, 2021, primarily due to an increase in deposits of $1.5 billion, partially offset by a decrease of $0.2 billion in Advances from FHLB and a decrease of $0.2 billion in securities loaned. Stockholders’ equity increased by $0.1 billion, or 8.7%, to $1.5 billion at December 31, 2021 from $1.4 billion at June 30, 2021. The increase was primarily the result of net income of $121.0 million.
The Bank’s Tier 1 core capital to adjusted average assets ratio was 10.13% at December 31, 2021. At December 31, 2020, the Tier 1 core capital to adjusted average assets ratio was 9.08%.



Conference Call
A conference call and webcast will be held on Thursday, January 27, 2022 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 accessed at Axos’ website, investors.axosfinancial.com. For those unable to listen to the live broadcast, a replay will be available until February 28, 2022, at Axos’ website and telephonically by dialing toll-free number 877-660-6853, passcode 13725755.

About Axos Financial, Inc. and Subsidiaries
The condensed consolidated financial statements include the accounts of Axos Financial, Inc. (“Axos”) and its wholly owned subsidiaries, Axos Bank (the “Bank”) and Axos Nevada Holding, LLC (the “Axos Nevada Holding” and collectively, the “Company”). 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 $15.5 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 $38 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.
The following tables present the operating results of the segments:
Three Months Ended December 31, 2021
(Dollars in thousands)Banking BusinessSecurities BusinessCorporate/EliminationsAxos Consolidated
Net interest income$142,259 $4,506 $(1,197)$145,568 
Provision for credit losses4,000 — — 4,000 
Non-interest income16,295 16,454 (1,962)30,787 
Non-interest expense62,449 21,654 1,916 86,019 
Income before taxes$92,105 $(694)$(5,075)$86,336 
Three Months Ended December 31, 2020
(Dollars in thousands)Banking BusinessSecurities BusinessCorporate/EliminationsAxos Consolidated
Net interest income$132,166 $4,260 $(2,334)$134,092 
Provision for credit losses8,000 — — 8,000 
Non-interest income22,295 6,572 (149)28,718 
Non-interest expense62,474 11,312 2,511 76,297 
Income before taxes$83,987 $(480)$(4,994)$78,513 



Six Months Ended December 31, 2021
(Dollars in thousands)Banking BusinessSecurities BusinessCorporate/EliminationsAxos Consolidated
Net interest income$284,500 $10,682 $(2,972)$292,210 
Provision for credit losses8,000 — — 8,000 
Non-interest income31,123 29,560 (3,194)57,489 
Non-interest expense125,174 40,927 4,349 170,450 
Income before taxes$182,449 $(685)$(10,515)$171,249 
Six Months Ended December 31, 2020
(Dollars in thousands)Banking BusinessSecurities BusinessCorporate/EliminationsAxos Consolidated
Net interest income$255,174 $9,154 $(2,909)$261,419 
Provision for credit losses19,800 — — 19,800 
Non-interest income52,507 12,356 (290)64,573 
Non-interest expense123,691 22,664 5,488 151,843 
Income before taxes$164,190 $(1,154)$(8,687)$154,349 

Use of Non-GAAP Financial Measures
In addition to the results presented in accordance with GAAP, this report includes non-GAAP financial measures such as 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. Although we believe the non-GAAP financial measures disclosed in this report enhance investors’ understanding of our business and performance, 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 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 the Bank’s operating performance. We believe excluding the non-recurring acquisition related costs and other costs (unusual or non-recurring) provides investors with an alternative understanding of Axos’ core business.
Below is a reconciliation of net income, the nearest compatible GAAP measure, to adjusted earnings and adjusted EPS (Non-GAAP) for the periods shown:
Three Months Ended
December 31,
Six Months Ended
December 31,
(Dollars in thousands, except per share amounts)2021202020212020
Net income$60,787 $54,785 $120,997 $107,807 
Acquisition-related costs
3,026 2,552 5,872 5,154 
Income taxes(896)(771)(1,723)(1,554)
Adjusted earnings (Non-GAAP)$62,917 $56,566 $125,146 $111,407 
Adjusted EPS (Non-GAAP)$1.04 $0.94 $2.06 $1.85 



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, the nearest compatible GAAP measure, to tangible book value per common share (Non-GAAP) as of the dates indicated:
December 31,
(Dollars in thousands, except per share amounts)20212020
Common stockholders’ equity$1,523,157 $1,287,482 
Less: mortgage servicing rights, carried at fair value20,110 14,314 
Less: goodwill and other intangible assets161,954 120,644 
Tangible common stockholders’ equity (Non-GAAP)$1,341,093 $1,152,524 
Common shares outstanding at end of period59,498,575 59,072,822 
Tangible book value per common share (Non-GAAP)$22.54 $19.51 

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’ ability to continue to grow profitably and increase its business, Axos’ ability to continue to diversify its lending and deposit franchises and the anticipated timing and financial performance of other offerings, initiatives, and acquisitions. 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 uncertainties surrounding the severity, duration, and effects of the COVID-19 pandemic, Axos’ ability to successfully integrate acquisitions and realize the anticipated benefits of the transactions, changes in the interest rate environment, inflation, government regulation, general economic conditions, conditions in the real estate markets in which we operate, risks associated with credit quality, the outcome and effects of pending class action litigation filed against the Company and other factors beyond our control. These and other risks and uncertainties detailed in Axos’ periodic reports filed with the Securities and Exchange Commission could cause actual results to differ materially from those expressed or implied in any forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement, and Axos undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this press release.

Investor Relations Contact:
Johnny Lai, CFA
VP, Corporate Development & Investor Relations
858-649-2218
jlai@axosfinancial.com



The following tables set forth certain selected financial data concerning the periods indicated:
AXOS FINANCIAL, INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited – dollars in thousands)
December 31,
2021
June 30,
2021
December 31,
2020
Selected Balance Sheet Data:
Total assets$15,547,947 $14,265,565 $14,393,267 
Loans—net of allowance for credit losses12,607,179 11,414,814 11,609,584 
Loans held for sale, carried at fair value27,428 29,768 64,287 
Loans held for sale, lower of cost or fair value11,446 12,294 13,769 
Allowance for credit losses - loans140,489 132,958 136,393 
Securities—trading1,223 1,983 362 
Securities—available-for-sale139,581 187,335 209,828 
Securities borrowed534,243 619,088 317,571 
Customer, broker-dealer and clearing receivables429,634 369,815 264,572 
Total deposits12,269,172 10,815,797 11,463,136 
Advances from the FHLB157,500 353,500 182,500 
Borrowings, subordinated notes and debentures
260,435 221,358 418,480 
Securities loaned578,762 728,988 362,170 
Customer, broker-dealer and clearing payables528,796 535,425 475,473 
Total stockholders’ equity1,523,157 1,400,936 1,287,482 
Capital Ratios:
Equity to assets at end of period9.80 %9.82 %8.95 %
Axos Financial, Inc.:
Tier 1 leverage (core) capital to adjusted average assets9.42 %8.82 %8.68 %
Common equity tier 1 capital (to risk-weighted assets)10.08 %11.36 %10.85 %
Tier 1 capital (to risk-weighted assets)10.08 %11.36 %10.85 %
Total capital (to risk-weighted assets)12.16 %13.78 %13.88 %
Axos Bank:
Tier 1 leverage (core) capital to adjusted average assets10.13 %9.45 %9.08 %
Common equity tier 1 capital (to risk-weighted assets)10.91 %12.28 %11.45 %
Tier 1 capital (to risk-weighted assets)10.91 %12.28 %11.45 %
Total capital (to risk-weighted assets)11.73 %13.21 %12.44 %
Axos Clearing, LLC:
Net capital$39,453 $35,950 $34,417 
Excess capital$32,171 $27,904 $28,941 
Net capital as a percentage of aggregate debit items10.84 %8.94 %12.57 %
Net capital in excess of 5% aggregate debit items$21,249 $15,836 $20,726 





AXOS FINANCIAL, INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited – dollars in thousands, except per share data)
At or for the Three Months EndedAt or for the Six Months Ended
December 31,December 31,
2021202020212020
Selected Income Statement Data:
Interest and dividend income$157,076 $155,379 $315,386 $305,268 
Interest expense11,508 21,287 23,176 43,849 
Net interest income145,568 134,092 292,210 261,419 
Provision for credit losses4,000 8,000 8,000 19,800 
Net interest income after provision for credit losses141,568 126,092 284,210 241,619 
Non-interest income30,787 28,718 57,489 64,573 
Non-interest expense86,019 76,297 170,450 151,843 
Income before income tax expense86,336 78,513 171,249 154,349 
Income tax expense25,549 23,728 50,252 46,542 
Net income$60,787 $54,785 $120,997 $107,807 
Net income attributable to common stock$60,787 $54,672 $120,997 $107,617 
Per Common Share Data:
Net income:
Basic$1.02 $0.93 $2.04 $1.82 
Diluted$1.00 $0.91 $1.99 $1.79 
Adjusted earnings (Non-GAAP)
$1.04 $0.94 $2.06 $1.85 
Book value$25.60 $21.79 $25.60 $21.79 
Tangible book value (Non-GAAP)$22.54 $19.51 $22.54 $19.51 
Weighted average number of common shares outstanding:
     Basic59,496,489 59,049,697 59,443,667 59,278,672 
     Diluted60,755,981 60,040,723 60,749,383 60,196,516 
Common shares outstanding at end of period59,498,575 59,072,822 59,498,575 59,072,822 
Common shares issued at end of period68,376,837 67,668,664 68,376,837 67,668,664 
Performance Ratios and Other Data:
Loan originations for investment$2,525,871 $1,909,978 $4,618,150 $3,240,790 
Loan originations for sale$193,320 $490,261 $403,287 $931,065 
Return on average assets1.63 %1.57 %1.65 %1.56 %
Return on average common stockholders’ equity16.29 %17.30 %16.51 %17.21 %
Interest rate spread1
3.90 %3.71 %3.97 %3.67 %
Net interest margin2
4.10 %3.94 %4.16 %3.89 %
Net interest margin2 – Banking Business Segment only
4.30 %4.11 %4.39 %4.01 %
Efficiency ratio3
48.78 %46.86 %48.74 %46.58 %
Efficiency ratio3 – Banking Business Segment only
39.39 %40.45 %39.66 %40.20 %
Asset Quality Ratios:
Net annualized charge-offs to average loans0.01 %0.16 %0.01 %0.12 %
Non-performing loans to total loans 1.14 %1.44 %1.14 %1.44 %
Non-performing assets to total assets0.94 %1.22 %0.94 %1.22 %
Allowance for credit losses to total loans held for investment at end of period1.10 %1.16 %1.10 %1.16 %
Allowance for credit losses to non-performing loans96.27 %80.58 %96.27 %80.58 %

1.    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.
2.    Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.
3. Efficiency ratio represents non-interest expense as a percentage of the aggregate of net interest income and non-interest income.

View differences made from one to another to evaluate Axos Financial, Inc.'s financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 8-K Corporate News to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Axos Financial, Inc..

Continue

Assess how Axos Financial, Inc.'s management team is paid from their Annual Proxy

Definitive Proxy Statement (Form DEF 14A)
Screenshot example of actual Proxy Statement

Axos Financial, Inc.'s Definitive Proxy Statement (Form DEF 14A) filed after their 2022 10-K Annual Report includes:

  • Voting Procedures
  • Board Members
  • Executive Team
  • Salaries, Bonuses, Perks
  • Peers / Competitors

Continue

Tools

Financial Statements, Disclosures and Schedules

Inside this 8-K Corporate News

Material Contracts, Statements, Certifications & more

Axos Financial, Inc. provided additional information to their SEC Filing as exhibits

Ticker: AX
CIK: 1299709
Form Type: 8-K Corporate News
Accession Number: 0001299709-22-000009
Submitted to the SEC: Thu Jan 27 2022 4:08:13 PM EST
Accepted by the SEC: Thu Jan 27 2022
Period: Thursday, January 27, 2022
Industry: Savings Institution Federally Chartered
Events:
  1. Earnings Release
  2. Financial Exhibit

External Resources:
Stock Quote
Social Media

Bookmark the Permalink:
https://last10k.com/sec-filings/ax/0001299709-22-000009.htm