The company reported a significant increase in book value per common share, reaching $45.79 from last year's $38.48. Strong net loan growth surpassed $700 million in the most robust quarter of fiscal year 2025, driven by asset-based lending, lender finance, and equipment leasing ventures. The company's loan growth was further supported by activities in single-family mortgage and multifamily lending sectors, contributing to improved production and net attrition.
Credit quality also showed progress, with a reduction in non-performing and non-accrual loans both in absolute terms and as a percentage of total assets and loans compared to the preceding quarter. The company utilized excess capital effectively, executing stock repurchases of approximately $28 million for the quarter ending March 31, 2025, and an additional $30 million from April 1 to April 30, 2025.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for Axos Financial Inc (AX, Financial) is $84.17 with a high estimate of $88.00 and a low estimate of $80.00. The average target implies an upside of 32.59% from the current price of $63.48. More detailed estimate data can be found on the Axos Financial Inc (AX) Forecast page.
Based on the consensus recommendation from 6 brokerage firms, Axos Financial Inc's (AX, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Axos Financial Inc (AX, Financial) in one year is $75.16, suggesting a upside of 18.4% from the current price of $63.48. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Axos Financial Inc (AX) Summary page.
AX Key Business Developments
Release Date: January 28, 2025
- Net Interest Income: $280 million, up 22.5% year-over-year.
- Net Interest Margin: 4.83% for the quarter, up 28 basis points year-over-year.
- Loan Balances: $19.5 billion, up 1.1% quarter-over-quarter and 6.7% year-over-year.
- Return on Average Common Equity: 17% for the quarter.
- Return on Assets: 1.7% for the quarter.
- Tangible Book Value Per Share Growth: 21% year-over-year.
- Total Deposits: $19.9 billion, up 9.5% year-over-year.
- Net Income: Approximately $104 million for the quarter.
- Adjusted Net Income: $92.5 million, excluding FDIC loan purchase gain.
- Adjusted Earnings Per Share (EPS): $1.82 for the quarter.
- Non-Interest Expenses: Approximately $145 million, down $2 million from the prior quarter.
- Efficiency Ratio: 41% for the banking business segment.
- Net Annualized Charge-Offs: 10 basis points, 8 basis points excluding auto loans covered by insurance.
- Average Loan Yields: 8.37% for the quarter.
- Interest-Bearing Deposit Costs: 3.95% for the quarter, down 51 basis points from the prior quarter.
- Provision for Credit Losses: $12 million for the quarter.
- Allowance for Credit Losses: 1.37% of total loans held for investment.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Axos Financial Inc (AX, Financial) reported double-digit year-over-year growth in net interest income and book value per share.
- Ending loan balances increased by 6.7% year over year to $19.5 billion.
- The company achieved a 17% return on average common equity and a 1.7% return on assets for the quarter.
- Net interest income rose by 22.5% compared to the previous year, reaching $280 million.
- Total on-balance sheet deposits grew by 9.5% year over year, supporting organic loan growth.
Negative Points
- Net income decreased to approximately $104 million from $152.8 million in the same period last year.
- Net interest margin declined from 5.17% in the previous quarter to 4.83% in the current quarter.
- Nonperforming assets increased in several loan categories, including single-family jumbo mortgages and multifamily mortgages.
- The company experienced declines in loan balances in certain mortgage categories, such as 5/1 hybrid ARM and multifamily jumbo mortgages.
- Provision for credit losses was $12 million, reflecting concerns over potential economic downturns and loan repricing risks.
