AX 8-K
Axos Financial, Inc. (AX)
8-K
2022-08-04
For: 2022-08-04
View Original
Added on
April 10, 2026
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): August 4, 2022
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification Number) | ||||||
(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 | ||||||
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):
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).
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 August 4, 2022, Axos Financial, Inc. (the “Registrant”) issued a press release announcing its fourth quarter results of operations for the period ended June 30, 2022. 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: | August 4, 2022 | By: | /s/ Derrick K. Walsh | |||||||||||
| Derrick K. Walsh | ||||||||||||||
| EVP and Chief Financial Officer | ||||||||||||||
Axos Financial, Inc. Announces Record Net Income of $240.7 million for Fiscal 2022
Net Interest Margin Expanded by 21 Basis Points to 4.13% in Fiscal 2022
LAS VEGAS, NV – (BUSINESS WIRE) – August 4, 2022 – 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, 2022. Net income for the quarter was $57.9 million, an increase of 6.7% over net income of $54.3 million for the quarter ended June 30, 2021. Earnings per diluted share for the quarter were $0.96, an increase of $0.06, or 6.7%, as compared to earnings per diluted share of $0.90 for the quarter ended June 30, 2021.
Adjusted earnings and adjusted earnings per diluted common share (“Adjusted EPS”), non-GAAP measures, which exclude non-cash amortization expenses and other non-recurring costs, increased 21.2% to $67.6 million and 21.7% to $1.12, respectively, for the quarter ended June 30, 2022 compared to $55.8 million and $0.92, respectively, for the quarter ended June 30, 2021.
Fourth Quarter Fiscal 2022 Financial Summary:
| Three Months Ended June 30, | |||||||||||||||||
| (Dollars in thousands, except per share data) | 2022 | 2021 | % Change | ||||||||||||||
| Net interest income | $ | 165,410 | $ | 141,654 | 16.8 | % | |||||||||||
| Non-interest income | $ | 27,100 | $ | 16,801 | 61.3 | % | |||||||||||
| Net income | $ | 57,896 | $ | 54,255 | 6.7 | % | |||||||||||
Adjusted Earnings (Non-GAAP)1 | $ | 67,616 | $ | 55,811 | 21.2 | % | |||||||||||
| Net income attributable to common stockholders | $ | 57,896 | $ | 54,255 | 6.7 | % | |||||||||||
| Diluted EPS | $ | 0.96 | $ | 0.90 | 6.7 | % | |||||||||||
Adjusted EPS (Non-GAAP)1 | $ | 1.12 | $ | 0.92 | 21.7 | % | |||||||||||
1 See “Use of Non-GAAP Financial Measures” for a reconciliation to the applicable GAAP measures
For the fiscal year ended June 30, 2022, net income was a record $240.7 million, an increase of 11.6% over net income of $215.7 million for the year ended June 30, 2021. Earnings per diluted share was $3.97, an increase of $0.41, or 11.5%, as compared to earnings per diluted share of $3.56 for the year ended June 30, 2021.
“We generated record loan growth of $1 billion while increasing our net interest margin by 17 basis points linked quarter to 4.19%,” stated Greg Garrabrants, President and Chief Executive Officer of Axos. “Strong growth in deposits from Axos Securities contributed to our non-interest bearing deposits increasing by $899 million to over $5 billion at June 30, 2022. Our strong loan growth outlook and the diversity of our core funding gives us confidence that our fiscal year 2023 net interest margin will be at or above the high end of our long-term target of 3.80% to 4.00%.”
“Record loan originations and the growth in the net interest margin resulted in a 10.6% linked quarter increase in our net interest income,” stated Derrick Walsh, Chief Financial Officer of Axos. “Our credit quality remains good, with 2 basis points of net annualized charge-offs to average loans and a 19 basis point sequential decline in our non-performing assets to total assets ratio. Excluding an $11.0 million charge primarily for the one-time resolution of a contractual claim, our efficiency ratio for the Banking Business Segment would have been 40.6%. We will continue to invest in our businesses while maintaining a best-in-class operating efficiency at Axos Bank.”
Other Highlights:
•Net loans, driven by commercial growth, increased $1.0 billion, or 30.4% annualized, between March 31, 2022 and June 30, 2022
•Deposits increased $1.2 billion, or 38% annualized, between March 31, 2022 and June 30, 2022
•Net interest margin was 4.19% for the three months ended June 30, 2022, up 27 basis points from 3.92% for the three months ended June 30, 2021
•Percentage of non-performing loans relative to total loans was 0.83% at June 30, 2022, down from 1.05% at March 31, 2022
•Book value increased to $27.48 per share, up 16.3% compared to June 30, 2021
•Earnings per diluted share outstanding were $0.96 for the three months ended June 30, 2022, up 6.7% from $0.90 in the corresponding period a year ago
•Adjusted EPS was $1.12 for the three months ended June 30, 2022, up 21.7% year-over-year
Fourth Quarter Fiscal 2022 Income Statement Summary
Net income was $57.9 million and diluted earnings per share was $0.96 for the three months ended June 30, 2022 compared to net income of $54.3 million and diluted earnings per share of $0.90 for the three months ended June 30, 2021. Net interest income increased to $165.4 million, up 16.8% for the three months ended June 30, 2022 compared to the three months ended June 30, 2021, primarily due to an increase in average earning assets, and an increase in non-interest bearing demand deposits.
The provision for credit losses was $6.0 million for the three months ended June 30, 2022 compared to $1.3 million for the three months ended June 30, 2021, primarily due to growth in the loan portfolio.
Non-interest income increased to $27.1 million, up 61.3%, for the three months ended June 30, 2022 from $16.8 million for the three months ended June 30, 2021. The net increase was primarily due to a $6.7 million increase in broker-dealer fee income driven by custody and mutual fund fees earned by the AAS division during fiscal 2022, $1.5 million increase in banking and service fees, $1.4 million increase in prepayment penalty fee income and $0.5 million increase in mortgage banking income.
Non-interest expense, comprised of various operating expenses, increased 28.0% to $104.8 million for the three months ended June 30, 2022 from $81.9 million for the three months ended June 30, 2021. The net increase was primarily driven by an increase of $11.7 million in general and administrative expenses, for an $11.0 million charge due largely to a one-time resolution of a contractual claim. We also had increases in salaries and benefits of $6.3 million and professional services of $2.7 million, largely resulting from growth at the Bank as well as the addition of AAS operations. Federal Deposit Insurance Corporation and regulatory fees increased by $1.8 million, due to growth at the Bank and increased assessment rates.
Our effective tax rate was 29.15% for the three months ended June 30, 2022 compared to 27.99% for the three months ended June 30, 2021. The lower tax rate for the three months ended June 30, 2021, was primarily due to tax benefits from stock compensation during the quarter ended June 30, 2021.
Full Year Fiscal 2022 Highlights
•Net income reached a record $240.7 million, an increase of 11.6% compared to the fiscal year ended June 30, 2021
•Earnings per diluted share outstanding were $3.97, up 11.5% from $3.56 in the fiscal year ended June 30, 2021
•Loan originations for investment for the fiscal year ended June 30, 2021 were $10.4 billion, up 60.18% compared to the fiscal year ended June 30, 2021
•Net interest margin for the Banking Business segment increased to 4.36% for the fiscal year ended June 30, 2022 compared to 4.11% for the fiscal year ended June 30, 2021
•Efficiency for the Banking Business segment was 41.61% for the fiscal year ended June 30, 2022 compared to 41.95% for the fiscal year ended June 30, 2021
•Return on average assets remained strong at 1.57% for the fiscal year ended June 30, 2022
Balance Sheet Summary
Axos’ total assets increased $3.2 billion or 22.4% to $17.5 billion at June 30, 2022 from June 30, 2021, primarily due to an increase of $2.7 billion in loans held for investment and an increase of $0.5 billion in total cash held. Total liabilities increased $2.9 billion to $15.8 billion at June 30, 2022 from June 30, 2021, primarily due to an increase of $3.1 billion in deposits. Stockholders’ equity increased by $242.0 million, or 17.3%, to $1.6 billion at June 30, 2022 from $1.4 billion at June 30, 2021. The increase was primarily the result of net income of $240.7 million.
The Bank’s Tier 1 core capital to adjusted average assets ratio was 10.65% at June 30, 2022 compared to 9.45% at June 30, 2021.
Conference Call
A conference call and webcast will be held on Thursday, August 4, 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: 888-645-4404. The conference call will be webcast live and may be accessed at Axos’ website, http://www.axosfinancial.com. For those unable to listen to the live broadcast, a replay will be available until September 4, 2022, at the Axos Financial website and telephonically by dialing toll-free number 877-660-6853, passcode 13731605.
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 (“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 $17.5 billion in 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 $32 billion of assets under custody and/or administration, and Axos Invest, Inc., provide comprehensive securities clearing 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 and reconciliations:
| 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 | |||||||||||||||
| For the Three Months Ended June 30, 2021 | |||||||||||||||||||||||
| (Dollars in thousands) | Banking Business | Securities Business | Corporate/Eliminations | Axos Consolidated | |||||||||||||||||||
| Net interest income | $ | 137,493 | $ | 5,744 | $ | (1,583) | $ | 141,654 | |||||||||||||||
| Provision for loan losses | 1,250 | — | — | 1,250 | |||||||||||||||||||
| Non-interest income | 10,442 | 6,902 | (543) | 16,801 | |||||||||||||||||||
| Non-interest expense | 66,863 | 12,149 | 2,848 | 81,860 | |||||||||||||||||||
| Income (Loss) before income taxes | $ | 79,822 | $ | 497 | $ | (4,974) | $ | 75,345 | |||||||||||||||
| 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 | |||||||||||||||
| Twelve Months Ended June 30, 2021 | |||||||||||||||||||||||
| (Dollars in thousands) | Banking Business | Securities Business | Corporate/Eliminations | Axos Consolidated | |||||||||||||||||||
| Net interest income | $ | 527,760 | $ | 18,746 | $ | (7,764) | $ | 538,742 | |||||||||||||||
| Provision for loan losses | 23,750 | — | — | 23,750 | |||||||||||||||||||
| Non-interest income | 79,150 | 27,627 | (1,516) | 105,261 | |||||||||||||||||||
| Non-interest expense | 254,596 | 48,095 | 11,819 | 314,510 | |||||||||||||||||||
| Income (Loss) before income taxes | $ | 328,564 | $ | (1,722) | $ | (21,099) | $ | 305,743 | |||||||||||||||
Use of Non-GAAP Financial Measures
In addition to the results presented in accordance with GAAP, this release 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 release 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 Company’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 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) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Net income | $ | 57,896 | $ | 54,255 | $ | 240,716 | $ | 215,707 | |||||||||||||||
| Acquisition-related costs | 2,745 | 2,161 | 11,355 | 9,826 | |||||||||||||||||||
| Other costs | 10,975 | — | 10,975 | — | |||||||||||||||||||
| Income taxes | (4,000) | (605) | (6,519) | (2,894) | |||||||||||||||||||
| Adjusted earnings (Non-GAAP) | $ | 67,616 | $ | 55,811 | $ | 256,527 | $ | 222,639 | |||||||||||||||
| Adjusted EPS (Non-GAAP) | $ | 1.12 | $ | 0.92 | $ | 4.23 | $ | 3.68 | |||||||||||||||
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 (Non-GAAP) as of the dates indicated:
| June 30, | |||||||||||
| (Dollars in thousands, except per share amounts) | 2022 | 2021 | |||||||||
| Common stockholders’ equity | $ | 1,642,973 | $ | 1,400,936 | |||||||
| Less: mortgage servicing rights, carried at fair value | 25,213 | 17,911 | |||||||||
| Less: goodwill and other intangible assets | 156,405 | 115,972 | |||||||||
| Tangible common stockholders’ equity (Non-GAAP) | $ | 1,461,355 | $ | 1,267,053 | |||||||
| Common shares outstanding at end of period | 59,777,949 | 59,317,944 | |||||||||
| Tangible book value per common share (Non-GAAP) | $ | 24.45 | $ | 21.36 | |||||||
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 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
SVP, Corporate Development & Investor Relations
(858) 649-2218
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)
| (Dollars in thousands) | June 30, 2022 | June 30, 2021 | June 30, 2020 | ||||||||||||||
| Selected Balance Sheet Data: | |||||||||||||||||
| Total assets | $ | 17,455,605 | $ | 14,265,565 | $ | 13,851,900 | |||||||||||
| Loans—net of allowance for credit losses | 14,091,061 | 11,414,814 | 10,631,349 | ||||||||||||||
| Loans held for sale, carried at fair value | 4,973 | 29,768 | 51,995 | ||||||||||||||
| Loans held for sale, lower of cost or fair value | 10,938 | 12,294 | 44,565 | ||||||||||||||
| Allowance for credit losses - loans | 148,617 | 132,958 | 75,807 | ||||||||||||||
| Securities—trading | 1,758 | 1,983 | 105 | ||||||||||||||
| Securities—available-for-sale | 262,518 | 187,335 | 187,627 | ||||||||||||||
| Securities borrowed | 338,980 | 619,088 | 222,368 | ||||||||||||||
| Customer, broker-dealer and clearing receivables | 471,857 | 369,815 | 220,266 | ||||||||||||||
| Total deposits | 13,946,422 | 10,815,797 | 11,336,694 | ||||||||||||||
| Advances from the FHLB | 117,500 | 353,500 | 242,500 | ||||||||||||||
| Borrowings, subordinated notes and debentures | 445,244 | 221,358 | 235,789 | ||||||||||||||
| Securities loaned | 474,400 | 728,988 | 255,945 | ||||||||||||||
| Customer, broker-dealer and clearing payables | 566,094 | 535,425 | 347,614 | ||||||||||||||
| Total stockholders’ equity | 1,642,973 | 1,400,936 | 1,230,846 | ||||||||||||||
| Capital Ratios: | |||||||||||||||||
| Equity to assets at end of period | 9.41 | % | 9.82 | % | 8.89 | % | |||||||||||
| Axos Financial, Inc.: | |||||||||||||||||
| Tier 1 leverage (core) capital to adjusted average assets | 9.24 | % | 8.82 | % | 8.97 | % | |||||||||||
| Common equity tier 1 capital (to risk-weighted assets) | 9.82 | % | 11.36 | % | 11.22 | % | |||||||||||
| Tier 1 capital (to risk-weighted assets) | 9.82 | % | 11.36 | % | 11.27 | % | |||||||||||
| Total capital (to risk-weighted assets) | 12.68 | % | 13.78 | % | 12.64 | % | |||||||||||
| Axos Bank: | |||||||||||||||||
| Tier 1 leverage (core) capital to adjusted average assets | 10.65 | % | 9.45 | % | 9.25 | % | |||||||||||
| Common equity tier 1 capital (to risk-weighted assets) | 11.24 | % | 12.28 | % | 11.79 | % | |||||||||||
| Tier 1 capital (to risk-weighted assets) | 11.24 | % | 12.28 | % | 11.79 | % | |||||||||||
| Total capital (to risk-weighted assets) | 12.01 | % | 13.21 | % | 12.62 | % | |||||||||||
| Axos Clearing, LLC: | |||||||||||||||||
| Net capital | $ | 38,915 | $ | 35,950 | $ | 34,022 | |||||||||||
| Excess capital | $ | 32,665 | $ | 27,904 | $ | 29,450 | |||||||||||
| Net capital as a percentage of aggregate debit items | 12.45 | % | 8.94 | % | 14.88 | % | |||||||||||
| Net capital in excess of 5% aggregate debit items | $ | 23,290 | $ | 15,836 | $ | 22,593 | |||||||||||
AXOS FINANCIAL, INC. AND SUBSIDIARIES
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 ending | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| (Dollars in thousands, except per share data) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Selected Income Statement Data: | |||||||||||||||||||||||
| Interest and dividend income | $ | 184,161 | $ | 156,921 | $ | 659,728 | $ | 617,863 | |||||||||||||||
| Interest expense | 18,751 | 15,267 | 52,570 | 79,121 | |||||||||||||||||||
| Net interest income | 165,410 | 141,654 | 607,158 | 538,742 | |||||||||||||||||||
| Provision for credit losses | 6,000 | 1,250 | 18,500 | 23,750 | |||||||||||||||||||
| Net interest income after provision for loan losses | 159,410 | 140,404 | 588,658 | 514,992 | |||||||||||||||||||
| Non-interest income | 27,100 | 16,801 | 113,363 | 105,261 | |||||||||||||||||||
| Non-interest expense | 104,793 | 81,860 | 362,062 | 314,510 | |||||||||||||||||||
| Income before income tax expense | 81,717 | 75,345 | 339,959 | 305,743 | |||||||||||||||||||
| Income tax expense | 23,821 | 21,090 | 99,243 | 90,036 | |||||||||||||||||||
| Net income | $ | 57,896 | $ | 54,255 | $ | 240,716 | $ | 215,707 | |||||||||||||||
| Net income attributable to common stock | $ | 57,896 | $ | 54,255 | $ | 240,716 | $ | 215,518 | |||||||||||||||
| Per Share Data: | |||||||||||||||||||||||
| Net income: | |||||||||||||||||||||||
Basic | $ | 0.97 | $ | 0.92 | $ | 4.04 | $ | 3.64 | |||||||||||||||
Diluted | $ | 0.96 | $ | 0.90 | $ | 3.97 | $ | 3.56 | |||||||||||||||
| Adjusted earnings (Non-GAAP) | $ | 1.12 | $ | 0.92 | $ | 4.23 | $ | 3.68 | |||||||||||||||
| Book value | $ | 27.48 | $ | 23.62 | $ | 27.48 | $ | 23.62 | |||||||||||||||
| Tangible book value (Non-GAAP) | $ | 24.45 | $ | 21.36 | $ | 24.45 | $ | 21.36 | |||||||||||||||
| Weighted average number of shares outstanding: | |||||||||||||||||||||||
Basic | 59,665,041 | 59,241,753 | 59,523,626 | 59,229,495 | |||||||||||||||||||
Diluted | 60,508,304 | 60,546,574 | 60,610,954 | 60,519,611 | |||||||||||||||||||
| Common shares outstanding at end of period | 59,777,949 | 59,317,944 | 59,777,949 | 59,317,944 | |||||||||||||||||||
| Common shares issued at end of period | 68,859,722 | 68,069,321 | 68,859,722 | 68,069,321 | |||||||||||||||||||
| Performance Ratios and Other Data: | |||||||||||||||||||||||
| Loan originations for investment | $ | 3,152,064 | $ | 2,041,324 | $ | 10,366,796 | $ | 6,471,864 | |||||||||||||||
| Loan originations for sale | $ | 86,873 | $ | 259,017 | $ | 656,487 | $ | 1,608,700 | |||||||||||||||
| Return on average assets | 1.40 | % | 1.46 | % | 1.57 | % | 1.52 | % | |||||||||||||||
| Return on average common stockholders’ equity | 14.13 | % | 15.56 | % | 15.61 | % | 16.51 | % | |||||||||||||||
Interest rate spread1 | 3.86 | % | 3.73 | % | 3.91 | % | 3.70 | % | |||||||||||||||
Net interest margin2 | 4.19 | % | 3.92 | % | 4.13 | % | 3.92 | % | |||||||||||||||
Net interest margin2 - Banking Business Segment only | 4.45 | % | 4.16 | % | 4.36 | % | 4.11 | % | |||||||||||||||
Efficiency ratio3 | 54.44 | % | 51.66 | % | 50.25 | % | 48.84 | % | |||||||||||||||
Efficiency ratio3 - Banking Business Segment only | 46.69 | % | 45.20 | % | 41.61 | % | 41.95 | % | |||||||||||||||
| Asset Quality Ratios: | |||||||||||||||||||||||
| Net annualized charge-offs to average loans | 0.02 | % | 0.22 | % | 0.02 | % | 0.12 | % | |||||||||||||||
| Non-performing loans to total loans | 0.83 | % | 1.26 | % | 0.83 | % | 1.26 | % | |||||||||||||||
| Non-performing assets to total assets | 0.68 | % | 1.07 | % | 0.68 | % | 1.07 | % | |||||||||||||||
| Allowance for credit losses to total loans held for investment at end of period | 1.04 | % | 1.15 | % | 1.04 | % | 1.15 | % | |||||||||||||||
| Allowance for credit losses to non-performing loans | 125.74 | % | 91.57 | % | 125.74 | % | 91.57 | % | |||||||||||||||
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.
AXOS FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| At June 30, | |||||||||||
| (Dollars in thousands, except par and stated value) | 2022 | 2021 | |||||||||
| ASSETS | |||||||||||
| Cash and cash equivalents | $ | 1,202,587 | $ | 715,624 | |||||||
| Cash segregated for regulatory purposes | 372,112 | 322,153 | |||||||||
| Total cash, cash equivalents, cash segregated | 1,574,699 | 1,037,777 | |||||||||
| Securities: | |||||||||||
| Trading | 1,758 | 1,983 | |||||||||
| Available-for-sale | 262,518 | 187,335 | |||||||||
| Stock of regulatory agencies | 20,368 | 19,995 | |||||||||
| Loans held for sale, carried at fair value | 4,973 | 29,768 | |||||||||
| Loans held for sale, lower of cost or fair value | 10,938 | 12,294 | |||||||||
Loans—net of allowance for credit losses of $148,617 as of June 2022 and $132,958 as of June 2021 | 14,091,061 | 11,414,814 | |||||||||
| Mortgage servicing rights, carried at fair value | 25,213 | 17,911 | |||||||||
| Other real estate owned and repossessed vehicles | 798 | 6,782 | |||||||||
| Securities borrowed | 338,980 | 619,088 | |||||||||
| Customer, broker-dealer and clearing receivables | 471,857 | 369,815 | |||||||||
| Goodwill and other intangible assets—net | 156,405 | 115,972 | |||||||||
| Other assets | 496,037 | 432,031 | |||||||||
| TOTAL ASSETS | $ | 17,455,605 | $ | 14,265,565 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Deposits: | |||||||||||
| Non-interest bearing | $ | 5,033,970 | $ | 2,474,424 | |||||||
| Interest bearing | 8,912,452 | 8,341,373 | |||||||||
| Total deposits | 13,946,422 | 10,815,797 | |||||||||
| Advances from the Federal Home Loan Bank | 117,500 | 353,500 | |||||||||
| Borrowings, subordinated notes and debentures | 445,244 | 221,358 | |||||||||
| Securities loaned | 474,400 | 728,988 | |||||||||
| Customer, broker-dealer and clearing payables | 566,094 | 535,425 | |||||||||
| Accounts payable and accrued liabilities and other liabilities | 262,972 | 209,561 | |||||||||
| Total liabilities | 15,812,632 | 12,864,629 | |||||||||
| STOCKHOLDERS’ EQUITY: | |||||||||||
| Common stock—$0.01 par value; 150,000,000 shares authorized, 68,859,722 shares issued and 59,777,949 shares outstanding as of June 2022; 68,069,321 shares issued and 59,317,944 shares outstanding as of June 2021 | 689 | 681 | |||||||||
| Additional paid-in capital | 453,784 | 432,550 | |||||||||
| Accumulated other comprehensive income (loss)—net of tax | (2,933) | 2,507 | |||||||||
| Retained earnings | 1,428,444 | 1,187,728 | |||||||||
| Treasury stock, at cost; 9,081,773 shares as of June 2022 and 8,751,377 shares as of June 2021 | (237,011) | (222,530) | |||||||||
| Total stockholders’ equity | 1,642,973 | 1,400,936 | |||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 17,455,605 | $ | 14,265,565 | |||||||
S-1
AXOS FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| For the Quarters Ended June 30, | |||||||||||
| (Dollars in thousands, except earnings per share) | 2022 | 2021 | |||||||||
| INTEREST AND DIVIDEND INCOME: | |||||||||||
| Loans, including fees | $ | 174,110 | $ | 147,965 | |||||||
| Securities borrowed and customer receivables | 4,462 | 6,270 | |||||||||
| Investments | 5,589 | 2,686 | |||||||||
| Total interest and dividend income | 184,161 | 156,921 | |||||||||
| INTEREST EXPENSE: | |||||||||||
| Deposits | 11,179 | 10,846 | |||||||||
| Advances from the Federal Home Loan Bank | 1,663 | 982 | |||||||||
| Securities loaned | 503 | 664 | |||||||||
| Other borrowings | 5,406 | 2,775 | |||||||||
| Total interest expense | 18,751 | 15,267 | |||||||||
| Net interest income | 165,410 | 141,654 | |||||||||
| Provision for credit losses | 6,000 | 1,250 | |||||||||
| Net interest income, after provision for credit losses | 159,410 | 140,404 | |||||||||
| NON-INTEREST INCOME: | |||||||||||
| Prepayment penalty fee income | 4,230 | 2,877 | |||||||||
| Gain on sale - other | 59 | (213) | |||||||||
| Mortgage banking income | 3,439 | 2,895 | |||||||||
| Broker-dealer fee income | 13,064 | 6,386 | |||||||||
| Banking and service fees | 6,308 | 4,856 | |||||||||
| Total non-interest income | 27,100 | 16,801 | |||||||||
| NON-INTEREST EXPENSE: | |||||||||||
| Salaries and related costs | 43,541 | 37,209 | |||||||||
| Data processing | 13,594 | 12,947 | |||||||||
| Depreciation and amortization | 6,022 | 6,211 | |||||||||
| Professional services | 7,649 | 4,901 | |||||||||
| Advertising and promotional | 3,449 | 3,612 | |||||||||
| Occupancy and equipment | 3,480 | 4,163 | |||||||||
| Broker-dealer clearing charges | 3,940 | 3,166 | |||||||||
| FDIC and regulatory fees | 3,967 | 2,203 | |||||||||
| General and administrative expense | 19,151 | 7,448 | |||||||||
| Total non-interest expense | 104,793 | 81,860 | |||||||||
| INCOME BEFORE INCOME TAXES | 81,717 | 75,345 | |||||||||
| INCOME TAXES | 23,821 | 21,090 | |||||||||
| NET INCOME | $ | 57,896 | $ | 54,255 | |||||||
| NET INCOME ATTRIBUTABLE TO COMMON STOCK | $ | 57,896 | $ | 54,255 | |||||||
| COMPREHENSIVE INCOME | $ | 56,589 | $ | 54,469 | |||||||
| Basic earnings per share | $ | 0.97 | $ | 0.92 | |||||||
| Diluted earnings per share | $ | 0.96 | $ | 0.90 | |||||||
S-2
AXOS FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| Year Ended June 30, | |||||||||||||||||
| (Dollars in thousands, except earnings per share) | 2022 | 2021 | 2020 | ||||||||||||||
| INTEREST AND DIVIDEND INCOME: | |||||||||||||||||
| Loans, including fees | $ | 626,628 | $ | 584,410 | $ | 582,748 | |||||||||||
| Securities borrowed and customer receivables | 20,512 | 20,466 | 16,585 | ||||||||||||||
| Investments | 12,588 | 12,987 | 23,506 | ||||||||||||||
| Total interest and dividend income | 659,728 | 617,863 | 622,839 | ||||||||||||||
| INTEREST EXPENSE: | |||||||||||||||||
| Deposits | 33,620 | 60,529 | 126,916 | ||||||||||||||
| Advances from the Federal Home Loan Bank | 4,625 | 4,672 | 11,988 | ||||||||||||||
| Securities loaned | 1,124 | 1,496 | 679 | ||||||||||||||
| Other borrowings | 13,201 | 12,424 | 5,645 | ||||||||||||||
| Total interest expense | 52,570 | 79,121 | 145,228 | ||||||||||||||
| Net interest income | 607,158 | 538,742 | 477,611 | ||||||||||||||
| Provision for credit losses | 18,500 | 23,750 | 42,200 | ||||||||||||||
| Net interest income, after provision for credit losses | 588,658 | 514,992 | 435,411 | ||||||||||||||
| NON-INTEREST INCOME: | |||||||||||||||||
| Prepayment penalty fee income | 13,303 | 7,166 | 5,993 | ||||||||||||||
| Gain on sale - other | 165 | 491 | 6,871 | ||||||||||||||
| Mortgage banking income | 19,033 | 42,150 | 20,646 | ||||||||||||||
| Broker-dealer fee income | 52,110 | 26,317 | 23,210 | ||||||||||||||
| Banking and service fees | 28,752 | 29,137 | 46,267 | ||||||||||||||
| Total non-interest income | 113,363 | 105,261 | 102,987 | ||||||||||||||
| NON-INTEREST EXPENSE: | |||||||||||||||||
| Salaries and related costs | 167,390 | 152,576 | 144,341 | ||||||||||||||
| Data processing | 50,159 | 40,719 | 30,671 | ||||||||||||||
| Depreciation and amortization | 24,596 | 24,124 | 24,443 | ||||||||||||||
| Professional services | 22,482 | 22,241 | 11,095 | ||||||||||||||
| Advertising and promotional | 13,580 | 14,212 | 14,523 | ||||||||||||||
| Occupancy and equipment | 13,745 | 13,402 | 12,059 | ||||||||||||||
| Broker-dealer clearing charges | 15,184 | 11,152 | 8,210 | ||||||||||||||
| FDIC and regulatory fees | 11,823 | 10,603 | 5,538 | ||||||||||||||
| General and administrative expense | 43,103 | 25,481 | 24,886 | ||||||||||||||
| Total non-interest expense | 362,062 | 314,510 | 275,766 | ||||||||||||||
| INCOME BEFORE INCOME TAXES | 339,959 | 305,743 | 262,632 | ||||||||||||||
| INCOME TAXES | 99,243 | 90,036 | 79,194 | ||||||||||||||
| NET INCOME | $ | 240,716 | $ | 215,707 | $ | 183,438 | |||||||||||
| NET INCOME ATTRIBUTABLE TO COMMON STOCK | $ | 240,716 | $ | 215,518 | $ | 183,129 | |||||||||||
| COMPREHENSIVE INCOME | $ | 235,276 | $ | 219,151 | $ | 182,485 | |||||||||||
| Basic earnings per share | $ | 4.04 | $ | 3.64 | $ | 3.01 | |||||||||||
| Diluted earnings per share | $ | 3.97 | $ | 3.56 | $ | 2.98 | |||||||||||
S-3
AXOS FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
| Year Ended June 30, | |||||||||||||||||
| (Dollars in thousands) | 2022 | 2021 | 2020 | ||||||||||||||
| NET INCOME | $ | 240,716 | $ | 215,707 | $ | 183,438 | |||||||||||
| Net unrealized gain (loss) from available-for-sale securities, net of tax expense (benefit) of $(2,416), $1,495, and $(381) for the years ended June 30, 2022, 2021 and 2020, respectively. | (5,440) | 3,444 | (953) | ||||||||||||||
| Other comprehensive income (loss) | $ | (5,440) | $ | 3,444 | $ | (953) | |||||||||||
| COMPREHENSIVE INCOME | $ | 235,276 | $ | 219,151 | $ | 182,485 | |||||||||||
S-4
AXOS FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
| Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss), Net of Income Tax | Treasury Stock | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Number of Shares | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Shares | Amount | Issued | Treasury | Outstanding | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2019 | 515 | $ | 5,063 | 66,563,922 | (5,435,105) | 61,128,817 | $ | 666 | $ | 389,945 | $ | 826,170 | $ | 16 | $ | (148,810) | $ | 1,073,050 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | — | 183,438 | — | — | 183,438 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | — | — | — | — | (953) | — | (953) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash dividends on preferred stock | — | — | — | — | — | — | — | (309) | — | — | (309) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock | — | — | — | (1,970,464) | (1,970,464) | — | — | — | — | (38,858) | (38,858) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense and restricted stock unit vesting | — | — | 759,131 | (304,849) | 454,282 | 7 | 21,928 | — | — | (7,457) | 14,478 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2020 | 515 | $ | 5,063 | 67,323,053 | (7,710,418) | 59,612,635 | $ | 673 | $ | 411,873 | $ | 1,009,299 | $ | (937) | $ | (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 expense and restricted stock unit vesting | — | — | 746,268 | (287,362) | 458,906 | 8 | 20,677 | — | — | (10,648) | 10,037 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2021 | — | $ | — | 68,069,321 | (8,751,377) | 59,317,944 | $ | 681 | $ | 432,550 | $ | 1,187,728 | $ | 2,507 | $ | (222,530) | $ | 1,400,936 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | — | 240,716 | — | — | 240,716 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | — | — | — | — | (5,440) | — | (5,440) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense and restricted stock unit vesting | — | — | 790,401 | (330,396) | 460,005 | 8 | 21,234 | — | — | (14,481) | 6,761 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2022 | — | $ | — | 68,859,722 | (9,081,773) | 59,777,949 | $ | 689 | $ | 453,784 | $ | 1,428,444 | $ | (2,933) | $ | (237,011) | $ | 1,642,973 | |||||||||||||||||||||||||||||||||||||||||||||||
S-5
AXOS FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||||||||||||||||
| Year Ended June 30, | |||||||||||||||||
| (Dollars in thousands) | 2022 | 2021 | 2020 | ||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||||
| Net income | $ | 240,716 | $ | 215,707 | $ | 183,438 | |||||||||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||||||||
| Accretion and amortization on securities, net | (423) | (365) | 291 | ||||||||||||||
| Net accretion of discounts on loans | (7,249) | (7,050) | (35,493) | ||||||||||||||
| Amortization of borrowing costs | 706 | 1,569 | 208 | ||||||||||||||
| Amortization of operating lease right of use asset | 10,899 | 10,598 | 10,543 | ||||||||||||||
| Stock-based compensation expense | 21,242 | 20,685 | 21,935 | ||||||||||||||
| Trading activity | 225 | (1,878) | 1,217 | ||||||||||||||
| Provision for credit losses | 18,500 | 23,750 | 42,200 | ||||||||||||||
| Deferred income taxes | (9,400) | (8,828) | (6,551) | ||||||||||||||
| Origination of loans held for sale | (656,487) | (1,608,700) | (1,601,579) | ||||||||||||||
| Unrealized (gain) loss on loans held for sale | 733 | 1,469 | (1,360) | ||||||||||||||
| Gain on sales of loans held for sale | (19,198) | (42,641) | (27,517) | ||||||||||||||
| Proceeds from sale of loans held for sale | 696,832 | 1,671,515 | 1,614,379 | ||||||||||||||
| Amortization and change in fair value of mortgage servicing rights | (2,228) | 6,319 | 5,806 | ||||||||||||||
| (Gain) loss on sale of other real estate and foreclosed assets | (458) | (201) | (449) | ||||||||||||||
| Depreciation and amortization | 24,596 | 24,124 | 24,443 | ||||||||||||||
| Net changes in assets and liabilities which provide (use) cash: | |||||||||||||||||
| Securities borrowed | 280,108 | (396,720) | (77,662) | ||||||||||||||
| Customer, broker-dealer and clearing receivables | (98,365) | (149,549) | (17,074) | ||||||||||||||
| Other assets | (116,202) | (7,259) | (36,979) | ||||||||||||||
| Securities loaned | (254,588) | 473,043 | 57,589 | ||||||||||||||
| Customer, broker-dealer and clearing payables | 30,669 | 187,811 | 109,010 | ||||||||||||||
| Accounts payable and other liabilities | 45,382 | (817) | 17,723 | ||||||||||||||
| Net cash provided by operating activities | $ | 206,010 | $ | 412,582 | $ | 284,118 | |||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||||
| Purchases of investment securities | (143,733) | (122,338) | (304,930) | ||||||||||||||
| Proceeds from sales of securities | 75,023 | — | — | ||||||||||||||
| Proceeds from repayment of securities | 61,117 | 74,667 | 325,704 | ||||||||||||||
| Purchase of stock of regulatory agencies | (54,350) | (305) | (55,870) | ||||||||||||||
| Proceeds from redemption of stock of regulatory agencies | 54,350 | 920 | 55,536 | ||||||||||||||
| Origination of loans held for investment | (10,325,104) | (5,761,303) | (6,573,568) | ||||||||||||||
| Proceeds from sale of loans and leases held for investment | 106,324 | 80,049 | 37,300 | ||||||||||||||
| Mortgage warehouse loans activity, net | 333,562 | (139,806) | (172,319) | ||||||||||||||
| Proceeds from sales of other real estate owned and repossessed assets | 8,654 | 1,586 | 2,241 | ||||||||||||||
| Acquisition of business activity, net of cash paid | (54,597) | — | — | ||||||||||||||
| Purchases of loans, net of discounts and premiums | (33,085) | (3,619) | — | ||||||||||||||
| Principal repayments on loans | 7,220,931 | 5,013,817 | 5,349,800 | ||||||||||||||
| Purchases of furniture, equipment, software and intangibles | (21,504) | (10,437) | (12,333) | ||||||||||||||
| Net cash used in investing activities | $ | (2,772,412) | $ | (866,769) | $ | (1,348,439) | |||||||||||
| Continued on Next Page | |||||||||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||||
| Net increase (decrease) in deposits | 3,130,625 | (520,897) | 2,353,521 | ||||||||||||||
| Proceeds from the Federal Home Loan Bank term advances | — | — | 65,000 | ||||||||||||||
| Repayments of the Federal Home Loan Bank term advances | (50,000) | (70,000) | (55,000) | ||||||||||||||
| Net (repayment) proceeds of Federal Home Loan Bank other advances | (186,000) | 181,000 | (226,000) | ||||||||||||||
| Redemption of subordinated notes | — | (51,000) | — | ||||||||||||||
| Repayment of Paycheck Protection Program Liquidity Facility advances | — | (151,952) | — | ||||||||||||||
| Proceeds from Paycheck Protection Program Liquidity Facility advances | — | — | 151,952 | ||||||||||||||
| Net (repayment) proceeds of other borrowings | 75,300 | 14,700 | (85,300) | ||||||||||||||
| Tax payments related to settlement of restricted stock units | (14,481) | (10,648) | (7,457) | ||||||||||||||
| Repurchase of treasury stock | — | (16,757) | (38,858) | ||||||||||||||
| Redemption of preferred stock, Series A | — | (5,150) | — | ||||||||||||||
| Cash dividends paid on preferred stock | — | (103) | (386) | ||||||||||||||
| Payment of debt issuance costs | (2,120) | (2,748) | — | ||||||||||||||
| Proceeds from issuance of subordinated notes | 150,000 | 175,000 | — | ||||||||||||||
| Net cash provided by financing activities | $ | 3,103,324 | $ | (458,555) | $ | 2,157,472 | |||||||||||
| NET CHANGE IN CASH AND CASH EQUIVALENTS | 536,922 | (912,742) | 1,093,151 | ||||||||||||||
| CASH AND CASH EQUIVALENTS—Beginning of year | 1,037,777 | 1,950,519 | 857,368 | ||||||||||||||
| CASH AND CASH EQUIVALENTS—End of year | $ | 1,574,699 | $ | 1,037,777 | $ | 1,950,519 | |||||||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||||||||||||
| Interest paid on interest-bearing liabilities | $ | 50,269 | $ | 77,995 | $ | 145,452 | |||||||||||
| Income taxes paid | 99,701 | 92,506 | 80,430 | ||||||||||||||
| Transfers to other real estate and repossessed vehicles | 2,134 | 1,903 | 1,315 | ||||||||||||||
| Transfers from loans and leases held for investment to loans held for sale | 105,884 | 71,136 | 141,849 | ||||||||||||||
| Transfers from loans held for sale to loans and leases held for investment | 3,098 | 29,616 | — | ||||||||||||||
| Securities transferred from available-for-sale portfolio to other assets | — | 70,751 | 17,482 | ||||||||||||||
| Loans held for investment sold, cash not received | — | — | 61,029 | ||||||||||||||
| Operating lease liabilities for obtaining right of use assets | 16,539 | — | 82,950 | ||||||||||||||
| Impact of adoption of ASC 326 on retained earnings | — | 37,088 | — | ||||||||||||||
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, 2022 | June 30, 2021 | |||||||||
| Single Family - Mortgage & Warehouse | $ | 3,988,462 | $ | 4,359,472 | |||||||
| Multifamily and Commercial Mortgage | 2,877,680 | 2,470,454 | |||||||||
| Commercial Real Estate | 4,781,044 | 3,180,453 | |||||||||
| Commercial & Industrial - Non-RE | 2,028,128 | 1,123,869 | |||||||||
| Auto & Consumer | 567,228 | 362,180 | |||||||||
| Other | 11,134 | 58,316 | |||||||||
| Total gross loans | 14,253,676 | 11,554,744 | |||||||||
| Allowance for credit losses - loans | (148,617) | (132,958) | |||||||||
| Unaccreted premiums (discounts) and loan fees | (13,998) | (6,972) | |||||||||
| Total net loans | $ | 14,091,061 | $ | 11,414,814 | |||||||
S-7
SECURITIES
The amortized cost, carrying amount and fair value for the trading and available for sale securities at June 30, 2022 and June 30, 2021 were:
| 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 | $ | 9 | $ | (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 | |||||||||||||||||||
| June 30, 2021 | |||||||||||||||||||||||||||||
| 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 | $ | — | $ | 23,639 | $ | 420 | $ | (146) | $ | 23,913 | |||||||||||||||||||
Non-agency2 | — | 65,174 | 2,862 | (421) | 67,615 | ||||||||||||||||||||||||
| Total mortgage-backed securities | — | 88,813 | 3,282 | (567) | 91,528 | ||||||||||||||||||||||||
| Non-MBS: | |||||||||||||||||||||||||||||
| Municipal | 1,983 | 3,466 | 99 | — | 3,565 | ||||||||||||||||||||||||
| Asset-backed securities and structured notes | — | 90,549 | 1,693 | — | 92,242 | ||||||||||||||||||||||||
| Total Non-MBS | 1,983 | 94,015 | 1,792 | — | 95,807 | ||||||||||||||||||||||||
| Total debt securities | $ | 1,983 | $ | 182,828 | $ | 5,074 | $ | (567) | $ | 187,335 | |||||||||||||||||||
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, 2022 | June 30, 2021 | |||||||||||||||||||||
| (Dollars in thousands) | Amount | Rate1 | Amount | Rate1 | |||||||||||||||||||
| Non-interest bearing | $ | 5,033,967 | — | % | $ | 2,474,424 | — | % | |||||||||||||||
| Interest bearing: | |||||||||||||||||||||||
| Demand | 3,611,891 | 0.61 | % | 3,369,845 | 0.15 | % | |||||||||||||||||
| Savings | 4,245,555 | 0.95 | % | 3,458,687 | 0.21 | % | |||||||||||||||||
| Total interest-bearing demand and savings | 7,857,446 | 0.79 | % | 6,828,532 | 0.18 | % | |||||||||||||||||
| Time deposits: | |||||||||||||||||||||||
| $250 and under | 651,392 | 1.22 | % | 1,070,139 | 1.30 | % | |||||||||||||||||
| Greater than $250 | 403,616 | 1.41 | % | 442,702 | 1.03 | % | |||||||||||||||||
| Total time deposits | 1,055,008 | 1.25 | % | 1,512,841 | 1.22 | % | |||||||||||||||||
Total interest bearing2 | 8,912,454 | 0.85 | % | 8,341,373 | 0.37 | % | |||||||||||||||||
| Total deposits | $ | 13,946,421 | 0.54 | % | $ | 10,815,797 | 0.29 | % | |||||||||||||||
1. Based on weighted-average stated interest rates at end of period.
2. The total interest-bearing includes brokered deposits of $1,032.7 million and $621.4 million as of June 30, 2022 and June 30, 2021, respectively, of which $250.0 million and $380.0 million, respectively, are time deposits classified as $250 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, | |||||||||||
| 2022 | 2021 | ||||||||||
| Non-interest-bearing | 42,372 | 36,726 | |||||||||
| Checking and savings accounts | 344,593 | 336,068 | |||||||||
| Time deposits | 8,734 | 12,815 | |||||||||
| Total number of deposit accounts | 395,699 | 385,609 | |||||||||
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, | |||||||||||||||||||||||||||||||||||
| 2022 | 2021 | ||||||||||||||||||||||||||||||||||
| (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 | $ | 13,706,238 | $ | 174,110 | 5.08 | % | $ | 11,485,248 | $ | 147,965 | 5.15 | % | |||||||||||||||||||||||
| Interest-earning deposits in other financial institutions | 1,239,655 | 2,597 | 0.84 | % | 1,930,140 | 703 | 0.15 | % | |||||||||||||||||||||||||||
Mortgage-backed and other investment securities4 | 241,300 | 2,648 | 4.39 | % | 158,221 | 1,376 | 3.48 | % | |||||||||||||||||||||||||||
| Securities borrowed and margin lending | 592,234 | 4,462 | 3.01 | % | 864,702 | 6,270 | 2.90 | % | |||||||||||||||||||||||||||
| Stock of the regulatory agencies | 24,852 | 344 | 5.54 | % | 20,520 | 607 | 11.83 | % | |||||||||||||||||||||||||||
| Total interest-earning assets | 15,804,279 | 184,161 | 4.66 | % | 14,458,831 | 156,921 | 4.34 | % | |||||||||||||||||||||||||||
| Non-interest-earning assets | 794,171 | 438,287 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 16,598,450 | $ | 14,897,118 | |||||||||||||||||||||||||||||||
| Liabilities and Stockholders’ Equity: | |||||||||||||||||||||||||||||||||||
| Interest-bearing demand and savings | $ | 7,007,304 | $ | 8,379 | 0.48 | % | $ | 7,441,814 | $ | 5,118 | 0.28 | % | |||||||||||||||||||||||
| Time deposits | 1,012,705 | 2,800 | 1.11 | % | 1,632,525 | 5,728 | 1.40 | % | |||||||||||||||||||||||||||
| Securities loaned | 408,416 | 503 | 0.49 | % | 412,385 | 664 | 0.64 | % | |||||||||||||||||||||||||||
| Advances from the FHLB | 543,247 | 1,663 | 1.22 | % | 171,808 | 982 | 2.29 | % | |||||||||||||||||||||||||||
| Borrowings, subordinated notes and debentures | 448,754 | 5,406 | 4.82 | % | 274,664 | 2,775 | 4.04 | % | |||||||||||||||||||||||||||
| Total interest-bearing liabilities | 9,420,426 | 18,751 | 0.80 | % | 9,933,196 | 15,267 | 0.61 | % | |||||||||||||||||||||||||||
| Non-interest-bearing demand deposits | 4,714,018 | 2,586,766 | |||||||||||||||||||||||||||||||||
| Other non-interest-bearing liabilities | 824,704 | 981,989 | |||||||||||||||||||||||||||||||||
| Stockholders’ equity | 1,639,302 | 1,395,167 | |||||||||||||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 16,598,450 | $ | 14,897,118 | |||||||||||||||||||||||||||||||
| Net interest income | $ | 165,410 | $ | 141,654 | |||||||||||||||||||||||||||||||
Interest rate spread6 | 3.86 | % | 3.73 | % | |||||||||||||||||||||||||||||||
Net interest margin7 | 4.19 | % | 3.92 | % | |||||||||||||||||||||||||||||||
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. Loans include average balances of $26.1 million and $26.9 million of Community Reinvestment Act loans which are taxed at a reduced rate for the 2022 and 2021 three-month periods respectively.
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, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (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 | $ | 12,577,397 | $ | 626,628 | 4.98 | % | $ | 11,332,020 | $ | 584,410 | 5.16 | % | $ | 10,149,867 | $ | 582,748 | 5.74 | % | |||||||||||||||||||||||||||||||||||
| Interest-earning deposits in other financial institutions | 1,233,983 | 4,501 | 0.36 | % | 1,600,811 | 2,185 | 0.14 | % | 833,612 | 10,906 | 1.31 | % | |||||||||||||||||||||||||||||||||||||||||
Mortgage-backed and other investment securities3 | 174,651 | 6,952 | 3.98 | % | 192,420 | 9,560 | 4.97 | % | 217,598 | 11,061 | 5.08 | % | |||||||||||||||||||||||||||||||||||||||||
Securities borrowed and margin lending4 | 687,363 | 20,512 | 2.98 | % | 613,735 | 20,466 | 3.33 | % | 362,063 | 16,585 | 4.58 | % | |||||||||||||||||||||||||||||||||||||||||
| Stock of the regulatory agencies | 21,844 | 1,135 | 5.20 | % | 20,588 | 1,242 | 6.03 | % | 28,776 | 1,539 | 5.35 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest-earning assets | 14,695,238 | 659,728 | 4.49 | % | 13,759,574 | 617,863 | 4.49 | % | 11,591,916 | 622,839 | 5.37 | % | |||||||||||||||||||||||||||||||||||||||||
| Non-interest-earning assets | 658,194 | 394,085 | 395,789 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 15,353,432 | $ | 14,153,659 | $ | 11,987,705 | |||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities and Stockholders’ Equity: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing demand and savings | $ | 6,762,705 | $ | 20,053 | 0.30 | % | $ | 7,204,698 | $ | 29,031 | 0.40 | % | $ | 4,844,700 | $ | 66,883 | 1.38 | % | |||||||||||||||||||||||||||||||||||
| Time deposits | 1,226,774 | 13,567 | 1.11 | % | 1,825,795 | 31,498 | 1.73 | % | 2,482,151 | 60,033 | 2.42 | % | |||||||||||||||||||||||||||||||||||||||||
| Securities loaned | 469,051 | 1,124 | 0.24 | % | 412,385 | 1,496 | 0.36 | % | 247,420 | 679 | 0.27 | % | |||||||||||||||||||||||||||||||||||||||||
| Advances from the FHLB | 349,796 | 4,625 | 1.32 | % | 211,077 | 4,672 | 2.21 | % | 747,358 | 11,988 | 1.60 | % | |||||||||||||||||||||||||||||||||||||||||
| Borrowings, subordinated notes and debentures | 310,454 | 13,201 | 4.25 | % | 340,699 | 12,424 | 3.65 | % | 103,652 | 5,645 | 5.45 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 9,118,780 | 52,570 | 0.58 | % | 9,994,654 | 79,121 | 0.79 | % | 8,425,281 | 145,228 | 1.72 | % | |||||||||||||||||||||||||||||||||||||||||
| Non-interest-bearing demand deposits | 3,929,457 | 2,182,009 | 1,990,005 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other non-interest-bearing liabilities | 762,833 | 671,581 | 397,506 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholders’ equity | 1,542,362 | 1,305,415 | 1,174,913 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 15,353,432 | $ | 14,153,659 | $ | 11,987,705 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 607,158 | $ | 538,742 | $ | 477,611 | |||||||||||||||||||||||||||||||||||||||||||||||
Interest rate spread5 | 3.91 | % | 3.70 | % | 3.65 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest margin6 | 4.13 | % | 3.92 | % | 4.12 | % | |||||||||||||||||||||||||||||||||||||||||||||||
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. Loans include average balances of $26.4 million,, $27.2 million, and $28.0 million of Community Reinvestment Act loans which are taxed at a reduced rate for the 2022 2021, and 2020 fiscal years respectively.
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 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, 2022 and 2021:
| For the Three Months Ended | |||||||||||||||||||||||||||||||||||
| June 30, | |||||||||||||||||||||||||||||||||||
| 2022 | 2021 | ||||||||||||||||||||||||||||||||||
| (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 | $ | 13,672,947 | $ | 173,334 | 5.07 | % | $ | 11,444,379 | $ | 147,235 | 5.15 | % | |||||||||||||||||||||||
| Interest-earning deposits in other financial institutions | 929,695 | 1,993 | 0.86 | % | 1,579,835 | 413 | 0.10 | % | |||||||||||||||||||||||||||
Mortgage-backed and other investment securities4 | 265,080 | 2,745 | 4.14 | % | 182,874 | 1,505 | 3.29 | % | |||||||||||||||||||||||||||
| Stock of the regulatory agencies | 21,734 | 344 | 6.33 | % | 17,250 | 301 | 6.98 | % | |||||||||||||||||||||||||||
| Total interest-earning assets | 14,889,456 | 178,416 | 4.79 | % | 13,224,338 | 149,454 | 4.52 | % | |||||||||||||||||||||||||||
| Non-interest-earning assets | 298,721 | 217,543 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 15,188,177 | $ | 13,441,881 | |||||||||||||||||||||||||||||||
| Liabilities and Stockholders’ Equity: | |||||||||||||||||||||||||||||||||||
| Interest-bearing demand and savings | $ | 7,148,061 | $ | 8,449 | 0.47 | % | $ | 7,553,737 | $ | 5,213 | 0.28 | % | |||||||||||||||||||||||
| Time deposits | 1,012,705 | 2,800 | 1.11 | % | 1,632,525 | 5,728 | 1.40 | % | |||||||||||||||||||||||||||
| Advances from the FHLB | 543,247 | 1,663 | 1.22 | % | 171,808 | 982 | 2.29 | % | |||||||||||||||||||||||||||
| Borrowings, subordinated notes and debentures | 33 | — | — | % | 44,983 | 40 | 0.36 | % | |||||||||||||||||||||||||||
| Total interest-bearing liabilities | 8,704,046 | 12,912 | 0.59 | % | 9,403,053 | 11,963 | 0.51 | % | |||||||||||||||||||||||||||
| Non-interest-bearing demand deposits | 4,770,915 | 2,629,016 | |||||||||||||||||||||||||||||||||
| Other non-interest-bearing liabilities | 139,753 | 104,885 | |||||||||||||||||||||||||||||||||
| Stockholders’ equity | 1,573,463 | 1,304,927 | |||||||||||||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 15,188,177 | $ | 13,441,881 | |||||||||||||||||||||||||||||||
| Net interest income | $ | 165,504 | $ | 137,491 | |||||||||||||||||||||||||||||||
Interest rate spread5 | 4.20 | % | 4.01 | % | |||||||||||||||||||||||||||||||
Net interest margin6 | 4.45 | % | 4.16 | % | |||||||||||||||||||||||||||||||
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. Loans include average balances of $26.1 million and $26.9 million of Community Reinvestment Act loans which are taxed at a reduced rate for the 2022 and 2021 three-month periods respectively.
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
Selected information concerning the Securities segment follows as of and for the three months ended:
| (Dollars in thousands) | June 30, 2022 | June 30, 2021 | |||||||||
| Compensation as a % of net revenue | 38.0 | % | 32.4 | % | |||||||
| FDIC insured program balances at banks (end of period) | $ | 3,452,358 | $ | 730,248 | |||||||
| Customer margin balances (end of period) | $ | 285,894 | $ | 327,148 | |||||||
| Customer funds on deposit, including short credits (end of period) | $ | 372,112 | $ | 322,153 | |||||||
| Clearing: | |||||||||||
| Total tickets | 1,236,292 | 2,053,362 | |||||||||
| Correspondents (end of period) | 71 | 69 | |||||||||
| Securities lending: | |||||||||||
| Interest-earning assets – stock borrowed (end of period) | $ | 338,980 | $ | 619,088 | |||||||
| Interest-bearing liabilities – stock loaned (end of period) | $ | 474,400 | $ | 728,988 | |||||||
S-13
Axos Q4 Fiscal 2022 Earnings Supplement August 4, 2022 NYSE: AX
1 Loan Growth by Category for Fourth Quarter Ended June 30, 2022 Loans Single Family Mortgage & Warehouse Multifamily & Commercial Mortgage Commercial Real Estate Auto & Consumer Jumbo Mortgage Multifamily Small Balance Commercial Lender Finance RE SF Warehouse Lending Asset-Based Lending Auto CRE Specialty Unsecured / OD Equipment Leasing Q4 FY22 $ millions Other Q3 FY22 $3,707 281 2,085 793 4,395 386 115 493 74 11 158 (142) 5 210 293 195 8 39 7 Inc (Dec) $3,549 423 2,080 583 4,102 191 107 454 67 16 Commercial & Industrial Non-RE Lender Finance Non RE 741 676 65 1,172 998 174 $14,253 $ 13,246 $1,007 (5)
In the money +75 Bps +100 Bps +150 Bps +200 Bps Interest Rate Components of Loan and Lease Portfolio At June 30, 2022 Floor Analysis** – Variable-Rate Loans Fixed/Hybrid Years to Maturity / Repricing*Mix of Loan Repricing Types Variable 52% Hybrid 39% Fixed 9% 6,324 6,760 6,999 7,206 79% 86% 91% 95% 98% 278 597 1,671 2,901 5,572 6,701 6,717 6,774 - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 1/2 1 2 3 5 10 20 >20 Years $M $M * -Excludes SFR Warehouse. Assumes Hybrids prepaying at 15% CPR 5% 11% 24% 43% 100%99%99%86% 5,829 **Prior to the Fed’s 75 bps Increase in the Fed Funds Rate on 7/27/22 2
Change in Allowance for Credit Losses (ACL) & Unfunded Loan Commitments Liability (UCL) ($ in millions) 143.4 (1.2) 0.4 6.0 148.6 9.7 11.0 120 125 130 135 140 145 150 155 160 165 March 31, 2022 ACL + UCL Gross Charge-offs Provisions for credit losses Gross Recoveries June 30, 2022 ACL + UCL UCLACL 1.3 3
4 Allowance for Credit Losses (ACL) by Loan Category as of June 30, 2022 Loans Single Family - Mortgage and Warehouse Multifamily & Commercial Mortgage Commercial Real Estate Auto & Consumer Loan Balance $ millions Other ACL $ $3,988.5 2,877.7 4,781.0 567.2 11.1 ACL % Commercial & Industrial Non-RE 2,028.1 $14,253.6 14.6 69.3 14.1 0.1 30.8 $19.7 $148.6 1.04% 1.45% 0.51% 0.49% 0.28% 2.49% 1.52%
Credit Quality ($ millions) No Loans Subject to Forbearance or Deferral for Over a Year 3/31/2022 Loans O/S NPAs % Single Family-Mortgage & Warehouse $3,972.1 $113.3 2.85% Multifamily and Commercial Mortgage 2,662.5 9.7 0.36% Commercial Real Estate 4,293.0 15.0 0.36% Commercial & Industrial - Non-RE 1,780.6 0.0 0.00% Auto & Consumer 521.9 0.4 0.08% Other 16.1 0.4 2.30% Total $13,246.2 $138.8 1.05% 6/30/2022 Loans O/S NPAs % Single Family-Mortgage & Warehouse $3,988.5 $66.4 1.66% Multifamily and Commercial Mortgage 2,877.7 33.4 1.16% Commercial Real Estate 4,781.0 14.9 0.31% Commercial & Industrial - Non-RE 2,028.1 3.0 0.15% Auto & Consumer 567.2 0.4 0.07% Other 11.1 0.1 0.90% Total $14,253.6 $118.2 0.83% Change at 6/30/22 from 3/31/22 Loans O/S NPAs Single Family-Mortgage & Warehouse $16.4 ($46.9) Multifamily and Commercial Mortgage 215.2 23.7 Commercial Real Estate 488.0 (0.1) Commercial & Industrial - Non-RE 247.5 3.0 Auto & Consumer 45.3 0.0 Other (5.0) (0.3) Total $1,007.4 ($20.6) 5
6 Greg Garrabrants, President and CEO Derrick Walsh, EVP and CFO Andy Micheletti, EVP-Finance [email protected] www.axosfinancial.com Johnny Lai, SVP Corporate Development and Investor Relations Phone: 858.649.2218 Mobile: 858.245.1442 [email protected] Contact Information