AXOS FINANCIAL, INC. Axos Financial, Inc. Investor Presentation
November 2, 2023 | NYSE: AX |
Safe Harbor
This presentation contains forward-looking statements that involve risks and uncertainties, including without limitation statements relating to Axos Financial, Inc.'s ("Axos") financial prospects and other projections of its performance and asset quality, Axos' deposit balances and capital ratios, Axos' ability to continue to grow profitably and increase its business, Axos' ability to continue to diversify its lending and deposit franchises, the anticipated timing and financial performance of other offerings, initiatives, and acquisitions, expectations of the environment in which Axos operates and projections of future performance. These forward-looking statements are made on the basis of the views and assumptions of management regarding future events and performance as of the date of this presentation. Actual results and the timing of events could differ materially from those expressed or implied in such forward-looking statements as a result of risks and uncertainties, including without limitation Axos' ability to successfully integrate acquisitions and realize the anticipated benefits of the transactions, changes in the interest rate environment, monetary policy, inflation, government regulation, general economic conditions, changes in the competitive marketplace, conditions in the real estate markets in which we operate, risks associated with credit quality, our ability to attract and retain deposits and access other sources of liquidity, and the outcome and effects of litigation and other
factors beyond our control. These and other risks and uncertainties detailed in Axos' periodic reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended June 30, 2023, Form 10-Q for the quarter ended September 30, 2023 and its last earnings press release, could cause actual results to differ materially from those expressed or implied in any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-lookingstatements, which speak only as of the date of this press release. Axos undertakes no obligation to publicly update or revise any forward-lookingstatements, whether as a result of new information, future events or otherwise. All written and oral forward-lookingstatements made in connection with this presentation, which are attributable to us or persons acting on Axos' behalf are expressly qualified in their entirety by the foregoing information.
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Axos' Business Model is Differentiated From Other Banks
Customer | Sales | Servicing | Distribution | ||||
Acquisition | |||||||
• | Digital Marketing | • | Automated | • | Self-service | • | Balance sheet |
• | Affinity and | fulfillment | • | Digital journey | • | Whole loan sales | |
Distribution | • | Inbound call center | • | Direct banker (call | options | ||
Partners | sales | center) | • | Securitization | |||
• | Data mining/target | • | Outbound call | ||||
feeding direct | center sales | ||||||
marketing | • | Minimal outside | |||||
• | Cross-selling | sales | |||||
• | Significant inside | ||||||
sales |
Core Digital Capabilities
Data Driven
Insight
Integrated
Customer
Experience
Digital
Marketing
Digitally
Enabled
Operations
Next-Gen
Technology
3
Axos is a Top Performer Versus Bank Peer Group
Axos Bank | Peer Group | Percentile | |
ROAA | 1.63% | 0.74% | 91% |
Return on equity | 16.56% | 7.48% | 91% |
Net interest income | 4.38% | 2.79% | 94% |
Efficiency ratio | 46.19% | 70.94% | 8% |
The 91% on ROE means that the Bank outperformed 91% of all banks. The 8% efficiency ratio ranking means that only 8% of banks have lower expenses in comparison to their revenues.
Source: Uniform Bank Performance Report (UBPR) as of 06/30/23; data retrieved 10/6/2023. | 4 |
Note: Peer group is all savings banks (101) with assets greater than $1 billion for quarter ended 06/30/23. |
Axos Financial's Three Divisions Provide the Foundation for Sustained Long-term Growth
Consumer
Banking
SecuritiesCommercial Banking
Investment Thesis
- Diverse mix of asset, deposit, and fee income reduces risk and provides multiple growth opportunities in varying environments
- Differentiated retail digital strategy from "online savings banks" or fin-tech competitors
- Structural cost advantage vs. traditional banks
- Differentiated distribution strategy
- New business initiatives generate incremental growth
- Universal Digital Banking Platform and Enterprise Technology stack provide operating leverage opportunity
- Technology synergies among divisions reduce overall cost of growth strategy
5
Consolidated Fiscal First Quarter 2024 Highlights Compared with Fiscal First Quarter 2023
Asset Growth | Deposit Growth |
$ Millions | $ Millions | |||
25,000 | 18,407 | 13.1% | 20,825 | 20,000 |
20,000 | ||||
15,000 | ||||
15,000 | ||||
10,000 | ||||
10,000 | ||||
5,000 | ||||
5,000 | ||||
0 | ||||
0 | Q1 2023 | Q1 2024 | ||
17,566
15,177 15.7%
Q1 2023 | Q1 2024 |
Net Income | Diluted EPS |
$ Millions
10082.6
69.6* | 18.7% | |||
50 | ||||
58.4 | ||||
0 | ||||
Q1 2023 | Q1 2024 | |||
$ Diluted EPS
1.40 | 1.38 | |
20.0% | ||
1.20 | 1.15* | |
1.00 | ||
0.80 | 0.97 | |
0.60 | ||
0.40 | ||
0.20 | ||
0.00 | Q1 2023 | Q1 2024 |
Return on Equity = 16.91% Return on Assets = 1.64%
* Net income and diluted EPS for Q1 2023 exclude a $16.0 million ($11.2 million post tax) accrual as a result of an adverse legal | 6 |
judgement that has not been finalized. |
Diluted EPS and Book Value Per Share Have Been Consistently Strong
Diluted EPS (FY) | Book Value Per Share (FY) | ||
$ per share | $ per share |
6.00 | 35.00 | |||||
5.00 | 16.4% CAGR | 5.07 | 30.00 | |||
4.00 | 3.56 | 3.97 | 25.00 | |||
3.00 | 2.48 | 2.98 | 20.00 | |||
2.37 | 15.00 | |||||
2.00 | 10.00 | |||||
1.00 | 5.00 | |||||
0.00 | 0.00 | |||||
2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
32.53
16.4% CAGR | 27.48 |
23.62
20.56
17.47
15.24
2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
7
Net Interest Margin has been Stable Through a Variety of Interest Rate Cycles*
Stable Net Interest Margin
5.08% 5.33%
3.76% 3.83% 3.92% 4.13% 4.35% 4.36%
2.40%
0.08% 0.08% 0.26%
2019 | 2020 | 2021 | 2022 | 2023 | Q1 2024 |
NIM | Effective Fed Funds rate | |
*NIM excludes impact of HRB; relationship with HRB terminated in December 2021.
8
Loan Portfolio More Sensitive to Rate Increases Today Compared to Last Fed Fund Rate Hike Starting in 2015
September 30, 2015 | September 30, 2023 | |
Variable rate | Fixed | Fixed |
9% | 11% | 7% |
32% | |
Variable rate | Hybrid |
61% |
Hybrid 80%
9
Interest Rate Components of Loan & Lease Portfolio
At September 30, 2023
Mix of Loan Repricing Types | Fixed/Hybrid Years to Maturity / Repricing* |
Fixed 7%
Variable | Hybrid |
61% | 32% |
7,000
6,000
5,000
4,000
3,000
2,000
1,000
-
$M
6,483 6,491 6,543
5,516
3,297
2,139
944
455
1/2 1 2 3Years5 10 20 >20
7% | 15% | 33% | 50% | 84% | 99% 99% 100% |
*Excludes SF Warehouse Lending and Equipment Leasing. The years to repricing assumes no loan prepayments and reflects only contractual terms.
Of the fixed and hybrid rate loan balances in our portfolio at September 30, 2023, 50% will reprice within 3 years and 84% will reprice within 5 years
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Disclaimer
Axos Financial Inc. published this content on 02 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 November 2023 01:18:04 UTC.
