Axos Financial, Inc. · NYSE:AX
Axos Financial — Q3 2024 Earnings Presentation
28 slides from Axos Financial's earnings presentation, Apr 30, 2024
Slide 1: Axos Financial, Inc. Investor Presentation
Axos Financial, Inc. Investor Presentation May 7, 2024 NYSE: AX
Slide 2: Safe Harbor
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 capit
Slide 3: Axos' Business Model is Differentiated From Other Banks
Axos’ Business Model is Differentiated From Other Banks Customer Sales Servicing Distribution Acquisition › Digital Marketing › Automated › Self-service › Balance sheet fulfillment › Affinity and › Digital journey › Whole loan sales Distribution › Inbound call center options › Direct banker (call Pa
Slide 4: Axos is a Top Performer Versus Bank Peer Group
Axos is a Top Performer Versus Bank Peer Group Axos Bank Peer Group1 Percentile ROAA 2.09% 0.65% 96% Return on Equity 21.04% 6.69% 94% Net Interest Income 4.46% 2.70% 96% Efficiency Ratio 42.71% 72.82% 6% The 94% on ROE means that the Bank outperformed 94% of all banks. The 6% efficiency ratio ranki
Slide 5: Axos Financial's Three Divisions Provide the Foundation for Sustained Long-term Growth
Axos Financial’s Three Divisions Provide the Foundation for Sustained Long-term Growth Investment Thesis › Diverse mix of assets, deposits, and fee income reduces risk and provides multiple growth opportunities in varying environments › Differentiated retail digital strategy from Consumer “online sa
Slide 6: Consolidated Fiscal Third Quarter 2024 Highlights Compared with Fiscal Third Quarter 2023
Consolidated Fiscal Third Quarter 2024 Highlights Compared with Fiscal Third Quarter 2023 Asset Growth Deposit Growth $ Millions $ Millions 14% 14% Q3 2024 Net Income Diluted EPS $ Millions $ Diluted EPS 39% 45% Return on Equity = 20.71% Return on Assets = 1.98% 6
Slide 7: Diluted EPS and Book Value Per Share Have Been Consistently Strong
Diluted EPS and Book Value Per Share Have Been Consistently Strong Diluted EPS (FY) Book Value Per Share (FY) $ Per Share $ Per Share 16.4% CAGR 16.4% CAGR 7
Slide 8: Expanding Net Interest Margin Through a Variety of Interest Rate Cycles
Expanding Net Interest Margin Through a Variety of Interest Rate Cycles1 Note 1: The Company partnered with H&R Block Bank (HRB) to provide HRB branded financial products. The partnership was terminated December 8 8, 2020. NIM excludes impact of HRB.
Slide 9: Interest Rate Components of Loan & Lease Portfolio
Interest Rate Components of Loan & Lease Portfolio As of March 31, 2024 Mix of Loan Repricing Types Fixed/Hybrid Years to Maturity / Repricing1 $ Millions Years 11% 21% 36% 57% 87% 99% 100% Note 1: Excludes SF Warehouse Lending and Equipment Leasing. The years to repricing assumes no loan prepayment
Slide 10: Loan Growth by Category
Loan Growth by Category $ Millions Q3 FY24 Q2 FY24 Inc (Dec) Single Family Jumbo Mortgage $ 3,964 $ 3,993 $ (29) Mortgage & Warehouse SF Warehouse Lending 159 99 60 Multifamily & Multifamily 2,663 2,708 (45) Commercial Mortgage Small Balance Commercial 1,338 1,357 (19) CRE Specialty 5,220 5,400 (180
Slide 11: LTV Distribution
Commercial Real Estate Specialty1 Detail as of March 31, 2024 Loan Type Balance (mm) Weighted Avg. LTV Non-Performing Loans (mm) Multifamily $ 1,971 38 % $ 11 Hotel 1,045 39 — SFR 812 42 15 Other 233 28 — Office 410 37 — Industrial 554 48 — Retail 195 46 — Total $ 5,220 40 % $ 26 LTV Distribution No
Slide 12: Commercial Real Estate Specialty Detail
Commercial Real Estate Specialty1 Detail as of March 31, 2024 76% of total Commercial Real Estate Specialty balance at March 31, 2024 is indirect note structures where Axos has first payment priority; these loans carry a weighted-average LTV of 39%. Loan Type Balance (mm) Weighted Avg. LTV Construct
Slide 13: Diversified Deposit Gathering
Diversified Deposit Gathering Approximately 90% of deposits are FDIC-insured or collateralized › Serves approximately 40% of U.S. Chapter 7 › Full service digital banking, wealth bankruptcy trustees in exclusive relationship management, and securities trading › Software allows servicing of SEC recei
Slide 14: Deposit Growth in Checking, Business, and Savings Was Achieved While Transforming the Mix of Deposits
Deposit Growth in Checking, Business, and Savings Was Achieved While Transforming the Mix of Deposits June 30, 2013 March 31, 2024 Total Deposits = $2.1 billion Total Deposits = $19.1 billion Checking and Time deposits other demand deposits Checking and other demand Time deposits deposits Savings Sa
Slide 15: Customer Base and Deposit Volume is Well Distributed Throughout the United States
Customer Base and Deposit Volume is Well Distributed Throughout the United States Axos Deposits Have National Reach With Customers in Every State 15
Slide 16: Non-Interest Income Growth and Diversification
Non-Interest Income Growth and Diversification Year Ended Three Months Ended June 30, 2019 March 31, 2024 Total Non-Interest Income = Total Non-Interest Income = $82.9 million $132.7 million1 Securities Segment Fee Income2 (6/2019 – 3/2024) = 590% Note 1: Represents annualized quarterly data 16 Note
Slide 17: Integrated Securities and Banking
Integrated Securities and Banking Leveraging Bank’s existing digital platforms allows for unique integrated and flexible Banking and Securities product features Onboard Clients Rich Banking & Unified Service “Single-Pane” Faster Securities Features Model Banking Salesforce Universal Universal Servic
Slide 18: Axos Clearing and Custody Highlights
Axos Clearing and Custody Highlights Three Months Ended March 31, 2024 › Leadership team with more than 100 Custody $ 8,105,387 years combined Clearing Fees & Execution 6,166,043 industry experience. Cash Sorting 17,212,844 › Proprietary front- and back-end Margin Lending 3,719,802 technologies for
Slide 19: Secular Industry Trends Provide Opportunities for Axos
Secular Industry Trends Provide Opportunities for Axos › RIAs need to reduce costs and streamline back-office Fee Compression for ops Active and Passive › Automation frees up time/resources for client Investment Managers interactions › Axos to provide bundled securities clearing, Advisors are Leavin
Slide 20: Axos Advisor Services (AAS) At A Glance
Axos Advisor Services (AAS) At A Glance Liberty Provides a Comprehensive Turnkey Platform Serving 201 RIAs1,3 ($1M+ AUC) ~$26B Assets Under Custody2 Automatic Reconciliation TAMPs Traditional Small RIAs RIAs 59% of Total 36% of Total AUC3 5% of Total AUC3 AUC3 Turnkey Asset Gathers and manages Manag
Slide 21: Axos Clearing Long-Term Revenue and Expense Synergies
Axos Clearing Long-Term Revenue and Expense Synergies Revenue Synergies Cost Synergies Axos Securities: Axos Securities: › Margin Loans › Self-Clearing › Securities Lending Axos Custody › Regulatory/Compliance › Fixed Income Trading › Client Acquisition Costs › Order Flow › Customer Service › White-
Slide 22: Key Goals of Universal Digital Bank
Key Goals of Universal Digital Bank › Increase chances of offering right product at the right time and place Personalization › Personalization is the right antidote for too much choice, too much content, and not enough time › Eventual artificial intelligence tools assist sale of banking products suc
Slide 23: Evolving Capabilities of the UDB Platform
Evolving Capabilities of the UDB Platform UDB offers a growing set of products, capabilities and supported user segments UDB 1.0 UDB 2.0 White Label UDB Banking: Axos deposit products Products + Features Borrowing: Axos loan products Investing: Managed Portfolios, Self Directed Trading Planning: Acc
Slide 24: Holistic Credit Risk Management
Holistic Credit Risk Management What We Do Utilize a holistic credit-risk management framework to manage and monitor credit quality at each stage of the loan life cycle, and leverage specialized Credit Tools to optimize monitoring and reporting capabilities Credit Monitoring & Oversight Loan Life Po
Slide 25: Charge-offs to Average Loans Outstanding
Charge-offs to Average Loans Outstanding Strong Credit Performance Exhibited through Low Charge-off Ratios Note 1: Includes advisory fee income from AAS business, which was acquired August 2, 2021. 25 Note 2: The Company partnered with H&R Block Bank (HRB) to provide HRB branded financial products.
Slide 26: Change in Allowance for Credit Losses (ACL) & Unfunded Loan Commitments Reserve (UCL)
Change in Allowance for Credit Losses (ACL) & Unfunded Loan Commitments Reserve (UCL) ($ in millions) ACL + UCL ACL + UCL 26
Slide 27: Allowance for Credit Losses (ACL) by Loan Category
Allowance for Credit Losses (ACL) by Loan Category as of March 31, 2024 $ Millions Loan Balance ACL $ ACL % Single Family Mortgage & Warehouse $ 4,123 17 0.4 % Multifamily & Commercial Mortgage 4,001 76 1.9 % Commercial Real Estate 5,913 83 1.4 % Loans Commercial & Industrial Non-RE 4,828 72 1.5 % A
Slide 28: Contact Information
Contact Information Greg Garrabrants, President and CEO Derrick Walsh, EVP and CFO investors@axosfinancial.com www.axosfinancial.com Johnny Lai, SVP Corporate Development and Investor Relations Phone: 858.649.2218 Mobile: 858.245.1442 jlai@axosfinancial.com 28