Axos Financial Q1 adjusted profit beats estimates on interest income growth
AX•Axos Financial reported fiscal first-quarter adjusted EPS of $2.34, up 13% year over year and above the $2.26 analyst estimate. Adjusted net income was $134.84 million, also beating expectations, while the company said it expects loan growth to accelerate in Q2.
1. Earnings and outlook
Axos Financial’s fiscal first-quarter adjusted net income was $134.84 million, compared with the $130.32 million analyst estimate. Net income was $129.65 million, and net interest income was $331.26 million. The company expects loan growth to accelerate in Q2 as delayed large loans close.
2. Income and credit quality
The company said double-digit net interest income growth was driven by higher interest income on loans, partly offset by lower interest income on deposits at other financial institutions and higher interest expense on advances and secured financings. Non-interest income nearly doubled, reflecting operating lease rental and other income from the Verdant Commercial Capital acquisition, commercial office complex lease income and higher prepayment penalty income. Annualized net charge-offs rose to 1.09% due to two commercial and industrial loans; the company said the rate would have been 0.08% excluding those charge-offs.
3. Share repurchases
Axos Financial repurchased $14 million of stock through Oct. 23.
