Axos Financial Q1 adjusted profit beats estimates on interest income growth

Overview

• US digital bank's fiscal Q1 adjusted EPS rose 13% yr/yr, beating analyst expectations

• Adjusted net income for fiscal Q1 also beat analyst expectations

• Company repurchased $14 mln of stock through Oct. 23

Outlook

• Company expects loan growth to accelerate in Q2 as delayed large loans close

Result Drivers

• NET INTEREST INCOME - Co said double-digit growth in net interest income was driven by increased interest income earned on loans, partially offset by lower interest income on deposits at other financial institutions and higher interest expense on advances and secured financings

• NON-INTEREST INCOME - Co attributed near doubling of non-interest income to operating lease rental and other income from Verdant Commercial Capital acquisition, commercial office complex operating lease rental income and higher prepayment penalty income

• CREDIT QUALITY - Annualized net charge-offs rose to 1.09% due to two C&I loans; Co said the rate would have been 0.08% excluding those charge-offs

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy"

• Wall Street's median 12-month price target for Axos Financial, Inc. is $116.00, about 26.8% above its October 28 closing price of $91.48

• The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 10 three months ago

Reuters Recommended Reads

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)