Axos Financial Inc. (AX) is a technology-driven, diversified financial services company that has established itself as a leading player in the banking and wealth management industries. With a focus on innovative technology, strategic acquisitions, and prudent risk management, Axos has consistently delivered strong financial performance and positioned itself for continued growth.
A Storied History of Adaptation and Expansion Axos Financial's origins trace back to 1999 when it was founded as BofI Federal Bank, a pioneering nationwide online bank. Initially, the company focused on offering deposit accounts and consumer loans, leveraging its low-cost digital platform to provide competitive rates and services. In 2007, Axos expanded into commercial lending, providing financing solutions to small and medium-sized businesses across the country.
The company underwent a significant transformation in 2013 when it changed its name to Axos Financial, Inc. to better reflect its growing portfolio of financial services beyond traditional banking. Over the next several years, Axos made strategic acquisitions to bolster its capabilities, including the purchases of an online mortgage lender, a securities clearing and custody business, and a digital wealth management platform.
In 2015, Axos faced a significant challenge when a former employee made allegations of improper practices, leading to a multi-year legal battle. Though the company was ultimately vindicated, this ordeal tested its resilience and prompted a thorough review of its compliance and risk management practices. Undeterred, Axos continued to diversify its business model, expanding into areas such as fund finance, lender finance, and equipment leasing.
The company also strengthened its deposit franchise, growing its commercial cash management, treasury services, and specialty deposit offerings to complement its consumer and small business deposit base. By the early 2020s, Axos had transformed into a well-diversified financial services firm with a nationwide presence. In 2018, the company rebranded to Axos Financial, reflecting its broader range of offerings and national footprint.
Under the leadership of CEO Gregory Garrabrants, Axos has executed a strategic expansion plan, leveraging both organic growth and selective acquisitions. The company's acquisition of Nationwide Loans in 2020 and the FDIC Loan Purchase in 2023 have significantly bolstered its loan portfolio and geographic reach. Today, Axos operates through two primary business segments: the Banking Business Segment and the Securities Business Segment, catering to a diverse customer base across the country.
Robust Financial Performance and Prudent Risk Management Axos' financial performance has been consistently strong, with the company reporting net income of $450 million and revenue of $1.07 billion in the fiscal year ended June 30, 2024. The company's net interest margin, a key metric in the banking industry, has remained above the industry average, standing at 4.83% in the most recent quarter.
Axos' prudent risk management practices have been a key driver of its success. The company maintains a well-diversified loan portfolio, with a focus on commercial and industrial lending, multifamily mortgages, and single-family residential loans. Its allowance for credit losses to total loans held for investment ratio stood at 1.37% as of December 31, 2024, reflecting the company's conservative approach to credit risk.
Innovative Technology and Digital Transformation Innovation is at the core of Axos' business strategy. The company has invested heavily in developing cutting-edge technology solutions to enhance the customer experience and improve operational efficiency. This includes the deployment of artificial intelligence, machine learning, and advanced data analytics across its banking and wealth management platforms.
Axos' Zenith platform, which serves the company's high-net-worth clients, has been a particular area of focus. In 2025, Axos partnered with Ascendion, a leading AI-driven software engineering firm, to further enhance the platform's capabilities and deliver more personalized and efficient services to its clients.
Diversified Revenue Streams and Balanced Growth Axos' revenue streams are well-diversified, with contributions from its Banking Business Segment and Securities Business Segment. The company's Banking Business Segment generates interest income from its loan portfolio and fees from deposit products, while the Securities Business Segment provides revenue from brokerage, advisory, and custody services.
In the most recent quarter, the company reported a 22.5% year-over-year increase in net interest income, driven by growth in its loan portfolio and prudent deposit pricing strategies. The Securities Business Segment has also shown resilience, with the company's Axos Clearing and Axos Advisor Services units contributing to the overall revenue mix.
Financials Revenue and Profitability For the fiscal year ended June 30, 2024, Axos reported revenue of $1.07 billion and net income of $450 million. The company's annual operating cash flow was $305.5 million, with annual free cash flow of $269.5 million. In the most recent quarter (Q2 2025), Axos generated revenue of $483.9 million and net income of $104.7 million. The company's net interest margin expanded to 4.83% in Q2 2025, up 28 basis points year-over-year.
Loan Portfolio Growth Axos has experienced significant growth in its loan portfolio, driven by strategic acquisitions and organic expansion. The company's focus on commercial and industrial lending, multifamily mortgages, and single-family residential loans has contributed to this growth while maintaining a diversified portfolio. As of Q2 2025, ending loan balances were up 1.1% linked quarter and 6.7% year-over-year to $19.5 billion.
Performance Metrics In Q2 2025, Axos generated a 17% return on average common equity and 1.7% return on assets. The company's efficiency ratio for the Banking Business Segment was 40.95% for the three months ended December 31, 2024, compared to 30.96% in the prior year period. The return on average assets for the Banking Business Segment was 1.87% for the three-month period, down from 2.81% in the same period of the previous year.
Liquidity Deposit Base and Capital Position Axos has maintained a strong and diversified deposit base, which provides a stable source of funding for its operations. The company's focus on growing its commercial cash management, treasury services, and specialty deposit offerings has contributed to its liquidity position. As of December 31, 2024, Axos reported a debt-to-equity ratio of 0.18, a current ratio of 8.19, and a quick ratio of 8.19.
Cash and Credit Availability As of June 30, 2024, Axos held $2.19 billion in cash. The company has access to $250 million in unsecured federal funds lines of credit and the ability to borrow from the Federal Reserve Bank of San Francisco discount window, further bolstering its liquidity position.
Capital Ratios The company maintains robust capital ratios, which are well above regulatory requirements. This strong capital position provides Axos with the flexibility to pursue growth opportunities and weather potential economic downturns. Axos Clearing LLC, a subsidiary within the Securities Business Segment, had a net capital position of $83.93 million and excess capital of $78.28 million as of December 31, 2024.
Business Segments Banking Business Segment The Banking Business Segment provides a broad range of banking services, including online banking, concierge banking, and mortgage, vehicle, and unsecured lending through online, low-cost distribution channels. For the three months ended December 31, 2024, this segment had net interest income of $276.72 million, an increase of 22.1% compared to the prior year period. Non-interest income decreased 97.2% to $2.95 million, largely due to the absence of the gain on the FDIC Loan Purchase that was present in the prior year period.
Securities Business Segment The Securities Business Segment includes the clearing broker-dealer, registered investment advisor custody business, and introducing broker-dealer lines of businesses. For the three months ended December 31, 2024, this segment had net interest income of $7.01 million, an increase of 15.2% compared to the prior year period. Non-interest income for the segment decreased 11.1% to $29.00 million, mainly due to lower broker-dealer fee income resulting from lower cash sorting balances.
Future Outlook and Guidance Axos expects its consolidated net interest margin, excluding FDIC loan purchases, to stay at the high end or slightly exceed the 4.25% to 4.35% range they have targeted over the past year. The company anticipates similar loan growth dynamics compared to recent quarters, with growth across a broader set of real estate and non-real estate lending businesses partially offset by payoffs in their CRESL, single-family mortgage, and multifamily lending verticals. Axos believes they will be able to grow loan balances organically by high single digits year-over-year in the remaining two quarters of fiscal 2025, excluding the impact of any loan portfolio purchased from the FDIC or other potential acquisitions.
Navigating Challenges and Seizing Opportunities Axos has demonstrated its ability to navigate various challenges, including the COVID-19 pandemic and the current macroeconomic environment. The company's diversified business model and proactive risk management have allowed it to weather these storms and continue delivering strong financial results.
Looking ahead, Axos is well-positioned to capitalize on emerging opportunities in the financial services industry. The company's focus on technology-driven solutions, strategic acquisitions, and prudent risk management make it an attractive investment proposition for investors seeking exposure to a dynamic and innovative financial services provider.
Conclusion Axos Financial Inc. (AX) has established itself as a formidable player in the banking and wealth management industries, leveraging its technological prowess, prudent risk management, and diversified revenue streams to deliver consistent financial performance. As the company continues to innovate and expand its reach, it remains poised to capitalize on the evolving landscape of the financial services sector and drive long-term shareholder value. With a strong financial foundation, robust liquidity position, and clear strategic vision, Axos is well-equipped to navigate the challenges and opportunities that lie ahead in the dynamic financial services industry.