Axos Financial, Inc. (NYSE:AX) Q2 2020 Earnings Conference Call - Final Transcript

Jan 29, 2020 • 05:00 pm ET


Axos Financial, Inc. (NYSE:AX) Q2 2020 Earnings Conference Call - Final Transcript


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Greetings, and welcome to the Axos Financial Second Quarter 2020 Earnings Results Conference Call. [Operator Instructions] A question-and-answer session will follow the formal presentation. [Operator Instructions]

It's now my pleasure to introduce your host, Johnny Lai. Please go ahead.

Johnny Lai

Thank you, and good afternoon everyone. Joining us today for Axos Financial, Inc. second quarter financial results conference call are the Company's President and Chief Executive Officer, Greg Garrabrants; and Executive Vice President and Chief Financial Officer, Andy Micheletti. Greg and Andy will review and comment on our financial and operational results for the second quarter, and they will be available to answer questions after the prepared presentation.

Before we begin, I would like to remind listeners that prepared remarks made on this call may contain forward-looking statements that are subject to risks and uncertainties and that management may make additional statements in response to your questions. Therefore, the Company claims the protection from the Safe Harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements related to the business of Axos Financial, Inc. and its subsidiaries can be identified by common used forward-looking terminology, and those statements involve unknown risks and uncertainties, including all business-related risks that are more detailed in the Company's filings on Form 10-K, 10-Q and 8-K with the SEC.

This call is being webcast, and there will be an audio replay available for 30 days in the Investor Relations section of the Company's website located at All the details of this call were provided on the conference call announcement and in today's press release.

At this time, I'd like to turn the call over to our CEO, Greg Garrabrants, who'll provide opening remarks. Greg, please begin.

Gregory Garrabrants

Thank you, Johnny. Good afternoon everyone, and thank you for joining us. I'd like to welcome everyone to Axos Financial's conference call for the second quarter of fiscal year 2020 ended December 31, 2019. I thank you for your interest in Axos Financial and Axos Bank. Axos announced record quarterly second quarter net income of $41.3 million for the fiscal second quarter ended December 31, 2019, up 6.3% from the $38.8 million earned in the fiscal second quarter ended December 31, 2018 and up 1.2% compared to the $40.7 million earned in the prior quarter. Earnings attributable to Axos's common stockholders were $41.2 million or $0.67 per diluted share for the quarter ended December 31, 2019, compared to $0.61 per diluted share for the quarter ended December 31, 2018 and $0.66 per diluted share for the quarter ended December -- September 30, 2019. Excluding non-recurring expenses, non-GAAP adjusted earnings and earnings per share were $42.9 million and $0.69 respectively for the quarter ended December 31, 2019.

Other highlights for the second quarter include ending loan and leases increased by approximately $1.1 billion, up 14.8% annualized from the first quarter of 2020 and up 12.5% year-over-year. Strong originations in commercial real estate specialty lending, small balance commercial real estate lending, mortgage warehouse and