Axos Financial (AX) 30 Oct 242025 Q1 Earnings call transcript

Greetings, and welcome to the Axos Financial, Inc.

First Quarter 2020 Earnings Call and Webcast. [Operator Instructions].

As a reminder, this conference is being recorded.

And it is now my pleasure to introduce Johnny Lai, Senior Vice President, Corporate Development and Investor Relations. Johnny. you, Thank

begin. You may

John. in Good for you, everyone. afternoon, interest Axos. your Thank Thanks

remarks. Walsh. after be months the XX, ended today Inc.'s to and on and risks and . But Greg Joining prepared your that before XXXX, harbor this review and I listeners Financial Axos Derrick Vice the our for us refer available made Financial, results to make Financial Chief to operational for and begin, Call subject on Greg questions. and Derrick investor Please Officer, statement uncertainties the I President in Officer, and and Results First are release press comment will additional company's details. will Executive statements President safe would Chief remarks forward-looking to forward-looking September are remind questions in earnings like Garrabrants; our Executive answer Conference additional today's that call management XXXX contain may for prepared and we that presentation and financial to in the X Quarter found statements may response

is section at call the Investor replay the available website being Relations an there days. webcast, in be This will located XX axosfinancial.com audio for company's of and

were announcement in press call Additional earnings details for this call in and provided today's the conference release.

with supplement X-K to in Before press handing an over the financial release, an call like this to the call. earnings addition earnings also to listeners that information Greg, remind I'd we for issued additional

website. these documents on can of be axosfinancial.com All found

the I'd Greg. to turn that, to over like With call

results everyone interest XX, us. XXXX to quarter joining XXXX. you for of September quarter, million fiscal deposits value quarter. and approximately outstanding thank and welcome your of deposits. $XXX demand fiscal . We the in afternoon, in our Axos to in you coming I per the share year-over-year in Johnny. everyone, call Good Financial. delivered growth growth per Thanks, by consecutive thank primarily We with like first for Axos double-digit and Financial's ended interest-bearing for conference XXXX, book grew linked earnings savings generating quarter for I'd first share tenth

balances linked some Ending XX.X% Average million multifamily mortgage real origination and up year-over-year volumes quarter $XXX loan single-family X.X% were to our billion. our groups. as were warehouse mortgage, balances quarter C&I and commercial up jumbo offset in loan prepayments $XX.X businesses of lending by and estate lending single-family in were linked

strong tangible the common continue We X per by months XX.X% high XX% in contributed growth in year-over-year returns our average And the equity as to generate on ended share. the returns evidenced to XXXX. XX, return value September book

following: QX the in Other XXXX, margin and purchase XX, X.XX%. FDIC, X.XX% June from the from from benefited margin for highlights from X quarter points XXXX XX, net purchased was X up include September these basis the the quarter Net the interest excluding in X.XX% quarter ended impact payoff XXXX. XX, of payoff we early margin of in interest loans, loans the from the XX up ended ended was the September net interest XXXX X.XX%

September Net average to months annualized X the XX in were ended XX, charge-offs loans points basis XXXX.

corresponding in the loans $XX.X QX XXXX, ago. auto in was in XXXX. to period points Net the XX were September year Excluding basis $XXX approximately by XX% from annualized average up a insurance, net loans covered million income quarter charge-offs million the the ended

X our for loan ended year-over-year warehouse C&I XX, for prepayments balances. were XX%. X specialty XXXX, in real the were levels $XX and jumbo XXXX. and X.XX%, Growth months loans estate single-family solid growth months finance mortgage, C&I of million growth groups. and single-family XX, loan across Elevated the multifamily loan in share lender September estate in lending September real ended for many mortgage, offset investment balances were of offset single-family mortgage by per of multifamily, declining Net auto commercial Earnings representing originations

non-purchased the X XX, quarter of loans the loans points average were a purchase $X.XX for X.XX%, X.XX% the basis includes yields September yields year from purchased up basis the loan ago. XX discount. and Average price and loan loans quarter loan were points. the corresponding months the XXXX, basis ended for and The XX FDIC XX.XX% yields average in XXXX were by prior acquired the of points up for from yield accretion increased our period prepayment XX Average first

FDIC in perform loan FDIC to purchased increased yields portfolio basis remaining all the The current. loan average the prepayments, remain Excluding loans that and quarter. continue loans XX points in

SFR New follows: X.X%. X.X%; loan C&I, multifamily, X.X%; interest as auto, rates were and mortgages were X.X%;

continues loans The September by was in loan-to-value credit the single-family are highly circumstances in The of Southern assets few located properties XX, strong increased led uptick to be this loan neighborhoods with Mar. to million June including quarter. an XXXX. to assets that property increase $XX.X of Northern average book beachfront desirable idiosyncratic located Nonperforming X one our in nonperforming XXXX, Del jumbo XX, portfolio XX%. result a our of despite quality mortgage in from in and The California, an

Nonperforming working not do classified estate estate loans real from bring increased million XX%. currently borrower of We a specialty with LTV portfolios. material X in loans nonperforming or current. assets actively weighted mortgage, this in We're to as the as $XX.X anticipate loss commercial commercial X a commercial and real multifamily loan to loan result our average mortgage book by a our with borrower single-family of

approximately our flow loan balance of Nonperforming in line lending Our One increase. commercial million for expectations. estate business assets increased the principal continues and syndicated backed cash by ABL million receivable portfolio real $XX of accounted with an cash one well to base very million. by flow unpaid perform in accounts $XX.X $X.X loan and C&I asset and with

the of contributing contributing of equity of loan. Axos subsequently another investment purchase The total loan shared The a sponsor-backed the loan October million $XX.X was loan at logistics a a the one with the national $XX is million, approximately credit of the share The made the X% in largest is loan to in of United to for balance sponsor outstanding of the in of companies of and original rollover is States. of another equity. $XXX the excluding preferred million million time $XXX June, million stock $XX loan management's company the the

the The September is at the the was for payment end loan XX on payment quarter. made current its of

group a Axos not in. subset did However, nor executed million new lenders contributed sponsor, incremental between of resulting the equity a lender was injection with a to a by which $XXX borrower participate restructuring and $XX the agree debt the of subset concurrent from of in million transaction

terms $XX on a for provision participating restructuring a September We group set despite potential lenders The specific of of given this to loan transaction September of payment the XX XX, the the lenders. approximately and the loss. received receiving loan the placed nonaccrual favor ended information quarter allocated of million about new a restructuring nonparticipating money account in this over XXXX,

evaluating We to restructuring transaction by actions been appropriate agreement. the terms take violated the advised we've as may credit counsel of the are currently have that the

collectible. other and to million have been recent entirely the the that account found to to audit $X.X backed be respect subject a loan receivable is that With loan, by by audit

the portion borrower to provide with loan We loan, are the a pay and working current. additional down actively the bring of collateral

XX.X% declined $XXX at quarter. increased at commercial assets and our fiscal and mortgage XX, by by book XXXX, of annualized. deposits in savings quarter the demand, in September $X.X million linked grew We year of money loan Nonperforming accounts deposits representing million XXXX. XX% market multifamily first total

We representing approximately which have a X%. diverse treasury million a mix our sheet, across small $X.X representing variety quarter-over-quarter. on management of business Axos' XX% were total deposits, Security, deposits Fiduciary of billion, prior services ending balance verticals Commercial representing noninterest-bearing representing business off quarter. XX%. of is Total to Axos clearing, and Total at the $XX And representing funding specialty, AAS, up $XX consumer approximately and X%. compared with including and million custody deposits were those XX%. up

has historic stabilized X% range at or compared Client at X%. bottom, of custody XXXX of to X% near to cash the September the assets sorting under representing

focused assets on advisers existing assets and and under grow custody from are We new cash our adding new to balances.

approximately balance deposits had deposits banks. at off balance sheet our our partner million In we on addition Axos of to Security sheet, $XXX

in C&I loans interest the arms were Since our loan manage risk are rate making interest our to our of when arms loans liabilities. X% by to hybrid these XX% with originated and consumer changes they are assets hybrid At XX% and than were rates hybrid continue generally were our tactical floating, were new replacement yield. and We after much approximately XX, fixed. our September were lower of today, accretive

by savings on the consumer In savings Subsequent the consumer total an XX XX deposits deposits advance Noninterest-bearing Fed's basis September, in rate reduced on points reduced the for our September, we we Fed as by XX. action our rate high-yield additional products the account points. of September basis in cut. to high-yield XX% of of

maintain margin interest rate cost in in it are this ability confident We net deposit and to management our and down our maintain our manage cycle. to

XXXX, quarter interest was our X.XX%. net X.XX% consolidated the For XX, ended our was while banking September NIM margin business

our loans the quarter. paid in Excluding off the from X.XX%, been XXXX from interest purchased margin the point June that consolidated FDIC up boost have early, would XX, basis XX X.XX% net

XX our expectation was margin points. basis net in XXXX, would When loan to our announced FDIC transaction the purchased we December XX of boost the interest by that

prepayments between remainder interest in expect portfolio, net for that XX this paid September year in the our off benefit the quarter, to Given margin XX XXXX. and loans X we the points basis including fiscal now of the be

interest balances separate loans our the the average was for the to XX-Q, the impact of the net and on which SEC loan purchases yields nonpurchased filed our purchased loan out break We with and in margin. today

We to we the net the over stay our $X.XX within FDIC the to consolidated expect past margin, benefit, $X.XX have year. range excluding targeted interest

have pricing actions deposit our on competitors, future adjusted the mix loan the based tactically and of we and originations the will margin. our impact on While and net pace Fed prepayments interest biggest by

below past inverted more are combination rates September properties over cautious annual single-family relatively and used us values mortgage, slowly to made low of are yield auto our the jumbo expectation from return elevated car our cap teens higher years and in in curve, few multifamily interest rates on optimistic we multifamily we that steeply an digit the range. was growth loan lending. While adjusting will income single to The high targeted quarter perspective,

growth. are environment rate interest difficult with hybrid loans lives in net loan X yield range average in loan X-year our lending attrition originations of September X the lending prepayments, categories. elevated $XXX in drag with balances million these in loan ending in on In highly quarter, a in to a These the groups, these are curve. the these weighted originate resulted with acceleration consolidated categories and all net represented profitably Lower coupled categories inverted

the when at match of most duration we optimistic liabilities To of extended issuance were rate about of CDs cuts auto for loans, average single-family XX-month markets a a pipeline of growing and rate duration the million our and $XXX of of duration. multifamily, yield X.X% to average weighted swaps interest

recent for curve, loan loan our that we growth rebound in several in have reducing these Given yield been have of quarters. categories changes seen a the pipeline each for

business clients we add scaling new balances our warehouse exiting competitors due to or continue back to in and business. Additionally, single-family the mortgage

high Finally, and our this line grew teams lending quarter new the which in quarter. current deposit month first to finance, our prior fund remain demand by in with in strong $XXX several is businesses We expectations. C&I in with million, of lending low-teen addition the the selected loans single-digit and of ABL

a includes flat banks. quarter. from $X.X and balance where deposits million $X.X which the at correspondent Clearing, were $XXX partner was at Of held September Clearing, as Clearing was business they billion our XX. on approximately had of of sheet and good clearing were Axos RA XX, million custody deposits Axos Axos from Total our June roughly at billion $XXX

business was growth This experienced months. the services Net X asset asset continuation Advisory $XXX growth with quarter. September at consecutive new $XXX the net we custody in or more new net of assets new million for for Axos marks have our positive million

Services June from solid $XX.X progress billion Total from custody to offsetting as $XX.X asset decline clients. make new September onboarding some historic of of were up XX. Advisory billion in the management continues turnkey The assets of assets sales advisory team firms, Axos as XX, under

in in streamline more the fee organic under growth custody We medium new net balances to our product processes drive growth, believe sustaining operational remains and expect management revenues that a AAS. The to normalization and and incremental business a continued operational in from pipeline clearing to we we continue identify productivity healthy, perspective, operating from term. asset leverage scalable. efficiency custody assets new make clients our positive and growth, to management transaction-based From initiatives ways generate and operations will asset and cash long

from have products to as few personal banking enabling years. suite label made early We features clients over launched lending our as platform out white select management. we investments our benefits some this see year, We advisers to past are well access starting financial earlier of new and the such as their rolled we enhanced soft deposit to

technology built leverages Bank associated or interactions we a clients the and statement. such the end clients platform various reduces UDB mailing Axos and This for with with paper check in advisers their as getting a costs

made our map. adviser have and user and features additional on products a suite have minor in modifications and We based of feedback road

growth. lending are The and deposit to various to businesses deposit loan contribute team hires across and we starting have commercial made

new in new teams quarter, we More a in onboarded recently, team has due including to generated technology with early-stage the $XXX treasury funds. and decades past and part in we a net life team deposits million companies cash a science in X growth together experience in banking this seasoned commercial added Valley, working years. Silicon and teams Our approximately management that

to leader group. experienced out middle lending an our build added also We market

asset fee-based based key years net in deposits contributed a on set existing of and sales in our AAS to the have members to and hires operational custody selected and team and our robust of national The few addition lending diversify business. franchises lending We of team specialty a acceleration XX selective deposit new have presence in verticals. of further over grow experience allow geographic our These products. us growth

with our adviser desirable along highly compete commitment Our makes clients alternatives such approach, not client-centric our Swab. to with us to as

us to returns positions Our average highly political a environments. competitive growth of variety business above and profitable diversified well and maintain and economic, in

structures asset-based than most diversified to of lending of loan higher of mix values are our and and flexibility competitors. us with conservative headwind, prepayments prudent funding short-term affords our lending While levels a philosophy and more

loss our remain capital, occur. business to our in downturn were cushion Finally, sufficient excess systems to and and capital and economic extended opportunistic to than people capital loan buybacks. shareholders provide that reinvesting our more weather an reserves liquidity with returning through if our We prudent

who Now will I'll details. the turn call Derrick, over provide additional to

Thanks, XX-Q an at through EDGAR our SEC provide Greg. like and our available To were filed begin, press release an some with brief the a our with Please for highlight SEC addition to additional details. website and our will axosfinancial.com. schedules today on I'd through release our comments X-K to online few are press I topics. and supplemental filings to or refer

Our discussed was provision credit ago. ended XXXX, a $XX the corresponding in classified this September the C&I $XX that Greg the loan months $XX $X was call. provision compared million to specific provision year period we million loss of for XX, that losses quarter a in earlier X this on for million loan nonaccrual as a million

compared to rates. and investment total remain reserved relative of credit was to historical X.XX% well to X.XX% our for current XX, XXXX. loans We allowance low loss at credit held Our losses June

sequential approximately X processing increase. June the months expenses for XX, the months Noninterest were an drove X related data the expenses XX, over and increase benefits hires the Higher by months million we've salaries September ended $X.X up million primarily in XXXX., XXXX. $XXX the expenses and to X past ended new that made from

our previous As to every organic salaries December has increase a it takes at reminder, we place the an our and annual quarter as a September, in years. merit-based expenses rate on compensation similar and adjustment in basis expect benefits

XXXX, million in gain strong of October Our jumbo $X.X and as auto of $X.X $XXX on small mortgage, consumer, commercial, billion XX, of balance multifamily pipeline million with $XXX million of $XX our SFR consisting commercial. of and $XXX remains of mortgage, sale million billion loans loan pipeline total and of of

digits any by potential consistent of year largely is loan have that will what balances able recent outlook or year-over-year We loan to growth high guided FDIC loan quarters. purchased fiscal portfolio other organically believe from XXXX, to loan the grow single excluding Our teens or any in the with excluding we acquisitions. the we low be impact asset to in

Our impacted ending continue the in any and be pace of timing to will quarter. loan by payoffs balances given

to the over call turn back I'll that, Johnny. With

Derrick. take Thanks, ready we're John, to questions.

comes Kyle Instructions] & line question the And with first Company. the of from Needham [Operator Peterson

bit you I wanted a that to growth. guys for behind touch deals. a competition are loan new that's know on little seeing particularly and big driver I pricing

more . any So had pretty Are see, in attractive, change looked dynamic? competitive I in nice especially like things wanted are quarter? less just some verticals you the getting seeing growth of they this to C&I or that the

Yes.

general spreads. I about have a few of this would try reasons tighten loan think that. than the obviously there that think lost of with be which I been and growth. to has gambled renewals I period, I a some one to I banks -- we And trend that kind seeing And I impacted thoughtful more otherwise

So to is do think we that, pressure there some I in be that verticals. pricing thoughtful certain about that have

still a we're of added in seeing demand. in variety of And verticals. a strong national very said, and being teams That we've geographies variety

we about definitely competition, our a loan have see pricing. be we thoughtful feel good concessions but ability Often, they're probably about pressure. increased increased will on pretty minor, but to to so And get pricing we times making at little growth.

on fee of I little quarter. contractual on just to see mortgage we was need wanted rates or uptick areas before in how tied to to thoughts penalty I headwind some a banking Okay. maybe helpful. income. bit like could also it fees? kind was your get drop rates. do gears of But just prepayment switching much things That's there's this then a And of I and know touching kind -- some know

to is prepayment really mix. loan fee one issue The that's related penalty Yes.

a hybrid that in inverted to such loans, prepayment was all when down, prepay. X/X spreads. penalty price So of right the a off as prepared yield multifamily highly my get focus X, have a curve, I typical X, had were X been that you from which arms almost hasn't X, the, saying X, fees step those business, And remarks, because difficult let's say, to X-year the really it's came

seeing we while around. those going are there take business pickup turn prepayment a of but loans penalties, and have in So to a that to that that's more now, are

So that element. is one

And but have that hedged. we element huge, It's it's servicing is other book. then not the a not

what really mark And but mark not big this there happens the much was how against rates is to a hedge it's so some of And quarter, enough decline, it. when couple million?

million. between $X.X Yes,

So there on was a that. mark

rates if the go horrible unfortunately, linear, it. but is it's So way to not that's -- down, market can't say estimate that you a not exactly --

a get linear just reduction. so very model that a You of complex have it. essentially mean, to that's piece it's I --

and get I think as of fees low it We're we flip you picked those Mortgage more the to is really credit. up where clients. lots yet. earnings -- enough, then have that not on clients on banking charge starts -- much we start rates there if decline, offset but rates that were has And obviously some are obviously, sensitive based with actually TM XX-year. to it's that volume

started And then so saw you blip, pop you saw back. pickup, you rates long see a a but to the

where see that have we'll So goes.

past just losing we're of I assets We're general. attrition securities say basically that a out we're corner play. grow it that best And the the fee the finally kind it, we will clients we volume think that's the are I in of from running now. TAMP in of have chance I completely And where is but our some sort are to continue. business, think and just income of -- around

has but So be there. -- a And there's opportunity clip. an it decent to

But look and sensitive thing average that is rate. about, say, basis you assets, some way as increases. to numbers that new is those a you on that. a have growth Those gave at in all deposits off-balance to of can about unfortunately, mind that we think that you look if can at XX to XX declining net you about be will on thinking one sheet But keep rate business let's points

impact income, to that decline, fee. is those that So to which the is that going extent rates

I mean, Derrick, I did miss anything?

saying, and Kyle, we forward a December quarter, we have charge paper some to every fees from that thing is one Just customers. statement

And the million. and in so usually that's between $X ballpark $X.X million

see up quarter. our in so you look during And if bump you'll that history, a second fiscal back

of So I make sure want aware you're just that. to

the And Liesch comes Andrew question next of line with the Sandler. from Piper

with have Just here net you assets forward? Fed Are points, those reached coming we offsetting the each a new follow-up look cutting on going XX and to other obviously, basis the point broker-dealer the in. be that we Have yet? fees, as

that also we think schedule we've of us activities Yes. way a cost to out costs. kind we of us That's to that a a is attempting paper certain incent new not behaviors fee seeing also about lot rolled are types cut allow that that our money, had to also And -- fees, have statement -- horrible it. of those actually things

coming. That's that's some So offset.

you basis I have that But business. to think XXX if hit XX basis points XX, -- -- you get you say have let's if But really points, a that's of offset. that going

got to really You've to you've -- run. got

Now if the that, -- targets. attrition lower very we definitely can faster, new to are net targets I pipeline internal if good. set around stretched assets than is there tried even grow think can And but we've those the is

I basis margin the it. XX benefit points, said X what commentary, Very And helpful. then What if so you on to . range? is acquired the another All is then XX -- XX just to you say it. sorry -- that And Got the from the right? did right. XX loans missed X

thought it I was XX.

XX . to XX

to XX XX.

it. Okay. Got

you... that down mentioned you margin cost Or that bit So $XX that it's of if accelerated funding where the the million below just come margin is end? it level? what's I driving have what's guess, would the little towards I the repricing? in. the out of the guess, terms I guess a it asset Is you high still income here, driving take that

deposits. growth cost. pretty rate funding Fed it's to lost lot to We all think thought about there. well cut, I really pretty we in good no, with kick also than were from carrying they're we've that reprice we the -- hired we deposit And think really Frankly, I starting teams a nicely. the excess able we're of of have we're and good the sort feeling less very

It loan club below wanted down turn why really just part mean, is it coming some I be where tighter deals, and growth some other is repaying more reason of deals, things. And at of don't repricing we we -- is a to loans the in you have little spread. folks

I we're up to think is So the a we're have to which tighten spreads volume, bit little going those going reality in order win to do. to

makes And difference. so that a

of being we I mean, are that lot Now loans obviously repricing still still quarter. said, a have hybrid that every

So there's movement a of lot there.

margin I NII. missed high little -- the you conservatism think the that doesn't loan because in, there's you the if you get growth then a have if come and in up

probably So conservatism in that. bit a little there's of

we great activity. find But activity. in loan seeing lot you growth like have We're some month. higher of at up the had uncertainty of then a average we I the a -- good get most And where think feel assets. we end side we that But we We're the the is quarter, had as these earning because paydowns. this

finance they're a but yesses We balance going those calling by to not sheet December to there, reaching getting ask always in have that's out the fund clients of address lot We're a possibility. capital. their if to We're business.

it of a where X bit from, say, So elevated on pricing that's are those -- let's seeing really a I that that's little we're market was little that last but ago. just the balance, pressure really factors. quarters think -- year even or there's There's it's

from Davidson. And question line the the of next Gary Tenner D.A. with comes

just increase wonder you of migration credit early wanted ask I between that I book kind rates do too NPLs that see color, moving you the beyond the to pressure of it on migration And in kind comment take additional -- how Is I trend kind just could on quarter. off of there? the from here? and to special substandard. appreciate if much in mention the the for the lower Greg,

just mean, I going we're -- what I what's feel about individual on There's but the I really because good that's actually clearing. on, level. see

a these of just take Some things while.

got XX We holding on and about quarter. and end the of while have X of kind should bar we a that the that on been for with property by we've the execute -- working offers

because subordinate putting that patient of that to borrowers we've sort are so things are and couple us to and others have in, the those of sort a issues got of funds we've been been on permit there's or building And of an still been kind coming final that money end.

-- really -- So loans, we're these But low of that we values. want choices. have actually even they're them loan and are at some things there's looking we such we X these them. Like buyers see to

We expect the that that. pay do is they'll cure, and to individual looking they'll off because

at I can multifamily. very But on really don't Like I estate see mean, pressure look say put mention little perspective book. and things entire we good. real frankly, really is rates there's So there and I'd worried look guarantees on commercial say, have from the almost side, really it. not a we about think -- on a I not special in that anything loss that

properties that. guarantees So things folks like strong personal warm lot body, a have that of to and full recourse

pretty good. looks that So

I it's going of more of is be think, more the an average to loan going to C&I sort loss a -- side probably look, of have thing.

basis back, look or we've with you had of family, something, multifamily it's I points we're if single So of super I able history, be in mean, low. couple a in loss just our years XX thing don't over like going say same to think to book,

ones really more that doing be the should a on the nonreal will finance we're stuff, C&I average, think not I that still estate lender little be good. quite

other low clearing and it's level of of very some credit, or the results taking getting risk like rather -- resolutions. an -- you're there's loan-to-value is average our with don't taking real like feel what good But than I more idiosyncratic feel But shared we're assets. -- I the this on national structures stuff we're of and up

were remind expenses color. in us, Appreciate December coming just some quarter expectation And Great. upward last deltas you over to sort you the to quarter. the obviously kept second. this the was side trying of more of increase. a this versus mentioned sequentially June the go for Can a June to Derrick, the the flat They lower pressure the up in anything quarter of current quarter? there quarter I'm before sense for just in quarter. that kind get expense

and quarter, processing had jumps has year March the salaries -- the June looking was really March. in to slightly even little some is kind the taxes, lower goes and and bit In maybe key up the think back March June factor the to where think benefits March quarter and the from other we data and up it flattish I then at quarter tax so the I usually where back employment resets, June a annual of

as kind obviously, we business. investing the teams, hiring deposit a both loan side of And commercial been upfront for the on touched of lot and the of growth we've future on,

we're probably different forward, look salaries looks ways think we there as benefits we strategic processing. will bumps I So areas the reduce and some the that that's avoidance in referring what data you're have and around but our control on we taking -- certainly to. some can up, And continued cost hard cost at and

though that folks as the even have teams. some of some the obviously, December great, some folks doing -- I you that We've we aren't. going level to here we've don't expand, expense quarter hired that Yes. expect in also growth are we're get you who had

and nice of just the sure we being a cautious had on well. as growth, so run we're expense side We've have just we're that. to focused of And make very

doing we're so that. And

ask one quick last I If could question.

competition? is landed that tightening the finance it seeing some spreads other maybe Regarding in the have as that? and at it predominantly more we're of C&I, your comment business than banks you're funds more widespread Or that seeing is about folks

business, deciding, not grid, of and lower little and a club you're you have and asking it's you -- deal the see finance really always well, there, -- It's point XX do go. across companies it not banks interesting, mean, a in deal the we're was maybe It's there, and sort you basis I really but and that lower, a fund seeing club to it if consent I the much. immediately more want just bit, reduction for everybody go still and you think the X good sitting standard tad or stay the -- in came really a activity

So really we're of I stuff think the that type seeing. that's

think still fund good competitive on too, group related, we I -- I the particularly that enough, think work the ways. -- which we there, in often think unique -- with have nichey finance is have don't very lender it's really I is based we and much that, actually advantages can fact is have finance And there team, more the that funds which really

it's more that folks in clubbed I'm that really just I across it's more So -- want and banking of to -- stuff growth that the asset the think saying really a industry they're don't lose on up people pressure not lot deals. there's

and pricing is. who is of like room And more I, hold that most sort the you I'm in follow thinking as only it. to I prefer But what us frankly, it feel that's about know, sometimes of a guy

David of line comes question with Feaster from the Raymond James. next the And

the side. deposit I touch on wanted to

curious, You started ahead -- you've down? deposits cuts. gotten as guys decline I'm see you or attrition taken of any a you in to have have Great rates deposit pushback costs. the seen repricing any done even

then But deposit the some excited that opportunity curious, do how verticals And growth. you where betas business growth? just for think low-cost And near term? you about the of cycle? think deposit do Obviously, you're is about securities a you this for that opportunity see most just tremendous core

teams in not we're hired more market lending. which going and be side, that space, verticals and doing middle Right. really venture businesses much than deposits on focused venture C&I and set the Yes, the we've is the finance entire across the to the lending, fund business lending of and technology

flow products. typically a cash have BL don't products, they just they there. stuff, but there's need specialty they're and -- sort any bringing of sort But of a They real lot of deposits, have have already

investments board, side, the a job. that. in well and we're it, was in requires some operating which show on seeing But do that seeing but doing business worth plan So are to up it's think we're good across the I teams growth really personnel, expense. It which the the really obviously the good

grew. be for We much did it consumer so side, in still some at of as the it but worrisome It particularly attrition not and see quarter. growing the to

up particularly you that it a with end the little was that. So account, makes cost like higher efficient, But a concerning. less things nothing so slightly marketing new per

to deposit intend rate said And so floating loans. the we to reduction our way we have intend down -- on I've publicly in our from that offset essentially essentially costs with our interest income

just think to ever better in that. ourselves commercial the the work given that's been, think And test continue and the much And a period, did for I all then state throughout given have this we we're that on we than definitely side. so I diversity done we and

opening lot so busy side and like new hiring they're on account in commercial stuff of that. the Frankly, we're that service people a

So I it's feels that momentum like And really it think there. is continuing.

And the on I contribution? have I see Where entertainment you then started new new middle build-out? marine hire, about, know just did touching talked these great. I but to mean, a some mean, you talking are at we tech and verticals plan. maybe pretty in of sciences That's management, think I the about. floor we the market were is like life we

of kind are contributing forward. how the going build-out you those lines in curious think Just to and a few growth them where of of about we

is extremely and The new. tech side Right. VC

this out that before. chance and lunch actually all deposit These spot because connections there, It we're opening I the meet their their they're venture capital these gotten was think think frankly, interesting there I to and never their to week to probably group. impressive with of meet quite names and it extremely I they're -- going a accounts. has neat guys folks press up are really was all the I and drop legends, to a just go bringing have of have and that release think an fun experience

lending, but accounts. some taken sort existing and venture that opening their guys of on products those started have. doing and not landed We're I there's mean, that the that's But we new. really of done have training a can be lot lending just

of market kind bringing the some He's people. is middle that at EVP We're larger some side, folks business was The an hired and San consolidating same based way. under him. a ran existing The for Diego we bank them. individual

new also So there. lot really that's and not a quite

a is entertainment boarding lot of accounts. that side, The

they'll think $XXX -- happen. below that's to be -- accounts they're continuing I but but they'll a smaller, There's sheet, deposits they're pipeline cross -- to a there. over balance little cost still think tend I decent those that. on Those million, are X

is a the lot quite because gets be really software awesome to manage of going well going the software. it clients making excited are for RIAs too. significant okay. Frankly, We're when that payments the it's RIAs investment done, an entire bill and it's to be We're whole something as software, idea -- about, their that that something is that doing there a and accounting very on RIA can and

the into excited put to we're So that platform RIAs. our that faces

the The on really side, plan traction we we're what getting to side. wanted focus is Marine there. floor which

doing are floor we're lines, manufacturers. new we sign and So continuing new plan to

XX-year we We bit make side, sale about have interest the we are do a want retail to new with sheet that some put the that. to rate got think on than it what and respect little disconnect business. The we're trying balance to on of buying fundamental a banks a how paper. We've risk in gain interested

XX-year bucket the for some have for of stuff. We a it

looking we've a on we're as there sale gain of got and traction so business, to But some more make really try to that well.

some business. it want niche. lending floor the making progress. to plan that that be And We well. definitely floor so think side, national we're categories a as good can We -- plan but We side other expand to like

then for And just last me. Okay. one

accelerate kind Is touched you broader business? You are securities the business. white client cross-selling some opportunities I'm -- it think broadly? rollout the -- of would How in just like just the has it some up implications on within of feedback securities of a When opened kind that? you been Does Do selectively. then acquisition? the do you what think expect label that with helps rollout? of And curious.

Axos Yes, both business absolutely salespeople starting -- are acting absolutely deposits deposits. It we're does. those where advisers for that as to and deposits, consumer get business

of we it what of we're doing our a game seeing in and we're also helping and ways. different And serviced, happening. sure clients which they're so in that serving is these lot evolve that, is to to we deposit the as helping we're it's way are that needing service being make used to growth, continue And

with a They're excited are think think lot I traction And very seeing for banking and interested it come that about of products, of hungry we they're us. working on. advisers I because in I'm new

facilitation that, and previously accounts essentially going interest X checking but of have tried Now active on -- rolling we're that. what somebody make calling accounts. a lot companion we're them they essentially, checking if style we payment side do an We're Axos out is the an getting One has can a of for still we're from more and more which And done get to we sort is account. took product, to offer high-yield that account, out incredible feedback feedback

the refine to continuing we're product. So

through a than better much I rather as it's we through it's an think TAMs, direct exciting. that's going we And these think RIAs relationships the with who great And I opportunity than But TAMs. board have -- we channel. really have

of from question Motta the Kelly next the with line comes And KBW.

the about accelerated accretion circle I that back But to It much. doesn't points changed ex your margin basis XX margin. outlook. it's I'd appreciate like had. like higher the was you to sound

about had coming Just wondering, in spreads know I yields. loan for you talked

wondering if quarter Just that ahead? payoffs quarter, that in excess any with or there fees loan -- margin and to was you we there interest should maybe about the that thinking as contributed margin paydowns saw be this modeling we're this recoveries pop core

or onetime No, wasn't that. like any interest things like recapture anything there any that,

rate conservative between earlier, and weighing the but to maybe of Greg to think drive look growth the forward. slightly some that aspect forecasting, growth we're we we're given the try in management I forward-looking we're what those as as kind also highlighted additional

be. are are be there There -- some may on may to deals pricing making some may mean, keep. that we I think Yes, I they -- concessions

trying too, growth. loan is just club have and -- going say, ensure the order them to we're that deals these club book, we to in on in competition -- the where is -- particularly take So conceding the are away and and to let's concede,

a is pressure. that So

rate, -- there's lot a had still repricing roll there's of those and I decent -- of offsetting that, of a and loans billions there's towards I a you're remember, far it book Now that that's find of to how your -- to that's the off. end still of lot have mean, particularly, you continuing in forward, are we 'XX, single-family, fixed the depends And dollars mean, on if it. in looking the are 'XX

will impact. that So just on when. depends a have also positive It

color. that appreciate really I

looking I opportunistic loan real commercial FDIC saw looks was been with did exposure XXX%. obviously your like above before. you repurchases. have up deal guys kicked estate that It We at portfolio the You the Y-XC.

you're two, some if of that's there estate in if contributed was to originated shift impacts sort One, acquired or CRE. both that that? exposure And thinking that willingness wondering how question. if reclass and and about for mix real and a Two-part ahead your growth appetite commercial

on lot the would than on know -- went loans. to No, loans, with we exactly and rather structure the nondepository the I of just the a underlying think of financial don't reports I the collateral, back you But institutions I based the circle Y-XC classify have on through aspect.

of you're back. of think those we there reports any dramatic And while might a see one . But press when and what that no, So can factor have in you I shift. been seeing been the CRESL CRESL some -- that the balance. hasn't release been supplement that a really months range we headwinds the as last -- It's regards XX we've repayment that slightly facing over some bound in as to book. the specifically with the been provide the amended

-- Yes, direct there. commercial not the concentration a that on grow is, around to in mean sort limited that your we'd of criteria balance limit abstract with in the loans floating and by estate. credit -- meet we our We're to real answer question I like

the And hitting maintaining We we're that, like even limits, current difficulty to not having them. it's grow. just fact, quite that's but in a concentration not but concentration have frankly, goal, we're we'd

loans. some so there's the out starting making is -- a that lenders not projects, sooner there's -- there's we're And in that at in earlier happening is back deals really see some -- very it's those what starting real also -- to see start of that's construction not -- what's to frankly, taking really rates, bridge differences us think of we're that to commercial I low reaching significant it's estate. fewer just and it's that's some side in

happening. and so seeing and that. in And sometimes, -- so are Those partnership private we're usually a debt there fund that's with

around no, we're looking all in book. doing is But quite interested stuff, and book The it's our growing real having the good. estate still noise extremely well, just commercial watching everything

we're so to And our it, still growing do that. interested we're in doing but best

I that if sounds leader helpful. provide could a have. ones that? Maybe may impactful deal have and... wouldn't on what if That's caused the and migration made one some like that of It larger you a where your slip me, NPA appreciate of kind could or club was it. deals Got on you concessions color Wondering size in. versus for last SNCs it the one I of the the more

about yes, was shared got I this banks the -- club -- very this that wasn't and -- national for deal think That way large wasn't credit was syndicate a I clean think you only would I a yes. mean,

stuff? include -- club stuff -- club we that know. number a I Yes. Because Is as or -- national So it's the credit we of don't just -- mix? as is shared Did or kind does far different. pull that

So okay.

We calculations do So very I the them. and grading wouldn't doing cash their next is SNCs. in mean, idiosyncratic. that But graded off obviously -- is is yes, this the total of by well. And book. $X flow And base others value strong billion. they're vast not majority They're I [indiscernible] it's enterprise

the from Investments. Shaker Hemmelgarn question with next Edward line the comes of And

and couple Just to or shared your what again the with of originating? loans what or percentage pricing loans loans as you -- more also questions. involved of participation participation, opposed a that solely are loans loan

to go depends go to It and much I'd the group have on very group, through each that. through

what generally loans And junior so talking CRESL, so in instance, there's And about all different almost right? so those not that but participants, in many have variations. we're that's

it's actually then of syndicating mezz always hired some that in all or cases, investment all fund almost almost So have syndication with a . And XX% loans or But of some own whatnot, -- a a lot or but our deals. whether something. counterparty, other have junior are we from not CRESL them, the folks a of them.

up cases, in agent the there's side just that So up which we future, lot deposits. on we're of established the now. end in -- of the We're others. then cash of being often, the out And as are then But variety clubbed happen. we're sometimes we're different smaller acting with a a clubs. And want the getting -- sizes for that it's deals a this is the to companies ways to book companies, and syndicating bank, whole part just can more so flow

just So depends it business. really the on

the say, let's time, multifamily, regular without bring that's a there borrower may wants mezz a of the the, partner. may we direct bring and be partner. may in more all it's leverage, in On direct if we But just that almost -- most straight -- mezz just

So it depends on the business.

one you Do loans? originating difference? you any is is that's feel you're underwriting stronger, there where Or are the

end believe it. Well, we're that documentation, difficult we'll concessions that the look, I get loan one documentation on -- given find in having yes, probably on. we to with litigating sense I in market that is this to fundamentally because into push are the are want don't much that this the too issue up issue a it back up that Frankly, certain mean, of issues think I do there we documentation

there's in the opportunities think, industry. to mean more But the I enough. I documentation, make clear But is it other clear

little more a that sometimes, And difficult. bit is movement

the then and we that is real fund over do the of our time, commercial how to everybody's -- our I panic a estate structure. different the over estate a had look, attack values think partners with reality reality -- think real and So fundamentally I just of commercial and loan

good can incentives has have sure that those a make and of the to an lot have. from of volatility a doesn't It's continually And it you incredibly requires It individual equity, clients. it structure. investments that an lot gain company

lending some -- individual to company, lending, is go in also of lending, an C&I when that you're of just different wrong you're I doing they're I be think those there's and idiosyncrasies. can -- not. some that in some C&I But mean, things So think might it general, when of I it

In on to this be just logistics risk. their And they product that's back are case, and very deteriorated, come going has very, has specific it but say, some, we the like different make a if what than you're right? it is And large as if the apartment deteriorated, it's company. And apartment and by an at gee, XX% pricing still cut for fundamentally rents -- apartment, half LTV you that don't can work, people much, right? the

to different be reflected those well So think perfect think do to of I of had we're on going very all commercial record just watch it's just and I and a -- that real something having we've essentially it decades, X.X still I it risks our sort this perfect -- different. to that, way is to kind go as has are don't on the single-family estate the not going look, is record real levels. just know, as think a but that estate over I convinced just commercial losses. I'm a either, it's far look,

several interest years. purchase margin X%. about lot you've was it's -- was Okay. And got in I of a mean, purchase always ignoring X.X% about more XXXX it's even pricing bit then around the what looking of range talk expanded talked the June back as as clearly quarter recently And I in last FDIC the number net to you a that a the loans. times. question little know is range, I you've the pricing. that were

the are mean, and I with towards gradually, that's the Is down comfortable still volume? more that you'll back moving of -- you X.X% doing that to kind X%. be

was sandbag he before to on wondering say And always to high it's Johnny always get thing. kept I can it now me. smiling margin me on to That loves wanting he's X%. how funny just because interest the keeps X.XX% to at still

has think in I But changes business. the some look, structural there fundamental been

that's so commercial lower have and cost a money spent is deposit one and good And of they them deposits. franchise, that a growing. built more we've that And is very -- lot

and on volumes working, sorts and continue all appears and managing be more through indicators see work. it to we're We of So it management we it hopefully, And spending into working. to better. see getting that, we're treasury OpEx will

is helpful, right? So that

power you that's otherwise side quarters, on even consumer So growth those when that been that So have last and have all that, continue the right? to you that, in you pricing not have you the good. good. might very gives have several the had, It really

of well. have also businesses a diversity quite We lending as

just -- risk part that right big margin the a got benefit competitors Now of way didn't, most was of we I rate right? interest that whole in think our emptied on started even we the bond We a So portfolio, deals than on X- happened. short rate we before several years super multifamily. everything, to rather got originating X right? the We X-year increases

in we a So that better much were position way.

it business to have think deposit so the we've managed also that we growth, because right, strong And the rates the we've of -- down we now way because able also I the manage benefit be now down, the are having deposit funded of side. what going to

think helpful. will that be So I

is a and I into are legitimate in that those elevated at think loans. I think pricing that a and areas. real there's I -- bit think that that estate, for there's to do like quite market think maybe happening pressure think beautifully I a general, threat on different pricing concentrations that I folks it's things moving also And I -- just banks the where that are of loans, there's hungry that Now there's think commercial level little there's they're

all the there. So some movements those are of

benefit as that that's think the a without the I future, we've far X that X new that I to look, for XX. But FDIC And we as see foreseeable side. right, range, XX the think given of million can

it's that's easily So don't I pretty achievable, think range. think a And -- think either. better think I don't don't range. much it's the stretch but actually that's a reasonable I think that I I of that's

think to manage it last down we we clearly think quarter. this require a costs at can way does deposit that and I us I did

But the you've you're bit currently ignoring a where room of and... little loans FDIC quite got between

Okay.

I But a in I coming the have sandbagging spreads. little that it -- of lower is which right? a there's loans look, part maybe in, it. mean, there mean So this are are tough tough part balance,

that's lower that so right? retain will So some those of some things of on down running so that that, want And happening. those and there's then we -- kind reprices, to right? spreads the well, as multifamily And push are of off if are

So there's just a of lot pieces. moving

estimate it think, more it's , think that achievable. conservative that's I more to so you an better have be I with

turn time. remarks. Johnny this at back floor I questions would further any the And like no Lai over are to There for to closing

for Have nice quarter. Thanks Great. to next interest. everyone's afternoon. . a We'll talk you

does for gentlemen, you ladies your today's and teleconference. that And We thank conclude participation.

lines You this may your disconnect at time.