Company: AX
Filing Date: 2025-08-21
Form Type: 10-K
Source: 0001299709-25-000125
Chunk: 139

Company: Axos Financial, Inc.
Filing Date: 2025-08-21
Form: 10-K
Item: Item 7
Chunk 139
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 The increase in net interest income is reflective of higher interest earned on loans, mainly attributable to higher loan balances, as well as lower rates on demand and savings deposits and lower average time deposits and advances from the FHLB. These decreases were partially offset by higher interest-bearing demand and savings deposit balances.

For the fiscal year 2025, the Banking Business Segment’s non-interest income decreased $92.6 million, or 66.6%, compared to non-interest income in fiscal year 2024. The decrease in non-interest income was primarily the result of the absence of the gain on the FDIC Loan Purchase as compared to fiscal year 2024.

For the fiscal year 2025, the Banking Business Segment’s non-interest expense increased $54.9 million, or 13.1%, compared to non-interest expense in fiscal 2024. The increase in non-interest expense was primarily driven by higher salaries and related costs.

We consider the ratios shown in the table below to be key indicators of the performance of our Banking Business Segment:

Fiscal Year EndedJune 30, 2025June 30, 2024Efficiency ratio40.80 %38.42 %Return on average assets2.02 %2.20 %Interest rate spread4.03 %3.66 %Net interest margin4.95 %4.68 %

Our Banking Business Segment’s net interest margin exceeds our consolidated net interest margin. Our consolidated net interest margin includes certain items that are not reflected in the calculation of our net interest margin within our Banking Business Segment and reduce our consolidated net interest margin, such as the borrowing costs at the Company and the yields and costs associated with certain items within interest-earning assets and interest-bearing liabilities in our Securities Business Segment, including those related to securities financing operations.

42

Securities Business Segment

For the fiscal year ended June 30, 2025, our Securities Business Segment had income before taxes of $32.9 million compared to income before taxes of $40.1 million for the fiscal year ended June 30, 2024. 

For the fiscal year 2025, the Securities Business Segment’s net interest income increased $2.2 million, or 8.5%, compared to fiscal year 2024, resulting from higher net interest income earned in securities lending activities and lower interest expense on borrowings. In the Securities Business Segment, interest is earned through margin loan balances, securities borrowed and cash deposit balances. Interest expense is incurred from cash borrowed