Axos Financial (AX) risk factors, FY2025 10-K

Risks Relating to Macroeconomic Conditions

1. 01Changes in interest rates could adversely affect our performance
2. 02A significant or sustained economic downturn could result in increases in our level of non-performing loans and leases and/or reduce demand for our products and services, which could have an adverse effect on our results of operations
3. 03Inflation has negatively impacted, and may continue to negatively impact our business and our profitability
4. 04The value of our securities in our investment portfolio may decline in the future
5. 05The weakness of other financial institutions or other companies in the financial services industries could adversely affect us
6. 06The economy, financial services industry and our business and operating results could be adversely affected by the political environment and governmental fiscal and monetary policies
7. 07Changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs, may adversely impact our business, financial condition, and results of operations

Risks Relating to Regulation of our Business

1. 08Changes in laws, regulations or oversight or increased enforcement activities by regulatory agencies may increase our costs and adversely affect our business and operations
2. 09The financial services industry and broader economy may be subject to new or changing regulation or government policy
3. 10Failure to comply with applicable laws or regulations, or to satisfy our regulators' supervisory expectations, could subject us to supervisory or enforcement action, which could adversely affect our business, financial condition and results of operations
4. 11The Company and its subsidiaries are subject to changes in federal and state tax laws and the interpretation of existing laws and examinations and challenges by taxing authorities
5. 12Our broker-dealer and investment advisory businesses subject us to regulatory risks
6. 13Policies and regulations enacted by the Consumer Financial Protection Bureau may negatively impact our consumer business and increase our compliance burdens
7. 14We are subject to numerous laws designed to protect consumers, and failure to comply with these laws could lead to a wide variety of sanctions

Risks Relating to Commercial Loans, Mortgage Loans and Mortgage-Backed Securities

1. 15Our real estate loan portfolio is subject to certain risks including market, environmental and project-specific risks
2. 16Declining real estate values, particularly in California and New York, could reduce the value of our loan and lease portfolio and impair our profitability and financial condition
3. 17Many of our mortgage loans are multifamily residential loans and defaults on such loans would harm our business
4. 18A decrease in the mortgage buying activity of Fannie Mae, Freddie Mac, and MBS’s guaranteed by Ginnie Mae or a failure by Fannie Mae, Ginnie Mae, and Freddie Mac to satisfy their obligations with respect to their RMBS could have a material adverse effect on our business, financial condition and results of operations
5. 19Commercial and industrial and commercial real estate loans may expose our company to greater financial and credit risk than other loans
6. 20Our mortgage origination business is subject to fluctuations based upon seasonal and other factors and, as a result, our results of operations for any given quarter may not be indicative of the results that may be achieved for the full fiscal year

Risks Relating to our Business Operations

1. 21Our results of operations could vary as a result of the methods, estimates, and judgments that we use in applying our accounting policies, including with respect to our allowance for credit losses
2. 22If our allowance for credit losses is not sufficient to cover actual credit losses, our earnings, capital adequacy and overall financial condition may suffer materially
3. 23Changes in the value of goodwill and other intangible assets could reduce our earnings
4. 24Our risk management processes and procedures may not be effective in mitigating our risks
5. 25Higher FDIC assessments could negatively impact profitability
6. 26Our broker-dealer and advisory businesses subject us to a variety of risks associated with the securities industry
7. 27We are subject to stringent capital requirements and may need to raise additional capital in the future, and that capital may not be available or its cost may be high
8. 28Liquidity and access to adequate funding cannot be assured
9. 29A reduction in our credit ratings could adversely affect our access to capital and could increase our cost of funds
10. 30Our inability to manage our growth or deploy assets profitably could harm our business and decrease our overall profitability, which may cause our stock price to decline
11. 31New lines of business, purchased assets or liabilities or new products and services may subject us to additional risks
12. 32We depend on the accuracy and completeness of information about customers
13. 33We face strong competition for customers and may not succeed in implementing our business strategy
14. 34Our business depends on a strong brand, and failing to maintain and enhance our brand could hurt our ability to maintain or expand our customer base
15. 35Our reputation and business could be damaged by negative publicity
16. 36We could be exposed to fraud risks that affect our operations and reputation
17. 37Extreme weather conditions, natural disasters, rising sea levels, acts of war or terrorism, civil unrest, public health issues, or other adverse external events could harm our business
18. 38Our success depends in large part on the continuing efforts of key executives. If we are unable to retain these key personnel or attract, hire and retain others to oversee and manage our Company, our business could suffer
19. 39We are exposed to risk of environmental liability with respect to properties to which we take title

Technology Risks

1. 40We rely on technology and information systems that may be disrupted, which would pose operational risks
2. 41Privacy concerns relating to our technology could damage our reputation and deter current and potential customers from using our products and services
3. 42We have risks of systems failure and disruptions to operations
4. 43Any damage or failure that causes an interruption in our operations could adversely affect our business, prospects, financial condition and results of operations
5. 44We are heavily reliant on technology, and a failure in effectively implementing technology initiatives or anticipating future technology needs or demands could adversely affect our business or financial results
6. 45The development and use of AI present risks and challenges that may adversely impact our business
7. 46dependency on technology. Failure to successfully keep pace with technological change affecting the banking and financial services industry could negatively affect our revenue and profitability
8. 47The market price of our common stock may be volatile
9. 48Provisions in our Certificate of Incorporation, By-laws and Delaware laws might discourage, delay or prevent a change of control of our Company or changes in our management and, therefore, depress the trading price of our common stock
10. 49Our acquisitions involve integration and other risks
11. 50As a public company, we face the risk of stockholder lawsuits and other related or unrelated litigation, particularly if we experience declines in the price of our common stock
12. 51Our controls and procedures may fail or be circumvented