San Diego's Axos Bank, Still Lending To Trump, Sees Website, Stock Go Down

By Ken Stone, Times of San Diego

July 28, 2023

The website of the San Diego-based online bank scrutinized for its loans to Donald Trump was down for at least five hours Thursday — and so was the stock price of its parent.

A little before noon, a customer service rep for Axos Bank confirmed “an across-the-board outage” — but the site was restored by 12:40 p.m.

Thursday morning, a 3,800-word story was posted by The Washington Post under the headline “Trump needed $225 million. A little-known bank came to the rescue.”

“Gregory Garrabrants, a GOP donor and CEO of online Axos Bank, approved the loans after the former president’s main lender had cut ties,” the paper added.

It wasn’t news that Axos lends to the former president — since Newsweek and Forbes in March 2022 had reported large real-estate loans to Trump’s company.

But Post reporter Michael Kranish visited the University City offices of Axos Bank and interviewed its president, Garrabrants, for his first public comments on the Trump loans.

Shares in Axos Financial, the Las Vegas-based holding company of Axos Bank, closed at $46.35 — down 1.7% from the previous day.

Axos Financial reported 4th-quarter and fiscal year earnings Thursday after the market closed. Year-to-date, AX stock has risen by 17.85%, according to tipranks.com.

In an hour-long earnings call, analysts heard: “It’s really a good time to be a lender now.” But none asked about The Washington Post story or about the Trump loans.

Axos Bank didn’t immediately respond to Times of San Diego requests for comment.

“The Axos loans to Trump were vital to stabilizing his post-presidential finances and enabling him to mount the campaign that now has him leading the GOP pack for the 2024 presidential nomination, according to disclosure records, loan documents and financial experts,” The Post reported.

Garrabrants, 51, told the Post that the Trump deals totaling hundreds of millions of dollars had nothing to do with his Republican politics.

“He said he made the loans because they will be profitable for his bank, adding that he did not agree with other bankers who stayed away from Trump due to allegations that he had incited the insurrection or concerns about his honesty,” the Post said.

It was “not my job or my role” to judge Trump’s actions, Garrabrants was quoted as saying.

Garrabrants donated $9,600 to support Trump’s 2020 campaign, the Post added, but said he’s never met the former president, dealing instead with Trump’s son Eric, the executive vice president of the Trump Organization.

Garrabrants also rejected claims by New York Attorney General Letitia James, who is investigating Trump, that he had sought to avoid providing certain financial information when applying for Axos loans, the Post said.

“He never refused any information we asked for,” Garrabrants told the Post. “We asked for a series of items in a specific format … and he delivered the items in the specific format we asked for.”

The Post said Garrabrants declined to comment when asked if he or the bank had been contacted by anyone from James’s office regarding her case against Trump.

In a press release, Axos Financial boasted net income for the fiscal year ended June 30 of $307.2 million, a record. It was an increase of 27.6% over the previous year’s $240.7 million.

Earnings per diluted share was $5.07, an increase of $1.10, or 27.7%, as compared to earnings per diluted share of $3.97 for the year ended June 30, the company said.

“We achieved record earnings and maintained strong credit quality and liquidity in the three and 12 months ended June 30, 2023,” Garrabrants said in a statement.

“Double-digit growth in net interest income and a net interest margin above the high end of our long-term target were the primary contributors to our strong results,” he added. “Our credit quality remains resilient, supported by our diverse, asset-based lending at low loan-to-values.

“Our strong balance sheet, with a modest unrealized loss on our securities portfolio equal to less than 0.5% of our shareholders’ equity and a growing deposit base generated by a variety of consumer and commercial banking and securities businesses, positions us well for continued growth.”

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