Axos Financial (AX) to Acquire E*TRADE Advisor Services

Axos Financial, Inc. (NYSE: AX) (“Axos” or the "Company”), parent of Axos Bank, announced today that its wholly-owned subsidiary Axos Clearing LLC (“Axos Clearing”) has signed a definitive agreement to acquire certain assets and liabilities of E*TRADE Advisor Services (“EAS”), the registered investment advisor (“RIA”) custody business Morgan Stanley acquired in its acquisition of E*TRADE Financial Corporation in 2020. Axos will fund the $55 million cash purchase price with existing capital at Axos Financial, Inc. and expects this transaction to close in the third calendar quarter of 2021.

“We are extremely excited to announce the EAS acquisition,” said Gregory Garrabrants, President and Chief Executive Officer of Axos Financial, Inc. “The addition of approximately 200 RIA custody relationships with $23 billion of combined assets under custody significantly accelerates our time-to-scale in this business. We intend to leverage EAS’ turnkey technology platform and Axos Clearing’s capabilities to expand the service offerings to independent registered investment advisors and turnkey asset management program managers. The $1.2 billion of client cash deposits adds another potential source of low-cost funding and optionality for Axos Bank. Assuming minimal cost and revenue synergies, we expect the acquisition to be 5% accretive to our fiscal 2023 earnings per share, with a tangible book value earn-back of approximately three years.”

“We’d like to welcome the EAS team and their clients to Axos,” continued Mr. Garrabrants. “The RIA custody business is an integral part of our strategic plan, and adding a team of experts with decades of experience and relationships with the RIA community is something we highly value. We look forward to investing in and growing the EAS team to support their high-touch service model.”

A presentation providing additional details regarding this transaction is available on the Axos Financial, Inc. website at https://investors.axosfinancial.com/.

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