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    Earnings call· Jun 2026(Q4 FY26)

    Axos Financial Q4 FY26 earnings call AX

    Jul 30, 2026 Source

    Executive summary

    Axos Financial Q4 FY26 — Strong Loan & Deposit Growth, Strategic Acquisitions

    Axos Financial closed fiscal 2026 with robust financial performance, marked by strong double-digit growth across key metrics and strategic acquisitions. The company successfully integrated Jenius Bank deposits and announced further deals, enhancing its digital capabilities and deposit base. Despite a one-time legal accrual impacting expenses, management maintained a focus on efficiency and opportunistic capital deployment, positioning the bank for continued growth.

    Highlights

    6

    • Achieved double-digit year-over-year growth in net interest income, noninterest income, ending loan and deposits, EPS, and book value per share.

    • Generated $638 million of net loan growth linked quarter, representing 15% annualized growth.

    • Noninterest income increased 50% year-over-year to $61.9 million for the quarter.

    • Diluted EPS, excluding a $21 million legal accrual, rose 28% year-over-year to $2.46 per share.

    • Nonperforming assets decreased to $159 million at quarter-end, down from $180 million in the prior quarter.

    • Ending deposit balances grew 17.9% year-over-year to $24.6 billion, with noninterest-bearing deposits up $788 million YoY.

    Concerns

    2

    • Noninterest expenses were $205.9 million for the quarter, up $20 million linked quarter, primarily due to a $21 million legal accrual.

    • Net interest margin was roughly flat quarter-over-quarter at 4.54%, compared to 4.57% in the prior quarter.

    Guidance & targets

    7
    CategoryTargetConfidence
    Organic loan growth
    low to mid-teens
    high materiality
    High
    Annual tax rate
    approximately 26% to 27%
    medium materiality
    Medium
    Loan loss reserve
    approximately 1.3% to 1.4% of total loans and leases
    medium materiality
    High
    Net interest margin outlook
    fairly stable
    high materiality
    Medium
    Deposit costs outlook
    fairly stable
    medium materiality
    Medium
    Efficiency ratio
    flat to improving
    high materiality
    Medium
    Noninterest expense run rate increase (Arc Technologies)
    approximately $1 million per month
    medium materiality
    High

    Operational metrics

    50
    Net loan growth
    $638 millionlinked quarter
    Q4 FY26

    Net loan growth for the quarter, with annualized growth rate.

    Net loan growth (ex-single-family mortgage warehouse)
    $750 millionlinked quarter
    Q4 FY26

    Increase in ending net loan balances excluding single-family mortgage warehouse.

    Noninterest income
    $61.9 millionup 50% year-over-year
    Q4 FY26

    Total noninterest income for the quarter.

    Noninterest income
    $233.6 millioncompared to $131.1 million in FY25
    FY26

    Total noninterest income for the fiscal year.

    Noninterest expenses
    $205.9 millionup $20 million linked quarter
    Q4 FY26

    Total noninterest expenses for the quarter.

    Noninterest expenses (ex-legal accrual)
    $184.9 milliondown $1 million linked quarter
    Q4 FY26

    Noninterest expenses excluding the $21 million legal accrual.

    Nonperforming assets
    $159 milliondown from $180 million at March 31, 2026
    June 30, 2026

    Total nonperforming assets at quarter-end.

    Net income
    $124.9 millionup 12.9% from $110.7 million in Q4 FY25
    Q4 FY26

    Net income for the quarter.

    Diluted EPS
    $2.16up 12.5% year-over-year
    Q4 FY26

    Diluted earnings per share for the quarter.

    Net income (ex-legal accrual)
    $141.8 millionup 28% from prior year's comparable quarter
    Q4 FY26

    Net income for the quarter, excluding the $21 million legal accrual.

    Diluted EPS (ex-legal accrual)
    $2.46
    Q4 FY26

    Diluted earnings per share for the quarter, excluding the $21 million legal accrual.

    Share repurchases
    $22 million
    Q4 FY26

    Value of common stock repurchased during the quarter.

    Remaining share repurchase authorization
    $126 million
    June 30, 2026

    Remaining amount in the current share repurchase authorization.

    Total originations for investment (ex-SFR warehouse)
    up 22%linked-quarter basis
    Q4 FY26

    Growth in total originations for investment, excluding single-family warehouse lending.

    Average loan yields
    7.4%stable compared to prior quarter
    Q4 FY26

    Average loan yields for the quarter.

    Average loan yields (nonpurchased loans)
    7.2%
    Q4 FY26

    Average loan yields for nonpurchased loans.

    Average loan yields (purchased loans)
    13%
    Q4 FY26

    Average loan yields for purchased loans, including accretion.

    New loan rates (single-family mortgage)
    6.9%
    June quarter

    New loan rates in the single-family mortgage business.

    New loan rates (multifamily)
    6.8%
    June quarter

    New loan rates in multifamily lending.

    New loan rates (C&I lending)
    6.6%
    June quarter

    New loan rates in C&I lending.

    New loan rates (auto portfolio)
    7.8%
    June quarter

    New loan rates in the auto portfolio.

    Ending deposit balances
    $24.6 billionup 17.9% year-over-year
    June 30, 2026

    Total ending deposit balances.

    Demand, money market, and savings accounts as % of total deposits
    98%up 22% year-over-year
    June 30, 2026

    Composition and growth of demand, money market, and savings accounts.

    Noninterest-bearing deposits
    over $3.8 billionup $439 million linked quarter and $788 million year-over-year
    June 30, 2026

    Total noninterest-bearing deposits and their growth.

    Client cash sorting deposits (on balance sheet)
    $1.2 billionup from $1.1 billion at March 31, 2026
    Q4 FY26

    Client cash sorting deposits held on balance sheet.

    Deposits off balance sheet (partner banks)
    $475 million
    Q4 FY26

    Deposits held off balance sheet at partner banks.

    Fund finance net new loan growth
    over $600 million
    June quarter

    Net new loan growth from the fund finance business.

    Floor plan lending outstanding loans growth
    over $100 million
    Q4 FY26

    Growth in outstanding loans from the floor plan lending business.

    Net charge-offs (ex-syndicated C&I loan)
    $5.9 million
    Q4 FY26

    Net charge-offs excluding a specific syndicated C&I loan.

    Nonperforming assets to total assets
    53 bpsdown 9 bps from March 31, 2026, and down 18 bps from June 30, 2025
    June 30, 2026

    Ratio of nonperforming assets to total assets.

    Banking and service fees
    $36.8 millioncompared to $9.5 million in Q4 FY25
    Q4 FY26

    Banking and service fees for the quarter, with Verdant as primary contributor.

    Prepayment penalty fees
    $4.2 millioncompared to $0.2 million in Q4 FY25
    Q4 FY26

    Prepayment penalty fees for the quarter.

    Assets under custody administration
    $47.8 billionincreased by $8.4 billion year-over-year
    Q4 FY26

    Total assets under custody administration.

    Net new assets (custody/admin)
    $85 million
    Q4 FY26

    Net new assets for the quarter, with fiscal year total.

    Cash sorting deposits (on and off balance sheet)
    $1.67 billionincreased by over $100 million linked quarter
    Q4 FY26

    Total cash sorting deposits, including on and off balance sheet.

    Ending margin balances
    up 36%from prior fiscal year
    FY26

    Growth in ending margin balances.

    Pretax income (reported)
    $15.4 million
    FY26

    Reported pretax income for the fiscal year.

    Pretax income (ex-legal accrual)
    $36.4 millionversus $32 million in FY25
    FY26

    Pretax income for the fiscal year, excluding the $21 million legal accrual.

    Noninterest expenses (ex-legal accrual and D&A)
    $158.1 million
    Q4 FY26

    Noninterest expenses excluding the $21 million legal accrual and depreciation and amortization.

    Return on assets
    1.76%
    FY26

    Return on assets for the fiscal year.

    Return on assets (ex-legal accrual)
    1.92%
    Q4 FY26

    Return on assets for the quarter, excluding the legal accrual.

    Return on assets (ex-legal accrual)
    1.82%
    FY26

    Return on assets for the fiscal year, excluding the legal accrual.

    Income tax rate
    19.9%compared to 24.6% in prior quarter
    Q4 FY26

    Income tax rate for the quarter, driven by RSU vestings and state tax changes.

    Provision for credit losses
    $17.8 millioncompared to $41 million in Q3 FY26
    Q4 FY26

    Provision for credit losses for the quarter, decrease due to less severe economic outlook.

    Loan pipeline
    $2.4 billion
    June 30, 2026

    Total loan pipeline at quarter-end, with detailed breakdown by category.

    Noninterest expense run rate increase (Arc Technologies)
    $1 million
    ongoing

    Expected increase in noninterest expense run rate as Arc Technologies is integrated.

    Noninterest-bearing deposit growth (Clearing sweep)
    $150 million
    Q4 FY26

    Contribution to noninterest-bearing deposit growth from clearing sweep.

    Noninterest-bearing deposit growth (C&I cross-sell)
    $100 million
    Q4 FY26

    Contribution to noninterest-bearing deposit growth from direct C&I cross-sell for lending.

    Noninterest-bearing deposit growth (Private banking)
    $100 million
    Q4 FY26

    Contribution to noninterest-bearing deposit growth from private banking.

    Noninterest-bearing deposit growth (Specialty and fund banking)
    $120 million
    Q4 FY26

    Contribution to noninterest-bearing deposit growth from specialty and fund banking.

    Industry KPIs

    12
    MetricValueDetails
    Loans$638 millionUSD
    Deposits$24.6 billionUSD
    Rotce ROE16.32%%
    Capital returns$22 millionUSD
    Fee income lines$61.9 millionUSD
    Allowance reserves1.34%%
    Net interest incomedouble-digit%
    Net interest margin4.54%%
    Net charge offs npls25 bpsbps
    Total operating expenses$205.9 millionUSD
    Provision for credit losses$17.8 millionUSD
    Efficiency ratio operating leverage42.2%%

    Deals & partnerships

    3
    Jenius BankDeposit acquisition

    Closed in early May 2026. Successful cross-selling of checking accounts to Jenius customers, adding over 3,400 new Axos consumer checking accounts.

    Capital OneIRA savings and CD acquisition

    Received regulatory approval in May 2026. Actively working with Capital One on conversion and close date in Q3 2026. Expected to add $3.2 billion in deposits.

    Arc TechnologiesFintech for cash management and debt marketplace technology

    Closed a few weeks prior to the call (July 2026). Arc developed an AI-enabled digital treasury management solution and access to a wide range of potential lenders for businesses. It brings a talented team of product, sales, and software engineers to accelerate development efforts, with an initial focus on integrating Arc into the banking platform for existing small business clients.

    Risks & headwinds

    3
    Legal matter in clearing businessQ4 FY26

    $21 million accrual

    Increased competitiveness on deposit side

    Other banks adopting models with companion high-cost savings accounts and small business checking accounts

    Mitigation: Focus on diverse funding across various business verticals and continued product development.

    Credit sensitivity in direct lending to sponsor-backed companies

    Historically, most credit losses at Axos have been in syndicated loans to single-asset companies without diversity or hard collateral.

    Mitigation: Being cautious and thoughtful about agents chosen for syndicated loans, looking for philosophical alignment and more club deals.

    What to watch in Q1 FY27

    5

    Capital One acquisition closing and integration

    Q3 2026
    CurrentRegulatory approval received, working on conversion
    TargetConversion and close in Q3 2026

    Why it matters

    This acquisition is expected to add $3.2 billion in deposits, significantly impacting funding and loan growth capacity.

    We received regulatory approval for the Capital One IRA savings and CD acquisition in May and are actively working with Capital One on a conversion and a close date in calendar -- in Q3 2026.

    Q&A highlights

    6

    What is the outlook for NIM and deposit costs, and is there increased competitiveness in deposits?

    Management expects a fairly stable net interest margin and deposit costs. While not seeing a broad-based increase in competition, some banks are becoming more aggressive in deposit acquisition, particularly with companion high-cost savings accounts.

    “So we believe we'll have a fairly stable net interest margin outlook. And we also think that, that's going to be with fairly stable deposit costs.”

    asked by David Chiaverini · answered by Gregory Garrabrants

    2 min read5 chapters

    Detailed Narrative

    01

    Robust Loan and Deposit Growth

    Axos Financial reported strong loan growth, with net loans increasing by $638 million linked quarter, an annualized growth rate of 15%. Excluding single-family mortgage warehouse, ending net loan balances rose by $750 million. Deposit balances also saw significant expansion, up 17.9% year-over-year to $24.6 billion, with noninterest-bearing deposits growing over $3.8 billion. The company's diverse funding mix, including consumer, small business, and commercial specialty, supports this growth.

    02

    Strategic Acquisitions and Digital Enhancement

    The company completed three deposit-focused acquisitions in calendar 2026: Jenius Bank (May), Capital One IRA savings and CD (regulatory approval May, closing Q3 2026), and Arc Technologies (July). The Jenius Bank acquisition successfully added $2.3 billion in deposits and 56,000 accounts. The Arc Technologies acquisition is expected to enhance Axos's digital treasury management solutions for small businesses, leveraging AI and accelerating the strategic roadmap for client-facing technology.

    03

    Noninterest Income Expansion and Efficiency

    Noninterest income surged 50% year-over-year to $61.9 million for the quarter, primarily driven by contributions from Verdant and higher prepayment fees. Despite ongoing investments in technology and infrastructure, the bank maintained a low operating efficiency ratio. Excluding a $21 million legal accrual and D&A, the efficiency ratio improved to 41.6% in Q4 FY26, down 283 basis points from the prior year, reflecting operational productivity initiatives and AI tool leverage.

    04

    Credit Quality and Reserve Management

    Credit quality remained strong with nonperforming assets declining to $159 million, down $23 million linked quarter. Net charge-offs were 25 basis points for the quarter, decreasing from 31 basis points in the prior quarter. The allowance for credit losses to total loans stood at 1.34%, and the allowance to nonaccrual loans was 221%, indicating a well-reserved position relative to low credit losses.

    05

    Capital Allocation and Shareholder Returns

    Axos continues to generate above-industry returns, with a return on assets of 1.76% and return on average common stockholders' equity of 16.32% for FY26. The company deployed excess capital into over $3.5 billion of organic loan growth, $1.2 billion in leases/securitizations from Verdant, and strategic acquisitions. Share repurchases totaled $22 million during the quarter at an average price of $87.95, with $126 million remaining in authorization, demonstrating an opportunistic approach to capital returns.

    AI-generated summary of the company’s earnings call. Not investment advice.