Where are the most significant loan growth opportunities, and are there any areas of concern regarding credit risk?

Expects relatively balanced growth across the C&I platform. Notes a potential positive from pullback in private credit in certain areas. The most credit-sensitive segment is direct lending to sponsor-backed companies, where caution is exercised due to single-asset exposure. “I think the most credit-sensitive segment that we're in, which we have to be very thoughtful about is just the direct lending to sponsor-backed companies.”

How will the Arc Technologies acquisition expand product offerings, monetization, and contribute to deposit growth and fee income long-term?

Arc will bridge the gap for small businesses that outgrow the basic platform but don't need full treasury management, offering sophisticated digital tools, AI-enabled services, and expense management. It will allow Axos to expand offerings to existing small business clients, serve Y Combinator companies, and leverage AI for client-facing interactions. While not immediately material to results, it accelerates the strategic roadmap and technology integration. “Arc has essentially created a very sophisticated digital platform for start-up businesses and even businesses that are middle market that might have a very specific set of use cases that are maybe -- you might call them TM Lite. But frankly, Arc, it's even better than TM Lite. It's full TM.”

How has the integration of the three recent deposit-focused deals been, and what is the appetite for additional deals?

Integration of Jenius Bank and Capital One has been smooth due to an established playbook for deposit-only acquisitions, with minimal client attrition. Arc Technologies is different as it involves integrating a fintech team and technology, but it aligns with existing tech needs. The company remains open for further opportunistic acquisition business. “We've done so many of these just straight raw, no asset deposit deals that the team really has a playbook down. So I have to say that I expected them to do well on Jenius side, but they just did fabulously.”

Axos Financial (AX) Q4 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q4 FY26)· Financials· Jul 30, 2026

Source: earnings call transcript

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

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

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

Category	Target	Timeline	Confidence
Organic loan growth	low to mid-teens high materiality	next year · FY27	High
Annual tax rate	approximately 26% to 27% medium materiality	annual	Medium
Loan loss reserve	approximately 1.3% to 1.4% of total loans and leases medium materiality	going forward	High
Net interest margin outlook	fairly stable high materiality	future	Medium
Deposit costs outlook	fairly stable medium materiality	going forward	Medium
Efficiency ratio	flat to improving high materiality	future	Medium
Noninterest expense run rate increase (Arc Technologies)	approximately $1 million per month medium materiality	going forward	High

AX operating KPIs by quarter

AX operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Mar 2026 Q3 FY26	This call Jun 2026 Q4 FY26	Change vs prior quarter
Net interest margin	4.57% Net interest margin was 4.57% for the quarter ended March 31, 2026, compared to 4.94% in the prior quarter. Source: earnings call transcript	4.54% Net interest margin was 4.54% for the quarter ended June 30, 2026, roughly flat compared to 4.57% in the prior quarter. Source: earnings call transcript	0 pt
Net new assets	~$140M Net new asset growth of approximately $140 million were offset by a decline in the stock market in the first 3 months of 2026. Source: earnings call transcript	~$85M Net new assets were approximately $85 million in the quarter ended June 30, 2026, bringing the net new asset totaled to $2.2 billion for fiscal year 2026. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

Jenius Bank Deposit 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 One IRA 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 Technologies Fintech 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

Legal matter in clearing business Q4 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

Capital One acquisition closing and integration

Q3 2026

Current Regulatory approval received, working on conversion

Target Conversion 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.

Find out whether AX delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.