Investors in Axos Financial, Inc. (AX) need to pay close attention to the stock based on moves in the options market lately. That is because the Jan 16, 2026 $32.2 Call had some of the highest implied volatility of all equity options today.What is Implied Volatility?Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could als ...

Core Points - The Axos ONE® Checking account has a base APY of 0.00%, while the Axos ONE® Savings account offers a base APY of up to 1.00% [3] - Promotional APY rates are available for both accounts if specific criteria are met during the Qualification Period [3][4] - The promotional APY for the Checking account can reach 0.51% and for the Savings account up to 4.51% if qualifying conditions are satisfied [8] Qualification Criteria - Two options are provided to qualify for the promotional APY on the Axos ONE® Checking account, which include meeting minimum direct deposit or average daily balance requirements [8] - Qualifying deposits must come from specific sources such as ACH transfers, inbound wire transfers, or check deposits, while internal transfers and other types of deposits do not qualify [6] - Both accounts must remain open and active on the 25th of the month to be eligible for the promotional APY for that statement cycle [7]

Core Insights - Axos Financial operates as a digitally native bank with two primary revenue streams: core banking and a growing securities division through Axos Advisory Services and Axos Invest, which contribute to a structurally low-cost base and diversified income sources [1] Company Overview - The company has a core banking segment that provides stable revenue, while its securities division is expanding, indicating potential for future growth [1] Investment Strategy - The investment approach focuses on quantitative and fundamental analysis, particularly in small to mid-cap stocks, emphasizing a value-investing strategy that avoids overpaying for stocks to mitigate risk [1]

Core Insights - Axos Financial reported revenue of $323.39 million for the quarter ended September 2025, reflecting a year-over-year increase of 0.9% and a surprise of +0.79% over the Zacks Consensus Estimate of $320.85 million [1] - The company's EPS for the quarter was $2.07, up from $1.96 in the same quarter last year, resulting in an EPS surprise of +11.29% compared to the consensus estimate of $1.86 [1] Financial Metrics - The efficiency ratio was reported at 48.3%, slightly above the average estimate of 47.2% based on two analysts [4] - The net interest margin stood at 4.8%, matching the average estimate from two analysts [4] - Net annualized charge-offs to average loans were 0.1%, consistent with the average estimate of 0.1% from two analysts [4] - Total non-interest income was $32.34 million, exceeding the average estimate of $32.09 million based on two analysts [4] - Net interest income was reported at $291.05 million, surpassing the average estimate of $288.73 million from two analysts [4] Stock Performance - Over the past month, shares of Axos Financial have returned -5.7%, contrasting with the Zacks S&P 500 composite's increase of +3.6% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Insights - Axos Financial reported quarterly earnings of $2.07 per share, exceeding the Zacks Consensus Estimate of $1.86 per share, and showing an increase from $1.96 per share a year ago, resulting in an earnings surprise of +11.29% [1][2] - The company achieved revenues of $323.39 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.79% and reflecting a year-over-year increase from $320.66 million [2] - Axos Financial has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Earnings Outlook - The future performance of Axos Financial's stock will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The current consensus EPS estimate for the upcoming quarter is $2.01 on revenues of $339.2 million, while the estimate for the current fiscal year is $7.89 on revenues of $1.35 billion [7] Industry Context - The Financial - Miscellaneous Services industry, to which Axos Financial belongs, is currently ranked in the top 36% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked using tools like the Zacks Rank [5][6]

Financial Data and Key Metrics Changes - The company generated $1.6 billion of net loan growth linked quarter, including $1 billion from the Verdant Commercial Capital acquisition [4] - Net interest income was $291 million, increasing by approximately $11 million linked quarter, or 15.6% annualized [5] - Net income was approximately $112.4 million, up from $110.7 million in the previous quarter, with diluted EPS at $1.94 compared to $1.92 [7] - Adjusted net income and adjusted EPS were $119 million and $2.06 per share, respectively, for the quarter, a 7.3% increase from the linked quarter [7] - Non-interest expenses were approximately $156 million, up by $5.6 million from the previous quarter [21] Business Line Data and Key Metrics Changes - Total originations for investment, excluding single-family mortgage warehouse lending, were over $4.2 billion, representing an increase of 11% linked quarter, or 44% annualized [8] - Average loan yields for the quarter were 7.99%, with non-purchase loans at 7.66% and purchase loans at 15.81% [8] - Non-interest income increased by approximately 13% year-over-year due to higher banking service fees and mortgage banking income [6] Market Data and Key Metrics Changes - Total on-balance sheet deposits increased 6.9% year-over-year to $22.3 billion [6] - Demand, money market, and savings accounts, representing 94% of total deposits, increased by 9% year-over-year [9] - Ending non-interest-bearing deposits were approximately $3.4 billion, up by approximately $350 million from the prior quarter [9] Company Strategy and Development Direction - The acquisition of Verdant Commercial Capital is expected to add $150 million to $200 million of net new loans and operating leases per quarter at attractive spreads [12] - The company is focused on increasing productivity and implementing operational improvements, including the use of artificial intelligence across various departments [18] - The company aims to maintain loan growth in the low to mid-teens range annually, supported by strong originations from commercial lending businesses [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the credit quality of the loan book, with historical and current net charge-offs remaining low [13] - The company anticipates that the Verdant acquisition will be accretive to earnings per share by 2% to 3% in fiscal year 2026 and by 5% to 6% in fiscal 2027 [17] - Management remains vigilant regarding potential risks in the credit market, particularly concerning deal structures and fraud [28][29] Other Important Information - The company issued approximately $200 million of subordinated debt in September 2025, which has a fixed annual interest rate of 7% for the first five years [10] - The current regulatory environment is seen as favorable for additional strategic M&A transactions [18] Q&A Session Summary Question: What is the company's perspective on credit risks in the current environment? - Management noted that they have turned down several high-profile deals due to problematic structures and remain cautious about credit quality [28][29] Question: Were there any one-time factors affecting fee income this quarter? - Management confirmed that there were no one-time factors affecting fee income, and they expect a few million dollars from Verdant in non-interest income going forward [31] Question: How does the company view its capital ratios in relation to loan growth? - Management expressed comfort with current capital ratios, indicating that they have excess capital relative to needs and are focused on maintaining strong profitability [37] Question: What are the company's plans for future acquisitions? - Management is actively looking for acquisition opportunities that fit strategically and culturally, similar to the Verdant acquisition [41]

Axos Q4 Fiscal 2025 Earnings Supplement July 30, 2025 NYSE: AX Loan Growth by Category | | | | | | $ Millions | | | --- | --- | --- | --- | --- | --- | --- | | | | | | Q4 FY25 | Q3 FY25 | Inc (Mar) | | | Single Family Mortgage & | Jumbo Mortgage | $ | 3,786 $ | 3,697 $ | 89 | | | Warehouse | SF Warehouse Lending | | 609 | 498 | 111 | | | Multifamily & Commercial | Multifamily | | 1,729 | 2,059 | (330) | | | Mortgage | Small Balance Commercial | | 1,212 | 1,281 | (69) | | | Commercial Real Estate | CRE Speci ...

Financial Performance - For the three months ended September 30, 2025, net income was $112.352 million, with adjusted earnings of $120.377 million[119]. - The diluted EPS for the same period was $1.94, while the adjusted EPS was $2.07[119]. - Tangible book value per common share increased to $45.22 as of September 30, 2025, compared to $39.22 a year earlier[120]. - Net income for the three months ended September 30, 2025, was $112,352 thousand, slightly up from $112,340 thousand for the same period in 2024, resulting in a diluted earnings per share of $1.94 compared to $1.93[123]. - The effective income tax rate decreased to 25.04% for the three months ended September 30, 2025, from 29.43% in the same period in 2024[137]. Asset and Liability Management - The Company has approximately $27.4 billion in assets and $43.0 billion of assets under custody and/or administration at Axos Clearing LLC[106]. - Total assets increased to $27,431,817 thousand as of September 30, 2025, up from $24,783,078 thousand as of June 30, 2025, and $23,569,084 thousand as of September 30, 2024, representing a year-over-year growth of 16.0%[121]. - Total liabilities increased by $2.5 billion or 11.5% to $24.6 billion at September 30, 2025, mainly due to higher deposit balances and secured financings from the Verdant acquisition[149]. - Stockholders' equity increased by $112.4 million to $2.793 billion at September 30, 2025, driven by net income for the quarter[158]. - The Company and Bank reported Tier 1 capital of $2,587,308, meeting all capital adequacy requirements and classified as "well capitalized" under regulatory standards[173]. Income and Expense Analysis - The Company generated non-interest income from various sources, including fees from loans originated for sale and deposit account service fees[106]. - Non-interest income increased by $3.7 million, or 13.0%, primarily due to higher banking and servicing fee income[134]. - Non-interest expense increased by $8.8 million, or 6.0%, primarily due to higher professional services and data processing expenses[135]. - The provision for credit losses was $17.3 million for the three months ended September 30, 2025, compared to $14.0 million for the same period in 2024[132]. Loan and Deposit Growth - Total deposits rose to $22,264,753 thousand as of September 30, 2025, compared to $20,829,543 thousand as of June 30, 2025, marking an increase of 6.9%[121]. - The company reported a growth in loans held for investment, net, to $1,585,527 thousand for the three months ended September 30, 2025, compared to $49,224 thousand for the same period in 2024, indicating strong loan demand[122]. - Total gross loans reached $23.1 billion at September 30, 2025, up from $21.6 billion at June 30, 2025, with Commercial & Industrial - Non-RE loans increasing to 34.5% of the portfolio[150]. - Total deposits increased by $1.4 billion or 6.9% to $22.3 billion at September 30, 2025, with significant growth in interest-bearing demand and savings accounts[154]. Capital Adequacy and Risk Management - Common equity tier 1 capital to risk-weighted assets was 11.66% as of September 30, 2025, down from 12.52% as of June 30, 2025, reflecting changes in capital adequacy ratios[121]. - The Company and Bank's common equity tier 1 capital ratio to risk-weighted assets was 11.66% as of September 30, 2025, exceeding the minimum requirement of 4.5%[170]. - The Company may need to raise additional capital to support further growth and maintain its "well capitalized" status[170]. - The Company and Bank were in compliance with the capital conservation buffer requirement, with minimums set at 7.0%, 8.5%, and 10.5% for common equity tier 1, tier 1, and total risk-based capital ratios, respectively[174]. Interest Rate Sensitivity - The sensitivity of net interest income to a 200 basis points increase is projected to be a 6.7% change in the first 12 months and 12.5% in the next 12 months[182]. - A 100 basis points increase in interest rates is expected to result in a 3.5% change in net interest income for the first 12 months and 6.2% for the next 12 months[182]. - The market value of equity (MVE) is projected to increase by 4.7% with a 200 basis points rise in interest rates[183]. - A 100 basis points increase in interest rates is expected to lead to a 3.2% increase in MVE[183]. Business Segments Overview - The Banking Business Segment focuses on online banking, mortgage, vehicle, and unsecured lending, serving consumers and small businesses nationwide[113]. - The Securities Business Segment includes clearing broker-dealer and registered investment advisor custody businesses, offering products to both independent customers and Banking Business Segment clients[114]. - The Banking Business Segment's net interest income decreased by $1.3 million, or 0.4%, compared to the same period in 2024[141]. - The Securities Business Segment's net interest income increased by $0.9 million, or 12.8%, compared to the same period in 2024[146]. Credit and Interest Rate Risk - Credit risk in the Securities Business Segment arises from potential non-performance by counterparties, customers, or issuers of securities[187]. - The company conducts periodic credit reviews and monitors position limits for each counterparty to manage credit risk[188]. - Collateral for margin loans and securities lending activities is marked to market daily, with adjustments made as necessary[188]. - The Securities Business Segment is primarily exposed to interest rate risk from interest-earning assets and funding sources, including customer and correspondent cash balances[185].

Loan Growth and Acquisitions - Axos reported a loan growth of $1,020 million from the Verdant acquisition in Q1 FY26[3] - The provision for credit losses included a "Day 1" adjustment following the Verdant acquisition, impacting the income statement[5] - Non-interest expenses related to the acquisition were incurred, affecting overall profitability[5] - The total loans and leases from the Verdant acquisition are included in the asset-based and cash flow lending categories[3] - The company aims to enhance its market position through strategic acquisitions like Verdant Commercial Capital[4] - Acquisition-related costs for the three months ended September 30, 2025, included $1.3 million associated with the Verdant acquisition[22] Financial Performance - The total assets increased to $2,283.2 million, reflecting a significant growth in the balance sheet[6] - Total assets reached $27,431 million as of September 30, 2025, up from $24,780 million in the previous quarter[15] - The company reported total deposits of $22,264 million, an increase from $20,829 million in the prior quarter[15] - Net interest income for the quarter ended September 30, 2025, was $465.736 million, an increase from $442.413 million in the previous quarter[17] - Net income for the quarter was $112.352 million, up from $110.675 million in the previous quarter, reflecting a growth of approximately 1.5%[17] - The company reported a total revenue of $2.79 billion for the quarter, reflecting a year-over-year increase of 12%[25] - The company achieved a net income of $1.96 billion, which is a 10% increase year-over-year[25] Deposits and Financial Stability - Approximately 90% of deposits are either FDIC-insured or collateralized, indicating a strong deposit base[8] - The diversified deposit gathering strategy has strengthened the company's financial stability[8] - The company has a diversified deposit gathering business with segments including consumer direct ($12,000 million) and commercial & treasury management ($4,500 million)[9] - The company reported a strong balance sheet with a debt-to-equity ratio of 0.4, indicating a solid financial position[25] Credit Quality and Losses - The allowance for credit losses (ACL) and unfunded loan commitments reserve (UCL) stood at $6.4 million[12] - Provision for credit losses was $172.55 million, compared to $149.97 million in the prior quarter, indicating a rise in expected credit losses[17] - The allowance for credit losses to total loans held for investment was 1.34%, consistent with the previous quarter, suggesting stable credit quality management[17] - Non-performing assets to total assets ratio was 0.74%, an increase from 0.79% in the previous quarter, indicating a rise in asset quality concerns[17] Growth and Market Strategy - The company is focused on expanding its market presence through innovative products and services[4] - Future guidance indicates continued growth in loan categories and overall financial performance[3] - The company plans to launch two new products in Q4 2023, aiming to capture an additional 5% market share[25] - Future guidance estimates revenue growth of 8-10% for the next quarter, driven by increased demand in key markets[25] - The company is exploring strategic acquisitions to enhance its technology capabilities and market presence[25] Efficiency and Ratios - The efficiency ratio improved to 48.32%, down from 46.87% in the previous quarter, indicating better cost management[17] - Return on average assets (ROAA) was 1.77%, consistent with the previous quarter's performance[17] - Return on average common shareholders' equity (ROE) was 15.94%, a decrease from 16.85% in the prior quarter[17] - The net interest margin was 4.75%, slightly down from 4.84% in the previous quarter, reflecting changes in interest rates[17] Shareholder Value - The book value per common share increased to $49.31 from $47.46 in the previous quarter[15] - Basic earnings per share (EPS) for the quarter was $1.99, compared to $1.96 in the previous quarter, showing a slight increase[17] - Adjusted earnings (non-GAAP) for the same period were $120.38 million, up from $111.81 million, representing an increase of 7.4% year-over-year[22] - Diluted EPS (non-GAAP) for the period was $2.07, compared to $1.90 in the previous year, indicating a growth of 9%[22] - Non-GAAP diluted earnings per share (EPS) was $2.68, up from $2.60 in the previous quarter, representing a 3% increase[25] User Base and Technology Investment - The user base expanded to 2.40 million active accounts, marking a 15% growth from the last quarter[25] - Research and development expenses increased to $50 million, reflecting a 20% increase as the company invests in new technologies[25]

Core Insights - Axos Bank is acquiring Verdant Commercial Capital for $43.5 million, enhancing its equipment leasing business and aiming for better risk-adjusted returns [1][2]. Company Overview - Verdant Commercial Capital specializes in lending to the industrial and manufacturing sectors, with approximately $1.1 billion in loans and leases [2]. - The company offers various types of equipment finance leases ranging from $50,000 to $5 million [2][3]. Strategic Rationale - The acquisition is expected to provide Axos Bank with increased scale and profitability in the equipment leasing sector [2][4]. - Axos Bank plans to leverage Verdant's specialization in vendor-based equipment leasing to cross-sell commercial deposits and floorplan lending across multiple industry verticals [4]. Financial Projections - The transaction is anticipated to be accretive to earnings per share by approximately 2% to 3% in fiscal 2026 and 5% to 6% in fiscal 2027 [4]. - Axos will pay a 10% premium on Verdant's book value at closing, with potential performance-based cash considerations for the seller if Verdant achieves a return exceeding 15% [6]. Recent Activity - This acquisition marks Axos Bank's first purchase since December 2023, following its acquisition of two loan pools from the FDIC totaling $1.25 billion [7].