The Annual Percentage Yield (APY) is accurate as of 10/01/2025. The base and promotional interest rate and corresponding APY for Axos ONE® Checking is variable and is set at our discretion. The base and promotional interest rate and corresponding APY for Axos ONE® Savings is variable and is set at our discretion. Axos ONE® Savings is a tiered variable rate account. Axos ONE® Checking is a non-tiered variable rate account. Interest rates may change as often as daily without prior notice. Fees may reduce earn ...

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].

Core Viewpoint - Axos Financial, Inc. has announced a public offering of $200 million in subordinated notes with a fixed-to-floating interest rate structure, indicating a strategic move to raise capital for its operations [1] Group 1: Company Overview - Axos Financial, Inc. is the holding company for Axos Bank, Axos Clearing LLC, and Axos Invest, Inc. [1] - The company is publicly traded on the NYSE under the ticker symbol AX [1] Group 2: Financial Details - The public offering consists of $200 million in aggregate principal amount of 7.00% Fixed-to-Floating Rate Subordinated Notes due in 2035 [1] - The Notes will have an interest rate of 7.00% per year, with interest payments made semi-annually on April 1 and October 1, starting from April 1, 2024 [1]