Financial Data and Key Metrics Changes - The company generated $1.6 billion of net loan growth linked quarter, with a 19 basis point increase in net interest margin, and a 23.3% year-over-year increase in earnings per share [4][6] - Net interest income was $331.6 million for the quarter, increasing by approximately $41 million linked quarter, or 14% [6][8] - Net income was approximately $128.4 million, up 22.6% from $104.7 million in the prior year's second quarter [8][24] Business Line Data and Key Metrics Changes - Total originations for investments excluding single-family warehouse lending were $5.6 billion, representing an increase of 35% linked quarter [8] - Non-interest income increased by approximately $21 million quarter-over-quarter due to higher banking service fees and broker-dealer fee income [7][25] - Verdant contributed approximately $18.9 million in non-interest income for the quarter [7][25] Market Data and Key Metrics Changes - Ending deposit balances were $23.2 billion, up 44.3% linked quarter and up 16.5% year-over-year [9][10] - Average non-interest-bearing deposits were approximately $3.5 billion, compared to $3 billion in the prior quarter [10][11] - Total assets under custody or administration increased from $43 billion to $44.4 billion [16] Company Strategy and Development Direction - The company is focused on organic growth and has identified opportunities to deepen relationships with existing vendors and accelerate growth in various verticals [13][20] - The integration of artificial intelligence across various business units is expected to enhance operational efficiency and innovation [18][19] - The company aims to maintain strong loan growth while managing credit performance and interest margins [14][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in generating loan growth in the low to mid-teens on an annual basis, supported by strong demand across various lending verticals [13][14] - The company anticipates a potential decline in net interest margin due to robust loan demand and expects to manage this through strategic growth [32][33] - Management highlighted the importance of maintaining a balance between growth and operational efficiency to sustain long-term success [56][58] Other Important Information - Non-interest expenses were approximately $184.6 million, with Verdant contributing $7.8 million in salaries and benefits expenses [24][25] - The company recorded $25 million in provisions for credit losses, reflecting robust loan growth in commercial lending categories [26] - The acquisition of Verdant is expected to contribute to EPS accretion in fiscal 2026 and 2027 [21][22] Q&A Session Summary Question: What is the outlook for net interest margin? - Management confirmed a normalized level of 4.72% and expects a 5-6 basis point decline due to robust growth [32][33] Question: What is the average remaining life of the FDIC purchase loans? - Management indicated it is approximately three to four more years [34] Question: What is the pipeline for team liftouts? - Management noted they have completed several team liftouts and are focused on developing those teams further [35][36] Question: What is the growth outlook for the loan portfolio? - Management expects balanced growth across various segments, with a strong contribution from commercial lending [42][43] Question: How will fee income be impacted by Verdant? - Management indicated that fee income from Verdant is expected to be consistent, with potential for small growth as originations increase [45][46] Question: What are the synergies expected from the Qualia partnership? - Management sees significant opportunities from the partnership, particularly in the escrow space, which could enhance deposit growth [81][82]

Financial Data and Key Metrics Changes - The company generated $1.6 billion of net loan growth quarter-over-quarter, with a 19 basis point increase in net interest margin [4][5] - Net interest income was $331.6 million for the quarter, up approximately $41 million or 14% linked quarter [5] - Net income was approximately $128.4 million, up 22.6% from $104.7 million in the prior year's second quarter [8] - Diluted earnings per share increased to $2.22, representing a 23.3% year-over-year increase [8] Business Line Data and Key Metrics Changes - Total originations for investments, excluding single-family warehouse lending, were $5.6 billion, representing a 35% increase linked quarter [8] - Non-interest income increased by approximately $21 million quarter-over-quarter, driven by higher banking service fees and broker-dealer fee income [6] - Non-interest income from Verdant was approximately $18.9 million in the quarter [6] Market Data and Key Metrics Changes - Ending deposit balances were $23.2 billion, up 44.3% linked quarter and 16.5% year-over-year [9] - Average non-interest-bearing deposits were approximately $3.5 billion, compared to $3 billion in the prior quarter [10] - Total assets under custody or administration increased from $43 billion to $44.4 billion [17] Company Strategy and Development Direction - The company aims to generate loan growth in the low to mid-teens on an annual basis, with a focus on deepening relationships with existing vendors and accelerating growth in previously constrained verticals [12][20] - The integration of artificial intelligence across various business units is expected to enhance operational efficiency and innovation [18][19] - The acquisition of Verdant is seen as a strategic fit, contributing to the company's commercial lending franchise and expected to achieve EPS accretion [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong loan growth despite anticipated declines in net interest margin due to robust loan demand [27][28] - The company does not anticipate material losses from loans currently classified as non-performing [17] - Management highlighted the importance of a balanced growth strategy across various business lines to sustain long-term performance [35] Other Important Information - Non-interest expenses were approximately $184.6 million, with Verdant contributing $7.8 million in salaries and benefits expenses [23] - Provisions for credit losses increased to $25 million, driven by robust loan growth in commercial lending categories [25] - The company is focused on maintaining salaries and benefits expense growth at 30% of revenue growth or lower on an annual basis [23] Q&A Session Summary Question: What is the outlook for net interest margin? - Management confirmed a normalized level of 4.72% and expects a 5-6 basis point decline due to robust loan demand [27][28] Question: Can you discuss the pipeline for team liftouts? - Management indicated that they have successfully completed several team liftouts and are focused on developing those teams further [29] Question: What is the growth outlook for Verdant? - Management expects Verdant to achieve growth of approximately $150 million per quarter, with strong integration and cultural fit enhancing performance [52] Question: How is the company managing deposit growth? - Management noted that deposit growth was primarily driven by specialty deposits and commercial segments, with a balanced approach across various areas [41]

Axos Q2 Fiscal 2026 Earnings Supplement January 29, 2026 NYSE: AX Loan Growth by Category $ Millions | | | | | Q2 FY26 | | Q1 FY26 | Inc (Dec) | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Single Family | | Jumbo Mortgage | $ | 3,751 | $ | 3,753 | $ | (2) | | Mortgage & | | SF Warehouse Lending | | 1,044 | | 788 | | 256 | | Warehouse | | | | | | | | | | Multifamily & | | Multifamily | | 1,469 | | 1,585 | | (116) | | Commercial | Mortgage | Small Balance Commercial | | 1,029 | | 1,209 | | (18 ...

Financial Performance - For the three months ended December 31, 2025, net income was $128.4 million, an increase of 22.6% from $104.7 million in the same period of 2024 [152]. - Adjusted earnings for the six months ended December 31, 2025, were $250.5 million, compared to $220.0 million for the same period in 2024, reflecting a growth of 13.9% [152]. - Diluted EPS for the six months ended December 31, 2025, was $4.17, up from $3.72 in the same period of 2024, representing an increase of 12.1% [152]. - For the three months ended December 31, 2025, net income was $128.4 million, or $2.22 per diluted share, compared to $104.7 million, or $1.80 per diluted share for the same period in 2024, representing a 22.8% increase in net income [156]. - For the six months ended December 31, 2025, net income reached $240.75 million, or $4.17 per diluted share, compared to $217.0 million, or $3.72 per diluted share for the same period in 2024, indicating an increase of 10.9% in net income [156]. Asset Growth - Total assets increased to $28.20 billion as of December 31, 2025, up from $24.78 billion as of June 30, 2025, reflecting a growth of 9.1% [154]. - Loans, net of allowance for credit losses, rose to $24.27 billion as of December 31, 2025, compared to $21.05 billion as of June 30, 2025, marking an increase of 15.4% [154]. - Total available-for-sale securities increased to $811.1 million as of December 31, 2025, compared to $66.0 million at June 30, 2025, driven by significant purchases during the period [195]. - Total deposits increased by $2.4 billion, or 11.5%, to $23.2 billion at December 31, 2025, with significant increases in interest-bearing demand and savings deposits [196]. - Stockholders' equity rose by $249.4 million to $2,930.1 million at December 31, 2025, driven by net income of $240.7 million for the six months ended December 31, 2025 [198]. Income and Expenses - Net interest income for the three months ended December 31, 2025, was $331.71 million, up from $280.10 million for the same period in 2024, representing an increase of 18.4% [155]. - Non-interest income for the three months ended December 31, 2025, was $53.38 million, compared to $27.80 million for the same period in 2024, showing a significant increase of 92.5% [155]. - Total non-interest expense increased by $39.3 million, or 27.0%, for the three months ended December 31, 2025, primarily due to higher salaries and related costs, depreciation, and general administrative expenses [175]. - Non-interest income for the six months ended December 31, 2025, increased by $29.3 million, or 52.0%, compared to the same period in 2024, reflecting strong performance in various income streams [173]. Efficiency and Profitability - The efficiency ratio for the three months ended December 31, 2025, was 47.93%, compared to 47.20% for the same period in 2024, indicating a slight decline in operational efficiency [155]. - The return on average common stockholders' equity for the three months ended December 31, 2025, was 17.44%, up from 16.97% for the same period in 2024, reflecting improved profitability [155]. - The return on average assets for the Banking Business Segment improved to 2.07% for the three months ended December 31, 2025, compared to 1.87% for the same period in 2024 [185]. Regulatory Compliance - The company is subject to supervision by the Federal Reserve and other regulatory bodies, ensuring compliance with financial regulations [140][141]. - The Company and Bank met all capital adequacy requirements as of December 31, 2025, and were classified as "well capitalized" under regulatory standards [211]. Interest Rate Sensitivity - The net interest rate sensitivity gap as a percentage of total interest-earning assets was 20.31% [218]. - In a rising interest rate environment, a positive gap allows the institution to invest in higher yielding assets, with a projected increase in net interest income of 8.3% for the first 12 months if rates rise by 200 basis points [220]. - Conversely, if interest rates decrease by 200 basis points, net interest income is expected to decline by 0.3% in the first 12 months [220]. Acquisition and Business Segments - The company completed the acquisition of Verdant Commercial Capital, LLC for $1.0 billion, enhancing its equipment leasing business and acquiring approximately $1.0 billion of loans and leases [143]. - The Banking Business Segment focuses on providing a wide range of banking services, including online banking and various lending products to consumers and small businesses [146]. - The Securities Business Segment includes clearing broker-dealer and registered investment advisor custody services, contributing to the company's diversified financial services [147].

Loan Performance - Total loans outstanding increased to $24,776 million in Q2 FY26, up from $23,142 million in Q1 FY26, representing a growth of 7.05%[4] - Non-accrual loans totaled $152 million, representing 0.61% of total loans outstanding as of December 31, 2025, a decrease from 0.74% in September 2025[12] - The single-family mortgage segment reported non-accrual loans of $56 million, or 1.17% of loans outstanding, down from 1.50% in the previous quarter[12] - The commercial real estate segment showed non-accrual loans of $22 million, or 0.26% of loans outstanding, reflecting improved credit quality[12] - The multifamily and commercial mortgage segment had non-accrual loans of $6 million, or 0.24% of loans outstanding, indicating stable performance[12] - The allowance for credit losses increased to $327,043 thousand, up from $307,431 thousand, indicating a rise of 6.0%[15] - The provision for credit losses was $1.2 million, indicating a cautious approach to potential loan defaults[6] - The allowance for credit losses to total loans held for investment was 1.33% in Q1 2025, consistent with 1.34% in Q4 2024[17] Financial Performance - The net interest income for Verdant Commercial Capital was $11.2 million for the three months ended December 31, 2025, with total non-interest income of $18.9 million[6] - Net income for Q1 2025 was $128,397 thousand, up from $112,352 thousand in Q4 2024, indicating a growth of 14.0%[17] - Net income for the quarter ended December 31, 2025, was $128.4 million, an increase from $112.4 million in the previous quarter[19] - Adjusted earnings for the same period were $130.2 million, compared to $120.4 million in the prior quarter, reflecting a growth of approximately 6.8%[19] - Net interest income after provision for credit losses was $306,709 thousand for Q1 2025, up from $273,795 thousand in Q4 2024, reflecting a growth of 12.0%[17] - Non-interest income increased to $53,378 thousand in Q1 2025, compared to $32,340 thousand in Q4 2024, marking a significant rise of 65.0%[17] Asset and Equity Growth - Total assets increased to $28,201,406 thousand as of December 31, 2025, up from $27,431,817 thousand in the previous quarter, representing a growth of 2.8%[15] - Total stockholders' equity increased to $2,930,092 thousand, up from $2,793,121 thousand, marking a growth of 4.9%[15] - Common stockholders' equity rose to $2.93 billion, up from $2.79 billion in the prior quarter, reflecting a growth of 5.0%[19] - Tangible common stockholders' equity (Non-GAAP) reached $2,708,542 thousand, compared to $2,561,131 thousand in the prior quarter, reflecting a significant increase[20] - Book value per common share improved to $51.70, a 4.8% increase from $49.31 in the previous quarter[15] - Tangible book value per common share (Non-GAAP) rose to $47.79, a 5.8% increase from $45.21 in the previous quarter[15] Operational Efficiency - The efficiency ratio for Q1 2025 was 47.93%, slightly improved from 48.32% in Q4 2024[17] - The return on average assets improved to 1.83% in Q1 2025, compared to 1.77% in Q4 2024[17] - The net interest margin for the banking business segment was 5.02% in Q1 2025, up from 4.80% in Q4 2024[17] Strategic Focus - The company continues to enhance its team and expand geographically, focusing on cross-selling banking and securities services[8] - The company plans to continue focusing on core business operations while managing potential losses effectively[19] - The company emphasized the importance of non-GAAP financial measures in providing a clearer picture of its operating performance[19] Other Financial Metrics - Interest and dividend income for Q1 2025 reached $513,845 thousand, an increase from $465,736 thousand in Q4 2024, representing a growth of 6.0%[17] - Loan originations for sale increased to $61,009 thousand in Q1 2025, compared to $47,122 thousand in Q4 2024, a growth of 29.9%[17] - Non-performing assets to total assets decreased to 0.56% in Q1 2025 from 0.64% in Q4 2024, indicating improved asset quality[17] - The company incurred acquisition-related costs of $2.4 million during the quarter, which impacted net income[19] - The company reported a provision for credit losses of $7.8 million in the quarter, which was not present in the previous quarter[19] - Income taxes for the quarter were reported at $(649) thousand, a decrease from $(2,681) thousand in the previous quarter, suggesting improved tax efficiency[20] - Goodwill and intangible assets decreased to $196,119 thousand from $205,747 thousand in the previous quarter, indicating potential asset optimization[20] - The company reported other costs of $(1,879) thousand, which remained consistent with previous quarters, suggesting stable operational expenses[20]

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Axos Financial FY Conference Summary Company Overview - **Company**: Axos Financial (NYSE:AX) - **History**: Founded as a digitally enabled consumer bank, evolved into a full-service financial institution with three main segments: commercial banking, treasury management, and securities business [4][5] - **Assets**: Approximately $26-27 billion in bank assets and nearly $50 billion in assets under custody [5] Core Business Segments - **Commercial Bank**: Offers nationwide lending services across various industry-focused verticals - **Treasury Management**: Provides a full suite of treasury management and banking products - **Securities Business**: Includes custody, RIA custody, and clearing services for introducing broker-dealers - **Consumer Digital Bank**: Offers loans and deposits, with a significant single-family mortgage division [4][5] Growth and Performance - **Loan and Deposit Growth**: Achieved organic growth above industry averages while maintaining low credit losses [6] - **Sustainability of Growth**: The company raised its loan growth guidance, indicating confidence in sustaining growth due to business diversity [7][11] - **Diversity of Lending Platform**: The ability to shift focus among various lending verticals allows for better risk-adjusted returns [7][8] Market Dynamics - **Interest Rate Environment**: The company has adapted to changing interest rates, with a more positively sloped yield curve improving loan origination conditions [12][20] - **Competitive Landscape**: Fewer competitors in certain lending areas have allowed Axos to regain market share [12][13] M&A Activity - **Verdant Acquisition**: The acquisition of Verdant was strategic due to cultural fit and the potential for immediate profitability through improved funding [14][15] - **Future M&A Focus**: Looking for national lending businesses with good risk-adjusted returns and entrepreneurial teams [15][16] Fee Income and Revenue Streams - **Impact of Verdant**: Expected to significantly boost fee income through various operating leases [27][30] - **Mortgage Banking Outlook**: Anticipated improvement in mortgage banking fees with potential rate decreases [28][29] Technology and AI Integration - **AI Utilization**: AI is being leveraged in software development, internal operations, and data management, leading to increased efficiency and faster product development [31][34] - **Product Development**: Plans to roll out new products, including crypto trading, and enhance existing platforms for better integration and user experience [41][44] Challenges and Opportunities - **Regulatory Environment**: Acknowledgment of increasing competition from new charters and fintechs, but a positive outlook on the regulatory landscape [48] - **Credit Quality**: Overall positive sentiment regarding credit quality, particularly in real estate [48] Conclusion - **Outlook**: The company expresses optimism for the future, driven by advancements in AI, successful integration of Verdant, and a favorable interest rate environment [49]

Core Viewpoint - Axos Financial, Inc. will host a conference call to discuss its financial results for the second quarter of fiscal year 2026, which ended on December 31, 2025 [1] Group 1 - The conference call is scheduled for Thursday, January 29, 2026, at 5:00 PM ET (2:00 PM PT) [1] - Executive management will provide insights into the Company's second quarter fiscal 2026 results during the call [1] - The Company plans to distribute its earnings report prior to the conference call [1]

Core Points - The Axos ONE® Checking account has a base APY of 0.00% and the Axos ONE® Savings account has a base APY of up to 1.00% [2] - Promotional APY is available for both accounts if specific criteria are met during the Qualification Period, which runs from the first business day of the month to the 25th [3] - To qualify for the promotional APY, the Axos ONE® Checking account must meet either of two sets of requirements related to direct deposits and average daily balance [7] Qualification Criteria - Option 1 requires monthly qualifying direct deposits of at least $1,500 and an average daily balance of at least $1,500 [7] - Option 2 requires monthly qualifying deposits of at least $5,000 and an average daily balance of at least $5,000 [7] - If the requirements are met, the Axos ONE® Checking account earns a promotional rate of 0.51% APY and the Axos ONE® Savings account can earn up to 4.31% APY for that statement cycle [7] Account Status - Both accounts must be open and active on the 25th of the month and on the date interest is paid to qualify for the promotional APY [6] - If either account closes during the Qualification Period, neither account will be eligible for the promotional APY for that cycle [6] Deposit Types - Qualifying deposits include ACH transfers, inbound wire transfers, and check deposits, while internal transfers and interest payments do not qualify [5][4]

Group 1 - The meeting is chaired by Lis Wigmore, who is a Trustee and the Chair of the Special Committee of the Board of Trustees [2] - The meeting is hybrid, allowing both in-person and virtual participation through the Lumi Connect platform, enabling registered unitholders to vote and ask questions [3] - The trustees present at the meeting include Heather-Anne Irwin, Samir Manji, Jacqueline Moss, Ben Rodney, Mike Shaikh, and Lis Wigmore, along with senior management team members [4]