Axos Financial(AX) - 2026 Q1 - Quarterly Results

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]