Axos Financial, Inc. (AX) - 10-K Summary for Fiscal Year Ended June 30, 2026
Business Context and Reporting Period
Axos Financial, Inc. is a technology-driven, diversified financial services company operating through two primary segments: the Banking Business Segment (Axos Bank) and the Securities Business Segment (Axos Clearing, Axos Advisor Services, and Axos Invest). The company provides digital banking, clearing, custody, and investment advisory solutions. This report covers the fiscal year ended June 30, 2026.
Key Financial Metrics
| Metric | Fiscal 2026 | Fiscal 2025 | Change |
|---|---|---|---|
| Total Assets | $29.96 billion | $24.78 billion | +20.9% |
| Total Deposits | $24.57 billion | $20.83 billion | +17.9% |
| Net Interest Income | $1.25 billion | $1.13 billion | +10.6% |
| Non-Interest Income | $233.6 million | $131.1 million | +78.2% |
| Net Income (GAAP) | $490.4 million | $432.9 million | +13.3% |
| Diluted EPS (GAAP) | $8.48 | $7.43 | +14.1% |
| Adjusted EPS (Non-GAAP) | $8.74 | $7.50 | +16.5% |
| Return on Average Assets | 1.76% | 1.82% | -0.06 bps |
| Return on Average Equity | 16.32% | 17.30% | -0.98 bps |
| Net Interest Margin | 4.70% | 4.90% | -20 bps |
| Efficiency Ratio | 49.49% | 46.84% | +265 bps |
| Allowance for Credit Losses | $347.4 million | $290.0 million | +19.8% |
| Non-Performing Assets | $159.0 million (0.53% of assets) | $175.4 million (0.71% of assets) | -9.4% |
Material Changes vs. Prior Period
- Acquisitions and Growth: The company significantly expanded its footprint through the acquisition of Verdant Commercial Capital, LLC (September 2025), adding approximately $1.0 billion in loans and leases and enhancing its equipment leasing business. Additionally, the company acquired approximately $2.3 billion in consumer deposits from Jenius Bank (May 2026) and entered into an agreement to acquire $3.2 billion in IRA deposits from Capital One (expected to close in 2026).
- Revenue Drivers: Non-interest income surged 78.2% to $233.6 million, driven primarily by a $22.0 million favorable legal settlement, operating lease income from the Verdant acquisition, and commercial office complex rental income. Net interest income grew 10.6% due to higher loan balances, partially offset by lower yields on interest-earning assets.
- Expense Increases: Non-interest expenses rose 24.3% to $732.7 million. Key drivers included a $51.6 million increase in depreciation and amortization (largely due to Verdant equipment leases) and a $42.8 million increase in general and administrative expenses, which included a $21.0 million accrual for a FINRA arbitration matter and a $7.0 million accrual related to a prior acquisition dispute.
- Asset Quality: While the provision for credit losses increased to $101.1 million (up from $55.7 million), non-performing assets decreased to 0.53% of total assets. Net charge-offs were $43.3 million, primarily concentrated in the Commercial & Industrial - Non-RE portfolio.
- Capital Position: Stockholders' equity increased to $3.17 billion. The company repurchased $22.0 million of common stock during the fiscal year. Both the Company and the Bank remained "well-capitalized" under regulatory standards.
Guidance, Outlook, Risks, and Unusual Items
- Unusual Items:
- Legal Settlement: A $22.0 million favorable legal settlement was recognized in Q4 2026, boosting non-interest income.
- FINRA Arbitration: A $21.0 million accrual was recorded in Q4 2026 regarding a FINRA arbitration award against Axos Clearing. The company has filed a petition to vacate the award.
- Acquisition Costs: Acquisition-related costs and amortization of intangibles impacted earnings, particularly related to the Verdant and COR Securities transactions.
- Risk Factors:
- Interest Rate Risk: The company faces sensitivity to changes in interest rates, which impact net interest income and the value of the securities portfolio. The company maintains a positive interest rate sensitivity gap.
- Commercial Real Estate (CRE) Exposure: Approximately 34.0% of the loan portfolio is CRE, with significant concentrations in New York (52.7%) and California (9.6% of CRE). Risks include declining property values and vacancy rates, particularly in office buildings.
- Regulatory and Compliance: The company faces scrutiny from the CFPB, OCC, and FINRA. Risks include potential enforcement actions, increased capital requirements, and compliance costs related to anti-money laundering and consumer protection laws.
- Cybersecurity: As a digital-first institution, the company is exposed to cyber threats, data breaches, and reliance on third-party technology vendors.
- Outlook: Management expects to continue growing assets and deposits, leveraging the Verdant acquisition and new deposit relationships. The company plans to maintain strong capital ratios and liquidity, with significant unused borrowing capacity at the FHLB and Federal Reserve Discount Window.
Key Facts for Investor Verification
- Deposit Acquisition Status: Verify the closing date and integration progress of the $3.2 billion Capital One IRA deposit acquisition and the $2.3 billion Jenius Bank deposit acquisition.
- FINRA Arbitration Outcome: Monitor the status of the petition to vacate the $49 million FINRA arbitration award against Axos Clearing and the potential for further financial impact beyond the $21 million accrual.
- CRE Portfolio Performance: Track delinquency and charge-off trends specifically within the Commercial Real Estate portfolio, given the high concentration in New York and California and the exposure to office properties.
- Verdant Integration: Assess the realization of synergies and the performance of the equipment leasing business acquired from Verdant Commercial Capital.
- Regulatory Capital Buffers: Confirm that the company maintains capital ratios well above the "well-capitalized" thresholds, particularly as the CECL transition phase-out is complete.