Axos Financial (NYSE:AX) closed fiscal 2026 with double-digit growth in net interest income, non-interest income, loans, deposits, earnings per share and book value per share, President and Chief Executive Officer Greg Garrabrants said during the company’s fourth-quarter earnings call.
For the quarter ended June 30, 2026, net income was approximately $124.9 million, up 12.9% from $110.7 million in the prior-year quarter. Diluted earnings per share rose 12.5% year over year to $2.16. Excluding a $21 million legal accrual related to its clearing business, Axos reported net income of $141.8 million and diluted EPS of $2.46, up 28% from the comparable fiscal 2025 period.
Loan Growth, Margin and Deposits
Axos’s fund finance business contributed more than $600 million of net new loan growth during the June quarter. The floor plan lending operation recorded its strongest quarter to date, with outstanding loans rising by more than $100 million. Capital call lending, real estate lender finance and equipment finance also contributed to growth, while jumbo single-family, multifamily and small-balance commercial loan balances were roughly flat sequentially.
Average loan yields were 7.4% for the quarter, unchanged from the prior quarter. Average yields on non-purchase loans were 7.2%, while purchase loans yielded 13%, including the accretion of purchase-price discounts. Garrabrants said all loans in the FDIC purchase portfolio remained current.
Net interest margin was 4.54%, compared with 4.57% in the preceding quarter. Garrabrants said the outlook calls for a “fairly stable” margin and deposit costs, although the pending transfer of Capital One deposits could result in a temporary cash overhang that would reduce reported margin without affecting net interest income.
Ending deposits totaled $24.6 billion, up 17.9% year over year. Demand, money market and savings accounts accounted for 98% of total deposits. The company completed its Jenius Bank deposit acquisition in May, adding about $2.3 billion in deposits across more than 56,000 consumer savings accounts.
Axos said it has opened more than 3,400 consumer checking accounts for former Jenius customers since onboarding the accounts. Non-interest-bearing deposits rose $439 million from the prior quarter and $788 million from a year earlier to more than $3.8 billion.
During the question-and-answer session, Garrabrants said the quarter’s growth in non-interest-bearing deposits was broad based, including approximately $150 million from clearing sweeps, about $100 million from direct commercial-and-industrial lending cross-sell, roughly $100 million from private banking and about $120 million from specialty and fund banking.
Fee Income and Expenses
Non-interest income increased 50% year over year to $61.9 million in the fourth quarter, compared with $41.3 million a year earlier. For fiscal 2026, non-interest income reached $233.6 million, up from $131.1 million in fiscal 2025.
Banking and service fees totaled $36.8 million in the quarter, compared with $9.5 million in the year-earlier period. Garrabrants identified Verdant as the principal contributor to the increase, while prepayment penalty fees rose to $4.2 million from $0.2 million. Axos Clearing also benefited from higher asset- and transaction-based advisory and broker fees.
Assets under custody or administration increased $8.4 billion year over year to $47.8 billion. Net new assets were about $85 million in the fourth quarter and $2.2 billion for the fiscal year. Ending margin balances were up 36% from the prior fiscal year.
Non-interest expense was $205.9 million, up $20 million sequentially, primarily due to the $21 million legal accrual. Excluding that accrual, expenses declined by about $1 million from the prior quarter. Chief Financial Officer Derrick Walsh said the company has seen productivity benefits from operational initiatives and greater use of artificial intelligence tools.
Walsh said the integration of Arc Technologies is expected to increase the non-interest expense run rate by approximately $1 million per month. Management said it expects a flat to improving efficiency ratio, excluding one-time items.
Credit Quality and Capital Deployment
Non-performing assets declined to $159 million at June 30 from $180 million at March 31 and $175 million a year earlier. Non-performing assets represented 53 basis points of total assets, down nine basis points from the prior quarter and 18 basis points year over year.
Net charge-offs were 25 basis points in the quarter, compared with 31 basis points in the preceding quarter. The company charged off the remaining $10 million principal balance of a syndicated C&I cash loan that had been placed on non-accrual more than a year earlier. Excluding that loan, net charge-offs were $5.9 million, or nine basis points of annualized average loans.
Axos’s allowance for credit losses was 1.34% of total loans at quarter-end and equaled 221% of non-accrual loans. Walsh said the company expects to maintain loan-loss reserves of about 1.3% to 1.4% of total loans and leases.
The company repurchased $22 million of common stock during the quarter at an average price of $87.95 per share, leaving approximately $126 million under its authorization, according to prepared remarks. Garrabrants said management remains opportunistic on repurchases and balances buybacks with growth and acquisition opportunities.
Acquisitions and Technology Strategy
Axos announced three deposit-focused acquisitions during calendar 2026: Jenius Bank in February, Capital One’s IRA savings and certificate-of-deposit portfolio in April, and Arc Technologies in July. The Capital One transaction received regulatory approval in May, and Axos said it is working toward a conversion and closing date in the third quarter.
The Arc transaction closed a few weeks before the earnings call. Garrabrants said Arc provides an AI-enabled cash-management and debt-marketplace platform aimed at businesses, including startups and middle-market clients. Axos plans initially to integrate Arc into its banking platform for its existing small-business customers.
Management said Arc could help bridge a product gap for small businesses that have outgrown basic small-business banking products but do not need the full onboarding and service model of the company’s larger treasury-management platform. Garrabrants also said the acquired technology could expand client-facing AI capabilities and potentially support further commercial-platform automation.
Axos reported a loan pipeline of approximately $2.4 billion at June 30, including $1.6 billion across commercial business lines. Walsh said remaining Jenius deposits, together with growth in consumer and commercial banking deposits, are expected to help fund planned loan expansion.
About Axos Financial (NYSE:AX)
Axos Financial, Inc (NYSE: AX) is a diversified online banking and financial services holding company headquartered in San Diego, California. The firm traces its origins to 1999 with the launch of Bank of Internet USA and rebranded as Axos Financial in December 2018 to reflect an expanded suite of digital offerings. Axos Financial operates through its wholly owned subsidiary, Axos Bank, providing a technology-driven banking platform that serves both retail and commercial clients across the United States.
Through its digital banking platform, Axos Financial delivers a range of deposit products, including checking and savings accounts, money market and certificate of deposit accounts, as well as individual retirement accounts.
