Axos Financial (NYSE: AX) grows loans and closes Verdant acquisition
Filing Impact
Filing Sentiment
Form Type
10-Q
Rhea-AI Filing Summary
Axos Financial, Inc. reported strong quarterly growth for the three months ended December 31, 2025. Net income rose to
Total assets increased to
Axos completed the all-cash acquisition of Verdant Commercial Capital, LLC on September 30, 2025. The transaction brought in about
Positive
- Double-digit earnings growth: Quarterly net income increased to
$128.4 million from$104.7 million , and diluted EPS rose to$2.22 from$1.80 , indicating stronger profitability. - Strategic Verdant acquisition: Closing the Verdant Commercial Capital, LLC deal added about
$1.2 billion of loans and leases and$30.1 million of net revenue, expanding Axos’s equipment finance capabilities.
Negative
- None.
Insights
Axos posts double-digit earnings growth and adds scale through the Verdant acquisition.
Axos Financial delivered solid operating momentum in the quarter. Net interest income rose to
Loans held for investment reached
The acquisition of Verdant Commercial Capital, LLC is a notable strategic move. Axos assumed approximately
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended December 31, 2025
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
Commission file number: 001-37709
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) (zip code)
Registrant’s telephone number, including area code: (858 ) 649-2218
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
__________________________________________________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | |||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
The number of shares outstanding of the registrant’s common stock on the last practicable date: 56,678,249 shares of common stock, $0.01 par value per share, as of January 16, 2026.
Table of Contents
AXOS FINANCIAL, INC.
INDEX
| Page | ||||||||
PART I – FINANCIAL INFORMATION | 1 | |||||||
ITEM 1. FINANCIAL STATEMENTS | 1 | |||||||
Condensed Consolidated Balance Sheets (unaudited) | 1 | |||||||
Condensed Consolidated Statements of Income (unaudited) | 2 | |||||||
Condensed Consolidated Statements of Comprehensive Income (unaudited) | 3 | |||||||
Condensed Consolidated Statements of Stockholders’ Equity (unaudited) | 4 | |||||||
Condensed Consolidated Statements of Cash Flows (unaudited) | 6 | |||||||
Notes to Condensed Consolidated Financial Statements (unaudited) | 8 | |||||||
1. Summary of Significant Accounting Policies | 8 | |||||||
2. Acquisitions | 10 | |||||||
3. Fair Value | 13 | |||||||
4. Available-for-Sale Securities | 19 | |||||||
5. Loans & Allowance for Credit Losses | 21 | |||||||
6. Derivatives | 27 | |||||||
7. Offsetting of Derivatives and Securities Financing Agreements | 29 | |||||||
8. Stockholders’ Equity and Stock-Based Compensation | 30 | |||||||
9. Earnings per Common Share | 32 | |||||||
10. Commitments and Contingencies | 32 | |||||||
11. Segment Reporting and Revenue Information | 34 | |||||||
12. Borrowings, Subordinated Notes and Debentures | 36 | |||||||
13. Other Assets | 36 | |||||||
14. Variable Interest Entities | 37 | |||||||
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 39 | |||||||
USE OF NON-GAAP MEASURES | 41 | |||||||
SELECTED FINANCIAL INFORMATION | 42 | |||||||
RESULTS OF OPERATIONS | 44 | |||||||
SEGMENT RESULTS | 48 | |||||||
FINANCIAL CONDITION | 50 | |||||||
LIQUIDITY | 53 | |||||||
CAPITAL RESOURCES AND REQUIREMENTS | 54 | |||||||
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 56 | |||||||
ITEM 4. CONTROLS AND PROCEDURES | 58 | |||||||
PART II – OTHER INFORMATION | 59 | |||||||
ITEM 1. LEGAL PROCEEDINGS | 59 | |||||||
ITEM 1A. RISK FACTORS | 59 | |||||||
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 59 | |||||||
ITEM 3. DEFAULTS UPON SENIOR SECURITIES | 59 | |||||||
ITEM 4. MINE SAFETY DISCLOSURES | 59 | |||||||
ITEM 5. OTHER INFORMATION | 59 | |||||||
ITEM 6. EXHIBITS | 60 | |||||||
SIGNATURES | 61 | |||||||
Table of Contents
PART I – FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS
AXOS FINANCIAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except par value) | December 31, 2025 | June 30, 2025 | |||||||||
| ASSETS | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Total cash, cash equivalents and restricted cash | |||||||||||
Trading securities | |||||||||||
Available-for-sale securities | |||||||||||
| Stock of regulatory agencies | |||||||||||
| Loans held for sale, carried at fair value | |||||||||||
Loans—net of allowance for credit losses of $ | |||||||||||
Servicing rights, carried at fair value | |||||||||||
| Securities borrowed | |||||||||||
| Customer, broker-dealer and clearing receivables | |||||||||||
| Goodwill and other intangible assets—net | |||||||||||
| Other assets | |||||||||||
| TOTAL ASSETS | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Deposits: | |||||||||||
| Non-interest-bearing | $ | $ | |||||||||
| Interest bearing | |||||||||||
| Total deposits | |||||||||||
| Advances from the Federal Home Loan Bank | |||||||||||
Secured financings | |||||||||||
Borrowings, subordinated notes and debentures | |||||||||||
| Securities loaned | |||||||||||
| Customer, broker-dealer and clearing payables | |||||||||||
| Accounts payable and other liabilities | |||||||||||
| Total liabilities | |||||||||||
COMMITMENTS AND CONTINGENCIES (Note 10) | |||||||||||
| STOCKHOLDERS’ EQUITY: | |||||||||||
Common stock—$ | |||||||||||
| Additional paid-in capital | |||||||||||
Accumulated other comprehensive income (loss)—net of income tax | |||||||||||
| Retained earnings | |||||||||||
Treasury stock, at cost; | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | |||||||||
See accompanying notes to the condensed consolidated financial statements.
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AXOS FINANCIAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||
| (Dollars in thousands, except earnings per common share) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| INTEREST AND DIVIDEND INCOME: | |||||||||||||||||||||||
| Loans, including fees | $ | $ | $ | $ | |||||||||||||||||||
| Securities borrowed and customer receivables | |||||||||||||||||||||||
Investments and other | |||||||||||||||||||||||
| Total interest and dividend income | |||||||||||||||||||||||
| INTEREST EXPENSE: | |||||||||||||||||||||||
| Deposits | |||||||||||||||||||||||
| Advances from the Federal Home Loan Bank | |||||||||||||||||||||||
| Securities loaned | |||||||||||||||||||||||
| Other borrowings | |||||||||||||||||||||||
| Total interest expense | |||||||||||||||||||||||
| Net interest income | |||||||||||||||||||||||
| Provision for credit losses | |||||||||||||||||||||||
| Net interest income, after provision for credit losses | |||||||||||||||||||||||
| NON-INTEREST INCOME: | |||||||||||||||||||||||
| Broker-dealer fee income | |||||||||||||||||||||||
| Advisory fee income | |||||||||||||||||||||||
| Banking and service fees | |||||||||||||||||||||||
Mortgage banking and servicing rights income | ( | ( | |||||||||||||||||||||
| Prepayment penalty fee income | |||||||||||||||||||||||
| Total non-interest income | |||||||||||||||||||||||
| NON-INTEREST EXPENSE: | |||||||||||||||||||||||
| Salaries and related costs | |||||||||||||||||||||||
Data and operational processing | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Advertising and promotional | |||||||||||||||||||||||
| Professional services | |||||||||||||||||||||||
| Occupancy and equipment | |||||||||||||||||||||||
| FDIC and regulatory fees | |||||||||||||||||||||||
| Broker-dealer clearing charges | |||||||||||||||||||||||
| General and administrative expense | |||||||||||||||||||||||
| Total non-interest expense | |||||||||||||||||||||||
| INCOME BEFORE INCOME TAXES | |||||||||||||||||||||||
| INCOME TAXES | |||||||||||||||||||||||
| NET INCOME | $ | $ | $ | $ | |||||||||||||||||||
| Basic earnings per common share | $ | $ | $ | $ | |||||||||||||||||||
| Diluted earnings per common share | $ | $ | $ | $ | |||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
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AXOS FINANCIAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||
| (Dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| NET INCOME | $ | $ | $ | $ | |||||||||||||||||||
| Net unrealized gain (loss) from available-for-sale securities, net of income tax | ( | ||||||||||||||||||||||
| Net unrealized gain (loss) on cash flow hedges, net of income tax | ( | ||||||||||||||||||||||
| Other comprehensive income (loss) | |||||||||||||||||||||||
| COMPREHENSIVE INCOME | $ | $ | $ | $ | |||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
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AXOS FINANCIAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
| For the Three Months Ended December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss), Net of Income Tax | Retained Earnings | Treasury Stock | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
| Number of Shares | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Issued | Treasury | Outstanding | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE—September 30, 2025 | ( | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation activity | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE—December 31, 2025 | ( | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||
| For the Six Months Ended December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss), Net of Income Tax | Retained Earnings | Treasury Stock | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
| Number of Shares | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Issued | Treasury | Outstanding | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE—June 30, 2025 | ( | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation activity | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE—December 31, 2025 | ( | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||
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AXOS FINANCIAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
| For the Three Months Ended December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss), Net of Income Tax | Retained Earnings | Treasury Stock | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
| Number of Shares | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Issued | Treasury | Outstanding | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE—September 30, 2024 | ( | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation activity | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE—December 31, 2024 | ( | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||
| For the Six Months Ended December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss), Net of Income Tax | Retained Earnings | Treasury Stock | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
| Number of Shares | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Issued | Treasury | Outstanding | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE—June 30, 2024 | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation activity | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE—December 31, 2024 | ( | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
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AXOS FINANCIAL, INC. | |||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
| (Unaudited) | |||||||||||
| Six Months Ended | |||||||||||
| December 31, | |||||||||||
| (Dollars in thousands) | 2025 | 2024 | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Other accretion and amortization | ( | ( | |||||||||
| Stock-based compensation expense | |||||||||||
| Trading activity | ( | ||||||||||
| Provision for credit losses | |||||||||||
| Deferred income taxes | ( | ||||||||||
| Origination of loans held for sale | ( | ( | |||||||||
| Unrealized and realized gains on loans held for sale | ( | ( | |||||||||
| Proceeds from sale of loans held for sale | |||||||||||
| Change in the fair value of servicing rights | |||||||||||
| Gain on repurchase of subordinated notes | ( | ||||||||||
| Net change in assets and liabilities which provide (use) cash: | |||||||||||
| Securities borrowed | ( | ||||||||||
| Customer, broker-dealer and clearing receivables | ( | ( | |||||||||
| Other assets | ( | ||||||||||
| Securities loaned | ( | ||||||||||
| Customer, broker-dealer and clearing payables | |||||||||||
| Accounts payable and other liabilities | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Purchases of available-for-sale securities | ( | ( | |||||||||
| Proceeds from sale and repayment of available-for-sale securities | |||||||||||
| Purchase of stock of regulatory agencies | ( | ||||||||||
| Net change in loans held for investment | ( | ( | |||||||||
| Proceeds from sale of loans originally classified as held for investment | |||||||||||
| Proceeds from sale of other real estate owned and repossessed assets | |||||||||||
| Purchase of BOLI policies | ( | ||||||||||
| Acquisition of business, net of cash acquired | ( | ||||||||||
| Purchases of furniture, equipment, software and intangibles | ( | ( | |||||||||
| Purchases of other investments | ( | ( | |||||||||
| Distributions received from other investments | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
| Net increase in deposits | |||||||||||
| Repayments of the Federal Home Loan Bank term advances | ( | ||||||||||
| Net (repayment) proceeds of other borrowings | |||||||||||
| Redemption of subordinated notes | ( | ||||||||||
| Payments related to settlement of restricted stock units | ( | ( | |||||||||
| Repayment of secured financings | ( | ||||||||||
| Repurchase of subordinated notes | ( | ||||||||||
| Payment of debt issuance costs | ( | ||||||||||
| Proceeds from issuance of subordinated notes | |||||||||||
| Net cash provided by financing activities | |||||||||||
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AXOS FINANCIAL, INC. | |||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
| (Unaudited) | |||||||||||
| Six Months Ended | |||||||||||
| December 31, | |||||||||||
| (Dollars in thousands) | 2025 | 2024 | |||||||||
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | ( | ||||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of year | $ | $ | |||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—End of period | $ | $ | |||||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||||||
| Interest paid on interest-bearing liabilities | |||||||||||
| Income taxes paid | |||||||||||
| Transfers to other real estate and repossessed vehicles from loans held for investment | |||||||||||
| Transfers from loans held for investment to loans held for sale | |||||||||||
| Transfers from loans held for sale to loans held for investment | |||||||||||
| Operating lease liabilities from obtaining right of use assets | |||||||||||
| Non-cash Contingent Consideration | |||||||||||
See accompanying notes to the condensed consolidated financial statements.
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AXOS FINANCIAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTH PERIODS ENDED DECEMBER 31, 2025 AND 2024
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The condensed consolidated financial statements include the accounts of Axos Financial, Inc. and its wholly owned subsidiaries (“Axos” or the “Company”). Axos Bank (the “Bank”), its wholly owned subsidiaries, the activities of three lending-related trust entities and certain other lending activity constitute the Banking Business Segment, and Axos Securities, LLC and its wholly owned subsidiaries constitute the Securities Business Segment. All significant intercompany balances and transactions have been eliminated in consolidation. The Notes to the Condensed Consolidated Financial Statements are an integral part of the Company’s financial statements. On December 7, 2023, the Company acquired from the Federal Deposit Insurance Corporation (“FDIC”) two loan portfolios with an aggregate unpaid principal balance of $1.3 billion at a 37 % discount to par. For additional information on the “FDIC Loan Purchase,” see Note 2—“Acquisitions” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (“2025 Form 10-K”) filed with the Securities and Exchange Commission (“SEC”).
The accompanying interim condensed consolidated financial statements, presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), are unaudited and reflect all adjustments which, in the opinion of management, are necessary for a fair statement of financial condition and results of operations for the interim periods. All adjustments are of a normal and recurring nature. Results for the three and six months ended December 31, 2025 are not necessarily indicative of results that may be expected for any other interim period or for the year as a whole. Certain information and note disclosures normally included in the audited annual financial statements prepared in accordance with GAAP have been condensed or not repeated herein pursuant to the rules and regulations of the SEC with respect to interim financial reporting. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended June 30, 2025 included in the 2025 Form 10-K.
Significant Accounting Policies
For further information regarding the Company’s significant accounting policies, see Note 1—“Organizations and Summary of Significant Accounting Policies” in the 2025 Form 10-K. During the six months ended December 31, 2025, there were no significant updates to the Company’s significant accounting policies, other than as noted below and the adoption of the accounting standards noted herein.
Derivatives. Commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans are accounted for as freestanding derivatives. The Company enters into forward commitments for the future delivery of mortgage loans when interest rate locks are entered into, in order to economically hedge the change in interest rates resulting from its commitments to fund the loans. Changes in the fair values of these derivatives are included in “Mortgage banking and servicing rights income” on the Condensed Consolidated Statements of Income.
The Company makes markets in interest rate swap and cap derivatives to facilitate customer demand. The Company enters into offsetting derivative transactions to offset its interest rate risk associated with this customer transaction activity. The Company acquired as part of the FDIC Loan Purchase certain customer-facing interest rate derivatives and related market-facing derivatives which offset the Company’s interest rate risk. For additional information on these derivatives see Note 2— “Acquisitions” and Note 6— “Derivatives.” Changes in the fair values of these derivatives, and related fees, are included in “Banking and service fees” on the Condensed Consolidated Statements of Income.
Additionally, the Company applies hedge accounting to certain derivative instruments for interest rate risk management purposes. The Company uses such derivative instruments to hedge the fair value of certain fixed-rate available-for-sale investment securities and forecasted variable cash flows from floating-rate deposits. For designated cash flow hedges, changes in the fair value of the derivatives are initially recorded in other comprehensive income (“OCI”) and subsequently recognized in earnings once the hedged item affects earnings. Derivative gains and losses reclassified to earnings are recognized in interest expense on the Condensed Consolidated Statements of Income, consistent with the hedged floating-rate deposits. For designated fair value hedges, the change in the fair value of the derivative, offset by the change in the fair value attributable to the change in the associated benchmark interest rate of the hedged asset, is recognized in earnings each period in “Interest and dividend income—Investments and other” on the Condensed Consolidated Statements of Income.
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Hedge accounting relationships, including the associated risk management objective and strategy, are formally documented at inception. Additionally, the effectiveness of hedge accounting relationships is monitored throughout the duration of the hedge period. For cash flow hedges, hedge accounting treatment is discontinued either when the derivative is terminated, when it is determined that a derivative is not expected to be, or has ceased to be, effective as a hedge or if the Company removes the cash flow hedge designation. If a hedge accounting relationship is terminated, the amount in accumulated other comprehensive income (“AOCI”) is recognized in earnings when the cash flows that were originally hedged affect earnings. However, if the original hedged transaction is deemed probable not to occur, the corresponding amount in recorded AOCI is immediately recognized in income. For fair value hedges, hedge accounting treatment is discontinued when the criteria to be eligible for fair value hedge accounting is no longer satisfied, the derivative is terminated or if the Company removes the fair value hedge designation. If a fair value hedge accounting relationship is discontinued, any basis adjustment remaining on the hedged item is amortized to interest income or interest expense over the remaining life of the hedged item using the level-yield interest method.
The Company also enters into foreign exchange derivatives in order to economically hedge its foreign exchange exposure to certain loans denominated in non-U.S. dollar currencies. Changes in the fair values of these derivatives, and related fees, are included in “Banking and service fees” on the Condensed Consolidated Statements of Income.
Derivative assets and liabilities are not subject to any counterparty netting and are presented at fair value on a gross basis in “Other assets” and “Accounts payable and other liabilities”, respectively, in the Condensed Consolidated Balance Sheets. Cash flows related to derivative assets and liabilities are presented in “Net change in assets and liabilities which provide (use) cash-Other Assets” and “Net change in assets and liabilities which provide (use) cash-Accounts payable and other liabilities,” respectively, in the Condensed Consolidated Statements of Cash Flows.
In connection with its derivative transactions, the Company may receive or pledge cash collateral with its counterparties or central clearinghouses to satisfy initial, maintenance and/or variation margin requirements. Any required margin posted by the Company, other than variation margin on centrally-cleared derivatives, is included in “Restricted cash” in the Condensed Consolidated Balance Sheets. Variation margin on centrally-cleared derivatives is considered settlement of the derivative transaction, and as such, is presented net against the centrally-cleared derivative asset or liability within “Other assets” or “Accounts payable and other liabilities,” respectively, in the Condensed Consolidated Balance Sheets.
New Accounting Standards
Recently Adopted Accounting Standards
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, which requires further granularity on the disclosure of income taxes, including:
•Certain prescribed line items in the income tax rate reconciliation presented both in dollar and percentage terms;
•Income taxes paid, income before income taxes and income taxes disaggregated by federal, state and foreign taxes; and
•Further disaggregation of income taxes paid by any individual jurisdiction equal to or exceeding five percent of total income taxes paid.
The Company adopted this standard as of July 1, 2025 and the required annual-only disclosures will be provided in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2026. There was no impact on the Company’s financial condition or results of operations upon adoption.
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Accounting Standards Issued But Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, which requires disaggregation of operating expenses by relevant expense caption on the statement of income into prescribed categories, including employee compensation, depreciation and intangible asset amortization. The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company does not expect any significant impact on its financial condition or results of operations upon adoption.
In September 2025, the FASB issued ASU 2025‑06, which amends certain aspects of the accounting for and disclosure of internal-use software costs. Among other things, the standard requires capitalization only after management authorizes and commits to funding a project and it is probable the project will be completed and used as intended. The standard is effective for all entities for annual reporting periods beginning after December 15, 2027, and for interim periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating how it plans to adopt this accounting standard from the three available adoption alternatives provided in the ASU.
In November 2025, the FASB issued ASU 2025‑08, which amends existing guidance for certain purchased seasoned loans which are not considered purchased credit deteriorated (“PCD”) loans. Following adoption of this guidance, purchased loans meeting certain criteria at acquisition are recognized at their purchase price plus an allowance for expected credit losses, in line with the existing accounting treatment of PCD loans. The standard is effective for all entities for annual reporting periods beginning after December 15, 2026, and for interim periods within those annual reporting periods, with early adoption permitted in an interim or annual reporting period. The Company does not expect any significant impact on its financial condition or results of operations upon adoption.
In November 2025, the FASB issued ASU 2025‑09, which amends certain hedge accounting guidance. Among other changes, this ASU permits groups of forecasted transactions in a designated cash flow hedging relationship using a single derivative to share similar risk characteristics versus the same risk characteristics as required under existing guidance. The standard is effective for all entities for annual reporting periods beginning after December 15, 2026, and for interim periods within those annual reporting periods. This standard is to be applied on a prospective basis for all hedging relationships and early adoption is permitted. The Company does not expect any significant impact on its financial condition or results of operations upon adoption.
In December 2025, the FASB issued ASU 2025‑11, which clarifies interim disclosure requirements, including providing a comprehensive list of interim disclosure requirements under U.S. GAAP and a disclosure principle that requires entities to disclose events since the last annual reporting period that have a material impact on the entity. The standard is effective for interim periods within annual reporting periods beginning after December 15, 2027. The Company does not expect any significant impact on its financial condition or results of operations upon adoption.
In December 2025, the FASB issued ASU 2025-12, which clarifies or otherwise modifies U.S. GAAP in a number of areas. The standard is effective for all entities for annual reporting periods beginning after December 15, 2026, and for interim periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period and adoption can be applied on prospectively or retrospectively, as well as on an issue-by-issue basis. The Company does not expect any significant impact on its financial condition or results of operations upon adoption.
2. ACQUISITIONS
Verdant Commercial Capital, LLC. On September 30, 2025, the Company completed the acquisition of 100% of the membership interests in Verdant Commercial Capital, LLC (“Verdant”) in an all-cash transaction, which increases the Company’s scale and enhances the Company’s existing equipment leasing business.
The following table presents the purchase price for the acquisition of Verdant as of September 30, 2025, inclusive of certain purchase price adjustments identified during the measurement period:
| (Dollars in thousands) | |||||
Adjusted Verdant book value1 | $ | ||||
| Purchase price premium paid by Axos | |||||
| PURCHASE PRICE | $ | ||||
1 Represents September 30, 2025 Verdant book value adjusted for certain items, including provision for credit losses and debt prepayment fees, according to the terms of the acquisition agreement.
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In the transaction, the Company acquired approximately $1.2 billion of loans and leases, including direct financing leases and equipment under operating lease arrangements. Total consideration for the transaction was approximately $566.9 million, comprising $500.0 million to settle certain debt of Verdant, cash of $36.1 million (adjusted for net purchase price adjustments identified during the measurement period), and potential performance-based cash consideration (“Contingent Consideration”), which was determined to have a fair value of $30.8 million as of September 30, 2025. This Contingent Consideration can be earned over a four-year period commencing with the date of acquisition, and the potential payment of which ranges from zero to $50.0 million based on the return on equity of Verdant. This Contingent Consideration is included in “Accounts payable and other liabilities” in the Condensed Consolidated Balance Sheet. For additional information related to the Contingent Consideration, see Note 3—“Fair Value.”
Upon acquisition, the assets and liabilities of Verdant were adjusted to their respective fair values (with the exception of PCD assets, as further discussed below) as of the closing date of the transaction, including the identifiable intangible assets acquired. Goodwill has been recorded representing the excess of the purchase price over the fair value of the net assets acquired and is expected to be fully tax-deductible. The goodwill recognized is the result of expected synergies and operational efficiencies, among other factors, and has been assigned to the Banking Business Segment. The Company’s accounting for the acquisition has not been finalized as the Company continues to evaluate the post-closing adjustment amount. As such, the Company made certain adjustments to the preliminary purchase consideration allocation during the three months ended December 31, 2025. The allocation may be further updated, if necessary, through the measurement period, which ends no later than one year from the acquisition date.
The following table provides the Verdant preliminary purchase consideration allocation as of the date of acquisition, including any purchase price adjustments identified during the measurement period:
| (Dollars in thousands) | September 30, 2025 | ||||
| ASSETS: | |||||
| Cash and cash equivalents | $ | ||||
| Restricted cash | |||||
Loans—net of allowance for credit losses of $ | |||||
Other assets1 | |||||
| Goodwill and other intangible assets—net | |||||
| TOTAL ASSETS | $ | ||||
| LIABILITIES: | |||||
| Secured financings | $ | ||||
| Accounts payable and other liabilities | |||||
| TOTAL LIABILITIES | $ | ||||
TOTAL CONSIDERATION (Including $ | $ | ||||
Amount paid to settle certain debt of Verdant, excluding $ | ( | ||||
| Contingent Consideration | ( | ||||
| PURCHASE PRICE | $ | ||||
1 Includes $212.6 million of equipment under operating lease arrangements.
The fair value estimates used in valuing certain acquired assets and liabilities are based, in part, on inputs that are unobservable. For loans, these include, but are not limited to, forecasted future cash flows and discount rates and for equipment under operating lease arrangements, cost and market valuation approaches were utilized.
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The following table details the intangible assets acquired in the acquisition:
| (Dollars in thousands) | September 30, 2025 | Weighted-Average Life (Years) | ||||||
| Vendor relationships | $ | |||||||
| Trade name | ||||||||
| Developed technologies | ||||||||
| Total intangible assets acquired | $ | |||||||
The following valuation approaches were utilized to estimate the acquisition-date fair value for the intangible assets acquired:
•Vendor relationships: Fair value was estimated with an income approach using a multi-period excess earnings method which discounts expected future cash flows, taking into account historic customer attrition rates and contributory asset charges, among other factors.
•Trade name: Fair value was estimated with an income approach using a relief-from-royalty method which considers the hypothetical royalty rate the Company would have paid if it did not own the trade name, taking into account discounted expected future cash flows, market royalty rates and expected useful life, among other factors.
•Developed technologies: Fair value was estimated with a cost approach using a replacement cost methodology, taking into account replacement costs, among other factors.
The following table summarizes the PCD loans and leases acquired in the acquisition:
| (Dollars in thousands) | September 30, 2025 | ||||
| Unpaid principal balance | $ | ||||
| Non-credit discount | ( | ||||
| Allowance for credit losses at acquisition | ( | ||||
| Purchase price allocated to PCD assets | $ | ||||
Verdant’s results are included in the Company’s consolidated results from September 30, 2025. Verdant net revenue included in Company’s Condensed Consolidated Statement of Income for the three and six months ended December 31, 2025 was $30.1 2.3 million for the three months ended December 31, 2025 (using the Company’s effective income tax rate for the period) and incurred a net loss of $3.5 million for the six months ended December 31, 2025.
The following table shows the Company and Verdant proforma combined net interest income, non-interest income and net income. The proforma financial information presented in the table below was computed by combining the historical financial information of the Company and Verdant along with the effects of the acquisition method of accounting for business combinations as though the Company acquired Verdant on July 1, 2024. Also included in the proforma financial information are certain adjustments, including $1.3 million of acquisition-related costs, as well as adjustments related to amortization expense of the intangible assets acquired in the Verdant acquisition and the elimination of the amortization expense of Verdant’s intangible assets prior to its acquisition by the Company. The proforma information does not reflect the potential benefits of cost and funding synergies, opportunities to earn additional revenues or other factors and therefore does not represent what the actual net revenues and net income would have been had the Company actually acquired Verdant as of this date.
| For the Three Months Ended December 31, | For the Six Months Ended December 31, | |||||||||||||
| (Dollars in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||
| Net interest income | ||||||||||||||
| Non-interest income | ||||||||||||||
| Net income | ||||||||||||||
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3. FAIR VALUE
The following tables set forth the Company’s financial assets and liabilities measured at fair value on a recurring basis at December 31, 2025 and June 30, 2025. Assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement:
| December 31, 2025 | |||||||||||||||||
| (Dollars in thousands) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||||
| ASSETS: | |||||||||||||||||
| Trading securities | $ | $ | $ | ||||||||||||||
| Available-for-sale securities: | |||||||||||||||||
| United States Treasury securities | |||||||||||||||||
| Agency MBS | |||||||||||||||||
| Non-Agency MBS | |||||||||||||||||
| Total—Available-for-sale securities: | $ | $ | $ | ||||||||||||||
| Loans held for sale | $ | $ | $ | ||||||||||||||
| Servicing rights | $ | $ | $ | ||||||||||||||
Other assets—Derivative instruments1 | $ | $ | $ | ||||||||||||||
| LIABILITIES: | |||||||||||||||||
| $ | $ | $ | |||||||||||||||
Accounts payable and other liabilities—Contingent Consideration | $ | $ | $ | ||||||||||||||
| June 30, 2025 | |||||||||||||||||
| (Dollars in thousands) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||||
| ASSETS: | |||||||||||||||||
| Trading securities | $ | $ | $ | ||||||||||||||
| Available-for-sale securities: | |||||||||||||||||
| Agency MBS | |||||||||||||||||
| Non-Agency MBS | |||||||||||||||||
| Municipal | |||||||||||||||||
| Total—Available-for-sale securities: | $ | $ | $ | ||||||||||||||
| Loans held for sale | $ | $ | $ | ||||||||||||||
| Servicing rights | $ | $ | $ | ||||||||||||||
Other assets—Derivative instruments1 | $ | $ | $ | ||||||||||||||
| LIABILITIES: | $ | — | |||||||||||||||
| Accounts payable and other liabilities—Derivative instruments | $ | $ | $ | ||||||||||||||
1 Other assets - Derivative instruments are presented net of $ | |||||||||||||||||
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The following section describes the valuation methodologies used by the Company to measure various financial instruments at fair value, including an indication of the level in the fair value hierarchy in which each instrument is generally classified. For additional information on the other valuation methodologies used by the Company, see Note 3—“Fair Value” in the 2025 Form 10-K.
Securities—trading and available-for-sale. During the three months ended December 31, 2025, the Company purchased United States Treasury securities that it classified as available‑for‑sale. These securities are measured at fair value using quoted prices in active markets for similar assets and are classified under Level 2 of the fair value hierarchy.
Contingent Consideration. The fair value of the Contingent Consideration liability is determined using a Nelson-Siegel stochastic simulation, which models various scenarios based on business forecasts, including monthly asset growth of the Verdant business and other inputs in accordance with the terms of the agreement. The resulting simulated cash flows are then discounted to present value and averaged to determine fair value.
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The following tables present additional information about assets measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value:
For the Three Months Ended | ||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||
| (Dollars in thousands) | Available-for-sale Securities: Non-Agency MBS | Servicing Rights1 | Accounts payable and other liabilities—Contingent Consideration | Total | ||||||||||||||||||||||
| Opening balance | $ | $ | $ | $ | ||||||||||||||||||||||
| Total gains or losses for the period: | ||||||||||||||||||||||||||
| Included in earnings—Mortgage banking and servicing rights income | ( | ( | ||||||||||||||||||||||||
| Included in earnings—General and administrative expense | ||||||||||||||||||||||||||
| Included in other comprehensive income | ( | ( | ||||||||||||||||||||||||
| Purchases, retentions, issues, sales and settlements: | ||||||||||||||||||||||||||
| Purchases/Retentions | ||||||||||||||||||||||||||
| Settlements | ( | ( | ||||||||||||||||||||||||
| Closing balance | $ | $ | $ | $ | ||||||||||||||||||||||
| Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
For the Six Months Ended | |||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| (Dollars in thousands) | Available-for-sale Securities: Non-Agency MBS | Servicing Rights1 | Accounts payable and other liabilities—Contingent Consideration | Total | |||||||||||||||||||
| Opening Balance | $ | $ | $ | $ | |||||||||||||||||||
| Total gains or losses for the period: | |||||||||||||||||||||||
| Included in earnings—Mortgage banking and servicing rights income | ( | ( | |||||||||||||||||||||
| Included in earnings—General and administrative expense | |||||||||||||||||||||||
| Included in other comprehensive income | |||||||||||||||||||||||
| Purchases, retentions, issues, sales and settlements: | |||||||||||||||||||||||
| Purchases/Retentions | |||||||||||||||||||||||
| Settlements | ( | ( | |||||||||||||||||||||
| Closing balance | $ | $ | $ | $ | |||||||||||||||||||
| Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period | $ | $ | ( | $ | $ | ( | |||||||||||||||||
1 Earnings from servicing rights were attributable to: time and payoffs, representing a decrease in servicing rights value due to passage of time, including the impact from both regularly scheduled loan principal payments and loans that were paid down or paid off during the period of $0.1 million and $0.5 million for the three and six months ended December 31, 2025, respectively, and a decrease in servicing rights value resulting from market-driven changes in interest rates of $1.0 million and $1.8 million for the three and six months ended December 31, 2025, respectively. Additions to servicing rights were related to purchases and servicing rights retained upon sale of loans held for sale.
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For the Three Months Ended | |||||||||||||||||
| December 31, 2024 | |||||||||||||||||
| (Dollars in thousands) | Available-for-sale Securities: Non-Agency MBS | Servicing Rights1 | Total | ||||||||||||||
| Opening balance | $ | $ | $ | ||||||||||||||
| Total gains or losses for the period: | |||||||||||||||||
| Included in earnings—Mortgage banking and servicing rights income | |||||||||||||||||
| Included in other comprehensive income | ( | ( | |||||||||||||||
| Purchases, retentions, issues, sales and settlements: | |||||||||||||||||
| Purchases/Retentions | |||||||||||||||||
| Settlements | ( | ( | |||||||||||||||
| Closing balance | $ | $ | $ | ||||||||||||||
| Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period | $ | $ | $ | ||||||||||||||
For the Six Months Ended | |||||||||||||||||
| December 31, 2024 | |||||||||||||||||
| (Dollars in thousands) | Available-for-sale Securities: Non-Agency MBS | Servicing Rights1 | Total | ||||||||||||||
| Opening Balance | $ | $ | $ | ||||||||||||||
| Total gains or losses for the period: | |||||||||||||||||
| Included in earnings—Mortgage banking and servicing rights income | ( | ( | |||||||||||||||
| Included in other comprehensive income | |||||||||||||||||
| Purchases, retentions, issues, sales and settlements: | |||||||||||||||||
| Purchases/Retentions | |||||||||||||||||
| Settlements | ( | ( | |||||||||||||||
| Closing balance | $ | $ | $ | ||||||||||||||
| Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period | $ | $ | ( | $ | ( | ||||||||||||
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The table below summarizes the quantitative information about Level 3 fair value measurements:
| December 31, 2025 | ||||||||||||||
| (Dollars in thousands) | Fair Value | Valuation Technique | Unobservable Input | Range (Weighted Average)1 | ||||||||||
| Available-for-sale securities: Non-Agency MBS | $ | Discounted Cash Flow | Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate over SOFR Swaps, Credit Enhancement | |||||||||||
| Servicing Rights | $ | Discounted Cash Flow | Projected Constant Prepayment Rate, Life (in years), Discount Rate | |||||||||||
Accounts payable and other liabilities—Contingent Consideration | $ | Nelson-Siegal Stochastic Model | Monthly Asset Growth, Credit Spread | ( | ||||||||||
| June 30, 2025 | ||||||||||||||
| (Dollars in thousands) | Fair Value | Valuation Technique | Unobservable Input | Range (Weighted Average)1 | ||||||||||
| Available-for-sale securities: Non-Agency MBS | $ | Discounted Cash Flow | Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate over SOFR Swaps, Credit Enhancement | |||||||||||
| Servicing Rights | $ | Discounted Cash Flow | Projected Constant Prepayment Rate, Life (in years), Discount Rate | |||||||||||
1 The weighted average for Available-for-sale securities: Non-agency MBS is based on the relative fair value of the securities, for Servicing Rights is based on the relative unpaid principal of the loans being serviced and for Accounts payable and other liabilities—Contingent Consideration.is based on annual projected consideration.
For non-agency mortgage-backed securities, a significant increase (decrease) in default rate, loss severity (potentially offset by the level of credit enhancement) or discount rate in isolation would result in a significantly lower (higher) fair value measurement, while a significant increase in the voluntary prepayment rate would result in a significant increase in fair value if the security is valued below par value, or a significant decrease in fair value if the security is valued above par value. Generally, a change in the assumptions used for the default rate is accompanied by a directionally opposite change in the assumption used for the voluntary prepayment rate.
For servicing rights, significant increases in the voluntary prepayment rate or discount rate in isolation would result in a significantly lower fair value measurement, while a significant increase in expected life in isolation would result in a significantly higher fair value measurement. Generally, a change in the voluntary prepayment rate is accompanied by a directionally opposite change in expected life.
For the Contingent Consideration, a significant increase (decrease) in the asset growth in isolation would result in a significantly higher (lower) fair value measurement, and a significant increase (decrease) in the discount rate in isolation would result in a significantly lower (higher) fair value measurement.
The aggregate fair value of loans held for sale, carried at fair value, the contractual balance (including accrued interest), and the unrealized gain were:
| (Dollars in thousands) | December 31, 2025 | June 30, 2025 | |||||||||
| Aggregate fair value | $ | $ | |||||||||
| Contractual balance | |||||||||||
| Unrealized gain | $ | $ | |||||||||
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The total interest income and amount of gains and losses from changes in fair value included in earnings for loans held for sale, carried at fair value, were:
| For the Three Months Ended December 31, | For the Six Months Ended December 31, | ||||||||||||||||||||||
| (Dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Interest income | $ | $ | $ | $ | |||||||||||||||||||
| Change in fair value | ( | ( | ( | ||||||||||||||||||||
| Total | $ | ( | $ | ( | $ | $ | |||||||||||||||||
Fair Value of Financial Instruments
Carrying amounts and estimated fair values of financial instruments at December 31, 2025 and June 30, 2025 were:
| December 31, 2025 | |||||||||||||||||||||||||||||
| Fair Value | |||||||||||||||||||||||||||||
| (Dollars in thousands) | Carrying Amount | Level 1 | Level 2 | Level 3 | Total Fair Value | ||||||||||||||||||||||||
| Financial assets: | |||||||||||||||||||||||||||||
Cash, cash equivalents and restricted cash | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Trading securities | |||||||||||||||||||||||||||||
Available-for-sale securities | |||||||||||||||||||||||||||||
| Stock of regulatory agencies | |||||||||||||||||||||||||||||
| Loans held for sale, at fair value | |||||||||||||||||||||||||||||
| Loans held for investment—net | |||||||||||||||||||||||||||||
| Securities borrowed | |||||||||||||||||||||||||||||
| Customer, broker-dealer and clearing receivables | |||||||||||||||||||||||||||||
Servicing rights | |||||||||||||||||||||||||||||
| Financial liabilities: | |||||||||||||||||||||||||||||
| Total deposits | |||||||||||||||||||||||||||||
| Advances from the Federal Home Loan Bank | |||||||||||||||||||||||||||||
Secured financings | |||||||||||||||||||||||||||||
| Borrowings, subordinated notes and debentures | |||||||||||||||||||||||||||||
| Securities loaned | |||||||||||||||||||||||||||||
| Customer, broker-dealer and clearing payables | |||||||||||||||||||||||||||||
Accounts payable and other liabilities - derivative instruments | |||||||||||||||||||||||||||||
| Accounts payable and other liabilities - Contingent Consideration | |||||||||||||||||||||||||||||
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| June 30, 2025 | |||||||||||||||||||||||||||||
| Fair Value | |||||||||||||||||||||||||||||
| (Dollars in thousands) | Carrying Amount | Level 1 | Level 2 | Level 3 | Total Fair Value | ||||||||||||||||||||||||
| Financial assets: | |||||||||||||||||||||||||||||
Cash, cash equivalents and restricted cash | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Trading securities | |||||||||||||||||||||||||||||
Available-for-sale securities | |||||||||||||||||||||||||||||
Stock of regulatory agencies | |||||||||||||||||||||||||||||
| Loans held for sale, at fair value | |||||||||||||||||||||||||||||
| Loans held for investment—net | |||||||||||||||||||||||||||||
| Securities borrowed | |||||||||||||||||||||||||||||
| Customer, broker-dealer and clearing receivables | |||||||||||||||||||||||||||||
Servicing rights | |||||||||||||||||||||||||||||
| Financial liabilities: | |||||||||||||||||||||||||||||
| Total deposits | |||||||||||||||||||||||||||||
| Advances from the Federal Home Loan Bank | |||||||||||||||||||||||||||||
| Borrowings, subordinated notes and debentures | |||||||||||||||||||||||||||||
| Securities loaned | |||||||||||||||||||||||||||||
| Customer, broker-dealer and clearing payables | |||||||||||||||||||||||||||||
Accounts payable and other liabilities - derivative instruments | |||||||||||||||||||||||||||||
1 Other assets - derivative assets are presented net of $41.4 million and $55.4 million of variation margin on centrally-cleared derivatives as of December 31, 2025 and June 30, 2025, respectively.
The carrying amount represents the estimated fair value for cash, cash equivalents and restricted cash, stock of regulatory agencies, interest-bearing deposits, accrued interest receivable and payable, demand deposits, short-term debt, and variable rate loans or deposits that reprice frequently and fully. For fixed rate loans, deposits, borrowings or subordinated debt and for variable rate loans, deposits, borrowings or subordinated debt with infrequent repricing or repricing limits, fair value is based on discounted cash flows using current market rates applied to the estimated life and credit risk. A discussion of the methods of valuing trading securities, available-for-sale securities, loans held for sale and derivatives can be found in Note 3—“Fair Value” in the 2025 Form 10-K. The fair value of off-balance sheet items is not considered material.
4. AVAILABLE-FOR-SALE SECURITIES
The amortized cost and fair value of available-for-sale securities were:
| December 31, 2025 | |||||||||||||||||||||||
| (Dollars in thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||||||||
| United States Treasury securities | $ | $ | $ | $ | |||||||||||||||||||
| Mortgage-backed securities (MBS): | |||||||||||||||||||||||
Agency1 | $ | $ | $ | ( | $ | ||||||||||||||||||
Non-agency2 | ( | ||||||||||||||||||||||
| Total mortgage-backed securities | ( | ||||||||||||||||||||||
Total available-for-sale securities | $ | $ | $ | ( | $ | ||||||||||||||||||
| June 30, 2025 | |||||||||||||||||||||||
| (Dollars in thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||||||||
| Mortgage-backed securities (MBS): | |||||||||||||||||||||||
Agency1 | $ | $ | $ | ( | $ | ||||||||||||||||||
Non-agency2 | ( | ||||||||||||||||||||||
| Total mortgage-backed securities | ( | ||||||||||||||||||||||
| Municipal | |||||||||||||||||||||||
Total available-for-sale securities | $ | $ | $ | ( | $ | ||||||||||||||||||
1 Includes securities guaranteed by Ginnie Mae, a U.S. government agency, and the government sponsored enterprises Fannie Mae and Freddie Mac.
2 Private sponsors of securities collateralized primarily by first-lien mortgage loans on commercial properties or by pools of 1-4 family residential first mortgages. Primarily super senior securities secured by prime, Alt-A or pay-option adjustable rate mortgages.
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The Company evaluates available-for-sale securities in an unrealized loss position based on an analysis of a number of factors, including, but not limited to: (1) the credit characteristics of the securities, such as the forecasted cash flows, credit ratings, credit enhancement, and government agency or government-sponsored enterprise backing, as applicable; and (2) whether the Company intends to sell or will be required to sell any of the securities before recovering the amortized cost basis. Based on its analysis, the Company determined the unrealized losses on available-for-sale securities are primarily driven by the increase in interest rates since the securities were purchased, and accordingly no no
The face amounts of available-for-sale securities pledged to secure borrowings were $750.6 million and $0.6 million as of December 31, 2025 and June 30, 2025.
There were | |||||||||||||||||||||||
Securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were:
| December 31, 2025 | |||||||||||||||||||||||||||||||||||
| Available-for-sale securities in loss position for | |||||||||||||||||||||||||||||||||||
| Less Than 12 Months | More Than 12 Months | Total | |||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||||||||||||||
| United States Treasury securities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| MBS: | |||||||||||||||||||||||||||||||||||
Agency | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
| Non-agency | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Total MBS | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total available-for-sale securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
| June 30, 2025 | |||||||||||||||||||||||||||||||||||
| Available-for-sale securities in loss position for | |||||||||||||||||||||||||||||||||||
| Less Than 12 Months | More Than 12 Months | Total | |||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||||||||||||||
| MBS: | |||||||||||||||||||||||||||||||||||
Agency | $ | $ | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||
| Non-agency | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Total MBS | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total available-for-sale securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
The following table sets forth the expected maturity distribution of our mortgage-backed securities, which is based on assumed prepayment rates, and the maturity distribution of our non-MBS, which is based on the contractual maturity:
| As of December 31, 2025 | |||||||||||||||||||||||||||||
| (Dollars in thousands) | Total Amount | Due Within One Year | Due after One but within Five Years | Due after Five but within Ten Years | Due After Ten Years | ||||||||||||||||||||||||
| United States Treasury securities | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| MBS: | |||||||||||||||||||||||||||||
| Agency | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Non-Agency | |||||||||||||||||||||||||||||
| Total MBS | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Available-for-sale—Amortized cost | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Available-for-sale—Fair value | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
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5. LOANS & ALLOWANCE FOR CREDIT LOSSES
The Company categorizes the loan portfolio into five segments: Single Family - Mortgage & Warehouse, Multifamily and Commercial Mortgage, Commercial Real Estate, Commercial & Industrial - Non Real Estate (“Non-RE”) and Auto & Consumer. For further detail of the segments of the Company’s loan portfolio, see Note 1—“Organizations and Summary of Significant Accounting Policies” in the 2025 Form 10-K. The Company acquired approximately $1.0 billion of loans and leases, including $211.0 million of PCD assets, as part of the Verdant acquisition, which was completed on September 30, 2025. The loans and leases acquired in the Verdant acquisition are included in the commercial & industrial - Non-RE portfolio. For additional information on the Verdant acquisition, see Note 2, “Acquisitions.”
The following table sets forth the composition of the loan portfolio:
| (Dollars in thousands) | December 31, 2025 | June 30, 2025 | |||||||||
| Single Family - Mortgage & Warehouse | $ | $ | |||||||||
Multifamily and Commercial Mortgage | |||||||||||
Commercial Real Estate | |||||||||||
| Commercial & Industrial - Non-RE | |||||||||||
| Auto & Consumer | |||||||||||
| Total gross loans | |||||||||||
| Allowance for credit losses - loans | ( | ( | |||||||||
| Unaccreted premiums (discounts) and loan fees | ( | ( | |||||||||
| Total net loans | $ | $ | |||||||||
on loans held for investments totaled $122.6 million and $109.6 million as of December 31, 2025 and June 30, 2025, respectively.
At December 31, 2025 and June 30, 2025, the Company pledged certain loans totaling $4,025.1 million and $4,284.7 million, respectively, to the Federal Home Loan Bank (“FHLB”) and $10,358.8 million and $8,227.7 million, respectively, to the Federal Reserve Bank of San Francisco (“FRBSF”).
The following table presents loan-to-value (“LTV”) for the Company’s real estate loans outstanding as of December 31, 2025:
| Total Real Estate Loans | Single Family - Mortgage & Warehouse | Multifamily and Commercial Mortgage | Commercial Real Estate | ||||||||||||||||||||
| Weighted-Average LTV | % | % | % | % | |||||||||||||||||||
| Median LTV | % | % | % | % | |||||||||||||||||||
The following table presents the components of the provision for credit losses:
For the Three Months December 31, | For the Six Months Ended December 31, | ||||||||||||||||||||||
(Dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
Provision for credit losses - loans | $ | $ | $ | $ | |||||||||||||||||||
Provision for credit losses - unfunded lending commitments | |||||||||||||||||||||||
Total provision for credit losses | $ | $ | $ | $ | |||||||||||||||||||
The following tables summarize activity in the allowance for credit losses - loans by portfolio segment:
| For the Three Months Ended December 31, 2025 | |||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Single Family-Mortgage & Warehouse | Multifamily and Commercial Mortgage | Commercial Real Estate | Commercial & Industrial - Non-RE | Auto & Consumer | Total | |||||||||||||||||||||||||||||
Balance at October 1, 2025 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Provision (benefit) for credit losses - loans | ( | ||||||||||||||||||||||||||||||||||
| Charge-offs | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
| Recoveries | |||||||||||||||||||||||||||||||||||
Balance at December 31, 2025 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
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| For the Three Months Ended December 31, 2024 | |||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Single Family-Mortgage & Warehouse | Multifamily and Commercial Mortgage | Commercial Real Estate | Commercial & Industrial - Non-RE | Auto & Consumer | Total | |||||||||||||||||||||||||||||
Balance at October 1, 2024 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Provision (benefit) for credit losses - loans | ( | ( | |||||||||||||||||||||||||||||||||
| Charge-offs | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Recoveries | |||||||||||||||||||||||||||||||||||
Balance at December 31, 2024 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| For the Six Months Ended December 31, 2025 | |||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Single Family-Mortgage & Warehouse | Multifamily and Commercial Mortgage | Commercial Real Estate | Commercial & Industrial - Non-RE | Auto & Consumer | Total | |||||||||||||||||||||||||||||
Balance at July 1, 2025 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Allowance for credit losses at acquisition of PCD loans | |||||||||||||||||||||||||||||||||||
| Provision (benefit) for credit losses - loans | ( | ( | |||||||||||||||||||||||||||||||||
| Charge-offs | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Recoveries | |||||||||||||||||||||||||||||||||||
Balance at December 31, 2025 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| For the Six Months Ended December 31, 2024 | |||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Single Family-Mortgage & Warehouse | Multifamily and Commercial Mortgage | Commercial Real Estate | Commercial & Industrial - Non-RE | Auto & Consumer | Total | |||||||||||||||||||||||||||||
Balance at July 1, 2024 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Provision (benefit) for credit losses - loans | ( | ( | |||||||||||||||||||||||||||||||||
| Charge-offs | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Recoveries | |||||||||||||||||||||||||||||||||||
Balance at December 31, 2024 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
For the three and six months ended December 31, 2025, the allowance for credit losses for loans increased primarily due to the provision for credit losses, partially offset by net charge-offs. The provision for credit losses for the three months ended December 31, 2025 reflects loan growth primarily in the commercial real estate and commercial & industrial - Non-RE portfolios, as well as the impact of macroeconomic variables used in the allowance for credit losses model, primarily the forecasted consumer price index, corporate bond yields, and the five-year U.S. Treasury rate. For the six months ended December 31, 2025, the increase in the allowance for credit losses was also due to the Verdant acquisition, which included the acquisition of PCD assets and also resulted in a post-acquisition provision for credit losses on the loans and leases acquired.
Loan products within each portfolio contain varying collateral types which impact the estimate of the loss given default utilized in the calculation of the allowance for credit losses for loans. For further discussion of the model method of estimating expected lifetime credit losses, see Note 1—“Organizations and Summary of Significant Accounting Policies” in the 2025 Form 10-K.
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As part of its lending activities, the Company makes certain off-balance lending commitments. For additional information on these and other commitments, see Note 10—“Commitments and Contingencies.” The following tables present a summary of the activity in the allowance for credit losses for off-balance sheet lending commitments:
Three Months Ended December 31, | |||||||||||
| (Dollars in thousands) | 2025 | 2024 | |||||||||
Balance at October 1, | $ | $ | |||||||||
| Provision (benefit) for credit losses - unfunded lending commitments | |||||||||||
Balance at December 31, | $ | $ | |||||||||
Six Months Ended December 31, | |||||||||||
| (Dollars in thousands) | 2025 | 2024 | |||||||||
Balance at July 1, | $ | $ | |||||||||
| Provision (benefit) for credit losses - unfunded lending commitments | |||||||||||
Balance at December 31, | $ | $ | |||||||||
The increase in the allowance for off-balance sheet lending commitments for the three and six months ended December 31, 2025, was primarily driven by unfunded lending commitment growth, primarily in the commercial real estate and commercial & industrial - non-RE portfolios.
Credit Quality Disclosures. The following tables provide the composition of loans that are performing and nonaccrual by portfolio segment:
| December 31, 2025 | |||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Single Family-Mortgage & Warehouse | Multifamily and Commercial Mortgage | Commercial Real Estate | Commercial & Industrial - Non-RE | Auto & Consumer | Total | |||||||||||||||||||||||||||||
| Performing | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Nonaccrual | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Nonaccrual loans to total loans | % | ||||||||||||||||||||||||||||||||||
| June 30, 2025 | |||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Single Family-Mortgage & Warehouse | Multifamily and Commercial Mortgage | Commercial Real Estate | Commercial & Industrial - Non-RE | Auto & Consumer | Total | |||||||||||||||||||||||||||||
| Performing | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Nonaccrual | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Nonaccrual loans to total loans | % | ||||||||||||||||||||||||||||||||||
There were no no
Credit Quality Indicators. The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends. In addition to the borrower’s primary source of repayment, in its risk rating process the Company considers all available sources of repayment, including obligor guaranties and liquidations of pledged collateral, where individually or together such sources would fully repay the loan on a timely basis. The Company analyzes loans individually by classifying the loans based on credit risk. The Company uses the following internally-defined risk ratings:
Pass. Loans where repayment in full is expected through any of the borrower’s sources of repayment.
Special Mention. Loans where any credit risk is not considered significant yet require management’s attention given certain currently identified characteristics of the borrower, collateral securing the loan and the obligor’s net worth and paying capacity. If the identified credit risks are not adequately monitored or mitigated, the loan may weaken and the Company’s credit position with respect to the loan may deteriorate in the future.
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Substandard. Loans where currently identified characteristics of the borrower, collateral securing the loan and the obligor’s net worth and paying capacity, taken together, could jeopardize the repayment of the debt. A loan not fully supported by at least one available source of repayment and involves a distinct possibility that the Company will sustain some loss in that loan if the weakness is not cured. A loan supported by a guaranty, collateral sufficient to incentivize a sale or refinance, or cash flow that is sufficient for timely repayment in full will not be classified as substandard even if the loan has a well-defined weakness in other sources of repayment.
Doubtful. Loans reflecting the same characteristics as those classified as substandard, but for which repayment in full in accordance with the contractual terms is currently considered highly unlikely.
The Company reviews and grades loans following a continuous review process, featuring coverage of all loan types and business lines at least quarterly. Continuous reviewing provides more effective risk monitoring because it immediately tests for potential impacts caused by changes in personnel, policy, products or underwriting standards.
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The following tables present the composition of loans by portfolio segment, fiscal year of origination and credit quality indicator, and the amount of year-to-date gross charge-offs.
| December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
Loans Held for Investment by Fiscal Year of Origination | Revolving Loans | Total | |||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior | |||||||||||||||||||||||||||||||||||||||||
| Single Family-Mortgage & Warehouse | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Year-to-date gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Multifamily and Commercial Mortgage | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Year-to-date gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial Real Estate | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Year-to-date gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial & Industrial - Non-RE | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Year-to-date gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Auto & Consumer | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Year-to-date gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| As a % of total gross loans | |||||||||||||||||||||||||||||||||||||||||||||||
| Year-to-date gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
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Table of Contents
| June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
Loans Held for Investment by Fiscal Year of Origination | Revolving Loans | Total | |||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | |||||||||||||||||||||||||||||||||||||||||
| Single Family-Mortgage & Warehouse | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Year-to-date gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Multifamily and Commercial Mortgage | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Year-to-date gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial Real Estate | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Year-to-date gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial & Industrial - Non-RE | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Year-to-date gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Auto & Consumer | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Year-to-date gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| As a % of total gross loans | |||||||||||||||||||||||||||||||||||||||||||||||
| Total year-to-date gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
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The following tables provide the aging of loans by portfolio segment:
| December 31, 2025 | |||||||||||||||||||||||||||||
| (Dollars in thousands) | Current | 30-59 Days | 60-89 Days | 90+ Days | Total | ||||||||||||||||||||||||
| Single Family-Mortgage & Warehouse | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Multifamily and Commercial Mortgage | |||||||||||||||||||||||||||||
| Commercial Real Estate | |||||||||||||||||||||||||||||
| Commercial & Industrial - Non-RE | |||||||||||||||||||||||||||||
| Auto & Consumer | |||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| As a % of total gross loans | % | % | % | % | % | ||||||||||||||||||||||||
| June 30, 2025 | |||||||||||||||||||||||||||||
| (Dollars in thousands) | Current | 30-59 Days | 60-89 Days | 90+ Days | Total | ||||||||||||||||||||||||
| Single Family-Mortgage & Warehouse | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Multifamily and Commercial Mortgage | |||||||||||||||||||||||||||||
| Commercial Real Estate | |||||||||||||||||||||||||||||
Commercial & Industrial - Non-RE | |||||||||||||||||||||||||||||
| Auto & Consumer | |||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| As a % of total gross loans | % | % | % | % | % | ||||||||||||||||||||||||
Loans reaching 90 or more days past due are generally placed on nonaccrual. As of both December 31, 2025 and June 30, 2025 there were no
Single family mortgage loans in process of foreclosure were $29.0 million and $30.4 million as of December 31, 2025 and June 30, 2025, respectively.
Direct Financing Leases and Sales-Type Leases. The Company acts as a lessor in certain direct financing leases and sales-type leases, which are included in Commercial & Industrial - Non-RE in the preceding tables. The following table presents the aggregate interest income earned under directing financing and sales-type leases for the periods presented. For additional information on these leases, see Note 1 —“Organizations and Summary of Significant Accounting Policies” in the 2025 Form 10-K.
| For the Three Months Ended December 31, | For the Six Months Ended December 31, | ||||||||||||||||||||||
| (Dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Lease interest income | $ | $ | $ | $ | |||||||||||||||||||
6. DERIVATIVES
For additional information on the Company’s derivative instruments, see Note 1—“Organizations and Summary of Significant Accounting Policies,” Note 3—“Fair Value” and Note 6—“Derivatives” in the 2025 Form 10-K and Note 3—“Fair Value” and Note 7 “Offsetting of Derivatives and Securities Financing Agreements” herein.
The following table presents the notional amounts and fair values of the Company’s derivative instruments. While the notional amounts give an indication of the volume of the Company’s derivatives activity, the notional amounts significantly exceed, in the Company’s view, the possible losses that could arise from such transactions. For most derivative contracts, the notional amount is not exchanged, rather it is a reference amount used to calculate payments.
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December 31, 2025 | June 30, 2025 | ||||||||||||||||||||||||||||||||||
| Fair Value | Fair Value | ||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Notional Amount | Derivative Assets | Derivative Liabilities | Notional Amount | Derivative Assets | Derivative Liabilities | |||||||||||||||||||||||||||||
| Derivatives designated as hedging instruments | |||||||||||||||||||||||||||||||||||
Interest rate contracts1 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Derivatives not designated as hedging instruments | |||||||||||||||||||||||||||||||||||
Interest rate contracts1 | |||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | |||||||||||||||||||||||||||||||||||
| Total derivatives | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Derivatives designated as fair value hedging instruments
The following table presents pre-tax fair value gains/(losses) on derivative instruments used in fair value hedge accounting relationships and the change in fair value of the hedged item. For additional information on the Company’s designated fair value hedges, see Note 1 —“Summary of Significant Accounting Policies.”
| For the Three Months Ended December 31, | For the Six Months Ended December 31, | ||||||||||||||||||||||
| (Dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Change in fair value of derivative instruments | $ | $ | $ | $ | |||||||||||||||||||
| Change in fair value of hedged items | $ | ( | $ | $ | ( | $ | |||||||||||||||||
The following table presents the carrying amount of available-for-sale securities in designated fair value hedge relationships and the cumulative amount of fair value hedge basis adjustments.
| As of December 31, 2025 | As of June 30, 2025 | ||||||||||||||||||||||
| (Dollars in thousands) | Amortized Cost | Cumulative Amount of Basis Adjustments1 | Amortized Cost | Cumulative Amount of Basis Adjustments1 | |||||||||||||||||||
| Available-for-sale securities—United States Treasury securities | $ | $ | ( | $ | $ | ||||||||||||||||||
Derivatives designated as cash flow hedging instruments
The following table presents pre-tax gains/(losses) on derivative instruments used in cash flow hedge accounting relationships.
For the Three Months Ended December 31, | For the Six Months Ended December 31, | ||||||||||||||||||||||
| (Dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Amounts recorded in other comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
| Amounts reclassified from AOCI to income | ( | $ | ( | ( | $ | ( | |||||||||||||||||
| Total change in OCI for period | $ | $ | $ | ( | $ | ||||||||||||||||||
As of December 31, 2025, the Company expects that approximately $2.0 million of pre-tax net gain related to cash flow hedges recorded in AOCI will be recognized in income over the next 12 months. The maximum length of time over which forecasted transactions are hedged is approximately 1.7 years.
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Derivatives not designated as hedging instruments
The following table presents the pre-tax gains/(losses) related to the Company’s derivative instrument activity recognized in the Condensed Consolidated Statements of Income:
For the Three Months Ended December 31, | For the Six Months Ended December 31, | ||||||||||||||||||||||
| (Dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Interest rate contracts | |||||||||||||||||||||||
| Banking and service fees | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| ( | ( | ( | |||||||||||||||||||||
| Foreign exchange contracts | |||||||||||||||||||||||
| Banking and service fees | ( | ( | |||||||||||||||||||||
The aggregate foreign exchange transaction gain/loss for the three and six months ended December 31, 2025 was a loss of approximately $0.3 million and a gain of $0.2 million, respectively. It was insignificant for the three and six months ended December 31, 2024.
7. OFFSETTING OF DERIVATIVES AND SECURITIES FINANCING AGREEMENTS
The Company enters into derivatives transactions as part of its mortgage banking activities, market making activity in interest rate swap and cap derivatives to facilitate customer demand and hedging activities related to interest rate and foreign exchange risk management, and enters into securities borrowed and securities loaned transactions to facilitate customer match-book activity, cover short positions and support customer securities lending. For additional information on offsetting see Note 7—“Offsetting of Derivatives and Securities Financing Agreements” in the 2025 Form 10-K.
The following tables present information about the offsetting of these instruments and related collateral amounts:
| December 31, 2025 | |||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Gross Assets / Liabilities | Amounts Offset | Net Balance Sheet Amount | Financial Collateral | Cash Collateral | Net Assets / Liabilities | |||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||
| Securities borrowed | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Other Assets — Derivative Assets1 | |||||||||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||
| Securities loaned | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Accounts Payable and Other Liabilities — Derivative Liabilities | |||||||||||||||||||||||||||||||||||
| June 30, 2025 | |||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Gross Assets / Liabilities | Amounts Offset | Net Balance Sheet Amount | Financial Collateral | Cash Collateral | Net Assets / Liabilities | |||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||
| Securities borrowed | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Other Assets — Derivative Assets1 | |||||||||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||
| Securities loaned | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Accounts Payable and Other Liabilities — Derivative Liabilities | |||||||||||||||||||||||||||||||||||
1 Gross amounts of Other Assets - Derivative Assets are presented net of $41.4 million and $55.4 million of variation margin on centrally-cleared derivatives as of December 31, 2025 and June 30, 2025, respectively.
The securities loaned transactions represent equities with an overnight and open maturity classification as of both periods presented.
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8. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION
The Company has an equity incentive plan, the Amended and Restated 2014 Stock Incentive Plan (the “2014 Plan”), which provides for the granting of non-qualified and incentive stock options, restricted stock and restricted stock units (“RSUs”), stock appreciation rights and other awards to employees, directors and consultants. On November 13, 2025, the Company’s stockholders approved an amendment to the 2014 Plan, which increased the maximum aggregate number of shares which may be issued under the 2014 Plan to 7,780,000 shares. The Company also has an employment agreement with its Chief Executive Officer that provides for an award of RSUs. For additional information regarding the Company’s stock-based compensation plans, see Note 16—“Stock-Based Compensation” in the 2025 Form 10-K.
At December 31, 2025, 2,038,794 shares of common stock were authorized for future awards under the 2014 Plan. As of December 31, 2025, the total compensation cost not yet recognized related to non-vested awards was $68.0 million, which is expected to be recognized over a weighted-average period of 1.3 years.
The following table presents the status and changes in RSUs:
| RSUs | Weighted-Average Grant-Date Fair Value | ||||||||||
Non-vested balance at June 30, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | ||||||||||
| Forfeited | ( | ||||||||||
Non-vested balance at December 31, 2025 | $ | ||||||||||
The total fair value of shares vested for the three and six months ended December 31, 2025 was $5.0 million and $27.8 million, respectively. The total fair value of shares vested for the three and six months ended December 31, 2024 was $0.7 million and $23.2 million, respectively.
Common Stock Repurchase Program
As of December 31, 2025, there was $148.1 million of share repurchase authorization remaining under the Company’s common stock repurchase program. The share repurchase program will continue in effect until terminated by the Board of Directors of the Company. There were no
At-the-Market Equity Offering
On January 28, 2025, the Company entered into an equity distribution agreement pursuant to which the Company may issue and sell through distribution agents from time to time shares of the Company’s common stock in at-the-market offerings with an aggregate offering price of up to $150,000,000 . The Company will issue the stock pursuant to a previously effective registration statement and a prospectus supplement filed with the SEC on January 28, 2025. No shares of the Company’s common stock have been issued pursuant to this offering.
Accumulated Other Comprehensive Income
AOCI includes the after-tax change in unrealized gains and losses on investment securities and cash flow hedging activities.
| For the Three Months Ended December 31, 2025 | |||||||||||||||||
| (Dollars in thousands) | Unrealized gain (loss) on available-for-sale securities | Cash flow hedges | Accumulated other comprehensive income | ||||||||||||||
Balance at September 30, 2025 | $ | ( | $ | $ | |||||||||||||
| Other comprehensive income/(loss) | |||||||||||||||||
Balance at December 31, 2025 | $ | $ | $ | ||||||||||||||
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For the Three Months Ended December 31, 2024 | |||||||||||||||||
| (Dollars in thousands) | Unrealized gain (loss) on available-for-sale securities | Cash flow hedges | Accumulated other comprehensive income | ||||||||||||||
Balance at September 30, 2024 | $ | ( | $ | $ | ( | ||||||||||||
| Other comprehensive income/(loss) | ( | ||||||||||||||||
Balance at December 31, 2024 | $ | ( | $ | $ | |||||||||||||
| For the Six Months Ended December 31, 2025 | |||||||||||||||||
| (Dollars in thousands) | Unrealized gain (loss) on available-for-sale securities | Cash flow hedges | Accumulated other comprehensive income | ||||||||||||||
Balance at June 30, 2025 | $ | ( | $ | $ | |||||||||||||
| Other comprehensive income/(loss) | ( | ||||||||||||||||
Balance at December 31, 2025 | $ | $ | $ | ||||||||||||||
For the Six Months Ended December 31, 2024 | |||||||||||||||||
| (Dollars in thousands) | Unrealized gain (loss) on available-for-sale securities | Cash flow hedges | Accumulated other comprehensive income | ||||||||||||||
Balance at June 30, 2024 | $ | ( | $ | $ | ( | ||||||||||||
| Other comprehensive income/(loss) | |||||||||||||||||
Balance at December 31, 2024 | $ | ( | $ | $ | |||||||||||||
The following table presents the pre-tax and after-tax changes in the components of other comprehensive income.
| For the Three Months Ended December 31, 2025 | For the Three Months Ended December 31, 2024 | ||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Pre-tax | Tax effect | After-tax | Pre-tax | Tax effect | After-tax | |||||||||||||||||||||||||||||
| Unrealized gain/(loss) on investment securities: | |||||||||||||||||||||||||||||||||||
| Net unrealized gains/(losses) arising during the period | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
| Reclassification adjustment for realized (gains)/losses included in net income | |||||||||||||||||||||||||||||||||||
| Net change | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
| Cash flow hedges: | |||||||||||||||||||||||||||||||||||
| Net unrealized gains/(losses) arising during the period | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Reclassification adjustment for realized (gains)/losses included in net income | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Net change | ( | ( | |||||||||||||||||||||||||||||||||
| Total other comprehensive income/(loss) | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| For the Six Months Ended December 31, 2025 | For the Six Months Ended December 31, 2024 | ||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Pre-tax | Tax effect | After-tax | Pre-tax | Tax effect | After-tax | |||||||||||||||||||||||||||||
| Unrealized gain/(loss) on investment securities: | |||||||||||||||||||||||||||||||||||
| Net unrealized gains/(losses) arising during the period | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Reclassification adjustment for realized (gains)/losses included in net income | |||||||||||||||||||||||||||||||||||
| Net change | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Cash flow hedges: | |||||||||||||||||||||||||||||||||||
| Net unrealized gains/(losses) arising during the period | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Reclassification adjustment for realized (gains)/losses included in net income | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Net change | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Total other comprehensive income | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
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9. EARNINGS PER COMMON SHARE
The following table presents the calculation of basic and diluted earnings per common share (“EPS”):
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||
| (Dollars in thousands, except per share data) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Earnings Per Common Share | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Average common shares issued and outstanding | |||||||||||||||||||||||
| Earnings per common share | $ | $ | $ | $ | |||||||||||||||||||
| Diluted Earnings Per Common Share | |||||||||||||||||||||||
| Average common shares issued and outstanding | |||||||||||||||||||||||
| Dilutive effect of average unvested RSUs | |||||||||||||||||||||||
Average dilutive common shares outstanding | |||||||||||||||||||||||
| Diluted earnings per common share | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average antidilutive common stock equivalents (excluded from the computation of EPS) | |||||||||||||||||||||||
For further information regarding the Company’s EPS calculation, see Note 17—“Earnings per Common Share” in the 2025 Form 10-K.
10. COMMITMENTS AND CONTINGENCIES
Credit-Related Financial Instruments. The Company is a party to credit-related financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments are commitments to extend credit. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the Condensed Consolidated Balance Sheets.
The Company’s exposure to credit loss is represented by the contractual amount of these commitments. The Company follows the same credit policies in making commitments as it does for on-balance-sheet instruments.
Commitments to extend credit are agreements to lend to a customer so long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if it is deemed necessary by the Company, is based on management’s credit evaluation of the customer. For single family loans classified as held for sale, the Company matches unfunded commitments to originate loans with commitments to sell loans. The Company also has standby letters of credit commitments. The following table presents a summary of off-balance sheet commitments.
| (dollars in thousands) | December 31, 2025 | ||||
| Commitments to fund loans | $ | ||||
| Commitments to sell loans | $ | ||||
| Standby letters of credit | $ | ||||
| Commitments to contribute capital - Non-LIHTC | $ | ||||
In addition, the Company has $41.7 million of commitments to contribute capital to low-income housing tax credit (“LIHTC”) investments included in “Accounts payable and other liabilities” on the Condensed Consolidated Balance Sheets. See Note 13—“Other Assets” for additional information on LIHTC investments.
In the normal course of business, Axos Clearing LLC’s (“Axos Clearing”) customer activities involve the execution, settlement, and financing of various customer securities transactions. These activities may expose Axos Clearing to off-balance-sheet risk in the event the customer or other broker is unable to fulfill its contracted obligations and Axos Clearing has to purchase or sell the financial instrument underlying the contract at a loss. Axos Clearing’s clearing agreements with broker-dealers for which it provides clearing services requires them to indemnify Axos Clearing if customers fail to satisfy their contractual obligation.
Other Commitments. On December 31, 2025, the Bank signed an agreement to purchase a multi-building commercial office complex and associated amenities located in San Diego, California. On January 23, 2026, the all-cash transaction closed for approximately $125
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Litigation. A consolidated derivative action, In re BofI Holding, Inc., Case No. 15cv2722GPC (KSC), was originally filed in the United States District Court for the Southern District of California (the “Derivative Action”) on December 3, 2015. The complaint in the Derivative Action set forth allegations made in a related and since concluded employment action, Erhart v. BofI Holding Inc., No. 15cv2287 BAS (NLS) (S.D. Cal.) (the “Employment Action”) brought by a former employee of the Company and was stayed pending resolution of the Employment Action. On January 2, 2024, the Derivative Action plaintiff filed a Third Amended Complaint. The Derivative Action defendants filed a Motion to Dismiss the Third Amended Complaint on April 4, 2025. A hearing on the motion was held on June 26, 2025. On September 18, 2025, the court granted defendants’ motion to dismiss with prejudice citing Plaintiffs’ failure to plead demand futility. On October 17, 2025, Plaintiffs filed a Notice of Appeal to the United States Court of Appeals for the Ninth Circuit, which appeal is pending. The Derivative Action defendants dispute, and intend to continue vigorously defending against, the allegations raised in the Third Amended Complaint. The Derivative Action plaintiff seeks damages on behalf of the Company with respect to the Employment Action and also seeks damages on behalf of the Company in connection with a now settled securities class action that was also based upon allegations made in the Employment Action and settled within available insurance coverage, without requiring changes in operations or attribution of wrongdoing to the Company, its management, or its directors.
The following three putative class action lawsuits are pending in the United States District Court, Southern District of California, under the following case names and numbers: (1) In re Axos Bank d/b/a UFB Direct Litigation, 3:23-cv-02266-BJC-DTF; (2) Pliszka et al. v. Axos Bank d/b/a UFB Direct, Case No. 3:24-cv-00445-BJC-DTF; and (3) Ash et al. v. Axos Bank d/b/a UFB Direct, Case No. 3:24-cv-01157-BJC-DTF (collectively, the “UFB Actions”). The plaintiffs in the UFB Actions allege that certain rate representations made by Axos Bank with respect to its UFB products were false or misleading. Axos Bank filed a motion to compel arbitration or dismiss the complaint in each of the UFB Actions. On September 13, 2024, the court entered an order compelling arbitration in each lawsuit. Accordingly, a separate AAA arbitration was initiated with respect to each of the UFB Actions. On March 26, 2025, the arbitrator in the Pliszka arbitration proceedings issued an order finding that none of the claims raised are subject to arbitration, dismissing the arbitration and remanding the case back to the United States District Court. A similar conclusion was reached by the arbitrator in the Ash arbitration via an order issued on June 3, 2025. The arbitrator in the Stempel arbitration reached a contrary conclusion and entered an order finding the claims to be arbitrable on June 5, 2025. On October 11, 2024, Defendant filed an interlocutory appeal seeking to enforce Defendant’s updated/modified Account Agreement and Online Access Agreement in Stempel, Pliszka and Ash. Defendant’s opening brief in such appeal was filed July 11, 2025. On September 9, 2025, the court in the Consolidated Action granted Defendant’s renewed motion to compel arbitration. On December 29, 2025, the appellate court hearing the interlocutory appeal ruled that it lacked interlocutory jurisdiction over the matter and dismissed the appeal on jurisdictional grounds. Defendant disputes, and intends to vigorously defend against, the allegations raised in the UFB Actions. The Company does not expect the ultimate outcome of the UFB Actions to have a material adverse effect on its consolidated results of operations, financial position or cash flows. It is not presently possible to state whether the likelihood of an unfavorable outcome is probable or remote, or to estimate the amount or range of any possible loss to the Company should an unfavorable outcome occur.
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11. SEGMENT REPORTING AND REVENUE INFORMATION
Segment Reporting. The operating segments reported below are the segments of the Company for which separate financial information is available and for which segment results are evaluated regularly by the Chief Executive Officer, who is the Chief Operating Decision Maker (“CODM”), in deciding how to allocate resources and in assessing performance. The operating segments and segment results of the Company are determined based upon the management reporting system, which assigns balance sheet and income statement items to each of the business segments and by which segment results are evaluated by the CODM in deciding how to allocate resources and in assessing performance.
The Company evaluates performance and allocates resources based on pre-tax profit or loss from operations in conjunction with its corporate strategy. Salaries and related costs represent the significant segment expense that is regularly provided to the CODM. For more information on the Company’s operating segments, see Note 22—“Segment Reporting” in the 2025 Form 10-K.
In order to reconcile the two The following tables present the operating results, goodwill, and assets of the segments:
For the Three Months Ended December 31, 2025 | |||||||||||||||||||||||
| (Dollars in thousands) | Banking Business Segment | Securities Business Segment | Corporate/Eliminations | Axos Consolidated | |||||||||||||||||||
| Net interest income | $ | $ | $ | ( | $ | ||||||||||||||||||
| Provision for credit losses | |||||||||||||||||||||||
Non-interest income1 | ( | ||||||||||||||||||||||
| Non-interest expense—Salaries and related costs | |||||||||||||||||||||||
Non-interest expense—Other segment items2 | ( | ||||||||||||||||||||||
Total non-interest expense1 | |||||||||||||||||||||||
| Income before taxes | $ | $ | $ | ( | $ | ||||||||||||||||||
For the Three Months Ended December 31, 2024 | |||||||||||||||||||||||
| (Dollars in thousands) | Banking Business Segment | Securities Business Segment | Corporate/Eliminations | Axos Consolidated | |||||||||||||||||||
| Net interest income | $ | $ | $ | ( | $ | ||||||||||||||||||
| Provision for credit losses | |||||||||||||||||||||||
Non-interest income1 | ( | ||||||||||||||||||||||
| Non-interest expense—Salaries and related costs | |||||||||||||||||||||||
Non-interest expense—Other segment items2 | ( | ||||||||||||||||||||||
Total non-interest expense1 | |||||||||||||||||||||||
| Income before taxes | $ | $ | $ | ( | $ | ||||||||||||||||||
1 Includes $ 2 Other segment items includes the non-interest expenses other than salaries and related costs as presented in the Condensed Consolidated Statements of Income. | |||||||||||||||||||||||
For the Six Months Ended December 31, 2025 | |||||||||||||||||||||||
| (Dollars in thousands) | Banking Business Segment | Securities Business Segment | Corporate/Eliminations | Axos Consolidated | |||||||||||||||||||
| Net interest income | $ | $ | $ | ( | $ | ||||||||||||||||||
| Provision for credit losses | |||||||||||||||||||||||
Non-interest income1 | ( | ||||||||||||||||||||||
| Non-interest expense—Salaries and related costs | |||||||||||||||||||||||
Non-interest expense—Other segment items2 | ( | ||||||||||||||||||||||
Total non-interest expense1 | |||||||||||||||||||||||
| Income before taxes | $ | $ | $ | ( | $ | ||||||||||||||||||
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For the Six Months Ended December 31, 2024 | |||||||||||||||||||||||
| (Dollars in thousands) | Banking Business Segment | Securities Business Segment | Corporate/Eliminations | Axos Consolidated | |||||||||||||||||||
| Net interest income | $ | $ | $ | ( | $ | ||||||||||||||||||
| Provision for credit losses | |||||||||||||||||||||||
Non-interest income1 | ( | ||||||||||||||||||||||
| Non-interest expense—Salaries and related costs | |||||||||||||||||||||||
Non-interest expense—Other segment items2 | ( | ||||||||||||||||||||||
Total non-interest expense1 | |||||||||||||||||||||||
| Income before taxes | $ | $ | $ | ( | $ | ||||||||||||||||||
1 Includes $ 2 Other segment items includes the non-interest expenses other than salaries and related costs as presented in the Condensed Consolidated Statements of Income. | |||||||||||||||||||||||
| As of December 31, 2025 | |||||||||||||||||||||||
| (Dollars in thousands) | Banking Business Segment | Securities Business Segment | Corporate/Eliminations | Axos Consolidated | |||||||||||||||||||
| Goodwill | $ | $ | $ | $ | |||||||||||||||||||
| Total Assets | $ | $ | $ | $ | |||||||||||||||||||
| As of June 30, 2025 | |||||||||||||||||||||||
| (Dollars in thousands) | Banking Business Segment | Securities Business Segment | Corporate/Eliminations | Axos Consolidated | |||||||||||||||||||
| Goodwill | $ | $ | $ | $ | |||||||||||||||||||
| Total Assets | $ | $ | $ | $ | |||||||||||||||||||
Revenue Information. The following presents non-interest income, segregated by revenue streams in-scope and out-of-scope of Accounting Standards Codification (“ASC”) 606 for the periods indicated. For additional information on the Company’s recognition of revenue and ASC 606, see Note 1—“Organizations and Summary of Significant Accounting Policies” in the 2025 Form 10-K.
For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||
| (Dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Advisory fee income | $ | $ | $ | $ | |||||||||||||||||||
| Broker-dealer clearing fees | |||||||||||||||||||||||
| Deposit service fees | |||||||||||||||||||||||
| Card fees and other | |||||||||||||||||||||||
| Bankruptcy trustee and fiduciary service fees | |||||||||||||||||||||||
| Non-interest income (in-scope of ASC 606) | |||||||||||||||||||||||
| Non-interest income (out-of-scope of ASC 606) | |||||||||||||||||||||||
| Total non-interest income | $ | $ | $ | $ | |||||||||||||||||||
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12. BORROWINGS, SUBORDINATED NOTES AND DEBENTURES
Borrowings from other banks. As of December 31, 2025, Axos Clearing borrowed $15 million on its $95.0 million unsecured line of credit at a fixed rate per annum of 6.25 %.
Subordinated Loans. The Company issued subordinated loans totaling $7.5 million on January 28, 2019, to the principal stockholders of Cor Securities Holdings, Inc. (“COR Securities”) in an equal principal amount, with a maturity of 15 months and a 6.25 % interest rate, to serve as the sole source of payment of indemnification obligations of the principal stockholders of COR Securities under the applicable merger agreement. During the fiscal year ended June 30, 2019, $0.1 million of subordinated loans were repaid. The Company made an indemnification claim against the $7.4 million. Following such claim, the principal stockholders of COR Securities filed an action seeking a declaratory judgment that they are not obligated under the merger agreement to indemnify the Company and on November 7, 2025, the declaratory judgment was entered. Further proceedings related to this matter may be initiated. As a result of the declaratory judgment, the Company accrued $7.0
Subordinated Notes. On September 19, 2025, the Company completed the issuance of $200 million aggregate principal amount of the Company’s 7.00 % Fixed-to-Floating Rate Subordinated Notes (the “2035 Notes”). The 2035 Notes are obligations only of Axos Financial, Inc. The 2035 Notes mature on October 1, 2035 and accrue interest at a fixed rate per annum equal to 7.00 %, payable semi-annually in arrears on April 1 and October 1 of each year during the fixed period, commencing on October 1, 2025. From and including October 1, 2030, to, but excluding October 1, 2035 or the date of early redemption, the 2035 Notes will bear interest at a floating rate per annum equal to three-month term SOFR plus a spread of 379 basis points, payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year, commencing on January 1, 2031. The 2035 Notes may be redeemed on or after October 1, 2030, which date may be extended at the Company’s discretion, at a redemption price equal to principal plus accrued and unpaid interest, subject to certain conditions. Fees and costs incurred in connection with the debt offering amortize to “Interest expense - Other borrowings” in the Condensed Consolidated Statements of Income over the term of the 2035 Notes.
On October 1, 2025, the Company completed the redemption of the $160.5 million aggregate principal amount outstanding of its 4.875 % Fixed-to-Floating Rate Subordinated Notes due 2030 (the “2030 Notes”), which were set to begin their floating period on such date. The 2030 Notes were redeemed for cash by the Company at 100 % of their principal amount, plus accrued and unpaid interest, in accordance with the terms of the indenture governing the 2030 Notes. Remaining unamortized deferred financing costs associated with such notes were expensed and included under “Interest expense - Other borrowings” in the Condensed Consolidated Statements of Income.
For information on secured financings issued by variable interest entities (“VIEs”) consolidated by the Company, see Note 14— “Variable Interest Entities,” and for additional information on other borrowings, see Note 13—“Borrowings, Subordinated Notes and Debentures” in the 2025 Form 10-K.
13. OTHER ASSETS
“Other Assets” in the Condensed Consolidated Balance Sheets primarily comprises bank-owned life insurance (“BOLI”), accrued interest receivable, derivatives, net deferred income tax assets, furniture, equipment and software, right-of-use lease assets, LIHTC investments and other receivables. For additional information on other assets, see Note 9—“Other Assets” in the 2025 Form 10-K. For additional information on accrued interest receivable, see Note 5—“Loans & Allowance for Credit Losses,” and for additional information on derivatives, see Note 6—“Derivatives.”
LIHTC Investments. The Company recognized the following income and tax benefits for its LIHTC investments.
For the Three Months Ended December 31, | For the Six Months Ended December 31, | |||||||||||||||||||||||||
| (Dollars in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Tax credits recognized | $ | $ | $ | $ | ||||||||||||||||||||||
| Other tax benefits recognized | ||||||||||||||||||||||||||
| Amortization | ( | ( | ( | ( | ||||||||||||||||||||||
| Net benefit (expense) included in income tax expense | ||||||||||||||||||||||||||
| Other income (loss) included in banking and service fees | ||||||||||||||||||||||||||
| Net benefit (expense) included in the Condensed Consolidated Statements of Income | $ | $ | $ | $ | ||||||||||||||||||||||
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The Company recognized the following investments on its balance sheets.
| (Dollars in thousands) | As of December 31, 2025 | As of June 30, 2025 | ||||||||||||
| LIHTC investments | $ | $ | ||||||||||||
LIHTC unfunded commitments1 | $ | $ | ||||||||||||
1LIHTC unfunded commitments are included in “Accounts Payable and Other Liabilities” on the Condensed Consolidated Balance Sheets.
For the three and six months ended December 31, 2025 and 2024, there have been no significant modifications or events that resulted in the change in the nature of the LIHTC investments or any changes in the relationship with the underlying project.
For the three and six months ended December 31, 2025 and 2024, there has been no impairment loss recognized from the forfeiture or ineligibility of income tax credits.
Operating Leases—Lessor. The following table summarizes operating lease income recognized by the Company as lessor under operating lease arrangements for the periods presented. Operating lease income is included in “Banking and service fees” in the Condensed Consolidated Statements of Income.
| For the Three Months Ended December 31, | For the Six Months Ended December 31, | ||||||||||||||||||||||
| (Dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Operating lease income | $ | $ | $ | $ | |||||||||||||||||||
14. VARIABLE INTEREST ENTITIES
The Company consolidated the results of operations and financial position of three lending-related entities, which it considers VIEs. The Company consolidated these VIEs because it or its subsidiaries is deemed to be the primary beneficiary since the Company or its subsidiaries has the power to direct the loan servicing or portfolio management activities, which are the activities that most significantly affect the VIEs’ economic performance, and the Company or its subsidiaries has the obligation to absorb the majority of the losses or benefits through ownership of all of the secured financings issued by the trusts. For these VIEs, the loans transferred to the VIEs are pledged as collateral to the related secured financings.
In addition, through its acquisition of Verdant, the Company acquired additional variable interests in certain securitization trusts. Following the acquisition, the Company performed an assessment and determined it continues to direct the activities that most significantly affect the acquired VIEs’ economic performance, and the Company has the obligation to absorb the majority of the losses or benefits of such acquired variable interests. As a result, the Company determined it is the primary beneficiary and continues to consolidate the VIEs as of December 31, 2025.
For these VIEs, including those acquired in the Verdant acquisition, the loans transferred to the VIEs are pledged as collateral to the related secured financings.
The following table provides a summary of the assets and liabilities of consolidated VIEs in the Company’s Condensed Consolidated Balance Sheets.
| (Dollars in thousands) | As of December 31, 2025 | As of June 30, 2025 | |||||||||
| Restricted cash | $ | $ | |||||||||
Loans—net of allowance for credit losses | |||||||||||
| Other assets | |||||||||||
Secured financings | |||||||||||
| Accounts payable and other liabilities | |||||||||||
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As part of its securitization activities, Verdant issued a series of notes to provide additional financing to its business. The notes outstanding as of December 31, 2025 are included in “Secured financings” in the Company’s Condensed Consolidated Balance Sheet and are summarized in the below table:
| Series | Classes | Interest Rate Range | Final Maturity Date / Range | Outstanding Principal at December 31, 2025 (Dollars in thousands) | ||||||||||
| 2022-01 | Class A, B, C, D | February 2030 | $ | |||||||||||
| 2023-01 | Class A-1, A-2, B, C, D | January 2031 | ||||||||||||
2024-01 | Class A-1, A-2, B, C, D | December 2031 | ||||||||||||
| 2025-01 | Class A-1, A-2, A-3, B, C, D | March 2028 to May 2033 | ||||||||||||
| Total | $ | |||||||||||||
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ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion provides information about the results of operations, financial condition, liquidity, and capital resources of Axos Financial, Inc. and subsidiaries (collectively, “we”, “us” or the “Company”). This information is intended to facilitate the understanding and assessment of significant changes and trends related to our financial condition and the results of our operations. This discussion and analysis should be read in conjunction with our financial information in our 2025 Form 10-K, and the interim unaudited condensed consolidated financial statements and notes thereto contained in this report.
Some matters discussed in this report may constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as such, may involve risks and uncertainties. These forward-looking statements can be identified by the use of terminology such as “estimate,” “project,” “anticipate,” “expect,” “intend,” “believe,” “will,” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. These forward-looking statements relate to, among other things, the Company’s financial prospects and other projections of our performance and asset quality, our deposit balances and capital ratios, our ability to continue to grow profitably and increase our business, our ability to continue to diversify lending and deposit franchises, the anticipated timing and financial performance of other offerings, initiatives, and acquisitions, expectations of the environment in which we operate and projections of future performance. Actual results and the timing of events could differ materially from those expressed or implied in such forward-looking statements as a result of risks and uncertainties, including without limitation our ability to successfully integrate acquisitions and realize the anticipated benefits of the transactions, changes in the interest rate environment, monetary policy, inflation, tariffs, government regulation, general economic conditions, changes in the competitive marketplace, conditions in the real estate markets in which we operate, risks associated with credit quality, our ability to attract and retain deposits and access other sources of liquidity, and the outcome and effects of litigation and other factors beyond our reasonable control. These and other risks and uncertainties are discussed under the heading “Item 1A. Risk Factors” herein and in our 2025 Form 10-K, which has been filed with the SEC, could cause actual results to differ materially from those expressed or implied in any forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this report. All forward-looking statements are qualified in their entirety by this cautionary statement, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. All written and oral forward-looking statements made in connection with this report, which are attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing information.
General
Our Company is a technology-driven, diversified financial services company with approximately $28.2 billion in assets and approximately $44.4 billion of assets under custody and/or administration at Axos Clearing LLC (“Axos Clearing”). Our client-centric, technology platforms provide secure and scalable banking, clearing and custody, and investment advisory solutions to retail and business customers. Axos Bank (the “Bank”) provides consumer and commercial banking products through its digital online and mobile banking platforms, low-cost distribution channels and affinity partners. Our Bank offers deposit and lending products to customers nationwide including consumer and business checking, savings and time deposit accounts and single family and multifamily residential mortgages, commercial real estate mortgages and loans, fund and lender finance loans, asset-based loans, auto loans and other consumer loans. Our Bank generates non-interest income from consumer and business products, including fees from loans originated for sale, deposit account service fees, prepayment fees, as well as technology and payment transaction processing fees. We offer securities products and services to independent registered investment advisors (“RIAs”) and introducing broker dealers (“IBDs”) through Axos Clearing and Axos Advisor Services (“AAS”) and direct-to-consumer securities trading and digital investment management products through Axos Invest, Inc. (“Axos Invest”). AAS and Axos Clearing generate interest and fee income by providing comprehensive securities custody services to RIAs and clearing, stock lending and margin lending services to IBDs, respectively. Axos Invest generates fee income from self-directed securities trading and margin lending and fee income from digital wealth management services to consumers. Our common stock is listed on the New York Stock Exchange under the ticker symbol “AX” and is a component of the Russell 2000® Index and the S&P SmallCap 600® Index, among other indices.
Axos Financial, Inc. is supervised and regulated as a savings and loan holding company that has elected to be treated as a financial holding company by the Board of Governors of the Federal Reserve System (the “Federal Reserve”) and is required to file reports with, comply with the rules and regulations of, and is subject to examination by, the Federal Reserve.
Our Bank is a federal savings association, which has elected to operate as a covered savings association. The Bank is regulated by the Office of the Comptroller of the Currency (“OCC”), and the Federal Deposit Insurance Corporation (“FDIC”) as its deposit insurer. The Bank must file reports with the OCC and the FDIC concerning its activities and financial condition.
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As a depository institution with more than $10 billion in assets, our Bank and our affiliates are subject to direct supervision by the Consumer Financial Protection Bureau.
Axos Clearing is a broker-dealer registered with the SEC and the Financial Industry Regulatory Authority, Inc. (“FINRA”). Axos Invest is a Registered Investment Advisor under the Investment Advisers Act of 1940, that is registered with the SEC. Axos Invest LLC is an IBD that is registered with the SEC and FINRA.
Mergers and Acquisitions
On September 30, 2025, the Company completed the acquisition of 100% of the membership interests in Verdant Commercial Capital, LLC (“Verdant”) in an all-cash transaction, which increases the Company’s scale and enhances the Company’s existing equipment leasing business. As part of the acquisition, the Company acquired, among other assets and liabilities, approximately $1.0 billion of loans and leases (including $211.0 million of PCD assets) and $212.6 million of equipment under operating lease arrangements.
For additional information on this acquisition, see Note 2, “Acquisitions” in the accompanying interim condensed consolidated financial statements.
Segment Information
The Company determines reportable segments based on what separate financial information is available and what segment results are evaluated regularly by the Chief Executive Officer in deciding how to allocate resources and in assessing performance. We operate through two segments: the Banking Business Segment and the Securities Business Segment.
Banking Business Segment. The Banking Business Segment includes a broad range of banking services including online banking, concierge banking, and mortgage, vehicle and unsecured lending through online, low-cost distribution channels to serve the needs of consumers and small businesses nationally. In addition, the Banking Business Segment focuses on providing deposit products nationwide to industry verticals (e.g., Title and Escrow), treasury management products to a variety of businesses, and commercial & industrial and commercial real estate lending to clients. The Banking Business Segment includes a bankruptcy trustee and fiduciary service that provides specialized software and consulting services to Chapter 7 bankruptcy and non-Chapter 7 trustees and fiduciaries.
Securities Business Segment. The Securities Business Segment includes the clearing broker-dealer, registered investment advisor custody business, and introducing broker-dealer lines of businesses. These lines of business offer products independently to their own customers as well as to Banking Business Segment clients.
Critical Accounting Estimates
The following discussion and analysis of our financial condition and results of operations is based upon our unaudited condensed consolidated financial statements and the notes thereto, which have been prepared in accordance with GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to make a number of estimates and assumptions that affect the reported amounts and disclosures in the unaudited condensed consolidated financial statements. On an ongoing basis, we evaluate our estimates and assumptions based upon historical experience and various factors and circumstances. We believe our estimates and assumptions are reasonable under the circumstances. However, actual results may differ significantly from these estimates and assumptions and could have a material effect on the carrying value of assets and liabilities, our results of operations and/or our cash flows.
Critical accounting estimates are those we consider most important to the portrayal of our financial condition and results of operations because they require our most difficult judgments, often as a result of the need to make estimates that are inherently uncertain. Our critical accounting estimates are described in detail in the 2025 Form 10-K in Note 1—“Organizations and Summary of Significant Accounting Policies” and Item 7—“Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates.”
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USE OF NON-GAAP FINANCIAL MEASURES
In addition to the results presented in accordance with GAAP, this report includes the non-GAAP financial measures adjusted earnings, adjusted earnings per common share (“Adjusted EPS”), and tangible book value per common share. Non-GAAP financial measures have inherent limitations, may not be comparable to similarly titled measures used by other companies and are not audited. Readers should be aware of these limitations and should be cautious as to their reliance on such measures. As noted below with respect to each measure, we believe the non-GAAP financial measures disclosed in this report enhance investors’ understanding of our business and performance, and our management uses these non-GAAP measures when it internally evaluates the performance of our business and makes operating decisions. However, these non-GAAP measures should not be considered in isolation, or as a substitute for GAAP basis financial measures.
We define “adjusted earnings”, a non-GAAP financial measure, as net income without the after-tax impact of non-recurring acquisition-related items, (including amortization of intangible assets related to acquisitions) and other costs (unusual or non-recurring charges). Adjusted EPS, a non-GAAP financial measure, is calculated by dividing non-GAAP adjusted earnings by the average number of diluted common shares outstanding during the period. We believe the non-GAAP measures of adjusted earnings and adjusted EPS provide useful information about the Company’s operating performance. We believe excluding the non-recurring acquisition-related costs, and other costs provides investors with an alternative understanding of our core business.
Below is a reconciliation of net income, the nearest comparable GAAP measure, to adjusted earnings and adjusted EPS (Non-GAAP):
For the Three Months Ended December 31, | For the Six Months Ended December 31, | ||||||||||||||||||||||
| (Dollars in thousands, except per share data) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Net income | $ | 128,397 | $ | 104,687 | $ | 240,749 | $ | 217,027 | |||||||||||||||
Acquisition-related costs1 | 2,419 | 1,645 | 5,360 | 4,199 | |||||||||||||||||||
| Verdant acquisition - Provision for credit losses | $ | — | — | 7,765 | — | ||||||||||||||||||
| Income tax effect | (649) | (503) | (3,415) | (1,255) | |||||||||||||||||||
| Adjusted earnings (Non-GAAP) | $ | 130,167 | $ | 105,829 | $ | 250,459 | $ | 219,971 | |||||||||||||||
| Average dilutive common shares outstanding | 57,731,339 | 58,226,006 | 57,792,146 | 58,262,923 | |||||||||||||||||||
| Diluted EPS | $ | 2.22 | $ | 1.80 | $ | 4.17 | $ | 3.72 | |||||||||||||||
Acquisition-related costs1 | 0.04 | 0.03 | 0.09 | 0.07 | |||||||||||||||||||
| Verdant acquisition - Provision for credit losses | — | — | 0.13 | — | |||||||||||||||||||
| Income tax effect | (0.01) | (0.01) | (0.06) | (0.02) | |||||||||||||||||||
| Adjusted EPS (Non-GAAP) | $ | 2.25 | $ | 1.82 | $ | 4.33 | $ | 3.77 | |||||||||||||||
1 Acquisition-related costs includes amortization of intangible assets, and for the six months ended December 31, 2025, also includes $1.3 million of acquisition-related costs associated with the Verdant acquisition.
We define “tangible book value,” a non-GAAP financial measure, as book value adjusted for goodwill and other intangible assets. Tangible book value is calculated using common stockholders’ equity minus servicing rights, goodwill and other intangible assets. Tangible book value per common share, a non-GAAP financial measure, is calculated by dividing tangible book value by the common shares outstanding at the end of the period. We believe tangible book value per common share is useful in evaluating the Company’s capital strength, financial condition, and ability to manage potential losses.
Below is a reconciliation of total stockholders’ equity, the nearest comparable GAAP measure, to tangible book value (Non-GAAP):
| (Dollars in thousands, except per share data) | December 31, 2025 | June 30, 2025 | December 31, 2024 | ||||||||||||||
| Common stockholders’ equity | $ | 2,930,092 | $ | 2,680,677 | $ | 2,521,962 | |||||||||||
| Less: servicing rights, carried at fair value | 25,431 | 27,218 | 28,045 | ||||||||||||||
| Less: goodwill and other intangible assets—net | 196,119 | 134,502 | 137,570 | ||||||||||||||
| Tangible common stockholders’ equity (Non-GAAP) | $ | 2,708,542 | $ | 2,518,957 | $ | 2,356,347 | |||||||||||
| Common shares outstanding at end of period | 56,677,323 | 56,483,617 | 57,097,632 | ||||||||||||||
| Book value per common share | 51.70 | 47.46 | 44.17 | ||||||||||||||
| Less: servicing rights, carried at fair value per common share | 0.45 | 0.48 | 0.49 | ||||||||||||||
| Less: goodwill and other intangible assets—net per common share | 3.46 | 2.38 | 2.41 | ||||||||||||||
| Tangible book value per common share (Non-GAAP) | $ | 47.79 | $ | 44.60 | $ | 41.27 | |||||||||||
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SELECTED FINANCIAL INFORMATION
| (Dollars in thousands, except per share data) | December 31, 2025 | June 30, 2025 | December 31, 2024 | ||||||||||||||
| Selected Balance Sheet Data: | |||||||||||||||||
| Total assets | $ | 28,201,406 | $ | 24,783,078 | $ | 23,709,422 | |||||||||||
| Loans—net of allowance for credit losses | 24,272,552 | 21,049,610 | 19,486,727 | ||||||||||||||
| Loans held for sale, carried at fair value | 18,826 | 10,012 | 25,436 | ||||||||||||||
| Allowance for credit losses | 327,043 | 290,049 | 270,605 | ||||||||||||||
| Trading securities | 880 | 649 | 241 | ||||||||||||||
| Available-for-sale securities | 811,126 | 66,008 | 97,848 | ||||||||||||||
| Securities borrowed | 109,141 | 139,396 | 114,672 | ||||||||||||||
| Customer, broker-dealer and clearing receivables | 277,308 | 252,720 | 298,887 | ||||||||||||||
| Total deposits | 23,232,748 | 20,829,543 | 19,934,904 | ||||||||||||||
| Advances from the Federal Home Loan Bank | 60,000 | 60,000 | 60,000 | ||||||||||||||
Secured financings | 691,507 | — | — | ||||||||||||||
| Borrowings, subordinated notes and debentures | 364,814 | 312,671 | 358,692 | ||||||||||||||
| Securities loaned | 128,869 | 139,426 | 135,258 | ||||||||||||||
| Customer, broker-dealer and clearing payables | 358,727 | 350,606 | 309,593 | ||||||||||||||
| Total stockholders’ equity | $ | 2,930,092 | $ | 2,680,677 | $ | 2,521,962 | |||||||||||
| Common shares outstanding at end of period | 56,677,323 | 56,483,617 | 57,097,632 | ||||||||||||||
| Common shares issued at end of period | 71,419,706 | 71,101,642 | 70,571,332 | ||||||||||||||
| Per Common Share Data: | |||||||||||||||||
| Book value per common share | $ | 51.70 | $ | 47.46 | $ | 44.17 | |||||||||||
Tangible book value per common share (Non-GAAP)1 | $ | 47.79 | $ | 44.60 | $ | 41.27 | |||||||||||
| Capital Ratios: | |||||||||||||||||
| Equity to assets at end of period | 10.39 | % | 10.82 | % | 10.64 | % | |||||||||||
| Axos Financial, Inc.: | |||||||||||||||||
| Tier 1 leverage (to adjusted average assets) | 9.80 | % | 10.73 | % | 10.02 | % | |||||||||||
| Common equity tier 1 capital (to risk-weighted assets) | 11.65 | % | 12.52 | % | 12.42 | % | |||||||||||
| Tier 1 capital (to risk-weighted assets) | 11.65 | % | 12.52 | % | 12.42 | % | |||||||||||
| Total capital (to risk-weighted assets) | 14.39 | % | 15.28 | % | 15.23 | % | |||||||||||
| Axos Bank: | |||||||||||||||||
| Tier 1 leverage (to adjusted average assets) | 9.15 | % | 10.23 | % | 9.85 | % | |||||||||||
| Common equity tier 1 capital (to risk-weighted assets) | 11.12 | % | 12.42 | % | 12.67 | % | |||||||||||
| Tier 1 capital (to risk-weighted assets) | 11.12 | % | 12.42 | % | 12.67 | % | |||||||||||
| Total capital (to risk-weighted assets) | 12.37 | % | 13.70 | % | 13.86 | % | |||||||||||
| Axos Clearing LLC: | |||||||||||||||||
| Net capital | $ | 94,673 | $ | 86,996 | $ | 83,932 | |||||||||||
| Excess capital | $ | 88,369 | $ | 81,834 | $ | 78,282 | |||||||||||
| Net capital as a percentage of aggregate debit items | 30.04 | % | 33.71 | % | 29.71 | % | |||||||||||
| Net capital in excess of 5% aggregate debit items | $ | 78,913 | $ | 74,091 | $ | 69,805 | |||||||||||
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For the Three Months Ended December 31, | For the Six Months Ended December 31, | ||||||||||||||||||||||
| (Dollars in thousands, except per share data) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Selected Income Statement Data: | |||||||||||||||||||||||
| Interest and dividend income | $ | 513,845 | $ | 456,068 | $ | 979,581 | $ | 940,330 | |||||||||||||||
| Interest expense | 182,136 | 175,969 | 356,822 | 368,183 | |||||||||||||||||||
| Net interest income | 331,709 | 280,099 | 622,759 | 572,147 | |||||||||||||||||||
| Provision for credit losses | 25,000 | 12,248 | 42,255 | 26,248 | |||||||||||||||||||
| Net interest income, after provision for credit losses | 306,709 | 267,851 | 580,504 | 545,899 | |||||||||||||||||||
| Non-interest income | 53,378 | 27,799 | 85,718 | 56,408 | |||||||||||||||||||
| Non-interest expense | 184,574 | 145,320 | 340,820 | 292,785 | |||||||||||||||||||
| Income before income taxes | 175,513 | 150,330 | 325,402 | 309,522 | |||||||||||||||||||
| Income taxes | 47,116 | 45,643 | 84,653 | 92,495 | |||||||||||||||||||
| Net income | $ | 128,397 | $ | 104,687 | $ | 240,749 | $ | 217,027 | |||||||||||||||
| Weighted average number of common shares outstanding: | |||||||||||||||||||||||
| Basic | 56,660,833 | 57,094,153 | 56,586,710 | 57,014,412 | |||||||||||||||||||
| Diluted | 57,731,339 | 58,226,006 | 57,792,146 | 58,262,923 | |||||||||||||||||||
| Per Common Share Data: | |||||||||||||||||||||||
| Net income: | |||||||||||||||||||||||
| Basic | $ | 2.27 | $ | 1.83 | $ | 4.25 | $ | 3.81 | |||||||||||||||
| Diluted | $ | 2.22 | $ | 1.80 | $ | 4.17 | $ | 3.72 | |||||||||||||||
Adjusted earnings per common share (Non-GAAP)1 | $ | 2.25 | $ | 1.82 | $ | 4.33 | $ | 3.77 | |||||||||||||||
| Performance Ratios and Other Data: | |||||||||||||||||||||||
| Growth in loans held for investment, net | $ | 1,637,415 | $ | 206,118 | $ | 3,222,942 | $ | 255,342 | |||||||||||||||
| Loan originations for sale | $ | 61,009 | $ | 66,826 | $ | 108,131 | $ | 136,396 | |||||||||||||||
| Return on average assets | 1.83 | % | 1.74 | % | 1.80 | % | 1.83 | % | |||||||||||||||
| Return on average common stockholders’ equity | 17.44 | % | 16.97 | % | 16.70 | % | 18.02 | % | |||||||||||||||
Interest rate spread2 | 4.17 | % | 3.91 | % | 4.03 | % | 4.01 | % | |||||||||||||||
Net interest margin3 | 4.94 | % | 4.83 | % | 4.85 | % | 5.00 | % | |||||||||||||||
Net interest margin3 – Banking Business Segment | 5.02 | % | 4.87 | % | 4.91 | % | 5.04 | % | |||||||||||||||
Efficiency ratio4 | 47.93 | % | 47.20 | % | 48.11 | % | 46.58 | % | |||||||||||||||
Efficiency ratio4 – Banking Business Segment | 41.39 | % | 40.95 | % | 42.07 | % | 40.37 | % | |||||||||||||||
| Asset Quality Ratios: | |||||||||||||||||||||||
| Net annualized charge-offs to average loans | 0.04 | % | 0.10 | % | 0.07 | % | 0.13 | % | |||||||||||||||
| Nonaccrual loans to total loans | 0.61 | % | 1.26 | % | 0.61 | % | 1.26 | % | |||||||||||||||
| Non-performing assets to total assets | 0.56 | % | 1.06 | % | 0.56 | % | 1.06 | % | |||||||||||||||
Allowance for credit losses - loans to total loans held for investment | 1.33 | % | 1.37 | % | 1.33 | % | 1.37 | % | |||||||||||||||
Allowance for credit losses - loans to nonaccrual loans5 | 215.81 | % | 107.58 | % | 215.81 | % | 107.58 | % | |||||||||||||||
1 See “Use of Non-GAAP Financial Measures.”
2 Interest rate spread represents the difference between the annualized weighted average yield on interest-earning assets and the annualized weighted average rate paid on interest-bearing liabilities.
3 Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.
4 Efficiency ratio represents non-interest expense as a percentage of the aggregate of net interest income and non-interest income.
5 The increase in the Allowance for credit losses - loans to nonaccrual loans is primarily attributable to the increase in the allowance for credit losses, including the impact of the Verdant acquisition. For additional information on the Verdant acquisition, see Note 2, “Acquisitions” in the accompanying interim condensed consolidated financial statements.
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RESULTS OF OPERATIONS
Comparison of the Three and Six Months Ended December 31, 2025 and 2024
For the three months ended December 31, 2025, we had net income of $128.4 million, or $2.22 per diluted share, compared to net income of $104.7 million, or $1.80 per diluted share, for the three months ended December 31, 2024. For the six months ended December 31, 2025, we had net income of $240.75 million or $4.17 per diluted share, compared to net income of $217.0 million or $3.72, for the six months ended December 31, 2024.
Average Balances, Net Interest Income, Yields Earned and Rates Paid
The following table presents information regarding (i) average balances; (ii) the total amount of interest income from interest-earning assets and the weighted average yields on such assets; (iii) the total amount of interest expense on interest-bearing liabilities and the weighted average rates paid on such liabilities; (iv) net interest income; (v) interest rate spread; and (vi) net interest margin:
For the Three Months Ended, | |||||||||||||||||||||||||||||||||||
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Average Balance1 | Interest Income/ Expense | Average Yields Earned/Rates Paid2 | Average Balance1 | Interest Income/ Expense | Average Yields Earned/Rates Paid2 | |||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||
Loans3, 4 | $ | 23,492,334 | $ | 478,086 | 8.14 | % | $ | 19,643,375 | $ | 410,868 | 8.37 | % | |||||||||||||||||||||||
Non-purchased loans | 22,731,601 | 433,738 | 7.63 | % | 18,681,035 | 377,376 | 8.08 | % | |||||||||||||||||||||||||||
Purchased loans5 | 760,733 | 44,348 | 23.32 | % | 962,340 | 33,492 | 13.92 | % | |||||||||||||||||||||||||||
| Interest-earning deposits in other financial institutions | 2,418,085 | 23,132 | 3.83 | % | 3,063,487 | 36,649 | 4.79 | % | |||||||||||||||||||||||||||
Mortgage-backed and other securities4 | 415,881 | 4,373 | 4.21 | % | 125,692 | 1,567 | 4.99 | % | |||||||||||||||||||||||||||
Securities borrowed and margin lending6 | 478,621 | 7,745 | 6.47 | % | 335,965 | 6,450 | 7.68 | % | |||||||||||||||||||||||||||
| Stock of the regulatory agencies | 29,600 | 509 | 6.88 | % | 29,598 | 534 | 7.22 | % | |||||||||||||||||||||||||||
| Total interest-earning assets | 26,834,521 | 513,845 | 7.66 | % | 23,198,117 | 456,068 | 7.86 | % | |||||||||||||||||||||||||||
| Non-interest-earning assets | 1,235,130 | 826,732 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 28,069,651 | $ | 24,024,849 | |||||||||||||||||||||||||||||||
| Liabilities and Stockholders’ Equity: | |||||||||||||||||||||||||||||||||||
| Interest-bearing demand and savings | $ | 18,426,331 | $ | 155,779 | 3.38 | % | $ | 16,352,350 | $ | 161,394 | 3.95 | % | |||||||||||||||||||||||
| Time deposits | 1,098,654 | 11,555 | 4.21 | % | 933,244 | 9,465 | 4.06 | % | |||||||||||||||||||||||||||
| Securities loaned | 166,369 | 269 | 0.65 | % | 113,904 | 480 | 1.69 | % | |||||||||||||||||||||||||||
| Advances from the FHLB | 60,001 | 313 | 2.09 | % | 87,066 | 507 | 2.33 | % | |||||||||||||||||||||||||||
| Secured financings | 738,270 | 8,061 | 4.37 | % | — | — | — | % | |||||||||||||||||||||||||||
| Borrowings, subordinated notes and debentures | 413,601 | 6,159 | 5.96 | % | 320,782 | 4,123 | 5.14 | % | |||||||||||||||||||||||||||
| Total interest-bearing liabilities | 20,903,226 | 182,136 | 3.49 | % | 17,807,346 | 175,969 | 3.95 | % | |||||||||||||||||||||||||||
| Non-interest-bearing demand deposits | 3,472,639 | 2,937,572 | |||||||||||||||||||||||||||||||||
| Other non-interest-bearing liabilities | 749,447 | 812,877 | |||||||||||||||||||||||||||||||||
| Stockholders’ equity | 2,944,339 | 2,467,054 | |||||||||||||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 28,069,651 | $ | 24,024,849 | |||||||||||||||||||||||||||||||
| Net interest income | $ | 331,709 | $ | 280,099 | |||||||||||||||||||||||||||||||
Interest rate spread7 | 4.17 | % | 3.91 | % | |||||||||||||||||||||||||||||||
Net interest margin8 | 4.94 | % | 4.83 | % | |||||||||||||||||||||||||||||||
1.Average balances are obtained from daily data. 2.Annualized. 3.Loans include loans held for sale, loan premiums and unearned fees. 4.Interest income includes reductions for amortization of loan and investment securities premiums and earnings from accretion of discounts and loan fees. 5.Purchased loans include loans, loan discounts and unearned fees related to the FDIC Loan Purchase. 6.Margin lending is the significant component of the asset titled customer, broker-dealer and clearing receivables on the unaudited Condensed Consolidated Balance Sheets. 7.Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate paid on interest-bearing liabilities. 8.Net interest margin represents annualized net interest income as a percentage of average interest-earning assets. | |||||||||||||||||||||||||||||||||||
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For the Six Months Ended | |||||||||||||||||||||||||||||||||||
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Average Balance1 | Interest Income/ Expense | Average Yields Earned/Rates Paid2 | Average Balance1 | Interest Income/ Expense | Average Yields Earned/Rates Paid2 | |||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||
Loans3, 4 | $ | 22,500,024 | $ | 907,661 | 8.07 | % | $ | 19,545,195 | $ | 849,097 | 8.69 | % | |||||||||||||||||||||||
Non-purchased loans | 21,688,039 | 831,100 | 7.66 | % | 18,574,872 | 759,835 | 8.18 | % | |||||||||||||||||||||||||||
Purchased loans5 | 811,985 | 76,561 | 18.86 | % | 970,323 | 89,262 | 18.40 | % | |||||||||||||||||||||||||||
| Interest-earning deposits in other financial institutions | 2,478,465 | 51,327 | 4.14 | % | 2,871,995 | 74,073 | 5.16 | % | |||||||||||||||||||||||||||
Mortgage-backed and other securities4 | 238,473 | 5,043 | 4.23 | % | 134,240 | 3,527 | 5.25 | % | |||||||||||||||||||||||||||
Securities borrowed and margin lending6 | 456,497 | 14,522 | 6.36 | % | 324,521 | 12,721 | 7.84 | % | |||||||||||||||||||||||||||
| Stock of the regulatory agencies | 29,600 | 1,028 | 6.95 | % | 24,305 | 912 | 7.50 | % | |||||||||||||||||||||||||||
| Total interest-earning assets | 25,703,059 | 979,581 | 7.62 | % | 22,900,256 | 940,330 | 8.21 | % | |||||||||||||||||||||||||||
| Non-interest-earning assets | 1,043,599 | 811,450 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 26,746,658 | $ | 23,711,706 | |||||||||||||||||||||||||||||||
| Liabilities and Stockholders’ Equity: | |||||||||||||||||||||||||||||||||||
| Interest-bearing demand and savings | $ | 17,801,862 | $ | 313,622 | 3.52 | % | $ | 16,134,067 | $ | 339,209 | 4.20 | % | |||||||||||||||||||||||
| Time deposits | 1,112,501 | 23,076 | 4.15 | % | 902,560 | 18,919 | 4.19 | % | |||||||||||||||||||||||||||
| Securities loaned | 158,412 | 554 | 0.70 | % | 105,560 | 1,020 | 1.93 | % | |||||||||||||||||||||||||||
| Advances from the FHLB | 60,003 | 626 | 2.09 | % | 88,534 | 1,036 | 2.34 | % | |||||||||||||||||||||||||||
| Secured financings | 373,387 | 8,061 | 4.32 | % | — | — | — | % | |||||||||||||||||||||||||||
| Borrowings, subordinated notes and debentures | 372,802 | 10,883 | 5.84 | % | 322,239 | 7,999 | 4.96 | % | |||||||||||||||||||||||||||
| Total interest-bearing liabilities | 19,878,967 | 356,822 | 3.59 | % | 17,552,960 | 368,183 | 4.20 | % | |||||||||||||||||||||||||||
| Non-interest-bearing demand deposits | 3,248,357 | 2,954,332 | |||||||||||||||||||||||||||||||||
| Other non-interest-bearing liabilities | 736,766 | 795,059 | |||||||||||||||||||||||||||||||||
| Stockholders’ equity | 2,882,568 | 2,409,355 | |||||||||||||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 26,746,658 | $ | 23,711,706 | |||||||||||||||||||||||||||||||
| Net interest income | $ | 622,759 | $ | 572,147 | |||||||||||||||||||||||||||||||
Interest rate spread7 | 4.03 | % | 4.01 | % | |||||||||||||||||||||||||||||||
Net interest margin8 | 4.85 | % | 5.00 | % | |||||||||||||||||||||||||||||||
1.Average balances are obtained from daily data. 2.Annualized. 3.Loans include loans held for sale, loan premiums and unearned fees. 4.Interest income includes reductions for amortization of loan and investment securities premiums and earnings from accretion of discounts and loan fees. 5.Margin lending is the significant component of the asset titled customer, broker-dealer and clearing receivables on the unaudited Condensed Consolidated Balance Sheets. 6.Purchased loans include loans, loan discounts and unearned fees related to the FDIC Loan Purchase 7.Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate paid on interest-bearing liabilities. 8.Net interest margin represents annualized net interest income as a percentage of average interest-earning assets. | |||||||||||||||||||||||||||||||||||
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Average Balances, Net Interest Income, Yields Earned and Rates Paid
The following table sets forth the effects of changing rates and volumes on our net interest income. Information is provided with respect to (i) effects on interest income and interest expense attributable to changes in volume (changes in volume multiplied by prior rate); and (ii) effects on interest income and interest expense attributable to changes in rate (changes in rate multiplied by prior volume). The change in interest due to both volume and rate has been allocated proportionally to each based on the relative changes attributable to volume and changes attributable to rate.
For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||||||||||||||
2025 vs 2024 | 2025 vs 2024 | ||||||||||||||||||||||||||||||||||
| Increase (Decrease) Due to | Increase (Decrease) Due to | ||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Volume | Rate | Total Increase (Decrease) | Volume | Rate | Total Increase (Decrease) | |||||||||||||||||||||||||||||
| Increase (decrease) in interest income: | |||||||||||||||||||||||||||||||||||
| Loans | $ | 78,763 | $ | (11,545) | $ | 67,218 | $ | 122,114 | $ | (63,550) | $ | 58,564 | |||||||||||||||||||||||
Non-purchased loans | 86,902 | (30,540) | 56,362 | 136,999 | (65,734) | 71,265 | |||||||||||||||||||||||||||||
Purchased loans1 | (8,139) | 18,995 | 10,856 | (14,885) | 2,184 | (12,701) | |||||||||||||||||||||||||||||
| Interest-earning deposits in other financial institutions | (6,927) | (6,590) | (13,517) | (9,312) | (13,434) | (22,746) | |||||||||||||||||||||||||||||
| Mortgage-backed and other securities | 3,087 | (281) | 2,806 | 2,308 | (792) | 1,516 | |||||||||||||||||||||||||||||
| Securities borrowed and margin lending | 2,426 | (1,131) | 1,295 | 4,509 | (2,708) | 1,801 | |||||||||||||||||||||||||||||
| Stock of the regulatory agencies | — | (25) | (25) | 187 | (71) | 116 | |||||||||||||||||||||||||||||
| Total increase (decrease) in interest income | $ | 77,349 | $ | (19,572) | $ | 57,777 | $ | 119,806 | $ | (80,555) | $ | 39,251 | |||||||||||||||||||||||
| Increase (decrease) in interest expense: | |||||||||||||||||||||||||||||||||||
| Interest-bearing demand and savings | $ | 19,174 | $ | (24,789) | $ | (5,615) | $ | 32,781 | $ | (58,368) | $ | (25,587) | |||||||||||||||||||||||
| Time deposits | 1,730 | 360 | 2,090 | 4,340 | (183) | 4,157 | |||||||||||||||||||||||||||||
| Securities loaned | 163 | (374) | (211) | 366 | (832) | (466) | |||||||||||||||||||||||||||||
| Advances from the FHLB | (146) | (48) | (194) | (308) | (102) | (410) | |||||||||||||||||||||||||||||
Secured financings | 8,061 | — | 8,061 | 8,061 | — | 8,061 | |||||||||||||||||||||||||||||
| Borrowings, subordinated notes and debentures | 1,312 | 724 | 2,036 | 827 | 2,057 | 2,884 | |||||||||||||||||||||||||||||
| Total increase (decrease) in interest expense | $ | 30,294 | $ | (24,127) | $ | 6,167 | $ | 46,067 | $ | (57,428) | $ | (11,361) | |||||||||||||||||||||||
1 Purchased loans include loans, loan discounts and unearned fees related to the FDIC Loan Purchase.
Net Interest Income
For the three months ended December 31, 2025, net interest income totaled $331.7 million, an increase of $51.6 million, or 18.4%, compared to net interest income of $280.1 million for the three months ended December 31, 2024. For the three months ended December 31, 2025, net interest margin increased by 11 basis points compared to the net interest margin of 4.83% for the three months ended December 31, 2024.
For the three months ended December 31, 2025, total interest and dividend income increased 12.7% from the three months ended December 31, 2024, primarily due to an increase in interest earned on loans, reflecting higher average balances, partially offset by a $13.5 million decrease in interest income on deposits in other financial institutions, primarily driven by lower average balances and lower rates earned.
For the three months ended December 31, 2025, total interest expense increased 3.5% from the three months ended December 31, 2024, primarily due to an increase in interest expense on secured financings, attributable to the Verdant acquisition, and other borrowings, partially offset by a $5.6 million decrease in interest expense on demand and savings deposits.
For the six months ended December 31, 2025, net interest income totaled $622.8 million, an increase of $50.6 million, or 8.8%, compared to net interest income of $572.1 million for the six months ended December 31, 2024. For the six months ended December 31, 2025, net interest margin decreased by 15 basis points compared to the net interest margin of 5.00% for the six months ended December 31, 2024.
For the six months ended December 31, 2025, total interest and dividend income increased 4.2% from the six months ended December 31, 2024, primarily due to a $58.6 million increase in interest income on loans, attributable to higher loan balances, partially offset by lower rates earned. This increase in interest and dividend income was partially offset by a $22.7 million decrease in interest income on interest-earning deposits at other financial institutions.
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For the six months ended December 31, 2025, total interest expense decreased 3.1% from the six months ended December 31, 2024, primarily due to a $25.6 million decrease in interest expense on demand and savings deposits, mainly reflecting lower rates paid. This decrease was partially offset by an increase in interest expense on secured financings, attributable to the Verdant acquisition, and other borrowings.
Provision for Credit Losses
The provision for credit losses was $25.0 million and $42.3 million for the three and six months ended December 31, 2025, respectively, compared to $12.2 million and $26.2 million, respectively, for the three and six months ended December 31, 2024. The provision for credit losses consists of provisions for both funded loans and for unfunded lending commitments. The provision for credit losses for funded loans was $22.3 million and $37.5 million for the three and six months ended December 31, 2025, respectively, and for the three months ended December 31, 2025, reflects loan growth primarily in the commercial real estate and commercial & industrial - Non-RE portfolios, as well as the impact of macroeconomic variables used in the allowance for credit losses model, primarily the forecasted consumer price index, corporate bond yields, and the five-year U.S. Treasury rate. For the six months ended December 31, 2025, the provision for credit losses was also impacted by the Verdant acquisition, which resulted in a post-acquisition provision for credit losses on the loans and leases acquired.
The provision for credit losses for unfunded lending commitments of $2.8 million and $4.8 million for the three and six months ended December 31, 2025, respectively, was primarily driven by unfunded lending commitment growth, primarily in the commercial real estate and commercial & industrial - non-RE portfolios. Provisions for credit losses are charged to income to bring the allowance for credit losses for loans and unfunded lending commitments to a level deemed appropriate by management based on the factors discussed under the heading “Financial Condition—Asset Quality and Allowance for Credit Losses - Loans.”
Non-Interest Income
The following table sets forth information regarding our non-interest income:
For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | 2025 | 2024 | Inc (Dec) | 2025 | 2024 | Inc (Dec) | |||||||||||||||||||||||||||||
| Broker-dealer fee income | $ | 11,145 | $ | 11,039 | $ | 106 | $ | 22,093 | $ | 22,099 | $ | (6) | |||||||||||||||||||||||
| Advisory fee income | 8,829 | 7,982 | 847 | 17,354 | 15,927 | 1,427 | |||||||||||||||||||||||||||||
| Banking and service fees | 31,732 | 9,813 | 21,919 | 42,552 | 18,426 | 24,126 | |||||||||||||||||||||||||||||
| Mortgage banking and servicing rights income | 644 | (1,797) | 2,441 | 2,039 | (1,347) | 3,386 | |||||||||||||||||||||||||||||
| Prepayment penalty fee income | 1,028 | 762 | 266 | 1,680 | 1,303 | 377 | |||||||||||||||||||||||||||||
| Total non-interest income | $ | 53,378 | $ | 27,799 | $ | 25,579 | $ | 85,718 | $ | 56,408 | $ | 29,310 | |||||||||||||||||||||||
For the three months ended December 31, 2025, non-interest income increased by $25.6 million, or 92.0%, and for the six months ended December 31, 2025, non interest income increased by $29.3 million, or 52.0%. The increases were primarily due to an increase in banking and servicing fee income, mainly attributable to operating lease rental and other income from the Verdant acquisition, as well as an increase in mortgage banking and servicing rights income, reflecting the absence of losses on certain loan sales in the prior year periods.
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Non-Interest Expense
The following table sets forth information regarding our non-interest expense:
For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | 2025 | 2024 | Inc (Dec) | 2025 | 2024 | Inc (Dec) | |||||||||||||||||||||||||||||
| Salaries and related costs | $ | 82,204 | $ | 74,097 | $ | 8,107 | $ | 158,809 | $ | 148,390 | $ | 10,419 | |||||||||||||||||||||||
| Data and operational processing | 21,825 | 19,314 | 2,511 | 43,882 | 38,299 | 5,583 | |||||||||||||||||||||||||||||
| Depreciation and amortization | 23,205 | 7,031 | 16,174 | 31,546 | 14,481 | 17,065 | |||||||||||||||||||||||||||||
| Advertising and promotional | 12,702 | 11,045 | 1,657 | 24,909 | 25,298 | (389) | |||||||||||||||||||||||||||||
| Professional services | 9,293 | 9,072 | 221 | 22,626 | 18,967 | 3,659 | |||||||||||||||||||||||||||||
| Occupancy and equipment | 5,191 | 4,206 | 985 | 9,811 | 8,524 | 1,287 | |||||||||||||||||||||||||||||
| FDIC and regulatory fees | 6,749 | 6,992 | (243) | 12,368 | 12,948 | (580) | |||||||||||||||||||||||||||||
| Broker-dealer clearing charges | 4,282 | 4,299 | (17) | 8,485 | 8,606 | (121) | |||||||||||||||||||||||||||||
| General and administrative expense | 19,123 | 9,264 | 9,859 | 28,384 | 17,272 | 11,112 | |||||||||||||||||||||||||||||
| Total non-interest expense | $ | 184,574 | $ | 145,320 | $ | 39,254 | $ | 340,820 | $ | 292,785 | $ | 48,035 | |||||||||||||||||||||||
For the three months ended December 31, 2025, non-interest expense increased $39.3 million, or 27.0%, primarily due to increases of:
•$16.2 million in depreciation and amortization primarily due to depreciation on equipment under operating leases obtained in the Verdant acquisition;
•$9.9 million in general and administrative expenses reflecting a $7.0 million accrual for developments in an ongoing matter related to the Company’s acquisition of COR Securities in fiscal year 2019; and
•$8.1 million in salaries and related costs primarily due to increased headcount and salaries, including as a result of the Verdant acquisition.
For the six months ended December 31, 2025, non-interest expense increased $48.0 million, or 16.4%, primarily due to increases of:
•$17.1 million in depreciation and amortization primarily due to depreciation on equipment under operating leases obtained in the Verdant acquisition;
•$11.1 million in general and administrative expenses reflecting a $7.0 million accrual for developments in an ongoing matter related to the Company’s acquisition of COR Securities in fiscal year 2019; and
•$10.4 million in salaries and related costs primarily due to increased headcount and salaries, including as a result of the Verdant acquisition.
Provision for Income Taxes
Income tax expense was $47.1 million and $84.7 million for the three and six months ended December 31, 2025, respectively, compared to $45.6 million and $92.5 million for three and six months ended December 31, 2024. Our effective income tax rates for the three months ended December 31, 2025 and 2024 were 26.84% and 30.36%, respectively. Our effective income tax rates for the six months ended December 31, 2025 and 2024 were 26.01% and 29.88%, respectively. The decrease in effective income tax rate for the three and six months ended December 31, 2025 reflects, in part, a change in the State of California income tax law effective beginning with the Company’s 2026 fiscal year.
SEGMENT RESULTS
Our Company determines reportable segments based on the services offered, the significance of the services offered, the significance of those services to our Company’s financial condition and operating results and management’s regular review of the operating results of those services. Our Company operates through two operating segments: the Banking Business Segment and the Securities Business Segment. In order to reconcile the two segments to the consolidated totals, our Company includes corporate activities and intercompany eliminations. Inter-segment transactions are eliminated in consolidation and primarily include non-interest income earned by the Securities Business Segment and non-interest expense incurred by the Banking Business Segment for cash sorting fees related to deposits sourced from Securities Business Segment customers.
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The following tables present the operating results of the segments:
For the Three Months Ended December 31, 2025 | |||||||||||||||||||||||
| (Dollars in thousands) | Banking Business Segment | Securities Business Segment | Corporate/Eliminations | Axos Consolidated | |||||||||||||||||||
| Net interest income | $ | 328,499 | $ | 8,642 | $ | (5,432) | $ | 331,709 | |||||||||||||||
| Provision for credit losses | 25,000 | — | — | 25,000 | |||||||||||||||||||
| Non-interest income | 32,812 | 30,171 | (9,605) | 53,378 | |||||||||||||||||||
| Non-interest expense | 149,537 | 29,102 | 5,935 | 184,574 | |||||||||||||||||||
| Income before income taxes | $ | 186,774 | $ | 9,711 | $ | (20,972) | $ | 175,513 | |||||||||||||||
For the Three Months Ended December 31, 2024 | |||||||||||||||||||||||
| (Dollars in thousands) | Banking Business Segment | Securities Business Segment | Corporate/Eliminations | Axos Consolidated | |||||||||||||||||||
| Net interest income | $ | 276,720 | $ | 7,007 | $ | (3,628) | $ | 280,099 | |||||||||||||||
| Provision for credit losses | 12,248 | — | — | 12,248 | |||||||||||||||||||
| Non-interest income | 2,948 | 29,004 | (4,153) | 27,799 | |||||||||||||||||||
| Non-interest expense | 114,536 | 28,178 | 2,606 | 145,320 | |||||||||||||||||||
| Income before income taxes | $ | 152,884 | $ | 7,833 | $ | (10,387) | $ | 150,330 | |||||||||||||||
For the Six Months Ended December 31, 2025 | |||||||||||||||||||||||
| (Dollars in thousands) | Banking Business Segment | Securities Business Segment | Corporate/Eliminations | Axos Consolidated | |||||||||||||||||||
| Net interest income | $ | 615,699 | $ | 16,836 | $ | (9,776) | $ | 622,759 | |||||||||||||||
| Provision for credit losses | 42,255 | — | — | 42,255 | |||||||||||||||||||
| Non-interest income | 45,187 | 59,628 | (19,097) | 85,718 | |||||||||||||||||||
| Non-interest expense | 278,030 | 58,469 | 4,321 | 340,820 | |||||||||||||||||||
| Income before income taxes | $ | 340,601 | $ | 17,995 | $ | (33,194) | $ | 325,402 | |||||||||||||||
For the Six Months Ended December 31, 2024 | |||||||||||||||||||||||
| (Dollars in thousands) | Banking Business Segment | Securities Business Segment | Corporate/Eliminations | Axos Consolidated | |||||||||||||||||||
| Net interest income | $ | 565,212 | $ | 14,274 | $ | (7,339) | $ | 572,147 | |||||||||||||||
| Provision for credit losses | 26,248 | — | — | 26,248 | |||||||||||||||||||
| Non-interest income | 11,538 | 58,906 | (14,036) | 56,408 | |||||||||||||||||||
| Non-interest expense | 232,851 | 56,269 | 3,665 | 292,785 | |||||||||||||||||||
| Income before income taxes | $ | 317,651 | $ | 16,911 | $ | (25,040) | $ | 309,522 | |||||||||||||||
Banking Business Segment
For the three and six months ended December 31, 2025, the Banking Business Segment had income before income taxes of $186.8 million and $340.6 million, respectively, compared to income before income taxes of $152.9 million and $317.7 million, respectively, for the three and six months ended December 31, 2024.
For the three and six months ended December 31, 2025, the Banking Business Segment’s net interest income increased $51.8 million, or 18.7%, and $50.5 million, or 8.9%, respectively, compared to net interest income for the three and six months ended December 31, 2024. The increase in net interest income was primarily due to an increase in interest earned on loans, reflecting higher average balances, partially offset by a decrease in interest income on deposits in other financial institutions, primarily driven by lower average balances and lower rates earned. These increases were partially offset by an increase in interest expense, primarily on secured financings, partially offset by a decrease in interest expense on demand and savings deposits.
For the three and six months ended December 31, 2025, the Banking Business Segment’s non-interest income increased $29.9 million and $33.6 million, respectively, compared to non-interest income for the three and six months ended December 31, 2024. The increase in non-interest income for the three and six months ended December 31, 2025 was primarily due to higher banking and servicing fee income, mainly attributable to the Verdant acquisition.
For the three and six months ended December 31, 2025, the Banking Business Segment’s non-interest expense increased $35.0 million, or 30.6%, and $45.2 million, or 19.4%, respectively, compared to non-interest expense for the three
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and six months ended December 31, 2024. The increase in non-interest expense for the three and six months ended December 31, 2025 reflected higher depreciation and amortization expense, mainly as a result of the Verdant acquisition, higher legal expenses and an increase in salaries and related costs, including as a result of the Verdant acquisition.
We consider the ratios shown in the table below to be key indicators of the performance of our Banking Business Segment:
For the Three Months Ended December 31, | For the Six Months Ended December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Efficiency ratio | 41.39 | % | 40.95 | % | 42.07 | % | 40.37 | % | |||||||||||||||
| Return on average assets | 2.07 | % | 1.87 | % | 1.96 | % | 2.02 | % | |||||||||||||||
| Interest rate spread | 4.27 | % | 3.96 | % | 4.12 | % | 4.05 | % | |||||||||||||||
| Net interest margin | 5.02 | % | 4.87 | % | 4.91 | % | 5.04 | % | |||||||||||||||
Our Banking Business Segment’s net interest margin exceeds our consolidated net interest margin. Our consolidated net interest margin includes certain items that are not reflected in the calculation of our net interest margin within our Banking Business Segment and reduce our consolidated net interest margin, such as the borrowing costs at our Company and the yields and costs associated with certain items within interest-earning assets and interest-bearing liabilities in our Securities Business Segment, including items related to securities financing operations.
Securities Business Segment
For the three and six months ended December 31, 2025, our Securities Business Segment had income before income taxes of $9.7 million and $18.0 million, respectively, compared to income before income taxes of $7.8 million and $16.9 million, respectively, for the three and six months ended December 31, 2024.
For the three and six months ended December 31, 2025, net interest income increased $1.6 million, or 23.3%, and $2.6 million, or 17.9%, respectively, compared to net interest income for the three and six months ended December 31, 2024. The increases for the three and six months ended December 31, 2025 were primarily attributable to higher broker-dealer interest income on higher average balances.
For the three and six months ended December 31, 2025, non-interest income increased $1.2 million, or 4.0%, and $0.7 million, or 1.2%, respectively, compared to the three and six months ended December 31, 2024. The increases were primarily driven by higher advisory fee income.
For the three and six months ended December 31, 2025, non-interest expense increased $0.9 million or 3.3%, and $2.2 million, or 3.9%, respectively, compared to the three and six months ended December 31, 2024. The increases primarily reflect higher data and operational processing expenses.
The following table provides selected information for Axos Clearing:
| (Dollars in thousands) | December 31, 2025 | June 30, 2025 | |||||||||
| FDIC insured deposit program balances at banks | $ | 1,550,213 | $ | 1,444,830 | |||||||
| Margin balances | $ | 263,004 | $ | 229,387 | |||||||
| Cash reserves for the benefit of customers | $ | 178,520 | $ | 146,835 | |||||||
| Securities lending: | |||||||||||
| Interest-earning assets – securities borrowed | $ | 109,141 | $ | 139,396 | |||||||
| Interest-bearing liabilities – securities loaned | $ | 128,869 | $ | 139,426 | |||||||
FINANCIAL CONDITION
Balance Sheet Analysis
Our total assets increased $3.4 billion, or 13.8%, to $28.2 billion at December 31, 2025, from $24.8 billion at June 30, 2025, primarily attributable to an increase in loans, mainly attributable to the Verdant acquisition, and higher available-for-sale securities, partially offset by lower cash and cash equivalents. Our total liabilities increased $3.2 billion, or 14.3%, to $25.3 billion at December 31, 2025 from $22.1 billion at June 30, 2025, primarily attributable to higher deposit balances, as well as secured financings assumed as part of the Verdant acquisition.
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Loans and Allowance for Credit Losses - Loans
The following table sets forth the composition of the loan portfolio:
| December 31, 2025 | June 30, 2025 | ||||||||||||||||||||||
| (Dollars in thousands) | Amount | Percent | Amount | Percent | |||||||||||||||||||
| Single Family - Mortgage & Warehouse | $ | 4,795,055 | 19.4 | % | $ | 4,395,278 | 20.4 | % | |||||||||||||||
Multifamily and Commercial Mortgage | 2,497,905 | 10.1 | % | 2,940,739 | 13.6 | % | |||||||||||||||||
Commercial Real Estate | 8,402,806 | 33.9 | % | 6,937,187 | 32.2 | % | |||||||||||||||||
| Commercial & Industrial - Non-RE | 8,503,598 | 34.3 | % | 6,795,497 | 31.6 | % | |||||||||||||||||
| Auto & Consumer | 576,243 | 2.3 | % | 482,996 | 2.2 | % | |||||||||||||||||
| Total gross loans | 24,775,607 | 100.0 | % | 21,551,697 | 100.0 | % | |||||||||||||||||
| Allowance for credit losses - loans | (327,043) | (290,049) | |||||||||||||||||||||
| Unaccreted discounts and loan fees | (176,012) | (212,038) | |||||||||||||||||||||
| Total net loans | $ | 24,272,552 | $ | 21,049,610 | |||||||||||||||||||
Management establishes an allowance for credit losses based upon its evaluation of the expected lifetime credit losses related to the amortized cost basis of loans on the balance sheet. The net charge-off rate for the three months ended December 31, 2025 was 0.04%, compared to 0.10% for the three months ended December 31, 2024. The decrease in the net charge-off rate was primarily driven by lower net charge-offs in the Commercial Real Estate and Single Family - Mortgage & Warehouse portfolio. For additional information regarding the Company’s allowance for credit losses, see Note 5—“Loans & Allowance for Credit Losses” in the accompanying interim condensed consolidated financial statements. For a discussion of the provision for credit losses for the three and six months ended December 31, 2025, see Item 2—“Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations.” We believe that the lower average LTV in the loan portfolio will continue to result in future lower average mortgage loan charge-offs when compared to many other comparable banks.
Asset Quality
Non-performing Assets. Loans reaching 90 days past due are generally placed on nonaccrual status. Loans not yet reaching 90 days past due may be placed on nonaccrual status based on management’s assessment of the aging of contractual principal amounts due, among other factors. For an aging analysis of the Company’s loans held for investment as of December 31, 2025 and June 30, 2025, see Note 5—“Loans & Allowance for Credit Losses” in the accompanying interim condensed consolidated financial statements. Non-performing assets include nonaccrual loans plus other real estate owned and repossessed vehicles.
Non-performing assets consisted of the following:
| (Dollars in thousands) | December 31, 2025 | June 30, 2025 | Increase (Decrease) | ||||||||||||||
| Non-performing assets: | |||||||||||||||||
Nonaccrual loans: | |||||||||||||||||
| Single Family - Mortgage & Warehouse | $ | 56,021 | $ | 44,196 | $ | 11,825 | |||||||||||
| Multifamily and Commercial Mortgage | 6,330 | 33,037 | (26,707) | ||||||||||||||
| Commercial Real Estate | 21,783 | 29,223 | (7,440) | ||||||||||||||
| Commercial & Industrial - Non-RE | 64,627 | 61,804 | 2,823 | ||||||||||||||
| Auto & Consumer | 2,780 | 2,126 | 654 | ||||||||||||||
| Total nonaccrual loans | $ | 151,541 | $ | 170,386 | $ | (18,845) | |||||||||||
| Foreclosed real estate | 4,383 | 4,535 | (152) | ||||||||||||||
Repossessed vehicles—Autos | 757 | 505 | 252 | ||||||||||||||
| Total non-performing assets | $ | 156,681 | $ | 175,426 | $ | (18,745) | |||||||||||
| Total nonaccrual loans as a percentage of total loans | 0.61 | % | 0.79 | % | (0.18) | % | |||||||||||
| Total non-performing assets as a percentage of total assets | 0.56 | % | 0.71 | % | (0.15) | % | |||||||||||
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Our non-performing assets decreased to $156.7 million at December 31, 2025 from $175.4 million compared to June 30, 2025, as decreases in the multifamily and commercial mortgage and commercial real estate portfolios, were partially offset by an increase in the single family - mortgage & warehouse portfolio. Non-performing assets as a percentage of total assets decreased to 0.56% at December 31, 2025 from 0.71% at June 30, 2025.
Total available-for-sale securities were $811.1 million as of December 31, 2025, compared with $66.0 million at June 30, 2025. During the six months ended December 31, 2025, we purchased $758.8 million of securities and we received principal repayments of $15.8 million. The remainder of the change for the available-for-sale securities portfolio is attributable to changes in the fair value of the securities.
Deposits
Deposits increased by $2.4 billion, or 11.5%, to $23.2 billion at December 31, 2025, from $20.8 billion at June 30, 2025. As of December 31, 2025 compared with June 30, 2025, interest-bearing demand and savings increased $2,365.8 million, non-interest-bearing deposits increased by $205.5 million and time deposits decreased $168.1 million.
The following table sets forth the composition of the deposit portfolio:
| (Dollars in thousands) | December 31, 2025 | June 30, 2025 | |||||||||
| Non-interest-bearing | $ | 3,246,199 | $ | 3,040,696 | |||||||
| Interest-bearing demand and savings | $ | 19,026,136 | $ | 16,660,290 | |||||||
| Time deposits | 960,413 | 1,128,557 | |||||||||
| Total interest bearing | $ | 19,986,549 | $ | 17,788,847 | |||||||
Total deposits1 | $ | 23,232,748 | $ | 20,829,543 | |||||||
1 Total deposits includes brokered deposits of $1,816.2 million and $1,801.1 million as of December 31, 2025 and June 30, 2025, respectively, which include brokered time deposits of $555.2 million and $700.0 million as of December 31, 2025 and June 30, 2025, respectively.
The following table sets forth the number of deposit accounts by type:
| December 31, 2025 | June 30, 2025 | December 31, 2024 | |||||||||||||||
| Non-interest-bearing | 53,437 | 50,967 | 48,930 | ||||||||||||||
| Interest-bearing checking and savings accounts | 572,722 | 546,678 | 527,590 | ||||||||||||||
| Time deposits | 2,558 | 2,956 | 3,631 | ||||||||||||||
| Total number of deposit accounts | 628,717 | 600,601 | 580,151 | ||||||||||||||
Total deposits that exceeded the FDIC insurance limit or were not collateralized at December 31, 2025 and June 30, 2025 were $3.6 billion and $2.6 billion, respectively. The maturities of non-collateralized time deposits that exceeded the FDIC insurance limit were as follows:
| (Dollars in thousands) | December 31, 2025 | ||||
| 3 months or less | $ | 5,973 | |||
| 3 months to 6 months | 4,548 | ||||
| 6 months to 12 months | 3,223 | ||||
| Over 12 months | 1,085 | ||||
| Total | $ | 14,829 | |||
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Borrowings and Secured Financings
The following table sets forth the composition of our borrowings and the interest rates:
| December 31, 2025 | June 30, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Balance | Weighted Average Rate | Balance | Weighted Average Rate | Balance | Weighted Average Rate | ||||||||||||||||||||||||||||||||
| FHLB Advances | $ | 60,000 | 2.07 | % | $ | 60,000 | 2.07 | % | $ | 60,000 | 2.07 | % | ||||||||||||||||||||||||||
| Secured financings | 691,507 | 5.53 | % | — | — | % | — | — | % | |||||||||||||||||||||||||||||
| Borrowings, subordinated notes and debentures | 364,814 | 5.80 | % | 312,671 | 4.55 | % | 358,692 | 4.86 | % | |||||||||||||||||||||||||||||
| Total borrowings | $ | 1,116,321 | 5.43 | % | $ | 372,671 | 4.15 | % | $ | 418,692 | 4.46 | % | ||||||||||||||||||||||||||
| Weighted average cost of total borrowings during the quarter | 4.80 | % | 4.66 | % | 4.54 | % | ||||||||||||||||||||||||||||||||
| Total borrowings as a percent of total assets | 3.96 | % | 1.50 | % | 1.77 | % | ||||||||||||||||||||||||||||||||
We regularly use advances from the FHLB to manage our interest rate risk and, to a lesser extent, manage our liquidity position. Generally, FHLB advances with terms between three and ten years have been used to fund the origination of loans and to provide us with interest rate risk protection should rates rise. On September 19, 2025, the Company completed the issuance of $200 million aggregate principal amount of the Company’s 2035 Notes, and on October 1, 2025, the Company completed the redemption of the $160.5 million aggregate principal amount outstanding of its 2030 Notes. For additional information see Note 12—“Borrowings, Subordinated Notes and Debentures” in the accompanying interim condensed consolidated financial statements.
Stockholders’ Equity
Stockholders’ equity increased $249.4 million to $2,930.1 million at December 31, 2025, compared to $2,680.7 million at June 30, 2025. The increase was primarily the result of net income for the six months ended December 31, 2025 of $240.7 million.
LIQUIDITY
Cash flow information is as follows:
For the Six Months Ended | |||||||||||
| December 31, | |||||||||||
| (Dollars in thousands) | 2025 | 2024 | |||||||||
| Operating Activities | $ | 222,541 | $ | 233,298 | |||||||
| Investing Activities | $ | (3,417,515) | $ | (314,758) | |||||||
| Financing Activities | $ | 2,359,131 | $ | 569,115 | |||||||
During the six months ended December 31, 2025, we had net cash inflows from operating activities of $222.5 million compared to inflows of $233.3 million for the six months ended December 31, 2024. Net operating cash inflows and outflows fluctuate primarily due to the timing of the following: originations of loans held for sale, proceeds from loan sales, securities borrowed and loaned, and customer, broker-dealer and clearing receivables and payables and changes in other assets and payables.
Net cash outflows from investing activities totaled $3,417.5 million for the six months ended December 31, 2025, while outflows totaled $314.8 million for the six months ended December 31, 2024. The increase in outflows was primarily due to a higher net change in loans held for investment and higher cash outflows for the purchase of available-for-sale securities in the six months ended December 31, 2025 as compared to the six months ended December 31, 2024, and the Verdant acquisition in the six months ended December 31, 2025.
Net cash inflows from financing activities totaled $2,359.1 million for the six months ended December 31, 2025, compared to net cash inflows from financing activities of $569.1 million for the six months ended December 31, 2024. The increase in net cash inflows from financing was primarily driven by a higher net increase in deposits during the six months ended December 31, 2025.
As of December 31, 2025, the Bank could borrow up to 35% of its total assets from the FHLB. Borrowings are collateralized by pledging certain mortgage loans and available-for-sale securities to the FHLB. At December 31, 2025, the
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Company had $2,579.7 million available immediately and $5,477.9 million available with additional collateral and the Company had $4,025.1 million of loans and $750.1 million of securities pledged to the FHLB. At December 31, 2025, the Company had $250.0 million in unsecured federal funds lines of credit with five major banks under which there were no borrowings outstanding.
The Bank has the ability to borrow short-term from the FRBSF Discount Window. At December 31, 2025, the Bank did not have any borrowings outstanding and the amount available from this source was $8,863.8 million. Borrowings are collateralized by pledging commercial loans and consumer loans. At December 31, 2025, the Bank had $10,358.8 million of loans pledged to the FRBSF.
Axos Clearing has a $150.0 million third-party secured line of credit available for borrowing, as needed. As of December 31, 2025, there was no amount outstanding on this credit facility. This credit facility bears interest at rates based on the Federal Funds rate and is due upon demand.
Axos Clearing has a $95.0 million third-party unsecured line of credit available for limited purpose borrowing. As of December 31, 2025, there was $15.0 million amount outstanding on this credit facility. This credit facility bears interest at rates based on the Federal Funds rate and is due upon demand.
We view our liquidity sources to be stable and adequate for our anticipated needs and contingencies for both the short- and long-term. Due to the diversified sources of our deposits, while maintaining approximately 85% of our total Bank deposits in insured or collateralized accounts as of December 31, 2025, we believe we have the ability to increase our level of deposits, and have available other potential sources of funding, to address our liquidity needs for the foreseeable future.
For additional information on certain contractual and other obligations, see Note 10—“Commitments and Contingencies,” Note 12—“Borrowings, Subordinated Notes and Debentures,” Note 13—“Other Assets” and Note 14— “Variable Interest Entities” in the accompanying interim condensed consolidated financial statements and refer to Note 11—“Deposits,” Note 12—“Advances from the Federal Home Loan Bank” and Note 13—“Borrowings, Subordinated Notes and Debentures” in the 2025 Form 10-K.
On January 28, 2025, the Company entered into an equity distribution agreement pursuant to which the Company may issue and sell through distribution agents from time to time shares of the Company’s common stock in at-the-market offerings with an aggregate offering price of up to $150,000,000. The Company will issue the stock pursuant to a previously effective registration statement and a prospectus supplement filed with the SEC on January 28, 2025. No shares of the Company’s common stock have been issued pursuant to this offering.
CAPITAL RESOURCES AND REQUIREMENTS
The Company and Bank are subject to regulatory capital adequacy requirements promulgated by federal bank regulatory agencies. Failure by the Company or Bank to meet minimum capital requirements could result in certain mandatory and discretionary actions by regulators that could have a material adverse effect on our consolidated financial statements. The Federal Reserve establishes capital requirements for the Company and the OCC has similar requirements for our Bank. The following tables present regulatory capital information for the Company and Bank. Information presented for December 31, 2025 reflects the Basel III capital requirements for both the Company and Bank. Under these capital requirements and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of the Company and Bank’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s and Bank’s capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings and other factors. As part of its capital management, the Bank may pay dividends to the Company from time to time.
Quantitative measures established by regulation require the Company and Bank to maintain certain minimum capital amounts and ratios. Federal bank regulators require the Company and Bank to maintain minimum ratios of tier 1 capital to adjusted average assets of 4.0%, common equity tier 1 capital to risk-weighted assets of 4.5%, tier 1 capital to risk-weighted assets of 6.0% and total risk-based capital to risk-weighted assets of 8.0%. To be “well capitalized,” the Company and Bank must maintain minimum leverage, common equity tier 1 risk-based, tier 1 risk-based and total risk-based capital ratios of at least 5.0%, 6.5%, 8.0% and 10.0%, respectively. Additionally, the Bank is required to maintain a tangible capital ratio equal to at least 1.5% of total average assets. At December 31, 2025, the Company and Bank met all the capital adequacy requirements to which they were subject and were “well capitalized” under the regulatory framework for prompt corrective action. Management believes that no conditions or events have occurred since December 31, 2025 that would materially adversely change the Company’s and Bank’s capital classifications. From time to time, we may need to raise additional capital to support the Company’s and Bank’s further growth and to maintain their “well capitalized” status.
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The Company and Bank both elected the five-year current expected credit losses (“CECL”) transition guidance for calculating regulatory capital and ratios, which allowed an entity to add back to regulatory capital the impact of the CECL adoption, subject to the five-year phase out. The phase out ended in fiscal year 2025 and the regulatory capital figures presented as of December 31, 2025 no longer reflect this adjustment.
The Company’s and Bank’s capital ratios and requirements were as follows:
| Axos Financial, Inc. | Axos Bank | “Well Capitalized” Ratio | Minimum Capital Ratio | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | December 31, 2025 | June 30, 2025 | December 31, 2025 | June 30, 2025 | |||||||||||||||||||||||||||||||
| Regulatory Capital: | |||||||||||||||||||||||||||||||||||
| Tier 1 | $ | 2,732,111 | $ | 2,554,071 | $ | 2,457,687 | $ | 2,360,284 | |||||||||||||||||||||||||||
| Common equity tier 1 | $ | 2,732,111 | $ | 2,554,071 | $ | 2,457,687 | $ | 2,360,284 | |||||||||||||||||||||||||||
| Total capital | $ | 3,373,478 | $ | 3,117,763 | $ | 2,734,035 | $ | 2,603,589 | |||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||
| Average adjusted | $ | 27,875,394 | $ | 23,813,242 | $ | 26,872,752 | $ | 23,077,089 | |||||||||||||||||||||||||||
| Total risk-weighted | $ | 23,450,710 | $ | 20,404,204 | $ | 22,105,008 | $ | 19,003,094 | |||||||||||||||||||||||||||
| Regulatory Capital Ratios: | |||||||||||||||||||||||||||||||||||
| Tier 1 leverage (to adjusted average assets) | 9.80 | % | 10.73 | % | 9.15 | % | 10.23 | % | 5.00 | % | 4.00 | % | |||||||||||||||||||||||
| Common equity tier 1 capital (to risk-weighted assets) | 11.65 | % | 12.52 | % | 11.12 | % | 12.42 | % | 6.50 | % | 4.50 | % | |||||||||||||||||||||||
| Tier 1 capital (to risk-weighted assets) | 11.65 | % | 12.52 | % | 11.12 | % | 12.42 | % | 8.00 | % | 6.00 | % | |||||||||||||||||||||||
| Total capital (to risk-weighted assets) | 14.39 | % | 15.28 | % | 12.37 | % | 13.70 | % | 10.00 | % | 8.00 | % | |||||||||||||||||||||||
Basel III requires all banking organizations to maintain a capital conservation buffer above the minimum risk-based capital requirements in order to avoid certain limitations on capital distributions, stock repurchases and discretionary bonus payments to executive officers. The capital conservation buffer is exclusively composed of common equity tier 1 capital, and it applies to each of the three risk-based capital ratios but not the leverage ratio. At December 31, 2025 and June 30, 2025, our Company and Bank were in compliance with the capital conservation buffer requirement, which sets the common equity tier 1 risk-based, tier 1 risk-based and total risk-based capital ratio minimums to 7.0%, 8.5% and 10.5%, respectively.
Securities Business
Pursuant to the net capital requirements of the Exchange Act, Axos Clearing is subject to the SEC Uniform Net Capital (Rule 15c3-1 of the Exchange Act). Under this rule, the Company has elected to operate under the alternate method and is required to maintain minimum net capital of $250,000 or 2% of aggregate debit balances arising from client transactions, as defined. Under the alternate method, the Company may not repay subordinated debt, pay cash distributions, or make any unsecured advances or loans to its parent or employees if such payment would result in net capital of less than 5% of aggregate debit balances or less than 120% of its minimum dollar requirement. As part of its capital management, Axos Clearing may make distributions to the Company from time to time.
The net capital position of Axos Clearing was as follows:
| (Dollars in thousands) | December 31, 2025 | June 30, 2025 | |||||||||
| Net capital | $ | 94,673 | $ | 86,996 | |||||||
| Excess Capital | $ | 88,369 | $ | 81,834 | |||||||
| Net capital as a percentage of aggregate debit items | 30.04 | % | 33.71 | % | |||||||
| Net capital in excess of 5% aggregate debit items | $ | 78,913 | $ | 74,091 | |||||||
Axos Clearing, as a clearing broker, is subject to the SEC Customer Protection Rule (Rule 15c3-3 of the Exchange Act) which requires segregation of funds in a special reserve account for the exclusive benefit of customers (“Customer Reserve Bank Account”) and proprietary accounts of brokers (“PAB Reserve Account”). As of December 31, 2025, Axos Clearing was in compliance with its Customer Reserve Bank Account and PAB Reserve Account deposit requirements.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
For further discussion of the Company’s market risk, see Item 7A—“Quantitative and Qualitative Disclosures About Market Risk” in the 2025 Form 10-K.
We measure interest rate sensitivity as the difference between amounts of interest-earning assets and interest-bearing liabilities that mature or contractually re-price within a given period of time. The difference, or the interest rate sensitivity gap, provides an indication of the extent to which an institution’s interest rate spread will be affected by changes in interest rates. A gap is considered positive when the amount of interest rate sensitive assets exceeds the amount of interest rate sensitive liabilities and negative when the amount of interest rate sensitive liabilities exceeds the amount of interest rate sensitive assets.
Absent any subsequent asset and liability actions by management, in a rising interest rate environment, an institution with a positive gap would be in a better position than an institution with a negative gap to invest in higher yielding assets or to have its asset yields adjusted upward, which would cause the yield on its assets to increase at a faster pace than the cost of its interest-bearing liabilities. Conversely, absent any subsequent asset and liability actions by management, during a period of falling interest rates, an institution with a positive gap would tend to have its assets reprice at a faster rate than one with a negative gap, which would tend to reduce the growth in its net interest income.
Banking Business Segment
The following table sets forth the amounts of interest earning assets and interest bearing liabilities that were outstanding at December 31, 2025 and the portions of each financial instrument that are expected to mature or reset interest rates in each future period:
| Term to Repricing, Repayment, or Maturity at | |||||||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||
| (Dollars in thousands) | Six Months or Less | Over Six Months Through One Year | Over One Year Through Five Years | Over Five Years | Total | ||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 1,126,975 | $ | — | $ | — | $ | — | $ | 1,126,975 | |||||||||||||||||||
Available-for-sale securities1 | 33,487 | 4,750 | 518,174 | 254,715 | 811,126 | ||||||||||||||||||||||||
| Stock of the FHLB, at cost | 29,600 | — | — | — | 29,600 | ||||||||||||||||||||||||
Loans2 | 16,881,975 | 2,808,232 | 4,345,835 | 236,510 | 24,272,552 | ||||||||||||||||||||||||
| Loans held for sale | 18,826 | — | — | — | 18,826 | ||||||||||||||||||||||||
| Total interest-earning assets | 18,090,863 | 2,812,982 | 4,864,009 | 491,225 | 26,259,079 | ||||||||||||||||||||||||
| Non-interest-earning assets | — | — | — | — | 1,120,009 | ||||||||||||||||||||||||
| Total assets | $ | 18,090,863 | $ | 2,812,982 | $ | 4,864,009 | $ | 491,225 | $ | 27,379,088 | |||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||
Interest-bearing deposits3 | $ | 19,996,172 | $ | 57,934 | $ | 119,118 | $ | — | $ | 20,173,224 | |||||||||||||||||||
| Advances from the FHLB | — | — | 60,000 | — | 60,000 | ||||||||||||||||||||||||
Secured financings | 117,991 | 106,909 | 462,162 | 4,445 | 691,507 | ||||||||||||||||||||||||
| Total interest-bearing liabilities | 20,114,163 | 164,843 | 641,280 | 4,445 | 20,924,731 | ||||||||||||||||||||||||
| Other non-interest-bearing liabilities | — | — | — | — | 3,707,815 | ||||||||||||||||||||||||
| Stockholders’ equity | — | — | — | — | 2,746,542 | ||||||||||||||||||||||||
| Total liabilities and equity | $ | 20,114,163 | $ | 164,843 | $ | 641,280 | $ | 4,445 | $ | 27,379,088 | |||||||||||||||||||
| Net interest rate sensitivity gap | $ | (2,023,300) | $ | 2,648,139 | $ | 4,222,729 | $ | 486,780 | $ | 5,334,348 | |||||||||||||||||||
| Cumulative gap | $ | (2,023,300) | $ | 624,839 | $ | 4,847,568 | $ | 5,334,348 | $ | 5,334,348 | |||||||||||||||||||
| Net interest rate sensitivity gap—as a % of total interest earning assets | (7.71) | % | 10.08 | % | 16.08 | % | 1.85 | % | 20.31 | % | |||||||||||||||||||
Cumulative gap—as % of total cumulative interest earning assets | (7.71) | % | 2.38 | % | 18.46 | % | 20.31 | % | 20.31 | % | |||||||||||||||||||
1 Comprised of U.S. government securities, mortgage-backed securities and other securities. The table reflects contractual repricing dates.
2 Loans includes loan premiums, discounts and unearned fees. The table reflects either contractual repricing dates or expected maturities.
3 The table assumes that the principal balances for demand deposits and savings accounts will reprice in the first year.
The above table provides an approximation of the projected re-pricing of assets and liabilities at December 31, 2025 on the basis of contractual maturities, adjusted for anticipated prepayments of principal and scheduled rate adjustments. The loan and securities prepayment rates reflected herein are primarily based on modeled cash flows. For the non-maturity deposit liabilities, we use decay rates and rate adjustments based upon our historical experience and the implied forward rate curve, respectively. Actual repayments of these instruments could vary substantially if future experience differs from our historical experience.
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Although “gap” analysis is a useful measurement device available to management in determining the existence of interest rate exposure, its static focus as of a particular date makes it necessary to utilize other techniques in measuring exposure to changes in interest rates. For example, gap analysis is limited in its ability to predict trends in future earnings and makes no assumptions about changes in prepayment tendencies, deposit or loan maturity preferences or repricing time lags that may occur in response to a change in the interest rate environment.
The following table indicates the sensitivity of net interest income movements to parallel instantaneous shocks in interest rates for the future 1-12 months’ and 13-24 months’ time periods. For purposes of modeling net interest income sensitivity the Company assumes no growth in the balance sheet other than for retained earnings:
| As of December 31, 2025 | |||||||||||
| First 12 Months | Next 12 Months | ||||||||||
| (Dollars in thousands) | Percentage Change from Base | Percentage Change from Base | |||||||||
| Up 200 basis points | 8.3 | % | 13.3 | % | |||||||
Up 100 basis points | 4.0 | % | 6.4 | % | |||||||
Down 100 basis points | (1.4) | % | (3.3) | % | |||||||
| Down 200 basis points | (0.3) | % | (4.0) | % | |||||||
We attempt to measure the effect market interest rate changes will have on the net present value of assets and liabilities, which is defined as market value of equity. We analyze the market value of equity (“MVE”) sensitivity to an immediate parallel and sustained shift in interest rates derived from the underlying interest rate curves.
The following table indicates the sensitivity of MVE to the interest rate movement described above:
| As of December 31, 2025 | |||||
| (Dollars in thousands) | Percentage Change from Base | ||||
| Up 200 basis points | 6.2 | % | |||
| Up 100 basis points | 3.8 | % | |||
| Down 100 basis points | (4.6) | % | |||
| Down 200 basis points | (9.2) | % | |||
The computation of the prospective effects of hypothetical interest rate changes is based on numerous assumptions, including relative levels of interest rates, asset prepayments (including replacing floating rate loan run-off with loans having similar spread and floor features), runoffs in deposits and changes in repricing levels of deposits to general market rates, and should not be relied upon as indicative of actual results. Furthermore, these computations do not take into account any actions that we may undertake in response to future changes in interest rates. Those actions include, but are not limited to, making changes in loan and deposit interest rates and changes in our asset and liability mix.
Securities Business Segment
Our Securities Business Segment is exposed to market risk primarily due to its role as a financial intermediary in customer transactions, which may include purchases and sales of securities, securities lending activities, and in our trading activities, which are used to support sales, underwriting and other customer activities. We are subject to the risk of loss that may result from the potential change in value of a financial instrument as a result of fluctuations in interest rates, market prices, investor expectations and changes in credit ratings of the issuer.
Our Securities Business Segment is primarily exposed to interest rate risk as a result of generating interest-earning assets including customer and correspondent margin loans, and its securities borrowing activities. Our exposure to interest rate risk is also from our funding sources including customer and correspondent cash balances, bank borrowings and securities lending activities. Interest rates on customer and correspondent balances and securities produce a positive spread with rates generally fluctuating in parallel.
With respect to securities held, our interest rate risk is managed by setting and monitoring limits on the size and duration of positions and on the length of time securities can be held. The majority of the interest rates on customer and correspondent margin loans are generally indexed and can vary daily. Our funding sources are generally short term with interest rates that can vary daily.
Our Securities Business Segment is engaged in various brokerage and trading activities that expose us to credit risk arising from potential non-performance from counterparties, customers or issuers of securities. This risk is managed by setting
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and monitoring position limits for each counterparty, conducting periodic credit reviews of counterparties, reviewing concentrations of securities and conducting business through central clearing organizations.
Collateral underlying margin loans to customers and correspondents, and with respect to securities lending activities, is marked to market daily and additional collateral is obtained or refunded, as necessary.
ITEM 4.CONTROLS AND PROCEDURES
The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, pursuant to Exchange Act Rule 13a-15(e). Based upon that evaluation, our Chief Executive Officer along with our Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In addition, there were no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2025 (as defined in Exchange Act Rule 13a-15(f)) that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.
Management, including the Company’s Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods is subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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PART II—OTHER INFORMATION
ITEM 1.LEGAL PROCEEDINGS
The information set forth in Note 10—“Commitments and Contingencies” in the accompanying interim condensed consolidated financial statements is incorporated herein by reference.
In addition, from time to time we may be a party to other claims or litigation that arise in the ordinary course of business, such as claims to enforce liens, claims involving the origination and servicing of loans, and other issues related to the Company’s business operations. None of such matters are expected to have a material adverse effect on the Company’s financial condition, results of operations or business.
ITEM 1A.RISK FACTORS
We face a variety of risks that are inherent in our business and our industry. These risks are described in more detail under Item 1A—“Risk Factors” in the 2025 Form 10-K. We encourage you to read these factors in their entirety. Moreover, other factors may also exist that we cannot anticipate or that we currently do not consider to be significant based on information that is currently available.
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The table below sets forth our market repurchases of Axos common stock and the Axos common stock retained in connection with net settlement of RSU awards during the three months ended December 31, 2025.
| (Dollars in thousands, except per share data) | Number of Shares Purchased | Average Price Paid Per Shares | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar value of Shares that May Yet be Purchased Under the Plans or Programs | |||||||||||||||||||
Stock Repurchases1 | |||||||||||||||||||||||
Quarter Ended December 31, 2025 | |||||||||||||||||||||||
October 1, 2025 to October 31, 2025 | — | $ | — | — | $ | 148,071 | |||||||||||||||||
November 1, 2025 to November 30, 2025 | — | — | — | 148,071 | |||||||||||||||||||
December 1, 2025 to December 31, 2025 | — | — | — | 148,071 | |||||||||||||||||||
| For the Three Months Ended December 31, 2025 | — | $ | — | — | $ | 148,071 | |||||||||||||||||
Stock Retained in Net Settlement2 | |||||||||||||||||||||||
October 1, 2025 to October 31, 2025 | 174 | ||||||||||||||||||||||
November 1, 2025 to November 30, 2025 | 29,299 | ||||||||||||||||||||||
December 1, 2025 to December 31, 2025 | 305 | ||||||||||||||||||||||
| For the Three Months Ended December 31, 2025 | 29,778 | ||||||||||||||||||||||
1 On April 27, 2023, the Company announced a program to repurchase up to $100 million of its common stock and on each of February 12, 2024 and May 12, 2025, the Company announced an additional $100 million increase to the common stock repurchase program. The share repurchase program will continue in effect until terminated by the Board of Directors of the Company.
2 The Amended and Restated 2014 Stock Incentive Plan permits net settlement of stock issuances related to equity awards for purposes of payment of a grantee’s minimum income tax obligation. Stock retained in net settlement was purchased at the vesting price of associated RSU.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
During the three months ended December 31, 2025, no director or officer of the Company adopted terminated
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ITEM 6.EXHIBITS
| 10.1 | Axos Financial, Inc. Amended and Restated 2014 Stock Incentive Plan | Filed herewith. | |||||||||
| 31.1 | Chief Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith. | |||||||||
| 31.2 | Chief Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith. | |||||||||
| 32.1 | Chief Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Filed herewith. | |||||||||
| 32.2 | Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Filed herewith. | |||||||||
| 101.INS | Inline XBRL Instance Document | The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. | |||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | Filed herewith. | |||||||||
| 101.CAL | Inline XBRL Taxonomy Calculation Linkbase Document | Filed herewith. | |||||||||
| 101.LAB | Inline XBRL Taxonomy Label Linkbase Document | Filed herewith. | |||||||||
| 101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document | Filed herewith. | |||||||||
| 101.DEF | Inline XBRL Taxonomy Definition Document | Filed herewith. | |||||||||
| 104 | Cover Page Interactive Data File | Formatted as Inline XBRL and contained in Exhibit 101 | |||||||||
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Axos Financial, Inc. | |||||||||||||||||
| Dated: | January 29, 2026 | By: | /s/ Gregory Garrabrants | ||||||||||||||
| Gregory Garrabrants President and Chief Executive Officer (Principal Executive Officer) | |||||||||||||||||
| Dated: | January 29, 2026 | By: | /s/ Derrick K. Walsh | ||||||||||||||
| Derrick K. Walsh Executive Vice President and Chief Financial Officer (Principal Financial Officer) | |||||||||||||||||
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FAQ
How did Axos Financial (AX) perform financially in the December 31, 2025 quarter?
Axos Financial reported higher profit and earnings per share. Net income rose to $128.4 million from $104.7 million a year earlier, while diluted EPS increased to $2.22 from $1.80 . Net interest income also grew to $331.7 million , reflecting a larger loan portfolio.
What impact did the Verdant Commercial Capital acquisition have on Axos Financial (AX)?
The Verdant acquisition expanded Axos’s loan and lease portfolio. Axos acquired about $1.2 billion of loans and leases and recorded total consideration of roughly $566.9 million . Verdant contributed $30.1 million of net revenue and $2.3 million of net income for the three months ended December 31, 2025.
How have Axos Financial’s loans and deposits changed as of December 31, 2025?
Loans and deposits both increased over the prior fiscal year-end. Loans held for investment reached $24.8 billion , up from $21.6 billion , while total deposits climbed to $23.2 billion from $20.8 billion . These increases support higher net interest income and balance sheet growth.
What is Axos Financial’s credit quality and allowance for credit losses position?
The allowance for credit losses increased alongside portfolio growth. Allowance for credit losses on loans rose to $327.0 million from $290.0 million . Nonaccrual loans totaled $151.5 million , or 0.61% of total loans, down from 0.79% at June 30, 2025.
How did non-interest income and expenses trend for Axos Financial (AX)?
Non-interest income and expenses both grew year over year. Total non-interest income increased to $53.4 million from $27.8 million , helped by banking and service fees. Non-interest expense rose to $184.6 million from $145.3 million , reflecting higher salaries, technology, and depreciation and amortization.
What is Axos Financial’s capital position as of December 31, 2025?
Stockholders’ equity continued to strengthen. Total stockholders’ equity increased to $2.93 billion from $2.68 billion at June 30, 2025, supported by retained earnings growth. The company also had $148.1 million of remaining authorization under its common stock repurchase program.
Axos Financial Inc
NYSE:AX
AX Rankings
AX Latest News
AX Latest SEC Filings
Jan 30, 2026
[144] Axos Financial, Inc. SEC Filing
Jan 29, 2026
[8-K] Axos Financial, Inc. Reports Material Event
Dec 18, 2025
[8-K] Axos Financial, Inc. Reports Material Event
AX Stock Data
5.36B
53.71M
3.94%
81.46%
3.87%
Banks - Regional
Savings Institution, Federally Chartered
United States
LAS VEGAS