Axos EPS Rises 16% To $2.25, But Charge-Offs Hit 1.09% Of Loans After Two Write-Offs
Net income reached $129.6 million, while loan growth shrank to $316.6 million from $1.59 billion a year earlier.
Axos Financial, the Las Vegas bank holding company, posted diluted earnings of $2.25 a share for its fiscal first quarter, up 16.0% from $1.94 a year earlier, on net income of $129.6 million versus $112.4 million. Loan growth slowed sharply and net charge-offs jumped to 1.09% of average loans from 0.11%, the company reported Thursday.
Interest and lease income carry the quarter
Net interest income rose 13.8% to $331.3 million. Non-interest income climbed 97.3% to $63.8 million, from $32.3 million, mainly on operating lease rental income from the Verdant Commercial Capital acquisition, which closed September 30, 2025, plus commercial office lease income and higher prepayment penalty income.
Net interest margin, the spread earned on loans over funding costs, was 4.64%, up from 4.54% in the June quarter but below 4.75% a year earlier. Non-interest expense rose $39.2 million to $195.4 million, driven largely by depreciation and amortization tied to Verdant and acquired deposits. Adjusted EPS, a measure that excludes acquisition-related items, was $2.34, against $2.07.
Book value per share reached $57.92 at September 30, 2026, up from $55.81 at June 30, 2026.
Two write-offs, and lending that cooled
CFO Derrick Walsh said Axos charged off two non-performing commercial and industrial loans it had already set aside specific reserves for. Excluding them, he said, annualized net charge-offs were 0.08% of average loans. The provision for credit losses was $24.5 million, against $17.3 million a year earlier.
Loans held for investment grew $316.6 million, versus $1.59 billion in the quarter ended September 30, 2025. CEO Greg Garrabrants said ending loans grew by about $563 million excluding net paydowns in single-family mortgage and warehouse, multifamily and small balance commercial real estate. Non-performing assets fell to 0.51% of total assets from 0.64% a year earlier.
Deposits grow, buyback room remains
Axos, which offers digital banking, securities clearing and custody, and investment advisory services, saw deposits rise $847.8 million to $25.4 billion from June 30, including deposits acquired from Capital One. Total assets reached $30.8 billion.
Garrabrants said the loan pipeline remains solid and a few large loans that did not close in the September quarter should speed loan growth in the December quarter. Through October 23, the company repurchased $14.0 million of stock at an average $87.40 a share, leaving $112.1 million of authorization.
Management hosts its earnings call at 5:00 p.m. Eastern Thursday.
Sources
- 8-K Filing — Axos Financial, Inc. (AX) — SEC EDGAR
- Exhibit pressrelease20260930axearn.htm — Axos Financial, Inc. 8-K exhibit — SEC EDGAR
- Exhibit septsupplement.htm — Axos Financial, Inc. 8-K exhibit — SEC EDGAR
- Axos Financial, Inc. Reports First Quarter Fiscal Year 2027 Results — businesswire.com
