Axos Financial (AX) Q1 2026 earnings summary

Executive summary

• Net income for Q1 FY2026 was $112.4 million, with diluted EPS of $1.94, nearly flat year-over-year, and adjusted EPS of $2.07, up 5.6% year-over-year, driven by strong loan growth and the Verdant acquisition.

• Net loan growth totaled $1.6 billion, including $1 billion from the Verdant Commercial Capital acquisition, which also added $1.2 billion in loans and leases and enhanced commercial lending capabilities.

• Book value per share increased 17% year-over-year to $49.31; tangible book value per share was $45.22.

• Total assets grew 10.7% to $27.4 billion as of September 30, 2025, driven by loan growth and the Verdant acquisition.

• Continued focus on operational efficiency, AI-driven productivity, and technology modernization across business lines.

Financial highlights

• Net interest income was $291.1 million, up $11 million linked quarter and 5.8% year-over-year excluding one-time items; net interest margin was 4.75%, down from 5.17% a year ago.

• Non-interest income rose 13% year-over-year to $32.3 million, mainly from higher banking and service fees.

• Non-interest expense increased to $156.2 million, reflecting acquisition-related costs and higher salaries.

• Adjusted net income and EPS (excluding Verdant deal-related items) were $119 million and $2.06, up 7.3% linked quarter.

• Return on average assets was 1.77% and return on average common equity was 15.94% for the quarter.

Outlook and guidance

• Management expects continued profitable growth, focusing on integrating Verdant and leveraging technology platforms.

• Verdant is expected to add $150–$200 million of net new loans and leases per quarter at attractive spreads starting Q2 fiscal 2026.

• Loan growth projected in the low to mid-teens annualized for the remainder of fiscal 2026.

• Corporate tax rate expected to remain at 26–27%.

• Verdant acquisition expected to be accretive to EPS by 2–3% in fiscal 2026 and 5–6% in fiscal 2027.