Q1 2026 Axos Financial Inc Earnings Call Transcript
Key Points
- Axos Financial Inc (AX) reported a strong start to fiscal 2026 with $1.6 billion in net loan growth, including $1 billion from the Verdant acquisition.
- The company achieved a 17% year-over-year increase in book value per share and maintained a high return on average common equity of nearly 16%.
- Net interest income increased by approximately $11 million linked quarter, benefiting from balanced growth across various lending sectors.
- Noninterest income rose by approximately 13% year-over-year due to higher banking service fees and mortgage banking income.
- Axos Financial Inc (AX) successfully completed the acquisition of Verdant Commercial Capital, expected to be accretive to earnings per share by 2% to 3% in fiscal 2026.
- Net interest margin decreased by 9 basis points to 4.75% for the quarter ended September 30, 2025.
- The Verdant acquisition added approximately $8.5 million per quarter in noninterest expenses, impacting overall expense management.
- The company issued $200 million of subordinated debt at a 7% fixed annual interest rate, which reduced net interest margin by 1 basis point.
- New loan yields are slightly lower in certain lending categories due to recent Federal Reserve actions.
- Capital ratios have decreased slightly, raising questions about the ability to support mid-teens loan growth.
Greetings, and welcome to the Axos Financial, Inc. first-quarter 2026 earnings call and webcast. (Operator Instructions) Please note, this conference is being recorded.
I will now turn the conference over to your host, Johnny Lai. Please go ahead.
Thanks, Carrie. Good afternoon, everyone, and thanks for your interest in Axos. Joining us today for Axos Financial, Inc.'s First Quarter 2026 Financial Results Conference Call are the company's President and Chief Executive Officer, Greg Garrabrants; and Executive Vice President and Chief Financial Officer, Derrick Walsh. Greg and Derrick will review and comment on the financial and operational results for the quarter ended September 30, 2025, and we will be available to answer questions after the prepared remarks.
Before I begin, I would like to remind listeners that prepared remarks made on this call may contain forward-looking statements that are subject to risks and uncertainties and that management may make
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