Q3 2026 Axos Financial Inc Earnings Call Transcript
Key Points
- Axos Financial Inc (AX) reported a double-digit year-over-year growth in net interest income, ending loan and deposit balances, earnings per share, and book value.
- The company achieved an 11.2% year-over-year increase in net interest income, with net loan growth of almost $700 million linked quarter.
- Non-interest income rose significantly to $86 million for the quarter, up from $53 million in the prior quarter, driven by higher mortgage banking income, advisory fees, and rental income.
- Axos Financial Inc (AX) maintained a strong return on average common equity of over 16% and a return on assets of 1.8% for the quarter.
- The company announced the acquisition of $2.3 billion of online savings deposits from Jenius Bank and $3.2 billion of IRA savings and CDs from Capital One, enhancing liquidity and funding for future growth.
- Net interest margin decreased to 4.57% for the quarter, down from 4.94% in the prior quarter, partly due to the impact of FDIC purchased loans and fewer days in the quarter.
- Non-interest expenses increased by $1.4 million linked quarter to $186 million, with higher professional services fees and FDIC and regulatory fees.
- Average loan yields from non-purchase loans declined to 7.23% from 7.63% in the prior quarter, influenced by rate cuts in the previous calendar quarter.
- Total non-performing assets increased in the C&I loan area due to a syndicated C&I share of national credit becoming delinquent, accounting for a $33 million sequential increase.
- Provision for credit losses rose to $41 million in Q3 '26, driven by a specific reserve for a C&I loan, indicating potential credit quality concerns.
Greetings and welcome to the Axos Bank third-quarter 2026 earnings conference call and webcast. (Operator Instructions) As a reminder, this conference is being recorded.
It is now my pleasure to introduce Johnny Lai, Senior Vice President, Corporate Development and Investor Relations. Thank you. You may begin.
Thank you, Diego. Good afternoon, everyone, and thank you for your interest in Axos. Joining us today for Axos Financial Inc.'s third-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 provide prepared remarks on the financial and operational results for the quarter ended March 31, 2026, then open up the call to a Q&A.
Before I begin, I'd like to remind listeners that prepared remarks made on this call may contain forward-looking statements that are subject to risks and
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