Executive Summary

Q4 FY25 delivered solid growth: diluted EPS $1.92, up 6.7% YoY; net income $110.7M; net interest margin expanded to 4.84% and loans grew $856M sequentially; adjusted EPS $1.94 .
Against S&P Global consensus, EPS beat while revenue slightly missed: Q4 FY25 EPS $1.94 vs $1.81 estimate (beat); revenue $306.45M vs $312.29M estimate (miss)*.
NPA/Assets and non‑accrual ratios improved sequentially; deposits rose 7.6% YoY to $20.83B; book value/share up 17.9% YoY to $47.46 .
Management guided tax rate down ~3ppt to ~26–27% beginning Sep quarter, expects FY26 organic loan growth toward mid-to-high end of high single-digits to low teens, and NIM ex-FDIC accretion to remain at or slightly above the 4.25–4.35% target range .
Catalysts: tax-rate step-down, continued loan growth momentum, margin durability, and potential M&A/team lift-outs; one‑time $12M loan sale gain helped non‑interest income; expense adds from floor plan team and merit increases will be watched .

What Went Well and What Went Wrong

What Went Well

Record-like loan growth: net loans +$856M QoQ (+4% or +16% annualized), driven by asset‑based lending, auto, equipment leasing, lender finance, and single-family mortgage .
Margin resilience: consolidated NIM 4.84% vs 4.78% prior quarter; net interest income rose $4.7M QoQ .
Credit metrics improved: NPA/Assets 0.71% (vs 0.79% prior quarter); non‑accrual loans decreased sequentially in C&I and CRE .
CEO tone on AI: “We believe we will see benefits in our operating efficiency from the implementation of artificial intelligence across the organization…” .

What Went Wrong

Provision for credit losses increased to $15.0M (vs $14.5M in Q3 and $6.0M in prior-year quarter), reflecting loan growth and CRE macro inputs .
Expense pressure: non‑interest expense rose to $150.7M (vs $146.3M in Q3 and $140.5M YoY); upcoming floor plan team costs (~$1M/quarter) and ~4% merit increases in September add to OpEx .
S&P “Revenue” missed consensus in Q4 despite strong company-reported NII and fee gains; reliance on one‑time $12M loan sale gain elevated non‑interest income *.

Financial Results

Company-reported performance across recent quarters and prior year:

Metric	Q4 2024	Q2 2025	Q3 2025	Q4 2025
Net Interest Income ($USD Millions)	$260.062	$280.099	$275.464	$280.161
Non-Interest Income ($USD Millions)	$30.861	$27.799	$33.373	$41.285
Diluted EPS ($USD)	$1.80	$1.80	$1.81	$1.92
Net Interest Margin %	4.65%	4.83%	4.78%	4.84%
Efficiency Ratio %	48.31%	47.20%	47.36%	46.87%
ROA %	1.81%	1.74%	1.77%	1.85%
ROE %	18.81%	16.97%	16.44%	16.85%

S&P Global consensus vs actuals (company fiscal quarters):

Metric	Q2 2025	Q3 2025	Q4 2025
Revenue Consensus Mean ($USD)	$302.161M*	$305.044M*	$312.287M*
Revenue Actual ($USD)	$295.650M*	$294.337M*	$306.449M*
EPS Consensus Mean ($USD)	$1.738*	$1.735*	$1.813*
EPS Actual ($USD)	$1.82*	$1.81*	$1.94*

Values retrieved from S&P Global.*
Note: Company-reported “Net interest income + Non-interest income” differs from S&P-defined “Revenue.”

Segment breakdown (Q4 FY25):

Segment	Net Interest Income ($USD Thousands)	Non-Interest Income ($USD Thousands)	Non-Interest Expense ($USD Thousands)	Income Before Income Taxes ($USD Thousands)
Banking Business	$276,701	$22,226	$122,369	$161,561
Securities Business	$7,215	$29,621	$29,942	$6,894
Corporate/Eliminations	$(3,755)	$(10,562)	$(1,659)	$(12,658)
Consolidated	$280,161	$41,285	$150,652	$155,797

Selected KPIs:

KPI	Q2 2025	Q3 2025	Q4 2025
Loans (Net, $USD Billions)	$19.49	$20.19	$21.05
Total Deposits ($USD Billions)	$19.93	$20.14	$20.83
Non-Performing Assets / Total Assets (%)	1.06%	0.79%	0.71%
Non-Accrual Loans / Total Loans (%)	1.26%	0.89%	0.79%
ACL / Total Loans (%)	1.37%	1.37%	1.36%
Book Value per Share ($)	$44.17	$45.79	$47.46

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Effective Tax Rate	Starting Q1 FY26	~29–30% (historical Q4 rate cited)	~26–27%	Lowered ~3ppt
NIM (ex-FDIC accretion)	FY26	Target 4.25–4.35% over past year	“Stay at the high or slightly above” that range	Maintained / Slightly higher
Organic Loan Growth	FY26	High single-digits to low teens (target)	Midpoint to high end of that range	Raised within range
Operating Expenses	Q1 FY26 onward	N/A	Floor plan team adds ~$1M/quarter; ~4% merit increase in September	Increased OpEx run-rate
Tariffs/Macro impact on loan demand	FY26 outlook	N/A	“Not seeing any material impacts from imposed or proposed tariffs on loan demand so far”	Neutral

No dividend guidance discussed in Q4 materials .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3 FY25)	Current Period (Q4 FY25)	Trend
AI/Technology initiatives	Not highlighted in Q2/Q3 press releases	Detailed plan to deploy AI to bend cost curve, accelerate software delivery (e.g., Figma AI), automate covenant extraction	Increasing focus
Deposit strategy	Q2: reduced interest-bearing deposit costs by 51 bps, deposits flat EOP ; Q3: deposits $20.14B, Axos ONE growth	Deposits $20.83B (+7.6% YoY); diversified mix; Axos ONE strong; ~90% deposits insured/collateralized (supplement)	Improving
Loan growth	Q2: +$206.1M net ; Q3: +$706.9M net	Q4: +$855.98M net; pipelines strengthened across categories	Accelerating
Credit quality	Q2: NPA/Assets 1.06% ; Q3: 0.79%	Q4: 0.71%; non‑accruals declined in C&I and CRE; low net charge‑offs	Improving
Tax/regulatory	Minimal in Q2/Q3	CA tax methodology change lowers ETR by ~3ppt from Sep quarter; Q4 DTA impairment one‑time	Positive
Fee income / Securities (AUC)	Q2: +$822M net new AUC ; Q3: +$289M	Q4: +$214.7M net new AUC; pipeline healthy; deposits ~$1.4B at Clearing (incl. off‑BS $450M)	Moderating, still positive
Capital allocation	Q3: ~$28M repurchases + $30M in April	Q4: ~$31M repurchased in April at ~$59; buybacks now less attractive given stock move; M&A/lift‑outs being evaluated	Opportunistic, disciplined
CRE prepayments	Headwind in prior quarters	“Moved past our peak level of prepayments” in CRE specialty portfolio	Improving

Management Commentary

“We delivered strong results this quarter, generating $856 million of net loan growth linked quarter, six basis points of net interest margin expansion, and an 18% year-over-year increase in book value per share.” — Greg Garrabrants, CEO .
“Our tax rate was approximately 29%… Starting in the period ending September 30, 2025, we currently expect our effective tax rate to be reduced by three percentage points…” — Derrick Walsh, CFO .
“We believe we will see benefits in our operating efficiency from the implementation of artificial intelligence across the organization… improve the speed, quality, and cost of software development projects and accelerate new product delivery.” — CEO .
“We expect our consolidated net interest margin ex‑FDIC loan purchase accretion to stay at the high or slightly above the 4.25%‑4.35% range we have targeted…” — CEO .
“Our loan pipeline remains healthy at approximately $2 billion as of July 25, 2025…” — CFO .

Q&A Highlights

NIM outlook: Slight pricing pressure on new loans offset by funding benefits; expect NIM to remain broadly consistent, within ±1–2 bps of range .
AI adoption: Management detailed concrete use cases (document parsing, covenant extraction, UX tooling) aiming to bend the cost curve and accelerate product delivery .
Funding cost dynamics: As loan growth accelerates, some funding cost pressure is possible; Axos ONE and specialty/commercial deposits help mitigate .
Securities/fee growth: AUC pipeline positive; fee growth expected but requires tech upgrades and adoption; hardest growth lever likely in securities .
Capital priorities: Opportunistic buybacks executed in April; M&A and specialty finance/fee businesses under evaluation; organic loan growth still priority .
Tax benefit usage: ETR decline flows to bottom line; cost discipline maintained despite benefit .
Credit watch: CRE looks strong; C&I non‑accruals manageable; broad-based deterioration not observed .

Estimates Context

EPS beat trajectory continuing: Q2 FY25 $1.82 vs $1.738*, Q3 FY25 $1.81 vs $1.735*, Q4 FY25 $1.94 vs $1.813* (beats)*.
Revenue misses under S&P’s definition despite company-reported NII/fee growth: Q2 $295.65M vs $302.16M*, Q3 $294.34M vs $305.04M*, Q4 $306.45M vs $312.29M* (misses)*.
Implications: Street likely nudges FY26 EPS up for tax-rate benefit and margin resilience; revenue modeling may diverge depending on treatment of NII vs “Revenue,” especially given one‑time gains. Values retrieved from S&P Global.*

Key Takeaways for Investors

Margin durability plus tax-rate tailwind should support EPS growth in FY26 even amid mild loan yield pressure .
Loan growth momentum broad-based; pipelines healthy; watch funding cost mix as growth accelerates .
Credit metrics trending better; low charge‑offs and declining non‑accruals in C&I/CRE reduce risk premia .
Expense adds (floor plan team, merit increases) offset by AI efficiencies; monitor operating leverage vs revenue growth .
Securities/AUC growth positive but moderating; technology upgrades key to sustaining fee momentum .
Potential M&A/lift-outs could add assets/fee streams; disciplined capital deployment likely a medium-term catalyst .
Near-term trading: EPS beat and tax-rate guide are positive; revenue miss under S&P definition and one‑time gains warrant scrutiny; stock likely reacts to margin and growth narrative more than headline “revenue” prints *.

Axos Financial, Inc. (AX)·Q4 2025 Earnings Summary