Axos profit rises to $129.6 million, earnings per share reach $2.25
Key Facts
Axos Financial reported net income of $129.6 million and diluted earnings per share of $2.25 for the first quarter of fiscal 2027, ended September 30, 2026. In its earnings release, the company said net income rose from $112.4 million in the same period a year earlier, when earnings per share were $1.94. Before the announcement, analysts’ average estimates were $2.26 per share and revenue of $386.3 million, according to a report published by Investing.com citing Reuters. Reported earnings per share fell $0.01 short of that estimate. Earnings per share were $2.53 in the previous fiscal quarter, when revenue was $379.8 million.
According to the release, net interest income was $331.256 million, up 13.8% from $291.050 million in the same quarter a year earlier. Non-interest income rose to $63.815 million from $32.340 million, a year-over-year increase of 97.3%. The company attributed the increase in non-interest income mainly to lease revenue and other income from its acquisition of Verdant Commercial Capital on September 30, 2025. Lease revenue from an office complex and higher prepayment penalty income also contributed to the growth. On an adjusted, non-GAAP basis, earnings were $134.8 million and earnings per share were $2.34, compared with $120.4 million and $2.07 a year earlier.
The net interest margin was 4.64% in the three months ended September 30, up 10 basis points from 4.54% in the quarter ended June. Net loan balances reached $25.9 billion at the end of September, after growing $316.6 million during the quarter. Deposits also rose to $25.4 billion, up $847.8 million from $24.6 billion on June 30. Total assets increased 2.9% to $30.8 billion from $30.0 billion at the end of June. Axos attributed the increase mainly to cash and loans, partly offset by a decline in available-for-sale securities.
On credit quality, non-performing assets fell to 0.51% of total assets on September 30, 2026, from 0.64% on the same date a year earlier. The chief financial officer said the company charged off two criticized loans in the commercial and industrial sectors, for which it had set aside specific reserves in previous quarters. Annualized net loan charge-offs to average loans were 0.08% after excluding the charge-offs of the two loans, according to the company’s release. Elsewhere, pretax income in the securities segment grew 23.8% year over year to $10.3 million during the quarter. The company repurchased $14 million of shares at an average price of $87.40 per share during the quarter through October 23, with $112.1 million remaining under its share repurchase authorization.
The chief executive said a few large loans did not close during the September quarter and that the company expects them to contribute to faster overall loan growth in the December 2026 quarter. He added that loans grew by about $563 million during the quarter after excluding net repayments in certain real estate categories, describing the loan pipeline as "still strong." Results in the previous quarter had beaten earnings-per-share expectations by more than 17%, with the company reporting $2.53 per share against consensus of $2.16, according to a Reuters report published by Investing.com. Before the results, six of seven analysts recommended buying the stock, while the consensus price target was $117.71, according to the same report. The stock closed at $91.48 on October 28, before the results were announced the following day; the available data did not include the session’s high and low prices.
The company had scheduled a conference call and webcast to discuss the results for October 29, 2026, at 5 p.m. Eastern time. It said a replay would be available through November 29, 2026. The call followed the release of results for the quarter ended September 30, while management’s stated outlook focused on the large loans that did not close during the September quarter. The chief executive said those loans could drive faster overall loan growth in the December 2026 quarter. That will be the next quarter cited by management in its outlook.