A digital-first financial services company that offers banking products—mortgages, auto loans, and deposits—entirely online, and provides clearing, custody, and investment advisory services to independent advisors and broker-dealers. It was founded in 1999 as BofI (Bank of Internet) and launched on July 4, 2000, a date chosen to symbolize independence from traditional banking, and rebranded as Axos in 2018.
10-K · Fiscal year ended Jun 30, 2026 · SEC filing ↗
Axos FY2026 net income rose 13% to $490.4M as the Verdant acquisition and a $22M legal settlement offset a near-tripling of credit provisions.
Credit costs nearly tripled as nonaccrual loans turned into actual losses. rose 17.6% to $1.48 billion and climbed 14.1% to $8.48, driven by the Verdant acquisition and a $22 million legal settlement, but the reached $101.1 million and net charge-offs hit $43.3 million. The bank grew its balance sheet by 21% to $30 billion, but the cost of that growth is now showing up in its loan book.
Key takeaways
The rose to $101.1 million from $55.7 million, and net charge-offs reached $43.3 million, concentrated in the commercial and industrial non-real estate portfolio — the credit normalization flagged in prior periods has now translated into actual losses.
rose 10.6% to $1.25 billion, driven by higher average loan balances from the Verdant acquisition, though compressed to 4.57% in the fourth quarter as higher funding costs from and secured financings took hold.
Section summaries
Business
Axos is a digital-first financial services company with banking and securities segments, ~$30B assets and ~$47.8B assets under custody.
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The Banking Business originates and retains single family, multifamily, commercial real estate, commercial & industrial, auto, and consumer loans, and funds them with demand, savings, and time deposits sourced through digital and affinity channels.
Non-interest income rose 78.2% to $233.6 million, primarily from banking and service fees tied to the Verdant equipment leasing business, a $22.0 million favorable legal settlement, and commercial office complex lease income.
Non- rose 24.3% to $732.7 million, including $51.6 million in higher on Verdant's operating lease equipment and a $21.0 million FINRA arbitration accrual in the Securities Business .
Total assets grew 20.9% to $30.0 billion, funded by a $3.7 billion increase in deposits to $24.6 billion — including the $2.3 billion Jenius Bank deposit acquisition completed in May 2026 — and $1.7 billion in additional .
The Securities Business 's pre-tax income fell to $15.4 million from $40.1 million, largely due to the $21.0 million FINRA arbitration accrual, while the Banking Business segment's pre-tax income rose to $697.3 million.
What changed
The non-performing assets ratio, flagged for multiple quarters as a key watch item, was not explicitly disclosed in the FY2026 annual report, but the $43.3 million in net charge-offs — up from $55.7 million in total provisions the prior year — confirms that nonaccrual loans in the C&I portfolio are translating into actual losses at an accelerating pace.
The allowance for credit losses ratio, last reported at 1.34% of total loans in FY2024 and flagged as a watch item in every subsequent filing, was not disclosed in the FY2026 annual report, leaving investors without a clear picture of reserve adequacy against the $30 billion balance sheet.
, which compressed to 4.57% in Q3 FY2026 from 4.78% in the prior quarter, reversed the expansion seen earlier in the year and confirmed the risk flagged in FY2025 that deposit cost relief alone would not stabilize the margin as higher-cost and secured financings grew.
The Securities Business 's pre-tax income fell 61.6% to $15.4 million, extending the decline from $59.6 million in FY2023 to $40.1 million in FY2024, though the FY2026 result was driven by a one-time $21.0 million FINRA arbitration accrual rather than the broker-dealer fee income erosion that drove prior declines.
The pending $5.5 billion in deposit acquisitions from Jenius Bank and Capital One, announced in Q3 FY2026, represent a strategic shift toward deposit-funded growth that could reduce reliance on higher-cost — the Jenius Bank portion closed in May 2026, adding $2.3 billion in deposits.
What to watch
in Q1 FY2027 to assess whether the $43.3 million in FY2026 charge-offs represents a new run rate or a one-time catch-up from prior nonaccrual accumulation, particularly in the C&I non-real estate portfolio.
Allowance for credit losses ratio — absent from disclosures since FY2024 — to see if the bank builds reserves above the prior 1.34% level in response to the $101.1 million provision and the addition of Verdant loans.
trajectory in Q1 FY2027 after the 21 compression to 4.57% in Q4 FY2026, to see if the Jenius Bank deposit acquisition reduces reliance on higher-cost and stabilizes funding costs.
Credit performance of the Verdant loan portfolio, given the acquisition added approximately $1.0 billion in loans and the FY2026 provision increase was partly attributed to loan growth in the C&I and CRE portfolios.
The Securities Business serves roughly 300 financial organizations through Axos Clearing (clearing, margin lending, securities lending for IBDs) and AAS (custody and a proprietary turnkey technology platform for RIAs), plus Axos Invest for retail self-directed trading and digital advice.
The company emphasizes a technology-enabled, low-cost distribution model and states its deposit franchise offers strategic funding advantages and greater scalability than branch-intensive banking models.
Axos Financial is regulated as a financial holding company by the Federal Reserve, while Axos Bank is a covered savings association supervised by the OCC, FDIC, and CFPB; its broker-dealers are regulated by the SEC and FINRA.
As of June 30, 2026, the company and bank exceeded 'well-capitalized' regulatory minimums, the bank was in compliance with its liquidity standard, and the bank received a 'Satisfactory' Community Reinvestment Act rating for 2022-2024.
The company had 2,191 full-time employees at June 30, 2026, with no union representation or work stoppages, and competes against larger financial institutions with greater brand recognition and resources.
Key risks center on interest-rate sensitivity, real-estate credit concentration in California and New York, and regulatory/technology exposure.
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is highly exposed to interest-rate changes because interest-earning assets and interest-bearing liabilities reprice at different times and against different rate benchmarks.
The loan portfolio is heavily concentrated in real estate, with 37.4% secured by New York property and 33.5% by California property, making results vulnerable to downturns in those two states.
Commercial and industrial loans ($9.5B, 36.4% of the portfolio) and commercial real estate loans ($8.9B, 34.0%) carry elevated credit risk, including $509.5M of office-secured CRE exposure amid remote-work pressure.
The company faces regulatory uncertainty from CFPB operational changes, the Loper Bright decision, Executive Order 14215, and evolving state privacy and tax rules, including a 2025 California apportionment change.
Technology and cybersecurity risks are material, including reliance on third-party vendors, AI-related fraud and compliance exposure, and the concentration of systems in disaster-prone San Diego.
Liquidity and capital depend on deposits and , and a credit-rating downgrade or loss of well-capitalized status could raise funding costs or restrict access to funding sources.
Our principal offices are located at 9205 West Russell Road, Suite 400, Las Vegas, NV 89148. Our Banking Business Segment and Securities Business Segment both conduct business at this location. Among other additional locations, we have office space located in San Diego, Californ…
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Our principal offices are located at 9205 West Russell Road, Suite 400, Las Vegas, NV 89148. Our Banking Business Segment and Securities Business Segment both conduct business at this location. Among other additional locations, we have office space located in San Diego, California totaling approximately 203,000 square feet. Additionally, the Company owns a commercial office complex located in San Diego, California, which is presently leased and offered for lease to third parties. At a future date, the Bank intends to occupy this property as its headquarters.
We may from time to time become a party to other claims or litigation that arise in the ordinary course of business, such as claims to enforce liens, claims involving the origination and servicing of loans, and other issues related to the Company’s operations. None of such matte…
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We may from time to time become a party to other claims or litigation that arise in the ordinary course of business, such as claims to enforce liens, claims involving the origination and servicing of loans, and other issues related to the Company’s operations. None of such matters are expected to have a material adverse effect on the Company’s financial condition, results of operations or business. For additional information on legal proceedings, refer to Note 19—“Commitments, Contingencies and Off-Balance-Sheet Activities” in the Consolidated Financial Statements.
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FY2026 net income rose 13% to $490.4M on loan growth and the Verdant acquisition, despite higher credit costs.
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rose $119.1M, or 10.6%, to $1,246.9M, driven by higher average loan balances, partially offset by lower yields and a $59.1M decline in interest income on deposits at other financial institutions.
increased $45.4M to $101.1M, with rising to $43.3M, primarily in the commercial & industrial - non-RE portfolio.
Non-interest income jumped 78.2% to $233.6M, mainly from banking and service fees tied to the Verdant acquisition, a $22.0M favorable legal settlement, and commercial office complex lease income.
Non- rose 24.3% to $732.7M, driven by $51.6M higher and from Verdant equipment leases, a $21.0M FINRA arbitration accrual, and higher salaries from increased headcount.
Total assets grew 20.9% to $30.0B, with net loans up $4.5B; total deposits rose $3.7B to $24.6B, including the $2.3B Jenius Bank deposit acquisition completed in May 2026.
The Banking Business 's pre-tax income rose to $697.3M, while the Securities Business Segment's pre-tax income fell to $15.4M, largely due to the FINRA arbitration accrual.
Quantitative and Qualitative Disclosures About Market Risk
The company is primarily exposed to interest rate risk, with a positive one-year gap and net interest income that rises when rates increase.
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The company identifies lag, repricing, basis, prepayment, and lifetime cap as its main interest rate risk types, with adjustable-rate loans carrying lifetime caps averaging 549 above current note rates at June 30, 2026.
The Banking Business shows a negative six-month gap of $169.2 million but a positive cumulative one-year gap of $806.6 million, indicating asset sensitivity over a one-year horizon.
Modeled sensitivity at June 30, 2026 shows a 9.2% increase under a 200-basis-point upward shock and a 4.8% decline under a 200-basis-point downward shock over the first 12 months.
sensitivity is more pronounced on the downside, with a 16.6% decline under a 200-basis-point downward shock versus an 11.2% increase under a 200-basis-point upward shock.
The asset/liability committee manages interest rate risk primarily through on-balance sheet products, adjusting investment and borrowing durations and limiting premiums paid on mortgage loans and mortgage-backed securities.
The Securities Business faces interest rate and credit risk from margin loans, securities borrowing, and trading activities, managed through position size and duration limits, counterparty credit reviews, and daily collateral mark-to-market.
Refer to the “Index to Consolidated Financial Statements” for an index of the financial statements filed as a part of this report, which begin on page F-1.
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Refer to the “Index to Consolidated Financial Statements” for an index of the financial statements filed as a part of this report, which begin on page F-1.