Axos Financial Q4 2025 slides: Loan growth accelerates as deposit base diversifies

Introduction & Market Context

Axos Financial Inc. (NYSE:AX) released its fourth quarter fiscal 2025 earnings presentation on July 30, 2025, highlighting strong loan growth and a diversified deposit base. The company’s stock has shown positive momentum, gaining nearly 39% over the past six months, closing at $80.87 following a 4.59% increase after the earnings announcement. With a market capitalization of approximately $4.78 billion, Axos continues to position itself as a diversified financial services provider in the digital banking space.

Quarterly Performance Highlights

Axos reported a net income of $110.7 million for Q4 FY2025, up from $105.2 million in the previous quarter, with earnings per share increasing to $1.92 from $1.81. The company maintained strong profitability metrics, including a 17% return on average common equity and a 1.9% return on assets. Net interest margin improved to 4.84%, up 6 basis points from the prior quarter.

The presentation revealed total loan balances of $21.55 billion as of June 30, 2025, representing quarterly growth of $823 million or approximately 4% from the previous quarter. This growth aligns with the company’s strategic focus on expanding its loan portfolio while maintaining credit quality.

Loan Portfolio Analysis

The loan portfolio shows significant diversification across multiple categories, with particularly strong growth in commercial real estate and commercial lending segments. As shown in the detailed breakdown of loan growth by category:

CRE Specialty loans led growth with a $342 million increase, followed by Asset-Based and Cash Flow Lending at $316 million. Lender Finance RE also showed strong growth of $239 million. These increases were partially offset by a $330 million decrease in Multifamily loans, suggesting a strategic shift in portfolio allocation.

The company’s allowance for credit losses (ACL) is distributed across loan categories based on risk assessment, with higher reserves allocated to riskier loan types:

Auto & Consumer loans carry the highest ACL percentage at 3.3%, while Single Family Mortgage & Warehouse loans have the lowest at 0.3%. The overall ACL stands at 1.3% of total loans, reflecting Axos’s risk management approach across its diverse portfolio.

Deposit Base and Funding

Axos has built a diversified deposit gathering strategy, with approximately 90% of deposits being FDIC-insured or collateralized, providing stability to its funding base. The presentation highlights the company’s multi-channel approach to deposit gathering:

Consumer Direct deposits form the largest component at $11.6 billion, followed by Commercial & Treasury Management at $3.9 billion. The company serves approximately 40% of U.S. Chapter 7 bankruptcy trustees through exclusive relationships, creating a stable and unique deposit source. This diversification helps mitigate funding risks and supports the company’s loan growth strategy.

Credit Quality and Risk Management

Axos’s credit quality metrics remained stable during the quarter, with non-accrual loans totaling $170 million or 0.79% of total loans as of June 30, 2025. The presentation provides a detailed view of the company’s allowance for credit losses:

The total allowance for credit losses increased from $280 million on March 31, 2025, to $290 million on June 30, 2025. This increase reflects a provision for credit losses of $18 million, partially offset by net charge-offs of $8 million. The increase in loan loss provisions suggests a prudent approach to risk management amid continued loan growth.

Credit quality metrics by loan category show varying risk profiles:

The company’s disciplined approach to credit risk is evidenced by the stable non-accrual loan ratio, which remains under 1% of total loans.

Forward-Looking Statements

According to the earnings call transcript, Axos is targeting loan growth in the high single to low double digits going forward. The company is exploring M&A opportunities in specialty finance and fee-based businesses while continuing to invest in AI technologies to enhance operational efficiency.

CEO Greg Gerbrandt highlighted the company’s progress in cross-selling deposits across lending businesses and emphasized the role of AI in improving operational efficiency. The company also anticipates a decrease in the corporate tax rate to 26-27% starting September 30, 2025, which could further enhance profitability.

Potential challenges for Axos include funding cost pressures due to accelerated loan growth, economic uncertainties affecting loan demand, and competition from other financial institutions. However, the company’s diversified business model and strong capital position appear well-positioned to navigate these challenges.

As Axos continues to execute its growth strategy, investors will be watching closely to see if the company can maintain its momentum in loan growth while preserving credit quality and expanding its deposit base in an evolving economic environment.

Full presentation:

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