AX 10-K & 10-Q changes, risk factors and insider trading

Our business and results of operations are affected by the financial markets and general economic conditions, including factors such as the level and volatility of interest rates, inflation, home prices, unemployment and under-employment levels, bankruptcies, household income and consumer spending. We operate in an uncertain economic environment due to a variety of other reasons including, but not limited to, trade policies and disputes, tariffs, geopolitical tensions and global military conflicts, including the Russia-Ukraine war and conflicts in the Middle East, inflation, fluctuating commodity prices and volatile global supply chains and energy prices.market prices and disruptions. The risks associated with our business become more acute in periods of a slowing economy or slow growth. Furthermore, given our high concentration of loans secured by real estate in California and New York, the Company remains particularly susceptible to a downturn in those states’ economies. These negative events may cause us to incur losses and may adversely affect our capital, financial condition and results of operations.

•a decrease in the demand for, or the availability of, loansloans, leases, and other products and services we offer;

It is difficult to predict the legislative and executive regulatory changes that will result from the current Congress and Presidential Administration. President Trump and certain members of Congress have advocated for the reduction of regulation of the financial services industry. Congress and the current administration may also cause broader economic changes due to various changes in the federal government’s approach to regulation and administration. NewChanges appointmentsin tothe composition of the Board of Governors of the FRB and the new Federal Reserve System (the “FRB”)chairman could also affect monetary policy and interest rates. Although the FRB cut certain benchmark interest rates in 2024 and 2025, it is uncertain if it will raise or lower rates in the future, in response to, among other things, inflationary pressures. Future legislation, regulation, and changes in trade and fiscal policy, including uncertainty surrounding the ongoing operations of the CFPB, could affect the banking industry as a whole, including our business and results of operations, in ways that are difficult to predict. In addition, our results of operations could be adversely affected by changes in the way in which existing statutes and regulations are interpreted or applied by courts and government agencies, including, but not limited to, changes resulting from efforts to limit the operations of the CFPB.

The current Presidential Administration has implemented, or threatened to implement, tariffs and retaliatory tariffs, asand wellhad assignaled imposing other trade restrictions, against U.S. trading partners. In response to tariffs, foreign countries have implemented, or may implement, retaliatory tariffs on U.S. goods. There is uncertainty about the future relationship between the U.S. and other countries with respect to trade policies, government regulations and tariffs. Historically, tariffs have led to increased trade and political tensions. Political tensions as a result of trade policies could reduce trade volume, investment, technological exchange, and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial markets. It may also cause the prices of our customers’ products to increase, which could reduce demand for such products, or reduce our customers’ margins, and adversely impact their revenues, financial results, and ability to service debt. This, in turn, could adversely affect our financial condition and results of operations. In addition, to the extent changes in the international trade environment have a negative impact on us or on the markets in which we operate our business, our results of operations and financial condition could be materially and adversely impacted in the future. On February 20, 2026, the U.S. Supreme Court struck down the Presidential Administration’s imposition of certain tariffs imposed in reliance on the International Emergency Economic Powers Act; however, the administration has signaled that it may pursue, and has pursued, alternative channels to maintain or increase such tariffs. Additional challenges to tariff policies could create significant uncertainty in domestic and global markets. At this time, it remains unclear what the U.S. government or foreign governments will or will not continue to do with respect to tariff policies or international trade agreements and policies.

The laws, rules, regulations and supervisory policies governing our business are intended primarily for the protection of our depositors, our customers, the financial system and the FDIC insurance fund, not our stockholders or other creditors and are subject to regular modification and change. New or amended laws, rules, regulations and policies, including those resulting from changes in U.S. Presidential administration, could impact our operations, increase our capital requirements or substantially restrict our growth and adversely affect our ability to operate profitably by making compliance more difficult or expensive, restricting our ability to originate or sell loans, or impacting the amount of interest or other charges or fees earned on loans or other products. It is difficult to predict future changes in regulation or the competitive impact that any such changes would have on our business. Any new laws, rules and regulations could make compliance more difficult, expensive, costly to implement or may otherwise adversely affect our business, financial condition or growth prospects. Other changes to statutes, regulations, or regulatory policies, including changes in interpretation or implementation of statutes, regulations, or policies, could affect us in substantial and unpredictable ways including subjecting us to additional costs, limiting the types of financial services and products we may offer, and increasing the ability of non-banks to offer competing financial services and products.

Recent U.S. Supreme Court decisions in administrative law could redefine the power of federal agencies to interpret and apply federal regulations, which could affect our business, prospects and operations, and our financial performance. In Loper Bright, the U.S. Supreme Court held that the U.S. Administrative Procedure Act requires that courts exercise independent judgment to determine whether a federal agency has acted within its statutory authority, and not to defer to an agency interpretation when a statute is ambiguous. The Loper Bright decision may result in additional legal challenges to interpretations by federal regulatory agencies, including those which Axos and the Bank rely on and intend to rely on in the future. Successful challenges of such regulations and guidance could have an impact on our business which could be material. Further, President Trump issued Executive Order 14215 in February of 2025, requiring all executive departments and agencies, including the FRB in connection with its supervision and regulation of financial institutions,FRB, to submit all proposed and final significant regulatory actions to the Office of Information and Regulatory Affairs prior to publication in the Federal Register.publication. Potential increased regulatory uncertainty following Loper Bright and potential delays or other impacts toin the federal agency rulemaking process following Executive Order 14215 could adversely impact the financial services industry and the broader economy, as well as our business and operations.

Our financial performance is impacted by federal and state tax laws. Given the current economic and political environment and ongoing budgetary pressures, the enactment of new federal or state legislation or new interpretations of existing tax laws could adversely impact our tax position, in some circumstances retroactively. The Inflation Reduction Act (the “IRA”), which established a 15% corporate alternative minimum tax on adjusted book income (of corporations that have an average adjusted book income in excess of $1 billion over a three-tax year period) for tax years beginning after December 31, 2022, may impact the Company’s cash tax payments and tax credit carryforward balances. The IRA includes a nondeductible 1% excise tax on certain repurchases of corporate stock for transactions occurring after December 31, 2022, which increases the Company’s cost of share repurchases exceeding certain thresholds. Additionally, in June 2025, the State of California adoptedmodified its fiscal year 2026 budget, which, among other things, changed the wayhow financial institutions’ multi-state income is apportioned to the State of California. This change impacted the Company’s deferred income tax assets and liabilities and reduced its expected effective income tax rate forrelative fiscalto yearsits 2026historical andeffective beyond.income tax rate. The consequences of the IRA, the 2025 change in California state tax law, the enactment of new federal or state tax legislation, or other changes in the interpretation of existing law, including provisions impacting income tax rates, apportionment, consolidation or combination, income, expenses, and credits, may have a material adverse effect on our financial condition, results of operations, and liquidity.

Our broker-dealer and investment advisory businesses subject us to regulation by the SEC, FINRA, other self-regulatory organizations (“SROs”),SROs, state securities commissions, and other regulatory bodies. Violations of the laws and regulations governed by these agencies could result in censure; penalties and fines; the issuance of cease-and-desist orders; the restriction, suspension, or expulsion from the securities industry of the Company or its officers or employees; or other similar adverse consequences, any of which could cause us to incur losses and adversely affect our capital, financial condition and results of operations. Clearing securities firms are subject to substantially more regulatory control and examination than introducing brokers that rely on others to perform clearing functions. Similarly, the attorney general of each state could bring legal action to ensure compliance with state securities laws, and regulatory agencies in foreign countries have similar authority. Our ability to comply with multiple laws and regulations pertaining to the securities industry depends in large part on our ability to establish and maintain an effective compliance function. The failure to establish and enforce reasonable compliance procedures, even if unintentional, could subject us to significant losses or disciplinary or other actions. Federally registered investment advisers are regulated and subject to examination by the SEC. In addition, the Advisers Act imposes numerous obligations on our investment advisory business, including fiduciary duties, disclosure obligations, recordkeeping and reporting requirements, marketing restrictions and general anti-fraud prohibitions. Our failure to comply with the Advisers Act and associated rules and regulations of the SEC could subject us to enforcement proceedings and sanctions for violations, including censure or termination of SEC registration, litigation and reputational harm. In addition, our investment advisory business is subject to notice filings and the anti-fraud rules of state securities regulators. See Item 1— Business—“Regulation of the Securities Business Segment.”

Our real estate loan portfolio encompasses commercial real estate, residential real estate, and real estate construction and land loans, which implicate a variety of risks, including: (i) market risks including increased competition in pricing and loan structure, macroeconomic conditions in the United States and in the markets where we lend, and decreased commercial and residential real estate values in the markets where we lend; (ii) environmental risks including natural disasters and impact on underlying real estate collateral and environmental liabilities with respect to real properties acquired; and (iii) project-specific risks including higher construction costs, failure by developers and contractors to meet project specifications or timelines, and buyers of completed construction projects not being able to secure permanent financing. These risks may also be affected by other risks described herein.

The majority of the loans in our portfolio are secured by real estate. At June 30, 2025,2026, approximately 35.8%37.4% and 28.2%33.5% of our real estate loan portfolio was secured by real estate located in CaliforniaNew York and New York,California, respectively. In recent years, there has been significant volatility in real estate values. If real estate values decrease or more of our borrowers experience financial difficulties, we will experience increased charge-offs, as the proceeds resulting from foreclosure may be significantly lower than the amounts outstanding on such loans and the time to foreclose may be extended. In addition, declining real estate values frequently accompany periods of economic downturn or recession and increasing unemployment, all of which can lead to lower demand for mortgage loans of the types we originate and impact the ability of borrowers to repay their loans. A decline of real estate values or decline of the credit position of our borrowers could have a material adverse effect on our business, prospects, financial condition and results of operations.

During the last three fiscal years we have sold approximately $297.7$337.5 million of residential mortgage loans to Fannie Mae and Freddie Mac and into mortgage-backed securities (“MBS”) guaranteed by Ginnie Mae. As of June 30, 2025,2026, approximately 70.8%8.3% of our securities portfolio consisted of residential mortgage-backed securities (“RMBS”) issued or guaranteed by these entities. Since 2008, Fannie Mae and Freddie Mac have been in conservatorship, with its primary regulator, the Federal Housing Finance Agency, acting as conservator. The United States government may enact structural changes to one or more of thethese government-sponsored enterprises (“GSEs”), including privatization, consolidation and/or a reduction in the ability of GSEs to purchase mortgage loans or guarantee mortgage obligations. We cannot predict if, when or how the conservatorships will end, or what associated changes (if any) may be made to the structure, mandate or overall business practices of either of the GSEs. Accordingly, there continues to be uncertainty regarding the future of the GSEs, including whether they will continue to exist in their current form and whether they will continue to meet their obligations with respect to their RMBS. A substantial reduction in mortgage purchasing activity by the GSEs could result in a material decrease in the availability of residential mortgage loans and the number of qualified borrowers, which in turn may lead to increased volatility in the residential housing market, including a decrease in demand for residential housing and a corresponding drop in the value of real property that secures current residential mortgage loans, as well as a significant increase in interest rates. In a rising or higher interest rate environment, our originations of mortgage loans may decrease, which would result in a decrease in mortgage loan revenues and a corresponding decrease in non-interest income. Any decision to change the structure, mandate or overall business practices of the GSEs and/or the relationship among the GSEs, the government and the private mortgage loan markets, or any failure by the GSEs to satisfy their obligations with respect to their RMBS, could have a material adverse effect on our business, financial condition and results of operations.

Our commercial real estate portfolio was approximately $6.9$8.9 billion, or 32.2%34.0% of our total loan portfolio at June 30, 2025.2026. The commercial real estate loans we make are secured by income-producing properties such as office buildings, retail centers, mixed-use buildings and multi-tenanted light industrial properties. At June 30, 2025,2026, $389.2$509.5 million, or 7%, of our commercial real estate specialty loan portfolio was secured by office buildings. The COVID-19ongoing pandemicshift toward remote and hybrid work arrangements has hadreduced, aand potentiallymay long-term negative impact on certain commercial real estate portfolios duecontinue to the risk that tenants may reduce the office space they lease as some portion of the workforce continues to work remotely on a hybrid or full-time basis. A reduction in the need for office space could result in a reduction inreduce, demand for these categories of commercial office space. Elevated vacancy rates and/or indownward pressure on office property valuations could impair our customers’borrowers' ability to repay their loans or reduce the value of the collateral securing those loans, which, in turn, may have an adverse effect on our business and results of operations.

Commercial real estate markets may face downward pressure due in part to increasing interest rates and declining property values. Accordingly, the federal banking regulatory agencies may apply increased regulatory scrutiny to institutions with commercial real estate loan portfolios that are fast growing or large relative to the institutions’ total capital. Banking regulatory authorities may require banks with higher levels of commercial real estate loans to implement enhanced risk management practices – including stricter underwriting, additional internal controls and risk management policies, more detailed reporting, and portfolio stress testing – as well as potential higher allowances for credit losses and capital levels as a result of commercial real estate lending growth and exposure. Our failure to adequately implement enhanced risk management policies, procedures and controls could adversely affect our ability to manage the commercial real estate segment of our loan portfolio and could result in an increased rate of delinquencies in, and increased losses from, our loan portfolio, which could have a material adverse effect on our business, financial condition and results of operations.

From time to time, the Financial Accounting Standards Board (the “FASB”) and the SEC change the financial accounting and reporting standards that govern the preparation of our financial statements. In addition, the FASB, SEC, bank regulators and outside independent auditors may revise their previous interpretations regarding existing accounting regulations and the application of these accounting standards. The methods, estimates and judgments that we use in applying our accounting policies have a significant impact on our results of operations. Such methods, estimates and judgments, include methodologies to value our securities, estimate our allowance for credit losses and evaluate goodwill and other intangibles for impairment. These methods, estimates and judgments are, by their nature, subject to substantial risks, uncertainties and assumptions; factors may arise over time that lead us to change our methods, estimates and judgments. Changes in those methods, estimates and judgments could significantly affect our results of operations. These changes can be difficult to predict and can materially impact how we record and report our financial condition and results of operations.

Our loans are generally secured by single family, multifamily and commercial real estate properties or other commercial assets, each initially having a fair market value generally greater than the amount of the loan secured. Although our loans and leases are typically secured, the risk of default, generally due to a borrower’s inability to make scheduled payments on his or herits loan, is an inherent risk of the Banking Business Segment. In determining the amount of the allowance for credit losses, we make various assumptions and judgments about the collectability of our loan and lease portfolio, including the creditworthiness of our borrowers, the value of the real estate or other assets serving as collateral for the repayment of our loans and our loss history. Defaults by borrowers could result in losses that exceed our loan and lease loss reserves. We may not have sufficient repayment experience to be certain whether the established allowance for loan and lease losses is adequate for certain types of loans and leases. We may have to establish a larger allowance for credit losses in the future if, in our judgment, it becomes necessary.

While we believe we have established appropriate underwriting and ongoing monitoring policies and procedures for our lending activities, there can be no assurance that such underwriting and ongoing monitoring policies and procedures are, or will continue to be, appropriate or that losses on loans will not require increased allowances for loan and leasecredit losses. Any increase in our allowance for loan and lease losses would increase our expenses and consequently may adversely affect our profitability, capital adequacy and overall financial condition.

The Company accounts for goodwill and other intangible assets in accordance with generally accepted accounting principles (“GAAP”), which, in general, requires that goodwill not be amortized, but rather tested for impairment at least annually at the reporting unit level using the two step approach.annually. Testing for impairment of goodwill and other intangible assets is performed annually and involves the identification of reporting units and the estimation of fair values. The estimation of fair values involves a high degree of judgment and subjectivity in the assumptions used. Changes in the local and national economy, the federal and state legislative and regulatory environments for financial institutions, the stock market, interest rates and other external factors (such as natural disasters or significant world events), including factors described herein, may occur from time to time, often with great unpredictability, and may materially impact the fair value of publicly traded financial institutions and could result in an impairment charge at a future date.

The deposits of the Bank are insured by the FDIC up to legal limits and, accordingly, subjected to the payment of FDIC deposit insurance assessments, which are determined in accordance with a defined calculation. The FDIC imposed a special assessment to recover the losses in connection with the receiverships of Silicon Valley Bank and Signature Bank. Increases in assessment rates or further special assessments may occur in the future, especially if there are significant additional financial institution failures. Any future special assessments, increases in assessment rates or required prepayments in FDIC insurance premiums could reduce our profitability or limit our ability to pursue certain business opportunities, which could have a material adverse effect on our business, financial condition and results of operations.

Our broker-dealer business is subject to the net capital requirements of the SEC, FINRA and various self-regulatory organizations.SROs. These requirements typically specify the minimum level of net capital a broker-dealer must maintain and mandate that a significant part of its assets be kept in relatively liquid form. Failure to maintain the required net capital may subject a firm to limitation of its activities, including suspension or revocation of its registration by the SEC and suspension or expulsion by FINRA and other regulatory bodies, and ultimately may require its liquidation.

From time to time, we may implement new lines of business, purchase assets or liabilities or offer new products and services. In addition, we will continue to make investments in research, development, and marketing for new products and services. There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets for such products and services are not fully developed. Initial timetables for the development and introduction of new lines of business and/or new products or services may not be achieved, price and profitability targets may not prove feasible and customers may fail to accept our new products and services. External factors, such as compliance with regulations, competitive alternatives, counterparty or third-party performance and shifting market preferences, may also impact the successful implementation of a new line of business, a purchase of assets or liabilities or a new product or service. Furthermore, the burden on management and our information technology of introducing any new line of business, purchasing of assets or liabilities and/or introducing new products or services could have a significant impact on the effectiveness of our system of internal controls. Failure to successfully manage these risks could have a material adverse effect on our business, financial condition and results of operations.

•The relevance of our products and services to customer needs and demands and the rate at which we and our competitors develop, introduce or modify new products and services;

Reputational risk is inherent in our business. Negative publicity or reputational harm can result from actual or alleged conduct in a number of areas, including legal and regulatory compliance, lending practices, corporate governance, litigation, inadequate protection of customer data, illegal or unauthorized acts taken by third parties that supply products or services to us, the behavior of our employees, the customers with whom we have chosen to do business and negative publicity for other financial institutions. Negative publicity or information regarding our business and personnel, whether or not accurate or true, may be posted on social media or other Internet forums or published by news organizations. The speed and pervasiveness with which information can be disseminated through these channels, in particular social media, may magnify risks relating to negative publicity. Damage to our reputation could adversely impact our ability to attract new, and maintain existing, loan and deposit customers, employees and business relationships, and, particularly with respect to our broker-dealer and registered investment adviserRIA businesses, could result in the imposition of new regulatory requirements, operational restrictions, enhanced supervision and/or civil money penalties. Such damage could also adversely affect our ability to raise additional capital. Any such damage to our reputation could have a material adverse effect on our financial condition and results of operations.

The potential impacts of extreme weather conditions, natural disasters and rising sea levels, could impact our operations as well as those of our customers and third party vendors upon which we rely. Our Bank is based in San Diego, California, and approximately 35.8%33.5% of our real estate loan portfolio was secured by real estate located in California at June 30, 2025.2026. In addition, some of our computer systems that operate our internet websites and their back-up systems are located in San Diego, California. Historically, California has been vulnerable to natural disasters. Therefore, we are susceptible to the risks of natural disasters, such as earthquakes, wildfires, floods and mudslides, the nature and magnitude of which cannot be predicted and may be exacerbated by global climate change. Natural disasters could harm our operations directly through interference with communications, including the interruption or loss of our websites, which would prevent us from gathering deposits, originating loans and leases and processing and controlling our flow of business, as well as through the destruction of facilities and our operational, financial and management information systems. A natural disaster or recurring power outages may also impair the value of our largest class of assets, our loan and lease portfolio, which is substantially composed of real estate loans. Losses from disasters for which borrowers are uninsured or under-insured may reduce borrowers’ ability to repay mortgage loans. Natural disasters, acts of war or terrorism, civil unrest, public health issues, or other adverse external events could each negatively impact our business operations or the stability of our deposit base, cause significant property damage, adversely impact the values of collateral securing our loans and/or interrupt our borrowers’ abilities to conduct their business in a manner to support their debt obligations, which could result in losses and increased provisions for credit losses. Although we have implemented several back-up systems and protections (and maintain standard business interruption insurance), these measures may not protect us fully from the effects of a natural disaster, acts of war or terrorism, civil unrest, public health issues, or other adverse external events. The occurrence of natural disasters,disasters or other adverse external events, particularly in California, could have a material adverse effect on our business, prospects, financial condition and results of operations, although the greater Los Angeles area fires in early 2025 did not have material impact to the Company.operations.

The development and use of AInew technologies, including AI, present risks and challenges that may adversely impact our business.

The banking and financial services industry continually experiences technological changes, with frequent introductions of new technology-driven products and services, including recent and rapid developments in AI, including with agentic AI and generative AI. Both our Company and third-party (or fourth-party) vendors might use AI or other new technologies in some business processes, products, or services. Our future success will depend, in part, upon our ability to address the needs of our clients by using technology to provide products and services that will satisfy client demands for convenience, as well as to assess the proper operation of AI models and capabilities to create additional efficiencies in our operations. We may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to our clients. In addition, the implementation of technological changes and upgrades to maintain current systems and integrate new ones may also create service interruptions, transaction processing errors, and system conversion delays and may cause us to fail to comply with applicable laws. There can be no assurance that we will be able to successfully manage the risks associated with our increased dependency on technology. Failure to successfully keep pace with technological change affecting the banking and financial services industry could negatively affect our revenue and profitability.

Provisions of our CertificationCertificate of Incorporation, by-lawsBy-laws and Delaware laws may discourage, delay or prevent a merger, acquisition or other change in control that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares of our common stock. These provisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. These provisions include:

The Consolidated Financial Statements include the accounts of Axos Financial, Inc. (“Axos”) and its wholly owned subsidiaries, Axos Bank (the “Bank” or “Axos Bank”) and Axos Nevada Holding, LLC (“Axos Nevada Holding”), collectively, the “Company.” Axos, the Bank, three lending-related entities and Axos Nevada Holding comprise substantially all of the Company’s assets and liabilities and revenues and expenses. The Bank, its wholly owned subsidiaries, and the activities of three lending-related entities,entities and certain other lending activities constitute the Banking Business Segment. Axos Nevada Holding owns Axos Securities, LLC, which owns Axos Clearing LLC (“Axos Clearing”), a clearing broker-dealer, Axos Invest, Inc., a registered investment advisor, and Axos Invest LLC, an introducing broker-dealer. Axos Securities, LLC and its consolidated subsidiaries constitute the Securities Business Segment. Axos Bank provides consumer and business banking products through its low-cost distribution channels and affinity partners. Axos Clearing and Axos Invest LLC, provide comprehensive securities clearing services to introducing broker-dealers and registered investment advisor correspondents and digital investment advisory services to retail investors, respectively. Axos Financial, Inc.’s common stock is listed on the NYSENew York Stock Exchange under the ticker symbol “AX” and is a component of the Russell 2000® Index and the S&P SmallCap 600® Index, among other indices.

From time to time, we undertake acquisitions or similar transactions consistent with our operating and growth strategies. On August 23, 2023, the Company acquired approximately $52 million of marine floor financing loans at par value along with other assets for an additional $2 million, primarily consisting of servicing rights as well as certain employees. The transaction was accounted for as an asset acquisition and such assets are included in the Company’s Consolidated Balance Sheets as of June 30, 2025.Sheets.

For additional information on these acquisitions, see Note 2—”Acquisitions.” There were no other significant acquisitions undertaken during fiscal years 2025,2026, 20242025 or 2023.2024.

The following discussion and analysis of our financial condition and results of operations is based upon our Consolidated Financial Statements and the notes thereto, which have been prepared in accordance with accounting principles generally accepted in the United States of America.America (“GAAP”). The preparation of these Consolidated Financial Statements requires us to make a number of estimates and assumptions that affect the reported amounts and disclosures in the Consolidated Financial Statements. On an ongoing basis, we evaluate our estimates and assumptions based upon historical experience and various factors and circumstances. We believe that our estimates and assumptions are reasonable under the circumstances. However, actual results may differ significantly from these estimates and assumptions that could have a material effect on the carrying value of assets and liabilities at the balance sheet dates and our results of operations for the reporting periods.

Allowance for Credit Losses. The Company maintains an allowance for credit losses (“ACL”) for its held-for-investment loan and net investment in leases portfolio as well as lending commitments, excluding loans measured at fair value in accordance with applicable accounting standards, which represents management’s estimate of the expected lifetime credit losses on the loans and net investment in leases. The estimate of the allowance for credit losses includes both a quantitative and qualitative assessment, both of which include variables that are subject to uncertainty.

The quantitative assessment reflects modeled outputs utilizing economic scenarios and forecasts, which are subject to uncertainty, and is also based on the Company’s current and expected future economic outlook. Key economic variables considered in the quantitative assessment include factors such as the U.S. unemployment rate and interest rates, both of which impact the default rate of the loan pools. Additionally, the results of the quantitative assessment are impacted by the third-party macroeconomic forecasts across various economic scenarios. The Company periodically reviews and adjusts the weighting of scenarios based on management’s allowance for credit losses (“ACL”) framework. Adjustment of scenario weighting away from the baseline scenario to the adverse scenario should increase the allowance for credit lossesACL on the Company’s held-for-investment loan and net investment in leases portfolio, all else remaining equal. Economic forecasts that impacted management’s assessment of scenario weightings includedincluded, among other forecasts, interest rates, inflation, changes in trade policies, and geopolitical unrest. Changes in one or more of these variables can cause a significant change in the estimate of the allowance for credit losses.ACL.

For further information on the allowance for credit losses,ACL, refer to Note 1—“Organizations and Summary of Significant Accounting Policies” and Note 5—“Loans & Allowance for Credit Losses” in the Consolidated Financial Statements.

We define “adjusted earnings,earnings”, a non-GAAP financial measure, as net income without the after-tax impact of non-recurring acquisition-related items (including amortization of intangible assets related to acquisitions and certain gains and provisions resulting from the Company’s FDIC Loan Purchase), and other costs (unusual or non-recurring charges). Adjusted earningsEPS, pera dilutednon-GAAP commonfinancial share (“adjusted EPS”)measure, is calculated by dividing non-GAAP adjusted earnings by the average number of diluted common shares outstanding during the period. We believe the non-GAAP measures of adjusted earnings and adjusted EPS provide useful information about the Company’s operating performance. We believe excluding the non-recurring acquisition-related costs, and other costs provides investors with an alternative understanding of our core business.

1Other3Other costs for the fiscal year ended 2025 primarily reflects the payment of a legal judgment at an amount less than previously accrued and for the fiscal year ended June 30, 2023 reflects the original accrual for such legal judgment.accrued.

55The The decreaseincrease in the allowanceAllowance for credit losses - loans to nonaccrual loans as of June 30, 20252026, is primarily attributable to an increase in the changeallowance for credit losses - loans and a decrease in nonaccrual loans.

Our results of operations depend on our net interest income, which is the difference between interest income on interest-earning assets and interest expense on interest-bearing liabilities. Our net interest income is subject to competitive factors in online banking and other markets. Our net interest income is reduced by our current estimate of credit losses. We earn non-interest income primarily from mortgage banking activities, banking products and service activity, asset custody services, broker-dealer clearing and related services, operating lease income, prepayment fee income from multifamily and commercial borrowers who repay their loans before maturity and from gains on sales of other loans and available-for-sale securities. Losses on sales of available-for-sale securities reduce non-interest income. The largest component of non-interest expense is salary and benefits, which is a function of the number of personnel, which increased to 2,191 full-time employees at June 30, 2026, from 1,989 full-time employees at June 30, 2025, from 1,781 full-time employees at June 30, 2024.2025. We are subject to federal and state income taxes, and our effective tax rates were 29.42%,24.17%, 29.19%29.42% and 28.85%29.19% for the fiscal years ended June 30, 2026, 2025, 2024, and 2023,2024, respectively. Other factors that affect our results of operations include expenses relating to data and operational processing, advertising, depreciation, occupancy, professional services, and other miscellaneous expenses.

Interest Expense. For fiscal year 2025,2026, interest expense decreasedincreased $6.5$22.3 million, or 0.9%3.2% compared to interest expense in fiscal year 2024,2025, primarily attributable to loweran ratesincrease in interest expense on secured financings, attributable to the Verdant acquisition, an increase in interest bearingexpense on advances from the FHLB and other borrowings. These increases were partially offset by a decrease in interest expense on demand and savings deposits anddriven by lower averagerates time deposits, advances from the FHLB, and other borrowings. These decreases were partially offset by higher interest-bearing demand and savings deposit balances.paid.

For fiscal year 2025,2026, non-interest income decreasedincreased $91.6$102.5 million, or 41.1%78.2% compared to non-interest income in fiscal year 2024.2025. The decreaseincrease was primarily the result of the absence of the gain on the FDIC Loan Purchase as compareddue to fiscal year 2024, as well as a decrease in broker-dealer fee income on lower rates earned on cash sorting balances. These decreases were partially offset by an increase in mortgage banking and servicing rightsfee income, reflectingmainly netattributable gains on loan sales in fiscal year 2025, and higher banking and service fees.to:

•$47.1$25.1 million in salaries and related costs primarily due to increased headcount and salariessalaries, to support continued growth inincluding the business;impact of the Verdant acquisition.

TheOur Company determines reportable segments based on the services offered, the significance of the services offered, the significance of those services to theour Company’s financial condition and operating results and management’s regular review of the operating results of those services. TheOur Company operates through two operating segments: the Banking Business Segment and the Securities Business Segment. In order to reconcile the two segments to the consolidated totals, theour Company includes parent-onlycorporate activities and intercompany eliminations. Inter-segment transactions are eliminated in consolidation and primarily include non-interest income earned by the Securities Business Segment and non-interest expense incurred by the Banking Business Segment for cash sorting fees related to deposits sourced from Securities Business Segment customers.

For the fiscal year ended June 30, 2025,2026, Banking Business Segment had pre-tax income of $631.3$697.3 million compared to pre-tax income of $638.7$631.3 million for the fiscal year ended June 30, 2024. For the fiscal year ended June 30, 2025, the decrease in pre-tax income was primarily related to the absence of the gain on the FDIC Loan Purchase as compared to fiscal year 2024 and a higher provision for credit losses, partially offset by higher net interest income.2025.

For the fiscal year 2025,2026, the Banking Business Segment’s net interest income increased $163.3$116.9 million, or 17.2%,10.5%, compared to net interest income in fiscal year 2024.2025. The increase in net interest income iswas reflectiveprimarily ofdue higherto an increase in interest earned on loans, mainlyreflecting higher average balances, partially offset by a decrease in interest income on deposits in other financial institutions, primarily driven by lower average balances and lower rates earned. These increases were partially offset by an increase in interest expense on secured financings, attributable to higherthe loanVerdant balances, as well as lower rates on demandacquisition, and savingsan depositsincrease andin lowerinterest averageexpense time deposits andon advances from the FHLB. These decreasesincreases were partially offset by highera interest-bearingdecrease in interest expense on demand and savings deposit balances.deposits.

For the fiscal year 2025,2026, the Banking Business Segment’s non-interest income decreasedincreased $92.6$103.5 million, or 66.6%,223.0%, compared to non-interest income in fiscal year 2024.2025. The decreaseincrease in non-interest income was primarily thedue resultto ofhigher banking and servicing fee income, mainly attributable to the absenceVerdant ofacquisition theand gaincommercial onoffice thecomplex FDICoperating Loanlease Purchaserental asincome, comparedand toa fiscal$22.0 yearmillion 2024.legal settlement in our favor reached in March 2026.

For the fiscal year 2025,2026, the Banking Business Segment’s non-interest expense increased $54.9$109.2 million, or 13.1%,23.1%, compared to non-interest expense in fiscal 2024.2025. The increase in non-interest expense was primarily driven by higher depreciation and amortization expense, mainly as a result of the Verdant acquisition, and an increase in salaries and related costs.costs, including the impact of the Verdant acquisition.

Our Banking Business Segment’s net interest margin exceeds our consolidated net interest margin. Our consolidated net interest margin includes certain items that are not reflected in the calculation of our net interest margin within our Banking Business Segment and reduce our consolidated net interest margin, such as the borrowing costs at theour Company and the yields and costs associated with certain items within interest-earning assets and interest-bearing liabilities in our Securities Business Segment, including thoseitems related to securities financing operations.

For the fiscal year 2025,2026, the Securities Business Segment’s net interest income increased $2.2$7.2 million, or 8.5%,25.5%, compared to fiscal year 2024,2025, resulting from higher netbroker-dealer interest income earnedon inincreased securitiesstock lending activitiesactivity and lowerhigher interestaverage expense on borrowings.balances. In the Securities Business Segment, interest is earned through margin loan balances, securities borrowed and cash deposit balances. Interest expense is incurred from cash borrowed through bank lines and securities lending.

For the fiscal year 2025,2026, the Securities Business Segment’s non-interest income decreasedincreased $9.9$1.7 million, or 7.7%,1.4%, compared to fiscal year 2024,2025, primarily attributable to higher advisory fee income, partially offset by lower broker-dealer fee income on lower rates earned on cash sorting balances.income.

For the fiscal year 2025,2026, the Securities Business Segment’s non-interest expense decreasedincreased $0.5$26.5 million, or 0.4%,23.1%, compared to non-interest expense in fiscal year ended June 30, 2024,2025, primarily related to lowera broker-dealer$21.0 clearingmillion charges.accrual related to a FINRA arbitration matter and higher data and operational processing expense.

Our total assets increased $1.9$5.2 billion, or 8.4%,20.9%, to $24.8$30.0 billion, as of June 30, 2025,2026, up from $22.9$24.8 billion at June 30, 2024.2025. The increase in total assets primarily reflects growth in total loans of $1.8$4.5 billion on a net basis, driven by increases in the commercial & industrial - non-REnon-RE, including the impact of the Verdant acquisition, and commercial real estate portfolios. Total liabilities increased by $1.5$4.7 billion or 7.5%,21.2%, to $26.8 billion at June 30, 2026, up from $22.1 billion at June 30, 2025, up from $20.6 billion at June 30, 2024.2025. The increase in total liabilities primarily reflects growth in deposits of $1.5$3.7 billion. Stockholders’ equity increased by $390.1$485.7 million, or 17.0%,18.1%, to $3.2 billion at June 30, 2026, up from $2.7 billion at June 30, 2025, up from $2.3 billion at June 30, 2024.2025. The increase in stockholders’ equity primarily reflects net income of $432.9$490.4 million, partially offset by repurchases of $58.5$22.0 million of common stock.

Our non-performing assets increaseddecreased to $159.0 million at June 30, 2026 from $175.4 million at June 30, 2025 from $115.8 million at June 30, 2024.2025. The increasedecrease in non-performing assets during the fiscal year ended June 30, 20252026 was primarily the result of ana increasedecrease in non-accrual loans of $57.0$13.3 million, specificallyprimarily in multifamily and commercial mortgage and commercial real estate, partially offset by increases in commercial & industrial - Non-RE,non-RE and ansingle increasefamily in- othermortgage real& estate owned and repossessed vehicles of $2.6 million.warehouse. Non-performing assets as a percentage of total assets increaseddecreased to 0.53% at June 30, 2026 from 0.71% at June 30, 2025 from 0.51% at June 30, 2024.2025.

For fiscal year 2025,2026, net charge-offs were $25.6$43.3 million and increased $16.6$17.8 million compared to net charge-offs for fiscal year 2024,2025, primarily due to net charge-offs in the commercial & industrial - non-RE and multifamily and commercial mortgage portfolios.portfolio.

For fiscal year 2024,2025, net charge-offs were $9.0$25.6 million and increased $2.3$16.6 million compared to net charge-offs for fiscal year 2023,2024, primarily due to the net charge-offs in thecommercial auto& industrial - non-RE and consumermultifamily portfolio.and commercial mortgage portfolios.

For fiscal year 2025,2026, the number of interest-bearing checking and savings accounts grew primarily due to a higher number of consumer deposit accounts.accounts, including as a result of the Jenius Bank deposit acquisition completed on May 2, 2026.

Liquidity. Our primary sources of liquidity include deposits, FHLB advances, borrowings, payments and maturities of outstanding loans, sales of loans, maturities or sales of available-for-sale securities and other short-term investments. While scheduled loan payments and maturing available-for-sale securities and short-term investments are relatively predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition. We generally invest excess funds in overnight deposits and other short-term interest-earning assets. We use cash generated through retail deposits, our largest funding source, to offset the cash utilized in lending and investing activities. Our short-term interest-earning available-for-sale securities are used to provide liquidity for lending and other operational requirements.

Axos Bank can borrow up to 35% of its total assets from the FHLB. Borrowings are collateralized by pledging certain mortgage loans and available-for-sale securities to the FHLB. Based on loans and securities pledged at June 30, 2025,2026, we had $2,799.2$2,391.0 million available immediately and an additional $4,925.6$6,336.1 million available with additional collateral and the Company had $4,284.7$3,761.6 million of loans and $127$750.1 thousandmillion of securities pledged to the FHLB. At June 30, 2025,2026, we had $250.0 million in unsecured federal funds lines of credit with five major banks under which there were no borrowings outstanding.

Axos Clearing has a $110.0$95.0 million unsecured line of credit available for limited purpose borrowing. As of June 30, 2025,2026, there was no amount outstanding. This credit facility bears interest at rates based on the Federal Funds rate and borrowings are due upon demand. TheIn unsecuredJuly 2026, this line of credit requireswas terminated by Axos Clearing to operate in accordance with specific covenants with respect to capital and debt ratios. Axos Clearing was in compliance with all covenants as of June 30, 2025.Clearing.

In January 2019, we issued subordinated loans totaling $7.5 million to the principal stockholders of Cor Securities Holdings, Inc. (“COR Securities”) in an equal principal amount, with a maturity of 15 months and a 6.25% interest rate, to serve as the source of payment of indemnification obligations of the principal stakeholders of COR Securities under the applicable merger agreement. During the fiscal year ended June 30, 2019, $0.1 million of subordinated loans were repaid. AsThe ofCompany June 30, 2025,made an indemnification claim against the $7.4 million. Following such claim, the principal stockholders of COR Securities filed an action seeking a declaratory judgment that they were not obligated under the merger agreement to indemnify the Company, and on November 7, 2025, the declaratory judgment in favor of the principal stockholders of COR Securities was entered. As a result of the declaratory judgment, the Company accrued $7.0 million remainsin pending.“General and administrative expense” in the Consolidated Statements of Income for the three months ended December 31, 2025. On April 8, 2026, the Company made payments, including the $7.4 million of outstanding principal of the subordinated loans, to the principal stockholders of COR Securities in resolution of the declaratory judgment action.

In February 2022, the Company completed the sale of $150 million aggregate principal amount of its 4.00% Fixed-to-Floating Rate Subordinated Notes (the “2032 Notes”). The 2032 Notes are obligations only of Axos Financial, Inc. The 2032 Notes mature on March 1, 2032 and accrue interest at a fixed rate per annum equal to 4.00%, payable semi-annually in arrears on March 1 and September 1 of each year, commencing on September 1, 2022. From and including March 1, 2027, to, but excluding March 1, 2032 or the date of early redemption, the 2032 Notes will bear interest at a floating rate per annum equal to three-month term SOFR plus a spread of 227 basis points, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, commencing on June 1, 2027. The 2032 Notes may be redeemed on or after March 1, 2027, which date may be extended at the Company’s discretion, at a redemption price equal to principal plus accrued and unpaid interest, subject to certain conditions. Fees and costs incurred in connection with the debt offering amortize to interest expense over the term of the 2032 Notes. On March 6, 2024, the Company paid $4.2 million to repurchase $5.0 million par value of its 2032 Notes resulting in a pre-tax non-cash gain on extinguishment of $0.7 million, after accounting for unamortized issuance costs and accrued interest. On July 15, 2024, the Company paid $2.6 million to repurchase $3.0 million par value of its 4.00% Fixed-to-Floating Rate Subordinated Notes due March 1, 2032 resulting in a pre-tax non-cash gain on extinguishment of $0.4 million, after accounting for unamortized issuance costs and accrued interest. On June 5, 2025, the Company paid $1.4 million to repurchase $1.5 million par value of its 2032 Notes resulting in a pre-tax non-cash gain on extinguishment of $0.1 million, after accounting for unamortized issuance costs and accrued interest. The non-cash gaingains isare recorded in “General and administrative expense” in the Consolidated Statements of Income for the fiscal year ended June 30, 2025.Income.

We view our liquidity sources to be stable and adequate for our anticipated needs and contingencies for both the short and long-term. We maintain a contingency funding plan designed to ensure that liquidity sources are sufficient to meet ongoing obligations and commitments, particularly in a stressed environment or during a market disruption. We also perform liquidity stress tests across a variety of scenarios. Due to the diversified sources of our deposits, while maintaining approximately 90%85% of our total Bank deposits in insured or collateralized accounts as of June 30, 2025,2026, we believe we have the ability to increase our level of deposits, and have available other potential sources of funding, to address our liquidity needs for the foreseeable future.

The Company and Bank Capital Requirements. Our Company and Bank are subject to regulatory capital adequacy requirements promulgated by federal bank regulatory agencies. Failure by our Company or Bank to meet minimum capital requirements could result in certain mandatory and discretionary actions by regulators that could have a material adverse effect on our Consolidated Financial Statements. The Federal Reserve establishes capital requirements for our Company and the OCC has similar requirements for our Bank. The following tables present regulatory capital information for our Company and Bank. Information presented for June 30, 2025, reflects the Basel III capital requirements for both our Company and Bank. Under these capital requirements and the regulatory framework for prompt corrective action, our Company and Bank must meet specific capital guidelines that involve quantitative measures of our Company and Bank’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. Our Company’s and Bank’s capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings and other factors.

Quantitative measures established by regulation require our Company and Bank to maintain certain minimum capital amounts and ratios. Federal bank regulators require our Company and Bank maintain minimum ratios of core capital to adjusted average assets of 4.0%, common equity tier 1 capital to risk-weighted assets of 4.5%, tier 1 capital to risk-weighted assets of 6.0% and total risk-based capital to risk-weighted assets of 8.0%. To be “well capitalized,” our Company and Bank must maintain minimum leverage, common equity tier 1 risk-based, tier 1 risk-based and total risk-based capital ratios of at least 5.0%, 6.5%, 8.0% and 10.0%, respectively. Additionally, theour Bank is required to maintain a tangible capital ratio equal to at least 1.5% of total average adjusted assets. At June 30, 2025,2026, our Company and Bank met all the capital adequacy requirements to which they were subject to and were “well capitalized” under the regulatory framework for prompt corrective action. Management believes that no conditions or events have occurred since June 30, 20252026 that would materially adversely change theour Company’s and Bank’s capital classifications. From time to time, we may need to raise additional capital to support our Company’s and Bank’s further growth and to maintain their “well capitalized” status.

The Company and Bank both elected the five-year current expected credit losses (“CECL”) transition guidance for calculating regulatory capital and ratios.ratios, The amounts in the following table reflect this election. This guidancewhich allowed an entity to add back to regulatory capital 100% of the impact of the day one CECL transitionadoption, adjustment and 25% of the subsequent increasessubject to the allowancefive-year forphase creditout. lossesThe through June 30, 2022. In fiscal year 2025, this cumulative amount was phasedphase out of regulatory capital at 75% and the cumulative amount will be 100% phased out of regulatory capital beginningended in fiscal year 2026.2025 and the regulatory capital figures presented as of June 30, 2026 no longer reflect this adjustment.

Axos Clearing Capital Requirements. Pursuant to the net capital requirements of the Exchange Act, Axos Clearing,Clearing is subject to the SEC Uniform Net Capital (Rule 15c3-1 of the Exchange Act). Under this rule, theAxos CompanyClearing has elected to operate under the alternate method and is required to maintain minimum net capital of $250,000 or 2% of aggregate debit balances arising from client transactions, as defined. Under the alternate method, theAxos CompanyClearing may not repay subordinated debt, pay cash distributions, or make any unsecured advances or loans to its parent or employees if such payment would result in net capital of less than 5% of aggregate debit balances or less than 120% of its minimum dollar requirement. As of June 30, 2026 and 2025, Axos Clearing was in compliance with its net capital requirements. As part of its capital management, Axos Clearing may make distributions to the Company from time to time.

For additional information on thisthese acquisition,acquisitions, see Note 2, “Acquisitions” in the accompanying interim condensed consolidated financial statements.

We define “adjusted earnings”, a non-GAAP financial measure, as net income without the after-tax impact of non-recurring acquisition-related items,items (including amortization of intangible assets related to acquisitions) and other costs (unusual or non-recurring charges). Adjusted EPS, a non-GAAP financial measure, is calculated by dividing non-GAAP adjusted earnings by the average number of diluted common shares outstanding during the period. We believe the non-GAAP measures of adjusted earnings and adjusted EPS provide useful information about the Company’s operating performance. We believe excluding the non-recurring acquisition-related costs, and other costs provides investors with an alternative understanding of our core business.

12 Acquisition-related costs includes amortization of intangible assets, and for the sixnine months ended DecemberMarch 31, 2025,2026, also includes $1.3 million of acquisition-related costs associated with the Verdant acquisition.

Comparison of the Three and SixNine Months Ended DecemberMarch 31, 20252026 and 20242025

For the three months ended DecemberMarch 31, 2025,2026, we had net income of $128.4$124.7 million, or $2.22$2.15 per diluted share, compared to net income of $104.7$105.2 million, or $1.80$1.81 per diluted share, for the three months ended DecemberMarch 31, 2024.2025. For the sixnine months ended DecemberMarch 31, 2025,2026, we had net income of $240.75$365.43 million or $4.17$6.33 per diluted share, compared to net income of $217.0$322.2 millionmillion, or $3.72,$5.55 per diluted share, for the sixnine months ended DecemberMarch 31, 2024.2025.

For the three months ended DecemberMarch 31, 2025,2026, net interest income totaled $331.7$306.3 million, an increase of $51.6$30.8 million, or 18.4%,11.2%, compared to net interest income of $280.1$275.5 million for the three months ended DecemberMarch 31, 2024.2025. For the three months ended DecemberMarch 31, 2025,2026, net interest margin increaseddecreased by 1121 basis points to 4.57%, compared to the net interest margin of 4.83%4.78% for the three months ended DecemberMarch 31, 2024.2025.

For the three months ended DecemberMarch 31, 2025,2026, total interest and dividend income increased 12.7%10.5% from the three months ended DecemberMarch 31, 2024,2025, primarily due to an increase in interest earned on loans, primarily reflecting higher average balances, partially offset by a $13.5$22.0 million decrease in interest income on deposits in other financial institutions, primarily driven by lower average balances and lower rates earned.

For the three months ended DecemberMarch 31, 2025,2026, total interest expense increased 3.5%9.4% from the three months ended DecemberMarch 31, 2024,2025, primarily due to an increase in interest expense on secured financings, attributable to the Verdant acquisition, and other borrowings, partiallyas offsetwell byas aan $5.6 million decreaseincrease in interest expense on demandadvances andfrom savingsthe deposits.FHLB.

For the sixnine months ended DecemberMarch 31, 2025,2026, net interest income totaled $622.8$929.0 million, an increase of $50.6$81.4 million, or 8.8%,9.6%, compared to net interest income of $572.1$847.6 million for the sixnine months ended DecemberMarch 31, 2024.2025. For the sixnine months ended DecemberMarch 31, 2025,2026, net interest margin decreased by 1517 basis points to 4.76%, compared to the net interest margin of 5.00%4.93% for the sixnine months ended DecemberMarch 31, 2024.2025.

For the sixnine months ended DecemberMarch 31, 2025,2026, total interest and dividend income increased 4.2%6.2% from the sixnine months ended DecemberMarch 31, 2024,2025, primarily due to a $58.6 millionan increase in interest income on loans, attributableprimarily toreflecting higher average loan balances, partially offset by lower rates earned. This increase in interest and dividend income was partially offset by a $22.7$44.7 million decrease in interest income on interest-earning deposits at other financial institutions.institutions primarily driven by lower average balances and lower rates earned.

For the sixnine months ended DecemberMarch 31, 2025,2026, total interest expense decreasedincreased 3.1%0.6% from the sixnine months ended DecemberMarch 31, 2024,2025, primarily due to a $25.6 million decrease in interest expense on demand and savings deposits, mainly reflecting lower rates paid. This decrease was partially offset by an increase in interest expense on secured financings, attributable to the Verdant acquisition, and other borrowings.borrowings, as well as an increase in interest expense on advances from the FHLB. These increases were partially offset by a decrease in interest expense on demand and savings deposits.

The provision for credit losses was $25.0$41.0 million and $42.3$83.3 million for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to $12.2$14.5 million and $26.2$40.7 million, respectively, for the three and sixnine months ended DecemberMarch 31, 2024.2025. The provision for credit losses consists of provisions for both funded loans and for unfunded lending commitments. The provision for credit losses for funded loans was $22.3$38.8 million and $37.5$76.3 million for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, and for the three months ended DecemberMarch 31, 2025,2026, reflectsreflected loan growth primarily in the commercial real estate and commercialCommercial & industrialIndustrial - Non-RE and Commercial Real Estate portfolios, an increase in specific reserves primarily related to one Commercial & Industrial - Non-RE portfolio loan with unique credit risk characteristics, as well as changes to the impact of macroeconomic variables used in thequantitative allowance for credit losses model,model primarilyinputs, theincluding geopolitical events impacting macroeconomic factors and forecasted consumerinterest price index, corporate bond yields, and the five-year U.S. Treasury rate.rates. For the sixnine months ended DecemberMarch 31, 2025,2026, the provision for credit losses was also impacted by the Verdant acquisition, which resulted in a post-acquisition provision for credit losses on the loans and leases acquired.

The provision for credit losses for unfunded lending commitments of $2.8$2.2 million and $4.8$7.0 million for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, was primarily driven by unfunded lending commitment growth, primarily in the commercialCommercial realReal estateEstate and commercialCommercial & industrialIndustrial - non-RENon-RE portfolios. Provisions for credit losses are charged to income to bring the allowance for credit losses for loans and unfunded lending commitments to a level deemed appropriate by management based on the factors discussed under the heading “Financial Condition—Asset Quality and Allowance for Credit Losses - Loans.”

For the three months ended DecemberMarch 31, 2025,2026, non-interest income increased by $25.6$52.6 million, or 92.0%,157.7%, and for the sixnine months ended DecemberMarch 31, 2025,2026, non interestnon-interest income increased by $29.3$81.9 million, or 52.0%.91.2%. The increases were primarily due to an increase in banking and servicing fee income, mainly attributable to operating lease rental and other income from the Verdant acquisition, as well as an increase in mortgage banking and servicing rights income, reflecting the absence of losses on certain loan sales in the prior year periods.:

For the three months ended DecemberMarch 31, 2025,2026, non-interest expense increased $39.3$39.7 million, or 27.0%,27.1%, primarily due to increases of:

•$16.2$15.4 million in depreciation and amortization primarily due to depreciation on equipment under operating leases obtained infollowing the Verdant acquisition;

•$9.9$9.5 million in general and administrative expenses primarily reflecting higher loan and lease servicing expenses following the Verdant acquisition and the absence of a $7.0 million accrual for developmentspayment in an ongoing matter related to the Company’sprior acquisitionyear period of CORa Securitieslegal injudgment fiscalat yearan 2019amount less than previously accrued; and

For the sixnine months ended DecemberMarch 31, 2025,2026, non-interest expense increased $48.0$87.7 million, or 16.4%,20.0%, primarily due to increases of:

•$17.1$32.5 million in depreciation and amortization primarily due to depreciation on equipment under operating leases obtained infollowing the Verdant acquisition;

•$11.1$20.6 million in general and administrative expenses primarily reflecting a $7.0 million accrual in the current period for developments in an ongoing matter related to the Company’s acquisition of COR Securities in fiscal year 20192019, higher loan and lease servicing expenses following the Verdant acquisition and the absence of a payment in the prior year period of a legal judgment at an amount less than previously accrued; and

Income tax expense was $47.1$40.6 million and $84.7$125.3 million for the three and sixnine months ended DecemberMarch 31, 2025,2026, respectively, compared to $45.6$42.9 million and $92.5$135.4 million for the three and sixnine months ended DecemberMarch 31, 2024.2025. Our effective income tax rates for the three months ended DecemberMarch 31, 20252026 and 20242025 were 26.84%24.57% and 30.36%,28.95%, respectively. Our effective income tax rates for the sixnine months ended DecemberMarch 31, 20252026 and 20242025 were 26.01%25.53% and 29.88%,29.58%, respectively. The decrease in the effective income tax rate for the three and sixnine months ended DecemberMarch 31, 20252026 reflects, in part, a change in the State of California income tax law effective beginning with the Company’s 2026 fiscal year.year, the benefit from RSU vestings, and the effective income tax rate benefit derived from certain tax credits in the three months ended March 31, 2026.

For the three and sixnine months ended DecemberMarch 31, 2025,2026, the Banking Business Segment had income before income taxes of $186.8$173.9 million and $340.6$514.5 million, respectively, compared to income before income taxes of $152.9$152.1 million and $317.7$469.8 million, respectively, for the three and sixnine months ended DecemberMarch 31, 2024.2025.

For the three and sixnine months ended DecemberMarch 31, 2025,2026, the Banking Business Segment’s net interest income increased $51.8$31.2 million, or 18.7%,11.5%, and $50.5$81.7 million, or 8.9%,9.8%, respectively, compared to net interest income for the three and sixnine months ended DecemberMarch 31, 2024.2025. The increase in net interest income was primarily due to an increase in interest earned on loans, reflecting higher average balances, partially offset by a decrease in interest income on deposits in other financial institutions, primarily driven by lower average balances and lower rates earned. These increases were partially offset by an increase in interest expense, primarily on secured financings, partiallyattributable offsetto bythe aVerdant decreaseacquisition, inas well as higher interest expense on demandadvances andfrom savingsthe deposits.FHLB.

For the three and sixnine months ended DecemberMarch 31, 2025,2026, the Banking Business Segment’s non-interest income increased $29.9$51.4 million and $33.6$85.1 million, respectively, compared to non-interest income for the three and sixnine months ended DecemberMarch 31, 2024.2025. The increase in non-interest income for the three and sixnine months ended DecemberMarch 31, 20252026 was primarily due to a $22.0 million legal settlement in our favor reached in March 2026, and higher banking and servicing fee income, mainly attributable to the Verdant acquisition.acquisition and commercial office complex operating lease rental income.

For the three and sixnine months ended DecemberMarch 31, 2025,2026, the Banking Business Segment’s non-interest expense increased $35.0$34.4 million, or 30.6%,29.0%, and $45.2$79.5 million, or 19.4%,22.6%, respectively, compared to non-interest expense for the three and sixnine months ended DecemberMarch 31, 2024.2025. The increase in non-interest expense for the three and sixnine months ended DecemberMarch 31, 20252026 reflected higher depreciation and amortization expense, mainly as a result of the Verdant acquisition, higher legal expenses and an increase in salaries and related costs, including as a result of the Verdant acquisition.

For the three and sixnine months ended DecemberMarch 31, 2025,2026, our Securities Business Segment had income before income taxes of $9.7$8.9 million and $18.0$26.9 million, respectively, compared to income before income taxes of $7.8$9.1 million and $16.9$26.0 million, respectively, for the three and sixnine months ended DecemberMarch 31, 2024.2025.

For the three and sixnine months ended DecemberMarch 31, 2025,2026, net interest income increased $1.6$0.9 million, or 23.3%,13.2%, and $2.6$3.5 million, or 17.9%,16.4%, respectively, compared to net interest income for the three and sixnine months ended DecemberMarch 31, 2024.2025. The increases for the three and sixnine months ended DecemberMarch 31, 20252026 were primarily attributable to higher broker-dealer interest income on increased stock lending activity and higher average balances.

For the three and sixnine months ended DecemberMarch 31, 2025,2026, non-interest income increaseddecreased $1.2$0.1 million, or 4.0%,0.3%, and $0.7increased $0.6 million, or 1.2%,0.7%, respectively, compared to the three and sixnine months ended DecemberMarch 31, 2024.2025. TheFor increasesthe werethree primarilymonths drivenended March 31, 2026, lower broker dealer fee income was partially offset by higher advisory fee income. For the nine months ended March 31, 2026, higher advisory fee income was partially offset by lower broker dealer fee income.

For the three and sixnine months ended DecemberMarch 31, 2025,2026, non-interest expense increased $0.9$1.1 million or 3.3%,3.9%, and $2.2$3.3 million, or 3.9%, respectively, compared to the three and sixnine months ended DecemberMarch 31, 2024.2025. The increases primarily reflectreflected higher data and operational processing and occupancy and equipment expenses.

Our total assets increased $3.4$4.5 billion, or 13.8%,18.0%, to $28.2$29.2 billion at DecemberMarch 31, 2025,2026, from $24.8 billion at June 30, 2025, primarily attributable to an increase in loans, mainly attributable to the Verdant acquisition,loans and higher available-for-sale securities, partially offset by lower cash and cash equivalents. Our total liabilities increased $3.2$4.1 billion, or 14.3%,18.5%, to $25.3$26.2 billion at DecemberMarch 31, 20252026 from $22.1 billion at June 30, 2025, primarily attributable to higher advances from the FHLB and higher deposit balances, as well as secured financings assumed as part of the Verdant acquisition.

Management establishes an allowance for credit losses based upon its evaluation of the expected lifetime credit losses related to the amortized cost basis of loans on the balance sheet. The net charge-off rate for the three months ended DecemberMarch 31, 20252026 was 0.04%,0.31%, compared to 0.10%0.09% for the three months ended DecemberMarch 31, 2024.2025. The decreaseincrease in the net charge-off rate was primarily driven by lowerhigher net charge-offs in the Commercial Real& Estate and Single FamilyIndustrial - Mortgage & Warehousenon-RE portfolio. For additional information regarding the Company’s allowance for credit losses, see Note 5—“Loans & Allowance for Credit Losses” in the accompanying interim condensed consolidated financial statements. For a discussion of the provision for credit losses for the three and sixnine months ended DecemberMarch 31, 2025,2026, see Item 2—“Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations.” We believe that the lower average LTV in the loan portfolio will continue to result in future lower average mortgage loan charge-offs when compared to many other comparable banks.

Non-performing Assets. Loans reaching 90 days past due are generally placed on nonaccrual status. Loans not yet reaching 90 days past due may be placed on nonaccrual status based on management’s assessment of the aging of contractual principal amounts due, among other factors. For an aging analysis of the Company’s loans held for investment as of DecemberMarch 31, 20252026 and June 30, 2025, see Note 5—“Loans & Allowance for Credit Losses” in the accompanying interim condensed consolidated financial statements. Non-performing assets include nonaccrual loans plus other real estate owned and repossessed vehicles.

Our non-performing assets decreasedincreased to $156.7$181.1 million at DecemberMarch 31, 20252026 from $175.4 million compared to June 30, 2025, as decreasesincreases in the multifamilyCommercial & Industrial - Non-RE and commercialSingle mortgageFamily and- commercialMortgage real& estateWarehouse portfolios, were partially offset by ana increasedecrease in the singleMultifamily familyand -Commercial mortgageMortgage & warehouseCommercial portfolio.Real Estate portfolios. Non-performing assets as a percentage of total assets decreased to 0.56%0.62% at DecemberMarch 31, 20252026 from 0.71% at June 30, 2025.

Total available-for-sale securities were $811.1$801.4 million as of DecemberMarch 31, 2025,2026, compared with $66.0 million at June 30, 2025. During the sixnine months ended DecemberMarch 31, 2025,2026, we purchased $758.8 million of securities and we received principal repayments of $15.8$16.7 million. The remainder of the change for the available-for-sale securities portfolio is attributable to changes in the fair value of the securities.

Deposits increased by $2.4$1.6 billion, or 11.5%,7.5%, to $23.2$22.4 billion at DecemberMarch 31, 2025,2026, from $20.8 billion at June 30, 2025. As of DecemberMarch 31, 20252026 compared with June 30, 2025, interest-bearing demand and savings increased $2,365.8$1,665.3 million, non-interest-bearing deposits increased by $205.5$348.9 million and time deposits decreased $168.1$455.5 million.

1 Total deposits includes brokered deposits of $1,816.2$1,992.6 million and $1,801.1 million as of DecemberMarch 31, 20252026 and June 30, 2025, respectively, which include brokered time deposits of $555.2$277.0 million and $700.0 million as of DecemberMarch 31, 20252026 and June 30, 2025, respectively.

Total deposits that exceeded the FDIC insurance limit or were not collateralized at DecemberMarch 31, 20252026 and June 30, 2025 were $3.6 billion and $2.6 billion, respectively. The maturities of non-collateralized time deposits that exceeded the FDIC insurance limit were as follows:

We regularly use advances from the FHLB to manage our interest rate risk and, to a lesser extent, manage our liquidity position. Generally, FHLB advances with terms between three and ten years have been used to fund the origination of loans and to provide us with interest rate risk protection should rates rise. OnDuring Septemberthe 19,three 2025,months ended March 31, 2026, the Company completedreduced thecertain issuancehigher-cost ofsavings $200and milliontime aggregatedeposits principalin amountanticipation of the Company’s 2035 Notes, and on October 1, 2025, the Company completed the redemptionclosing of the $160.5Jenius millionBank aggregatedeposit principalacquisition amountand outstandingtemporarily ofreplaced itssuch 2030funding Notes.with overnight FHLB advances. For additional information on the Jenius Bank deposit acquisition, see Note 12—“Borrowings, Subordinated NotesMergers and DebenturesAcquisitions” in the accompanying interim condensed consolidated financial statements.herein.

Stockholders’ equity increased $249.4$384.5 million to $2,930.1$3,065.2 million at DecemberMarch 31, 2025,2026, compared to $2,680.7 million at June 30, 2025. The increase was primarily the result of net income for the sixnine months ended DecemberMarch 31, 20252026 of $240.7$365.4 million.

During the sixnine months ended DecemberMarch 31, 2025,2026, we had net cash inflows from operating activities of $222.5$264.6 million compared to inflows of $233.3$307.0 million for the sixnine months ended DecemberMarch 31, 2024.2025. Net operating cash inflows and outflows fluctuate primarily due to the timing of the following: originations of loans held for sale, proceeds from loan sales, securities borrowed and loaned, and customer, broker-dealer and clearing receivables and payables and changes in other assets and payables.

Net cash outflows from investing activities totaled $3,417.5$4,298.2 million for the sixnine months ended DecemberMarch 31, 2025,2026, while outflows totaled $314.8$992.3 million for the sixnine months ended DecemberMarch 31, 2024.2025. The increase in outflows was primarily due to a higher net change in loans held for investment and higher cash outflows for the purchase of available-for-sale securities in the sixnine months ended DecemberMarch 31, 20252026 as compared to the sixnine months ended DecemberMarch 31, 2024,2025, and the Verdant acquisition in the sixnine months ended DecemberMarch 31, 2025.2026.

Net cash inflows from financing activities totaled $2,359.1$3,208.6 million for the sixnine months ended DecemberMarch 31, 2025,2026, compared to net cash inflows from financing activities of $569.1$757.2 million for the sixnine months ended DecemberMarch 31, 2024.2025. The increase in net cash inflows from financing was primarily driven by higher net proceeds from proceeds of advances from the FHLB and a higher net increase in deposits during the sixnine months ended DecemberMarch 31, 2025.2026.

As of DecemberMarch 31, 2025,2026, the Bank could borrow up to 35% of its total assets from the FHLB. Borrowings are collateralized by pledging certain mortgage loans and available-for-sale securities to the FHLB. At DecemberMarch 31, 2025,2026, the Company had $2,579.7$1,121.0 million available immediately and $5,477.9$6,295.8 million available with additional collateral and the Company had $4,025.1$3,812.6 million of loans and $750.1$400.1 million of securities pledged to the FHLB. At DecemberMarch 31, 2025,2026, the Company had $250.0 million in unsecured federal funds lines of credit with five major banks under which there were no borrowings outstanding.

The Bank has the ability to borrow short-term from the FRBSF Discount Window. At DecemberMarch 31, 2025,2026, the Bank did not have any borrowings outstanding and the amount available from this source was $8,863.8$9,826.5 million. Borrowings are collateralized by pledging commercial loans and consumer loans. At DecemberMarch 31, 2025,2026, the Bank had $10,358.8$11,473.0 million of loans pledged to the FRBSF.

Axos Clearing has a $150.0 million third-party secured line of credit available for borrowing, as needed. As of DecemberMarch 31, 2025,2026, there was no$28.0 million amount outstanding on this credit facility. This credit facility bears interest at rates based on the Federal Funds rate and is due upon demand.

Axos Clearing has a $95.0 million third-party unsecured line of credit available for limited purpose borrowing. As of DecemberMarch 31, 2025,2026, there was $15.0 millionno amount outstanding on this credit facility. This credit facility bears interest at rates based on the Federal Funds rate and is due upon demand.

We view our liquidity sources to be stable and adequate for our anticipated needs and contingencies for both the short- and long-term. Due to the diversified sources of our deposits, while maintaining approximately 85% of our total Bank deposits in insured or collateralized accounts as of DecemberMarch 31, 2025,2026, we believe we have the ability to increase our level of deposits, and have available other potential sources of funding, to address our liquidity needs for the foreseeable future.

The Company and Bank are subject to regulatory capital adequacy requirements promulgated by federal bank regulatory agencies. Failure by the Company or Bank to meet minimum capital requirements could result in certain mandatory and discretionary actions by regulators that could have a material adverse effect on our consolidated financial statements. The Federal Reserve establishes capital requirements for the Company and the OCC has similar requirements for our Bank. The following tables present regulatory capital information for the Company and Bank. Information presented for December 31, 2025 reflects the Basel III capital requirements for both the Company and Bank. Under these capital requirements and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of the Company and Bank’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s and Bank’s capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings and other factors. As part of its capital management, the Bank may pay dividends to the Company from time to time.

Quantitative measures established by regulation require the Company and Bank to maintain certain minimum capital amounts and ratios. Federal bank regulators require the Company and Bank to maintain minimum ratios of tier 1 capital to adjusted average assets of 4.0%, common equity tier 1 capital to risk-weighted assets of 4.5%, tier 1 capital to risk-weighted assets of 6.0% and total risk-based capital to risk-weighted assets of 8.0%. To be “well capitalized,” the Company and Bank must maintain minimum leverage, common equity tier 1 risk-based, tier 1 risk-based and total risk-based capital ratios of at least 5.0%, 6.5%, 8.0% and 10.0%, respectively. Additionally, the Bank is required to maintain a tangible capital ratio equal to at least 1.5% of total average assets. At DecemberMarch 31, 2025,2026, the Company and Bank met all the capital adequacy requirements to which they were subject and were “well capitalized” under the regulatory framework for prompt corrective action. Management believes that no conditions or events have occurred since DecemberMarch 31, 20252026 that would materially adversely change the Company’s and Bank’s capital classifications. From time to time, we may need to raise additional capital to support the Company’s and Bank’s further growth and to maintain their “well capitalized” status.

The Company and Bank both elected the five-year current expected credit losses (“CECL”) transition guidance for calculating regulatory capital and ratios, which allowed an entity to add back to regulatory capital the impact of the CECL adoption, subject to the five-year phase out. The phase out ended in fiscal year 2025 and the regulatory capital figures presented as of DecemberMarch 31, 20252026 no longer reflect this adjustment.