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Market ClerkRecap
Sat Oct 24 · markets closed6 signals on Oct 2394 insider buys this week · $48.3MCIRO short report next: Oct 30The week ahead

AX

Axos Financial, Inc.
NYSE · FINANCIALS · SAVINGS INSTITUTION, FEDERALLY CHARTERED
91.79
−0.74 −0.80%
USD · close Oct 23
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Work order
45
WATCH · shorts 45
Insiders, 90 days
0
no open-market filings in 90 days
Congress, 90 days
0 / 0
no disclosures naming it
Big money
1 / 15
tracked funds hold it
Calls on record
0
nobody we score has called it yet
MKT CAP $5.2BP/E 10.8DIV YIELD —FCF YIELD 5.59%REV TTM —NET INCOME $490.4M +13.3%NET CASH $765.7M52W 75.60 – 105.10SEC XBRL · TTM TO Invalid Date

How AX rewrote its risk factors

10-K ITEM 1A · FY2025 → FY2026
Text kept
74%
of sentences unchanged
Added
117
new sentences
Dropped
106
sentences removed
Length
+254
words, now 24,150

New in FY2026

  • If any of these risks occur, our business, financial condition or results of operations could be materially and adversely affected. ◦ Changes in interest rates; ◦ General economic and market conditions, including the risk of a significant and/or prolonged period of inflation or economic downturn; ◦ Changes in the value of securities in our investment portfolio; ◦ The soundness of other financial institutions; ◦ The political environment and governmental fiscal and monetary policies; ◦ Changes in U.S. trade policies and tariffs; ◦ Changes in regulation, regulatory capital requirements or regulatory oversight, accounting rules, and laws; ◦ Failure to comply with applicable consumer protection laws or regulations, or to satisfy regulators’ supervisory expectations, including those of the Consumer Financial Protection Bureau (“CFPB”), the Community Reinvestment Act and fair lending laws and regulations; ◦ Changes in the substance or interpretation of federal and state tax laws; ◦ Regulatory scrutiny of our broker-dealer business and investment advisory business; ◦ Market, environmental and project-specific risks related to our real estate portfolio; ◦ Changes in real estate values; ◦ Possible defaults on our multifamily residential loans; ◦ Mortgage buying activity of Fannie Mae and Freddie Mac; ◦ Financial and credit risks associated with commercial and industrial and commercial real estate loans; ◦ Seasonal fluctuations in mortgage origination; ◦ The adequacy of our allowance for credit losses; ◦ Changes in the value of goodwill and other intangible assets; ◦ The effectiveness of our risk management processes and procedures; ◦ Higher Federal Deposit Insurance Corporation (“FDIC”) assessments; ◦ Securities risks related to our broker-dealer business and investment advisory business; ◦ Our ability to access the equity capital markets; ◦ Access to adequate funding; ◦ Our credit ratings; ◦ Our ability to manage our growth and deploy assets profitably; ◦ Entry into new lines of business or the purchase or introduction of new assets or products and services; ◦ Accuracy of customer information; ◦ Competition for customers from other banks and financial services companies; ◦ Our ability to maintain and enhance our brand; ◦ Reputational risk associated with any negative publicity; ◦ Fraud risks; ◦ Extreme weather conditions, a natural disaster, rising sea levels, acts of war or terrorism, civil unrest, public health issues, or other adverse external events; ◦ Our ability to retain the services of key personnel and attract, hire and retain other skilled managers; ◦ Possible exposure to environmental liability; ◦ Reliance on third-party vendors for operational tasks ◦ Our dependence on third-party service providers for core banking and securities transactions technology; ◦ Privacy concerns relating to our technology that could damage our reputation or deter customers from using our products and services; ◦ Risk of systems failure and disruptions to operations; ◦ Information security incidents; ◦ Our reliance on technology innovation; ◦ Development and use of artificial intelligence (“AI”); ◦ The market price of our common stock may be volatile; ◦ Our charter documents and state law may delay or prevent a change of control or changes in our management; ◦ Changes to our size and structure; ◦ Our ability to integrate acquired companies; ◦ The outcome or impact of current or future litigation involving the Company; and ◦ Failure or circumvention of our controls and procedures.
  • BUSINESS Overview Our Company is a technology-driven, diversified financial services company with approximately $30.0 billion in assets and approximately $47.8 billion of assets under custody and/or administration at Axos Clearing LLC (“Axos Clearing”).
  • The Bank provides consumer and commercial banking products and services through its digital online and mobile banking platforms, low-cost distribution channels and affinity partners.
  • Our Bank offers deposit and lending products to customers nationwide including consumer and business checking, savings and time deposit accounts and single family and multifamily residential mortgages, commercial real estate mortgages and loans, lender finance loans, asset-based loans, capital call facilities, equipment lending and leasing, auto loans, retail and floor plan marine loans and other consumer loans.
  • Our Bank generates non-interest income from consumer and business products and services, including fees from loans originated for sale, operating lease income, deposit account service fees, prepayment fees, loan servicing fees, as well as technology and payment transaction processing fees, among others.
  • For additional information on our business segments, see Note 23 — “Segment Reporting” in the Consolidated Financial Statements.
  • The loans we retain primarily include first mortgages secured by single family real property, multifamily real property and commercial real property, commercial & industrial loans and leases to businesses, automobile loans and certain other consumer loans.
  • Loan Portfolio Single Family - Mortgage & Warehouse Our Single Family - Mortgage & Warehouse loans are primarily secured by first liens on 1-4 unit residential properties.
  • We source multifamily and commercial mortgage loans through targeted direct-to-borrower origination channels and we may sell certain loans to investors.
  • We source our CRE loans through direct-to-borrower originations, brokers, and third-party lenders.
  • Commercial & Industrial - Non-Real Estate (“non-RE”) Our commercial & industrial – non-RE loans are typically secured by commercial assets, including, but not limited to, receivables, inventory, equipment and other assets as included in related uniform commercial code (“UCC”) all asset filings.
  • Product types include lender finance, asset-based loans, leveraged cash flow loans, insurance premium finance, capital call facilities, equipment loans and leases, floor plan loans, and general working capital commercial and industrial loans.
  • We retain and service auto originations.
  • Loan Underwriting Process and Criteria Our loan underwriting policies and procedures are adopted by our Board of Directors and our Credit Committee.
  • Credit extensions conform to the intent and technical requirements of our lending policies and the applicable lending regulations of our federal regulators.
  • Additionally, we often obtain personal guarantees from all material owners or partners of the borrower.
  • In evaluating multifamily or commercial real estate credit, we consider all relevant factors, including the outside financial assets of the material owners or partners, payment history with us or other financial institutions, and the experience of management and/or ownership with similar properties or businesses.
  • Additionally, in our commercial real estate and commercial & industrial – non-RE loans we generally take a senior lien position in a structured facility collateralized by the underlying assets.
  • For additional information on the Company’s loan portfolio, including asset quality and the allowance for credit losses, see Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—“ Financial Condition .” Available-for-Sale Securities Portfolio We buy and sell available-for-sale securities to facilitate liquidity and to manage our interest rate risk.
  • Under our investment policy, the Bank is authorized to invest in United States Treasury securities, agency mortgage-backed obligations issued or fully guaranteed by the United States government, non-agency asset-backed obligations, specific federal agency obligations, municipal obligations, specific time deposits, negotiable certificates of deposit issued by commercial banks and other insured financial institutions, investment grade corporate debt securities and other specified investments.
  • We may also from time-to-time acquire deposits from other institutions.
  • Our deposit lines of business include: • Commercial deposits , which primarily include deposits sourced from a targeted set of industry verticals: ◦ Commercial Banking Verticals , which include middle market industries along with deposit relationships from commercial real estate and commercial & industrial clients ◦ Specialty Deposit Verticals , which include title, escrow, homeowner association (“HOA”) and property management, 1031 exchange, trust & estates and payment processors; and ◦ Software Verticals , which include: ▪ Axos Fiduciary Services: A full-service fiduciary team catered specifically to support bankruptcy and non-bankruptcy trustees and fiduciaries with their software and banking needs, and ▪ Zenith Information Systems, Inc.: A business management and entertainment accounting and payroll software offering supported by a dedicated service team. • Consumer deposits , which primarily include retail and small business deposits as well as sweep deposits from financial advisory and clearing firms, including Axos Clearing and its business division, AAS.
  • At June 30, 2026, we provided services to approximately 300 financial organizations, including correspondent broker-dealers and RIAs.
  • The Securities Business Segment generates both fee and interest income and is also a source of low-cost deposits for the Company.
  • Human Capital At June 30, 2026, we had 2,191 full-time employees, which does not include seasonal interns.
  • To support these objectives, our human resources programs are designed to develop talent to prepare them for critical roles and leadership positions in the future, reward and support employees through competitive pay, and provide benefit and perquisite programs.
  • Supervision and Regulations General We are subject to comprehensive regulation under state and federal laws.
  • The Bank, a federal savings association, has elected to operate as a covered savings association and is subject to regulation, examination, and supervision by the Office of the Comptroller of the Currency (“OCC”) as its primary regulator and the FDIC as its deposit insurer.
  • In connection with its election to operate as a covered savings association, the Bank was required to become a member of the Federal Reserve and subscribe to the capital stock of the Federal Reserve Bank of San Francisco (the “FRBSF”).
  • The Bank must file reports with the OCC, and the FDIC and Axos Financial, Inc. must file reports with the Federal Reserve, concerning their activities and financial condition.
  • In addition, the Bank is subject to regulation, examination, and supervision by the CFPB with respect to a broad array of federal consumer laws.
  • Our subsidiaries, Axos Clearing and Axos Invest LLC, are broker-dealers and are registered with and subject to regulation by the SEC and FINRA.
  • Financial holding companies are generally permitted to affiliate with securities firms and insurance companies and engage in other activities that are “financial in nature.” Such activities include, among other things, securities underwriting, dealing and market making; sponsoring mutual funds and investment companies; insurance underwriting and sales; merchant banking; and other activities that the Federal Reserve has determined to be closely related to banking.
  • Trust preferred securities have been phased out of tier 1 capital for banking organizations that had $15.0 billion or more in total consolidated assets as of December 31, 2009 unless the banking organization grows above $15.0 billion in assets as a result of an acquisition.
  • However, the Company’s trust preferred securities are currently grandfathered under this provision and therefore continue to be treated as part of tier 1 capital.
  • In addition, as of July 1, 2025, the Company and the Bank had fully phased-out the capital adjustments permitted under the five year transition guidance in connection with the current expected credit losses (“CECL”) transition.
  • In addition, various aspects of the Regulatory Capital Rules continue to be subject to further evaluation, interpretation and rulemaking by the federal banking regulatory agencies, including, most recently, in connection with the Board of Governors of the Federal Reserve System (“FRB”), OCC and FDIC’s issuance of three joint notices of proposed rulemaking in March 2026, intended to modernize the calculation of regulatory capital for financial institutions of all sizes.
  • As of June 30, 2026, the capital ratios of both the Company and the Bank exceeded the minimums necessary to be considered “well-capitalized” under the capital adequacy requirements.
  • For additional information, please see Note 20 — “Regulatory Capital Requirements” in the Consolidated Financial Statements.
  • As a covered savings association, the Bank is not required to comply with the lending limits established by the Home Owners’ Loan Act that are applicable to federal savings associations.

and 77 more.

Gone since FY2025

  • If any of these risks occur, our business, financial condition or results of operations could be materially and adversely affected. ◦ Changes in interest rates, including recent increases to interest rates; ◦ General economic and market conditions, including the risk of a significant and/or prolonged period of inflation or economic downturn; ◦ Changes in the value of securities in our investment portfolio; ◦ The soundness of other financial institutions; ◦ The political environment and governmental fiscal and monetary policies; ◦ Changes in U.S. trade policies and tariffs; ◦ Changes in regulation, regulatory capital requirements or regulatory oversight, accounting rules, and laws; ◦ Failure to comply with applicable consumer protection laws or regulations, or to satisfy regulators’ supervisory expectations, including those of the Consumer Financial Protection Bureau, the Community Reinvestment Act and fair lending laws and regulations; ◦ Changes in the substance or interpretation of federal and state tax laws; ◦ Regulatory scrutiny of our broker-dealer business and investment advisory business; ◦ Market, environmental and project-specific risks related to our real estate portfolio; ◦ Changes in real estate values; ◦ Possible defaults on our multifamily residential loans; ◦ Mortgage buying activity of Fannie Mae and Freddie Mac; ◦ Financial and credit risks associated with commercial and industrial and commercial real estate loans; ◦ Seasonal fluctuations in mortgage origination; ◦ The adequacy of our allowance for credit losses; ◦ Changes in the value of goodwill and other intangible assets; ◦ The effectiveness of our risk management processes and procedures; ◦ Higher Federal Deposit Insurance Corporation (“FDIC”) assessments; ◦ Securities risks related to our broker-dealer business and investment advisory business; ◦ Our ability to access the equity capital markets; ◦ Access to adequate funding; ◦ Our credit ratings; ◦ Our ability to manage our growth and deploy assets profitably; ◦ Entry into new lines of business or the purchase or introduction of new assets or products and services; ◦ Accuracy of customer information; ◦ Competition for customers from other banks and financial services companies; ◦ Our ability to maintain and enhance our brand; ◦ Reputational risk associated with any negative publicity; ◦ Extreme weather conditions, a natural disaster, rising sea levels, acts of war or terrorism, civil unrest, public health issues, or other adverse external events; ◦ Our ability to retain the services of key personnel and attract, hire and retain other skilled managers; ◦ Possible exposure to environmental liability; ◦ Our dependence on third-party service providers for core banking and securities transactions technology; ◦ Privacy concerns relating to our technology that could damage our reputation or deter customers from using our products and services; ◦ Fraud risks; ◦ Risk of systems failure and disruptions to operations; ◦ Information security incidents; ◦ Our reliance on technology innovation; ◦ Development and use of artificial intelligence (“AI”); ◦ The market price of our common stock may be volatile; ◦ Our charter documents and state law may delay or prevent a change of control or changes in our management; ◦ Changes to our size and structure; ◦ Our ability to acquire and integrate acquired companies; ◦ The outcome or impact of current or future litigation involving the Company; and ◦ Failure or circumvention of our controls and procedures.
  • BUSINESS Overview Our Company is a technology-driven, diversified financial services company with approximately $24.8 billion in assets and approximately $39.4 billion of assets under custody and/or administration at Axos Clearing LLC (“Axos Clearing”).
  • Axos Bank (the “Bank”) provides consumer and commercial banking products and services through its digital online and mobile banking platforms, low-cost distribution channels and affinity partners.
  • Our Bank offers deposit and lending products to customers nationwide including consumer and business checking, savings and time deposit accounts and single family and multifamily residential mortgages, commercial real estate mortgages and loans, fund and lender finance loans, asset-based loans, auto loans, retail and floor plan marine loans and other consumer loans.
  • Our Bank generates non-interest income from consumer and business products and services, including fees from loans originated for sale, deposit account service fees, prepayment fees, loan servicing fees, as well as technology and payment transaction processing fees.
  • For additional information on our business segments, see Note 22 — “Segment Reporting” in the Consolidated Financial Statements.
  • The loans we retain primarily include first mortgages secured by single family real property, multifamily real property and commercial real property, commercial & industrial loans to businesses, automobile loans and certain other consumer loans.
  • Loan Portfolio Single Family - Mortgage & Warehouse Our Single Family - Mortgage & Warehouse loans are primarily secured by first and second liens on 1-4 unit residential properties.
  • We source multifamily and commercial mortgage loans through targeted direct-to-borrower original channels and we may sell certain loans to investors.
  • We source our CRE loans through direct to borrower origination, brokers, and third-party lenders.
  • Commercial & Industrial - Non-Real Estate (“non-RE”) Our commercial & industrial – non-RE loans are typically secured by commercial assets, including, but not limited to, receivables, inventory, equipment and uniform commercial code (“UCC”) all asset filings.
  • Product types include lender finance, asset-based loans, leveraged cash flow loans, insurance premium finance, capital call facilities, equipment leases, and general working capital commercial and industrial loans.
  • We retain and service all of the auto originations.
  • A subset of loans serviced in the portfolio continue to include a legacy product no longer offered on new originations that is composed of default risk-insured subprime borrowers.
  • Ongoing collections of insured losses will continue as this population of loans remains active in the portfolio.
  • Loan Underwriting Process and Criteria Our loan underwriting policies and procedures are written and adopted by our Bank’s Board of Directors and our Bank’s Credit Committee.
  • Credit extensions by the Bank conform to the intent and technical requirements of our lending policies and the applicable lending regulations of our federal regulators.
  • Additionally, the Bank often obtains personal guarantees from all material owners or partners of the borrower.
  • In evaluating multifamily or commercial real estate credit, we consider all relevant factors, including the outside financial assets of the material owners or partners, payment history at the Bank or other financial institutions, and the experience of management and/or ownership with similar properties or businesses.
  • Additionally, in our commercial real estate and commercial & industrial – non-RE loans we typically take a senior lien position in a structured facility collateralized by the underlying assets.
  • For additional information on the Company’s loan portfolio, including asset quality and the allowance for credit losses, see Management’s Discussion and Analysis — “ Financial Condition .” Available-for-Sale Securities Portfolio We buy and sell available-for-sale securities to facilitate liquidity and to manage our interest rate risk.
  • Under our investment policy, the Bank is authorized to invest in agency mortgage-backed obligations issued or fully guaranteed by the United States government, non-agency asset-backed obligations, specific federal agency obligations, municipal obligations, specific time deposits, negotiable certificates of deposit issued by commercial banks and other insured financial institutions, investment grade corporate debt securities and other specified investments.
  • Our deposit lines of business include: • Commercial deposits , which primarily include deposits sourced from a targeted set of industry verticals: ◦ Commercial Banking Verticals , which include middle market industries along with deposit relationships from commercial real estate and commercial & industrial clients ◦ Specialty Deposit Verticals , which include title, escrow, home owner association (“HOA”) and property management, 1031 exchange, trust & estates and payment processors; and ◦ Software Verticals , which include: ▪ Axos Fiduciary Services: A full-service fiduciary team catered specifically to support bankruptcy and non-bankruptcy trustees and fiduciaries with their software and banking needs, and ▪ Zenith Information Systems, Inc.: A business management and entertainment accounting and payroll software offering supported by a dedicated service team. • Consumer deposits , which primarily include retail and small business deposits as well as sweep deposits from financial advisory and clearing firms, including Axos Clearing and its business division, AAS.
  • At June 30, 2025, we provided services to 327 financial organizations, including correspondent broker-dealers and RIAs.
  • The Securities Business Segment generates both fee and interest income and is also a source of low-cost deposits for the Banking Business Segment.
  • HUMAN CAPITAL At June 30, 2025, we had 1,989 full-time employees, which does not include seasonal interns.
  • To support these objectives, our human resources programs are designed to develop talent to prepare them for critical roles and leadership positions for the future, reward and support employees through competitive pay, and provide benefit and perquisite programs.
  • SUPERVISION AND REGULATION GENERAL We are subject to comprehensive regulation under state and federal laws.
  • The Bank, a federal savings association, has elected to operate as a covered savings association and is subject to regulation, examination, and supervision by the OCC as its primary regulator and the FDIC as its deposit insurer.
  • In connection with its election to operate as a covered savings association, the Bank was required to become a member of the Federal Reserve System and subscribe to the capital stock of the Federal Reserve Bank of San Francisco (the “FRBSF”).The Bank must file reports with the OCC, and the FDIC and Axos Financial, Inc. with the Federal Reserve, concerning their activities and financial condition.
  • In addition, the Bank is subject to the regulation, examination, and supervision by the Consumer Financial Protection Bureau (“CFPB”) with respect to a broad array of federal consumer laws.
  • Our subsidiaries, Axos Clearing LLC and Axos Invest LLC, are broker-dealers and are registered with and subject to regulation by the SEC and FINRA.
  • Financial holding companies are generally permitted to affiliate with securities firms and insurance companies and engage in other activities that are “financial in nature.” Such activities include, among other things, securities underwriting, dealing and market making; sponsoring mutual funds and investment companies; insurance underwriting and sales; merchant banking; and activities that the Federal Reserve has determined to be closely related to banking.
  • In addition, trust preferred securities have been phased out of tier 1 capital for banking organizations that had $15.0 billion or more in total consolidated assets as of December 31, 2009 unless the banking organization grows above $15.0 billion in assets as a result of an acquisition.
  • The Company’s trust preferred securities currently are grandfathered under this provision and therefore continue to be treated as part of tier 1 capital.
  • In addition, the Company and the Bank elected the current expected credit losses (“CECL”) five-year transition guidance for calculating regulatory capital ratios on July 1, 2020, and such election is reflected in the June 30, 2025 ratios.
  • This guidance allowed an entity to add back to capital 100% of the capital impact from the day one CECL transition adjustment and 25% of subsequent increases to the allowance for credit losses through June 30, 2022.
  • This cumulative amount was phased out of regulatory capital over the three years beginning July 1, 2022, and will no longer be reflected as a regulatory capital adjustment from July 1, 2025 onward.
  • Various aspects of the Regulatory Capital Rules continue to be subject to further evaluation and interpretation by the U.S. banking regulators.
  • As of June 30, 2025, the capital ratios of both the Company and the Bank exceeded the minimums necessary to be considered “well-capitalized” under the capital adequacy requirements.

and 66 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2025 ↗, FY2026 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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