Axos Financial's Q4 2025: Unpacking Contradictions in Loan Growth, Deposits, and Crypto Strategy

Loan growth expectations, deposit growth and funding strategies, deposit cost management strategies, crypto engagement, and net interest margin outlook are the key contradictions discussed in Axos Financial's latest 2025Q4 earnings call.



Strong Financial Performance:
- Axos Financial reported net loan growth of $856 million linked-quarter, alongside a 6 basis points increase in net interest margin and an 18% year-over-year increase in book value per share.
- The growth was driven by diverse and granular deposit bases, organic loan growth, and managed operating expenses.

Deposit and Loan Growth:
- Total on-balance sheet deposits increased 7.6% year-over-year to $21 billion, with specific growth in demand money market and savings accounts, which represent 95% of total deposits.
- The company achieved net loan growth in loans for investment of approximately $856 million, rising 4.2% linked-quarter. This growth was supported by its diverse deposit base and strong loan pipelines.

Credit Quality and Asset Quality:
- Nonaccrual loans declined by $15 million linked-quarter, resulting in a 79 basis points improvement in the nonaccrual loans to total loans ratio.
- The decline was primarily due to reductions in C&I and commercial real estate lending portfolios, reflecting strong credit quality throughout the loan book.

Impact of FDIC Purchase Pool:
- One loan from the FDIC purchase pool paid off, accelerating accretion of the purchase price discount, contributing approximately $450,000 to net interest income.
- Despite this, the company maintained a best-in-class net interest margin with or without the benefit of loan purchase accretion.