Axos Financial, Inc.

RESULTS OF OPERATIONS

Comparison of the Three and Six Months Ended December 31, 2025 and 2024

For the three months ended December 31, 2025, we had net income of $128.4 million, or $2.22 per diluted share, compared to net income of $104.7 million, or $1.80 per diluted share, for the three months ended December 31, 2024. For the six months ended December 31, 2025, we had net income of $240.75 million or $4.17 per diluted share, compared to net income of $217.0 million or $3.72, for the six months ended December 31, 2024.

Average Balances, Net Interest Income, Yields Earned and Rates Paid

The following table presents information regarding (i) average balances; (ii) the total amount of interest income from interest-earning assets and the weighted average yields on such assets; (iii) the total amount of interest expense on interest-bearing liabilities and the weighted average rates paid on such liabilities; (iv) net interest income; (v) interest rate spread; and (vi) net interest margin:

Average Balances, Net Interest Income, Yields Earned and Rates Paid

The following table sets forth the effects of changing rates and volumes on our net interest income. Information is provided with respect to (i) effects on interest income and interest expense attributable to changes in volume (changes in volume multiplied by prior rate); and (ii) effects on interest income and interest expense attributable to changes in rate (changes in rate multiplied by prior volume). The change in interest due to both volume and rate has been allocated proportionally to each based on the relative changes attributable to volume and changes attributable to rate.

1 Purchased loans include loans, loan discounts and unearned fees related to the FDIC Loan Purchase.

Net Interest Income

For the three months ended December 31, 2025, net interest income totaled $331.7 million, an increase of $51.6 million, or 18.4%, compared to net interest income of $280.1 million for the three months ended December 31, 2024. For the three months ended December 31, 2025, net interest margin increased by 11 basis points compared to the net interest margin of 4.83% for the three months ended December 31, 2024.

For the three months ended December 31, 2025, total interest and dividend income increased 12.7% from the three months ended December 31, 2024, primarily due to an increase in interest earned on loans, reflecting higher average balances, partially offset by a $13.5 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 December 31, 2025, total interest expense increased 3.5% from the three months ended December 31, 2024, primarily due to an increase in interest expense on secured financings, attributable to the Verdant acquisition, and other borrowings, partially offset by a $5.6 million decrease in interest expense on demand and savings deposits.

For the six months ended December 31, 2025, net interest income totaled $622.8 million, an increase of $50.6 million, or 8.8%, compared to net interest income of $572.1 million for the six months ended December 31, 2024. For the six months ended December 31, 2025, net interest margin decreased by 15 basis points compared to the net interest margin of 5.00% for the six months ended December 31, 2024.

For the six months ended December 31, 2025, total interest and dividend income increased 4.2% from the six months ended December 31, 2024, primarily due to a $58.6 million increase in interest income on loans, attributable to higher loan balances, partially offset by lower rates earned. This increase in interest and dividend income was partially offset by a $22.7 million decrease in interest income on interest-earning deposits at other financial institutions.

For the six months ended December 31, 2025, total interest expense decreased 3.1% from the six months ended December 31, 2024, 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.

Provision for Credit Losses

The provision for credit losses was $25.0 million and $42.3 million for the three and six months ended December 31, 2025, respectively, compared to $12.2 million and $26.2 million, respectively, for the three and six months ended December 31, 2024. 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 million and $37.5 million for the three and six months ended December 31, 2025, respectively, and for the three months ended December 31, 2025, reflects loan growth primarily in the commercial real estate and commercial & industrial - Non-RE portfolios, as well as the impact of macroeconomic variables used in the allowance for credit losses model, primarily the forecasted consumer price index, corporate bond yields, and the five-year U.S. Treasury rate. For the six months ended December 31, 2025, 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 million and $4.8 million for the three and six months ended December 31, 2025, respectively, was primarily driven by unfunded lending commitment growth, primarily in the commercial real estate and commercial & industrial - non-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.”

Non-Interest Income

The following table sets forth information regarding our non-interest income:

For the three months ended December 31, 2025, non-interest income increased by $25.6 million, or 92.0%, and for the six months ended December 31, 2025, non interest income increased by $29.3 million, or 52.0%. 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.

Non-Interest Expense

The following table sets forth information regarding our non-interest expense:

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

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

•$9.9 million in general and administrative expenses reflecting a $7.0 million accrual for developments in an ongoing matter related to the Company’s acquisition of COR Securities in fiscal year 2019; and

•$8.1 million in salaries and related costs primarily due to increased headcount and salaries, including as a result of the Verdant acquisition.

For the six months ended December 31, 2025, non-interest expense increased $48.0 million, or 16.4%, primarily due to increases of:

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

•$11.1 million in general and administrative expenses reflecting a $7.0 million accrual for developments in an ongoing matter related to the Company’s acquisition of COR Securities in fiscal year 2019; and

•$10.4 million in salaries and related costs primarily due to increased headcount and salaries, including as a result of the Verdant acquisition.

Provision for Income Taxes

Income tax expense was $47.1 million and $84.7 million for the three and six months ended December 31, 2025, respectively, compared to $45.6 million and $92.5 million for three and six months ended December 31, 2024. Our effective income tax rates for the three months ended December 31, 2025 and 2024 were 26.84% and 30.36%, respectively. Our effective income tax rates for the six months ended December 31, 2025 and 2024 were 26.01% and 29.88%, respectively. The decrease in effective income tax rate for the three and six months ended December 31, 2025 reflects, in part, a change in the State of California income tax law effective beginning with the Company’s 2026 fiscal year.