Axos Financial, Inc. Announces Strategic Deposit Acquisition

Axos Financial, Inc. (NYSE: AX) is set to significantly boost its deposit base and strengthen its funding profile.

Event Description (what happened)

Its subsidiary, Axos Bank, will acquire approximately $2.6 billion in U.S. consumer deposits from Jenius Bank, a division of SMBC MANUBANK. This strategic acquisition aims to strengthen Axos's low-cost funding and expand its digital banking reach. It will substantially increase Axos's funding capacity without the typical high marketing costs of attracting new customers. This move aligns with Axos's long-term strategy to leverage technology for efficient growth and enhance its Net Interest Margin (NIM) by securing lower-cost funding.

Event Date/Timeline

Axos Bank signed the agreement for this deposit acquisition on February 12, 2026, which this 8-K filing reports. We expect the actual transfer of deposits and customer accounts to occur in late March or April 2026. This timeline depends on receiving the necessary regulatory approval from the Office of the Comptroller of the Currency (OCC).

Impact Assessment (who/what is affected)

This acquisition will affect several key groups:

• Investors: This transaction marks a strategic growth initiative for Axos Financial. Investors should monitor the successful integration and deposit retention post-acquisition. While Axos will incur an upfront deposit premium, the long-term potential for improved profitability and scale is significant.
• Jenius Bank Customers: Their accounts will transfer to Axos Bank. Customers will become Axos Bank clients, gaining access to its digital banking platform, mobile application, and product offerings. Axos Bank will provide detailed instructions for the account transition, including new account numbers, online access, and any changes to terms or services.
• Current Axos Bank Customers: A larger, more diversified deposit base is expected to strengthen the bank, potentially leading to a broader range of services or competitive rates in the future. We do not expect this acquisition to directly impact existing Axos Bank accounts.
• Employees: Since this transaction primarily involves transferring deposit accounts rather than a full operational acquisition of Jenius Bank, we do not anticipate significant employee impacts.

Potential Risks:

• Customer Attrition: Some Jenius Bank customers may choose to move their deposits elsewhere rather than transition to Axos Bank, which could diminish the deal's value.
• Integration Challenges: Merging customer data, systems, and processes can be complex and costly. Unexpected integration issues could delay benefits or increase expenses.
• Regulatory Approval: While expected, delays or conditions imposed by the OCC remain a possibility.
• Deposit Retention Costs: If the actual cost of retaining these deposits (e.g., through competitive rates) exceeds expectations, the accretive impact on Net Interest Margin (NIM) could decrease.

Financial Impact (if applicable)

Axos Financial will pay a deposit premium for these accounts. While the summary did not disclose the exact premium amount, these premiums typically represent a percentage of the acquired deposit value, paid to the selling institution. This upfront cost will impact short-term earnings.

However, we expect substantial long-term financial benefits:

• Enhanced Funding: Adding $2.6 billion in consumer deposits, which are generally more stable and lower-cost than wholesale funding, should improve Axos's funding mix and potentially lower its overall cost of funds.
• Net Interest Margin (NIM): A lower cost of funds is expected to boost Axos's Net Interest Margin, a key measure of a bank's profitability.
• Earnings Per Share (EPS): Management anticipates the transaction will increase earnings per share within the first year post-integration, contingent on successful deposit retention.
• Capital Ratios: Axos expects to maintain strong capital ratios post-transaction, indicating the deal is structured to avoid unduly straining its financial strength.
• Integration Costs: Although not quantified in the summary, Axos will incur costs to integrate these new customers and their accounts into its systems.

Key Takeaways for Investors

This acquisition underscores Axos Financial's commitment to digital growth and strengthening its funding profile. Investors should monitor these key aspects:

• Closing Date: Confirm the transaction closes as expected in late March or April 2026.
• Deposit Retention Rates: In subsequent earnings reports, look for updates on the retention rates of Jenius Bank customers and deposits.
• Net Interest Margin (NIM): Track Axos's NIM to observe the impact of these lower-cost deposits.
• Integration Progress: Listen for management commentary on the smooth transition of customers and any associated costs.
• Future Guidance: Pay attention to any updated financial guidance from Axos that incorporates the expected benefits of this acquisition.

This acquisition is a strategic step for Axos Financial. Its success will depend on effective integration and customer retention, ultimately influencing the company's long-term profitability and shareholder value.