Axos Financial (AX) presents a positive liquidation recovery posture relative to most going-concern banks, driven primarily by the dominance of cash and loan receivables on its asset side and the fact that goodwill and other intangibles represent a small fraction of total assets. At March 31, 2026, total assets were $29.2B versus total liabilities of $26.2B, producing reported book equity of $3.07B. Under liquidation haircuts: cash of $1.17B recovers at par; AFS securities of $801M recover near par given minimal unrealized losses ($2.2M gross loss, no credit losses accrued); the $25.5B gross loan portfolio (net $25.0B) is the critical variable. The loan book is predominantly floating-rate commercial and industrial ($9.0B, 35.1% of gross) and commercial real estate ($8.7B, 34.2%), with single-family mortgage ($4.7B, 18.5%) and multifamily ($2.5B, 9.7%) making up most of the remainder. Under a liquidation scenario, real estate-collateralized loans would receive 60-75% recovery depending on collateral type and market conditions, while unsecured and C&I credits would receive materially less. Applying conservative blended haircuts (75% on real estate loans, 60% on C&I non-RE, 80% on consumer/auto), gross loan recovery would be approximately $18-19B against the face value of $25.5B, creating a haircut of $6-7B. This would compress recovery well below reported equity. The allowance for credit losses on loans was $346.7M (1.36% of gross loans), up from $290.0M at June 30, 2025, reflecting $83.3M in nine-month provision and the Verdant acquisition PCD mark. Net charge-off rate rose to 0.31% annualized in Q3 from 0.09% in the prior-year quarter, driven by C&I non-RE — the highest-haircut segment. The most significant balance sheet change since the December 31, 2025 filing is the addition of $1.745B in overnight FHLB advances (from $60M), bringing total borrowings to $2.82B at a blended 4.52% cost, and $634M in secured financings assumed via the Verdant acquisition (nonexistent at June 30, 2025). Both liabilities carry at face value in liquidation. Total deposits grew to $22.4B; brokered deposits represent $1.99B of that. Goodwill of $144M and total intangibles of $211M are zeroed in liquidation. The CECL five-year phase-out completed in FY2025, so regulatory capital is no longer benefiting from that addback; CET1 at the consolidated level declined from 12.52% to 11.65% between June 2025 and March 2026, reflecting rapid asset growth outpacing retained earnings. Filing discusses the Verdant acquisition and the pending Jenius Bank deposit acquisition in MD&A but does not separately XBRL-tag secured financings assumed or acquisition-related intangibles in a single line item distinct from the general goodwill and intangibles tags.
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