Axos Financial, Inc.

actual financial fourth quarter 2025 earnings followed by cash. At this time, all participants are in English as you know. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce you to your host, Johnny Lai, SVP, Corporate Development and IR. Thank you, Johnny. You may begin.

Thanks, Alicia. Good afternoon, everyone, and thanks for your interest in Axos. Joining us today for Axos Financial Inc.' 's fourth quarter and fiscal 2025 financial results conference call are the company's president and chief executive officer, Greg Garabrantz, and Executive Vice President and Chief Financial Officer, Derek Walsh. Greg and Derek will review and comment on the financial and operational results for the quarter and fiscal year ended June 30th, 2025, and we will be available to answer questions after the prepared remarks. Before I begin, I'd like to remind listeners that prepared remarks made on this call may contain forward-looking statements that are subject to risk and uncertainties, and that management may make additional forelinking statements in response to your questions. Please refer to the safe harbor statement found in today's earnings press release and in our investor presentation for additional details. This call is being webcast, and there will be an audio replay available in the investor relations section of the company's website located at accessfinancial.com for 30 days. Details for this call were provided on the conference call announcement and in today's earnings press releases. Before handing over the call to Greg, I'd like to remind listeners that in addition to the earnings press release, we also issued an earnings supplement in a K with additional financial schedules. All of these documents can be found on accessfinancial.com. With that, I'd like to turn the call over to Greg.

Thank you, Johnny. Good afternoon, everyone, and thank you for joining us. I'd like to welcome everyone to Axos Financial's conference call for the fourth quarter of fiscal 2025, ended June 30th, 2025. I thank you for your interest in Axos Financial and Axos Bank. We delivered strong results this quarter, generating $856 million of net loan growth linked quarter, six basis points of net interest margin expansion, and an 18 percent year-over-year increase in book value per share. We continue to generate high returns as evidenced by the 17% return on average common equity and the 1.9% return on assets in the three months ended June 30, 2025. Other highlights in the quarter include net interest income was $280 million for the three months ended June 30, 2025, up 7.7% from the $260 million in the prior year period. Net interest margin was 4.84% for the quarter ended June 30, 2025, up six basis points from the 4.78% in the quarter ended March 31, 2025. One loan from the FDIC purchase pool paid off this quarter, and that accelerated accretion of the purchase price discount increased our net interest income by approximately $450,000. We continue to maintain a best-in-class net interest margin with or without the benefit of the accretion from loans purchased from the FDIC. Total on-balance sheet deposits increased 7.6 percent year-over-year to 21 million. Our diverse and granular deposit base across consumer and commercial banking and our securities businesses continue to support our organic loan growth. We managed our operating expenses well this quarter. Total non-interest expenses for the quarter ended June 30th, 2025, were up by 3 percent from the prior quarter, excluding the reversal of a legal rule in the prior quarter, which reduced other G&A expenses by approximately 2 million. Total non-interest expenses were up 2.5 million from March to June. Total non-accrual loans declined by 15 million link quarter, resulting in our non-accrual loans, the total loans ratio improving by 89 basis points in the quarter ended March 31st, 2025 to 79 basis points as of June 30th, 2025. Net income was approximately $110.7 million in the quarter ended June 30th, 2025, compared to $105.2 million in the quarter ended March 31st. The looted EPS was $1.92 for the quarter ended June 30th, 2025, compared to $1.81 in the March quarter. We had a few non-recurring items this quarter that impacted our net income and EPS. We recognized a $12 million pre-tax gain from the sale of multifamily loans that were included in mortgage banking income. We also recognized a one-time non-cash deferred tax impairment that increased our net income tax by $5.5 million. Excluding the impact from those two non-reoccurring items, our adjusted net income and adjusted earnings-predicted share would have been $107.7 million and $1.87 per share, respectively. We took advantage of the temporary market downturn in April to repurchase approximately $31 million of common stock at an average price of $59 per share. Total originations for investment, excluding single-family warehouse lending, increased 5% on a linked quarter basis, resulting in net loan growth in loans for investment of approximately $856 million for the three months ended June 30, 2025, representing an increase of 4.2% Asset-based lending, commercial real estate, specialty lending, equipment leasing, lender finance, and single-family warehouse had strong originations in net loan growth this quarter. Additionally, we grew ending loan balances and single-family mortgage for the second consecutive quarter. Average loan yields for the three months ended June 30, 2025, were 8% flat compared to the prior quarter. Average loan yields for non-purchase loans were 7.66%, and average yields for purchase loans were 14.9%, which includes the accretion of our purchase price discount. The FDIC purchase loans continue to perform, and all loans in the portfolio remain current. New loan interest rates were the following. Single-family mortgage, 7.2%, multifamily, 7.1%, CNI, 7.8%, and auto, 8.3%. Ending deposit balances were $20.8 billion, and they were up 3.4% link quarter and up 7.6% year over year. Demand, money market, and savings accounts representing 95% of total deposits at June 30, 2025, increased by 7% year over year. We have a diverse mix of funding across a variety of business verticals with consumer and small business representing 59% of total deposits, commercial cash, treasury management, and institutional representing 20%, Commercial Specialty representing 11%, Axos Fiduciary Services representing 5%, and Axos Securities, which is our custody and clearing business, representing 5%. Total non-interest-bearing deposits were approximately $3 billion at the end of the quarter, up slightly from the prior quarter. Client cash sorting deposits ended the quarter around $980 million, up from $900 million at March 31, 2025. We remain focused on adding new assets from existing and new advisors to grow our assets under custody and cash balances. In addition, our access securities deposits on our balance sheet, we had approximately $450 million of deposits off balance sheet at partner banks. Our consolidated net interest margin was 4.84% for the quarter ended June 30, 2025, compared to 4.78% in the quarter ended March 31, 2025. We are seeing strong growth in accounts and balances from our Axos One consumer bundle deposit product, which includes a checking and a savings account. Growth in Axos One and other deposit businesses, including our commercial, cash, and treasury management and specialty businesses, has provided us with sufficient funding to support our strong organic loan growth. We are also making excellent progress cross-selling deposits across our lending businesses. We expect our consolidated net interest margin ex-FDIC loan purchase accretion to stay at the high or slightly above the 4.25% to 4.35% range we have targeted over the past year. While new loan yields are coming in slightly lower in many lending categories we compete in, we continue to offset some of that pressure through refinancing or paying off lower-yielding single-family and multifamily loans originated two to three years ago. Our loan pipelines have improved over the past few quarters as a result of successfully expanding our distribution channels across certain commercial lending categories and contributions from teams we have onboarded over the past 12 months. We also believe we have moved past our peak level of prepayments in our commercial specialty real estate portfolio. which had been a significant headwind to net loan growth for the past several quarters. Taking all of these factors into consideration, we expect organic loan growth to come in toward the mid- to high-end of our single-digit and low-teens range on an annual basis in fiscal 2026. The credit quality of our loan book continues to be solid, and our historic and current net charge-offs remain low. Total non-performing assets declined by $13.4 million in the quarter, representing $71 billion The sequential decrease in non-accrual loans were primarily driven by $9.4 million in our CNI portfolio and $4.9 million in our commercial real estate lending business. We did not anticipate a material loss from loans currently classified as non-performing in our single-family, multifamily, or commercial real estate loan portfolio. Our commercial real estate specialty portfolio continues to perform very well and in line with expectations. Non-accrual C&I loan balances at June 30, 2025 were down by approximately $9.4 million from the prior quarter. The two largest C&I loans we have on non-accrual continue to be up to date on their payments, and no new C&I loans were placed on non-accrual in the quarter. We continue to monitor the credit trends across all loan portfolios and have not seen any broad-based deterioration in any individual lending category. Access clearing, which includes our correspondent clearing and RA and custody business, had a good quarter. to $39.4 billion at June 30, 2025. Net new assets for our custody business increased by $215 million in the June quarter, extending the positive net new asset momentum we have experienced over the past several quarters. The stock market has rebounded off its year-to-date lows, and many of our custody clients continue to generate positive assets under management growth. The pipeline for new custody clients remains healthy for small and large RIA firms, underpinning our optimism in continued net positive net new asset growth in our securities business. Total deposits at Axios Clearing were $1.4 billion at the end of the quarter, up $90 million from where they were in the prior quarter. Of the $1.4 billion of deposits from Axios Clearing, approximately $990 million were on the balance sheet and $450 million were held at partner banks. The slight sequential increase in deposits is encouraging given the strong rally in the stock market. While it's difficult to be absolutely certain that cash sorting has bottomed, we believe that clients and advisors are becoming less focused on maximizing yield in their sweep accounts compared to a year ago. Many of our commercial lending and deposit teams, including our life science and technology business and our middle market banking teams that we have added over the prior few quarters are now producing nicely and contributing to loan and commercial deposit growth. We onboarded a new floor plan lending team that will help us scale our floor plan lending business. We continue to evaluate M&A opportunities to augment growth from our existing businesses and team lift-outs. The pace and quality of M&A opportunities have increased over the past few months, and seller expectations have become more reasonable. We are evaluating specialty lending and non-banking businesses that generate asset and transaction-based income and low-cost deposits. Our strong capital, liquidity, and profitability allow us to be disciplined in how and where we deploy capital to ensure the investments meet our strategic and valuation hurdles. We ended fiscal 2025 with positive momentum. Loan growth accelerated in the back half of the year, our credit quality was strong, and our net interest margin remained above our long-term target. We expect the change in the income tax calculation methodology for the State of California will reduce our income tax rate by three percentage points starting in the This being the 25th anniversary of Axos Bank, we are proud of delivering consistent performance through a variety of economic, geopolitical, and regulatory environments. I'm even more excited about the opportunities that we have in each of our businesses. We remain hyper-focused on executing our strategic and operational initiatives. These include investments in technology and operations to scale businesses and roll out new products faster while maintaining a best-in-class operating efficiency ratio. We believe we will see benefits in our operating efficiency from the implementation of artificial intelligence across the organization and believe that its implementation will enable us to create greater operating leverage and improve the speed, quality, and cost of software development projects and accelerate new product delivery. We believe that we can deploy our capital in a disciplined manner in our existing and new businesses to further diversify our lending, funding, and fee-based incomes. We have a lot of runway in each of our businesses, and I feel confident that our teams and our leaders will deliver the results that our shareholders have come to expect from us. Now I'll turn the call over to Derek, who will provide additional details on our financial results.

Thanks, Greg. Quick reminder that in addition to our press release, an 8K with supplemental schedules was filed with the SEC today and are available online through Edgar or through our website at accessfinancial.com. I will provide some brief comments on a few topics. Please refer to our press release and our SEC filing for additional details. Non-interest expenses were approximately $151 million for the three months ended June 30th, 2025, up by $4.4 million from the three months ended March 31st, 2025. Excluding approximately $1.9 million reversal of illegal accrual in the March 31st quarter, Total non-interest expenses were up by approximately $2.5 million in the linked quarter. Salaries and benefit expenses were $74.9 million, roughly flat from the prior quarter ended March 31st. Professional services expenses were $10.4 million compared to $8.2 million in fiscal Q3 2025. The sequential increase in professional services expense was attributed to a handful of services across different business units. Looking ahead to the September quarter, we recently added a floor plan financing team that adds an incremental $1 million of expense per quarter. And as a reminder, September is when we have our annual merit compensation increase, which we estimate to be about 4%. We remain focused on managing our expenses while making strategic investments in a controlled manner in order to maintain our operating efficiency ratio. Next, our income tax rate was 29% for the three months ended June 30, 2025, compared to 27.4% in the corresponding year-ago period. Our income tax expense in Q4-25 included a one-time non-cash deferred tax impairment on June 30th, 2025, which required us to reassess the value of our deferred tax assets. That resulted in a $5.6 million one-time non-cash impairment charge in the quarter ended June 30th, 2025. Our income tax expense for the quarter ended June 30th, 2025 benefited from the increase in our stock price from June 3024 to June 3025. which is one factor used to calculate our CEO's stock-based incentive compensation. The net impact of the deferred tax asset remeasurement and stock-based incentive compensation calculation combined with higher pre-tax income was a $2.3 million increase in our income tax expense in Q4 2025. Starting in the quarter ending September 30, 2025 and going forward, we expect our corporate tax rate to be a an improvement of three percentage points from the previously 29 to 30 percent. I'll wrap up with our loan pipeline and growth outlook. Our loan pipeline remains healthy at approximately $2 billion as of July 25, 2025, consisting of $532 million of single-family residential jumbo mortgage, $49 million of gain-on-sale mortgage, $302 million of multifamily and small business commercial, $73 million of auto and consumer, and $1.1 billion in commercial lending. We are not seeing any material impacts from imposed or proposed tariffs on loan demand so far. and we believe that we will be able to grow loan balances organically at the midpoint to high end of our high single digits to low teens year-over-year growth target over the next 12 months, excluding the impact of the loan portfolio purchase from the FDIC or any other potential loan or asset acquisitions. With that, I'll turn the call back over to Johnny.

Thank you, Derek. Alicia, we're ready to take questions.

We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment, please, while we close the question. Thank you. Our first question comes from the line of Kyle Peterson with Needham & Cutler.

Great. Good afternoon. Thanks, guys. I want to start off on loan yields and that kind of side of the net interest margin. It sounds like maybe there might be a little more pricing pressure and yields on new loans might be lower, but then it could be a partial offset on, you know, prepays being a little slower. I guess, like, how do you guys view, like, the net impact of those? And I guess, like, is the NIM outlook, it sounds fairly consistent with last quarter? Are those kind of a rough wash? Or how are you guys looking at different pieces there?

I think they're fairly consistent. You know, for a lot of these businesses, like the Cap Call side and whatnot, they have a lot of deposits that come with them, and the middle market business also has that, too. So while loan yields might be a little tighter, there's an offsetting benefit on the funding side, which results in a decent net. I think there, you know, if I were to take a guess, I'd say that, you know, I think that the credit spread side has been more consistent in this quarter with the last quarter, so I wouldn't say there's that much incremental pressure, but it is very different than it was a year ago, just with respect to, you know, particularly in some of the CNI club deals and some of the syndicated deals, there's just a lot of banks that are kind of pushing into that space, I think, because they don't maybe want to grow as much in commercial real estate, and that's pushed it down a bit. I think This is somewhat of obviously a forecast, but I think we're going to be able to keep it pretty consistent, I think. But it could be a basis point or two either way. Sure. It's not that much of a science.

Okay. That's helpful. And then, Greg, I know we've kind of chatted in the past, and you've mentioned kind of different dynamics and kind of how you're kind of leveraging, you know, AI to longer term kind of press on margins and cap expense growth. I guess, could you remind us like how you are thinking about, you know, expense growth relative to revenue, how you guys are using, you know, whether it's tech and AI in your day to day, I think it'd be really helpful for everyone on the call.

Right. What we had previously said as a target that we wanted to ensure that our personnel and professional services cost growth did not exceed 30% of our net interest income and non-interest income growth. Now, you know, we are adding, we just added a team there, you know, so that's definitely a target over the year. We added a fairly expensive floor plan team. They're great folks. We expect them to be able to produce, but it'll take a couple quarters to really get that running. But just in general, with respect to artificial intelligence, there's just so much opportunity, and we are taking advantage of that opportunity now. And it's just making people more efficient and and it's taking a lot of routine tasks and automating them. And so the ability to take unstructured data out of documents, you know, for example, you know, we obviously, you know, we have, let's say you have a big legal agreement for a commercial loan. and previously would take an attorney quite a bit of time to go through and make sure all the covenants were extracted and placed into the commercial origination system. Now AI can read that. It can present it to the attorney, make sure that it's correct. When the attorney makes corrections, it will auto-learn off that and then allow that process a lot faster. It doesn't mean that we're relying entirely on that agent, but it makes that process a lot faster. That agent can then auto-upload those covenants into the system for tracking. There's lots of examples like that that are going on. We've got a pretty active task force pushing on the tools and then on the processes we want to work through But I do really believe that it is going to bend the cost curve in the operations side. And then on the software development side, obviously we have so many cool and interesting things we want to do. And previously we've been limited by the speed at which the coders can code. And there's just so many – really incredible breakthroughs that are occurring at such a rapid pace in the software development process. One recent example is we use a software that essentially creates the screens and is called the FIGMAs, right, which are just sort of what the user experience is supposed to look like and that sort of thing. And they rolled out their AI product just this month, and the team is telling me it takes less than 10% of the time now to basically take a product from conceptualization and get that all organized and get the field validations done and get the user experience, you know, ready to be shown and reviewed by the folks that are going to review it. So that's just one example, but there's just a lot of stuff going on that – I'm pretty excited about. So, yeah, I think it is going to bend the cost curve, and it also I don't think will be successful unless we can say that we're able to deliver more better product faster and cheaper on the software side.

Awesome. Thank you very much, and next quarter. Thank you.

Thank you. Our next question comes from the line of David Feaster with Raymond James. Please proceed.

Hi, good afternoon, everybody. Hey, David. Hey, David. Maybe just, you know, we touched on the loan side a bit. Let's touch on the funding side. Obviously, you've had a lot of success driving deposit growth. I mean, notable success in the consumer direct side. It had some nice tailwinds in the specialty deposits and the commercial and treasury management, too. Where do you see the most opportunity on the funding side today? How's pricing competition there as industry loan growth is picking up? And just your thoughts on your ability to continue to manage deposit costs lower and still grow.

Yeah. Well, I think... I think it really depends on the vertical. And some of the new verticals we've added do come with some pretty nice compensating deposit balances. And so, you know, those are going to be more favorably priced in general. But I do think that as industry loan growth picks up, we might see even some of these middle market clients as we sort of start to take clients and things like that. We've seen some of the competitors try to retain those clients by getting aggressive on the deposit rates. So, you know, I think if our loan growth has accelerated, it's reasonable that there might be... a slightly higher funding cost associated with that. If the loan growth is, let's say, you know, we said we're at the higher end of our high single digits, low double digits, but if we had a loan growth similar to what we had this quarter, every quarter in the next fiscal year, then I think that that might put a little pressure on funding costs. Of course, hard to say because the XS1 product is doing very well. The funding cost there is, you know, it can be reasonable depending upon the max of checking and savings accounts that come in and a variety of factors there. But I think it's not a bad modeling exercise to say if we're If we're growing a lot faster, then there might be a little pressure on funding costs. Or if we do a big acquisition or even a moderately sized acquisition of an asset pool or a specialty lending business, then that might put a little pressure on growth on the funding side for a little while.

Okay. But, you know, with that, I mean, even if you did have outsized growth and maybe a little margin gap, pressure, it's not hard to still see a really strong NII growth profile. You know, you're obviously having a lot of success on the fee side and gaining share with the security side. Sounds like the pipeline is doing pretty good. Do you think that you can keep the fee income growth in line with NII or what initiatives maybe that you have to help support fee revenue growth, maybe hopefully keeping that proportion relatively stable?

Yeah, I think, I mean, remember there was, look, we did have good growth from the market and then decent growth on net new assets. It's not quite where we want to be. There is a nice pipeline, though. There are some wins that are coming through and getting onboarded that are decent size this coming quarter and the next quarter. which should boost that new asset growth number. But I think that we're doing a lot of development on the software technology to be able to have an extremely compelling product. And I think we have a good product, but it needs to get better to be best in class. And I think there's... I think that the biggest part of our growth in the fee income side is clearly going to be on the security side in this rate environment. And we are making good progress there, but to say that that is going to increase at the same level, I think we've got goals for that and some of the technology is going to have to come in place and get some adoption there to make that happen. So I'm, I think we can do it, but it'll be, it'll be a little difficult. I think it won't be, it's not impossible, but it won't be easy.

Okay. And then lastly, just touching on the capital front. I mean, you're still accreting capital, extremely profitable, even with, you know, creating capital in excess of your organic growth. It just kind of wanted to touch on your, your capital priorities here. You know, the stock's moved, which is great. You know, it makes buybacks a little less attractive, though. And I know the excess capital isn't burning a hole in your pocket, but just wanted to get a sense of your capital priorities. It sounds like M&As might be more in the cards today. It sounds like conversations are pretty good, but just kind of curious some of the types of things you're considering.

Yeah, well, you know, we have a good organic growth pipeline here. We're still looking at different M&A opportunities in a variety of places. We look at fee income businesses. We look at specialty finance businesses if they're a good fit. So, you know, that's always a good place to deploy capital if it's synergistic. And, yeah, then, you know, we'll continue to monitor that. You know, we obviously bought back some stock this quarter, but there's been obviously a big move in the stock price, too. We still like where we are and feel good about being able to generate earnings that are supportive of that share price. But, yeah, I mean, I think it's all in play. And, you know, but organic loan growth remains a priority for us.

Terrific. Thanks, everybody.

Thank you, David. Thank you. Our next question, functional one, is Gary Tenner. 58 Davidson.

Thanks. Good afternoon. Question on the multifamily loan sale. Just curious about kind of, you know, the kind of reasoning behind it. Obviously, yields must have been pretty good there given the gain that you picked up. So just curious about the thought process around that. Obviously, you had great net loan growth regardless, but, you know, any color.

Oh, yeah, no, it was, you know, I think when we look at loans and we see what we think about them from a standpoint of where, you know, they are from a credit perspective and, you know, and look at what we think about them. And so there was some good buyers that were interested in some loans, and so we... we decided to sell that particular loan.

Was that a single loan? Just a single large loan or a basket loan?

It was a few others. Yeah, there was a handful of loans that were sold.

Okay. All right, great. And then as you think about 2026, and I know that, Greg, you mentioned expectations of being towards the mid to higher part of your loan growth range. Obviously, CNI has been pretty strong throughout fiscal 2025, and now you saw Crestle, you know, this current quarter really pick up. So those two, I would imagine, are the largest drivers, probably the vast majority of loan growth for the year, or is there anything else that you think could accelerate it?

I think Cap Call can do something. I think the lender finance businesses, both real estate and non-real estate, can as well. Jumbo Mortgage started to grow again. It's not going to be massive, but the pipeline there is pretty good. So I think we could have pretty balanced loan growth across, but those are probably the biggest categories. I mean, I think... I think that we have a lot of – the good part of our business is it's just so diverse that you may have some movements within quarters, but we can look across the board and look at the pipelines and see where we are there. I mean, Crestle is a little tough because sometimes our prepayments can come there that are relatively unexpected and move that number around. Right. I think we can be much more certain about the aggregate number than about the individual categories.

Okay. And if I could ask one more question, you kind of reiterated the goal on the kind of comp line to not exceed 30% of revenue growth or NII growth. So in terms of the tax benefit that you're getting from the California change, you know, I guess the question would be, does that free up any additional resources for investment, or that goes to the bottom line?

No, that goes to the bottom line. I think the executives wish it would, but Greg pulled the nuts tight. No, it's a disciplined measure, and, you know, to my knowledge, nobody was actually involved with the lobbying of the California legislature to give us such a that are not located in California. In all seriousness, I think that's a pre-tax. It's just a very simple number. If you take the revenue growth from non-interest revenue and interest revenue, you add it up, you look at the difference. Obviously, there could be some one-time items in there and you don't have compensation or professional service expenses additively grow that, and it's a pre-tax ratio. So that's what it is. And I think, obviously, look, at any one quarter, you know, we hired this floor plan team. Derek said that's going to cost about a million a quarter. You know, but, I mean, over the year... we intend to hit that number and, you know, and make sure that that happens. And that's not saying that we can't do better with AI and whatever it is, but that's a public goal that the team, you know, is going to hit. Thank you.

Thank you. Our next question comes from the line of Kelly Moda with KBW. Please proceed.

Hey, good afternoon. Thanks for the question and congrats on 25 years. Very cool you get to celebrate on the 4th of July. Greg, maybe with the Genius Act coming out, I believe before the Silver Gates blow up, you were potentially looking into stable coin and digital assets. Can you refresh us now that you know, if there's additional color as to a more conducive regulatory environment, if there's any update as to how you're thinking about it and interested in pursuing it.

Yeah, sure. And there's still some things that I may be They're in process, so I'll give you some preliminary thoughts, and then there will be others to come. You know, in our self-directed business, we've been allowing, you know, the crypto trading side. We haven't really pushed it very much with, you know, allowing the ETFs and those sort of things on the crypto side. We've been allowing that for a while. Our self-directed business is pretty – it needs to – you know, have some technological sort of upgrades just from a standpoint of the user experience and stuff. It's not really as competitive as it should be and hasn't been a big focus for us. But I think given that, you know, that the crypto side could, you know, become more important, that might be a vehicle for some of those, you know, some of the... the transactional-related and payment-related activities that are there because we're already doing that, and just we can expand that a little bit or make the user experience better. You know, we did not, when the administration changed, you know, we've, With respect to what we've done on the crypto banking side, you know, there was a complex set of sort of rules around what we would accept and what we wouldn't based on sort of a risk profile around what different companies were doing and whether or not there was regulatory clarity around how those companies were being treated. And so, you know, when the administration changed, we've been more willing to look at those accounts and those sort of things and kind of do that. You know, with respect to, you know, how I'm thinking and how we're thinking broadly about, you know, stablecoin, I'd say that I'm not going to have a lot of public comments on that now, but we are focused on it and thinking through it and looking at exactly how you know, how it should integrate into everything we're doing. So obviously a lot of change and movement recently, and, you know, we're thinking hard about it and paying attention to it.

Got it. Thanks for the color. That's helpful. Maybe switching to the funding side, you had some nice EOP growth in not sharing this quarter. Wondering if there was any – you know, end-of-period flows that impacted that, and just more broadly speaking, which areas of the business are seeing the best growth in just core operating accounts? Because you did have very nice deposit growth this quarter.

Yeah. The specialty, the commercial specialty side has some real bright spots and continues to grow there. The The tech business that we brought on through that team is doing well and bringing on a lot of core deposits there. So it's nice to see some success with that team, and that's been steady. And then the middle market team as well is doing the same thing. And then a lot of cross-sell across all the lending verticals. I think we do a really good job on the payment side and with the API infrastructure we have on the commercial side that leads a lot of clients who have some pretty sophisticated payment needs to choose us. Those are nice clients because when they integrate with us from a software perspective, they tend to be pretty sticky. So, you know, it really hasn't been any one thing, but it's been a lot, you know, across the board in those categories that I just talked about.

Got it. That's helpful. Maybe last question for me. It seems like asset quality held in really strong. Just wondering, Greg, Any areas that you're, you know, any update as to what you're looking at and watching more carefully? Just to round out questions on credit, that would be.

Sure. Sure. Yeah, I think the commercial real estate side looks really, really good. You know, and then on the CNI side, As we continue to work with different banks and do club stuff and things like that and do some syndications, I expect that we'll always have a handful of stuff rattling around. But in most cases, I think those things will work out reasonably well just given The, you know, the enterprise value of the businesses, but, you know, I think on the CNI side, I think, you know, we've had, if you look at our, I mean, I think our, you know, our Crestle losses are, I don't think we've really had any, you know, of any, right? And then I think in all our time in multifamily, you know, a couple basis points maybe in 25 years in single family, the same way. You know, I think that the CNI side, as we're doing more sort of average bank stuff, you know, we'll probably have, you know, hopefully we'll do better than average, but, you know, there'll always be, you know, I think something, but nothing of any significant materiality.

Great. Thank you for the time. I'll step back next quarter.

Thank you. Thanks, Kelly.

Thank you, Kelly. Thank you. If there are no further questions at this time, I'd like to pass the call back over to Donnie Lai for any closing remarks.

Great. Thanks for everyone's participation, and we'll talk to you next quarter.

this concludes today's teleconference you may disconnect your lines at this time thank you for your participation