Axos Financial, Inc.
For the period ended Sep 30, 2025. Filed Oct 30, 2025.
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Sep 30, 2025 · Filed Oct 30, 2025
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6. Derivatives
- DERIVATIVES
For additional information on the Company’s derivative instruments, see Note 1—“Organizations and Summary of Significant Accounting Policies,” Note 3—“Fair Value” and Note 6—“Derivatives”in the 2025 Form 10-K and Note 3—“Fair Value” and Note 7 “Offsetting of Derivatives and Securities Financing Agreements” herein.
The following table presents the notional amounts and fair values of the Company’s derivative instruments. While the notional amounts give an indication of the volume of the Company’s derivatives activity, the notional amounts significantly exceed, in the Company’s view, the possible losses that could arise from such transactions. For most derivative contracts, the notional amount is not exchanged, rather it is a reference amount used to calculate payments.
| September 30, 2025 · June 30, 2025 | ||||||
|---|---|---|---|---|---|---|
| Fair Value | Fair Value | |||||
| (Dollars in thousands) | Notional Amount | Derivative Assets | Derivative Liabilities | Notional Amount | Derivative Assets | Derivative Liabilities |
| Derivatives designated as hedging instruments | ||||||
| Interest rate contracts1 | $400,000 | $1,184 | $— | $400,000 | $1,950 | $— |
| Derivatives not designated as hedging instruments | ||||||
| Interest rate contracts1 | 2,627,948 | 16,679 | 64,599 | 2,761,021 | 15,782 | 68,427 |
| Foreign exchange contracts | 9,777 | 29 | 20 | 9,570 | 2 | 71 |
| Total derivatives | $3,037,725 | $17,892 | $64,619 | $3,170,591 | $17,734 | $68,498 |
1 Derivative Assets are presented net of $50.8 million and $55.4 million of variation margin on centrally-cleared derivatives as of September 30, 2025 and June 30, 2025, respectively.
Derivatives designated as hedging instruments
The following table presents pre-tax gains/(losses) on derivative instruments used in cash flow hedge accounting relationships.
| For the Three Months Ended September 30, | ||
|---|---|---|
| (Dollars in thousands) | 2025 | 2024 |
| Amounts recorded in other comprehensive income (“OCI”) | $374 | $553 |
| Amounts reclassified from AOCI to income | (1,118) | — |
| Total change in OCI for period | $(744) | $553 |
The Company did not experience any forecasted transactions that failed to occur during the three months ended September 30, 2025 or 2024. There are no amounts excluded from the assessment of hedge effectiveness.
As of September 30, 2025, the Company expects that approximately $1.2 million of pre-tax net gain related to cash flow hedges recorded in accumulated other comprehensive income will be recognized in income over the next 12 months. The maximum length of time over which forecasted transactions are hedged is approximately 2.0 years.
Derivatives not designated as hedging instruments
The following table presents the pre-tax gains/(losses) related to the Company’s derivative instrument activity recognized in the Condensed Consolidated Statements of Income:
| For the Three Months Ended September 30, | ||
|---|---|---|
| (Dollars in thousands) | 2025 | 2024 |
| Interest rate contracts | ||
| Banking and service fees | $(558) | $(1,372) |
| Mortgage banking and servicing rights income | 417 | (251) |
| Foreign exchange contracts | ||
| Banking and service fees | 539 | — |
The aggregate foreign exchange transaction gain totaled approximately $0.5 million for the three months ended September 30, 2025, and wasnot significant for the three months ended September 30, 2024.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.