Company: AX
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0001299709-25-000184
Chunk: 2

Company: Axos Financial, Inc.
Filing Date: 2025-10-30
Form: 10-Q
Item: Part I, Item 3
Chunk 2
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 historical experience.

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Table of Contents

Although “gap” analysis is a useful measurement device available to management in determining the existence of interest rate exposure, its static focus as of a particular date makes it necessary to utilize other techniques in measuring exposure to changes in interest rates. For example, gap analysis is limited in its ability to predict trends in future earnings and makes no assumptions about changes in prepayment tendencies, deposit or loan maturity preferences or repricing time lags that may occur in response to a change in the interest rate environment.

The following table indicates the sensitivity of net interest income movements to parallel instantaneous shocks in interest rates for the future 1-12 months’ and 13-24 months’ time periods. For purposes of modeling net interest income sensitivity the Company assumes no growth in the balance sheet other than for retained earnings:

As of September 30, 2025First 12 MonthsNext 12 Months(Dollars in thousands)Percentage Change from BasePercentage Change from BaseUp 200 basis points6.7 %12.5 %Up 100 basis points3.5 %6.2 %Down 100 basis points(1.7)%(3.4)%Down 200 basis points(1.0)%(3.9)%

We attempt to measure the effect market interest rate changes will have on the net present value of assets and liabilities, which is defined as market value of equity. We analyze the MVE sensitivity to an immediate parallel and sustained shift in interest rates derived from the underlying interest rate curves.

The following table indicates the sensitivity of MVE to the interest rate movement described above:

As of September 30, 2025(Dollars in thousands)Percentage Change from BaseUp 200 basis points4.7 %Up 100 basis points3.2 %Down 100 basis points(3.9)%Down 200 basis points(7.7)%

The computation of the prospective effects of hypothetical interest rate changes is based on numerous assumptions, including relative levels of interest rates, asset prepayments (including replacing floating rate loan run-off with loans having similar spread and floor features), runoffs in deposits and changes in repricing levels of deposits to general market rates, and should not be relied upon as indicative of actual results. Furthermore, these computations do not take into account any actions that we may undertake in response to future changes in interest rates. Those actions include, but are not limited to, making changes in loan and deposit interest rates and changes in our asset and