Company: AX
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0001299709-25-000184
Chunk: 120

Company: Axos Financial, Inc.
Filing Date: 2025-10-30
Form: 10-Q
Item: Part I, Item 8
Chunk 120
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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.

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Derivatives designated as hedging instrumentsThe 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)20252024Amounts 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 $1.2 million of pre-tax net gain related to cash flow hedges recorded in accumulated other comprehensive income will be recognized in income over the next 12 months. The maximum length of time over which forecasted transactions are hedged is approximately 2.0 years.Derivatives not designated as hedging instrumentsThe following table presents the pre-tax gains/(losses) related to the Company’s derivative instrument activity recognized in the Condensed Consolidated Statements of Income:For the Three Months Ended September 30, (Dollars in thousands)20252024Interest rate contractsBanking and service fees$(558)$(1,372)Mortgage banking and servicing rights income417 (251)Foreign exchange contractsBanking and service fees539 — The aggregate foreign exchange transaction gain totaled approximately $0.5 million for the three months ended September 30, 2025, and was not significant for the three months ended September 30, 2024.

7.    OFFSETTING OF DERIVATIVES AND SECURITIES FINANCING AGREEMENTS

The Company enters into derivatives transactions as part of its mortgage banking activities, market making activity in interest rate swap and cap derivatives to facilitate customer demand and hedging activities related to interest rate and foreign exchange risk management, and enters into securities borrowed and securities loaned transactions to facilitate customer match-book activity, cover short positions and support customer securities lending. For additional information on offsetting see Note 7—“Offsetting