Company: AX
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0001299709-25-000184
Chunk: 92

Company: Axos Financial, Inc.
Filing Date: 2025-10-30
Form: 10-Q
Item: Part I, Item 1
Chunk 92
---
)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 liability mix.

Securities Business Segment

Our Securities Business Segment is exposed to market risk primarily due to its role as a financial intermediary in customer transactions, which may include purchases and sales of securities, securities lending activities, and in our trading activities, which are used to support sales, underwriting and other customer activities. We are subject to the risk of loss that may result from the potential change in value of a financial instrument as a result of fluctuations in interest rates, market prices, investor expectations and changes in credit ratings of the issuer.

Our Securities Business Segment is primarily exposed to interest rate risk as a result of generating interest-earning assets including customer and correspondent margin loans, and its securities borrowing activities. Our exposure to interest rate risk is also from our funding sources including customer and correspondent cash balances, bank borrowings and securities lending activities. Interest rates on customer and correspondent balances and securities produce a positive spread with rates generally fluctuating in parallel.

With