Axos Financial Inc
For the period ended Sep 30, 2024. Filed Oct 30, 2024.
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Sep 30, 2024 · Filed Oct 30, 2024
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5. 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 2024 Form 10-K and Note 2—“Fair Value”.
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. As of June 30, 2024, there wereno derivatives designated in hedge accounting relationships.
| September 30, 2024 · June 30, 2024 | ||||||
|---|---|---|---|---|---|---|
| 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 contracts | $400,000 | $401 | $— | $— | $— | $— |
| Derivatives not designated as hedging instruments | ||||||
| Interest rate contracts | 2,516,173 | 65,771 | 63,225 | $2,435,874 | 106,796 | 102,949 |
| Total derivatives | $2,916,173 | $66,172 | $63,225 | $2,435,874 | $106,796 | $102,949 |
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) | 2024 | 2023 |
| Amounts recorded in OCI | $553 | $— |
| Amounts reclassified from AOCI to income | — | — |
| Total change in OCI for period | $553 | $— |
The Company did not experience any forecasted transactions that failed to occur during the three months ended September 30, 2024 or 2023. There are no amounts excluded from the assessment of hedge effectiveness.
At September 30, 2024, the Company expects that approximately $2.1 million of pre-tax net gain related to cash flow hedges recorded in accumulated other comprehensive income (“AOCI”) will be recognized in income over the next 12 months. The maximum length of time over which forecasted transactions are hedged is approximately three 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) | 2024 | 2023 |
| Banking and service fees | $(1,372) | $340 |
| Mortgage banking and servicing rights income | (251) | 277 |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.