Axos Financial, Inc.
For the period ended Sep 30, 2026. Filed Oct 29, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Oct 29, 2026
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3. Fair Value
- FAIR VALUE
The following tables set forth the Company’s financial assets and liabilities measured at fair value on a recurring basis at September 30, 2026 and June 30, 2026. Assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement:
| September 30, 2026 | |||
|---|---|---|---|
| (Dollars in thousands) | Significant OtherObservableInputs(Level 2) | SignificantUnobservableInputs(Level 3) | Total |
| ASSETS: | |||
| Trading securities | $402 | $— | $402 |
| Available-for-sale securities: | |||
| United States Treasury securities | $712,025 | $— | $712,025 |
| Agency MBS | 64,466 | — | 64,466 |
| Non-Agency MBS | — | 4,094 | 4,094 |
| Total—Available-for-sale securities: | $776,491 | $4,094 | $780,585 |
| Loans held for sale | $14,659 | $— | $14,659 |
| Servicing rights | $— | $26,469 | $26,469 |
| Other assets—Derivative instruments1 | $29,751 | $— | $29,751 |
| Other assets—Loans held for investment at fair value | $— | $11,000 | $11,000 |
| Other assets—Equity instruments | $— | $8,700 | $8,700 |
| LIABILITIES: | |||
| Accounts payable and other liabilities—Derivative instruments | $75,911 | $— | $75,911 |
| Accounts payable and other liabilities—Contingent Consideration | $— | $29,685 | $29,685 |
| June 30, 2026 | |||
|---|---|---|---|
| (Dollars in thousands) | Significant OtherObservableInputs(Level 2) | SignificantUnobservableInputs(Level 3) | Total |
| ASSETS: | |||
| Trading securities | $661 | $— | $661 |
| Available-for-sale securities: | |||
| United States Treasury securities | $732,422 | $— | $732,422 |
| Agency MBS | 66,972 | — | 66,972 |
| Non-Agency MBS | — | 4,273 | 4,273 |
| Total—Available-for-sale securities: | $799,394 | $4,273 | $803,667 |
| Loans held for sale | $14,937 | $— | $14,937 |
| Servicing rights | $— | $25,653 | $25,653 |
| Other assets—Derivative instruments1 | $16,941 | $— | $16,941 |
| Other assets—Loans held for investment at fair value | $— | $10,000 | $10,000 |
| LIABILITIES: | |||
| Accounts payable and other liabilities—Derivative instruments | $52,509 | $— | $52,509 |
| Accounts payable and other liabilities—Contingent Consideration | $— | $30,810 | $30,810 |
| 1 Other assets - Derivative instruments are presented net of $83.9 million and $52.3 million of variation margin on centrally-cleared derivatives as of September 30, 2026 and June 30, 2026, respectively. | |||
For information on the valuation methodologies used by the Company, see Note 3—“Fair Value”in the 2026 Form 10-K.
The following tables present additional information about assets measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value. There were no transfers in or out of Level 3 during the three months ended September 30, 2026 and the three months ended September 30, 2025.
| For the Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| September 30, 2026 | ||||||
| (Dollars in thousands) | Available-for-sale Securities:Non-Agency MBS | Servicing Rights1 | Other assets—Loans held for investment at fair value | Other assets—Equity instruments | Accounts payable and other liabilities—Contingent Consideration | Total |
| Opening balance | $4,273 | $25,653 | $10,000 | $— | $30,810 | $70,736 |
| Total gains or losses for the period: | ||||||
| Included in earnings—Banking and service fees2 | — | — | 1,000 | — | — | 1,000 |
| Included in earnings—Mortgage banking and servicing rights income | — | 621 | — | — | — | 621 |
| Included in earnings—General and administrative expense | — | — | — | — | (1,125) | (1,125) |
| Included in other comprehensive income | (89) | — | — | — | — | (89) |
| Purchases, retentions, issues, exchanges, sales and settlements: | ||||||
| Purchases/Issuances/Exchanges/Retentions | — | 195 | — | 8,700 | — | 8,895 |
| Settlements/Sales | (90) | — | — | — | — | (90) |
| Closing balance | $4,094 | $26,469 | $11,000 | $8,700 | $29,685 | $79,948 |
| Change in unrealized gains or losses for the period included in earnings for assets and liabilities held at the end of the reporting period | $— | $621 | $1,000 | $— | $(1,125) | $496 |
1 Earnings from servicing rights were attributable to: time and payoffs, representing a decrease in servicing rights value due to passage of time, including the impact from both regularly scheduled loan principal payments and loans that were paid down or paid off during the period of $0.7 million for the three months ended September 30, 2026 and an increase in servicing rights value resulting from market-driven changes in interest rates of $1.3 million for the three months ended September 30, 2026. Additions to servicing rights were related to purchases and servicing rights retained upon sale of loans held for sale.
2 The amount included in earnings for the three months ended September 30, 2026, is considered attributable to instrument-specific credit risk.
| For the Three Months Ended | ||||
|---|---|---|---|---|
| September 30, 2025 | ||||
| (Dollars in thousands) | Available-for-sale Securities:Non-Agency MBS | Servicing Rights1 | Accounts payable and other liabilities—Contingent Consideration | Total |
| Opening Balance | $15,569 | $27,218 | $— | $42,787 |
| Total gains or losses for the period: | ||||
| Included in earnings—Mortgage banking and servicing rights income | — | (1,189) | — | (1,189) |
| Included in other comprehensive income | 116 | — | — | 116 |
| Purchases, retentions, issues, exchanges, sales and settlements: | ||||
| Purchases/Issuances/Exchanges/Retentions | — | 214 | 30,810 | 31,024 |
| Settlements/Sales | (4,493) | — | — | (4,493) |
| Closing balance | $11,192 | $26,243 | $30,810 | $68,245 |
| Change in unrealized gains or losses for the period included in earnings for assets and liabilities held at the end of the reporting period | $— | $(1,189) | $— | $(1,189) |
1 Earnings from servicing rights were attributable to: time and payoffs, representing a decrease in servicing rights value due to passage of time, including the impact from both regularly scheduled loan principal payments and loans that were paid down or paid off during the period of $0.4 million for the three months ended September 30, 2025 and a decrease in servicing rights value resulting from market-driven changes in interest rates of $0.8 million for the three months ended September 30, 2025. Additions to servicing rights were related to purchases and servicing rights retained upon sale of loans held for sale.
The table below presents the quantitative information about Level 3 fair value measurements:
| September 30, 2026 | ||||
|---|---|---|---|---|
| (Dollars in thousands) | Fair Value | Valuation Technique | Unobservable Input | Range (Weighted Average)1 |
| Available-for-sale securities: Non-Agency MBS | $4,094 | Discounted Cash Flow | Projected Constant Prepayment Rate,Projected Constant Default Rate,Projected Loss Severity,Discount Rate over SOFR Swaps,Credit Enhancement | 2.5 to 8.3% (3.8%)1.5 to 1.9% (1.5%)40.0 to 68.9% (61.2%)2.5 to 4.5% (3.2%)0.0 to 78.0% (13.1%) |
| Servicing Rights | $26,469 | Discounted Cash Flow | Projected Constant Prepayment Rate,Life (in years),Discount Rate | 2.5 to 32.9% (10.0%)2.5 to 14.2 (8.8) 9.5 to 11.2% (9.7%) |
| Other assets—Loans held for investment at fair value | $11,000 | Discounted Cash Flow | Discount rate,Probability,Recovery Rate | 9.2 to 9.3% (9.2%)40.0 to 60.0% (41.3%) 10.0 to 25.0% (16.3%) |
| Other assets—Equity instruments | $8,700 | Discounted Cash Flow | Discount Rate,Terminal Growth Rate | 11.5 to 13.0% (12.8%)0.9 to 2.2% (2.0%) |
| Accounts payable and other liabilities—Contingent Consideration | $29,685 | Nelson-Siegel Stochastic Model | Monthly Asset Growth,Credit Spread | -7.4 to 14.5% (3.6%) 2.9 to 2.9% (2.9%) |
| June 30, 2026 | ||||
|---|---|---|---|---|
| (Dollars in thousands) | Fair Value | Valuation Technique | Unobservable Input | Range (Weighted Average)1 |
| Available-for-sale securities: Non-Agency MBS | $4,273 | Discounted Cash Flow | Projected Constant Prepayment Rate,Projected Constant Default Rate,Projected Loss Severity,Discount Rate over SOFR Swaps,Credit Enhancement | 2.5 to 15.7% (4.0%)1.5 to 1.9% (1.5%)40.0 to 68.9% (61.0%)2.5 to 4.7% (3.2%)0.0 to 78.2% (13.2%) |
| Servicing Rights | $25,653 | Discounted Cash Flow | Projected Constant Prepayment Rate,Life (in years),Discount Rate | 4.1 to 30.7% (10.2%)2.7 to 14.2 (8.6) 9.5 to 11.2% (9.8%) |
| Other assets—Loans held for investment at fair value | $10,000 | Discounted Cash Flow | Discount Rate,Terminal Growth Rate,EBITDA Multiple | 28.0 to 28.0% (28.0%)3.0 to 3.0% (3.0%) 1.0 times to 1.0 times (1.0 times) |
| Accounts payable and other liabilities—Contingent Consideration | $30,810 | Nelson-Siegel Stochastic Model | Monthly Asset Growth,Credit Spread | -7.4 to 14.5% (3.6%) 2.9 to 2.9% (2.9%) |
1 The weighted averages for Available-for-sale securities: Non-Agency MBS, Other assets—Loans held for investment at fair value and Other assets—Equity instruments are based on the relative fair value, for Servicing Rights are based on the relative unpaid principal of the loans being serviced and for Accounts payable and other liabilities—Contingent Consideration are based on annual projected consideration.
For non-agency mortgage-backed securities, a significant increase (decrease) in default rate, loss severity (potentially offset by the level of credit enhancement) or discount rate in isolation would result in a significantly lower (higher) fair value measurement, while a significant increase in the voluntary prepayment rate would result in a significant increase in fair value if the security is valued below par value, or a significant decrease in fair value if the security is valued above par value. Generally, a change in the assumptions used for the default rate is accompanied by a directionally opposite change in the assumption used for the voluntary prepayment rate.
For servicing rights, significant increases in the voluntary prepayment rate or discount rate in isolation would result in a significantly lower fair value measurement, while a significant increase in expected life in isolation would result in a significantly higher fair value measurement. Generally, a change in the voluntary prepayment rate is accompanied by a directionally opposite change in expected life.
For loans held for investment at fair value, a significant increase (decrease) to the growth rate and EBITDA multiple in isolation would result in significantly higher (lower) fair value measurement, and a significant increase (decrease) in the discount rate in isolation would result in a significantly lower (higher) fair value measurement. In addition, a significant increase (decrease) in the recovery rate in isolation would result in a significantly higher (lower) fair value measurement. Changes in the probability of resolution outcomes are generally accompanied by changes in the other valuation inputs, which may move in either direction.
For equity instruments, a significant increase (decrease) in the terminal growth rate in isolation would result in a significantly higher (lower) fair value measurement, and a significant increase (decrease) in the discount rate in isolation would result in a significantly lower (higher) fair value measurement.
For the Contingent Consideration, a significant increase (decrease) in the asset growth in isolation would result in a significantly higher (lower) fair value measurement, and a significant increase (decrease) in the credit spread in isolation would result in a significantly lower (higher) fair value measurement.
The aggregate fair value of loans held for sale, carried at fair value, and the contractual balance (including accrued interest) were:
| (Dollars in thousands) | September 30, 2026 | June 30, 2026 |
|---|---|---|
| Aggregate fair value | $14,659 | $14,937 |
| Unpaid principal balance | $14,327 | $14,476 |
The total interest income and amount of gains and losses from changes in fair value included in earnings for loans held for sale, carried at fair value, were:
| For the Three Months Ended September 30, | ||
|---|---|---|
| (Dollars in thousands) | 2026 | 2025 |
| Interest income | $169 | $181 |
| Change in fair value | (203) | 540 |
| Total | $(34) | $721 |
The Company measures certain loans held for investment at fair value. As of September 30, 2026, and June 30, 2026, the aggregate fair value of loans held for investment carried at fair value was $11.0 million and $10.0 million, respectively, and the related unpaid principal balance was $133.7 million and $133.4 million, respectively. As of September 30, 2026 and June 30, 2026, the loans held for investment at fair value are more than 90 days past due and on nonaccrual status. The Company did not recognize any interest income on loans held for investment at fair value during the three months ended September 30, 2026 and 2025.
Fair Value of Financial Instruments
Carrying amounts and estimated fair values of financial instruments at September 30, 2026 and June 30, 2026 were:
| September 30, 2026 | |||||
|---|---|---|---|---|---|
| Fair Value | |||||
| (Dollars in thousands) | CarryingAmount | Level 1 | Level 2 | Level 3 | Total Fair Value |
| Financial assets: | |||||
| Cash, cash equivalents and restricted cash | $1,876,623 | $1,876,623 | $— | $— | $1,876,623 |
| Trading securities | 402 | — | 402 | — | 402 |
| Available-for-sale securities | 780,585 | — | 776,491 | 4,094 | 780,585 |
| Stock of regulatory agencies | 36,293 | — | 36,293 | — | 36,293 |
| Loans held for sale, at fair value | 14,659 | — | 14,659 | — | 14,659 |
| Loans held for sale, at lower of cost or fair value | 3,298 | — | — | 3,331 | 3,331 |
| Loans held for investment—net | 25,912,024 | — | — | 25,962,440 | 25,962,440 |
| Securities borrowed | 190,831 | — | — | 189,097 | 189,097 |
| Customer, broker-dealer and clearing receivables | 320,416 | — | — | 318,602 | 318,602 |
| Servicing rights | 26,469 | — | — | 26,469 | 26,469 |
| Other assets - derivative instruments1 | 29,751 | — | 29,751 | — | 29,751 |
| Other assets - loans held for investment at fair value | 11,000 | — | — | 11,000 | 11,000 |
| Other assets - equity instruments2 | 8,700 | — | — | 8,700 | 8,700 |
| Financial liabilities: | |||||
| Total deposits | 25,413,197 | — | 25,037,438 | — | 25,037,438 |
| Advances from the Federal Home Loan Bank | 60,000 | — | 55,660 | — | 55,660 |
| Secured financings | 511,647 | — | 501,205 | — | 501,205 |
| Borrowings, subordinated notes and debentures | 343,166 | — | 335,754 | — | 335,754 |
| Securities loaned | 238,502 | — | — | 236,988 | 236,988 |
| Customer, broker-dealer and clearing payables | 386,792 | — | — | 386,792 | 386,792 |
| Accounts payable and other liabilities - derivative instruments | 75,911 | — | 75,911 | — | 75,911 |
| Accounts payable and other liabilities - Contingent Consideration | 29,685 | — | — | 29,685 | 29,685 |
| June 30, 2026 | |||||
|---|---|---|---|---|---|
| Fair Value | |||||
| (Dollars in thousands) | CarryingAmount | Level 1 | Level 2 | Level 3 | Total Fair Value |
| Financial assets: | |||||
| Cash, cash equivalents and restricted cash | $1,307,802 | $1,307,802 | $— | $— | $1,307,802 |
| Trading securities | 661 | — | 661 | — | 661 |
| Available-for-sale securities | 803,667 | — | 799,394 | 4,273 | 803,667 |
| Stock of regulatory agencies | 36,166 | — | 36,166 | — | 36,166 |
| Loans held for sale, at fair value | 14,937 | — | 14,937 | — | 14,937 |
| Loans held for sale, at lower of cost or fair value | 5,129 | — | — | 5,303 | 5,303 |
| Loans held for investment—net | 25,595,403 | — | — | 25,789,184 | 25,789,184 |
| Securities borrowed | 163,462 | — | — | 161,870 | 161,870 |
| Customer, broker-dealer and clearing receivables | 347,944 | — | — | 345,800 | 345,800 |
| Servicing rights | 25,653 | — | — | 25,653 | 25,653 |
| Other assets - derivative instruments1 | 16,941 | — | 16,941 | — | 16,941 |
| Other assets - loans held for investment at fair value | 10,000 | — | — | 10,000 | 10,000 |
| Financial liabilities: | |||||
| Total deposits | 24,565,392 | — | 24,427,010 | — | 24,427,010 |
| Advances from the Federal Home Loan Bank | 154,000 | — | 150,677 | — | 150,677 |
| Secured financings | 576,680 | — | 568,019 | — | 568,019 |
| Borrowings, subordinated notes and debentures | 342,915 | — | 343,891 | — | 343,891 |
| Securities loaned | 194,729 | — | — | 193,717 | 193,717 |
| Customer, broker-dealer and clearing payables | 365,792 | — | — | 365,792 | 365,792 |
| Accounts payable and other liabilities - derivative instruments | 52,509 | — | 52,509 | — | 52,509 |
| Accounts payable and other liabilities - Contingent Consideration | 30,810 | — | — | 30,810 | 30,810 |
1 Other assets - derivative assets are presented net of $83.9 million and $52.3 million of variation margin on centrally-cleared derivatives as of September 30, 2026 and June 30, 2026, respectively.
2 Other assets—Equity instruments excludes certain investments that are measured based on net asset value (“NAV”) per share, which are not classified in the fair value hierarchy. For additional information on the Company’s commitments to contribute capital to its investments, see Note 10—“Commitments and Contingencies.”
The carrying amount represents the estimated fair value for cash, cash equivalents and restricted cash, stock of regulatory agencies, interest-bearing deposits, accrued interest receivable and payable, demand deposits, short-term debt, and variable rate loans or deposits that reprice frequently and fully. For fixed rate loans, deposits, borrowings or subordinated debt and for variable rate loans, deposits, borrowings, secured financings, or subordinated debt with infrequent repricing or repricing limits, fair value is based on discounted cash flows using current market rates applied to the estimated life and credit risk. A discussion of the methods of valuing trading securities, available-for-sale securities, loans held for sale and derivatives can be found in Note 3—“Fair Value”in the 2026 Form 10-K. The fair value of off-balance sheet items is not considered material.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.