Axos Financial, Inc.AX
Axos Financial, Inc. Debt Disclosure
BORROWINGS, SUBORDINATED NOTES AND DEBENTURES
The following table sets forth the composition of the borrowings, subordinated notes and debentures as of the dates indicated:
| (Dollars in thousands) | June 30, 2025 | June 30, 2024 | |||||||||
| Borrowings from other banks | $ | — | $ | — | |||||||
| Subordinated loans | 7,400 | 7,400 | |||||||||
| Subordinated notes | 301,000 | 315,000 | |||||||||
| Junior subordinated debentures | 5,155 | 5,155 | |||||||||
| Total borrowings, subordinated notes and debentures, gross of unamortized issuance costs | 313,555 | 327,555 | |||||||||
| Less unamortized issuance costs | (884) | (1,876) | |||||||||
| Total borrowings, subordinated notes and debentures, net of unamortized issuance costs | $ | 312,671 | $ | 325,679 | |||||||
Maturities of borrowings, subordinated notes and debentures are as follows:
| (Dollars in thousands) | June 30, 2025 | ||||
| Within one year | $ | 7,400 | |||
| After one but within two years | — | ||||
| After two but within three years | — | ||||
| After three but within four years | — | ||||
| After four but within five years | — | ||||
| After five years | 306,155 | ||||
| Total | $ | 313,555 | |||
Borrowings from other banks. Axos Clearing has a $150 million secured line of credit available for borrowing. As of June 30, 2025, there was no amount outstanding, and as of June 30, 2024 there was no amount outstanding. This credit facility bears interest at rates based on the Federal Funds rate and is due upon demand.
Axos Clearing has a $110 million unsecured line of credit available for limited purpose borrowing. As of June 30, 2025, there was no amount outstanding on this credit facility, and as of June 30, 2024 there was no amount outstanding. This credit facility bears interest at rates based on the Federal Funds rate and is due upon demand. The unsecured line of credit requires Axos Clearing to operate in accordance of specific covenants surrounding capital and debt ratios. Axos Clearing was in compliance of all covenants as of June 30, 2025.
Subordinated Loans. The Company issued subordinated loans totaling $7.5 million on January 28, 2019, to the principal stockholders of Cor Securities Holdings, Inc. (“COR Securities”) in an equal principal amount, with a maturity of 15 months and a 6.25% interest rate, to serve as the sole source of payment of indemnification obligations of the principal stockholders of COR Securities under the applicable merger agreement. During the fiscal year ended June 30, 2019, $0.1 million of subordinated loans were repaid. As of June 30, 2025, an indemnification claim against the $7.4 million remains pending.
Subordinated Notes. In September 2020, the Company completed the sale of $175 million aggregate principal amount of its 4.875% Fixed-to-Floating Rate Subordinated Notes due October 1, 2030 (the “2030 Notes”). The 2030 Notes mature on October 1, 2030 and accrue interest at a fixed rate per annum equal to 4.875%, payable semi-annually in arrears on April 1 and October 1 of each year, commencing on April 1, 2021. From and including October 1, 2025, to, but excluding October 1, 2030 or the date of early redemption, the 2030 Notes will bear interest at a floating rate per annum equal to three-month term SOFR plus a spread of 476 basis points, payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year, commencing on January 2026. The 2030 Notes may be redeemed on or after October 1, 2025, which date may be extended at the Company’s discretion, at a redemption price equal to principal plus accrued and unpaid interest, subject to certain conditions. Fees and costs incurred in connection with the debt offering amortize to interest expense over the term of the 2030 Notes. On September 27, 2024, the Company paid $9.2 million to repurchase $9.5 million par value of its 2030 Notes resulting in a pre-tax non-cash gain on extinguishment of $0.2 million, after accounting for unamortized issuance costs and accrued
interest. The non-cash gain is recorded in “General and administrative expense” in the Consolidated Statements of Income for the fiscal year ended June 30, 2025.
In February 2022, the Company completed the sale of $150 million aggregate principal amount of its 4.00% Fixed-to-Floating Rate Subordinated Notes (the “2032 Notes”). The 2032 Notes are obligations only of Axos Financial, Inc. The 2032 Notes mature on March 1, 2032 and accrue interest at a fixed rate per annum equal to 4.00%, payable semi-annually in arrears on March 1 and September 1 of each year, commencing on September 1, 2022. From and including March 1, 2027, to, but excluding March 1, 2032 or the date of early redemption, the 2032 Notes will bear interest at a floating rate per annum equal to three-month term SOFR plus a spread of 227 basis points, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, commencing on June 1, 2027. The 2032 Notes may be redeemed on or after March 1, 2027, which date may be extended at the Company’s discretion, at a redemption price equal to principal plus accrued and unpaid interest, subject to certain conditions. Fees and costs incurred in connection with the debt offering amortize to interest expense over the term of the 2032 Notes. On July 15, 2024, the Company paid $2.6 million to repurchase $3.0 million par value of its 2032 Notes resulting in a pre-tax non-cash gain on extinguishment of $0.4 million, after accounting for unamortized issuance costs and accrued interest. On June 5, 2025, the Company paid $1.4 million to repurchase $1.5 million par value of its 2032 Notes resulting in a pre-tax non-cash gain on extinguishment of $0.1 million, after accounting for unamortized issuance costs and accrued interest. The non-cash gains are recorded in “General and administrative expense” in the Consolidated Statements of Income for the fiscal year ended June 30, 2025.
Junior Subordinated Debentures. On December 13, 2004, the Company entered into an agreement to form an unconsolidated trust which issued $5.0 million of trust preferred securities in a transaction that closed on December 16, 2004. The net proceeds from the offering were used to purchase $5.2 million of junior subordinated debentures (“Debentures”) of the Company with a stated maturity date of February 23, 2035. The Debentures are the sole assets of the trust. The trust preferred securities are mandatorily redeemable upon maturity, or upon earlier redemption as provided in the indenture. The Company has the right to redeem the Debentures in whole (but not in part) on or after specific dates, at a redemption price specified in the indenture plus any accrued but unpaid interest through the redemption date. Interest accrues at the rate of three-month term SOFR plus a 2.4% margin and a 0.26% spread adjustment, for a rate of 6.99% as of June 30, 2025, with interest paid quarterly.
Other Available Borrowings. The Bank has the ability to borrow short-term from the FRBSF Discount Window. At June 30, 2025 and 2024, there were no amounts outstanding and the available borrowings from this source were $7,046.5 million and $6,976.2 million, respectively. The 2025 available borrowings were collateralized by certain loans. The Bank has additional unencumbered collateral that could be pledged to the FRBSF Discount Window to increase borrowing liquidity.
As of June 30, 2025, the Bank has federal funds lines of credit with five major banks totaling $250.0 million. The Bank had no outstanding balances on its lines of credit as of June 30, 2025 or June 30, 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Aug 21, 2025 | Showing above |
| 2024 | Aug 22, 2024 | |
| 2023 | Aug 29, 2023 | |
| 2022 | Sep 8, 2022 | |
| 2021 | Aug 26, 2021 | |
| 2020 | Aug 26, 2020 | |
| 2019 | Aug 28, 2019 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.