AXOS FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | | | | | | | | | | |
| At June 30, |
| (Dollars in thousands, except par and stated value) | 2021 | | 2020 |
| ASSETS | | | |
| Cash and due from banks | $ | 715,624 | | | $ | 1,756,477 | |
| Cash segregated for regulatory purposes | 322,153 | | | 194,042 | |
| | | |
| | | |
| Total cash, cash equivalents, cash segregated | 1,037,777 | | | 1,950,519 | |
| Securities: | | | |
| Trading | 1,983 | | | 105 | |
| Available-for-sale | 187,335 | | | 187,627 | |
| | | |
| Stock of regulatory agencies | 19,995 | | | 20,610 | |
| Loans held for sale, carried at fair value | 29,768 | | | 51,995 | |
| Loans held for sale, lower of cost or fair value | 12,294 | | | 44,565 | |
| Loans—net of allowance for credit losses of $133.0 million as of June 2021 and $75.8 million as of June 2020 | 11,414,814 | | | 10,631,349 | |
| | | |
| | | |
| | | |
| | | |
| Mortgage servicing rights, carried at fair value | 17,911 | | | 10,675 | |
| Other real estate owned and repossessed vehicles | 6,782 | | | 6,408 | |
| Securities borrowed | 619,088 | | | 222,368 | |
| Customer, broker-dealer and clearing receivables | 369,815 | | | 220,266 | |
| Goodwill and other intangible assets—net | 115,972 | | | 125,389 | |
| Other assets | 432,031 | | | 380,024 | |
| | | |
| TOTAL ASSETS | $ | 14,265,565 | | | $ | 13,851,900 | |
| | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | |
| Deposits: | | | |
| Non-interest bearing | $ | 2,474,424 | | | $ | 1,936,661 | |
| Interest bearing | 8,341,373 | | | 9,400,033 | |
| Total deposits | 10,815,797 | | | 11,336,694 | |
| | | |
| Advances from the Federal Home Loan Bank | 353,500 | | | 242,500 | |
| Borrowings, subordinated notes and debentures | 221,358 | | | 235,789 | |
| | | |
| | | |
| Securities loaned | 728,988 | | | 255,945 | |
| Customer, broker-dealer and clearing payables | 535,425 | | | 347,614 | |
| Accounts payable and accrued liabilities and other liabilities | 209,561 | | | 202,512 | |
| Total liabilities | 12,864,629 | | | 12,621,054 | |
| | | |
| STOCKHOLDERS’ EQUITY: | | | |
| Preferred stock—$0.01 par value; 1,000,000 shares authorized; | | | |
| Series A—$10,000 stated value and liquidation preference per share; 0 shares issued and outstanding as of June 2021 and 515 shares issued and outstanding as of June 2020 | — | | | 5,063 | |
| | | |
| | | |
| Common stock—$0.01 par value; 150,000,000 shares authorized, 68,069,321 shares issued and 59,317,944 shares outstanding as of June 2021, 67,323,053 shares issued and 59,612,635 shares outstanding as of June 2020 | 681 | | | 673 | |
| Additional paid-in capital | 432,550 | | | 411,873 | |
| Accumulated other comprehensive income (loss)—net of tax | 2,507 | | | (937) | |
| Retained earnings | 1,187,728 | | | 1,009,299 | |
| Treasury stock, at cost; 8,751,377 shares as of June 2021 and 7,710,418 shares as of June 2020 | (222,530) | | | (195,125) | |
| Total stockholders’ equity | 1,400,936 | | | 1,230,846 | |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 14,265,565 | | | $ | 13,851,900 | |
AXOS FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| | | | | | | | | | | |
| | For the Quarters Ended June 30, |
| (Dollars in thousands, except earnings per share) | 2021 | | 2020 |
| INTEREST AND DIVIDEND INCOME: | | | |
| Loans, including fees | $ | 147,965 | | | $ | 137,194 | |
| Securities borrowed and customer receivables | 6,270 | | | 3,560 | |
| Investments | 2,686 | | | 3,389 | |
| Total interest and dividend income | 156,921 | | | 144,143 | |
| INTEREST EXPENSE: | | | |
| Deposits | 10,846 | | | 23,942 | |
| Advances from the Federal Home Loan Bank | 982 | | | 1,777 | |
| Securities loaned | 664 | | | 115 | |
| Other borrowings | 2,775 | | | 1,037 | |
| Total interest expense | 15,267 | | | 26,871 | |
| Net interest income | 141,654 | | | 117,272 | |
| Provision for credit losses | 1,250 | | | 6,500 | |
| Net interest income, after provision for credit losses | 140,404 | | | 110,772 | |
| NON-INTEREST INCOME: | | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Prepayment penalty fee income | 2,877 | | | 1,169 | |
| Gain on sale - other | (213) | | | 517 | |
| Mortgage banking income | 2,895 | | | 12,673 | |
| Broker-dealer fee income | 6,386 | | | 5,670 | |
| Banking and service fees | 4,856 | | | 8,673 | |
| Total non-interest income | 16,801 | | | 28,702 | |
| NON-INTEREST EXPENSE: | | | |
| Salaries and related costs | 37,209 | | | 37,409 | |
| Data processing | 12,947 | | | 8,887 | |
| Depreciation and amortization | 6,211 | | | 6,982 | |
| Professional services | 4,901 | | | 3,163 | |
| Advertising and promotional | 3,612 | | | 2,803 | |
| Occupancy and equipment | 4,163 | | | 3,180 | |
| Broker-dealer clearing charges | 3,166 | | | 2,162 | |
| FDIC and regulatory fees | 2,203 | | | 2,395 | |
| | | |
| General and administrative expense | 7,448 | | | 4,563 | |
| Total non-interest expense | 81,860 | | | 71,544 | |
| INCOME BEFORE INCOME TAXES | 75,345 | | | 67,930 | |
| INCOME TAXES | 21,090 | | | 22,630 | |
| NET INCOME | $ | 54,255 | | | $ | 45,300 | |
| NET INCOME ATTRIBUTABLE TO COMMON STOCK | $ | 54,255 | | | $ | 45,223 | |
| COMPREHENSIVE INCOME | $ | 54,469 | | | $ | 47,089 | |
| Basic earnings per share | $ | 0.92 | | | $ | 0.76 | |
| Diluted earnings per share | $ | 0.90 | | | $ | 0.75 | |
AXOS FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| | | | | | | | | | | | | | | | | |
| Year Ended June 30, |
| (Dollars in thousands, except earnings per share) | 2021 | | 2020 | | 2019 |
| INTEREST AND DIVIDEND INCOME: | | | | | |
| Loans, including fees | $ | 584,410 | | | $ | 582,748 | | | $ | 525,317 | |
| Securities borrowed and customer receivables | 20,466 | | | 16,585 | | | 8,746 | |
| Investments | 12,987 | | | 23,506 | | | 30,824 | |
| Total interest and dividend income | 617,863 | | | 622,839 | | | 564,887 | |
| INTEREST EXPENSE: | | | | | |
| Deposits | 60,529 | | | 126,916 | | | 117,080 | |
| Advances from the Federal Home Loan Bank | 4,672 | | | 11,988 | | | 32,834 | |
| Securities loaned | 1,496 | | | 679 | | | 748 | |
| Other borrowings | 12,424 | | | 5,645 | | | 5,620 | |
| Total interest expense | 79,121 | | | 145,228 | | | 156,282 | |
| Net interest income | 538,742 | | | 477,611 | | | 408,605 | |
| Provision for credit losses | 23,750 | | | 42,200 | | | 27,350 | |
| Net interest income, after provision for credit losses | 514,992 | | | 435,411 | | | 381,255 | |
| NON-INTEREST INCOME: | | | | | |
| Realized gain (loss) on sale of securities | — | | | — | | | 709 | |
| Other-than-temporary loss on securities: | | | | | |
| Other-than-temporary loss on securities: | — | | | — | | | (1,666) | |
| Less: Portion of other temporary impairment losses recognized in OCI | — | | | — | | | 845 | |
| Change to net impairment losses recognized in earnings on securities | — | | | — | | | (821) | |
| | | | | |
| Total unrealized loss on securities | — | | | — | | | (821) | |
| Prepayment penalty fee income | 7,166 | | | 5,993 | | | 5,851 | |
| Gain on sale - other | 491 | | | 6,871 | | | 6,160 | |
| Mortgage banking income | 42,150 | | | 20,646 | | | 5,267 | |
| Broker-dealer fee income | 26,317 | | | 23,210 | | | 11,737 | |
| Banking and service fees | 29,137 | | | 46,267 | | | 53,854 | |
| Total non-interest income | 105,261 | | | 102,987 | | | 82,757 | |
| NON-INTEREST EXPENSE: | | | | | |
| Salaries and related costs | 152,576 | | | 144,341 | | | 127,433 | |
| Data processing | 40,719 | | | 30,671 | | | 24,150 | |
| Depreciation and amortization | 24,124 | | | 24,443 | | | 16,471 | |
| Professional services | 22,241 | | | 11,095 | | | 11,916 | |
| Advertising and promotional | 14,212 | | | 14,523 | | | 14,710 | |
| Occupancy and equipment | 13,402 | | | 12,059 | | | 8,571 | |
| Broker-dealer clearing charges | 11,152 | | | 8,210 | | | 2,822 | |
| FDIC and regulatory fees | 10,603 | | | 5,538 | | | 9,005 | |
| | | | | |
| General and administrative expense | 25,481 | | | 24,886 | | | 36,128 | |
| Total non-interest expense | 314,510 | | | 275,766 | | | 251,206 | |
| INCOME BEFORE INCOME TAXES | 305,743 | | | 262,632 | | | 212,806 | |
| INCOME TAXES | 90,036 | | | 79,194 | | | 57,675 | |
| NET INCOME | $ | 215,707 | | | $ | 183,438 | | | $ | 155,131 | |
| NET INCOME ATTRIBUTABLE TO COMMON STOCK | $ | 215,518 | | | $ | 183,129 | | | $ | 154,822 | |
| COMPREHENSIVE INCOME | $ | 219,151 | | | $ | 182,485 | | | $ | 155,760 | |
| Basic earnings per share | $ | 3.64 | | | $ | 3.01 | | | $ | 2.50 | |
| Diluted earnings per share | $ | 3.56 | | | $ | 2.98 | | | $ | 2.48 | |
AXOS FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
| | | | | | | | | | | | | | | | | |
| Year Ended June 30, |
| (Dollars in thousands) | 2021 | | 2020 | | 2019 |
| NET INCOME | $ | 215,707 | | | $ | 183,438 | | | $ | 155,131 | |
| Net unrealized gain (loss) from available-for-sale securities, net of tax expense (benefit) of $1,495, $(381), and $562 for the years ended June 30, 2021, 2020 and 2019, respectively. | 3,444 | | | (953) | | | 1,741 | |
| Other-than-temporary impairment on securities sold, reclassified in other comprehensive income, net of tax expense (benefit) of $0, $0, and $(251) for the years ended June 30, 2021, 2020 and 2019, respectively. | — | | | — | | | (594) | |
| Reclassification of net (gain) loss from available-for-sale securities included in income, net of tax expense (benefit) of $0, $0, and $191 for the years ended June 30, 2021, 2020 and 2019, respectively. | — | | | — | | | (518) | |
| Other comprehensive income (loss) | $ | 3,444 | | | $ | (953) | | | $ | 629 | |
| Comprehensive income | $ | 219,151 | | | $ | 182,485 | | | $ | 155,760 | |
AXOS FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Preferred Stock | | Common Stock | | Additional
Paid-in
Capital | | Retained
Earnings | | Accumulated Other Comprehensive Income (Loss), Net of
Income Tax | | Treasury
Stock | | Total |
| | | | | Number of Shares | | | | | | | |
| (Dollars in thousands) | Shares | | Amount | | Issued | | Treasury | | Outstanding | | Amount | | | | | |
| Balance as of June 30, 2018 | 515 | | | $ | 5,063 | | | 65,796,060 | | | (3,107,996) | | | 62,688,064 | | | $ | 658 | | | $ | 366,515 | | | $ | 671,348 | | | $ | (613) | | | $ | (82,458) | | | $ | 960,513 | |
| Net income | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 155,131 | | | — | | | — | | | 155,131 | |
| Other comprehensive income (loss) | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 629 | | | — | | | 629 | |
| Cash dividends on preferred stock | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (309) | | | — | | | — | | | (309) | |
| | | | | | | | | | | | | | | | | | | | | |
| Purchase of treasury stock | — | | | — | | | — | | | (2,009,352) | | | (2,009,352) | | | — | | | — | | | — | | | — | | | (56,437) | | | (56,437) | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Stock-based compensation expense and restricted stock unit vesting | — | | | — | | | 767,862 | | | (317,757) | | | 450,105 | | | 8 | | | 23,430 | | | — | | | — | | | (9,915) | | | 13,523 | |
| | | | | | | | | | | | | | | | | | | | | |
| Balance as of June 30, 2019 | 515 | | | $ | 5,063 | | | 66,563,922 | | | (5,435,105) | | | 61,128,817 | | | $ | 666 | | | $ | 389,945 | | | $ | 826,170 | | | $ | 16 | | | $ | (148,810) | | | $ | 1,073,050 | |
| Net income | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 183,438 | | | — | | | — | | | 183,438 | |
| Other comprehensive income (loss) | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (953) | | | — | | | (953) | |
| Cash dividends on preferred stock | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (309) | | | — | | | — | | | (309) | |
| | | | | | | | | | | | | | | | | | | | | |
| Purchase of treasury stock | — | | | — | | | — | | | (1,970,464) | | | (1,970,464) | | | — | | | — | | | — | | | — | | | (38,858) | | | (38,858) | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Stock-based compensation expense and restricted stock unit vesting | — | | | — | | | 759,131 | | | (304,849) | | | 454,282 | | | 7 | | | 21,928 | | | — | | | — | | | (7,457) | | | 14,478 | |
| | | | | | | | | | | | | | | | | | | | | |
| Balance as of June 30, 2020 | 515 | | | $ | 5,063 | | | 67,323,053 | | | (7,710,418) | | | 59,612,635 | | | $ | 673 | | | $ | 411,873 | | | $ | 1,009,299 | | | $ | (937) | | | $ | (195,125) | | | $ | 1,230,846 | |
| Cumulative effect of change in accounting principle net of tax, adoption of ASU No. 2016-13 | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (37,088) | | | — | | | — | | | (37,088) | |
| Net income | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 215,707 | | | — | | | — | | | 215,707 | |
| Other comprehensive income (loss) | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 3,444 | | | — | | | 3,444 | |
| Cash dividends on preferred stock | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (103) | | | — | | | — | | | (103) | |
| | | | | | | | | | | | | | | | | | | | | |
| Preferred stock - Series A redemption | (515) | | | (5,063) | | | — | | | — | | | — | | | — | | | — | | | (87) | | | — | | | — | | | (5,150) | |
| | | | | | | | | | | | | | | | | | | | | |
| Purchase of treasury stock | — | | | — | | | — | | | (753,597) | | | (753,597) | | | — | | | — | | | — | | | — | | | (16,757) | | | (16,757) | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Stock-based compensation expense and restricted stock unit vesting | — | | | — | | | 746,268 | | | (287,362) | | | 458,906 | | | 8 | | | 20,677 | | | — | | | — | | | (10,648) | | | 10,037 | |
| | | | | | | | | | | | | | | | | | | | | |
| Balance as of June 30, 2021 | — | | | $ | — | | | 68,069,321 | | | (8,751,377) | | | 59,317,944 | | | $ | 681 | | | $ | 432,550 | | | $ | 1,187,728 | | | $ | 2,507 | | | $ | (222,530) | | | $ | 1,400,936 | |
| | | | | | | | | | | | | | | | | |
AXOS FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
|
|
| Year Ended June 30, |
| (Dollars in thousands) | 2021 | | 2020 | | 2019 |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | |
| Net income | $ | 215,707 | | | $ | 183,438 | | | $ | 155,131 | |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | | | | | |
| Accretion and amortization on securities, net | (365) | | | 291 | | | (264) | |
| Net accretion of discounts on loans | (7,050) | | | (35,493) | | | (30,176) | |
| Amortization of borrowing costs | 1,569 | | | 208 | | | 208 | |
| Amortization of operating lease right of use asset | 10,598 | | | 10,543 | | | — | |
| Stock-based compensation expense | 20,685 | | | 21,935 | | | 23,439 | |
| | | | | |
| Trading activity, (net) | (1,878) | | | 1,217 | | | — | |
| Net (gain) loss on sale of investment securities | — | | | — | | | (709) | |
| Impairment charge on securities | — | | | — | | | 821 | |
| Provision for credit losses | 23,750 | | | 42,200 | | | 27,350 | |
| Broker-dealer reserve for bad debt | — | | | — | | | 15,298 | |
| Deferred income taxes | (8,828) | | | (6,551) | | | (8,686) | |
| Origination of loans held for sale | (1,608,700) | | | (1,601,579) | | | (1,471,906) | |
| Unrealized (gain) loss on loans held for sale | 1,469 | | | (1,360) | | | (252) | |
| Gain on sales of loans held for sale | (42,641) | | | (27,517) | | | (11,427) | |
| Proceeds from sale of loans held for sale | 1,671,515 | | | 1,614,379 | | | 1,481,911 | |
| Amortization and change in fair value of mortgage servicing rights | 6,319 | | | 5,806 | | | 3,362 | |
| (Gain) loss on sale of other real estate and foreclosed assets | (201) | | | (449) | | | (283) | |
| Depreciation and amortization | 24,124 | | | 24,443 | | | 16,471 | |
| | | | | |
| Net changes in assets and liabilities which provide (use) cash: | | | | | |
| | | | | |
| | | | | |
| Securities borrowed | (396,720) | | | (77,662) | | | 13,192 | |
| Customer, broker-dealer and clearing receivables | (149,549) | | | (17,074) | | | 13,684 | |
| Other assets | (7,259) | | | (36,979) | | | (27,564) | |
| Securities loaned | 473,043 | | | 57,589 | | | (4,685) | |
| Customer, broker-dealer and clearing payables | 187,811 | | | 109,010 | | | (1,506) | |
| | | | | |
| Accounts payable and other liabilities | (817) | | | 17,723 | | | 11,012 | |
| Net cash provided by operating activities | $ | 412,582 | | | $ | 284,118 | | | $ | 204,421 | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | |
| Purchases of investment securities | (122,338) | | | (304,930) | | | (146,886) | |
| | | | | |
| Proceeds from sales of securities | 3,600 | | | — | | | 15,863 | |
| Proceeds from repayment of securities | 71,067 | | | 325,704 | | | 93,779 | |
| Purchase of stock of regulatory agencies | (305) | | | (55,870) | | | (204,206) | |
| Proceeds from redemption of stock of regulatory agencies | 920 | | | 55,536 | | | 203,611 | |
| Origination of loans held for investment | (5,761,303) | | | (6,573,568) | | | (6,756,832) | |
| Proceeds from sale of loans and leases held for investment | 80,049 | | | 37,300 | | | 119,881 | |
| Mortgage warehouse loans activity, net | (139,806) | | | (172,319) | | | (126,491) | |
| Proceeds from sales of other real estate owned and repossessed assets | 1,586 | | | 2,241 | | | 2,202 | |
| Cash paid for deposit acquisition | — | | | — | | | (14,747) | |
| | | | | |
| Acquisition of business activity, net of cash paid | — | | | — | | | 67,343 | |
| Purchases of loans, net of discounts and premiums | (3,619) | | | — | | | (11,525) | |
| Principal repayments on loans | 5,013,817 | | | 5,349,800 | | | 5,846,349 | |
| Purchases of furniture, equipment, software and intangibles | (10,437) | | | (12,333) | | | (20,082) | |
| Net cash used in investing activities | $ | (866,769) | | | $ | (1,348,439) | | | $ | (931,741) | |
|
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | |
| Net increase (decrease) in deposits | (520,897) | | | 2,353,521 | | | 997,823 | |
| Proceeds from the Federal Home Loan Bank term advances | — | | | 65,000 | | | — | |
| Repayments of the Federal Home Loan Bank term advances | (70,000) | | | (55,000) | | | (147,500) | |
| Net (repayment) proceeds of Federal Home Loan Bank other advances | 181,000 | | | (226,000) | | | 149,000 | |
| Redemption of subordinated notes | (51,000) | | | — | | | — | |
| Repayment of Paycheck Protection Program Liquidity Facility advances | (151,952) | | | — | | | — | |
| Proceeds from Paycheck Protection Program Liquidity Facility advances | — | | | 151,952 | | | — | |
| Net (repayment) proceeds of other borrowings | 14,700 | | | (85,300) | | | 21,700 | |
| | | | | |
| Tax payments related to settlement of restricted stock units | (10,648) | | | (7,457) | | | (9,916) | |
| Repurchase of treasury stock | (16,757) | | | (38,858) | | | (56,437) | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| Redemption of preferred stock, Series A | (5,150) | | | — | | | — | |
| Cash dividends paid on preferred stock | (103) | | | (386) | | | (232) | |
| Payment of debt issuance costs | (2,748) | | | — | | | — | |
| Proceeds from issuance of subordinated notes | 175,000 | | | — | | | 7,400 | |
| Net cash provided by financing activities | $ | (458,555) | | | $ | 2,157,472 | | | $ | 961,838 | |
| NET CHANGE IN CASH AND CASH EQUIVALENTS | (912,742) | | | 1,093,151 | | | 234,518 | |
| CASH AND CASH EQUIVALENTS—Beginning of year | 1,950,519 | | | 857,368 | | | 622,850 | |
| CASH AND CASH EQUIVALENTS—End of year | $ | 1,037,777 | | | $ | 1,950,519 | | | $ | 857,368 | |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | | | | | |
| Interest paid on interest-bearing liabilities | $ | 77,995 | | | $ | 145,452 | | | $ | 152,756 | |
| Income taxes paid | 92,506 | | | 80,430 | | | 64,117 | |
| Transfers to other real estate and repossessed vehicles | 1,903 | | | 1,315 | | | 850 | |
| Transfers from loans and leases held for investment to loans held for sale | 71,136 | | | 141,849 | | | 106,911 | |
| Transfers from loans held for sale to loans and leases held for investment | 29,616 | | | — | | | 1,714 | |
| Securities transferred from available-for-sale portfolio to other assets | 70,751 | | | 17,482 | | | — | |
| Loans held for investment sold, cash not received | — | | | 61,029 | | | — | |
| Operating lease liabilities for obtaining right of use assets | — | | | 82,950 | | | — | |
| | | | | |
| Preferred stock dividends declared but not paid | — | | | — | | | 77 | |
| | | | | |
| | | | | |
| | | | | |
| Impact of adoption of ASU No. 2016-13 on retained earnings | 37,088 | | | — | | | — | |
LOANS & ALLOWANCE FOR CREDIT LOSSES
The following table sets forth the composition of the loan portfolio as of the dates indicated:
| | | | | | | | | | | |
(Unaudited)
(Dollars in thousands) | June 30, 2021 | | June 30, 2020 |
| | | |
| Single Family - Mortgage & Warehouse | $ | 4,359,472 | | | $ | 4,722,304 | |
| Multifamily and Commercial Mortgage | 2,470,454 | | | 2,263,054 | |
| Commercial Real Estate | 3,180,453 | | | 2,297,920 | |
| Commercial & Industrial - Non-RE | 1,123,869 | | | 885,320 | |
| Auto & Consumer | 362,180 | | | 341,365 | |
| Other | 58,316 | | | 193,479 | |
| | | |
| | | |
| | | |
| Total gross loans | 11,554,744 | | | 10,703,442 | |
| Allowance for credit losses - loans | (132,958) | | | (75,807) | |
| Unaccreted premiums (discounts) and loan and lease fees | (6,972) | | | 3,714 | |
| Total net loans | $ | 11,414,814 | | | $ | 10,631,349 | |
SECURITIES
The amortized cost, carrying amount and fair value for the trading and available for sale securities at June 30, 2021 and June 30, 2020 were:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| June 30, 2021 |
| Trading | | Available for sale | | |
(Unaudited)
(Dollars in thousands) | Fair
Value | | Amortized
Cost | | Unrealized
Gains | | Unrealized
Losses | | Fair
Value | | | | | | | | |
| Mortgage-backed securities (MBS): | | | | | | | | | | | | | | | | | |
U.S agencies1 | $ | — | | | $ | 23,639 | | | $ | 420 | | | $ | (146) | | | $ | 23,913 | | | | | | | | | |
Non-agency2 | — | | | 65,174 | | | 2,862 | | | (421) | | | 67,615 | | | | | | | | | |
| Total mortgage-backed securities | — | | | 88,813 | | | 3,282 | | | (567) | | | 91,528 | | | | | | | | | |
| Non-MBS: | | | | | | | | | | | | | | | | | |
U.S. agencies1 | — | | | — | | | — | | | — | | | — | | | | | | | | | |
| Municipal | 1,983 | | | 3,466 | | | 99 | | | — | | | 3,565 | | | | | | | | | |
| Asset-backed securities and structured notes | — | | | 90,549 | | | 1,693 | | | — | | | 92,242 | | | | | | | | | |
| Total other debt securities | 1,983 | | | 94,015 | | | 1,792 | | | — | | | 95,807 | | | | | | | | | |
| Total debt securities | $ | 1,983 | | | $ | 182,828 | | | $ | 5,074 | | | $ | (567) | | | $ | 187,335 | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | June 30, 2020 |
| Trading | | Available for sale | | |
(Unaudited)
(Dollars in thousands) | Fair
Value | | Amortized
Cost | | Unrealized
Gains | | Unrealized
Losses | | Fair
Value | | | | | | | | |
| Mortgage-backed securities (MBS): | | | | | | | | | | | | | | | | | |
U.S agencies1 | $ | — | | | $ | 16,192 | | | $ | 634 | | | $ | — | | | $ | 16,826 | | | | | | | | | |
Non-agency2 | — | | | 18,180 | | | 1,024 | | | (872) | | | 18,332 | | | | | | | | | |
| Total mortgage-backed securities | — | | | 34,372 | | | 1,658 | | | (872) | | | 35,158 | | | | | | | | | |
| Non-MBS: | | | | | | | | | | | | | | | | | |
U.S. agencies1 | — | | | 1,799 | | | — | | | — | | | 1,799 | | | | | | | | | |
| Municipal | 105 | | | 10,550 | | | 44 | | | (194) | | | 10,400 | | | | | | | | | |
| Asset-backed securities and structured notes | — | | | 141,338 | | | 1 | | | (1,069) | | | 140,270 | | | | | | | | | |
| Total other debt securities | 105 | | | 153,687 | | | 45 | | | (1,263) | | | 152,469 | | | | | | | | | |
| Total debt securities | $ | 105 | | | $ | 188,059 | | | $ | 1,703 | | | $ | (2,135) | | | $ | 187,627 | | | | | | | | | |
1 Includes securities guaranteed by Ginnie Mae, a U.S. government agency, and the government sponsored enterprises Fannie Mae and Freddie Mac.
2 Private sponsors of securities collateralized primarily by first - lien mortgage loans on commercial properties or by pools of 1-4 family residential first mortgages. Primarily super senior securities secured by Alt-A or pay-option ARM mortgages.
DEPOSITS
The following table sets forth the composition of the deposit portfolio as of the dates indicated:
| | | | | | | | | | | | | | | | | | | | | | | |
| (Unaudited) | June 30, 2021 | | June 30, 2020 |
| (Dollars in thousands) | Amount | | Rate1 | | Amount | | Rate1 |
| Non-interest bearing | $ | 2,474,424 | | | — | % | | $ | 1,936,661 | | | — | % |
| Interest bearing: | | | | | | | |
| Demand | 3,369,845 | | | 0.15 | % | | 3,456,127 | | | 0.37 | % |
| Savings | 3,458,687 | | | 0.21 | % | | 3,697,188 | | | 0.78 | % |
| Total interest-bearing demand and savings | 6,828,532 | | | 0.18 | % | | 7,153,315 | | | 0.58 | % |
| Time deposits: | | | | | | | |
| $250 and under | 1,070,139 | | | 1.30 | % | | 1,584,034 | | | 2.12 | % |
| Greater than $250 | 442,702 | | | 1.03 | % | | 662,684 | | | 1.39 | % |
| Total time deposits | 1,512,841 | | | 1.22 | % | | 2,246,718 | | | 1.91 | % |
Total interest bearing2 | 8,341,373 | | | 0.37 | % | | 9,400,033 | | | 0.90 | % |
| Total deposits | $ | 10,815,797 | | | 0.29 | % | | $ | 11,336,694 | | | 0.75 | % |
1. Based on weighted-average stated interest rates at end of period.
2. The total interest-bearing includes brokered deposits of $621.4 million and $1,318.0 million as of June 30, 2021 and June 30, 2020, respectively, of which $380.0 million and $603.6 million, respectively, are time deposits classified as $250 and under.
The number of deposit accounts at the end of each of the last five fiscal years is set forth below:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| At June 30, |
| 2021 | | 2020 | | 2019 | | 2018 | | 2017 |
| Non-interest-bearing, prepaid and other | 36,726 | | | 3,361,965 | | | 3,743,334 | | | 3,535,904 | | | 3,113,128 | |
| Checking and savings accounts | 336,068 | | | 310,463 | | | 311,067 | | | 270,082 | | | 274,962 | |
| Time deposits | 12,815 | | | 18,450 | | | 23,447 | | | 2,309 | | | 2,748 | |
| Total number of deposit accounts | 385,609 | | | 3,690,878 | | | 4,077,848 | | | 3,808,295 | | | 3,390,838 | |
Our non-interest bearing, prepaid and other accounts contained two omnibus accounts that when condensed for regulatory reporting purposes result in 27,108 accounts, 16,706 accounts, 7,370 accounts, and 5,636 accounts for the years ended June 30, 2020, 2019, 2018, and 2017, respectively. The two omnibus accounts represented $351.9 million, $446.5 million, $402.9 million, and $366.8 million at June 30, 2020, 2019, 2018, and 2017, respectively. The decrease in the number of accounts is the result of the termination of our third-party prepaid card relationships, such as H&R Block, due to the reduction of our interchange fees effective July 1, 2020 as a result of the Durbin Amendment. See the Regulation of Banking Business in our Form 10-K for the year ended June 30, 2020 for additional information.
AVERAGE BALANCES, NET INTEREST INCOME, YIELDS EARNED AND RATES PAID
The following table presents information regarding (i) average balances; (ii) the total amount of interest income from interest-earning assets and the weighted average yields on such assets; (iii) the total amount of interest expense on interest-bearing liabilities and the weighted average rates paid on such liabilities; (iv) net interest income; (v) interest rate spread; and (vi) net interest margin:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| For the three months ended June 30, |
| 2021 | | 2020 |
(Unaudited)
(Dollars in thousands) | Average
Balance2 | | Interest
Income /
Expense | | Average
Yields
Earned /
Rates Paid1 | | Average
Balance2 | | Interest
Income /
Expense | | Average
Yields
Earned /
Rates Paid1 |
| Assets: | | | | | | | | | | | |
Loans3,4 | $ | 11,485,248 | | | $ | 147,965 | | | 5.15 | % | | $ | 10,570,886 | | | $ | 137,194 | | | 5.19 | % |
| | | | | | | | | | | |
| Interest-earning deposits in other financial institutions | 1,930,140 | | | 703 | | | 0.15 | % | | 930,622 | | | 365 | | | 0.16 | % |
Securities4 | 158,221 | | | 1,376 | | | 3.48 | % | | 231,396 | | | 2,858 | | | 4.94 | % |
| Securities borrowed and margin lending | 864,702 | | | 6,270 | | | 2.90 | % | | 297,163 | | | 3,560 | | | 4.79 | % |
| Stock of the regulatory agencies | 20,520 | | | 607 | | | 11.83 | % | | 28,719 | | | 166 | | | 2.31 | % |
| Total interest-earning assets | 14,458,831 | | | 156,921 | | | 4.34 | % | | 12,058,786 | | | 144,143 | | | 4.78 | % |
| Non-interest-earning assets | 438,287 | | | | | | | 411,004 | | | | | |
| Total assets | $ | 14,897,118 | | | | | | | $ | 12,469,790 | | | | | |
| Liabilities and Stockholders’ Equity: | | | | | | | | | | | |
| Interest-bearing demand and savings | $ | 7,441,814 | | | $ | 5,118 | | | 0.28 | % | | $ | 5,092,648 | | | $ | 10,222 | | | 0.80 | % |
| Time deposits | 1,632,525 | | | 5,728 | | | 1.40 | % | | 2,446,915 | | | 13,720 | | | 2.24 | % |
| Securities loaned | 412,385 | | | 664 | | | 0.64 | % | | 153,573 | | | 115 | | | 0.30 | % |
| | | | | | | | | | | |
| Advances from the FHLB | 171,808 | | | 982 | | | 2.29 | % | | 807,680 | | | 1,777 | | | 0.88 | % |
| Borrowings, subordinated notes and debentures | 274,664 | | | 2,775 | | | 4.04 | % | | 83,228 | | | 1,037 | | | 4.98 | % |
| Total interest-bearing liabilities | 9,933,196 | | | 15,267 | | | 0.61 | % | | 8,584,044 | | | 26,871 | | | 1.25 | % |
| Non-interest-bearing demand deposits | 2,586,766 | | | | | | | 2,139,803 | | | | | |
| Other non-interest-bearing liabilities | 981,989 | | | | | | | 510,889 | | | | | |
| Stockholders’ equity | 1,395,167 | | | | | | | 1,235,054 | | | | | |
| Total liabilities and stockholders’ equity | $ | 14,897,118 | | | | | | | $ | 12,469,790 | | | | | |
| Net interest income | | | $ | 141,654 | | | | | | | $ | 117,272 | | | |
Interest rate spread5 | | | | | 3.73 | % | | | | | | 3.53 | % |
Net interest margin6 | | | | | 3.92 | % | | | | | | 3.89 | % |
1 Annualized.
2 Average balances are obtained from daily data.
3 Loans include loans held for sale, loan premiums and unearned fees.
4 Interest income includes reductions for amortization of loan and investment securities premiums and earnings from accretion of discounts and loan fees. Loans include average balances of $26.9 million and $27.7 million of Community Reinvestment Act loans which are taxed at a reduced rate for the 2021 and 2020 three-month periods respectively.
5 Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate paid on interest-bearing liabilities.
6 Net interest margin represents net interest income as a percentage of average interest-earning assets.
AVERAGE BALANCES, NET INTEREST INCOME, YIELDS EARNED AND RATES PAID
The following tables set forth, for the periods indicated, information regarding (i) average balances; (ii) the total amount of interest income from interest-earning assets and the weighted average yields on such assets; (iii) the total amount of interest expense on interest-bearing liabilities and the weighted average rates paid on such liabilities; (iv) net interest income; (v) interest rate spread; and (vi) net interest margin:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| For the Fiscal Years Ended June 30, |
| 2021 | | 2020 | | 2019 |
| (Unaudited)(Dollars in thousands) | Average
Balance1 | | Interest
Income /
Expense | | Average
Yields
Earned /
Rates Paid | | Average
Balance1 | | Interest
Income /
Expense | | Average
Yields
Earned /
Rates Paid | | Average
Balance1 | | Interest
Income /
Expense | | Average
Yields
Earned /
Rates Paid |
| Assets: | | | | | | | | | | | | | | | | | |
Loans2,3 | $ | 11,332,020 | | | $ | 584,410 | | | 5.16 | % | | $ | 10,149,867 | | | $ | 582,748 | | | 5.74 | % | | $ | 8,974,820 | | | $ | 525,317 | | | 5.85 | % |
| | | | | | | | | | | | | | | | | |
| Interest-earning deposits in other financial institutions | 1,600,811 | | | 2,185 | | | 0.14 | % | | 833,612 | | | 10,906 | | | 1.31 | % | | 631,228 | | | 13,495 | | | 2.14 | % |
Securities3 | 192,420 | | | 9,560 | | | 4.97 | % | | 217,598 | | | 11,061 | | | 5.08 | % | | 210,189 | | | 13,943 | | | 6.63 | % |
| Securities borrowed and margin lending | 613,735 | | | 20,466 | | | 3.33 | % | | 362,063 | | | 16,585 | | | 4.58 | % | | 173,829 | | | 8,746 | | | 5.03 | % |
| Stock of the regulatory agencies | 20,588 | | | 1,242 | | | 6.03 | % | | 28,776 | | | 1,539 | | | 5.35 | % | | 41,078 | | | 3,386 | | | 8.24 | % |
| Total interest-earning assets | 13,759,574 | | | 617,863 | | | 4.49 | % | | 11,591,916 | | | 622,839 | | | 5.37 | % | | 10,031,144 | | | 564,887 | | | 5.63 | % |
| Non-interest-earning assets | 394,085 | | | | | | | 395,789 | | | | | | | 234,993 | | | | | |
| Total assets | $ | 14,153,659 | | | | | | | $ | 11,987,705 | | | | | | | $ | 10,266,137 | | | | | |
| Liabilities and Stockholders’ Equity: | | | | | | | | | | | | | | | | | |
| Interest-bearing demand and savings | $ | 7,204,698 | | | $ | 29,031 | | | 0.40 | % | | $ | 4,844,700 | | | $ | 66,883 | | | 1.38 | % | | $ | 3,906,833 | | | $ | 61,391 | | | 1.57 | % |
| Time deposits | 1,825,795 | | | 31,498 | | | 1.73 | % | | 2,482,151 | | | 60,033 | | | 2.42 | % | | 2,322,039 | | | 55,689 | | | 2.40 | % |
| Securities loaned | 412,385 | | | 1,496 | | | 0.36 | % | | 247,420 | | | 679 | | | 0.27 | % | | 221,469 | | | 748 | | | 0.34 | % |
| | | | | | | | | | | | | | | | | |
| Advances from the FHLB | 211,077 | | | 4,672 | | | 2.21 | % | | 747,358 | | | 11,988 | | | 1.60 | % | | 1,397,460 | | | 32,834 | | | 2.35 | % |
| Borrowings, subordinated notes and debentures | 340,699 | | | 12,424 | | | 3.65 | % | | 103,652 | | | 5,645 | | | 5.45 | % | | 104,287 | | | 5,620 | | | 5.39 | % |
| Total interest-bearing liabilities | 9,994,654 | | | 79,121 | | | 0.79 | % | | 8,425,281 | | | 145,228 | | | 1.72 | % | | 7,952,088 | | | 156,282 | | | 1.97 | % |
| Non-interest-bearing demand deposits | 2,182,009 | | | | | | | 1,990,005 | | | | | | | 1,227,285 | | | | | |
| Other non-interest-bearing liabilities | 671,581 | | | | | | | 397,506 | | | | | | | 76,651 | | | | | |
| Stockholders’ equity | 1,305,415 | | | | | | | 1,174,913 | | | | | | | 1,010,113 | | | | | |
| Total liabilities and stockholders’ equity | $ | 14,153,659 | | | | | | | $ | 11,987,705 | | | | | | | $ | 10,266,137 | | | | | |
| Net interest income | | | $ | 538,742 | | | | | | | $ | 477,611 | | | | | | | $ | 408,605 | | | |
Interest rate spread4 | | | | | 3.70 | % | | | | | | 3.65 | % | | | | | | 3.66 | % |
Net interest margin5 | | | | | 3.92 | % | | | | | | 4.12 | % | | | | | | 4.07 | % |
1 Average balances are obtained from daily data.
2 Loans include loans held for sale, loan premiums and unearned fees.
3 Interest income includes reductions for amortization of loan and investment securities premiums and earnings from accretion of discounts and loan fees. Loans include average balances of $27.2 million, $28.0 million, and $28.7 million of Community Reinvestment Act loans which are taxed at a reduced rate for the 2021 2020, and 2019 fiscal years respectively.
4 Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate paid on interest-bearing liabilities.
5 Net interest margin represents net interest income as a percentage of average interest-earning assets.
AVERAGE BALANCES, NET INTEREST INCOME, YIELDS EARNED AND RATES PAID
BANKING BUSINESS
The following table presents our Banking segment’s information regarding (i) average balances; (ii) the total amount of interest income from interest-earning assets and the weighted average yields on such assets; (iii) the total amount of interest expense on interest-bearing liabilities and the weighted average rates paid on such liabilities; (iv) net interest income; (v) interest rate spread; and (vi) net interest margin for the three months ended June 30, 2021 and 2020:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Three Months Ended |
| June 30, |
| | 2021 | | 2020 |
| (Dollars in thousands) | Average Balance1 | | Interest
Income/
Expense | | Average Yields Earned/Rates Paid2 | | Average Balance1 | | Interest
Income/
Expense | | Average Yields Earned/Rates Paid2 |
| Assets: | | | | | | | | | | | |
Loans3, 4 | $ | 11,444,379 | | | $ | 147,235 | | | 5.15 | % | | $ | 10,516,828 | | | $ | 136,532 | | | 5.19 | % |
| Interest-earning deposits in other financial institutions | 1,579,835 | | | 413 | | | 0.10 | % | | 763,989 | | | 192 | | | 0.10 | % |
Securities4 | 182,874 | | | 1,505 | | | 3.29 | % | | 269,288 | | | 3,137 | | | 4.66 | % |
| Stock of the regulatory agencies | 17,250 | | | 301 | | | 6.98 | % | | 25,474 | | | 165 | | | 2.59 | % |
| Total interest-earning assets | 13,224,338 | | | 149,454 | | | 4.52 | % | | 11,575,579 | | | 140,026 | | | 4.84 | % |
| Non-interest-earning assets | 217,543 | | | | | | | 185,795 | | | | | |
| Total assets | $ | 13,441,881 | | | | | | | $ | 11,761,374 | | | | | |
| Liabilities and Stockholders’ Equity: | | | | | | | | | | | |
| Interest-bearing demand and savings | $ | 7,553,737 | | | $ | 5,213 | | | 0.28 | % | | $ | 5,108,866 | | | $ | 10,254 | | | 0.80 | % |
| Time deposits | 1,632,525 | | | 5,728 | | | 1.40 | % | | 2,446,915 | | | 13,720 | | | 2.24 | % |
| | | | | | | | | | | |
| Advances from the FHLB | 171,808 | | | 982 | | | 2.29 | % | | 807,680 | | | 1,777 | | | 0.88 | % |
Borrowings, subordinated notes and debentures
| 44,983 | | | 40 | | | 0.36 | % | | 12,416 | | | 11 | | | 0.35 | % |
| Total interest-bearing liabilities | 9,403,053 | | | 11,963 | | | 0.51 | % | | 8,375,877 | | | 25,762 | | | 1.23 | % |
| Non-interest-bearing demand deposits | 2,629,016 | | | | | | | 2,148,671 | | | | | |
| Other non-interest-bearing liabilities | 104,885 | | | | | | | 98,020 | | | | | |
| Stockholders’ equity | 1,304,927 | | | | | | | 1,138,806 | | | | | |
| Total liabilities and stockholders’ equity | $ | 13,441,881 | | | | | | | $ | 11,761,374 | | | | | |
| Net interest income | | | $ | 137,491 | | | | | | | $ | 114,264 | | | |
Interest rate spread5 | | | | | 4.01 | % | | | | | | 3.61 | % |
Net interest margin6 | | | | | 4.16 | % | | | | | | 3.95 | % |
1. Average balances are obtained from daily data.
2. Annualized.
3. Loans include loans held for sale, loan premiums and unearned fees.
4. Interest income includes reductions for amortization of loan and investment securities premiums and earnings from accretion of discounts and loan fees. Loans include average balances of $26.9 million and $27.7 million of Community Reinvestment Act loans which are taxed at a reduced rate for the 2021 and 2020 three-month periods respectively.
5. Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate paid on interest-bearing liabilities.
6. Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.
SECURITIES BUSINESS
Selected information concerning Axos Clearing LLC follows as of and for the three months ended:
| | | | | | | | | | | |
| (Dollars in thousands) | June 30, 2021 | | June 30, 2020 |
| Compensation as a % of net revenue | 32.4 | % | | 39.2 | % |
| FDIC insured program balances at banks (end of period) | $ | 730,248 | | | $ | 450,251 | |
| Customer margin balances (end of period) | $ | 327,148 | | | $ | 206,702 | |
| Customer funds on deposit, including short credits (end of period) | $ | 322,153 | | | $ | 194,042 | |
| | | |
| Clearing: | | | |
| Total tickets | 2,053,362 | | | 1,228,635 | |
| Correspondents (end of period) | 69 | | | 61 | |
| | | |
| Securities lending: | | | |
| Interest-earning assets – stock borrowed (end of period) | $ | 619,088 | | | $ | 222,368 | |
| Interest-bearing liabilities – stock loaned (end of period) | $ | 728,988 | | | $ | 255,945 | |
