000129970906/302021Q2FALSEus-gaap:AccountingStandardsUpdate201613Memberus-gaap:AccountingStandardsUpdate201613Memberus-gaap:AccountingStandardsUpdate201613Memberus-gaap:AccountingStandardsUpdate201613Memberus-gaap:AccountingStandardsUpdate201613Member33.3333.3333.332525252500012997092020-07-012020-12-310001299709us-gaap:CommonStockMember2020-07-012020-12-310001299709ax:Subordinated625NotesDue2026Member2020-07-012020-12-31xbrli:shares00012997092021-01-22iso4217:USD00012997092020-12-3100012997092020-06-30iso4217:USDxbrli:shares0001299709us-gaap:SeriesAPreferredStockMember2020-12-310001299709us-gaap:SeriesAPreferredStockMember2020-06-3000012997092020-10-012020-12-3100012997092019-10-012019-12-3100012997092019-07-012019-12-310001299709us-gaap:PreferredStockMember2020-09-300001299709us-gaap:CommonStockMember2020-09-300001299709us-gaap:TreasuryStockMember2020-09-300001299709us-gaap:AdditionalPaidInCapitalMember2020-09-300001299709us-gaap:RetainedEarningsMember2020-09-300001299709us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-3000012997092020-09-300001299709us-gaap:RetainedEarningsMember2020-10-012020-12-310001299709us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-10-012020-12-310001299709us-gaap:PreferredStockMember2020-10-012020-12-310001299709us-gaap:TreasuryStockMember2020-10-012020-12-310001299709us-gaap:CommonStockMember2020-10-012020-12-310001299709us-gaap:AdditionalPaidInCapitalMember2020-10-012020-12-310001299709us-gaap:PreferredStockMember2020-12-310001299709us-gaap:CommonStockMember2020-12-310001299709us-gaap:TreasuryStockMember2020-12-310001299709us-gaap:AdditionalPaidInCapitalMember2020-12-310001299709us-gaap:RetainedEarningsMember2020-12-310001299709us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001299709us-gaap:PreferredStockMember2020-06-300001299709us-gaap:CommonStockMember2020-06-300001299709us-gaap:TreasuryStockMember2020-06-300001299709us-gaap:AdditionalPaidInCapitalMember2020-06-300001299709us-gaap:RetainedEarningsMember2020-06-300001299709us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-3000012997092019-07-012020-06-300001299709srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RetainedEarningsMember2020-06-300001299709srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-06-300001299709us-gaap:RetainedEarningsMember2020-07-012020-12-310001299709us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-012020-12-310001299709us-gaap:PreferredStockMember2020-07-012020-12-310001299709us-gaap:TreasuryStockMember2020-07-012020-12-310001299709us-gaap:CommonStockMember2020-07-012020-12-310001299709us-gaap:AdditionalPaidInCapitalMember2020-07-012020-12-310001299709us-gaap:PreferredStockMember2019-09-300001299709us-gaap:CommonStockMember2019-09-300001299709us-gaap:TreasuryStockMember2019-09-300001299709us-gaap:AdditionalPaidInCapitalMember2019-09-300001299709us-gaap:RetainedEarningsMember2019-09-300001299709us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-09-3000012997092019-09-300001299709us-gaap:RetainedEarningsMember2019-10-012019-12-310001299709us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-10-012019-12-310001299709us-gaap:CommonStockMember2019-10-012019-12-310001299709us-gaap:TreasuryStockMember2019-10-012019-12-310001299709us-gaap:AdditionalPaidInCapitalMember2019-10-012019-12-310001299709us-gaap:PreferredStockMember2019-12-310001299709us-gaap:CommonStockMember2019-12-310001299709us-gaap:TreasuryStockMember2019-12-310001299709us-gaap:AdditionalPaidInCapitalMember2019-12-310001299709us-gaap:RetainedEarningsMember2019-12-310001299709us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-3100012997092019-12-310001299709us-gaap:PreferredStockMember2019-06-300001299709us-gaap:CommonStockMember2019-06-300001299709us-gaap:TreasuryStockMember2019-06-300001299709us-gaap:AdditionalPaidInCapitalMember2019-06-300001299709us-gaap:RetainedEarningsMember2019-06-300001299709us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-06-3000012997092019-06-300001299709us-gaap:RetainedEarningsMember2019-07-012019-12-310001299709us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-07-012019-12-310001299709us-gaap:CommonStockMember2019-07-012019-12-310001299709us-gaap:TreasuryStockMember2019-07-012019-12-310001299709us-gaap:AdditionalPaidInCapitalMember2019-07-012019-12-3100012997092020-07-012020-09-300001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberax:SingleFamilyMortgageSecuredMembersrt:ScenarioPreviouslyReportedMember2020-07-010001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberax:WarehouseLoansMembersrt:ScenarioPreviouslyReportedMember2020-07-010001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberax:FinancingLoanMembersrt:ScenarioPreviouslyReportedMember2020-07-010001299709ax:ResidentialPortfolioMultifamilyRealEstateSegmentMembersrt:ScenarioPreviouslyReportedMember2020-07-010001299709us-gaap:CommercialRealEstatePortfolioSegmentMembersrt:ScenarioPreviouslyReportedMember2020-07-010001299709us-gaap:CommercialPortfolioSegmentMembersrt:ScenarioPreviouslyReportedMember2020-07-010001299709us-gaap:ConsumerPortfolioSegmentMembersrt:ScenarioPreviouslyReportedMember2020-07-010001299709ax:OtherPortfolioSegmentMembersrt:ScenarioPreviouslyReportedMember2020-07-010001299709srt:ScenarioPreviouslyReportedMember2020-07-010001299709ax:ResidentialPortfolioMultifamilyRealEstateSegmentMemberus-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberax:RevisionOfPriorPeriodAdjustmentToCommercialRealEstateMortgageToMultifamilyAndCommercialMortgageMember2020-07-010001299709us-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberax:RevisionOfPriorPeriodAdjustmentToCommercialRealEstateMortgageToMultifamilyAndCommercialMortgageMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2020-07-010001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberax:FinancingLoanMemberus-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberax:RevisionOfPriorPeriodAdjustmentToMultifamilyAndSingleFamilyFinancingLoansToCommercialRealEstateMember2020-07-010001299709ax:ResidentialPortfolioMultifamilyRealEstateSegmentMemberus-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberax:RevisionOfPriorPeriodAdjustmentToMultifamilyAndSingleFamilyFinancingLoansToCommercialRealEstateMember2020-07-010001299709us-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberax:RevisionOfPriorPeriodAdjustmentToMultifamilyAndSingleFamilyFinancingLoansToCommercialRealEstateMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2020-07-010001299709us-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberax:RevisionOfPriorPeriodAdjustmentToRealEstateSecuredCommercialAndIndustrialToCommercialRealEstateMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2020-07-010001299709us-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberax:RevisionOfPriorPeriodAdjustmentToRealEstateSecuredCommercialAndIndustrialToCommercialRealEstateMemberus-gaap:CommercialPortfolioSegmentMember2020-07-010001299709us-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:ConsumerPortfolioSegmentMemberax:RevisionOfPriorPeriodAdjustmentToUnsecuredConsumerLoansToAutoAndConsumerMember2020-07-010001299709us-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberax:RevisionOfPriorPeriodAdjustmentToUnsecuredConsumerLoansToAutoAndConsumerMemberax:OtherPortfolioSegmentMember2020-07-010001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberax:RevisionOfPriorPeriodAdjustmentToSingleFamilyWarehouseAndMortgageCombinedMemberus-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberax:SingleFamilyMortgageSecuredMember2020-07-010001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberax:RevisionOfPriorPeriodAdjustmentToSingleFamilyWarehouseAndMortgageCombinedMemberax:WarehouseLoansMemberus-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-07-010001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberax:RevisionOfPriorPeriodAdjustmentToSingleFamilyWarehouseAndMortgageCombinedMemberax:FinancingLoanMemberus-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-07-010001299709us-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:CommercialPortfolioSegmentMemberax:RevisionOfPriorPeriodAdjustmentToOtherReclassificationsMember2020-07-010001299709us-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberax:RevisionOfPriorPeriodAdjustmentToOtherReclassificationsMemberax:OtherPortfolioSegmentMember2020-07-010001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2020-07-010001299709ax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2020-07-010001299709us-gaap:CommercialRealEstatePortfolioSegmentMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2020-07-010001299709us-gaap:CommercialPortfolioSegmentMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2020-07-010001299709us-gaap:ConsumerPortfolioSegmentMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2020-07-010001299709ax:OtherPortfolioSegmentMembersrt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2020-07-010001299709srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2020-07-010001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberus-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMembersrt:RestatementAdjustmentMemberax:SingleFamilyMortgageSecuredMember2020-07-010001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberax:WarehouseLoansMemberus-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMembersrt:RestatementAdjustmentMember2020-07-010001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberax:FinancingLoanMemberus-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMembersrt:RestatementAdjustmentMember2020-07-010001299709ax:ResidentialPortfolioMultifamilyRealEstateSegmentMemberus-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMembersrt:RestatementAdjustmentMember2020-07-010001299709us-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMembersrt:RestatementAdjustmentMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2020-07-010001299709us-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMembersrt:RestatementAdjustmentMemberus-gaap:CommercialPortfolioSegmentMember2020-07-010001299709us-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMembersrt:RestatementAdjustmentMemberus-gaap:ConsumerPortfolioSegmentMember2020-07-010001299709us-gaap:AccountingStandardsUpdate201613Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMembersrt:RestatementAdjustmentMemberax:OtherPortfolioSegmentMember2020-07-010001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMember2020-07-010001299709ax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMember2020-07-010001299709us-gaap:CommercialRealEstatePortfolioSegmentMember2020-07-010001299709us-gaap:CommercialPortfolioSegmentMember2020-07-010001299709us-gaap:ConsumerPortfolioSegmentMember2020-07-010001299709ax:OtherPortfolioSegmentMember2020-07-0100012997092020-07-010001299709us-gaap:MunicipalBondsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2020-12-310001299709us-gaap:FairValueInputsLevel2Memberus-gaap:MunicipalBondsMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709us-gaap:FairValueInputsLevel3Memberus-gaap:MunicipalBondsMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709us-gaap:MunicipalBondsMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709us-gaap:AgencySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2020-12-310001299709us-gaap:AgencySecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709us-gaap:AgencySecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709us-gaap:AgencySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709ax:AgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2020-12-310001299709us-gaap:FairValueInputsLevel2Memberax:AgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709us-gaap:FairValueInputsLevel3Memberax:AgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709ax:AgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709us-gaap:FairValueMeasurementsRecurringMemberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueInputsLevel1Member2020-12-310001299709us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberax:NonAgencyResidentialMortgageBackedSecuritiesMember2020-12-310001299709us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberax:NonAgencyResidentialMortgageBackedSecuritiesMember2020-12-310001299709us-gaap:FairValueMeasurementsRecurringMemberax:NonAgencyResidentialMortgageBackedSecuritiesMember2020-12-310001299709us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberax:AssetbackedSecuritiesandStructuredNotesMember2020-12-310001299709us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberax:AssetbackedSecuritiesandStructuredNotesMember2020-12-310001299709us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberax:AssetbackedSecuritiesandStructuredNotesMember2020-12-310001299709us-gaap:FairValueMeasurementsRecurringMemberax:AssetbackedSecuritiesandStructuredNotesMember2020-12-310001299709us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2020-12-310001299709us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709us-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709us-gaap:MunicipalBondsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2020-06-300001299709us-gaap:FairValueInputsLevel2Memberus-gaap:MunicipalBondsMemberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709us-gaap:FairValueInputsLevel3Memberus-gaap:MunicipalBondsMemberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709us-gaap:MunicipalBondsMemberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709us-gaap:AgencySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2020-06-300001299709us-gaap:AgencySecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709us-gaap:AgencySecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709us-gaap:AgencySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709ax:AgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2020-06-300001299709us-gaap:FairValueInputsLevel2Memberax:AgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709us-gaap:FairValueInputsLevel3Memberax:AgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709ax:AgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709us-gaap:FairValueMeasurementsRecurringMemberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueInputsLevel1Member2020-06-300001299709us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberax:NonAgencyResidentialMortgageBackedSecuritiesMember2020-06-300001299709us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberax:NonAgencyResidentialMortgageBackedSecuritiesMember2020-06-300001299709us-gaap:FairValueMeasurementsRecurringMemberax:NonAgencyResidentialMortgageBackedSecuritiesMember2020-06-300001299709us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberax:AssetbackedSecuritiesandStructuredNotesMember2020-06-300001299709us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberax:AssetbackedSecuritiesandStructuredNotesMember2020-06-300001299709us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberax:AssetbackedSecuritiesandStructuredNotesMember2020-06-300001299709us-gaap:FairValueMeasurementsRecurringMemberax:AssetbackedSecuritiesandStructuredNotesMember2020-06-300001299709us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2020-06-300001299709us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709us-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberax:NonAgencyResidentialMortgageBackedSecuritiesMember2020-09-300001299709ax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-09-300001299709us-gaap:DerivativeFinancialInstrumentsAssetsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-09-300001299709us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-09-300001299709us-gaap:MortgageBankingMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberax:NonAgencyResidentialMortgageBackedSecuritiesMember2020-10-012020-12-310001299709ax:MortgageServicingRightsMemberus-gaap:MortgageBankingMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-10-012020-12-310001299709us-gaap:DerivativeFinancialInstrumentsAssetsMemberus-gaap:MortgageBankingMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-10-012020-12-310001299709us-gaap:MortgageBankingMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-10-012020-12-310001299709us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberax:NonAgencyResidentialMortgageBackedSecuritiesMember2020-10-012020-12-310001299709ax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-10-012020-12-310001299709us-gaap:DerivativeFinancialInstrumentsAssetsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-10-012020-12-310001299709us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-10-012020-12-310001299709ax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709us-gaap:DerivativeFinancialInstrumentsAssetsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709ax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709us-gaap:DerivativeFinancialInstrumentsAssetsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709us-gaap:MortgageBankingMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberax:NonAgencyResidentialMortgageBackedSecuritiesMember2020-07-012020-12-310001299709ax:MortgageServicingRightsMemberus-gaap:MortgageBankingMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-07-012020-12-310001299709us-gaap:DerivativeFinancialInstrumentsAssetsMemberus-gaap:MortgageBankingMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-07-012020-12-310001299709us-gaap:MortgageBankingMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-07-012020-12-310001299709us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberax:NonAgencyResidentialMortgageBackedSecuritiesMember2020-07-012020-12-310001299709ax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-07-012020-12-310001299709us-gaap:DerivativeFinancialInstrumentsAssetsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-07-012020-12-310001299709us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-07-012020-12-310001299709us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberax:NonAgencyResidentialMortgageBackedSecuritiesMember2019-09-300001299709ax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-09-300001299709us-gaap:DerivativeFinancialInstrumentsAssetsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-09-300001299709us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-09-300001299709us-gaap:MortgageBankingMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberax:NonAgencyResidentialMortgageBackedSecuritiesMember2019-10-012019-12-310001299709ax:MortgageServicingRightsMemberus-gaap:MortgageBankingMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-10-012019-12-310001299709us-gaap:DerivativeFinancialInstrumentsAssetsMemberus-gaap:MortgageBankingMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-10-012019-12-310001299709us-gaap:MortgageBankingMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-10-012019-12-310001299709us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberax:NonAgencyResidentialMortgageBackedSecuritiesMember2019-10-012019-12-310001299709ax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-10-012019-12-310001299709us-gaap:DerivativeFinancialInstrumentsAssetsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-10-012019-12-310001299709us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-10-012019-12-310001299709us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberax:NonAgencyResidentialMortgageBackedSecuritiesMember2019-12-310001299709ax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-12-310001299709us-gaap:DerivativeFinancialInstrumentsAssetsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-12-310001299709us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-12-310001299709us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberax:NonAgencyResidentialMortgageBackedSecuritiesMember2019-06-300001299709ax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-06-300001299709us-gaap:DerivativeFinancialInstrumentsAssetsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-06-300001299709us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-06-300001299709us-gaap:MortgageBankingMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberax:NonAgencyResidentialMortgageBackedSecuritiesMember2019-07-012019-12-310001299709ax:MortgageServicingRightsMemberus-gaap:MortgageBankingMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-07-012019-12-310001299709us-gaap:DerivativeFinancialInstrumentsAssetsMemberus-gaap:MortgageBankingMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-07-012019-12-310001299709us-gaap:MortgageBankingMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-07-012019-12-310001299709us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberax:NonAgencyResidentialMortgageBackedSecuritiesMember2019-07-012019-12-310001299709ax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-07-012019-12-310001299709us-gaap:DerivativeFinancialInstrumentsAssetsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-07-012019-12-310001299709us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-07-012019-12-310001299709us-gaap:FairValueMeasurementsRecurringMember2020-07-012020-12-31xbrli:pure0001299709srt:MinimumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputConstantPrepaymentRateMemberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709srt:MaximumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputConstantPrepaymentRateMemberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputConstantPrepaymentRateMembersrt:WeightedAverageMemberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709srt:MinimumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDefaultRateMemberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709srt:MaximumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDefaultRateMemberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709us-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberus-gaap:MeasurementInputDefaultRateMemberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709srt:MinimumMemberus-gaap:FairValueInputsLevel3Memberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MeasurementInputLossSeverityMember2020-12-310001299709srt:MaximumMemberus-gaap:FairValueInputsLevel3Memberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MeasurementInputLossSeverityMember2020-12-310001299709us-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MeasurementInputLossSeverityMember2020-12-310001299709srt:MinimumMemberus-gaap:MeasurementInputDiscountRateMemberus-gaap:FairValueInputsLevel3Memberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709srt:MaximumMemberus-gaap:MeasurementInputDiscountRateMemberus-gaap:FairValueInputsLevel3Memberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709us-gaap:MeasurementInputDiscountRateMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709srt:MinimumMemberax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputConstantPrepaymentRateMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709srt:MaximumMemberax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputConstantPrepaymentRateMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709ax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputConstantPrepaymentRateMembersrt:WeightedAverageMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-31ax:Y0001299709srt:MinimumMemberus-gaap:MeasurementInputExpectedTermMemberax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709srt:MaximumMemberus-gaap:MeasurementInputExpectedTermMemberax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709us-gaap:MeasurementInputExpectedTermMemberax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709srt:MinimumMemberus-gaap:MeasurementInputDiscountRateMemberax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709srt:MaximumMemberus-gaap:MeasurementInputDiscountRateMemberax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709us-gaap:MeasurementInputDiscountRateMemberax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709ax:ProjectedProfitofUnderlyingLoansMembersrt:MinimumMemberus-gaap:DerivativeFinancialInstrumentsAssetsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709ax:ProjectedProfitofUnderlyingLoansMemberus-gaap:DerivativeFinancialInstrumentsAssetsMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709ax:ProjectedProfitofUnderlyingLoansMemberus-gaap:DerivativeFinancialInstrumentsAssetsMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001299709srt:MinimumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputConstantPrepaymentRateMemberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709srt:MaximumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputConstantPrepaymentRateMemberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputConstantPrepaymentRateMembersrt:WeightedAverageMemberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709srt:MinimumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDefaultRateMemberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709srt:MaximumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDefaultRateMemberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709us-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberus-gaap:MeasurementInputDefaultRateMemberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709srt:MinimumMemberus-gaap:FairValueInputsLevel3Memberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MeasurementInputLossSeverityMember2020-06-300001299709srt:MaximumMemberus-gaap:FairValueInputsLevel3Memberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MeasurementInputLossSeverityMember2020-06-300001299709us-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MeasurementInputLossSeverityMember2020-06-300001299709srt:MinimumMemberus-gaap:MeasurementInputDiscountRateMemberus-gaap:FairValueInputsLevel3Memberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709srt:MaximumMemberus-gaap:MeasurementInputDiscountRateMemberus-gaap:FairValueInputsLevel3Memberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709us-gaap:MeasurementInputDiscountRateMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberax:NonAgencyResidentialMortgageBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709srt:MinimumMemberax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputConstantPrepaymentRateMemberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709srt:MaximumMemberax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputConstantPrepaymentRateMemberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709ax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputConstantPrepaymentRateMembersrt:WeightedAverageMemberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709srt:MinimumMemberus-gaap:MeasurementInputExpectedTermMemberax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709srt:MaximumMemberus-gaap:MeasurementInputExpectedTermMemberax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709us-gaap:MeasurementInputExpectedTermMemberax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709srt:MinimumMemberus-gaap:MeasurementInputDiscountRateMemberax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709srt:MaximumMemberus-gaap:MeasurementInputDiscountRateMemberax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709us-gaap:MeasurementInputDiscountRateMemberax:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709ax:ProjectedProfitofUnderlyingLoansMembersrt:MinimumMemberus-gaap:DerivativeFinancialInstrumentsAssetsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709ax:ProjectedProfitofUnderlyingLoansMemberus-gaap:DerivativeFinancialInstrumentsAssetsMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709ax:ProjectedProfitofUnderlyingLoansMemberus-gaap:DerivativeFinancialInstrumentsAssetsMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberus-gaap:FairValueMeasurementsRecurringMember2020-06-300001299709us-gaap:FairValueMeasurementsNonrecurringMemberax:OtherRealEstateOwnedSingleFamilyMemberus-gaap:FairValueInputsLevel1Member2020-12-310001299709us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMemberax:OtherRealEstateOwnedSingleFamilyMember2020-12-310001299709us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Memberax:OtherRealEstateOwnedSingleFamilyMember2020-12-310001299709us-gaap:FairValueMeasurementsNonrecurringMemberax:OtherRealEstateOwnedSingleFamilyMember2020-12-310001299709us-gaap:FairValueMeasurementsNonrecurringMemberax:ForeclosedAssetsRecreationalVehicleandAutoMemberus-gaap:FairValueInputsLevel1Member2020-12-310001299709us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMemberax:ForeclosedAssetsRecreationalVehicleandAutoMember2020-12-310001299709us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Memberax:ForeclosedAssetsRecreationalVehicleandAutoMember2020-12-310001299709us-gaap:FairValueMeasurementsNonrecurringMemberax:ForeclosedAssetsRecreationalVehicleandAutoMember2020-12-310001299709us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel1Member2020-12-310001299709us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMember2020-12-310001299709us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Member2020-12-310001299709us-gaap:FairValueMeasurementsNonrecurringMember2020-12-310001299709us-gaap:FairValueMeasurementsNonrecurringMemberax:OtherRealEstateOwnedSingleFamilyMemberus-gaap:FairValueInputsLevel1Member2020-06-300001299709us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMemberax:OtherRealEstateOwnedSingleFamilyMember2020-06-300001299709us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Memberax:OtherRealEstateOwnedSingleFamilyMember2020-06-300001299709us-gaap:FairValueMeasurementsNonrecurringMemberax:OtherRealEstateOwnedSingleFamilyMember2020-06-300001299709us-gaap:FairValueMeasurementsNonrecurringMemberax:ForeclosedAssetsRecreationalVehicleandAutoMemberus-gaap:FairValueInputsLevel1Member2020-06-300001299709us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMemberax:ForeclosedAssetsRecreationalVehicleandAutoMember2020-06-300001299709us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Memberax:ForeclosedAssetsRecreationalVehicleandAutoMember2020-06-300001299709us-gaap:FairValueMeasurementsNonrecurringMemberax:ForeclosedAssetsRecreationalVehicleandAutoMember2020-06-300001299709us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel1Member2020-06-300001299709us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMember2020-06-300001299709us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Member2020-06-300001299709us-gaap:FairValueMeasurementsNonrecurringMember2020-06-300001299709us-gaap:RealEstateAcquiredInSatisfactionOfDebtMemberus-gaap:FairValueMeasurementsNonrecurringMember2020-12-310001299709us-gaap:RealEstateAcquiredInSatisfactionOfDebtMemberus-gaap:FairValueMeasurementsNonrecurringMember2020-07-012020-12-310001299709us-gaap:FairValueMeasurementsNonrecurringMember2020-07-012020-12-310001299709us-gaap:MeasurementInputComparabilityAdjustmentMembersrt:MinimumMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Memberax:OtherRealEstateOwnedSingleFamilyMember2020-12-310001299709us-gaap:MeasurementInputComparabilityAdjustmentMemberus-gaap:FairValueMeasurementsNonrecurringMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberax:OtherRealEstateOwnedSingleFamilyMember2020-12-310001299709us-gaap:MeasurementInputComparabilityAdjustmentMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberax:OtherRealEstateOwnedSingleFamilyMember2020-12-310001299709us-gaap:MeasurementInputComparabilityAdjustmentMembersrt:MinimumMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Memberax:ForeclosedAssetsRecreationalVehicleandAutoMember2020-12-310001299709us-gaap:MeasurementInputComparabilityAdjustmentMemberus-gaap:FairValueMeasurementsNonrecurringMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberax:ForeclosedAssetsRecreationalVehicleandAutoMember2020-12-310001299709us-gaap:MeasurementInputComparabilityAdjustmentMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberax:ForeclosedAssetsRecreationalVehicleandAutoMember2020-12-310001299709us-gaap:MeasurementInputComparabilityAdjustmentMembersrt:MinimumMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Memberax:OtherRealEstateOwnedSingleFamilyMember2020-06-300001299709us-gaap:MeasurementInputComparabilityAdjustmentMemberus-gaap:FairValueMeasurementsNonrecurringMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberax:OtherRealEstateOwnedSingleFamilyMember2020-06-300001299709us-gaap:MeasurementInputComparabilityAdjustmentMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberax:OtherRealEstateOwnedSingleFamilyMember2020-06-300001299709us-gaap:MeasurementInputComparabilityAdjustmentMembersrt:MinimumMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Memberax:ForeclosedAssetsRecreationalVehicleandAutoMember2020-06-300001299709us-gaap:MeasurementInputComparabilityAdjustmentMemberus-gaap:FairValueMeasurementsNonrecurringMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Memberax:ForeclosedAssetsRecreationalVehicleandAutoMember2020-06-300001299709us-gaap:MeasurementInputComparabilityAdjustmentMemberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberax:ForeclosedAssetsRecreationalVehicleandAutoMember2020-06-300001299709us-gaap:CarryingReportedAmountFairValueDisclosureMember2020-12-310001299709us-gaap:FairValueInputsLevel1Member2020-12-310001299709us-gaap:FairValueInputsLevel2Member2020-12-310001299709us-gaap:FairValueInputsLevel3Member2020-12-310001299709us-gaap:EstimateOfFairValueFairValueDisclosureMember2020-12-310001299709us-gaap:CarryingReportedAmountFairValueDisclosureMember2020-06-300001299709us-gaap:FairValueInputsLevel1Member2020-06-300001299709us-gaap:FairValueInputsLevel2Member2020-06-300001299709us-gaap:FairValueInputsLevel3Member2020-06-300001299709us-gaap:EstimateOfFairValueFairValueDisclosureMember2020-06-300001299709ax:AgencyResidentialMortgageBackedSecuritiesMember2020-12-310001299709ax:NonAgencyResidentialMortgageBackedSecuritiesMember2020-12-310001299709us-gaap:ResidentialMortgageBackedSecuritiesMember2020-12-310001299709us-gaap:USGovernmentAgenciesDebtSecuritiesMember2020-12-310001299709us-gaap:MunicipalBondsMember2020-12-310001299709ax:NonAgencySecuritiesMember2020-12-310001299709us-gaap:OtherDebtSecuritiesMember2020-12-310001299709ax:AgencyResidentialMortgageBackedSecuritiesMember2020-06-300001299709ax:NonAgencyResidentialMortgageBackedSecuritiesMember2020-06-300001299709us-gaap:ResidentialMortgageBackedSecuritiesMember2020-06-300001299709us-gaap:USGovernmentAgenciesDebtSecuritiesMember2020-06-300001299709us-gaap:MunicipalBondsMember2020-06-300001299709ax:NonAgencySecuritiesMember2020-06-300001299709us-gaap:OtherDebtSecuritiesMember2020-06-30ax:security0001299709ax:NonAgencyRmbsSuperSeniorSecuritiesMember2020-12-310001299709us-gaap:AssetPledgedAsCollateralMember2020-12-310001299709us-gaap:AssetPledgedAsCollateralMember2020-06-300001299709ax:NonAgencyResidentialMortgageBackedSecuritiesMember2020-10-012020-12-310001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMember2020-12-310001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMember2020-06-300001299709ax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMember2020-12-310001299709ax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMember2020-06-300001299709us-gaap:CommercialRealEstatePortfolioSegmentMember2020-12-310001299709us-gaap:CommercialRealEstatePortfolioSegmentMember2020-06-300001299709us-gaap:CommercialPortfolioSegmentMember2020-12-310001299709us-gaap:CommercialPortfolioSegmentMember2020-06-300001299709us-gaap:ConsumerPortfolioSegmentMember2020-12-310001299709us-gaap:ConsumerPortfolioSegmentMember2020-06-300001299709ax:OtherPortfolioSegmentMember2020-12-310001299709ax:OtherPortfolioSegmentMember2020-06-300001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMember2020-09-300001299709ax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMember2020-09-300001299709us-gaap:CommercialRealEstatePortfolioSegmentMember2020-09-300001299709us-gaap:CommercialPortfolioSegmentMember2020-09-300001299709us-gaap:ConsumerPortfolioSegmentMember2020-09-300001299709ax:OtherPortfolioSegmentMember2020-09-300001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMember2020-10-012020-12-310001299709ax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMember2020-10-012020-12-310001299709us-gaap:CommercialRealEstatePortfolioSegmentMember2020-10-012020-12-310001299709us-gaap:CommercialPortfolioSegmentMember2020-10-012020-12-310001299709us-gaap:ConsumerPortfolioSegmentMember2020-10-012020-12-310001299709ax:OtherPortfolioSegmentMember2020-10-012020-12-310001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMember2019-09-300001299709ax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMember2019-09-300001299709us-gaap:CommercialRealEstatePortfolioSegmentMember2019-09-300001299709us-gaap:CommercialPortfolioSegmentMember2019-09-300001299709us-gaap:ConsumerPortfolioSegmentMember2019-09-300001299709ax:OtherPortfolioSegmentMember2019-09-300001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMember2019-10-012019-12-310001299709ax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMember2019-10-012019-12-310001299709us-gaap:CommercialRealEstatePortfolioSegmentMember2019-10-012019-12-310001299709us-gaap:CommercialPortfolioSegmentMember2019-10-012019-12-310001299709us-gaap:ConsumerPortfolioSegmentMember2019-10-012019-12-310001299709ax:OtherPortfolioSegmentMember2019-10-012019-12-310001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMember2019-12-310001299709ax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMember2019-12-310001299709us-gaap:CommercialRealEstatePortfolioSegmentMember2019-12-310001299709us-gaap:CommercialPortfolioSegmentMember2019-12-310001299709us-gaap:ConsumerPortfolioSegmentMember2019-12-310001299709ax:OtherPortfolioSegmentMember2019-12-310001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-06-300001299709srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMember2020-06-300001299709srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2020-06-300001299709srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:CommercialPortfolioSegmentMember2020-06-300001299709srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:ConsumerPortfolioSegmentMember2020-06-300001299709srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberax:OtherPortfolioSegmentMember2020-06-300001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMember2020-07-012020-12-310001299709ax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMember2020-07-012020-12-310001299709us-gaap:CommercialRealEstatePortfolioSegmentMember2020-07-012020-12-310001299709us-gaap:CommercialPortfolioSegmentMember2020-07-012020-12-310001299709us-gaap:ConsumerPortfolioSegmentMember2020-07-012020-12-310001299709ax:OtherPortfolioSegmentMember2020-07-012020-12-310001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMember2019-06-300001299709ax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMember2019-06-300001299709us-gaap:CommercialRealEstatePortfolioSegmentMember2019-06-300001299709us-gaap:CommercialPortfolioSegmentMember2019-06-300001299709us-gaap:ConsumerPortfolioSegmentMember2019-06-300001299709ax:OtherPortfolioSegmentMember2019-06-300001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMember2019-07-012019-12-310001299709ax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMember2019-07-012019-12-310001299709us-gaap:CommercialRealEstatePortfolioSegmentMember2019-07-012019-12-310001299709us-gaap:CommercialPortfolioSegmentMember2019-07-012019-12-310001299709us-gaap:ConsumerPortfolioSegmentMember2019-07-012019-12-310001299709ax:OtherPortfolioSegmentMember2019-07-012019-12-310001299709us-gaap:NonperformingFinancingReceivableMember2020-12-310001299709us-gaap:NonperformingFinancingReceivableMember2020-06-300001299709us-gaap:NonperformingFinancingReceivableMember2020-07-012020-12-310001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberus-gaap:NonperformingFinancingReceivableMember2020-12-310001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberus-gaap:PerformingFinancingReceivableMember2020-12-310001299709ax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMemberus-gaap:PerformingFinancingReceivableMember2020-12-310001299709us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMember2020-12-310001299709us-gaap:CommercialPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMember2020-12-310001299709us-gaap:ConsumerPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMember2020-12-310001299709us-gaap:PerformingFinancingReceivableMemberax:OtherPortfolioSegmentMember2020-12-310001299709us-gaap:PerformingFinancingReceivableMember2020-12-310001299709us-gaap:NonperformingFinancingReceivableMemberax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMember2020-12-310001299709us-gaap:NonperformingFinancingReceivableMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2020-12-310001299709us-gaap:NonperformingFinancingReceivableMemberus-gaap:CommercialPortfolioSegmentMember2020-12-310001299709us-gaap:NonperformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2020-12-310001299709us-gaap:NonperformingFinancingReceivableMemberax:OtherPortfolioSegmentMember2020-12-310001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberus-gaap:PerformingFinancingReceivableMember2020-06-300001299709ax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMemberus-gaap:PerformingFinancingReceivableMember2020-06-300001299709us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMember2020-06-300001299709us-gaap:CommercialPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMember2020-06-300001299709us-gaap:ConsumerPortfolioSegmentMemberus-gaap:PerformingFinancingReceivableMember2020-06-300001299709us-gaap:PerformingFinancingReceivableMemberax:OtherPortfolioSegmentMember2020-06-300001299709us-gaap:PerformingFinancingReceivableMember2020-06-300001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberus-gaap:NonperformingFinancingReceivableMember2020-06-300001299709us-gaap:NonperformingFinancingReceivableMemberax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMember2020-06-300001299709us-gaap:NonperformingFinancingReceivableMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2020-06-300001299709us-gaap:NonperformingFinancingReceivableMemberus-gaap:CommercialPortfolioSegmentMember2020-06-300001299709us-gaap:NonperformingFinancingReceivableMemberus-gaap:ConsumerPortfolioSegmentMember2020-06-300001299709us-gaap:NonperformingFinancingReceivableMemberax:OtherPortfolioSegmentMember2020-06-30ax:loan0001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberus-gaap:PassMember2020-12-310001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberus-gaap:SpecialMentionMember2020-12-310001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberus-gaap:SubstandardMember2020-12-310001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberus-gaap:DoubtfulMember2020-12-310001299709us-gaap:PassMemberax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMember2020-12-310001299709us-gaap:SpecialMentionMemberax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMember2020-12-310001299709us-gaap:SubstandardMemberax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMember2020-12-310001299709us-gaap:DoubtfulMemberax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMember2020-12-310001299709us-gaap:PassMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2020-12-310001299709us-gaap:SpecialMentionMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2020-12-310001299709us-gaap:SubstandardMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2020-12-310001299709us-gaap:DoubtfulMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2020-12-310001299709us-gaap:PassMemberus-gaap:CommercialPortfolioSegmentMember2020-12-310001299709us-gaap:SpecialMentionMemberus-gaap:CommercialPortfolioSegmentMember2020-12-310001299709us-gaap:SubstandardMemberus-gaap:CommercialPortfolioSegmentMember2020-12-310001299709us-gaap:DoubtfulMemberus-gaap:CommercialPortfolioSegmentMember2020-12-310001299709us-gaap:PassMemberus-gaap:ConsumerPortfolioSegmentMember2020-12-310001299709us-gaap:SpecialMentionMemberus-gaap:ConsumerPortfolioSegmentMember2020-12-310001299709us-gaap:SubstandardMemberus-gaap:ConsumerPortfolioSegmentMember2020-12-310001299709us-gaap:DoubtfulMemberus-gaap:ConsumerPortfolioSegmentMember2020-12-310001299709us-gaap:PassMemberax:OtherPortfolioSegmentMember2020-12-310001299709us-gaap:SpecialMentionMemberax:OtherPortfolioSegmentMember2020-12-310001299709us-gaap:SubstandardMemberax:OtherPortfolioSegmentMember2020-12-310001299709us-gaap:DoubtfulMemberax:OtherPortfolioSegmentMember2020-12-310001299709us-gaap:PassMember2020-12-310001299709us-gaap:SpecialMentionMember2020-12-310001299709us-gaap:SubstandardMember2020-12-310001299709us-gaap:DoubtfulMember2020-12-310001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2020-12-310001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2020-12-310001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2020-12-310001299709ax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2020-12-310001299709us-gaap:FinancingReceivables60To89DaysPastDueMemberax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMember2020-12-310001299709ax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2020-12-310001299709us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2020-12-310001299709us-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2020-12-310001299709us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2020-12-310001299709us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2020-12-310001299709us-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:CommercialPortfolioSegmentMember2020-12-310001299709us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2020-12-310001299709us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2020-12-310001299709us-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:ConsumerPortfolioSegmentMember2020-12-310001299709us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2020-12-310001299709us-gaap:FinancingReceivables30To59DaysPastDueMemberax:OtherPortfolioSegmentMember2020-12-310001299709us-gaap:FinancingReceivables60To89DaysPastDueMemberax:OtherPortfolioSegmentMember2020-12-310001299709us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberax:OtherPortfolioSegmentMember2020-12-310001299709us-gaap:FinancingReceivables30To59DaysPastDueMember2020-12-310001299709us-gaap:FinancingReceivables60To89DaysPastDueMember2020-12-310001299709us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2020-12-310001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2020-06-300001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2020-06-300001299709ax:ResidentialPortfolioSingleFamilyRealEstateSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2020-06-300001299709ax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2020-06-300001299709us-gaap:FinancingReceivables60To89DaysPastDueMemberax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMember2020-06-300001299709ax:ResidentialPortfolioMultifamilyRealEstateAndCommercialMortgageSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2020-06-300001299709us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2020-06-300001299709us-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2020-06-300001299709us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2020-06-300001299709us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2020-06-300001299709us-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:CommercialPortfolioSegmentMember2020-06-300001299709us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2020-06-300001299709us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2020-06-300001299709us-gaap:FinancingReceivables60To89DaysPastDueMemberus-gaap:ConsumerPortfolioSegmentMember2020-06-300001299709us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2020-06-300001299709us-gaap:FinancingReceivables30To59DaysPastDueMemberax:OtherPortfolioSegmentMember2020-06-300001299709us-gaap:FinancingReceivables60To89DaysPastDueMemberax:OtherPortfolioSegmentMember2020-06-300001299709us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMemberax:OtherPortfolioSegmentMember2020-06-300001299709us-gaap:FinancingReceivables30To59DaysPastDueMember2020-06-300001299709us-gaap:FinancingReceivables60To89DaysPastDueMember2020-06-300001299709us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2020-06-300001299709us-gaap:SeniorSubordinatedNotesMember2020-09-300001299709us-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberus-gaap:SeniorSubordinatedNotesMember2020-09-012020-09-300001299709us-gaap:CommonStockMember2016-03-170001299709us-gaap:CommonStockMember2019-08-020001299709us-gaap:CommonStockMember2016-03-172016-03-170001299709us-gaap:CommonStockMember2019-08-022019-08-020001299709us-gaap:CommonStockMember2020-12-310001299709us-gaap:SeriesAPreferredStockMember2020-10-302020-10-300001299709us-gaap:SeriesAPreferredStockMember2020-10-300001299709us-gaap:RestrictedStockUnitsRSUMemberax:EmployeesandDirectorsMember2020-07-012020-12-310001299709us-gaap:RestrictedStockUnitsRSUMemberax:EmployeesandDirectorsMember2019-07-012019-12-310001299709us-gaap:RestrictedStockUnitsRSUMember2020-07-012020-12-310001299709us-gaap:RestrictedStockUnitsRSUMember2019-07-012019-12-310001299709us-gaap:RestrictedStockUnitsRSUMember2020-12-310001299709us-gaap:RestrictedStockUnitsRSUMember2019-06-300001299709us-gaap:RestrictedStockUnitsRSUMember2019-07-012020-06-300001299709us-gaap:RestrictedStockUnitsRSUMember2020-06-300001299709us-gaap:RestrictedStockUnitsRSUMember2020-10-012020-12-310001299709us-gaap:RestrictedStockUnitsRSUMember2019-10-012019-12-310001299709us-gaap:ShareBasedCompensationAwardTrancheOneMemberus-gaap:RestrictedStockUnitsRSUMemberax:EmployeesandDirectorsMember2020-07-012020-12-310001299709us-gaap:ShareBasedCompensationAwardTrancheTwoMemberus-gaap:RestrictedStockUnitsRSUMemberax:EmployeesandDirectorsMember2020-07-012020-12-310001299709us-gaap:ShareBasedCompensationAwardTrancheThreeMemberus-gaap:RestrictedStockUnitsRSUMemberax:EmployeesandDirectorsMember2020-07-012020-12-310001299709srt:ChiefExecutiveOfficerMemberus-gaap:ShareBasedCompensationAwardTrancheOneMemberus-gaap:RestrictedStockUnitsRSUMember2020-07-012020-12-310001299709us-gaap:ShareBasedCompensationAwardTrancheTwoMembersrt:ChiefExecutiveOfficerMemberus-gaap:RestrictedStockUnitsRSUMember2020-07-012020-12-310001299709srt:ChiefExecutiveOfficerMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMemberus-gaap:RestrictedStockUnitsRSUMember2020-07-012020-12-310001299709srt:ChiefExecutiveOfficerMemberus-gaap:RestrictedStockUnitsRSUMemberax:SharebasedCompensationAwardTrancheFourMember2020-07-012020-12-310001299709us-gaap:LoanOriginationCommitmentsMemberax:FixedInterestRateMember2020-12-310001299709us-gaap:LoanOriginationCommitmentsMemberax:AdjustableInterestRateMember2020-12-310001299709us-gaap:LoanOriginationCommitmentsMember2020-12-310001299709us-gaap:LoanOriginationCommitmentsMemberax:FixedInterestRateMemberax:SalesCommitmentMember2020-12-310001299709us-gaap:LoanOriginationCommitmentsMemberax:AdjustableInterestRateMemberax:SalesCommitmentMember2020-12-310001299709us-gaap:LoanOriginationCommitmentsMemberax:SalesCommitmentMember2020-12-31ax:claim00012997092015-12-012015-12-3100012997092017-08-10ax:segment0001299709us-gaap:OperatingSegmentsMemberax:BankingBusinessSegmentMember2020-10-012020-12-310001299709us-gaap:OperatingSegmentsMemberax:SecuritiesBusinessSegmentMember2020-10-012020-12-310001299709ax:CorporateAndReconcilingItemsMember2020-10-012020-12-310001299709us-gaap:OperatingSegmentsMemberax:BankingBusinessSegmentMember2019-10-012019-12-310001299709us-gaap:OperatingSegmentsMemberax:SecuritiesBusinessSegmentMember2019-10-012019-12-310001299709ax:CorporateAndReconcilingItemsMember2019-10-012019-12-310001299709us-gaap:OperatingSegmentsMemberax:BankingBusinessSegmentMember2020-07-012020-12-310001299709us-gaap:OperatingSegmentsMemberax:SecuritiesBusinessSegmentMember2020-07-012020-12-310001299709ax:CorporateAndReconcilingItemsMember2020-07-012020-12-310001299709us-gaap:OperatingSegmentsMemberax:BankingBusinessSegmentMember2019-07-012019-12-310001299709us-gaap:OperatingSegmentsMemberax:SecuritiesBusinessSegmentMember2019-07-012019-12-310001299709ax:CorporateAndReconcilingItemsMember2019-07-012019-12-310001299709us-gaap:OperatingSegmentsMemberax:BankingBusinessSegmentMember2020-12-310001299709us-gaap:OperatingSegmentsMemberax:SecuritiesBusinessSegmentMember2020-12-310001299709ax:CorporateAndReconcilingItemsMember2020-12-310001299709us-gaap:OperatingSegmentsMemberax:BankingBusinessSegmentMember2019-12-310001299709us-gaap:OperatingSegmentsMemberax:SecuritiesBusinessSegmentMember2019-12-310001299709ax:CorporateAndReconcilingItemsMember2019-12-31

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period ended December 31, 2020
☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 001-37709
AX-20201231_G1.JPG
AXOS FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0867444
(State or other jurisdiction of
incorporation or organization) 		(I.R.S. Employer
Identification No.)
9205 West Russell Road, STE 400, Las Vegas, NV 89148
(Address of principal executive offices) (zip code)
Registrant’s telephone number, including area code: (858) 649-2218
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common stock, $0.01 par value AX New York Stock Exchange
6.25% Subordinated Notes Due 2026 AXO New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
__________________________________________________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   ☒  Yes    ☐  No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   ☒  Yes    ☐  No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer ☐
Non-accelerated filer   ☐ Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ☐  Yes    ☒  No
The number of shares outstanding of the registrant’s common stock on the last practicable date: 59,077,145 shares of common stock, $0.01 par value per share, as of January 22, 2021.

Table of Contents
AXOS FINANCIAL, INC.
INDEX
Page
1
1
1
2
3
4
6
7
32
37
39
52
56
57
59
60
63
63
64
64
64
64
64
64
64
65
66

Table of Contents
PART I – FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS
AXOS FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except par and stated value) December 31,
2020 		June 30,
2020
ASSETS
Cash and cash equivalents $ 1,129,898  $ 1,756,477 
Cash segregated for regulatory purposes 313,297  194,042 
Total cash, cash equivalents, and cash segregated 1,443,195  1,950,519 
Securities:
Trading 362  105 
Available-for-sale 209,828  187,627 
Stock of regulatory agencies 20,612  20,610 
Loans held for sale, carried at fair value 64,287  51,995 
Loans held for sale, lower of cost or fair value 13,769  44,565 
Loans and leases—net of allowance for credit losses of $136.4 million as of December 31, 2020 and $75.8 million as of June 30, 2020
11,609,584  10,631,349 
Mortgage servicing rights, carried at fair value 14,314  10,675 
Other real estate owned and repossessed vehicles 6,296  6,408 
Goodwill and other intangible assets—net 120,644  125,389 
Securities borrowed 317,571  222,368 
Customer, broker-dealer and clearing receivables 264,572  220,266 
Other assets 308,233  380,024 
TOTAL ASSETS $ 14,393,267  $ 13,851,900 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Non-interest bearing $ 2,201,932  $ 1,936,661 
Interest bearing 9,261,204  9,400,033 
Total deposits 11,463,136  11,336,694 
Advances from the Federal Home Loan Bank 182,500  242,500 
Borrowings, subordinated notes and debentures 418,480  235,789 
Securities loaned 362,170  255,945 
Customer, broker-dealer and clearing payables 475,473  347,614 
Accounts payable and accrued liabilities and other liabilities 204,026  202,512 
Total liabilities 13,105,785  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 December 31, 2020 and 515 shares issued and outstanding as of June 30, 2020
—  5,063 
Common stock—$0.01 par value; 150,000,000 shares authorized; 67,668,664 shares issued and 59,072,822 shares outstanding as of December 31, 2020; 67,323,053 shares issued and 59,612,635 shares outstanding as of June 30, 2020
677  673 
Additional paid-in capital 420,895  411,873 
Accumulated other comprehensive income (loss)—net of tax 1,251  (937)
Retained earnings 1,079,828  1,009,299 
Treasury stock, at cost; 8,595,842 shares as of December 31, 2020 and 7,710,418 shares as of June 30, 2020
(215,169) (195,125)
Total stockholders’ equity 1,287,482  1,230,846 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 14,393,267  $ 13,851,900 

See accompanying notes to the condensed consolidated financial statements.
1
Table of Contents
AXOS FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) 
Three Months Ended Six Months Ended
December 31, December 31,
(Dollars in thousands, except earnings per common share) 2020 2019 2020 2019
INTEREST AND DIVIDEND INCOME:
Loans and leases, including fees $ 147,085  $ 136,602  $ 288,509  $ 270,489 
Securities borrowed and customer receivables 4,666  3,865  9,743  9,207 
Investments 3,628  6,821  7,016  13,937 
Total interest and dividend income 155,379  147,288  305,268  293,633 
INTEREST EXPENSE:
Deposits 16,095  32,914  35,649  71,720 
Advances from the Federal Home Loan Bank 1,326  4,495  2,698  6,259 
Securities loaned 255  163  379  449 
Other borrowings 3,611  1,296  5,123  3,482 
Total interest expense 21,287  38,868  43,849  81,910 
Net interest income 134,092  108,420  261,419  211,723 
Provision for credit losses 8,000  4,500  19,800  7,200 
Net interest income, after provision for credit losses 126,092  103,920  241,619  204,523 
NON-INTEREST INCOME:
Prepayment penalty fee income 1,579  2,006  2,947  3,418 
Gain on sale – other 156  1,924  490  5,746 
Mortgage banking income 10,651  2,224  30,218  5,018 
Broker-dealer fee income 6,287  5,555  11,989  11,211 
Banking and service fees 10,045  9,498  18,929  17,350 
Total non-interest income 28,718  21,207  64,573  42,743 
NON-INTEREST EXPENSE:
Salaries and related costs 38,199  33,958  76,822  70,675 
Data processing 9,673  7,410  17,601  15,221 
Depreciation and amortization 5,862  6,040  12,048  11,264 
Advertising and promotional 3,783  4,043  6,339  7,833 
Professional services 5,629  3,112  11,628  4,701 
Occupancy and equipment 3,132  3,122  6,143  5,960 
FDIC and regulatory fees 2,601  939  5,293  1,130 
Broker-dealer clearing charges 2,451  1,860  4,708  3,868 
General and administrative expense 4,967  6,481  11,261  11,780 
Total non-interest expense 76,297  66,965  151,843  132,432 
INCOME BEFORE INCOME TAXES 78,513  58,162  154,349  114,834 
INCOME TAXES 23,728  16,867  46,542  32,753 
NET INCOME $ 54,785  $ 41,295  $ 107,807  $ 82,081 
NET INCOME ATTRIBUTABLE TO COMMON STOCK $ 54,672  $ 41,217  $ 107,617  $ 81,926 
COMPREHENSIVE INCOME $ 55,691  $ 40,515  $ 109,995  $ 81,818 
Basic earnings per common share $ 0.93  $ 0.67  $ 1.82  $ 1.34 
Diluted earnings per common share $ 0.91  $ 0.67  $ 1.79  $ 1.32 
See accompanying notes to the condensed consolidated financial statements.
2
Table of Contents
AXOS FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
(Dollars in thousands) 2020 2019 2020 2019
NET INCOME $ 54,785  $ 41,295  $ 107,807  $ 82,081 
Net unrealized gain (loss) from available-for-sale securities, net of tax expense (benefit) of $437 and $(327) for the three and $940 and $(110) for the six months ended December 31, 2020 and 2019, respectively.
906  (780) 2,188  (263)
Other comprehensive income (loss) 906  (780) 2,188  (263)
Comprehensive income $ 55,691  $ 40,515  $ 109,995  $ 81,818 

See accompanying notes to the condensed consolidated financial statements.


3
Table of Contents
AXOS FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
For the Three Months Ended December 31, 2020
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—September 30, 2020 515  $ 5,063  67,622,935  (8,407,001) 59,215,934  $ 676  $ 416,285  $ 1,025,156  $ 345  $ (210,560) $ 1,236,965 
Net income —  —  —  —  —  —  —  54,785  —  —  54,785 
Other comprehensive income (loss) —  —  —  —  —  —  —  —  906  —  906 
Cash dividends on preferred stock —  —  —  —  —  —  —  (26) —  —  (26)
Preferred stock - Series A redemption (515) (5,063) —  —  —  —  —  (87) —  —  (5,150)
Purchase of treasury stock —  —  —  (171,348) (171,348) —  —  —  —  (4,015) (4,015)
Stock-based compensation expense
and restricted stock unit vesting 		—  —  45,729  (17,493) 28,236  1  4,610  —  —  (594) 4,017 
BALANCE—December 31, 2020 —  $ —  67,668,664  (8,595,842) 59,072,822  $ 677  $ 420,895  $ 1,079,828  $ 1,251  $ (215,169) $ 1,287,482 
For the Six Months Ended December 31, 2020
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—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 —  —  —  —  —  —  —  107,807  —  —  107,807 
Other comprehensive income (loss) —  —  —  —  —  —  —  —  2,188  —  2,188 
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 		—  —  345,611  (131,827) 213,784  4  9,022  —  —  (3,287) 5,739 
BALANCE—December 31, 2020 —  $ —  67,668,664  (8,595,842) 59,072,822  $ 677  $ 420,895  $ 1,079,828  $ 1,251  $ (215,169) $ 1,287,482 
4
Table of Contents
AXOS FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Continued)
(Unaudited)
For the Three Months Ended December 31, 2019
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—September 30, 2019 515  $ 5,063  66,837,037  (5,549,442) 61,287,595  $ 668  $ 394,904  $ 866,879  $ 533  $ (151,807) $ 1,116,240 
Net income —  —  —  —  —  —  —  41,295  —  —  41,295 
Other comprehensive income (loss) —  —  —  —  —  —  —  —  (780) —  (780)
Cash dividends on preferred stock —  —  —  —  —  —  —  (78) —  —  (78)
Stock-based compensation expense
and restricted stock unit vesting 		—  —  78,441  (27,650) 50,791  1  4,902  —  —  (828) 4,075 
BALANCE—December 31, 2019 515  $ 5,063  66,915,478  (5,577,092) 61,338,386  $ 669  $ 399,806  $ 908,096  $ (247) $ (152,635) $ 1,160,752 
For the Six Months Ended December 31, 2019
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—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 —  —  —  —  —  —  —  82,081  —  —  82,081 
Other comprehensive income (loss) —  —  —  —  —  —  —  —  (263) —  (263)
Cash dividends on preferred stock —  —  —  —  —  —  —  (155) —  —  (155)
Stock-based compensation expense
and restricted stock unit vesting 		—  —  351,556  (141,987) 209,569  3  9,861  —  —  (3,825) 6,039 
BALANCE—December 31, 2019 515  $ 5,063  66,915,478  (5,577,092) 61,338,386  $ 669  $ 399,806  $ 908,096  $ (247) $ (152,635) $ 1,160,752 

See accompanying notes to the condensed consolidated financial statements.
5
Table of Contents
AXOS FINANCIAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
  Six Months Ended
December 31,
(Dollars in thousands) 2020 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 107,807  $ 82,081 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Accretion and amortization on securities, net (13) 483 
Net accretion of discounts on loans and leases (2,684) (606)
Amortization of borrowing costs 284  104 
Amortization of operating lease right of use asset 5,310  5,235 
Stock-based compensation expense 9,026  9,864 
Provision for credit losses 19,800  7,200 
Deferred income taxes (8,354) (1,414)
Origination of loans held for sale (931,065) (994,004)
Unrealized (gain) loss on loans held for sale 104  23 
Gain on sales of loans held for sale (30,708) (10,764)
Proceeds from sale of loans held for sale 949,009  999,908 
Amortization and change in fair value of mortgage servicing rights 4,045  1,272 
(Gain) loss on sale of other real estate and foreclosed assets (38) (71)
Depreciation and amortization 12,048  11,264 
Net changes in assets and liabilities which provide (use) cash:
Securities borrowed (95,203) (23,408)
Customer, broker-dealer and clearing receivables (44,306) (41,187)
Other assets 60,576  29,481 
Securities loaned 106,225  7,843 
Customer, broker-dealer and clearing payables 127,859  67,065 
Accounts payable and other liabilities (5,305) (21,715)
Net cash provided by (used in) operating activities 284,417  128,654 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investment securities (57,725) (139,490)
Proceeds from repayment of securities 56,147  157,703 
Purchase of stock of regulatory agencies (2) (27,532)
Proceeds from redemption of stock of regulatory agencies —  27,532 
Origination of loans and leases held for investment (2,530,229) (2,766,687)
Proceeds from sale of loans and leases held for investment 15,711  14,587 
Mortgage warehouse loans activity, net (710,561) (130,231)
Proceeds from sales of other real estate owned and repossessed assets 584  412 
Purchases of loans and leases, net of discounts and premiums (1,471) — 
Principal repayments on loans and leases 2,218,068  2,090,614 
Purchases of furniture, equipment, software and intangibles (5,815) (6,064)
Net cash used in investing activities (1,015,293) (779,156)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits 126,442  1,131,166 
Proceeds from the Federal Home Loan Bank term advances —  60,000 
Payments of the Federal Home Loan Bank term advances (55,000) (30,000)
Net (repayment) proceeds of Federal Home Loan Bank other advances (5,000) (231,000)
Net proceeds (repayments) of other borrowings 10,155  (106,800)
Tax payments related to settlement of restricted stock units (3,287) (3,825)
Redemption of preferred stock, Series A (5,150) — 
Repurchase of treasury stock (16,757) — 
Cash dividends paid on preferred stock (103) (232)
Payment of debt issuance costs (2,748) — 
Proceeds from issuance of subordinated notes 175,000  — 
Net cash provided by financing activities 223,552  819,309 
NET CHANGE IN CASH AND CASH EQUIVALENTS (507,324) 168,807 
CASH AND CASH EQUIVALENTS—Beginning of year $ 1,950,519  $ 857,368 
CASH AND CASH EQUIVALENTS—End of period $ 1,443,195  $ 1,026,175 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid on deposits and borrowed funds $ 41,194  $ 81,728 
Income taxes paid $ 50,574  $ 27,671 
Transfers to other real estate and repossessed vehicles $ 528  $ 446 
Transfers from loans and leases held for investment to loans held for sale $ 8,680  $ 40,025 
Transfers from loans held for sale to loans held for investment $ 27,739  $ — 
Loans and leases held for investment sold, cash not received $ —  $ 28,742 
Operating lease liabilities for obtaining right of use assets $ —  $ 79,746 
Impact of adoption of ASU No. 2016-13 on retained earnings
$ 37,088  $ — 
See accompanying notes to the condensed consolidated financial statements.
6
Table of Contents
AXOS FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTH PERIODS ENDED DECEMBER 31, 2020 AND 2019
(Dollars in thousands, except per share and stated value amounts)
(Unaudited)

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The condensed consolidated financial statements include the accounts of Axos Financial, Inc. (“Axos”) and its wholly owned subsidiaries, Axos Bank (the “Bank”) and Axos Nevada Holding, LLC (the “Axos Nevada Holding”) and collectively, the “Company”. Axos Nevada Holding wholly owns its subsidiary Axos Securities, LLC, which wholly owns subsidiaries Axos Clearing LLC (“Axos Clearing”), a clearing broker dealer, Axos Invest, Inc., a registered investment advisor, and Axos Invest LLC, an introducing broker dealer. All significant intercompany balances and transactions have been eliminated in consolidation.
The accompanying interim condensed consolidated financial statements, presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), are unaudited and reflect all adjustments which, in the opinion of management, are necessary for a fair statement of financial condition and results of operations for the interim periods. All adjustments are of a normal and recurring nature. Results for the six months ended December 31, 2020 are not necessarily indicative of results that may be expected for any other interim period or for the year as a whole. Certain information and note disclosures normally included in the audited annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) with respect to interim financial reporting. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended June 30, 2020 included in our Annual Report on Form 10-K.
7
As a result of the change from adopting Accounting Standard Update (“ASU”) 2016-13, “Measurement of Credit Losses on Financial Instruments” and all subsequent amendments that modified ASU 2016-13 (collectively, “ASC 326”) on July 1, 2020, the Company updated categorization of the loan portfolio. For comparability purposes, certain reclassifications have been made to the presentation of loan categories as of June 30, 2020 and as of and for the six months then ended December 31, 2019 to conform with current presentation adopted under ASC 326. The Company reclassified its loan categories to align with the segments adopted for the measurement of credit losses under ASC 326. The reclassification had no impact on the total loan balances or the allowance for credit losses - loans.
Loans and Leases - Carrying Amount
(Dollars in thousands) Single Family Real Estate Secured - Mortgage Single Family Real Estate Secured - Warehouse Single Family Real Estate Secured - Financing Multifamily Real Estate Secured - Mortgage and Financing Commercial Real Estate - Mortgage Commercial & Industrial Auto & RV - Secured Other Total
Balance July 1, 2020 Pre-ASC 326 Adoption $4,244,563 $474,318 $682,477 $2,303,216 $371,176 $2,094,322 $291,452 $241,918 $10,703,442
Commercial Real Estate - Mortgage to Multifamily and Commercial Mortgage — — — 371,176 (371,176) — — — —
Multifamily and Single Family Financing loans to Commercial Real Estate — — (679,054) (411,338) 1,090,392 — — — —
Real estate secured Commercial & Industrial to Commercial Real Estate — — — — 1,207,528 (1,207,528) — — —
Unsecured Consumer loans to Auto & Consumer — — — — — — 49,913 (49,913) —
Single Family Warehouse and Mortgage combined 477,741 (474,318) (3,423) — — — — — —
Other reclassifications — — — — — (1,474) — 1,474 —
Balance July 1, 2020 Post ASC 326 Adoption $4,722,304 $— $— $2,263,054 $2,297,920 $885,320 $341,365 $193,479 $10,703,442
Loan Category Post-ASC 326 Adoption
Single Family - Mortgage & Warehouse N/A N/A Multifamily and Commercial Mortgage Commercial Real Estate Commercial & Industrial - Non RE Auto & Consumer Other Total

8
Allowance for Credit Losses
(Dollars in thousands) Single Family Real Estate Secured - Mortgage Single Family Real Estate Secured - Warehouse Single Family Real Estate Secured - Financing Multifamily Real Estate Secured - Mortgage and Financing Commercial Real Estate - Mortgage Commercial & Industrial Auto & RV - Secured Other Total
Balance July 1, 2020 Pre-ASC 326 Adoption $24,041 $1,860 $5,094 $6,318 $1,456 $22,863 $5,738 $8,437 $75,807
Reclassification 1,860 (1,860) (5,094) (1,600) 19,596 (12,909) 3,723 (3,716) —
Balance July 1, 2020 Post Reclassification $25,901 $— $— $4,718 $21,052 $9,954 $9,461 $4,721 $75,807
Loan Category Post-ASC 326 Adoption Single Family - Mortgage & Warehouse N/A N/A Multifamily and Commercial Mortgage Commercial Real Estate Commercial & Industrial - Non RE Auto & Consumer Other Total
Allowance for Credit Losses. The allowance for credit losses (“ACL”) is a valuation account that offsets the amortized cost basis of loans and net investment in leases. Under ASC 326, amortized cost is the basis on which the ACL is determined. Amortized cost is principal outstanding, net of any purchase premiums and discounts and net of any deferred loan fees and costs.
Credit losses are charged off when the Company believes that collectability of at least some portion of outstanding principal is unlikely. These charge-offs are recorded as a reversal, thereby reducing, the allowance for credit losses. Recoveries on loans previously charged off are recorded as a provision to, thereby increasing, the allowance for credit losses. The allowance for credit losses is maintained at a level needed to absorb expected credit losses over the contractual life, considering the effects of prepayments, of the loan portfolio as of the reporting date. Determining the adequacy of the allowance is complex and requires judgment by Management about the effect of matters that are inherently uncertain. As such, a future assessment of current conditions may require material adjustments to the allowance.
The Company’s process for determining expected life-time credit losses entails a loan-level, model-based approach and requires consideration of a broad range of relevant information relating to historical loss experience, current economic conditions as well as reasonable and supportable forecasts.
A credit loss is estimated for all loans. Consequently, the Company stratifies the full loan population into segments sharing similar characteristics to perform the evaluation of the credit loss collectively.
The Company defines a segment as the level at which the Company develops a systematic methodology to determine the allowance for credit losses. Additionally, the Company can further stratify loans of similar type, risk attributes and methods for monitoring credit risk. The Company categorizes the loan portfolio into six segments: Single Family - Mortgage & Warehouse, Multifamily and Commercial Mortgage, Commercial Real Estate, Commercial & Industrial - Non Real Estate, Auto & Consumer and Other – refer to Note 4 – “Loans & Allowance for Credit Losses” for further detail of the segments and classes within.
The method for estimating expected life-time credit losses includes, among other things, the following main components: 1) The use of a probability of default (“PD”)/loss given default (“LGD”) model; 2) defining a number of economic scenarios across the benign to adverse spectrum; 3) an initial and reasonable forecast period of one year for all loan segments; and 4) a reversion period of 18 months using a linear transition to historical loss rates for each loan pool. After the reversion period, the historical loss rate is applied over the remaining contractual life of loan.
Given the inherent limitations of a solely quantitative model, qualitative adjustments are included to arrive at the ending calculated loss amount in order to account for data points not captured from quantitative inputs alone.

Qualitative criteria we consider includes, among other things, the following:
•Regulatory and Legal - matters that may impact the timeliness and/or amounts of repayments;
•Concentration - portfolio composition and loan concentration;
•Collateral Dependency - changes in collateral values;
•Lending/Underwriting Standards - current lending policies and the effects of any new policies;
•Nature and Volume - loan production volume and mix;
•Loan Trends - credit performance trends, including a borrower’s financial condition and credit rating.

9
On a quarterly basis, Management convenes a Credit Review meeting in which current information and trends are collectively assessed to forecast future economic impact for purposes of assessing the adequacy of the ACL. The forecasted direction and magnitude of change with respect to future economic conditions is then assessed against the estimate in the model.
Accrued Interest. Accrued interest receivable is excluded from amortized cost and is presented separately in “Other Assets” on the unaudited Condensed Consolidated Balance Sheets. Additionally, the Company does not estimate an allowance for credit losses on accrued interest receivable as the Company has a policy to charge off accrued interest deemed uncollectible in a timely manner. When a loan is placed on non-accrual status, which occurs when a borrower becomes delinquent by 90 days, interest previously accrued, but not collected, is reversed against current period interest income.
Individually Assessed Loans. Credit loss is estimated for any individual loan on a collective basis, unless an individual loan’s credit characteristics has deteriorated below a range of the overall group, in which case the loan would then be individually assessed. Individually assessed loans are measured for credit loss based on present value of future expected cash flows, discounted at the loan’s effective interest rate or the fair value of the collateral, less estimated selling costs, if the loan is collateral-dependent.
Available-for-Sale Debt Securities. Unrealized credit losses will be recognized through an allowance for credit losses instead of an adjustment to amortized cost basis, eliminating the other-than-temporary impairment concept. For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not, that it will be required to sell the security before recovery of its amortized cost basis. If either criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through earnings. For available-for-sale debt securities that do not meet the above conditions, the Company evaluates at the individual security level whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, Management considers the extent to which fair value is less than amortized cost and unfavorable conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recognized for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. All other changes in fair value of the security that have not been recognized through an allowance for credit losses are recognized in other comprehensive income. Changes in the allowance for credit losses, if any, are recognized as a provision for (or reversal of) credit losses. Losses are charged against the allowance when management believes an available-for-sale investment security is uncollectible or when either of the criteria regarding intent or requirement to sell is met.
Loan Commitments. Loans commitments not unconditionally cancellable are subject to an estimate of credit loss under a current expected credit loss model. The Company’s process for determining the estimate of credit loss on loan commitments is the same as it is on loans. Refer to detail of Allowance on Credit Losses above.
New Accounting Standards
Accounting Standards Adopted During Fiscal 2021
Financial Instruments. Credit Losses. On July 1, 2020, the Company adopted ASC 326. The update replaces incurred loss models based on the probable recognition threshold with a current expected credit loss model to estimate all credit losses over the contractual life for financial instruments carried at amortized cost and certain off-balance sheet credit exposures, such as loan commitments. The new model requires consideration of a broader range of relevant information, such as historical loss experience, current economic conditions and reasonable and supportable forecasts. The change will generally result in earlier, accelerated loss recognition. For available-for-sale debt securities, unrealized credit losses will be recognized through an allowance for credit losses rather than as adjustment to amortized cost basis, eliminating the other-than-temporary impairment concept. No credit loss adjustment on available-for-sale debt securities resulted upon adoption of ASC 326.
The Company adopted this standard using the modified retrospective transition method for all financial assets measured at amortized cost and off-balance sheet credit exposures. Prior period amounts are not retroactively adjusted. A prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date.



10
2.     FAIR VALUE
Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC Topic 820, Fair Value Measurement, also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
The following table sets forth the Company’s financial assets and liabilities measured at fair value on a recurring basis at December 31, 2020 and June 30, 2020. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:
December 31, 2020
(Dollars in thousands) Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) 		Significant Other
Observable
Inputs
(Level 2) 		Significant
Unobservable
Inputs
(Level 3) 		Total
ASSETS:
Securities—Trading: Municipal $ —  $ 362  $ —  $ 362 
Securities—Available-for-Sale:
Agency Debt1
$ —  $ 1,799  $ —  $ 1,799 
Agency RMBS1
—  16,975  —  16,975 
Non-Agency RMBS2
—  —  17,135  17,135 
Municipal —  3,514  —  3,514 
Asset-backed securities and structured notes —  170,405  —  170,405 
Total—Securities—Available-for-Sale $ —  $ 192,693  $ 17,135  $ 209,828 
Loans Held for Sale $ —  $ 64,287  $ —  $ 64,287 
Mortgage servicing rights $ —  $ —  $ 14,314  $ 14,314 
Other assets—Derivative instruments $ —  $ —  $ 10,263  $ 10,263 
LIABILITIES:
   Other liabilities—Derivative instruments $ —  $ —  $ 2,284  $ 2,284 
June 30, 2020
(Dollars in thousands) Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) 		Significant Other
Observable
Inputs
(Level 2) 		Significant
Unobservable
Inputs
(Level 3) 		Total
ASSETS:
Securities—Trading: Municipal
$ —  $ 105  $ —  $ 105 
Securities—Available-for-Sale:
Agency Debt1
$ —  $ 1,799  $ —  $ 1,799 
Agency RMBS1
—  16,826  —  16,826 
Non-Agency RMBS2
—  —  18,332  18,332 
Municipal —  10,400  —  10,400 
Asset-backed securities and structured notes —  140,270  —  140,270 
Total—Securities—Available-for-Sale $ —  $ 169,295  $ 18,332  $ 187,627 
Loans Held for Sale $ —  $ 51,995  $ —  $ 51,995 
Mortgage servicing rights $ —  $ —  $ 10,675  $ 10,675 
Other assets—Derivative instruments $ —  $ —  $ 9,131  $ 9,131 
LIABILITIES:
Other liabilities—Derivative instruments $ —  $ —  $ 1,715  $ 1,715 
1Includes securities guaranteed by Ginnie Mae, a U.S. government agency, and the government sponsored enterprises Fannie Mae and Freddie Mac.
2Private sponsors of securities collateralized primarily by pools of 1-4 family residential first mortgages. Primarily super senior securities secured by Alt-A or pay-option ARM mortgages.
11
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:
For the Three Months Ended
December 31, 2020
(Dollars in thousands) Securities – Available-for-Sale: Non-Agency RMBS Mortgage Servicing Rights Derivative Instruments, net Total
Opening balance $ 17,612  $ 12,130  $ 12,999  $ 42,741 
Included in earnings—Mortgage banking income —  (2,250) (5,020) (7,270)
Included in other comprehensive income 15  —  —  15 
Purchases, originations, issues, sales and settlements:
Purchases/originations —  4,434  —  4,434 
Settlements (492) —  —  (492)
Closing balance $ 17,135  $ 14,314  $ 7,979  $ 39,428 
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period $ —  $ (2,250) $ (5,020) $ (7,270)
For the Six Months Ended
December 31, 2020
(Dollars in thousands) Securities – Available-for-Sale: Non-Agency RMBS Mortgage Servicing Rights Derivative Instruments, net Total
Opening Balance $ 18,332  $ 10,675  $ 7,416  $ 36,423 
Included in earnings—Mortgage banking income —  (4,045) 563  (3,482)
Included in other comprehensive income (307) —  —  (307)
Purchases, originations, issues, sales and settlements:
Purchases/originations —  7,684  —  7,684 
Settlements (890) —  —  (890)
Closing balance $ 17,135  $ 14,314  $ 7,979  $ 39,428 
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period $ —  $ (4,045) $ 563  $ (3,482)

12
For the Three Months Ended
December 31, 2019
(Dollars in thousands) Securities – Available-for-Sale: Non-Agency RMBS Mortgage Servicing Rights Derivative Instruments, net Total
Opening balance $ 13,132  $ 10,632  $ 1,727  $ 25,491 
Included in earnings—Mortgage banking income —  (589) (710) (1,299)
Included in other comprehensive income 151  —  —  151 
Purchases, originations, issues, sales and settlements:
Purchases/originations —  1,219  —  1,219 
Settlements (496) —  —  (496)
Closing balance $ 12,787  $ 11,262  $ 1,017  $ 25,066 
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period $ —  $ (589) $ (710) $ (1,299)
For the Six Months Ended
December 31, 2019
(Dollars in thousands) Securities – Available-for-Sale: Non-Agency RMBS Mortgage Servicing Rights Derivative Instruments, net Total
Opening Balance $ 13,025  $ 9,784  $ 1,246  $ 24,055 
Total gains or losses for the period:
Included in earnings—Mortgage banking income —  (1,272) (229) (1,501)
Included in other comprehensive income 840  —  —  840 
Purchases, originations, issues, sales and settlements:
Purchases/originations —  2,750  —  2,750 
Settlements (1,078) —  —  (1,078)
Closing balance $ 12,787  $ 11,262  $ 1,017  $ 25,066 
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period $ —  $ (1,272) $ (229) $ (1,501)

The table below summarizes the quantitative information about level 3 fair value measurements as of the dates indicated:
December 31, 2020
(Dollars in thousands) Fair Value Valuation Technique Unobservable Input Range (Weighted Average)
Securities – Non-agency RMBS $ 17,135  Discounted Cash Flow Projected Constant Prepayment Rate,
Projected Constant Default Rate,
Projected Loss Severity,
Discount Rate over LIBOR
2.5 to 24.6% (10.5%)
1.5 to 6.3% (1.7%)
40.0 to 100.0% (76.7%)
2.8 to 7.4% (4.4%)
Mortgage Servicing Rights $ 14,314  Discounted Cash Flow Projected Constant Prepayment Rate,
Life (in years),
Discount Rate
6.7 to 72.2% (12.3%)
0.7 to 7.4 (6.1)
9.5 to 14.0% (9.7%)
Derivative Instruments $ 7,979  Sales Comparison Approach Projected Sales Profit of Underlying Loans
0.2 to 0.4% (0.3%)
13
June 30, 2020
(Dollars in thousands) Fair Value Valuation Technique Unobservable Input Range (Weighted Average)
Securities – Non-agency RMBS $ 18,332  Discounted Cash Flow Projected Constant Prepayment Rate,
Projected Constant Default Rate,
Projected Loss Severity,
Discount Rate over LIBOR
2.5 to 47.9% (26.1%)
0.5 to 4.5% (2.0%)
35.0 to 68.4% (50.1%)
2.9 to 9.4% (5.0%)

Mortgage Servicing Rights $ 10,675  Discounted Cash Flow Projected Constant Prepayment Rate,
Life (in years),
Discount Rate
4.7 to 39.6% (11.4%)
1.6 to 7.7 (6.2)
9.5 to 14.0% (9.8%)

Derivative Instruments $ 7,416  Sales Comparison Approach Projected Sales Profit of Underlying Loans
(0.3) to 0.8% (0.2%)
The significant unobservable inputs used in the fair value measurement of the Company’s residential mortgage-backed securities are projected prepayment rates, probability of default, and projected loss severity in the event of default. Significant increases (decreases) in any of those inputs in isolation would result in a significantly lower (higher) fair value measurement. Generally, a change in the assumption used for the probability of default is accompanied by a directionally similar change in the assumption used for the projected loss severity and a directionally opposite change in the assumption used for projected prepayment rates.
The table below summarizes assets measured for impairment on a non-recurring basis:
December 31, 2020
(Dollars in thousands) Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) 		Significant Other
Observable
Inputs
(Level 2) 		Significant
Unobservable
Inputs
(Level 3) 		Balance
Other real estate owned and foreclosed assets:
Single family real estate $ —  $ —  $ 6,114  $ 6,114 
Autos and RVs —  —  182  182 
Total $ —  $ —  $ 6,296  $ 6,296 
June 30, 2020
(Dollars in thousands) Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) 		Significant Other
Observable
Inputs
(Level 2) 		Significant
Unobservable
Inputs
(Level 3) 		Balance
Other real estate owned and foreclosed assets:
Single family real estate $ —  $ —  $ 6,114  $ 6,114 
Autos and RVs —  —  294  294 
Total $ —  $ —  $ 6,408  $ 6,408 
Other real estate owned and foreclosed assets, which are measured at the lower of carrying value or fair value less costs to sell, had a net carrying amount of $6,296 after charge-offs of $0 for the six months ended December 31, 2020.
The Company has elected the fair value option for Agency loans held for sale. These loans are intended for sale and the Company believes that the fair value is the best indicator of the resolution of these loans. Interest income is recorded based on the contractual terms of the loan and in accordance with the Company’s policy on loans held for investment. None of these loans are 90 days or more past due nor on nonaccrual as of December 31, 2020 and June 30, 2020.
As of December 31, 2020 and June 30, 2020, the aggregate fair value of loans held for sale, carried at fair value, contractual balance (including accrued interest), and unrealized gain was as follows:
(Dollars in thousands) December 31, 2020 June 30, 2020
Aggregate fair value $ 64,287  $ 51,995 
Contractual balance 62,093  49,700 
Unrealized gain $ 2,194  $ 2,295 
14
The total amount of gains and losses from changes in fair value included in earnings for the period indicated below for loans held for sale were:
For the Three Months Ended For the Six Months Ended
December 31, December 31,
(Dollars in thousands) 2020 2019 2020 2019
Interest income $ 420  $ 291  $ 802  $ 596 
Change in fair value (6,425) (728) 459  (252)
Total $ (6,005) $ (437) $ 1,261  $ 344 
15
The following table presents quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at the periods indicated:
December 31, 2020
(Dollars in thousands) Fair Value Valuation Technique(s) Unobservable Input
Range (Weighted Average) 1
Other real estate owned and foreclosed assets:
Single family real estate $ 6,114  Sales comparison approach Adjustment for differences between the comparable sales
0.1 to 0.1% (0.1%)
Autos and RVs $ 182  Sales comparison approach Adjustment for differences between the comparable sales
0.0 to 0.0% (0.0%)
June 30, 2020
(Dollars in thousands) Fair Value Valuation Technique(s) Unobservable Input
Range (Weighted Average) 1
Other real estate owned and foreclosed assets:
Single family real estate $ 6,114  Sales comparison approach Adjustment for differences between the comparable sales
18.7 to 18.7% (18.7%)
Autos and RVs $ 294  Sales comparison approach Adjustment for differences between the comparable sales
(24.6) to 44.2% (2.8%)
1 For other real estate owned and foreclosed assets the ranges shown may vary positively or negatively based on the comparable sales reported in the current appraisal. In certain instances, the range can be significant due to small sample sizes and in some cases the property being valued having limited comparable sales with similar characteristics at the time the current appraisal is conducted.

16
Fair value of Financial Instruments
The carrying amounts and estimated fair values of financial instruments at December 31, 2020 and June 30, 2020 were as follows:
December 31, 2020
Fair Value
(Dollars in thousands) Carrying
Amount 		Level 1 Level 2 Level 3 Total Fair Value
Financial assets:
Cash and cash equivalents $ 1,443,195  $ 1,443,195  $ —  $ —  $ 1,443,195 
Securities — trading 362  —  362  —  362 
Securities — available-for-sale 209,828  —  192,693  17,135  209,828 
Loans held for sale, at fair value 64,287  —  64,287  —  64,287 
Loans held for sale, at lower of cost or fair value 13,769  —  —  13,815  13,815 
Loans and leases held for investment—net 11,609,584  —  —  12,151,576  12,151,576 
Securities borrowed 317,571  —  —  317,666  317,666 
Customer, broker-dealer and clearing receivables 264,572  —  —  264,678  264,678 
Mortgage servicing rights 14,314  —  —  14,314  14,314 
Financial liabilities:
Total deposits 11,463,136  —  11,103,293  —  11,103,293 
Advances from the Federal Home Loan Bank 182,500  —  192,082  —  192,082 
Borrowings, subordinated notes and debentures 418,480  —  414,350  —  414,350 
Securities loaned 362,170  —  —  363,365  363,365 
Customer, broker-dealer and clearing payables 475,473  —  —  475,473  475,473 
June 30, 2020
Fair Value
(Dollars in thousands) Carrying
Amount 		Level 1 Level 2 Level 3 Total Fair Value
Financial assets:
Cash and cash equivalents $ 1,950,519  $ 1,950,519  $ —  $ —  $ 1,950,519 
Securities — trading 105  —  105  —  105 
Securities — available-for-sale 187,627  —  169,295  18,332  187,627 
Loans held for sale, at fair value 51,995  —  51,995  —  51,995 
Loans held for sale, at lower of cost or fair value 44,565  —  —  44,625  44,625 
Loans and leases held for investment—net 10,631,349  —  —  11,138,255  11,138,255 
Securities borrowed 222,368  —  —  222,613  222,613 
Customer, broker-dealer and clearing receivables 220,266  —  —  220,464  220,464 
Mortgage servicing rights 10,675  —  —  10,675  10,675 
Financial liabilities:
Total deposits 11,336,694  —  11,088,447  —  11,088,447 
Advances from the Federal Home Loan Bank 242,500  —  254,114  —  254,114 
Borrowings, subordinated notes and debentures 235,789  —  234,445  —  234,445 
Securities loaned 255,945  —  —  256,790  256,790 
Customer, broker-dealer and clearing payables 347,614  —  —  347,614  347,614 
17
The methods and assumptions, not previously presented, used to estimate fair value are described as follows: Carrying amount is the estimated fair value for cash and cash equivalents, interest bearing deposits, accrued interest receivable and payable, demand deposits, short-term debt, and variable rate loans and leases or deposits that reprice frequently and fully. For fixed rate loans and leases, deposits, borrowings or subordinated debt and for variable rate loans and leases, deposits, borrowings 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 and loans held for sale can be found earlier in this footnote. The carrying amount of stock of regulatory agencies approximates the estimated fair value of this investment. The fair value of off-balance sheet items is not considered material.
3.     SECURITIES
The amortized cost, carrying amount and fair value for the trading and available-for-sale securities at December 31, 2020 and June 30, 2020 were:
December 31, 2020
Trading Available-for-sale
(Dollars in thousands) Fair
Value 		Amortized
Cost 		Unrealized
Gains 		Unrealized
Losses 		Fair
Value
Mortgage-backed securities (RMBS):
U.S. agencies1
$ —  $ 16,424  $ 552  $ (1) $ 16,975 
Non-agency2
—  17,289  821  (975) 17,135 
Total mortgage-backed securities —  33,713  1,373  (976) 34,110 
Non-RMBS:
U.S. agencies1
—  1,800  —  (1) 1,799 
Municipal 362  3,405  109  —  3,514 
Asset-backed securities and structured notes —  168,215  2,190  —  170,405 
Total Non-RMBS 362  173,420  2,299  (1) 175,718 
Total debt securities $ 362  $ 207,133  $ 3,672  $ (977) $ 209,828 
June 30, 2020
Trading Available-for-sale
(Dollars in thousands) Fair
Value 		Amortized
Cost 		Unrealized
Gains 		Unrealized
Losses 		Fair
Value
Mortgage-backed securities (RMBS):
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-RMBS:
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 Non-RMBS 105  153,687  45  (1,263) 152,469 
Total debt securities $ 105  $ 188,059  $ 1,703  $ (2,135) $ 187,627 
1Includes securities guaranteed by Ginnie Mae, a U.S. government agency, and the government sponsored enterprises Fannie Mae and Freddie Mac.
2Private sponsors of securities collateralized primarily by pools of 1-4 family residential first mortgages. Primarily super senior securities secured by Alt-A or pay-option ARM mortgages.

The Company’s non-agency RMBS available-for-sale portfolio with a total fair value of $17,135 at December 31, 2020 consists of 15 different issues of super senior securities.
The face amounts of debt securities available-for-sale that were pledged to secure borrowings at December 31, 2020 and June 30, 2020 were $3.4 million and $3.5 million, respectively.
18
The securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows:
December 31, 2020
Available-for-sale securities in loss position for
Less Than
12 Months 		More Than
12 Months 		Total
(Dollars in thousands) Fair
Value 		Gross
Unrealized
Losses 		Fair
Value 		Gross
Unrealized
Losses 		Fair
Value 		Gross
Unrealized
Losses
RMBS:
U.S. agencies $ 537  $ (1) $ —  $ —  $ 537  $ (1)
Non-agency —  —  6,317  (975) 6,317  (975)
Total RMBS securities 537  (1) 6,317  (975) 6,854  (976)
Non-RMBS:
U.S. agencies 1,799  (1) —  —  1,799  (1)
Total Non-RMBS 1,799  (1) —  —  1,799  (1)
Total debt securities $ 2,336  $ (2) $ 6,317  $ (975) $ 8,653  $ (977)
June 30, 2020
Available-for-sale securities in loss position for
Less Than
12 Months 		More Than
12 Months 		Total
(Dollars in thousands) Fair
Value 		Gross
Unrealized
Losses 		Fair
Value 		Gross
Unrealized
Losses 		Fair
Value 		Gross
Unrealized
Losses
RMBS:
U.S. agencies $ 85  $ —  $ —  $ —  $ 85  $ — 
Non-agency —  —  6,978  (872) 6,978  (872)
Total RMBS securities 85  —  6,978  (872) 7,063  (872)
Non-RMBS:
Municipal debt —  —  2,002  (194) 2,002  (194)
Asset-backed securities and structured notes 139,883  (1,069) —  —  139,883  (1,069)
Total Non-RMBS 139,883  (1,069) 2,002  (194) 141,885  (1,263)
Total debt securities $ 139,968  $ (1,069) $ 8,980  $ (1,066) $ 148,948  $ (2,135)
On December 31, 2020, there were eight securities that were in a continuous loss position for a period of more than 12 months, and three securities that were in a continuous loss position for a period of less than 12 months. At June 30, 2020, there were ten securities that were in a continuous loss position for a period of more than 12 months, and four securities that were in a continuous loss position for a period of less than 12 months.
At December 31, 2020, one non-agency RMBS with a total carrying amount of $2.7 million was determined to have cumulative credit losses of $0.8 million of which none was recognized in earnings during the three months ended December 31, 2020. For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available-for-sale debt securities that do not meet the aforementioned criteria, the Company evaluates at the individual security level whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses, if any, are recorded as a provision for (or reversal of) credit losses. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale investment security is confirmed or when either of the criteria regarding intent or requirement to sell is met.
During the three months ended December 31, 2019, the company sold no available-for-sale securities. During the three months ended December 31, 2020, the company sold no available-for-sale securities.
19
The Company had recorded unrealized gains and unrealized losses in accumulated other comprehensive loss as follows:
(Dollars in thousands) December 31,
2020 		June 30,
2020
Available-for-sale debt securities—net unrealized gains (losses) $ 2,695  $ (432)
Available-for-sale debt securities—non-credit related losses (845) (845)
Subtotal 1,850  (1,277)
Tax benefit (expense) (599) 340 
Net unrealized gain (loss) on investment securities in accumulated other comprehensive income (loss) $ 1,251  $ (937)


4.    LOANS & ALLOWANCE FOR CREDIT LOSSES
The following table(s) sets forth the composition of the loan portfolio as of the dates indicated:
(Dollars in thousands) December 31, 2020 June 30, 2020
Single Family - Mortgage & Warehouse $ 5,252,810  $ 4,722,304 
Multifamily and Commercial Mortgage 2,363,024  2,263,054 
Commercial Real Estate 2,720,922  2,297,920 
Commercial & Industrial - Non-RE 933,081  885,320 
Auto & Consumer 327,340  341,365 
Other 151,496  193,479 
Total gross loans and leases 11,748,673  10,703,442 
Allowance for credit losses - loans (136,393) (75,807)
Unaccreted premiums (discounts) and loan and lease fees (2,696) 3,714 
Total net loans and leases $ 11,609,584  $ 10,631,349 

20
The following tables summarize activity in the allowance for credit losses - loans by portfolio classes for the periods indicated.
For the Three Months Ended December 31, 2020
(Dollars in thousands) Single Family-Mortgage & Warehouse Multifamily and Commercial Mortgage Commercial Real Estate Commercial & Industrial - Non-RE Auto & Consumer Other Total
Balance at October 1, 2020 $ 28,307  $ 12,419  $ 49,198  $ 23,295  $ 8,678  $ 11,018  $ 132,915 
Provision for credit losses - loans 5,271  470  7,517  (1,546) (214) (3,498) 8,000 
Charge-offs (870) —  —  (2,620) (1,220) —  (4,710)
Recoveries 19  —  —  —  169  —  188 
Balance at December 31, 2020 $ 32,727  $ 12,889  $ 56,715  $ 19,129  $ 7,413  $ 7,520  $ 136,393 
For the Three Months Ended December 31, 2019
(Dollars in thousands) Single Family-Mortgage & Warehouse Multifamily and Commercial Mortgage Commercial Real Estate Commercial & Industrial - Non-RE Auto & Consumer Other Total
Balance at October 1, 2019 $ 21,712  $ 4,005  $ 12,462  $ 14,402  $ 6,585  $ 61  $ 59,227 
Provision for credit losses - loans 23  (78) 229  (2,276) 1,570  5,032  4,500 
Charge-offs (145) —  —  —  (1,109) (4,132) (5,386)
Recoveries 71  119  —  —  122  861  1,173 
Balance at December 31, 2019 $ 21,661  $ 4,046  $ 12,691  $ 12,126  $ 7,168  $ 1,822  $ 59,514 
For the Six Months Ended December 31, 2020
(Dollars in thousands) Single Family-Mortgage & Warehouse Multifamily and Commercial Mortgage Commercial Real Estate Commercial & Industrial - Non-RE Auto & Consumer Other Total
Balance at July 1, 2020 $ 25,901  $ 4,718  $ 21,052  $ 9,954  $ 9,461  $ 4,721  $ 75,807 
Effect of Adoption of ASC 326
6,318  7,408  25,893  7,042  610  29  47,300 
Provision for credit losses - loans 2,832  763  9,770  4,966  (1,301) 2,770  19,800 
Charge-offs (2,359) —  —  (2,833) (1,956) —  (7,148)
Recoveries 35  —  —  —  599  —  634 
Balance at December 31, 2020 $ 32,727  $ 12,889  $ 56,715  $ 19,129  $ 7,413  $ 7,520  $ 136,393 
For the Six Months Ended December 31, 2019
(Dollars in thousands) Single Family-Mortgage & Warehouse Multifamily and Commercial Mortgage Commercial Real Estate Commercial & Industrial - Non-RE Auto & Consumer Other Total
Balance at July 1, 2019 $ 22,290  $ 3,807  $ 14,632  $ 9,544  $ 6,339  $ 473  $ 57,085 
Provision for credit losses - loans (656) 120  (1,941) 2,582  2,751  4,344  7,200 
Charge-offs (151) —  —  —  (2,130) (4,182) (6,463)
Recoveries 178  119  —  —  208  1,187  1,692 
Balance at December 31, 2019 $ 21,661  $ 4,046  $ 12,691  $ 12,126  $ 7,168  $ 1,822  $ 59,514 

Credit Quality Disclosures. Nonaccrual loans consisted of the following as of the dates indicated:
As of December 31, 2020
(Dollars in thousands) With Allowance With No Allowance Total
Single Family - Mortgage & Warehouse $ 68,789  $ 48,400  $ 117,189 
Multifamily and Commercial Mortgage 25,487  6,643  32,130 
Commercial Real Estate 16,631  —  16,631 
Commercial & Industrial - Non-RE 2,960  —  2,960 
Auto & Consumer 238  116  354 
     Total nonaccrual loans $ 114,105  $ 55,159  $ 169,264 
Nonaccrual loans to total loans 1.44  %

Approximately 0.50% of our nonaccrual loans at December 31, 2020 were considered TDRs, compared to 0.34% at June 30, 2020. Borrowers that make timely payments after TDRs are considered non-performing for at least six months. Generally, after six months of timely payments, those TDRs are reclassified from the nonaccrual loan category to the performing loan category and any previously deferred interest income is recognized. Approximately 69.23% of the Bank’s nonaccrual loans are single family first mortgages, repaid and written down to 89.15% in aggregate, of the original loan value of the underlying properties.
21
No interest income was recognized in the three and six months ended December 31, 2020 on nonaccrual loans.
The following tables present the outstanding unpaid balance of loans that are performing and nonaccrual by portfolio class:
December 31, 2020
(Dollars in thousands) Single Family-Mortgage & Warehouse Multifamily and Commercial Mortgage Commercial Real Estate Commercial & Industrial - Non-RE Auto & Consumer Other Total
Performing $ 5,135,621  $ 2,330,894  $ 2,704,291  $ 930,121  $ 326,986  $ 151,496  $ 11,579,409 
Nonaccrual 117,189  32,130  16,631  2,960  354  —  169,264 
          Total $ 5,252,810  $ 2,363,024  $ 2,720,922  $ 933,081  $ 327,340  $ 151,496  $ 11,748,673 
June 30, 2020
(Dollars in thousands) Single Family-Mortgage & Warehouse Multifamily and Commercial Mortgage Commercial Real Estate Commercial & Industrial - Non-RE Auto & Consumer Other Total
Performing $ 4,638,274  $ 2,259,629  $ 2,297,920  $ 885,107  $ 341,092  $ 193,479  $ 10,615,501 
Nonaccrual 84,030  3,425  —  213  273  —  87,941 
          Total $ 4,722,304  $ 2,263,054  $ 2,297,920  $ 885,320  $ 341,365  $ 193,479  $ 10,703,442 

From time to time, the Company modifies loan terms temporarily for borrowers who are experiencing financial stress. These loans are performing and accruing and will generally return to the original loan terms after the modification term expires. The Company had no TDRs classified as performing loans at December 31, 2020 or June 30, 2020. Under guidelines set forth in the CARES Act, the Company had provided borrowers the ability to delay payments and not consider them to be TDRs. Starting at September 30, 2020, the Company no longer allowed delayed payments and no loans existed at September 30, 2020 or December 31, 2020 that were in a forbearance status.





























22
Credit Quality Indicators
The amortized cost basis by fiscal year of origination and credit quality indicator of the Company’s loan and leases as of December 31, 2020 was as follows:
Loans Held for Investment Origination Year Revolving Loans Revolving Loans Converted to Loans HFI Revolving Loans Converted to Term Loans Total
(Dollars in thousands) 2021 2020 2019 2018 2017 Prior
Single Family-Mortgage & Warehouse
Pass $ 539,284  $ 952,830  $ 660,507  $ 575,594  $ 444,502  $ 710,004  $ 1,165,124  $ —  $ —  $ 5,047,845 
Special Mention 285  12,131  8,781  15,512  8,170  10,857  19,755  —  —  75,491 
Substandard —  5,203  24,645  26,206  12,960  60,460  —  —  —  129,474 
Doubtful —  —  —  —  —  —  —  —  —  — 
Total 539,569  970,164  693,933  617,312  465,632  781,321  1,184,879  —  —  5,252,810 
Multifamily and Commercial Mortgage
Pass 280,288  596,962  466,586  341,318  217,464  385,722  —  —  —  2,288,340 
Special Mention —  36,222  2,075  1,338  1,431  631  —  —  —  41,697 
Substandard —  24,499  2,165  4,479  —  1,844  —  —  —  32,987 
Doubtful —  —  —  —  —  —  —  —  —  — 
Total 280,288  657,683  470,826  347,135  218,895  388,197  —  —  —  2,363,024 
Commercial Real Estate
Pass 576,922  1,065,384  491,215  169,036  45,701  63,750  181,521  —  —  2,593,529 
Special Mention —  24,842  12,161  —  11,221  —  2,271  —  —  50,495 
Substandard —  15,250  45,017  16,631  —  —  —  —  —  76,898 
Doubtful —  —  —  —  —  —  —  —  —  — 
Total 576,922  1,105,476  548,393  185,667  56,922  63,750  183,792  —  —  2,720,922 
Commercial & Industrial - Non-RE
Pass 39,640  112,479  19,423  34,711  14,560  68  599,386  —  104,716  924,983 
Special Mention —  —  —  —  92  —  —  —  —  92 
Substandard 2,824  865  3,360  957  —  —  —  —  —  8,006 
Doubtful —  —  —  —  —  —  —  —  —  — 
Total 42,464  113,344  22,783  35,668  14,652  68  599,386  —  104,716  933,081 
Auto & Consumer
Pass 54,091  102,067  91,972  43,978  23,142  10,803  —  —  —  326,053 
Special Mention 14  269  108  105  33  1  —  —  —  530 
Substandard —  223  353  98  66  17  —  —  —  757 
Doubtful —  —  —  —  —  —  —  —  —  — 
Total 54,105  102,559  92,433  44,181  23,241  10,821  —  —  —  327,340 
Other
Pass —  140,023  —  1,886  874  1,426  —  —  —  144,209 
Special Mention —  —  —  —  —  —  —  —  —  — 
Substandard —  7,287  —  —  —  —  —  —  —  7,287 
Doubtful —  —  —  —  —  —  —  —  —  — 
Total —  147,310  —  1,886  874  1,426  —  —  —  151,496 
Total
Pass 1,490,225  2,969,745  1,729,703  1,166,523  746,243  1,171,773  1,946,031  —  104,716  11,324,959 
Special Mention 299  73,464  23,125  16,955  20,947  11,489  22,026  —  —  168,305 
Substandard 2,824  53,327  75,540  48,371  13,026  62,321  —  —  —  255,409 
Doubtful —  —  —  —  —  —  —  —  —  — 
Total $ 1,493,348  $ 3,096,536  $ 1,828,368  $ 1,231,849  $ 780,216  $ 1,245,583  $ 1,968,057  $ —  $ 104,716  $ 11,748,673 
As a % of total gross loans and leases 12.71  % 26.36  % 15.56  % 10.49  % 6.64  % 10.60  % 16.75  % —  % 0.89  % 100.0  %

The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses - loans. The Company also evaluates credit quality based on the aging status of its loans and leases. During the year, the Company holds certain short-term loans that do not have a fixed maturity date that are treated as delinquent if not paid in full 90 days after the origination date.
The Company has taken proactive measures to manage loans that became delinquent during the recent economic downturn as a result of the COVID-19 pandemic. No forbearance or deferrals were provided to any borrowers during the three months ended December 31, 2020.
The following tables provide the outstanding unpaid balance of loans and leases that are past due 30 days or more by portfolio class as of the dates indicated:
23
December 31, 2020
(Dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due 90+ Days Past Due Total
Single Family-Mortgage & Warehouse $ 29,886  $ 31,537  $ 93,829  $ 155,252 
Multifamily and Commercial Mortgage 4,112  2,909  25,578  32,599 
Commercial Real Estate 24,648  —  —  24,648 
Commercial & Industrial - Non-RE —  —  2,960  2,960 
Auto & Consumer 1,657  620  266  2,543 
Other —  —  —  — 
Total $ 60,303  $ 35,066  $ 122,633  $ 218,002 
As a % of total gross loans and leases 0.51  % 0.30  % 1.04  % 1.86  %
June 30, 2020
(Dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due 90+ Days Past Due Total
Single Family-Mortgage & Warehouse $ 17,931  $ 23,115  $ 66,813  $ 107,859 
Multifamily and Commercial Mortgage 7,744  5,287  —  13,031 
Commercial Real Estate —  —  —  — 
Commercial & Industrial - Non-RE —  —  —  — 
Auto & Consumer 973  166  326  1,465 
Other —  —  —  — 
Total $ 26,648  $ 28,568  $ 67,139  $ 122,355 
As a % of total gross loans and leases 0.25  % 0.27  % 0.63  % 1.13  %

Allowance for Credit Losses
The allowance for credit losses is the sum of the allowance for credit losses - loans and the unfunded loan commitment liabilities. Unfunded loan commitment liabilities is included in “Accounts payable, accrued liabilities and other liabilities” in the unaudited Condensed Consolidated Balance Sheets.
The following tables present a summary of the activity in the allowance for credit losses for the periods indicated:
Three Months Ended December 31, 2020
(Dollars in thousands) Allowance for Credit Losses - Loans Unfunded Loan Commitment Liabilities Total Allowance for Credit Losses
Balance at October 1, 2020 $ 132,915  $ 6,723  $ 139,638 
Provision for Credit Losses 8,000  (1,000) 7,000 
Charge-offs (4,710) —  (4,710)
Recoveries 188  —  188 
Balance at December 31, 2020 $ 136,393  $ 5,723  $ 142,116 
Three Months Ended December 31, 2019
(Dollars in thousands) Allowance for Credit Losses - Loans Unfunded Loan Commitment Liabilities Total Allowance for Credit Losses
Balance at October 1, 2019 $ 59,227  $ 227  $ 59,454 
Provision for Credit Losses 4,500  17  4,517 
Charge-offs (5,386) —  (5,386)
Recoveries 1,173  —  1,173 
Balance at December 31, 2019 $ 59,514  $ 244  $ 59,758 
For the Six Months Ended December 31, 2020
(Dollars in thousands) Allowance for Credit Losses - Loans Unfunded Loan Commitment Liabilities Total Allowance for Credit Losses
Balance at July 1, 2020 $ 75,807  $ 323  $ 76,130 
Effect of Adoption of ASC 326 47,300  5,700  53,000 
Provision for Credit Losses 19,800  (300) 19,500 
Charge-offs (7,148) —  (7,148)
Recoveries 634  —  634 
Balance at December 31, 2020 $ 136,393  $ 5,723  $ 142,116 

24
For the Six Months Ended December 31, 2019
(Dollars in thousands) Allowance for Credit Losses - Loans Unfunded Loan Commitment Liabilities Total Allowance for Credit Losses
Balance at July 1, 2019 $ 57,085  $ 227  $ 57,312 
Provision for Credit Losses 7,200  17  7,217 
Charge-offs (6,463) —  (6,463)
Recoveries 1,692  —  1,692 
Balance at December 31, 2019 $ 59,514  $ 244  $ 59,758 



5.    SUBORDINATED NOTES
In September 2020, the Company completed the sale of $175.0 million aggregate principal amount of its 4.875% Fixed-to-Floating Rate Subordinated Notes due October 1, 2030 (the “Notes”). The 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 Notes will bear interest at a floating rate per annum equal to a benchmark rate (which is expected to be the Three-Month Term Secured Overnight Financing Rate) 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 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 Notes.


6.    EQUITY AND STOCK-BASED COMPENSATION
    Common Stock Repurchases. On March 17, 2016, the Board of Directors of the Company (the “Board”), authorized a program to repurchase up to $100 million of common stock and extended the program by $100 million on August 2, 2019. The Company may repurchase shares on the open market or through privately negotiated transactions at times and prices considered appropriate, at the discretion of the Company, and subject to its assessment of alternative uses of capital, stock trading price, general market conditions and regulatory factors. The repurchase program does not obligate the Company to acquire any specific number of shares. The share repurchase program will continue in effect until terminated by the Board. With the March 17, 2016 authorization, the Company repurchased a total of $100 million or 3,567,051 common shares at an average price of $28.03 per share. With the August 2, 2019 authorization, the Company has repurchased a total of $47.2 million or 2,399,853 common shares at an average price of $19.68 per share and there remains $52.8 million under the plan. During the six months ended December 31, 2020, the Company repurchased a total of $16.8 million, or 753,597 common shares at an average price of $22.24 per share. The Company has $52.8 million remaining under the Board authorized stock repurchase program. The Company accounts for treasury stock using the cost method as a reduction of stockholders’ equity in the accompanying unaudited condensed consolidated financial statements.
Preferred Stock. The Company redeemed for cash all 515 outstanding shares of Series A-6% Cumulative Nonparticipating Perpetual Preferred Stock on October 30, 2020, at the face value $10,000 liquidation price per share plus accrued dividends.
    Restricted Stock Units. During the six months ended December 31, 2020 and 2019, the Company granted 437,608 and 380,765 restricted stock unit awards (“RSUs”) to employees and directors, respectively. RSUs granted during these quarters generally vest over three years, one-third on each anniversary date, except for any RSUs granted to the Company’s CEO, which vest one-fourth on each fiscal year end.
25
    The Company’s income before income taxes and net income for the six months ended December 31, 2020 and 2019 include stock award expense of $9,026 and $9,811, with total income tax benefit of $2,721 and $2,798, respectively. The Company recognizes compensation expense based upon the grant-date fair value divided by the vesting and the service period between each vesting date. At December 31, 2020, unrecognized compensation expense related to non-vested awards aggregated to $30,083 and is expected to be recognized in future periods as follows:
(Dollars in thousands) Stock Award
Compensation
Expense
For the fiscal year remainder:
2021 $ 8,891 
2022 12,674 
2023 6,760 
2024 1,326 
2025 331 
Thereafter 101 
Total $ 30,083 
    
The following table presents the status and changes in restricted stock units for the periods indicated:
Restricted
Stock Units 		Weighted-Average
Grant-Date
Fair Value
Non-vested balance at June 30, 2019 1,546,848  $ 30.73 
Granted 714,569  24.05 
Vested (693,660) 28.52 
Canceled (122,217) 29.10 
Non-vested balance at June 30, 2020 1,445,540  $ 28.62 
Granted 437,608  24.78 
Vested (327,211) 28.88 
Canceled (100,757) 26.34 
Non-vested balance at December 31, 2020 1,455,180  $ 27.57 
    The total fair value of shares vested for the three and six months ended December 31, 2020 was $1,644 and $8,246. The total fair value of shares vested for the three and six months ended December 31, 2019 was $2,349 and $9,531.

7.    EARNINGS PER COMMON SHARE
    Earnings per common share (“EPS”) are presented under two formats: basic EPS and diluted EPS. Basic EPS is computed by dividing the net income attributable to common stock (net income after deducting dividends on preferred stock and preferred stock redemption charge) by the sum of the weighted-average number of common shares outstanding during the year and the unvested average of participating RSUs. Diluted EPS is computed by dividing the sum of net income attributable to common stock and dividends on diluted preferred stock by the sum of the weighted-average number of common shares outstanding during the year and the impact of dilutive potential common shares, such as nonparticipating RSUs, stock options and convertible preferred stock.
    The unvested stock-based compensation awards issued under the 2014 Stock Incentive Plan, have no stockholder rights, meaning they are not entitled to dividends and are considered nonparticipating. The Company does not include these nonparticipating RSUs in the basic EPS calculation but are included in the diluted EPS calculation using the treasury stock method.
26
The following table presents the calculation of basic and diluted EPS:
Three Months Ended Six Months Ended
December 31, December 31,
(Dollars in thousands, except per share data) 2020 2019 2020 2019
Earnings Per Common Share
Net income $ 54,785  $ 41,295  $ 107,807  $ 82,081 
Preferred stock dividends (26) (78) (103) (155)
Preferred stock redemption charge (87) —  (87) — 
Net income attributable to common stockholders $ 54,672  $ 41,217  $ 107,617  $ 81,926 
Average common shares outstanding 59,049,697  61,315,590  59,278,672  61,281,127 
Total qualifying shares 59,049,697  61,315,590  59,278,672  61,281,127 
Earnings per common share $ 0.93  $ 0.67  $ 1.82  $ 1.34 
Diluted Earnings Per Common Share
Dilutive net income attributable to common stockholders $ 54,672  $ 41,217  $ 107,617  $ 81,926 
Average common shares issued and outstanding 59,049,697  61,315,590  59,278,672  61,281,127 
Dilutive effect of average unvested RSUs 991,026  623,398  917,844  619,506 
Total dilutive common shares outstanding 60,040,723  61,938,988  60,196,516  61,900,633 
Diluted earnings per common share $ 0.91  $ 0.67  $ 1.79  $ 1.32 

8.    COMMITMENTS AND CONTINGENCIES
COVID-19 Impact. The Company is closely monitoring the rapid developments of and uncertainties caused by the COVID-19 pandemic. In response to the changes in economic and business conditions as a result of the COVID-19 pandemic, the Company has taken the following actions to support customers, employees, partners and shareholders:
•Actively communicating with borrowers and partners to assess individual needs;
•Participating as a lender in the Paycheck Protection Program (PPP) and evaluating various components of the CARES Act applicability to the Company;
•Extending our participation to a second round of loans under the PPP as a result of the Consolidated Appropriations Act, 2021 signed into law on December 27, 2020;
•Provided secure and efficient remote work options for our team members;
•Increasing provisions for credit losses as a result of a weakening economy and reduced business activities;
•Tightening underwriting standards;
•Reallocated personnel to increase resources for customer service and portfolio management; and
•Limiting business travel.
Under the guidelines set forth in the CARES Act, the Company had provided certain borrowers the ability to delay or make interest-only payments. Starting on September 30, 2020, the Company no longer allows delayed or interest-only payments.
Operating Leases. The Company leases office space under operating lease agreements scheduled to expire at various dates. The following table represents maturities of lease liabilities as of December 31, 2020 in the corresponding fiscal years:
(Dollars in thousands)
Remainder of 2021 $ 4,905 
2022 9,548 
2023 9,820 
2024 9,422 
2025 8,791 
Thereafter 41,968 
Total lease payments 84,454 
Less: present value discount (10,483)
Total Lease Liability $ 73,971 

27
Credit-Related Financial Instruments. The Company is a party to credit-related financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments are commitments to extend credit. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the unaudited condensed consolidated balance sheets.
The Company’s exposure to credit loss is represented by the contractual amount of these commitments. The Company follows the same credit policies in making commitments as it does for on-balance-sheet instruments.
At December 31, 2020, the Company had commitments to originate $75.0 million in fixed rate loans and leases and $622.2 million in variable rate loans, totaling an aggregate outstanding principal balance of $697.2 million. At December 31, 2020, the Company’s fixed rate commitments to originate had a weighted-average rate of 2.76%. At December 31, 2020, the Company also had commitments to sell $124.7 million in fixed rate loans and none in variable rate loans, totaling an aggregate outstanding principal balance of $124.7 million.
Commitments to extend credit are agreements to lend to a customer so long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The commitments for equity lines of credit may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if it is deemed necessary by the Company, is based on management’s credit evaluation of the customer.
In the normal course of business, Axos Clearing’s customer activities involve the execution, settlement, and financing of various customer securities transactions. These activities may expose Axos Clearing to off-balance-sheet risk in the event the customer or other broker is unable to fulfill its contracted obligations and Axos Clearing has to purchase or sell the financial instrument underlying the contract at a loss. Axos Clearing’s clearing agreements with broker-dealers for which it provides clearing services requires them to indemnify Axos Clearing if customers fail to satisfy their contractual obligation.
Litigation. On October 15, 2015, the Company, its Chief Executive Officer and its Chief Financial Officer were named defendants in a putative class action lawsuit styled Golden v. BofI Holding, Inc., et al, and brought in United States District Court for the Southern District of California (the “Golden Case”). On November 3, 2015, the Company, its Chief Executive Officer and its Chief Financial Officer were named defendants in a second putative class action lawsuit styled Hazan v. BofI Holding, Inc., et al, and also brought in the United States District Court for the Southern District of California (the “Hazan Case”). On February 1, 2016, the Golden Case and the Hazan Case were consolidated as In re BofI Holding, Inc. Securities Litigation, Case #: 3:15-cv-02324-GPC-KSC (the “Class Action”), and the Houston Municipal Employees Pension System was appointed lead plaintiff. The plaintiffs allege that the Company and other named defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by failing to disclose wrongful conduct that was alleged in a complaint filed in connection with a wrongful termination of employment lawsuit filed on October 13, 2015 (the “Employment Matter”) and that as a result the Company’s statements regarding its internal controls, as well as portions of its financial statements, were false and misleading. On March 21, 2018, the Court entered a final order dismissing the Class Action with prejudice. Subsequently, the plaintiff appealed, the Court overturned the dismissal and the Company is preparing a petition for a rehearing.
On April 3, 2017, the Company, its Chief Executive Officer and its Chief Financial Officer were named defendants in a putative class action lawsuit styled Mandalevy v. BofI Holding, Inc., et al, and brought in United States District Court for the Southern District of California (the “Mandalevy Case”). The Mandalevy Case seeks monetary damages and other relief on behalf of a putative class that has not been certified by the Court. The complaint in the Mandalevy Case (the “Mandalevy Complaint”) alleges a class period that differs from that alleged in the First Class Action, and that the Company and other named defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by failing to disclose wrongful conduct that was alleged in a March 2017 media article. The Mandalevy Case has not been consolidated into the First Class Action. On December 7, 2018, the Court entered a final order granting the defendants’ motion and dismissing the Mandalevy Case with prejudice. Subsequently, the plaintiff filed a notice of appeal and the Court took the matter under advisement. On November 3, 2020, the Court issued a ruling affirming in part and reversing in part the District Court's Order dismissing the Class Action Second Amended Complaint.
The Company and the other named defendants dispute the allegations of wrongdoing advanced by the plaintiffs in the Class Action, the Mandalevy Case, and in the Employment Matter, as well as those plaintiffs’ statement of the underlying factual circumstances, and are vigorously defending each case.
In addition to the First Class Action and the Mandalevy Case, two separate shareholder derivative actions were filed in December, 2015, purportedly on behalf of the Company. The first derivative action, Calcaterra v. Garrabrants, et al, was filed in the United States District Court for the Southern District of California on December 3, 2015. The second derivative action, Dow v. Micheletti, et al, was filed in the San Diego County Superior Court on December 16, 2015. A third derivative action,
28
DeYoung v. Garrabrants, et al, was filed in the United States District Court for the Southern District of California on January 22, 2016, a fourth derivative action, Yong v. Garrabrants, et al, was filed in the United States District Court for the Southern District of California on January 29, 2016, a fifth derivative action, Laborers Pension Trust Fund of Northern Nevada v. Allrich et al, was filed in the United States District Court for the Southern District of California on February 2, 2016, and a sixth derivative action, Garner v. Garrabrants, et al, was filed in the San Diego County Superior Court on August 10, 2017. Each of these six derivative actions names the Company as a nominal defendant, and certain of its officers and directors as defendants. Each complaint sets forth allegations of breaches of fiduciary duties, gross mismanagement, abuse of control, and unjust enrichment against the defendant officers and directors. The plaintiffs in these derivative actions seek damages in unspecified amounts on the Company’s behalf from the officer and director defendants, certain corporate governance actions, and an award of their costs and attorney’s fees.
The United States District Court for the Southern District of California ordered the four above-referenced derivative actions pending before it to be consolidated and appointed lead counsel in the consolidated action. On June 7, 2018, the Court entered an order granting defendant’s motion for judgment on the pleadings, but giving the plaintiffs limited leave to amend by June 28, 2018. The plaintiffs failed to file an amended complaint, and instead plaintiffs filed on June 28, 2018 a motion to stay the case pending resolution of the securities class action and Employment Matter. On August 10, 2018, defendants filed an opposition to plaintiffs’ motion. On September 11, 2018, the plaintiffs filed a second amended complaint. On October 16, 2018, defendants filed a motion to dismiss the second amended complaint. On October 16, 2018, defendants filed a motion to dismiss the second amended complaint. The Court dismissed the second amended complaint with prejudice on May 23, 2019. Subsequently, the plaintiff filed a notice of appeal and opening brief and the Company filed its answering brief. Oral argument was held September 2, 2020 and the Court took the matter under advisement.
The two derivative actions pending before the San Diego County Superior Court have been consolidated and have been stayed by agreement of the parties.
In view of the inherent difficulty of predicting the outcome of each legal action, particularly since claimants seek substantial or indeterminate damages, it is not possible to reasonably predict or estimate the eventual loss or range of loss, if any, related to each legal action.
9.    RELATED PARTY TRANSACTIONS
In the ordinary course of business, the Company has granted related party loans collateralized by real property to certain executive officers, directors and their affiliates. There were three new related party loans for approximate amount of $2.3 million funded under the provisions of the employee loan program and one refinance of an existing loan for approximately $1.4 million during the six months ended December 31, 2020, and one new related party loan in the amount of $0.6 million and one loan refinance of an existing loan of $1.2 million during the six months ended December 31, 2019.

29
10.    SEGMENT REPORTING
There are no material inter-segment sales or transfers. The accounting policies used by each reportable segment are the same as those discussed in Note 1 - “Organizations and Summary of Significant Accounting Policies” in our Annual Report on Form 10-K for the year ended June 30, 2020. All costs, except certain corporate administration costs and income taxes, have been allocated to the reportable segments. Therefore, combined amounts agree to the unaudited condensed consolidated totals.In order to reconcile the two segments to the unaudited condensed consolidated totals, the Company includes parent-only activities and intercompany eliminations. The following tables present the operating results, goodwill, and assets of the segments:
For the Three Months Ended December 31, 2020
(Dollars in thousands) Banking
Business 		Securities Business Corporate/Eliminations Axos Consolidated
Net interest income $ 132,166  $ 4,260  $ (2,334) $ 134,092 
Provision for credit losses 8,000  —  —  8,000 
Non-interest income 22,295  6,572  (149) 28,718 
Non-interest expense 62,474  11,312  2,511  76,297 
Income before taxes $ 83,987  $ (480) $ (4,994) $ 78,513 
For the Three Months Ended December 31, 2019
(Dollars in thousands) Banking
Business 		Securities Business Corporate/Eliminations Axos Consolidated
Net interest income $ 105,340  $ 4,037  $ (957) $ 108,420 
Provision for credit losses 4,500  —  —  4,500 
Non-interest income 16,225  6,284  (1,302) 21,207 
Non-interest expense 53,253  10,455  3,257  66,965 
Income before taxes $ 63,812  $ (134) $ (5,516) $ 58,162 
Six Months Ended December 31, 2020
(Dollars in thousands) Banking
Business 		Securities Business Corporate/Eliminations Axos Consolidated
Net interest income $ 255,174  $ 9,154  $ (2,909) $ 261,419 
Provision for credit losses 19,800  —  —  19,800 
Non-interest income 52,507  12,356  (290) 64,573 
Non-interest expense 123,691  22,664  5,488  151,843 
Income before taxes $ 164,190  $ (1,154) $ (8,687) $ 154,349 
Six Months Ended December 31, 2019
(Dollars in thousands) Banking
Business 		Securities Business Corporate/Eliminations Axos Consolidated
Net interest income $ 204,812  $ 9,183  $ (2,272) $ 211,723 
Provision for credit losses 7,200  —  —  7,200 
Non-interest income 32,015  12,685  (1,957) 42,743 
Non-interest expense 103,886  21,519  7,027  132,432 
Income before taxes $ 125,741  $ 349  $ (11,256) $ 114,834 




30
As of December 31, 2020
(Dollars in thousands) Banking Business Securities Business Corporate/Eliminations Axos Consolidated
Goodwill $ 35,721  $ 35,501  $ —  $ 71,222 
Total Assets $ 13,301,164  $ 1,001,249  $ 90,854  $ 14,393,267 
As of June 30, 2020
(Dollars in thousands) Banking Business Securities Business Corporate/Eliminations Axos Consolidated
Goodwill $ 35,721  $ 35,501  $ —  $ 71,222 
Total Assets $ 13,018,814  $ 737,419  $ 95,667  $ 13,851,900 

31
ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion provides information about the results of operations, financial condition, liquidity, off balance sheet items and capital resources of Axos Financial, Inc. and subsidiaries (the “Company”). This information is intended to facilitate the understanding and assessment of significant changes and trends related to our financial condition and the results of our operations. This discussion and analysis should be read in conjunction with our financial information in our Annual Report on Form 10-K for the year ended June 30, 2020, and the interim unaudited condensed consolidated financial statements and notes thereto contained in this report.
Some matters discussed in this report may constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as such, may involve risks and uncertainties. These forward-looking statements can be identified by the use of terminology such as “estimate,” “project,” “anticipate,” “expect,” “intend,” “believe,” “will,” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. These forward-looking statements relate to, among other things, the effects on our business of the current novel coronavirus pandemic (“COVID-19”), the Company’s financial prospects and other projections of its performance and asset quality, our ability to continue to grow profitably and increase its business, our ability to continue to diversify lending and deposit franchises, and the anticipated timing and financial performance of other offerings, initiatives, and acquisitions, expectations of the environment in which we operate and projections of future performance. Forward-looking statements are inherently unreliable and actual results may vary. Factors that could cause actual results to differ from these forward-looking statements include uncertainties surrounding the severity, duration, and effects of the COVID-19 pandemic, our ability to successfully integrate acquisitions and realize the anticipated benefits of the transactions, changes in the interest rate environment, inflation, government regulation, general economic conditions, changes in the competitive marketplace, conditions in the real estate markets in which we operate, risks associated with credit quality, the outcome and effects of pending class action litigation filed against the Company and other risk factors discussed under the heading “Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q for the quarter ended December 31, 2020 and in our Annual Report on Form 10-K for the year ended June 30, 2020, which has been filed with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. All written and oral forward-looking statements made in connection with this report, which are attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing information.
General
Our Company, the holding company for Axos Bank (the “Bank”), is a diversified financial services company with approximately $14.4 billion in assets that provides consumer and business banking products through its online, low-cost distribution channels and affinity partners. Our Bank has deposit and loan and lease customers nationwide including consumer and business checking, savings and time deposit accounts and financing for single family and multifamily residential properties, small-to-medium size businesses in target sectors, and automobiles. Our Bank generates fee income from consumer and business products including fees from loans originated for sale and transaction fees earned from processing payment activity. Our wholly-owned subsidiaries, Axos Clearing LLC (“Axos Clearing”) and Axos Invest, Inc. (“Axos Invest”), generate interest and fee income by providing comprehensive securities clearing services to introducing broker-dealers and registered investment advisor correspondents and digital investment advisory services to retail investors, respectively. Axos Financial, Inc.’s common stock is listed on the New York Stock Exchange and is a component of the Russell 2000® Index and the S&P SmallCap 600® Index.
Our Bank is a federal savings bank wholly-owned by our Company and regulated by the Office of the Comptroller of the Currency (“OCC”), and the Federal Deposit Insurance Corporation (“FDIC”) as its deposit insurer. The Bank must file reports with the OCC and the FDIC concerning its activities and financial condition. As a depository institution with more than $10 billion in assets, our Bank and our affiliates are subject to direct supervision by the Consumer Financial Protection Bureau (“CFPB”).
Axos Clearing is a broker-dealer registered with the SEC and the Financial Industry Regulatory Authority, Inc. (“FINRA”). Axos Invest is a Registered Investment Advisor under the Investment Advisers Act of 1940, that is registered with the SEC, and Axos Invest LLC is an introducing broker-dealer that is registered with the SEC and FINRA.
We distribute our deposit products through a wide range of retail distribution channels, and our deposits consist of demand, savings and time deposits accounts. We distribute our loan products through our retail, correspondent and wholesale channels, and the loans we retain are primarily first mortgages secured by single family real property and by multifamily real property as well as commercial & industrial loans to businesses. Our mortgage-backed securities consist of mortgage pass-through securities issued by government-sponsored entities and non-agency collateralized mortgage obligations and asset-backed mortgage-backed securities issued by private sponsors. We believe our flexibility to adjust our asset generation channels has been a competitive advantage
32
Table of Contents
allowing us to avoid markets and products where credit fundamentals are poor or risks and rewards are not sufficient to support our required return on equity.
Segment Information
The Company determines reportable segments based on what separate financial information is available and what segment results are evaluated regularly by the Chief Executive Officer in deciding how to allocate resources and in assessing performance. We operate through two segments: Banking Business and Securities Business.
Banking Business. The Banking Business includes a broad range of banking services including online banking, concierge banking, prepaid card services, and mortgage, vehicle and unsecured lending through online and telephonic distribution channels to serve the needs of consumer and small businesses nationally. In addition, the Banking Business focuses on providing deposit products nationwide to industry verticals (e.g., Title and Escrow), cash management products to a variety of businesses, and commercial & industrial and commercial real estate lending to clients. The Banking Business also includes a bankruptcy trustee and fiduciary service that provides specialized software and consulting services to Chapter 7 bankruptcy and non-Chapter 7 trustees and fiduciaries.
Securities Business. The Securities Business consists of two sets of products and services, securities services provided to third-party securities firms and investment management provided to consumers.
Securities services includes fully disclosed clearing services through Axos Clearing to FINRA- and SEC-registered member firms for trade execution and clearance as well as back office services such as record keeping, trade reporting, accounting, general back-office support, securities and margin lending, reorganization assistance and custody of securities. We provide financing to our brokerage customers for their securities trading activities through margin loans that are collateralized by securities, cash, or other acceptable collateral. Securities lending activities include borrowing and lending securities with other broker-dealers. These activities involve borrowing securities to cover short sales and to complete transactions in which clients have failed to deliver securities by the required settlement date, and lending securities to other broker dealers for similar purposes.
Investment management includes our digital wealth management business, which provides our retail customers with investment management services through a comprehensive and flexible technology platform.
Segment results are compiled based upon the management reporting system, which assigns balance sheet and income statement items to each of the business segments. The process is designed around the organizational and management structure and, accordingly, the results derived are not necessarily comparable with similar information published by other financial institutions or in accordance with generally accepted accounting principles.
The Company evaluates performance and allocates resources based on profit or loss from operations. There are no material inter-segment sales or transfers. Certain corporate administration costs and income taxes have not been allocated to the reportable segments. Therefore, in order to reconcile the two segments to the unaudited condensed consolidated totals, we include parent-only activities and intercompany eliminations.
COVID-19 Impact
We are closely monitoring the rapid developments of and uncertainties caused by the COVID-19 pandemic. In response to the changes in economic and business conditions as a result of the COVID-19 pandemic, we have taken the following actions to support customers, employees, partners and shareholders:
•Actively communicating with borrowers and partners to assess individual needs;
•Participating as a lender in the Paycheck Protection Program (PPP) and evaluating various components of the CARES Act applicability to the Company;
•Extending our participation to a second round of loans under the PPP as a result of the Consolidated Appropriations Act, 2021 signed into law on December 27, 2020
•Provided secure and efficient remote work options for our team members;
•Increasing provisions for credit losses as a result of a weakening economy and reduced business activities;
•Tightening underwriting standards;
•Reallocated personnel to increase resources for customer service and portfolio management; and
•Limiting business travel.

Under the guidelines set forth in the CARES Act, for our borrowers who are one or less payments past due on April 1, 2020, we may delay payments for an agreed upon timeframe, depending on each individual borrower’s characteristics. The Company has taken proactive measures to manage loans that became delinquent during the recent economic downturn as a result of the
33
Table of Contents
COVID-19 pandemic. As of December 31, 2020, the Company provided no forbearance nor deferrals of payment obligations on any single family, multifamily and commercial mortgage loans, warehouse loans and commercial real estate loans. Deferrals totaling $0.9 million of auto and consumers loans were granted during the six months ended December 31, 2020. No forbearance or deferrals were provided to any borrowers during the three months ended December 31, 2020.
Mergers and Acquisitions
From time to time we undertake acquisitions or similar transactions consistent with our Company’s operating and growth strategies. There were no transactions during the six months ended December 31, 2020, nor the year ended June 30, 2020.
Critical Accounting Policies
The following discussion and analysis of our financial condition and results of operations is based upon our unaudited condensed consolidated financial statements and the notes thereto, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these unaudited condensed consolidated financial statements requires us to make a number of estimates and assumptions that affect the reported amounts and disclosures in the unaudited condensed consolidated financial statements. On an ongoing basis, we evaluate our estimates and assumptions based upon historical experience and various factors and circumstances. We believe that our estimates and assumptions are reasonable under the circumstances. However, actual results may differ significantly from these estimates and assumptions that could have a material effect on the carrying value of assets and liabilities at the balance sheet dates and our results of operations for the reporting periods.
Except as discussed below, there have been no changes to our significant accounting policies and practices as described in greater detail in Note 1 to our June 30, 2020 audited consolidated financial statements and under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies” contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission for the fiscal year ended June 30, 2020.
Allowance for Credit Losses. On July 1, 2020, we adopted ASC 326. The allowance for credit losses is maintained at a level needed to absorb expected credit losses over the contractual life, considering the effects of prepayments, of the loan portfolio as of the reporting date. Determining the adequacy of the allowance is complex and requires judgment by our management team about the effect of matters that are inherently uncertain. As such, a future assessment of current conditions may require material adjustments to the allowance.
Our process for determining expected life-time credit losses entails a loan-level, model-based approach and requires consideration of a broad range of relevant information relating to historical loss experience, current economic conditions and reasonable and supportable forecasts.
A credit loss is estimated for all loans. Consequently, we stratify the full loan population into segments sharing similar characteristics to perform the evaluation of the credit loss collectively.
We define a segment as the level at which we develop a systematic methodology to determine the allowance for credit losses. Additionally, we can further stratify loans of similar type, risk attributes and methods for monitoring credit risk. We categorize the loan portfolio into six segments: Single Family - Mortgage & Warehouse, Multifamily and Commercial Mortgage, Commercial Real Estate, Commercial & Industrial - Non Real Estate, Auto & Consumer and Other – refer to Note 4 – “Loans & Allowance for Credit Losses” for further detail of the segments and classes within.

The method for estimating expected life-time credit losses includes, among other things, the following main components: 1) The use of a probability of default (“PD”)/loss given default (“LGD”) model; 2) defining a number of economic scenarios across the benign to adverse spectrum; 3) an initial and reasonable forecast period of one year for all loan segments; and 4) a reversion period of 18 months using a linear transition to historical loss rates for each loan pool. After the reversion period, the historical loss rate is applied over the remaining contractual life of loan.

Given the inherent limitations of a solely quantitative model, qualitative adjustments are included to arrive at the ending calculated loss amount in order to account for data points not captured from quantitative inputs alone.

Qualitative criteria we consider includes, among other things, the following:
•Regulatory and Legal - matters that may impact the timeliness and/or amounts of repayments;
•Concentration - portfolio composition and loan concentration;
•Collateral Dependency - changes in collateral values;
•Lending/Underwriting Standards - current lending policies and the effects of any new policies;
•Nature and Volume - loan production volume and mix;
•Loan Trends - credit performance trends, including a borrower’s financial condition and credit rating.

34
Table of Contents
On a quarterly basis, our management team convenes a Credit Review meeting in which current information and trends are collectively assessed to forecast future economic impact for purposes of assessing the adequacy of the ACL. The forecasted direction and magnitude of change with respect to future economic conditions is then assessed against the estimate in the model.

For further information on the Allowance for Credit Losses, refer to Note 1 - “Summary of Significant Accounting Policies”.

USE OF NON-GAAP FINANCIAL MEASURES
In addition to the results presented in accordance with GAAP, this report includes non-GAAP financial measures such as adjusted earnings, adjusted earnings per common share, and tangible book value per common share. Non-GAAP financial measures have inherent limitations, may not be comparable to similarly titled measures used by other companies and are not audited. Readers should be aware of these limitations and should be cautious as to their reliance on such measures. Although we believe the non-GAAP financial measures disclosed in this report enhance investors’ understanding of our business and performance, these non-GAAP measures should not be considered in isolation, or as a substitute for GAAP basis financial measures.
We define “adjusted earnings”, a non-GAAP financial measure, as net income without the after-tax impact of non-recurring acquisition-related costs (including amortization of intangible assets related to acquisitions), and other costs (unusual or non-recurring charges). Adjusted earnings per diluted common share (“adjusted EPS”), a non-GAAP financial measure, is calculated by dividing non-GAAP adjusted earnings by the average number of diluted common shares outstanding during the period. We believe the non-GAAP measures of adjusted earnings and adjusted EPS provide useful information about the Bank’s operating performance. We believe excluding the non-recurring acquisition related costs, and other costs provides investors with an alternative understanding of Axos’ business without these non-recurring costs.
Below is a reconciliation of net income, the nearest compatible GAAP measure, to adjusted earnings and adjusted EPS (Non-GAAP) for the periods shown:
Three Months Ended Six Months Ended
December 31, December 31,
(Dollars in thousands, except per share amounts) 2020 2019 2020 2019
Net income $ 54,785  $ 41,295  $ 107,807  $ 82,081 
Acquisition-related costs
2,552  2,330  5,154  3,977 
Income taxes (771) (676) (1,554) (1,134)
Adjusted earnings (Non-GAAP) $ 56,566  $ 42,949  $ 111,407  $ 84,924 
Growth in adjusted earnings 31.7  % 31.2  %
Adjusted EPS (Non-GAAP) $ 0.94  $ 0.69  $ 1.85  $ 1.37 

    We define “tangible book value”, a non-GAAP financial measure, as book value adjusted for goodwill and other intangible assets. Tangible book value is calculated using common stockholders’ equity minus mortgage servicing rights, goodwill and other intangible assets. Tangible book value per common share, a non-GAAP financial measure, is calculated by dividing tangible book value by the common shares outstanding at the end of the period. We believe tangible book value per common share is useful in evaluating the Company’s capital strength, financial condition, and ability to manage potential losses.
35
Table of Contents
Below is a reconciliation of total stockholders’ equity, the nearest compatible GAAP measure, to tangible book value (Non-GAAP) as of the dates indicated:
December 31,
(Dollars in thousands) 2020 2019
Total stockholders’ equity 1,287,482  1,160,752 
Less: preferred stock —  5,063 
Common stockholders’ equity 1,287,482  1,155,689 
Less: mortgage servicing rights, carried at fair value 14,314  11,262 
Less: goodwill and other intangible assets 120,644  130,534 
Tangible common stockholders’ equity (Non-GAAP) 1,152,524  1,013,893 
Common shares outstanding at end of period 59,072,822  61,338,386 
Tangible book value per common share (Non-GAAP) 19.51  16.53 
36
Table of Contents
SELECTED FINANCIAL DATA
The following tables set forth certain selected financial data concerning the periods indicated:
AXOS FINANCIAL, INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Dollars in thousands) December 31,
2020 		June 30,
2020 		December 31,
2019
Selected Balance Sheet Data:
Total assets 14,393,267  $ 13,851,900  $ 12,269,288 
Loans and leases—net of allowance for credit losses 11,609,584  10,631,349  10,141,397 
Loans held for sale, carried at fair value 64,287  51,995  36,092 
Loans held for sale, lower of cost or fair value 13,769  44,565  3,430 
Allowance for credit losses - loans 136,393  75,807  59,514 
Securities—trading 362  105  1,740 
Securities—available-for-sale 209,828  187,627  208,026 
Securities borrowed 317,571  222,368  168,114 
Customer, broker-dealer and clearing receivables 264,572  220,266  244,379 
Total deposits 11,463,136  11,336,694  10,114,340 
Advances from the FHLB 182,500  242,500  257,500 
Borrowings, subordinated notes and debentures
418,480  235,789  62,233 
Securities loaned 362,170  255,945  206,199 
Customer, broker-dealer and clearing payables 475,473  347,614  305,669 
Total stockholders’ equity 1,287,482  1,230,846  1,160,752 
Capital Ratios:
Equity to assets at end of period 8.95  % 8.89  % 9.46  %
Axos Financial, Inc.:
Tier 1 leverage (core) capital to adjusted average assets 8.68  % 8.97  % 8.88  %
Common equity tier 1 capital (to risk-weighted assets) 10.85  % 11.22  % 11.29  %
Tier 1 capital (to risk-weighted assets) 10.85  % 11.27  % 11.35  %
Total capital (to risk-weighted assets) 13.88  % 12.64  % 12.65  %
Axos Bank:
Tier 1 leverage (core) capital to adjusted average assets 9.08  % 9.25  % 9.16  %
Common equity tier 1 capital (to risk-weighted assets) 11.45  % 11.79  % 11.55  %
Tier 1 capital (to risk-weighted assets) 11.45  % 11.79  % 11.55  %
Total capital (to risk-weighted assets) 12.44  % 12.62  % 12.25  %
Axos Clearing, LLC:
Net capital 34,417  34,022  31,917 
Excess capital 28,941  29,450  27,056 
Net capital as a percentage of aggregate debit items 12.57  % 14.88  % 13.13  %
Net capital in excess of 5% aggregate debit items 20,726  22,593  19,765 



37
Table of Contents
AXOS FINANCIAL, INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
At or for the Three Months Ended At or for the Six Months Ended
December 31, December 31,
(Dollars in thousands, except per share data) 2020 2019 2020 2019
Selected Income Statement Data:
Interest and dividend income $ 155,379  $ 147,288  $ 305,268  $ 293,633 
Interest expense 21,287  38,868  43,849  81,910 
Net interest income 134,092  108,420  261,419  211,723 
Provision for credit losses 8,000  4,500  19,800  7,200 
Net interest income after provision for credit losses 126,092  103,920  241,619  204,523 
Non-interest income 28,718  21,207  64,573  42,743 
Non-interest expense 76,297  66,965  151,843  132,432 
Income before income tax expense 78,513  58,162  154,349  114,834 
Income tax expense 23,728  16,867  46,542  32,753 
Net income $ 54,785  $ 41,295  $ 107,807  $ 82,081 
Net income attributable to common stock $ 54,672  $ 41,217  $ 107,617  $ 81,926 
Per Common Share Data:
Net income:
Basic $ 0.93  $ 0.67  $ 1.82  $ 1.34 
Diluted $ 0.91  $ 0.67  $ 1.79  $ 1.32 
Adjusted earnings (Non-GAAP)
$ 0.94  $ 0.69  $ 1.85  $ 1.37 
Book value $ 21.79  $ 18.84  $ 21.79  $ 18.84 
Tangible book value (Non-GAAP) $ 19.51  $ 16.53  $ 19.51  $ 16.53 
Weighted average number of common shares outstanding:
     Basic 59,049,697  61,315,590  59,278,672  61,281,127 
     Diluted 60,040,723  61,938,988  60,196,516  61,900,633 
Common shares outstanding at end of period 59,072,822  61,338,386  59,072,822  61,338,386 
Common shares issued at end of period 67,668,664  66,915,478  67,668,664  66,915,478 
Performance Ratios and Other Data:
Loan and lease originations for investment $ 1,909,978  $ 1,435,152  $ 3,240,790  $ 2,896,918 
Loan originations for sale $ 490,261  $ 666,192  $ 931,065  $ 994,004 
Return on average assets 1.57  % 1.42  % 1.56  % 1.43  %
Return on average common stockholders’ equity 17.30  % 14.35  % 17.21  % 14.57  %
Interest rate spread1
3.71  % 3.37  % 3.67  % 3.35  %
Net interest margin2
3.94  % 3.87  % 3.89  % 3.81  %
Net interest margin2 – Banking Business Segment only
4.11  % 3.94  % 4.01  % 3.89  %
Efficiency ratio3
46.86  % 51.66  % 46.58  % 52.04  %
Efficiency ratio3 – Banking Business Segment only
40.45  % 43.81  % 40.20  % 43.87  %
Asset Quality Ratios:
Net annualized charge-offs to average loans and leases 0.16  % 0.17  % 0.12  % 0.10  %
Non-performing loans to total loans 1.44  % 0.52  % 1.44  % 0.52  %
Non-performing assets to total assets 1.22  % 0.49  % 1.22  % 0.49  %
Allowance for credit losses - loans to total loans held for investment at end of period 1.16  % 0.58  % 1.16  % 0.58  %
Allowance for credit losses - loans to non-performing loans 80.58  % 112.85  % 80.58  % 112.85  %
1     Interest rate spread represents the difference between the annualized weighted average yield on interest-earning assets and the annualized weighted average
rate paid on interest-bearing liabilities.
2    Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.
3 Efficiency ratio represents non-interest expense as a percentage of the aggregate of net interest income and non-interest income.
38
Table of Contents
RESULTS OF OPERATIONS
Comparison of the Three and Six Months Ended December 31, 2020 and 2019
For the three months ended December 31, 2020, we had net income of $54.8 million compared to net income of $41.3 million for the three months ended December 31, 2019. Net income attributable to common stockholders was $54.7 million or $0.91 per diluted share for the three months ended December 31, 2020 compared to net income attributable to common shareholders of $41.2 million, or $0.67 per diluted share for the three months ended December 31, 2019. For the six months ended December 31, 2020, we had net income of $107.8 million compared to net income of $82.1 million for the six months ended December 31, 2019. Net income attributable to common stockholders was $107.6 million, or $1.79 per diluted share for the six months ended December 31, 2020 compared to net income attributable to common shareholders of $81.9 million, or $1.32 per diluted share for the six months ended December 31, 2019.
Other key comparisons between our operating results for the three and six months ended December 31, 2020 and 2019 are as follows:
•Net interest income increased $25.7 million and our net interest margin increased 7 basis points in the three months ended December 31, 2020 compared to the three months ended December 31, 2019, and increased $49.7 million and our net interest margin increased 8 basis points in the six months ended December 31, 2020, compared to the six months ended December 31, 2019. The increases were primarily due to an increase in average earning assets and a reduction in the rates paid on interest-bearing demand and savings deposits due to decreases in prevailing deposit rates across the industry.
•Non-interest income increased $7.5 million and $21.8 million for the three and six months ended December 31, 2020 compared to the three and six months ended December 31, 2019. The increase in non-interest income for the three months ended December 31, 2020 was primarily the result of an increase in mortgage banking of $8.4 million, partially offset by a decrease of $1.8 million in gain on sale – other. The increase in non-interest income for the six months ended December 31, 2020 was primarily the result of an increase in mortgage banking of $25.2 million and an increase of $1.6 million in banking service fees and other income, partially offset by a decrease of $5.3 million in gain on sale – other.
•Non-interest expense increased $9.3 million and $19.4 million for the three and six months ended December 31, 2020 compared to the three and six months ended December 31, 2019. The change for the three months ended December 31, 2020 was primarily driven by a $4.2 million increase in salary and payroll costs due to growth in Bank staffing, an increase of $2.5 million in professional services, an increase of $2.3 million in data processing expense, and a $1.7 million increase in FDIC and regulatory fees, partially offset by a decrease of $1.5 million of other general and administrative expenses. The change for the six months ended December 31, 2020 was primarily driven by increases of $6.9 million in professional services, $6.1 million in salary and payroll costs due to growth in Bank staffing, $4.2 million in FDIC and regulatory fees, and $2.4 million in data processing, partially offset by a decrease of $1.5 million to advertising and promotional costs and a decrease of $0.5 million of other general and administrative expenses.
Adjusted earnings and adjusted EPS, non-GAAP measures, which exclude non-recurring costs related to mergers and acquisitions (including amortization of intangible assets related to acquisitions), increased 31.7% to $56.6 million and 36.2% to $0.94, respectively, for the quarter ended December 31, 2020 compared to $42.9 million and $0.69, respectively, for the quarter ended December 31, 2019. Adjusted earnings and adjusted EPS increased 31.2% to $111.4 million and 35.0% to $1.85, respectively, for the six months ended December 31, 2020 compared to $84.9 million and $1.37, respectively, for the six months ended December 31, 2019.
Net Interest Income
Net interest income for the three and six months ended December 31, 2020 totaled $134.1 million and $261.4 million, an increase of 23.7% and 23.5%, compared to net interest income of $108.4 million and $211.7 million for the three and six months ended December 31, 2019. The growth of net interest income for both the three and six months ended December 31, 2020 is primarily due to increased average earnings assets from net loan and lease portfolio growth and reduced rates paid on interest-bearing demand and savings deposits, partially offset by reduced yields on interest earning assets.
Total interest and dividend income during the three and six months ended December 31, 2020 increased 5.5% to $155.4 million and 4.0% to $305.3 million, respectively, compared to $147.3 million and $293.6 million during the three and six months ended December 31, 2019. The increases in interest and dividend income for the three and six months ended December 31, 2020 was primarily attributable to the continued growth in average earning assets from loan and lease originations, partially offset by reduced yields on loans and leases and interest-earning deposits. The average balance of interest-earning loans and leases increased 16.1% and 14.6% for the three and six months ended December 31, 2020 compared to the three and six months ended December 31, 2019.
39
Table of Contents
Total interest expense was $21.3 million for the three months ended December 31, 2020, a decrease of $17.6 million or 45.2% as compared with the three months ended December 31, 2019. Total interest expense was $43.8 million for the six months ended December 31, 2020, a decrease of $38.1 million or 46.5% as compared with the six months ended December 31, 2019. The decrease in the average cost of funds rate for the three months ended December 31, 2020 compared to 2019 was primarily due to 111 basis point and 121 basis point decreases in the three and six month average rates paid on interest-bearing demand and savings deposits due to decreases in prevailing deposit rates across the industry. The decrease in rates was partially offset by growth in interest-bearing liabilities for the three and six months ended December 31, 2020 compared to 2019.
Net interest margin, defined as annualized net interest income divided by average earning assets, increased 7 basis points to 3.94% for the three months ended December 31, 2020 from 3.87% for the three months ended December 31, 2019, and increased 8 basis points to 3.89% for the six months ended December 31, 2020 from 3.81% for the six months ended December 31, 2019.
40
Table of Contents
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 December 31, 2020 and 2019:
  For the Three Months Ended
December 31,
  2020 2019
(Dollars in thousands)
Average
Balance1
Interest
Income/
Expense
Average Yields
Earned/Rates
Paid2
Average
Balance1
Interest
Income/
Expense
Average Yields
Earned/Rates
Paid2
Assets:
Loans and leases3, 4
$ 11,409,942  $ 147,085  5.16  % $ 9,827,007  $ 136,602  5.56  %
Interest-earning deposits in other financial institutions 1,495,760  493  0.13  % 755,275  3,240  1.72  %
Securities4
202,363  2,917  5.77  % 202,266  3,051  6.03  %
Securities borrowed and margin lending5
486,692  4,666  3.83  % 400,771  3,865  3.86  %
Stock of the regulatory agencies 20,611  218  4.23  % 32,601  530  6.50  %
Total interest-earning assets 13,615,368  155,379  4.56  % 11,217,920  147,288  5.25  %
Non-interest-earning assets 363,373  382,178 
Total assets $ 13,978,741  $ 11,600,098 
Liabilities and Stockholders’ Equity:
Interest-bearing demand and savings $ 7,215,813  $ 8,131  0.45  % $ 4,473,537  $ 17,418  1.56  %
Time deposits 1,860,058  7,964  1.71  % 2,537,155  15,496  2.44  %
Securities loaned 305,900  255  0.33  % 212,412  163  0.31  %
Advances from the FHLB 234,649  1,326  2.26  % 948,464  4,495  1.90  %
Borrowings, subordinated notes and debentures 429,833  3,611  3.36  % 84,576  1,296  6.13  %
Total interest-bearing liabilities 10,046,253  21,287  0.85  % 8,256,144  38,868  1.88  %
Non-interest-bearing demand deposits 2,039,064  1,756,495 
Other non-interest-bearing liabilities 624,220  438,551 
Stockholders’ equity 1,269,204  1,148,908 
Total liabilities and stockholders’ equity $ 13,978,741  $ 11,600,098 
Net interest income $ 134,092  $ 108,420 
Interest rate spread6
3.71  % 3.37  %
Net interest margin7
3.94  % 3.87  %
1Average balances are obtained from daily data.
2Annualized.
3Loans and leases include loans held for sale, loan premiums and unearned fees.
4Interest income includes reductions for amortization of loan and investment securities premiums and earnings from accretion of discounts and loan fees. Loans and leases include average balances of $27.3 million and $28.6 million of Community Reinvestment Act loans which are taxed at a reduced rate for the 2020 and 2019 three-month periods, respectively.
5Margin lending is the significant component of the asset titled customer, broker-dealer and clearing receivables on the unaudited condensed consolidated balance sheets.
6Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate paid on interest-bearing liabilities.
7Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.



41
Table of Contents

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 six months ended December 31, 2020 and 2019:
  For the Six Months Ended
December 31,
  2020 2019
(Dollars in thousands)
Average
Balance1
Interest
Income/
Expense
Average Yields
Earned/Rates
Paid2
Average
Balance1
Interest
Income/
Expense
Average Yields
Earned/Rates
Paid2
Assets:
Loans and leases3, 4
$ 11,125,812  $ 288,509  5.19  % $ 9,706,230  $ 270,489  5.57  %
Interest-earning deposits in other financial institutions 1,601,170  1,000  0.12  % 745,878  7,473  2.00  %
Securities4
196,270  5,594  5.70  % 205,662  5,633  5.48  %
Securities borrowed and margin lending5
488,129  9,743  3.99  % 421,943  9,207  4.36  %
Stock of the regulatory agencies 20,610  422  4.10  % 26,439  831  6.29  %
Total interest-earning assets 13,431,991  305,268  4.55  % 11,106,152  293,633  5.29  %
Non-interest-earning assets 363,165  368,121 
Total assets $ 13,795,156  $ 11,474,273 
Liabilities and Stockholders’ Equity:
Interest-bearing demand and savings $ 7,134,068  $ 17,222  0.48  % $ 4,829,469  $ 40,779  1.69  %
Time deposits 1,959,299  18,427  1.88  % 2,511,527  30,941  2.46  %
Securities loaned 304,251  379  0.25  % 326,161  449  0.28  %
Advances from the FHLB 238,574  2,698  2.26  % 627,617  6,259  1.99  %
Borrowings, subordinated notes and debentures 343,198  5,123  2.99  % 132,077  3,482  5.27  %
Total interest-bearing liabilities 9,979,390  43,849  0.88  % 8,426,851  81,910  1.94  %
Non-interest-bearing demand deposits 1,971,139  1,604,911 
Other non-interest-bearing liabilities 593,835  313,235 
Stockholders’ equity 1,250,792  1,129,276 
Total liabilities and stockholders’ equity $ 13,795,156  $ 11,474,273 
Net interest income $ 261,419  $ 211,723 
Interest rate spread6
3.67  % 3.35  %
Net interest margin7
3.89  % 3.81  %
1Average balances are obtained from daily data.
2Annualized.
3Loans and leases include loans held for sale, loan premiums and unearned fees.
4Interest income includes reductions for amortization of loan and investment securities premiums and earnings from accretion of discounts and loan fees. Loans and leases include average balances of $27.4 million and $28.8 million of Community Reinvestment Act loans which are taxed at a reduced rate for the 2020 and 2019 six-month periods, respectively.
5Margin lending is the significant component of the asset titled customer, broker-dealer and clearing receivables on the unaudited condensed consolidated balance sheets.
6Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate paid on interest-bearing liabilities.
7Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.
42
Table of Contents
Average Balances, Net Interest Income, Yields Earned and Rates Paid
The following table sets forth the effects of changing rates and volumes on our net interest income. Information is provided with respect to (i) effects on interest income and interest expense attributable to changes in volume (changes in volume multiplied by prior rate); (ii) effects on interest income and interest expense attributable to changes in rate (changes in rate multiplied by prior volume); and (iii) changes in rate/volume (change in rate multiplied by change in volume) for the three and six months ended December 31, 2020 and 2019:
  For the Three Months Ended For the Six Months Ended
December 31, December 31,
2020 vs 2019 2020 vs 2019
  Increase (Decrease) Due to Increase (Decrease) Due to
(Dollars in thousands) Volume Rate Total
Increase
(Decrease) 		Volume Rate Total
Increase
(Decrease)
Increase / (decrease) in interest income:
Loans and leases $ 20,833  $ (10,350) $ 10,483  $ 37,439  $ (19,419) $ 18,020 
Interest-earning deposits in other financial institutions 1,676  (4,423) (2,747) 4,148  (10,621) (6,473)
Securities 1  (135) (134) (261) 222  (39)
Securities borrowed and margin lending 831  (30) 801  1,361  (825) 536 
Stock of the regulatory agencies (160) (152) (312) (158) (251) (409)
$ 23,181  $ (15,090) $ 8,091  $ 42,529  $ (30,894) $ 11,635 
Increase / (decrease) in interest expense:
Interest-bearing demand and savings $ 7,192  $ (16,479) $ (9,287) $ 13,950  $ (37,507) $ (23,557)
Time deposits (3,551) (3,981) (7,532) (6,039) (6,475) (12,514)
Securities loaned 80  12  92  (27) (43) (70)
Advances from the FHLB (3,896) 727  (3,169) (4,623) 1,062  (3,561)
Borrowings, subordinated notes and debentures
3,139  (824) 2,315  3,662  (2,021) 1,641 
$ 2,964  $ (20,545) $ (17,581) $ 6,923  $ (44,984) $ (38,061)

Provision for Credit Losses
The provision for credit losses was $8.0 million for the three months ended December 31, 2020 compared to $4.5 million for the three months ended December 31, 2019. The provision for credit losses was $19.8 million for the six months ended December 31, 2020 compared to $7.2 million for the six months ended December 31, 2019. The increase in the provision for the three months ended December 31, 2020 compared to the provision for the three months ended December 31, 2019 was mainly attributable to loan growth, changes in loan mix and a change in the provision for credit losses methodology from the incurred loss model to a current expected credit loss model as described under “Critical Accounting Policies.” The increase in the provision for the six months ended December 31, 2020 compared to the provision for the six months ended December 31, 2019 was due to taking net additional reserves of $3.1 million on seasonal tax product loans that continue to have delays in collection due to IRS processing delays, loan growth, changes in loan mix and a change in the provision for credit losses methodology from the incurred loss model to a current expected credit loss model as described under “Critical Accounting Policies.” Provisions for credit losses are charged to income to bring the allowance for credit losses - loans to a level deemed appropriate by management based on the factors discussed under “Financial Condition—Asset Quality and Allowance for Credit Losses - Loans.” On July 1, 2020, the Company adopted ASC 326, adding approximately $53.0 million to the allowance for credit losses. The increase was primarily related to two factors:
•The difference between loss emergence periods previously utilized, as compared to estimating lifetime credit losses as required by ASC 326.
•The lifetime impact of COVID-19 on the Company’s loan and lease portfolio, or more specifically the impact on macroeconomic factors across the loan and lease portfolio, with the largest impacts shown in hospitality and retail real estate loans.


43
Table of Contents
Non-Interest Income
The following table sets forth information regarding our non-interest income for the periods shown:
For the Three Months Ended For the Six Months Ended
December 31, December 31,
(Dollars in thousands) 2020 2019 Inc (Dec) 2020 2019 Inc (Dec)
Prepayment penalty fee income 1,579  2,006  (427) 2,947  3,418  (471)
Gain on sale – other 156  1,924  (1,768) 490  5,746  (5,256)
Mortgage banking income 10,651  2,224  8,427  30,218  5,018  25,200 
Broker-dealer fee income 6,287  5,555  732  11,989  11,211  778 
Banking and service fees 10,045  9,498  547  18,929  17,350  1,579 
Total non-interest income $ 28,718  $ 21,207  $ 7,511  $ 64,573  $ 42,743  $ 21,830 
Non-interest income increased $7.5 million to $28.7 million for the three months ended December 31, 2020 compared to the three months ended December 31, 2019. The increase was the result of an increase of $8.4 million in mortgage banking, $0.7 million in broker dealer fees and $0.5 million in banking and service fees, partially offset by a decrease of $1.8 million in gain on sale-other, as certain sales of Emerald Advance loans to H&R Block in the three months ended December 31, 2019 did not recur in the three months ended December 31, 2020, due to contract termination and a $0.4 million decrease in prepayment penalty fee income. Non-interest income increased $21.8 million to $64.6 million for the six months ended December 31, 2020 compared to the six months ended December 31, 2019. The increase was primarily the result of an increase of $25.2 million in mortgage banking income and a $1.6 million increase in banking and service fees, partially offset by a decrease of $5.3 million in gain on sale-other, as certain sales of lottery receivables and Emerald Advance loans to H&R Block in the six months ended December 31, 2019 did not recur in the six months ended December 31, 2020.
Included in gain on sale – other are sales of unsecured and secured consumer and business loans originated through introductions from our third-party partner relationships and sales of structured settlement annuity and state lottery receivables. We engage in the wholesale and retail purchase of state lottery prize and structured settlement annuity payments. These payments are high credit quality deferred payment receivables having a state lottery commission or investment grade (top two tiers) insurance company payor. The Bank originates contracts for the retail purchase of such payments and classifies these under the category of Other in the loan portfolio. Factoring yields are typically higher than mortgage loan rates. Typically, the gain received upon sale of these payment streams is greater than the gain received from an equivalent amount of mortgage loan sales. Since 2013, pools of structured settlement receivables have been originated for sale depending upon management’s assessment of interest rate risk, liquidity, and offers containing favorable terms and are classified on our balance sheet as loans held for sale. Increased sales on favorable terms during the three and six months ended December 31, 2019 resulted in an increase in gain on sale from structured settlement annuity and state lottery receivables. Such sales did not recur to the same degree for the three and six months ended December 31, 2020.
44
Table of Contents
Non-Interest Expense
    The following table sets forth information regarding our non-interest expense for the periods shown:
  For the Three Months Ended For the Six Months Ended
December 31, December 31,
(Dollars in thousands) 2020 2019 Inc (Dec) 2020 2019 Inc (Dec)
Salaries and related costs $ 38,199  $ 33,958  $ 4,241  $ 76,822  $ 70,675  $ 6,147 
Data processing 9,673  7,410  2,263  17,601  15,221  2,380 
Advertising and promotional 3,783  4,043  (260) 6,339  7,833  (1,494)
Depreciation and amortization 5,862  6,040  (178) 12,048  11,264  784 
Professional services 5,629  3,112  2,517  11,628  4,701  6,927 
Occupancy and equipment 3,132  3,122  10  6,143  5,960  183 
FDIC and regulatory fees 2,601  939  1,662  5,293  1,130  4,163 
Broker-dealer clearing charges 2,451  1,860  591  4,708  3,868  840 
General and administrative expense 4,967  6,481  (1,514) 11,261  11,780  (519)
Total non-interest expenses
$ 76,297  $ 66,965  $ 9,332  $ 151,843  $ 132,432  $ 19,411 
Non-interest expense, which is comprised of compensation, data processing, depreciation and amortization, advertising and promotional, professional services, occupancy and equipment, FDIC and regulator fees, broker-dealer clearing charges and other operating expenses, was $76.3 million for the three months ended December 31, 2020, compared to $67.0 million for the three months ended December 31, 2019. Non-interest expense was $151.8 million for the six months ended December 31, 2020, up from $132.4 million for the six months ended December 31, 2019. The increases for the three and six months ended December 31, 2020 were primarily due to to the expansion of the Bank specifically in areas related to lending and deposits.
Total salaries and related costs increased $4.2 million to $38.2 million for the three months ended December 31, 2020 compared to $34.0 million for the three months ended December 31, 2019 and costs increased $6.1 million to $76.8 million for the six months ended December 31, 2020 compared to $70.7 million for the six months ended December 31, 2019. The increases in compensation expense for the three and six months ended December 31, 2020 were primarily due to the staffing additions to support growth in deposit and lending activities. Our staff increased to 1,157 from 1,031, or 12.2% between December 31, 2020 and 2019.
Data processing expense increased $2.3 million for the three months ended December 31, 2020 compared to three months ended December 31, 2019, and increased $2.4 million for the six months ended December 31, 2020 compared to the six month period ended December 31, 2019, primarily due to enhancements to customer interfaces and the Bank’s core processing system.
Advertising and promotional expense decreased $0.3 million and $1.5 million for the three and six months ended December 31, 2020, compared to the three and six months ended December 31, 2019, respectively. The decreases for the three and six months ended December 31, 2020 were primarily related to reduced deposit marketing.
Depreciation and amortization expense decreased $0.2 million and increased $0.8 million for the three and six months ended December 31, 2020, compared to the three and six months ended December 31, 2019, respectively. The decrease for the three months ended December 31, 2020 was primarily due to reduced depreciation of computer hardware and furniture and fixtures. The increase for the six months ended December 31, 2020 was primarily due to amortization of intangibles, depreciation on lending platform enhancements and infrastructure development.
Professional services expense increased $2.5 million and $6.9 million for the three and six months ended December 31, 2020, compared to the three and six months ended December 31, 2019, respectively. Professional services charges increased due primarily to increased legal and consulting fees.
Occupancy and equipment expense was flat and increased by $0.2 million for the three and six months ended December 31, 2020 compared to the three and six months ended December 31, 2019, respectively. The changes for the three and six months ended December 31, 2020 are primarily related to the timing of new property leases.
Our cost of FDIC and regulatory fees increased $1.7 million and $4.2 million for the three and six months ended December 31, 2020, compared to the three and six month period last year, respectively. The increases were due to a small bank assessment credit received from the FDIC during the three and six months ended December 31, 2019, which did not recur in 2020. As an FDIC-insured institution, the Bank is required to pay deposit insurance premiums to the FDIC.
45
Table of Contents
Broker-dealer clearing charges increased $0.6 million and $0.8 million for the three and six months ended December 31, 2020 compared to the three and six months ended December 31, 2019. The increases were attributable to increased activity in the Securities Business.
Other general and administrative costs decreased by $1.5 million and $0.5 million for the three and six months ended December 31, 2020, compared to the three and six month period ended December 31, 2019, respectively. The decreases were primarily related to a reduction in the reserve for unfunded loan commitments.
Provision for Income Taxes
Our effective income tax rates (income tax provision divided by net income before income tax) for the three months ended December 31, 2020 and 2019 were 30.22% and 29.00%, respectively. Our effective income tax rates for the six months ended December 31, 2020 and 2019 were 30.15% and 28.52%, respectively. The change in effective income tax rates between periods are primarily the result of changes in tax benefits from stock compensation.
SEGMENT RESULTS
Our Company determines reportable segments based on what separate financial information is available and what segment results are evaluated regularly by the Chief Executive Officer in deciding how to allocate resources and in assessing performance. The Company operates through two operating segments: Banking Business and Securities Business. In order to reconcile the two segments to the unaudited condensed consolidated totals, the Company includes parent-only activities and intercompany eliminations. The following tables present the operating results of the segments:
For the Three Months Ended December 31, 2020
(Dollars in thousands) Banking Business Securities Business Corporate/Eliminations Axos Consolidated
Net interest income $ 132,166  $ 4,260  $ (2,334) $ 134,092 
Provision for credit losses 8,000  —  —  8,000 
Non-interest income 22,295  6,572  (149) 28,718 
Non-interest expense 62,474  11,312  2,511  76,297 
Income before taxes $ 83,987  $ (480) $ (4,994) $ 78,513 
For the Three Months Ended December 31, 2019
(Dollars in thousands) Banking Business Securities Business Corporate/Eliminations Axos Consolidated
Net interest income $ 105,340  $ 4,037  $ (957) $ 108,420 
Provision for credit losses 4,500  —  —  4,500 
Non-interest income 16,225  6,284  (1,302) 21,207 
Non-interest expense 53,253  10,455  3,257  66,965 
Income before taxes $ 63,812  $ (134) $ (5,516) $ 58,162 
For the Six Months Ended December 31, 2020
(Dollars in thousands) Banking Business Securities Business Corporate/Eliminations Axos Consolidated
Net interest income $ 255,174  $ 9,154  $ (2,909) $ 261,419 
Provision for credit losses 19,800  —  —  19,800 
Non-interest income 52,507  12,356  (290) 64,573 
Non-interest expense 123,691  22,664  5,488  151,843 
Income before taxes $ 164,190  $ (1,154) $ (8,687) $ 154,349 
46
Table of Contents
For the Six Months Ended December 31, 2019
(Dollars in thousands) Banking Business Securities Business Corporate/Eliminations Axos Consolidated
Net interest income $ 204,812  $ 9,183  $ (2,272) $ 211,723 
Provision for credit losses 7,200  —  —  7,200 
Non-interest income 32,015  12,685  (1,957) 42,743 
Non-interest expense 103,886  21,519  7,027  132,432 
Income before taxes $ 125,741  $ 349  $ (11,256) $ 114,834 
Banking Business
For the three months ended December 31, 2020, our Banking Business segment had income before taxes of $84.0 million compared to income before taxes of $63.8 million for the three months ended December 31, 2019. For the six months ended December 31, 2020, we had income before taxes of $164.2 million compared to income before taxes of $125.7 million for the six months ended December 31, 2019. For the three and six months ended December 31, 2020, the increase in income before taxes was the result of an increase in average earning assets and a reduction in the rates paid on interest-bearing demand and savings deposits and an increase in non-interest income due to increased mortgage banking income.
We consider the ratios shown in the table below to be key indicators of the performance of our Banking Business segment:
At or for the Three Months Ended At or for the Six Months Ended
December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019
Efficiency ratio 40.45  % 43.81  % 40.20  % 43.87  %
Return on average assets 1.80  % 1.66  % 1.79  % 1.67  %
Interest rate spread 3.93  % 3.47  % 3.82  % 3.42  %
Net interest margin 4.11  % 3.94  % 4.01  % 3.89  %
Our Banking segment’s net interest margin exceeds our consolidated net interest margin. Our consolidated net interest margin includes certain items that are not reflected in the calculation of our net interest margin within our Banking Business and reduce our consolidated net interest margin, such as the borrowing costs at our Parent Company and the yields and costs associated with certain items within interest-earning assets and interest-bearing liabilities in our Securities Business, including items related to securities financing operations that particularly decrease net interest margin.

47
Table of Contents
Average Balances, Net Interest Income, Yields Earned and Rates Paid
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 December 31, 2020 and 2019:
  For the Three Months Ended
December 31,
  2020 2019
(Dollars in thousands)
Average
Balance1
Interest
Income/
Expense
Average Yields
Earned/Rates
Paid2
Average
Balance1
Interest
Income/
Expense
Average Yields
Earned/Rates
Paid2
Assets:
Loans and leases3, 4
$ 11,364,115  $ 146,327  5.15  % $ 9,825,725  $ 136,602  5.56  %
Interest-earning deposits in other financial institutions 1,239,160  324  0.10  % 629,407  2,634  1.67  %
Securities4
232,518  3,072  5.28  % 199,716  3,052  6.11  %
Stock of the regulatory agencies 17,250  216  5.01  % 29,577  528  7.14  %
Total interest-earning assets 12,853,043  149,939  4.67  % 10,684,425  142,816  5.35  %
Non-interest-earning assets 159,802  211,833 
Total assets $ 13,012,845  $ 10,896,258 
Liabilities and Stockholders’ Equity:
Interest-bearing demand and savings $ 7,391,544  $ 8,354  0.45  % $ 4,498,675  $ 17,485  1.55  %
Time deposits 1,860,058  7,964  1.71  % 2,537,155  15,496  2.44  %
Advances from the FHLB 234,649  1,326  2.26  % 948,475  4,495  1.90  %
Total interest-bearing liabilities 9,633,605  17,774  0.74  % 7,984,305  37,476  1.88  %
Non-interest-bearing demand deposits 2,057,615  1,766,740 
Other non-interest-bearing liabilities 126,001  78,492 
Stockholders’ equity 1,195,624  1,066,721 
Total liabilities and stockholders’ equity $ 13,012,845  $ 10,896,258 
Net interest income $ 132,165  $ 105,340 
Interest rate spread5
3.93  % 3.47  %
Net interest margin6
4.11  % 3.94  %
1Average balances are obtained from daily data.
2Annualized.
3Loans and leases include loans held for sale, loan premiums and unearned fees.
4Interest income includes reductions for amortization of loan and investment securities premiums and earnings from accretion of discounts and loan fees. Loans and leases include average balances of $27.3 million and $28.0 million of Community Reinvestment Act loans which are taxed at a reduced rate for the 2020 and 2019 three-month periods, respectively.
5Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate paid on interest-bearing liabilities.
6Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.




48
Table of Contents
Average Balances, Net Interest Income, Yields Earned and Rates Paid
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 six months ended December 31, 2020 and 2019:
  For the Six Months Ended
December 31,
  2020 2019
(Dollars in thousands)
Average
Balance1
Interest
Income/
Expense
Average Yields
Earned/Rates
Paid2
Average
Balance1
Interest
Income/
Expense
Average Yields
Earned/Rates
Paid2
Assets:
Loans and leases3, 4
$ 11,077,492  $ 287,005  5.18  % $ 9,705,585  $ 270,489  5.57  %
Interest-earning deposits in other financial institutions 1,390,747  716  0.10  % 606,871  5,961  1.96  %
Securities4
229,799  5,928  5.16  % 203,975  5,633  5.52  %
Stock of the regulatory agencies 17,250  419  4.86  % 23,414  827  7.06  %
Total interest-earning assets 12,715,288  294,068  4.63  % 10,539,845  282,910  5.37  %
Non-interest-earning assets 156,007  201,775 
Total assets $ 12,871,295  $ 10,741,620 
Liabilities and Stockholders’ Equity:
Interest-bearing demand and savings $ 7,245,289  $ 17,509  0.48  % $ 4,851,899  $ 40,898  1.69  %
Time deposits 1,959,299  18,427  1.88  % 2,511,527  30,941  2.46  %
Advances from the FHLB 238,574  2,698  2.26  % 627,622  6,259  1.99  %
Borrowings, subordinated notes and debentures
149,653  262  0.35  % —  —  —  %
Total interest-bearing liabilities 9,592,815  38,896  0.81  % 7,991,048  78,098  1.95  %
Non-interest-bearing demand deposits 1,988,235  1,615,396 
Other non-interest-bearing liabilities 130,736  82,420 
Stockholders’ equity 1,159,509  1,052,756 
Total liabilities and stockholders’ equity $ 12,871,295  $ 10,741,620 
Net interest income $ 255,172  $ 204,812 
Interest rate spread5
3.82  % 3.42  %
Net interest margin6
4.01  % 3.89  %
1Average balances are obtained from daily data.
2Annualized.
3Loans and leases include loans held for sale, loan premiums and unearned fees.
4Interest income includes reductions for amortization of loan and investment securities premiums and earnings from accretion of discounts and loan fees. Loans and leases include average balances of $27.4 million and $28.1 million of Community Reinvestment Act loans which are taxed at a reduced rate for the 2020 and 2019 six-month periods, respectively.
5Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate paid on interest-bearing liabilities.
6Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.


49
Table of Contents
Average Balances, Net Interest Income, Yields Earned and Rates Paid
The following table sets forth the effects of changing rates and volumes on our net interest income for our Banking segment. Information is provided with respect to (i) effects on interest income and interest expense attributable to changes in volume (changes in volume multiplied by prior rate); (ii) effects on interest income and interest expense attributable to changes in rate (changes in rate multiplied by prior volume); and (iii) changes in rate/volume (change in rate multiplied by change in volume) for the three and six months ended December 31, 2020 and 2019:
  For the Three Months Ended For the Six Months Ended
December 31, December 31,
2020 vs 2019 2020 vs 2019
  Increase (Decrease) Due to Increase (Decrease) Due to
(Dollars in thousands) Volume Rate Total
Increase
(Decrease) 		Volume Rate Total
Increase
(Decrease)
Increase / (decrease) in interest income:
Loans and leases $ 20,856  $ (11,131) $ 9,725  $ 37,072  $ (20,556) $ 16,516 
Interest-earning deposits in other financial institutions 2,290  (4,600) (2,310) 4,588  (9,833) (5,245)
Mortgage-backed and other investment securities 14  6  20  165  130  295 
Stock of the regulatory agencies, at cost (188) (124) (312) (191) (217) (408)
$ 22,972  $ (15,849) $ 7,123  $ 41,634  $ (30,476) $ 11,158 
Increase / (decrease) in interest expense:
Interest-bearing demand and savings $ 9,802  $ (18,933) $ (9,131) $ 16,350  $ (39,739) $ (23,389)
Time deposits (3,465) (4,067) (7,532) (5,919) (6,595) (12,514)
Advances from the FHLB (3,097) (72) (3,169) (3,463) (98) (3,561)
Borrowings, subordinated notes and debentures
130  —  130  262  —  262 
$ 3,370  $ (23,072) $ (19,702) $ 7,230  $ (46,432) $ (39,202)
The Banking segment’s net interest income for the three and six months ended December 31, 2020 totaled $132.2 million and $255.2 million, an increase of 25.5% and 24.6%, compared to net interest income of $105.3 million and $204.8 million for the three and six months ended December 31, 2019, respectively. The growth of net interest income for both the three and six months ended December 31, 2020 is primarily due to an increase in average earning assets and a reduction in the rates paid on interest-bearing demand and savings deposits due to decreases in prevailing deposit rates across the industry.
The Banking segment’s non-interest income increased $6.1 million from $16.2 million to $22.3 million and increased $20.5 million from $32.0 million to $52.5 million for the three and six months ended December 31, 2020 compared to the three and six months ended December 31, 2019, respectively. The $6.1 million increase in non-interest income for the three months ended December 31, 2020, was primarily the result of an increase of $7.9 million in mortgage banking income, partially offset by a decrease of $1.8 million in gain on sale-other, as certain sales of lottery receivables in the three months ended December 31, 2019 did not recur in the three months ended December 31, 2020. The $20.5 million increase in non-interest income for the six months ended December 31, 2020, was primarily the result of a $24.7 million increase in mortgage banking income, $1.5 million increase in banking and service fees, partially offset by a decrease of $5.3 million in gain on sale-other, as certain sales of lottery receivables in the six months ended December 31, 2019 did not recur in the six months ended December 31, 2020.
The Banking segment’s non-interest expense increased $9.2 million and $19.8 million for the three and six months ended December 31, 2020 compared to the three and six months ended December 31, 2019, respectively. For the three months ended December 31, 2020 compared to the three months ended December 31, 2019, the $9.2 million increase of non-interest expense was primarily due to a $5.9 million increase of salaries and related expenses related to an increase in staffing to support the overall growth of the Bank, a $2.4 million increase in data processing expense, an increase of $1.7 million in FDIC and regulatory fees due to a small bank assessment credit received from the FDIC during the three months ended December 31, 2019 that did not recur in 2020, and a $1.6 million increase in professional services, partially offset by a $1.4 million decrease in other and general expense and a $0.7 million decrease in advertising and promotional expense. For the six months ended December 31, 2020 compared to the six months ended December 31, 2019, the $19.8 million increase was primarily due to a $9.1 million increase in salaries and related expenses related to an increase in staffing to support the overall growth of the Bank, a $5.7 million increase in professional services, an increase of $4.1 million in FDIC and regulatory fees due to a small bank
50
Table of Contents
assessment credit received during the six months ended December 31, 2019 that did not recur in 2020, and a $2.5 million increase in data processing expense, a $0.7 million increase in depreciation and amortization, partially offset by a decrease of $2.5 million decrease in advertising and promotional expense.
Securities Business
For the three months ended December 31, 2020, our Securities Business segment had a loss before taxes of $0.5 million compared to a loss before taxes of $0.1 million for the three months ended December 31, 2019. For the six months ended December 31, 2020, our Securities Business segment had a loss before taxes of $1.2 million compared to income before taxes of $0.3 million for the six months ended December 31, 2020.
Net interest income for the three months ended December 31, 2020, increased $0.3 million to $4.3 million compared to $4.0 million for the three months ended December 31, 2019. Net interest income for the six months ended December 31, 2020 at $9.2 million was flat compared to $9.2 million for the six months ended December 31, 2019. The $0.3 million increase for the three months ended December 31, 2020 was primarily a result of growth in earning assets, partially offset by decreases in prevailing market rates. The negligible change for the six months ended December 31, 2020 was due to decreases in prevailing market rates, offset by growth in earning assets and decreased borrowing costs. In the Securities Business, interest is earned through margin loan balances, securities borrowed, and cash deposit balances. Interest expense is incurred from cash borrowed through bank lines and securities lending.
The non-interest income during the three months ended December 31, 2020, was $6.6 million compared to $6.3 million for the three months ended December 31, 2019. The increase was primarily the result of a $0.3 million increase to $6.4 million of broker-dealer fee income primarily due to increased volumes in trading and securities lending, partially offset by decreases in the prevailing deposit rates. Non-interest income during the six months ended December 31, 2020 was $12.4 million compared to $12.7 million for the six months ended December 31, 2019. The decrease was primarily the result of a $0.4 million decrease to $12.2 million of broker-dealer fee income primarily due to decreases in the prevailing deposit rates, partially offset by increased volumes in trading and securities lending.
Non-interest expense was $11.3 million and $22.7 million during the three and six months ended December 31, 2020 compared to $10.5 million and $21.5 million for the three and six months ended December 31, 2019, respectively.
Non-interest expense increased $0.9 million for the three months ended December 31, 2020, primarily the result of a $1.1 million increase in professional services and a $0.6 million increase in broker-dealer clearing charges, partially offset by a decrease of $0.6 million decrease in salaries and related expenses. For the three months ended December 31, 2020, non-interest expense was primarily made up of $4.1 million in salaries and related expenses related to staffing, $2.5 million in broker-dealer clearing charges, $1.3 million in data processing, $1.4 million in professional services and $1.0 million in other and general expense. For the three months ended December 31, 2019, non-interest expense was primarily made up of $4.7 million in salaries and related expenses related to staffing, $1.9 million in broker-dealer clearing charges, $1.4 million in data processing, $0.3 million in professional services and $1.1 million in other and general expense.
Non-interest expense increased $1.1 million for the six months ended December 31, 2020, primarily the result of a $1.0 million increase in professional services and a $0.8 million increase in broker-dealer clearing charges, partially offset by a $0.2 million decrease in salaries and related expenses and a $0.3 million decrease in other general and administrative expenses. For the six months ended December 31, 2020, non-interest expense was primarily made up of $9.1 million in salaries and related expenses related to staffing, $4.7 million in broker-dealer clearing charges, $2.7 million in data processing, $2.3 million in professional services, $1.8 million in other and general expense and $1.3 million in depreciation and amortization expense. For the six months ended December 31, 2019, non-interest expense was primarily made up of $9.3 million in salaries and related expenses related to staffing, $3.9 million in broker-dealer clearing charges, $2.8 million in data processing, $1.3 million in professional services, $2.1 million in other and general expense, and $1.2 million in depreciation and amortization expense.
51
Table of Contents
Selected information concerning the Securities segment follows as of and for the three months ended:
December 31,
(Dollars in thousands) 2020 2019
Compensation as a % of net revenue 33.2  % 37.9  %
FDIC insured program balances (end of period) $ 772,801  $ 357,629 
Customer margin balances (end of period) $ 231,189  $ 226,231 
Customer funds on deposit, including short credits (end of period) $ 313,297  $ 96,237 
Clearing:
Total tickets 1,314,534  744,365 
Correspondents (end of period) 63  63 
Securities lending:
Interest-earning assets – stock borrowed (end of period) $ 317,571  $ 168,114 
Interest-bearing liabilities – stock loaned (end of period) $ 362,170  $ 206,199 
FINANCIAL CONDITION
Balance Sheet Analysis
Total assets increased $541.4 million, or 3.9%, to $14.4 billion, as of December 31, 2020, up from $13.9 billion at June 30, 2020. The increase in total assets was mainly due to an increase of $978.2 million in net loans and leases held for investment and an increase of $95.2 million in securities borrowed, partially offset by a decrease in cash and cash equivalents of $507.3 million. Total liabilities increased $484.7 million, primarily from increased borrowings of $182.7 million, an increase in customer, broker-dealer and clearing payables of $127.9 million, growth in deposits of $126.4 million, and an increase of $106.2 million in securities loaned, partially offset by a decrease of $60.0 million in advances from the FHLB.
Loans
Net loans and leases held for investment increased 9.2% to $11.6 billion at December 31, 2020 from $10.6 billion at June 30, 2020. The increase in the loan and lease portfolio was primarily due to loan and lease originations of $2.5 billion and mortgage warehouse loan originations of $0.7 billion, partially offset by loan and lease repayments and other adjustments of $2.2 billion and an adjustment of approximately $47.3 million to the allowance for credit losses - loans resulting from the adoption of ASC 326 during the six months ended December 31, 2020.
The following table sets forth the composition of the loan and lease portfolio as of the dates indicated:
December 31, 2020 June 30, 2020
(Dollars in thousands) Amount Percent Amount Percent
Single Family - Mortgage & Warehouse $ 5,252,810  44.7  % $ 4,722,304  44.1  %
Multifamily and Commercial Mortgage 2,363,024  20.1  % 2,263,054  21.1  %
Commercial Real Estate 2,720,922  23.2  % 2,297,920  21.5  %
Commercial & Industrial - Non-RE 933,081  7.9  % 885,320  8.3  %
Auto & Consumer 327,340  2.8  % 341,365  3.1  %
Other 151,496  1.3  % 193,479  1.8  %
Total gross loans and leases 11,748,673  100.0  % 10,703,442  100.0  %
Allowance for loan and lease losses (136,393) (75,807)
Unaccreted discounts and loan and lease fees (2,696) 3,714 
Total net loans and leases $ 11,609,584  $ 10,631,349 
The Bank originates some single family interest only loans with terms that include repayments that are less than the repayments for fully amortizing loans. The Bank’s lending guidelines for interest only loans are adjusted for the increased credit risk associated with these loans by requiring borrowers with such loans to borrow at LTVs that are lower than standard amortizing ARM loans and by calculating debt to income ratios for qualifying borrowers based upon a fully amortizing
52
Table of Contents
payment, not the interest only payment. The Bank monitors and performs reviews of interest only loans. Adverse trends reflected in the Company’s delinquency statistics, grading and classification of interest only loans would be reported to management and the Board of Directors. As of December 31, 2020, the Company had $1.3 billion of interest only mortgage loans.
Asset Quality and Allowance for Loan and Lease Losses
Non-performing Assets
Non-performing loans are comprised of loans past due 90 days or more on nonaccrual status and other nonaccrual loans. Non-performing assets include non-performing loans plus other real estate owned and repossessed vehicles. At December 31, 2020, our non-performing loans totaled $169.3 million, or 1.44% of total gross loans and our non-performing loans and foreclosed assets or “non-performing assets” totaled $175.6 million, or 1.22% of total assets.
Non-performing assets consisted of the following as of the dates indicated:
(Dollars in thousands) December 31, 2020 June 30, 2020 Inc (Dec)
Non-performing assets:
Non-accrual loans and leases:
Single Family - Mortgage & Warehouse $ 117,189  $ 84,030  33,159 
Multifamily and Commercial Mortgage 32,130  3,425  28,705 
Commercial Real Estate 16,631  —  16,631 
Commercial & Industrial - Non-RE 2,960  213  2,747 
Auto & Consumer 354  273  81 
Other —  —  — 
Total non-performing loans 169,264  87,941  81,323 
Foreclosed real estate 6,114  6,114  — 
Repossessed—Auto and RV 182  294  (112)
Total non-performing assets $ 175,560  $ 94,349  $ 81,211 
Total non-performing loans as a percentage of total loans 1.44  % 0.82  % 0.62  %
Total non-performing assets as a percentage of total assets 1.22  % 0.68  % 0.54  %
Total non-performing assets increased from $94.3 million at June 30, 2020 to $175.6 million at December 31, 2020. The increase in non-performing assets of approximately $81.2 million, was primarily attributable to single family, multifamily and commercial real estate loans. Non-performing single family mortgages increased $33.2 million to $117.2 million between June 30, 2020 and December 31, 2020 primarily as a result of loans coming off forbearance temporarily granted due to COVID-19. The Company ended forbearance for all single family mortgage borrowers during the quarter ended September 30, 2020. The weighted average LTV of the non-performing single family mortgage loans was 58.8% at December 31, 2020. Non-performing multifamily mortgage loans increased $28.7 million to $32.1 million as a result of decline on a macroeconomic level. The weighted average LTV of the non-performing multifamily mortgage loans was 53.7% at December 31, 2020. The weighted average LTV of the non-performing commercial real estate loans was 47.0% at December 31, 2020
The Bank had no performing troubled debt restructurings at December 31, 2020 and June 30, 2020. A troubled debt restructuring is a concession made to a borrower experiencing financial difficulties, typically permanent or temporary modifications of principal and interest payments or an extension of maturity dates. When a loan is delinquent and classified as a troubled debt restructuring no interest is accrued until the borrower demonstrates over time (typically six months) that it can make payments. When a loan is considered a troubled debt restructuring and is on nonaccrual, it is considered non-performing and included in the table above.
53
Table of Contents
Allowance for Credit Losses - Loans

On July 1, 2020, the Company adopted ASC 326. The update replaces the historical incurred loss model to a current expected loss model, resulting, generally, in earlier recognition of loss. Refer to Note 1 - Summary of Significant Accounting Policies within this Form 10-Q for the Quarterly Period ended December 31, 2020 for further detail on the accounting adoption along with detail of the processes involved in determining the allowance for credit losses under the new guidance.

The following table reflects management’s allocation of the allowance for credit losses - loans by loan category and the ratio of each loan category to total loans as of the dates indicated:
December 31, 2020 June 30, 2020
(Dollars in thousands) Amount
of
Allowance 		Allocation
as a % of
Allowance 		Amount
of
Allowance 		Allocation
as a % of
Allowance
Single Family Real Estate $ 32,727  24.0  % $ 25,901  34.2  %
Multifamily Real Estate 12,889  9.4  % 4,718  6.2  %
Commercial Real Estate 56,715  41.7  % 21,052  27.8  %
Commercial and Industrial - Non-RE 19,129  14.0  % 9,954  13.1  %
Consumer and Auto 7,413  5.4  % 9,461  12.5  %
Other 7,520  5.5  % 4,721  6.2  %
Total $ 136,393  100.0  % $ 75,807  100.0  %
The provision for credit losses was $8.0 million and $4.5 million for the three months ended December 31, 2020 and 2019, respectively. The provision for credit losses was $19.8 million and $7.2 million for the six months ended December 31, 2020 and 2019, respectively. The increase in the provision for credit losses for the three and six months ended December 31, 2020, were primarily due to loan growth, updates on a macroeconomic level relating to COVID-19 and a change in the provision for the credit loss methodology from the incurred loss model to a current expected credit loss model as described under “Critical Accounting Policies”. We believe that the lower average LTV in the Bank’s mortgage loan portfolio will continue to result in future lower average mortgage loan charge-offs when compared to many other comparable banks. The resolution of the Bank’s existing other real estate owned and non-performing loans should not have a significant adverse impact on our operating results.
Investment Securities
Total investment securities were $210.2 million as of December 31, 2020, compared with $187.7 million at June 30, 2020. During the six months ended December 31, 2020, we purchased securities for $57.7 million and received principal repayments of approximately $56.1 million in our available-for-sale portfolio. The remainder of the change for the available-for-sale portfolio is attributable to accretion and other activities.
54
Table of Contents
Deposits
Deposits increased a net $126.4 million, or 1.1%, to $11.5 billion at December 31, 2020, from $11.3 billion at June 30, 2020. Non-interest bearing deposits increased $265.3 million, or 13.7%, to $2.2 billion at December 31, 2020, from $1.9 billion at June 30, 2020. Total interest-bearing deposits decreased $138.8 million and total time deposits decreased by $435.2 million as higher costing deposits matured.
The following table sets forth the composition of the deposit portfolio as of the dates indicated:
December 31, 2020 June 30, 2020
(Dollars in thousands) Amount
Rate1
Amount
Rate1
Non-interest bearing $ 2,201,932  —  % $ 1,936,661  —  %
Interest-bearing:
Demand 4,022,562  0.24  % 3,456,127  0.37  %
Savings 3,427,123  0.38  % 3,697,188  0.78  %
Total interest-bearing demand and savings 7,449,685  0.31  % 7,153,315  0.58  %
Time deposits:
$250 and under2
1,240,713  1.73  % 1,584,034  2.12  %
Greater than $250 570,806  1.36  % 662,684  1.39  %
Total time deposits
1,811,519  1.61  % 2,246,718  1.91  %
Total interest bearing2
9,261,204  0.56  % 9,400,033  0.90  %
Total deposits $ 11,463,136  0.45  % $ 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 $1,297.4 million and $1,318.0 million as of December 31, 2020 and June 30, 2020, respectively, of which $419.6 million and $603.6 million, respectively, are time deposits classified as $250 and under.

The following table sets forth the number of deposit accounts by type as of the date indicated:
December 31, 2020 June 30, 2020 December 31, 2019
Non-interest bearing, prepaid and other 30,068  3,361,965 4,372,046 
Checking and savings accounts 314,145  310,463 303,033 
Time deposits 15,797  18,450 22,154 
Total number of deposit accounts 360,010  3,690,878 4,697,233
Our non-interest bearing, prepaid and other accounts contained two omnibus accounts that when condensed for regulatory reporting purposes result in 27,108 accounts at June 30, 2020 and 21,104 accounts as of December 31, 2019. The two omnibus accounts represented $351.9 million and $282.5 million at June 30, 2020 and December 31, 2019, 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, 200 for additional information.

Borrowings
    The following table sets forth the composition of our borrowings and the interest rates at the dates indicated:
December 31, 2020 June 30, 2020 December 31, 2019
(Dollars in thousands) Balance Weighted Average Rate Balance Weighted Average Rate Balance Weighted Average Rate
FHLB Advances $182,500 2.21  % $242,500 2.22  % $257,500 2.28  %
Borrowings, subordinated notes and debentures 418,480 3.45  % 235,789 5.18  % 62,233 6.30  %
Total borrowings $600,980 3.07  % $478,289 3.68  % $319,733 3.06  %
Weighted average cost of borrowings during the quarter 2.97  % 1.26  % 2.24  %
Borrowings as a percent of total assets 4.18  % 3.45  % 2.60  %
55
Table of Contents
At December 31, 2020, total borrowings amounted to $601.0 million, up $122.7 million, or 25.7%, from June 30, 2020 and up $281.2 million or 88.0% from December 31, 2019. Borrowings as a percent of total assets were 4.18%, 3.45% and 2.60% at December 31, 2020, June 30, 2020 and December 31, 2019, respectively. Weighted average cost of borrowings during the quarter were 2.97%, 1.26% and 2.24% for the quarters ended December 31, 2020, June 30, 2020 and December 31, 2019, respectively.
In September 2020, the Company completed the sale of $175.0 million aggregate principal amount of its 4.875% Fixed-to-Floating Rate Subordinated Notes due October 1, 2030 (the “Notes”). The Notes mature on October 1, 2030 and will 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 Notes will bear interest at a floating rate per annum equal to a benchmark rate (which is expected to be the Three-Month Term Secured Overnight Financing Rate) 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 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.
We regularly use advances from the FHLB to manage our interest rate risk and, to a lesser extent, manage our liquidity position. Generally, FHLB advances with terms between three and ten years have been used to fund the purchase of single family and multifamily mortgages and to provide us with interest rate risk protection should rates rise.
Stockholders’ Equity
    Stockholders’ equity increased $56.6 million to $1,287.5 million at December 31, 2020 compared to $1,230.8 million at June 30, 2020. The increase was the result of our net income for the six months ended December 31, 2020 of $107.8 million, stock compensation expense of $5.7 million, a $2.2 million increase in other comprehensive income, net of tax, partially offset by $0.1 million for dividends declared on preferred stock, $5.2 million for the redemption of the series-A preferred stock, $16.8 million for common stock repurchases, and an opening day adjustment of $37.1 million for the change to ASC 326 - refer to Note 1 - Summary of Significant Accounting Policies for further detail of the adoption.
During the six months ended December 31, 2020, the Company repurchased a total of $16.8 million, or 753,597 common shares at an average price of $22.24 per share. The Company has $52.8 million remaining under the Board authorized stock repurchase program.
We redeemed in full the 515 outstanding shares of Series A-6% Cumulative Nonparticipating Perpetual Preferred Stock on October 20, 2020 at $10,000 per plus accrued dividends.

LIQUIDITY
Cash flow information is as follows:
For the Six Months Ended
December 31,
(Dollars in thousands) 2020 2019
Operating Activities $ 284,417  $ 128,654 
Investing Activities $ (1,015,293) $ (779,156)
Financing Activities $ 223,552  $ 819,309 
During the six months ended December 31, 2020, we had net cash inflows from operating activities of $284.4 million compared to inflows of $128.7 million for the six months ended December 31, 2019, primarily due to net income for each period. Net operating cash inflows and outflows fluctuate primarily due to the timing of the following: originations of loans held for sale, proceeds from loan sales, securities borrowed and loaned, and customer, broker-dealer and clearing receivables and payables.
Net cash outflows from investing activities totaled $1,015.3 million for the six months ended December 31, 2020, while outflows totaled $779.2 million for the six months ended December 31, 2019. The increase in outflows was primarily due to increased net originations of mortgage warehouse loans, partially offset by increased repayments on loans compared to the six months ended December 31, 2019.
Net cash inflows from financing activities totaled $223.6 million for the six months ended December 31, 2020, compared to net cash inflows from financing activities of $819.3 million for the six months ended December 31, 2019. The change was primarily due to reduced deposit growth partially offset by the net proceeds of $175.0 million of subordinated notes in the six months ended December 31, 2020.
56
Table of Contents
During the six months ended December 31, 2020, the Bank could borrow up to 40.0% of its total assets from the FHLB. Borrowings are collateralized by the pledge of certain mortgage loans and investment securities to the FHLB. At December 31, 2020, the Company had $2,470.7 million available immediately and $2,499.7 million available with additional collateral. At December 31, 2020, we also had two unsecured federal funds purchase lines with two different banks totaling $175.0 million, under which no borrowings were outstanding.
The Bank has the ability to borrow short-term from the Federal Reserve Bank of San Francisco Discount Window. At December 31, 2020, the Bank did not have any borrowings outstanding and the amount available from this source was $1,835.0 million. The credit line is collateralized by consumer loans and mortgage-backed securities. Additionally, the Bank can borrow through the Paycheck Protection Program Liquidity Facility (“PPPLF”). Advances under the PPPLF are collateralized by pledged Small Business Administration Paycheck Protection Program Loans. Advances under the PPPLF were $131.2 million at December 31, 2020, had interest rates of 0.35% and mature at the earlier of PPP borrower forgiveness or June 2022.
Axos Clearing has a total of $230 million uncommitted secured lines of credit available for borrowing as needed. As of December 31, 2020, there was $30.2 million outstanding. These credit facilities bear interest at rates based on the Federal Funds rate and are due upon demand.
Axos Clearing has a $50.0 million committed unsecured line of credit available for limited purpose borrowing. As of December 31, 2020, there was $22.2 million outstanding. This credit facility bears interest at rates based on the Federal Funds rate and are due upon demand.
We believe our liquidity sources to be stable and adequate for our anticipated needs and contingencies for the next 12 months and beyond. We believe we have the ability to increase our level of deposits and borrowings to address our liquidity needs for the foreseeable future.
OFF-BALANCE SHEET COMMITMENTS
At December 31, 2020, we had commitments to originate loans with an aggregate outstanding principal balance of $697.2 million, and commitments to sell loans with an aggregate outstanding principal balance of $124.7 million. We have no commitments to purchase loans, leases, investment securities or any other unused lines of credit.
In the normal course of business, Axos Clearing’s customer activities involve the execution, settlement, and financing of various customer securities transactions. These activities may expose Axos Clearing to off-balance-sheet risk in the event the customer or other broker is unable to fulfill its contracted obligations and Axos Clearing has to purchase or sell the financial instrument underlying the contract at a loss. Axos Clearing’s clearing agreements with broker-dealers for which it provides clearing services requires them to indemnify Axos Clearing if customers fail to satisfy their contractual obligation.
Litigation. On October 15, 2015, the Company, its Chief Executive Officer and its Chief Financial Officer were named defendants in a putative class action lawsuit styled Golden v. BofI Holding, Inc., et al, and brought in United States District Court for the Southern District of California (the “Golden Case”). On November 3, 2015, the Company, its Chief Executive Officer and its Chief Financial Officer were named defendants in a second putative class action lawsuit styled Hazan v. BofI Holding, Inc., et al, and also brought in the United States District Court for the Southern District of California (the “Hazan Case”). On February 1, 2016, the Golden Case and the Hazan Case were consolidated as In re BofI Holding, Inc. Securities Litigation, Case #: 3:15-cv-02324-GPC-KSC (the “Class Action”), and the Houston Municipal Employees Pension System was appointed lead plaintiff. The plaintiffs allege that the Company and other named defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by failing to disclose wrongful conduct that was alleged in a complaint filed in connection with a wrongful termination of employment lawsuit filed on October 13, 2015 (the “Employment Matter”) and that as a result the Company’s statements regarding its internal controls, as well as portions of its financial statements, were false and misleading. On March 21, 2018, the Court entered a final order dismissing the Class Action with prejudice. Subsequently, the plaintiff appealed, the Court overturned the dismissal and the Company is preparing a petition for a rehearing.
57
Table of Contents
On April 3, 2017, the Company, its Chief Executive Officer and its Chief Financial Officer were named defendants in a putative class action lawsuit styled Mandalevy v. BofI Holding, Inc., et al, and brought in United States District Court for the Southern District of California (the “Mandalevy Case”). The Mandalevy Case seeks monetary damages and other relief on behalf of a putative class that has not been certified by the Court. The complaint in the Mandalevy Case (the “Mandalevy Complaint”) alleges a class period that differs from that alleged in the First Class Action, and that the Company and other named defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by failing to disclose wrongful conduct that was alleged in a March 2017 media article. The Mandalevy Case has not been consolidated into the First Class Action. On December 7, 2018, the Court entered a final order granting the defendants’ motion and dismissing the Mandalevy Case with prejudice. Subsequently, the plaintiff filed a notice of appeal and the Court took the matter under advisement. On November 3, 2020, the Court issued a ruling affirming in part and reversing in part the District Court's Order dismissing the Class Action Second Amended Complaint.
The Company and the other named defendants dispute the allegations of wrongdoing advanced by the plaintiffs in the Class Action, the Mandalevy Case, and in the Employment Matter, as well as those plaintiffs’ statement of the underlying factual circumstances, and are vigorously defending each case.
In addition to the First Class Action and the Mandalevy Case, two separate shareholder derivative actions were filed in December, 2015, purportedly on behalf of the Company. The first derivative action, Calcaterra v. Garrabrants, et al, was filed in the United States District Court for the Southern District of California on December 3, 2015. The second derivative action, Dow v. Micheletti, et al, was filed in the San Diego County Superior Court on December 16, 2015. A third derivative action, DeYoung v. Garrabrants, et al, was filed in the United States District Court for the Southern District of California on January 22, 2016, a fourth derivative action, Yong v. Garrabrants, et al, was filed in the United States District Court for the Southern District of California on January 29, 2016, a fifth derivative action, Laborers Pension Trust Fund of Northern Nevada v. Allrich et al, was filed in the United States District Court for the Southern District of California on February 2, 2016, and a sixth derivative action, Garner v. Garrabrants, et al, was filed in the San Diego County Superior Court on August 10, 2017. Each of these six derivative actions names the Company as a nominal defendant, and certain of its officers and directors as defendants. Each complaint sets forth allegations of breaches of fiduciary duties, gross mismanagement, abuse of control, and unjust enrichment against the defendant officers and directors. The plaintiffs in these derivative actions seek damages in unspecified amounts on the Company’s behalf from the officer and director defendants, certain corporate governance actions, and an award of their costs and attorney’s fees.
The United States District Court for the Southern District of California ordered the four above-referenced derivative actions pending before it to be consolidated and appointed lead counsel in the consolidated action. On June 7, 2018, the Court entered an order granting defendant’s motion for judgment on the pleadings, but giving the plaintiffs limited leave to amend by June 28, 2018. The plaintiffs failed to file an amended complaint, and instead plaintiffs filed on June 28, 2018 a motion to stay the case pending resolution of the securities class action and Employment Matter. On August 10, 2018, defendants filed an opposition to plaintiffs’ motion. On September 11, 2018, the plaintiffs filed a second amended complaint. On October 16, 2018, defendants filed a motion to dismiss the second amended complaint. On October 16, 2018, defendants filed a motion to dismiss the second amended complaint. The Court dismissed the second amended complaint with prejudice on May 23, 2019. Subsequently, the plaintiff filed a notice of appeal and opening brief and the Company filed its answering brief. Oral argument was held September 2, 2020 and the Court took the matter under advisement.
The two derivative actions pending before the San Diego County Superior Court have been consolidated and have been stayed by agreement of the parties.
In view of the inherent difficulty of predicting the outcome of each legal action, particularly since claimants seek substantial or indeterminate damages, it is not possible to reasonably predict or estimate the eventual loss or range of loss, if any, related to each legal action.
58
Table of Contents
CAPITAL RESOURCES AND REQUIREMENTS
Our Company and Bank are subject to regulatory capital adequacy requirements promulgated by federal bank regulatory agencies. Failure by our Company or Bank to meet minimum capital requirements could result in certain mandatory and discretionary actions by regulators that could have a material adverse effect on our unaudited condensed consolidated financial statements. The Federal Reserve establishes capital requirements for our Company and the OCC has similar requirements for our Bank. The following tables present regulatory capital information for our Company and Bank. Information presented for December 31, 2020, reflects the Basel III capital requirements that became effective January 1, 2015 for both our Company and Bank. Under these capital requirements and the regulatory framework for prompt corrective action, our Company and Bank must meet specific capital guidelines that involve quantitative measures of our Company and Bank’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. Our Company’s and Bank’s capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings and other factors.
Quantitative measures established by regulation require our Company and Bank to maintain certain minimum capital amounts and ratios. Federal bank regulators require our Company and Bank maintain minimum ratios of core capital to adjusted average assets of 4.0%, common equity tier 1 capital to risk-weighted assets of 4.5%, tier 1 capital to risk-weighted assets of 6.0% and total risk-based capital to risk-weighted assets of 8.0%. To be “well capitalized,” our Company and Bank must maintain minimum leverage, common equity tier 1 risk-based, tier 1 risk-based and total risk-based capital ratios of at least 5.0%, 6.5%, 8.0% and 10.0%, respectively. At December 31, 2020, our Company and Bank met all the capital adequacy requirements to which they were subject and were “well capitalized” under the regulatory framework for prompt corrective action. Management believes that no conditions or events have occurred since December 31, 2020 that would materially adversely change the Company’s and Bank’s capital classifications. From time to time, we may need to raise additional capital to support our Company’s and Bank’s further growth and to maintain their “well capitalized” status.
The Company and Bank elected the CECL 5-year transition guidance for calculating regulatory capital ratios and the December 31, 2020 ratios include this election. This guidance allows an entity to add back to capital 100% of the capital impact from the day one CECL transition adjustment and 25% of subsequent increases to the allowance for credit losses through June 30, 2023. This cumulative amount will then be phased out of regulatory capital over the next three years.
The Company’s and Bank’s estimated capital amounts, capital ratios and capital requirements under Basel III were as follows:
Axos Financial, Inc. Axos Bank “Well 
Capitalized”
Ratio 		Minimum Capital
Ratio
(Dollars in millions) December 31, 2020 June 30,
2020 		December 31, 2020 June 30,
2020
Regulatory Capital:
Tier 1 $ 1,192  $ 1,106  $ 1,164  $ 1,080 
Common equity tier 1 $ 1,192  $ 1,101  $ 1,164  $ 1,080 
Total capital (to risk-weighted assets) $ 1,525  $ 1,241  $ 1,264  $ 1,156 
Assets:
Average adjusted $ 13,733  $ 12,333  $ 12,823  $ 11,680 
Total risk-weighted $ 10,985  $ 9,817  $ 10,163  $ 9,160 
Regulatory Capital Ratios:
Tier 1 leverage (core) capital to adjusted average assets 8.68  % 8.97  % 9.08  % 9.25  % 5.00  % 4.00  %
Common equity tier 1 capital (to risk-weighted assets) 10.85  % 11.22  % 11.45  % 11.79  % 6.50  % 4.50  %
Tier 1 capital (to risk-weighted assets) 10.85  % 11.27  % 11.45  % 11.79  % 8.00  % 6.00  %
Total capital (to risk-weighted assets) 13.88  % 12.64  % 12.44  % 12.62  % 10.00  % 8.00  %
Basel III implemented a requirement for all banking organizations to maintain a capital conservation buffer above the minimum risk-based capital requirements in order to avoid certain limitations on capital distributions, stock repurchases and discretionary bonus payments to executive officers. The capital conservation buffer is exclusively composed of common equity tier 1 capital, and it applies to each of the three risk-based capital ratios but not the leverage ratio. At December 31, 2020, our Company and Bank are in compliance with the capital conservation buffer requirement, which sets the common equity tier 1 risk-based, tier 1 risk-based and total risk-based capital ratio minimums to 7.0%, 8.5% and 10.5%, respectively.
59
Table of Contents
Securities Business
Pursuant to the net capital requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Axos Clearing, is subject to the SEC Uniform Net Capital (Rule 15c3-1 of the Exchange Act). Under this rule, the Company has elected to operate under the alternate method and is required to maintain minimum net capital of $250,000 or 2% of aggregate debit balances arising from client transactions, as defined. Under the alternate method, the Company may not repay subordinated debt, pay cash distributions, or make any unsecured advances or loans to its parent or employees if such payment would result in net capital of less than 5% of aggregate debit balances or less than 120% of its minimum dollar requirement.
The net capital positions of Axos Clearing were as follows:
(Dollars in thousands) December 31, 2020 June 30, 2020
Net capital $ 34,417  $ 34,022 
Excess Capital $ 28,941  $ 29,450 
Net capital as a percentage of aggregate debit items 12.57  % 14.88  %
Net capital in excess of 5% aggregate debit items $ 20,726  $ 22,593 
Axos Clearing as a clearing broker, is subject to SEC Customer Protection Rule (Rule 15c3-3 of the Exchange Act) which requires segregation of funds in a special reserve account for the benefit of customers. At December 31, 2020, the Company had a deposit requirement of $239.3 million and maintained a deposit of $277.9 million. On January 5, 2021, the company made a withdrawal of $35.1 million.
Certain broker-dealers have chosen to maintain brokerage customer accounts at Axos Clearing. To allow these broker-dealers to classify their assets held by the Company as allowable assets in their computation of net capital, the Company computes a separate reserve requirement for Proprietary Accounts of Brokers (PAB). At December 31, 2020, the Company had a deposit requirement of $44.1 million and maintained a deposit of $35.4 million. On January 5, 2021, the Company made a deposit in the amount of $9.2 million.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We measure interest rate sensitivity as the difference between amounts of interest-earning assets and interest-bearing liabilities that mature or contractually re-price within a given period of time. The difference, or the interest rate sensitivity gap, provides an indication of the extent to which an institution’s interest rate spread will be affected by changes in interest rates. A gap is considered positive when the amount of interest rate sensitive assets exceeds the amount of interest rate sensitive liabilities and negative when the amount of interest rate sensitive liabilities exceeds the amount of interest rate sensitive assets. In a rising interest rate environment, an institution with a positive gap would be in a better position than an institution with a negative gap to invest in higher yielding assets or to have its asset yields adjusted upward, which would cause the yield on its assets to increase at a faster pace than the cost of its interest-bearing liabilities. During a period of falling interest rates, however, an institution with a positive gap would tend to have its assets reprice at a faster rate than one with a negative gap, which would tend to reduce the growth in its net interest income.
60
Table of Contents
Banking Business
The following table sets forth the amounts of interest earning assets and interest bearing liabilities that were outstanding at December 31, 2020 and the portions of each financial instrument that are expected to mature or reset interest rates in each future period:
Term to Repricing, Repayment, or Maturity at
December 31, 2020
(Dollars in thousands) Six Months or Less Over Six
Months Through
One Year 		Over One
Year Through
Five Years 		Over Five
Years 		Total
Interest-earning assets:
Cash and cash equivalents $ 1,110,306  $ —  $ —  $ —  $ 1,110,306 
Securities1
217,215  1,539  9,289  10,261  238,304 
Stock of the regulatory agencies 17,250  —  —  —  17,250 
Loans and leases—net of allowance for credit loss 7,128,762  1,434,246  3,101,261  36,263  11,700,532 
Loans held for sale 78,056  —  —  —  78,056 
Total interest-earning assets 8,551,589  1,435,785  3,110,550  46,524  13,144,448 
Non-interest earning assets —  —  —  —  156,716 
Total assets $ 8,551,589  $ 1,435,785  $ 3,110,550  $ 46,524  $ 13,301,164 
Interest-bearing liabilities:
Interest-bearing deposits $ 6,953,237  $ 1,812,506  $ 633,434  $ 40,385  $ 9,439,562 
Advances from the FHLB 15,000  10,000  97,500  60,000  182,500 
Borrowings, subordinated notes and debentures 229,465  —  —  14,000  243,465 
Total interest-bearing liabilities 7,197,702  1,822,506  730,934  114,385  9,865,527 
Other non-interest-bearing liabilities —  —  —  —  2,231,480 
Stockholders’ equity —  —  —  —  1,204,157 
Total liabilities and equity $ 7,197,702  $ 1,822,506  $ 730,934  $ 114,385  $ 13,301,164 
Net interest rate sensitivity gap $ 1,353,887  $ (386,721) $ 2,379,616  $ (67,861) $ 3,278,921 
Cumulative gap $ 1,353,887  $ 967,166  $ 3,346,782  $ 3,278,921  $ 3,278,921 
Net interest rate sensitivity gap—as a % of total interest earning assets 10.30  % (2.94) % 18.10  % (0.52) % 24.95  %
Cumulative gap—as % of total interest earning assets 10.30  % 7.36  % 25.46  % 24.95  % 24.95  %
1    Comprised of agency and non-agency mortgage-backed securities, municipal securities and other non-agency debt securities, which are classified as available-for-sale.
The above table provides an approximation of the projected re-pricing of assets and liabilities at December 31, 2020 on the basis of contractual maturities, adjusted for anticipated prepayments of principal and scheduled rate adjustments. The loan and securities prepayment rates reflected herein are based on historical experience. For the non-maturity deposit liabilities, we use decay rates and rate adjustments based upon our historical experience. Actual repayments of these instruments could vary substantially if future experience differs from our historic experience.
Although “gap” analysis is a useful measurement device available to management in determining the existence of interest rate exposure, its static focus as of a particular date makes it necessary to utilize other techniques in measuring exposure to changes in interest rates. For example, gap analysis is limited in its ability to predict trends in future earnings and makes no assumptions about changes in prepayment tendencies, deposit or loan maturity preferences or repricing time lags that may occur in response to a change in the interest rate environment.
61
Table of Contents
The following table indicates the sensitivity of net interest income movements to parallel instantaneous shocks in interest rates for the future 1-12 months and 13-24 months’ time periods. For purposes of modeling net interest income sensitivity the Bank assumes no growth in the balance sheet other than for retained earnings:
As of December 31, 2020
First 12 Months Next 12 Months
(Dollars in thousands) Net Interest Income Percentage Change from Base Net Interest Income Percentage Change from Base
Up 200 basis points $ 558,304  10.2  % $ 509,509  7.8  %
Base $ 506,591  —  % $ 472,526  —  %
Down 100 basis points $ 505,061  (0.3) % $ 474,617  0.4  %
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 market value of equity sensitivity to an immediate parallel and sustained shift in interest rates derived from the current treasury and LIBOR yield curves. For rising interest rate scenarios, the base market interest rate forecast was increased by 100, 200 and 300 basis points. For falling interest rate scenarios, we used a 100 basis point decrease due to limitations inherent in the current rate environment.
The following table indicates the sensitivity of market value of equity to the interest rate movement described above:
As of December 31, 2020
(Dollars in thousands) Net
Present Value 		Percentage Change from Base Net
Present
Value as a
Percentage
of Assets
Up 300 basis points $ 1,506,763  6.8  % 11.2  %
Up 200 basis points $ 1,502,689  6.6  % 11.0  %
Up 100 basis points $ 1,454,314  3.1  % 10.6  %
Base $ 1,410,291  —  % 10.2  %
Down 100 basis points $ 1,271,148  (9.9) % 9.1  %
The computation of the prospective effects of hypothetical interest rate changes is based on numerous assumptions, including relative levels of interest rates, asset prepayments, 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 change in loan and deposit interest rates and changes in our asset and liability mix.
Securities Business
Our Securities Business 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 is exposed to interest rate risk as a result of maintaining inventories of interest rate sensitive financial instruments and other interest earning assets including customer and correspondent margin loans and 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 respect to securities held, our interest rate risk is managed by setting and monitoring limits on the size and duration of positions and on the length of time securities can be held. Much of the interest rates on customer and correspondent margin loans are indexed and can vary daily. Our funding sources are generally short term with interest rates that can vary daily.
At December 31, 2020, Axos Clearing held municipal obligations, these positions were classified as trading securities and had maturities greater than 10 years.
Our Securities Business is engaged in various brokerage and trading activities that expose us to credit risk arising from potential non-performance from counterparties, customers or issuers of securities. This risk is managed by setting and
62
Table of Contents
monitoring position limits for each counterparty, conducting periodic credit reviews of counterparties, reviewing concentrations of securities and conducting business through central clearing organizations.
Collateral underlying margin loans to customers and correspondents and with respect to securities lending activities is marked to market daily and additional collateral is required as necessary.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
For quantitative and qualitative disclosures regarding market risks in our portfolio, see, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosures About Market Risk.”

ITEM 4.CONTROLS AND PROCEDURES
The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, pursuant to Exchange Act Rule 13a-15(e). Based upon that evaluation, our Chief Executive Officer along with our Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Beginning July 1, 2020, the Company adopted ASC 326. As a result, the Company made changes to and incorporated new policies, processes and controls over the estimation of the allowance for credit losses. These changes were not undertaken in response to any identified deficiency in the Company’s internal control over financial reporting. There have been no other changes in the Company’s internal control.
Management, including the Company’s Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.
63
Table of Contents
PART II—OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS
The information set forth in Note 8 – “Commitments And Contingencies” to the Unaudited Condensed Consolidated Financial Statements is incorporated herein by reference.
In addition, from time to time we may be a party to other claims or litigation that arise in the ordinary course of business, such as claims to enforce liens, claims involving the origination and servicing of loans, and other issues related to the business of the Bank. None of such matters are expected to have a material adverse effect on the Company’s financial condition, results of operations or business.

ITEM 1A.RISK FACTORS
We face a variety of risks that are inherent in our business and our industry. These risks are described in more detail under Part 1, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended June 30, 2020. We encourage you to read these factors in their entirety. Moreover, other factors may also exist that we cannot anticipate or that we currently do not consider to be significant based on information that is currently available.


ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The table below sets forth our market repurchases of Axos common stock and the Axos common shares retained in connection with net settlement of restricted stock awards during the quarter ended December 31, 2020.
(Dollars in thousands, except per share data) Number
of Shares
Purchased 		Average Price
Paid Per Shares 		Total Number of
Shares
Purchased as Part of Publicly  Announced
Plans or Programs 		Approximate Dollar value of
Shares that May
Yet be Purchased
Under the Plans
or Programs
Stock Repurchases1
Quarter Ended December 31, 2020
October 1, 2020 to October 31, 2020 171,348  $ 23.43  171,348  $ 52,764 
November 1, 2020 to November 30, 2020 —  $ —  —  $ — 
December 1, 2020 to December 31, 2020 —  $ —  —  $ — 
For the Three Months Ended December 31, 2020 171,348  $ 23.43  171,348  $ 52,764 
Stock Retained in Net Settlement2
October 1, 2020 to October 31, 2020 1,294 
November 1, 2020 to November 30, 2020 325 
December 1, 2020 to December 31, 2020 15,874 
For the Three Months Ended December 31, 2020 17,493 
1 On March 17, 2016, the Board of Directors of the Company authorized a program to repurchase up to $100 million of common stock and extended the program by an additional $100 million on August 2, 2019. The share repurchase program will continue in effect until terminated by the Board of Directors of the Company. Purchases were made in open-market transactions.
2 In October 2019, the stockholders of the Company approved the amended and restated the 2014 Stock Incentive Plan, which among other changes permitted net settlement of stock issuances related to equity awards for purposes of payment of a grantee’s minimum income tax obligation. Stock Retained in Net Settlement was at the vesting price of the associated restricted stock unit.


ITEM 3.    DEFAULTS UPON SENIOR SECURITIES
None.

ITEM 4.    MINE SAFETY DISCLOSURES
None.

ITEM 5.    OTHER INFORMATION
64
Table of Contents
    On January 25, 2021, the Company filed a Certificate of Elimination with the Secretary of the State of Delaware eliminating from the Certificate of Incorporation all matters set forth in the Certificate of Designations with respect to its Series A - 6% Cumulative Nonparticipating Perpetual Preferred Stock Convertible through January 2009 (the “Series A Preferred Stock”). No shares of the Series A Preferred Stock were outstanding at the time of the filing of the Certificate of Elimination and all outstanding shares of the Series A Preferred Stock were redeemed on October 30, 2020. The Certificate of Elimination was effective on filing and related to the Series A Preferred Stock is attached as Exhibit 3.1.8 to this Quarterly Report on Form 10-Q.

ITEM 6.EXHIBITS
Exhibit
Number 		Description Incorporated By Reference to
3.1.8 Certificate of Elimination relating to the Series A - 6% Cumulative Nonparticipating Perpetual Preferred Stock Convertible through January 2009, filed with the Delaware Secretary of State on January 25, 2021.
4.1 Indenture, dated as of March 3, 2016, between Axos Financial, Inc. and U.S. Bank National Association, as trustee
4.2 Second Supplemental Indenture, dated as of September 18, 2020, between Axos Financial, Inc. and U.S. Bank
National Association, as trustee
4.3 Form of Global Note to represent the 4.875% Fixed-to-Floating Rate Subordinated Notes due 2030 of Axos Financial, Inc.
31.1 Chief Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Chief Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Chief Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.SCH XBRL Taxonomy Extension Schema Document Filed herewith.
101.CAL XBRL Taxonomy Calculation Linkbase Document Filed herewith.
101.LAB XBRL Taxonomy Label Linkbase Document Filed herewith.
101.PRE XBRL Taxonomy Presentation Linkbase Document Filed herewith.
101.DEF XBRL Taxonomy Definition Document Filed herewith.
101.INS XBRL Instance Document The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.



65
Table of Contents
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Axos Financial, Inc.
Dated: January 28, 2021 By:     /s/ Gregory Garrabrants
Gregory Garrabrants
President and Chief Executive Officer
(Principal Executive Officer)
Dated: January 28, 2021 By:     /s/ Andrew J. Micheletti
Andrew J. Micheletti
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
66

CERTIFICATE ELIMINATING

REFERENCE TO A SERIES OF SHARES OF STOCK FROM THE

CERTIFICATE OF INCORPORATION

OF

AXOS FINANCIAL, INC.

January 25, 2021

Axos Financial, Inc., a corporation organized and existing under the laws of the State of Delaware (the "Corporation"), in accordance with the provisions of Section 151(g) of the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies as follows:

FIRST: The designation of the Series of shares of stock of the Corporation to which this certificate relates is the Series A – 6% Cumulative Nonparticipating Perpetual Preferred Stock Convertible through January 2009 (the "Series A Preferred Stock").

SECOND: The voting powers, designations, preferences, and the relative, participating, optional, or other rights, and the qualifications, limitations, and restrictions of said Series A Preferred Stock were provided for in a resolution adopted by the Board of Directors of the Corporation pursuant to authority expressly vested in it by the provisions of the Certificate of Incorporation of the Corporation. A certificate setting forth said resolution has been heretofore filed with the Secretary of State of the State of Delaware pursuant to the provisions of Section 151(g) of the General Corporation Law of the State of Delaware.

THIRD: The Board of Directors of the Corporation has adopted the following resolutions:

RESOLVED, that none of the authorized shares of stock designated in the Certificate of Incorporation as the Series A Preferred Stock are currently outstanding, and none will be issued by the Corporation.

RESOLVED FURTHER, that the Designated Officers be, and each of them hereby is, authorized and directed to file a certificate with the Secretary of State of the State of Delaware pursuant to the provisions of Section 151(g) of the Delaware General Corporation Law, stating that no authorized shares of the Series A Preferred Stock are outstanding and that none will be issued, in order to eliminate from the Certificate of Incorporation all references to and designation of the Series A Preferred Stock.

FOURTH: The “Designated Officers” include Gregory Garrabrants, President and Chief Executive Officer, and Andrew J. Micheletti, Executive Vice President and Chief Financial Officer.

FIFTH: This certificate shall be effective upon filing.

IN WITNESS WHEREOF, the undersigned has executed and delivered this certificate in the name and on behalf of the Company on and as of the date set forth above.

    


By: /s/ Andrew J. Micheletti
Name:    Andrew J. Micheletti
Title:    Executive Vice President and Chief Financial Officer


Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gregory Garrabrants, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Axos Financial, Inc. (the “registrant”);
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d -15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Dated: January 28, 2021   /s/ GREGORY GARRABRANTS
   
GREGORY GARRABRANTS
President and Chief Executive Officer (Principal Executive Officer)


Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Andrew J. Micheletti, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Axos Financial, Inc. (the “registrant”);
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d -15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Dated: January 28, 2021   /s/ ANDREW J. MICHELETTI
   
ANDREW J. MICHELETTI
Executive Vice President and Chief Financial Officer (Principal Financial Officer)


Exhibit 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Axos Financial, Inc. (the “Company”) on Form 10-Q for the period ended December 31, 2020, the (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, Gregory Garrabrants, hereby certify in my capacity as President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 that:
a)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
b)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the financial statements included in such Report.
Dated: January 28, 2021   /s/ GREGORY GARRABRANTS
   
GREGORY GARRABRANTS
President and Chief Executive Officer (Principal Executive Officer)


Exhibit 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Axos Financial, Inc. (the “Company”) on Form 10-Q for the period ended December 31, 2020, the (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, Andrew J. Micheletti, hereby certify in my capacity as Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 that:
a)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
b)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the financial statements included in such Report.

Dated: January 28, 2021   /s/ ANDREW J. MICHELETTI
    
ANDREW J. MICHELETTI
Executive Vice President and Chief Financial Officer (Principal Financial Officer)