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COMMITMENTS, CONTINGENCIES, AND OFF-BALANCE-SHEET ACTIVITIES | 12 Months Ended
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Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract] |
COMMITMENTS, CONTINGENCIES, AND OFF-BALANCE-SHEET ACTIVITIES | COMMITMENTS, CONTINGENCIES, AND OFF-BALANCE-SHEET ACTIVITIES 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 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 June 30, 2023, the Company had unfunded commitments to originate $85.1 million in fixed rate loans and $2,832.5 million in variable rate loans, totaling an aggregate outstanding principal balance of $2,917.6 million. For June 30, 2023, the Company’s fixed rate commitments to originate had a weighted-average rate of 9.14%. For June 30, 2022, the Company had commitments to originate $184.5 million in fixed rate loans and $3,319.8 million in variable rate loans, totaling an aggregate outstanding principal balance of $3,504.3 million. For June 30, 2022, the Company’s fixed rate commitments to originate had a weighted-average rate of 5.75%. At June 30, 2023, the Company also had fixed rate commitments to sell loans with an aggregate outstanding principal balance of $24.9 million. At June 30, 2022, the Company had fixed rate and variable rate commitments to sell of $8.4 million. At June 30, 2023 and 2022, 10.6% and 42.3% of the commitments to originate loans are matched with commitments to sell related to conforming single family loans classified as held for sale, respectively. 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 addition, we invest in low income housing project partnerships, which provide income tax credits, and in small business investment companies that call for capital contributions up to an amount specified in the partnership agreements. As of June 30, 2023 and 2022, we had commitments to contribute capital to these entities totaling $19.1 million and $28.1 million. 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. As of June 30, 2023, non-customer and customer margin securities of approximately $260.1 million and stock borrowings of approximately $134.3 million were available to the Company to utilize as collateral on various borrowings or for other purposes. The Company utilized $159.8 million of these available securities as collateral for securities loaned, $114.2 million for bank loans, and $23.4 million for OCC margin requirements. Litigation. A consolidated derivative action, In re BofI Holding, Inc., Case No. 15cv2722 GPC (KSC), is pending before the United States District Court for the Southern District of California (the “Derivative Action”). The complaint in the Derivative Action sets forth allegations made in a related employment action, Erhart v. BofI Holding Inc., No. 15cv2287 BAS (NLS) (S.D. Cal.) (the “Employment Action”) brought by a former employee of the Company. The Derivative Action plaintiff seeks damages on behalf of the Company should an adverse judgment be entered in the Employment Action, and also seeks damages on behalf of the Company in connection with a now settled securities class action that was also based upon allegations made in the Employment Action and settled within available insurance coverage without attribution of wrongdoing to the Company, its management, or its directors. The Derivative Action has been stayed pending resolution of the Employment Action. On October 26, 2022, a jury verdict was reached in the case of MUFG Union Bank, N.A. v. Axos Bank, et al, awarding damages to Union Bank. Judgment on such verdict was initially entered on June 5, 2023, and a corrected judgment was entered on June 20, 2023. The Company filed a Notice of Appeal on July 6, 2023, and the plaintiff filed a Notice of Cross-Appeal on July 20, 2023. The Company recorded a $16 million accrued expense in “Accounts payable and other liabilities” on the condensed consolidated balance sheet and in “General and administrative expense” on the condensed consolidated statement of income as of and for the year ended June 30, 2023, respectively. Given the uncertainty of the appellate process and other factors that are unknown or currently unquantifiable, the Company has maintained its accrual at June 30, 2023. 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, unless otherwise disclosed above.

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