ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Securities registered pursuant to Section 12(b) of the Act: | ||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
☒ | Accelerated filer | ☐ | |
Non-accelerated filer | ☐ | Smaller reporting company | |
Emerging growth company |
• | Changes in interest rates; |
• | General economic and market conditions, including the risk of a significant economic downturn; |
• | The soundness of other financial institutions; |
• | Changes in regulation or regulatory oversight, and laws, including tax laws; |
• | Policies and regulations enacted by the Consumer Financial Protection Bureau; |
• | Changes in United States trade policies; |
• | Replacement of the LIBOR benchmark interest rate; |
• | Changes in real estate values; |
• | Possible defaults on our mortgage loans; |
• | Mortgage buying activity of Fannie Mae and Freddie Mac; |
• | The adequacy of our allowance for loan and lease losses; |
• | Changes in the value of goodwill and other intangible assets; |
• | Our risk management processes and procedures effectiveness; |
• | Our acquisition of a broker-dealer business and entry into the investment advisory business; |
• | Changes to our size and structure; |
• | Our ability to acquire and integrate acquired companies; |
• | Changes in our relationship with H&R Block, Inc. and the financial benefits of that relationship; |
• | The outcome or impact of current or future litigation involving the Company; |
• | Our ability to access the equity capital markets; |
• | Access to adequate funding; |
• | Our ability to manage our growth and deploy assets profitably; |
• | Competition for customers from other banks and financial services companies; |
• | Our ability to maintain and enhance our brand; |
• | Reputational risk associated with any negative publicity; |
• | A natural disaster, especially in California; |
• | Our ability to retain the services of key personnel and attract, hire and retain other skilled managers; |
• | Possible exposure to environmental liability; |
• | Our dependence on third-party service providers for core banking technology; |
• | Privacy concerns relating to our technology that could damage our reputation or deter customers from using our products and services; |
• | Risk of systems failure and disruptions to operations; and |
• | Our reliance on continued and unimpeded access to the internet. |
• | Maintain an annualized return on average common stockholders’ equity of 17.0% or better; |
• | Annually increase average interest-earning assets by 12% or more; and |
• | Maintain annualized efficiency ratio at the Bank to a level 40% or lower. |
• | Multiple national online banking brands with tailored products targeted to specific consumer segments; |
• | Affinity groups where we gain access to the affinity group’s members, and our exclusive relationships with financial advisory firms; |
• | A business banking division focused on providing deposit products and loans to specific nationwide industry verticals (e.g., Homeowners’ Associations) and small and medium size businesses; |
• | A commission-based lending sales force that operates from home offices focusing primarily on the origination of single family and multifamily mortgage loans; |
• | A commission-based lending sales force that operates from our San Diego office focusing on commercial and industrial loans to businesses; |
• | A commission-based leasing sales force that operates from our Salt Lake City office focusing on commercial and industrial leases to businesses; |
• | A bankruptcy and non-bankruptcy trustee and fiduciary services team that operates from our Kansas City office focusing on specialized software and consulting services that provide deposits; and |
• | Inside sales teams that originate loans and deposits from self-generated leads, third-party purchase leads, and from our retention and cross-sell of our existing customer base. |
• | Retail. We originate single family mortgage loans directly through i) our multiple national online banking brand websites, where our customers can view interest rates and loan terms, enter their loan applications and lock in interest rates directly online, ii) our relationships with large affinity groups and iii) our call center which uses self-generated internet leads, third-party purchased leads, and cross-selling to our existing customer base. |
• | Wholesale. We have developed relationships with independent mortgage companies, cooperatives and individual loan brokers and we manage these relationships and our wholesale loan pipeline through our originations systems and websites. Through our secure website, our approved brokers can compare programs, terms and pricing on a real time basis and communicate with our staff. |
• | Correspondent. We acquire closed loans from third-party mortgage companies that originate single family loans in accordance with our portfolio specifications or the specifications of our investors. We may purchase pools of seasoned, single-family loans originated by others during economic cycles when those loans have more attractive risk-adjusted returns than those we may originate. |
At June 30, | ||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||||||
Single family real estate secured: | ||||||||||||||||||||||||||||||||||
Mortgage | $ | 4,278,822 | 45.3 | % | $ | 4,198,941 | 49.3 | % | $ | 3,901,754 | 52.4 | % | $ | 3,678,520 | 57.5 | % | $ | 2,980,795 | 59.6 | % | ||||||||||||||
Home equity | 2,258 | — | % | 2,306 | — | % | 2,092 | — | % | 2,470 | — | % | 3,604 | 0.1 | % | |||||||||||||||||||
Warehouse and other | 820,559 | 8.7 | % | 412,085 | 4.8 | % | 452,390 | 6.1 | % | 537,714 | 8.4 | % | 385,413 | 7.7 | % | |||||||||||||||||||
Multifamily real estate secured | 1,948,513 | 20.6 | % | 1,800,919 | 21.1 | % | 1,619,404 | 21.7 | % | 1,373,216 | 21.5 | % | 1,185,531 | 23.7 | % | |||||||||||||||||||
Commercial real estate secured | 326,154 | 3.4 | % | 220,379 | 2.6 | % | 162,715 | 2.2 | % | 121,746 | 1.9 | % | 61,403 | 1.2 | % | |||||||||||||||||||
Auto and RV secured | 290,894 | 3.1 | % | 213,522 | 2.5 | % | 154,246 | 2.1 | % | 73,676 | 1.2 | % | 13,140 | 0.3 | % | |||||||||||||||||||
Factoring | 93,091 | 1.0 | % | 169,885 | 2.1 | % | 160,674 | 2.1 | % | 98,275 | 1.5 | % | 122,200 | 2.4 | % | |||||||||||||||||||
Commercial & Industrial | 1,653,314 | 17.5 | % | 1,481,051 | 17.4 | % | 992,232 | 13.3 | % | 514,300 | 8.0 | % | 248,584 | 5.0 | % | |||||||||||||||||||
Other | 35,705 | 0.4 | % | 18,598 | 0.2 | % | 3,754 | 0.1 | % | 2,542 | — | % | 601 | — | % | |||||||||||||||||||
Total loans and leases held for investment | 9,449,310 | 100.0 | % | 8,517,686 | 100.0 | % | 7,449,261 | 100.0 | % | 6,402,459 | 100.0 | % | 5,001,271 | 100.0 | % | |||||||||||||||||||
Allowance for loan and lease losses | (57,085 | ) | (49,151 | ) | (40,832 | ) | (35,826 | ) | (28,327 | ) | ||||||||||||||||||||||||
Unamortized premiums/discounts, net of deferred loan fees | (10,101 | ) | (36,246 | ) | (33,936 | ) | (11,954 | ) | (44,326 | ) | ||||||||||||||||||||||||
Net loans and leases held for investment | $ | 9,382,124 | $ | 8,432,289 | $ | 7,374,493 | $ | 6,354,679 | $ | 4,928,618 |
Term to Contractual Maturity | |||||||||||||||||||
(Dollars in thousands) | Less Than Three Months | Over Three Months Through One Year | Over One Year Through Five Years | Over Five Years | Total | ||||||||||||||
June 30, 2019 | $ | 501,409 | $ | 772,607 | $ | 1,630,409 | $ | 6,544,885 | $ | 9,449,310 |
(Dollars in thousands) | Fixed | Floating or Adjustable1 | Total | ||||||||
Single family real estate secured: | |||||||||||
Mortgage | $ | 72,858 | $ | 4,173,792 | $ | 4,246,650 | |||||
Home equity | 613 | 1,645 | 2,258 | ||||||||
Warehouse and other | 13,211 | 177,083 | 190,294 | ||||||||
Multifamily real estate secured | 52,880 | 1,851,655 | 1,904,535 | ||||||||
Commercial real estate secured | 14,934 | 300,620 | 315,554 | ||||||||
Auto and RV secured | 290,731 | — | 290,731 | ||||||||
Factoring | 82,993 | — | 82,993 | ||||||||
Commercial & Industrial | 329,933 | 779,398 | 1,109,331 | ||||||||
Other | 32,948 | — | 32,948 | ||||||||
Total | $ | 891,101 | $ | 7,284,193 | $ | 8,175,294 |
At June 30, 2019 | ||||||||||||||
Percentage of Loan Principal Secured by Real Estate Located in State or Region | ||||||||||||||
Single family | ||||||||||||||
State or Region | Total Real Estate Mortgage Loans | Mortgage | Home Equity | Multifamily real estate secured | Commercial real estate secured | |||||||||
California—south1 | 55.12 | % | 53.79 | % | 52.08 | % | 58.30 | % | 55.12 | % | ||||
California—north2 | 17.08 | % | 15.46 | % | 10.43 | % | 20.11 | % | 21.66 | % | ||||
New York | 9.47 | % | 11.56 | % | 11.38 | % | 4.67 | % | 8.56 | % | ||||
Florida | 5.11 | % | 6.91 | % | — | % | 1.45 | % | 1.78 | % | ||||
Arizona | 1.66 | % | 2.28 | % | 2.25 | % | 0.48 | % | — | % | ||||
Washington | 1.44 | % | 1.07 | % | 5.99 | % | 2.40 | % | 0.82 | % | ||||
Illinois | 1.46 | % | 0.29 | % | — | % | 3.92 | % | 3.29 | % | ||||
Hawaii | 1.29 | % | 1.80 | % | — | % | 0.27 | % | 0.23 | % | ||||
Colorado | 0.99 | % | 0.71 | % | — | % | 1.45 | % | 2.03 | % | ||||
Texas | 0.86 | % | 0.70 | % | — | % | 1.14 | % | 1.36 | % | ||||
All other states | 5.52 | % | 5.43 | % | 17.87 | % | 5.81 | % | 5.15 | % | ||||
100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % |
Single family | ||||||||||||||
Total Real Estate Mortgage Loans | Mortgage | Home Equity1 | Multifamily real estate secured | Commercial real estate secured | ||||||||||
Weighted Average LTV | 55.50 | % | 57.23 | % | 29.68 | % | 52.59 | % | 49.10 | % | ||||
Median LTV | 55.82 | % | 57.91 | % | 52.59 | % | 50.43 | % | 47.40 | % |
Available-for-Sale | Held-to-maturity | Trading | |||||||||||||
(Dollars in thousands) | Fair Value | Carrying Amount | Fair Value | Total | |||||||||||
Fiscal year end | |||||||||||||||
June 30, 2019 | $ | 227,513 | $ | — | $ | — | $ | 227,513 | |||||||
June 30, 2018 | 180,305 | — | — | 180,305 | |||||||||||
June 30, 2017 | 264,470 | — | 8,327 | 272,797 | |||||||||||
June 30, 2016 | 265,447 | 199,174 | 7,584 | 472,205 | |||||||||||
June 30, 2015 | 163,361 | 225,555 | 7,832 | 396,748 |
At June 30, 2019 | ||||||||||||||||||||||||||||||||||
Total Amount | Due Within One Year | Due After One but within Five Years | Due After Five but within Ten Years | Due After Ten Years | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Amount | Yield1 | Amount | Yield1 | Amount | Yield1 | Amount | Yield1 | Amount | Yield1 | ||||||||||||||||||||||||
Available-for-sale | ||||||||||||||||||||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||||||||||||||||
U.S. Agency2 | $ | 9,486 | 2.47 | % | $ | 862 | 2.65 | % | $ | 2,905 | 2.65 | % | $ | 2,674 | 2.57 | % | $ | 3,045 | 2.16 | % | ||||||||||||||
Non-Agency3 | 13,489 | 5.00 | % | 1,877 | 4.89 | % | 5,938 | 4.60 | % | 3,824 | 4.71 | % | 1,850 | 7.01 | % | |||||||||||||||||||
Total Mortgage-Backed Securities | $ | 22,975 | 3.96 | % | $ | 2,739 | 4.18 | % | $ | 8,843 | 3.96 | % | $ | 6,498 | 3.83 | % | $ | 4,895 | 3.99 | % | ||||||||||||||
Non-RMBS | ||||||||||||||||||||||||||||||||||
U.S. agencies | $ | 1,682 | 2.44 | % | $ | 1,682 | 2.44 | % | $ | — | — | % | $ | — | — | % | $ | — | — | % | ||||||||||||||
Municipal | $ | 21,974 | 3.01 | % | $ | 3,952 | 2.27 | % | $ | 5,150 | 1.28 | % | $ | 8,266 | 4.05 | % | $ | 4,606 | 3.70 | % | ||||||||||||||
Asset-backed securities and structured notes | 179,976 | 6.00 | % | 16,918 | 7.43 | % | 163,058 | 5.85 | % | — | — | % | — | — | % | |||||||||||||||||||
Total Non-RMBS | $ | 203,632 | 5.65 | % | $ | 22,552 | 6.15 | % | $ | 168,208 | 5.71 | % | $ | 8,266 | 4.05 | % | $ | 4,606 | 3.70 | % | ||||||||||||||
Available-for-sale—Amortized Cost | $ | 226,607 | 5.48 | % | $ | 25,291 | 5.94 | % | $ | 177,051 | 5.63 | % | $ | 14,764 | 3.95 | % | $ | 9,501 | 3.85 | % | ||||||||||||||
Available-for-sale—Fair Value | $ | 227,513 | 5.48 | % | $ | 25,960 | 5.94 | % | $ | 178,194 | 5.63 | % | $ | 13,980 | 3.95 | % | $ | 9,379 | 3.85 | % | ||||||||||||||
Total securities | $ | 227,513 | 5.48 | % | $ | 25,960 | 5.94 | % | $ | 178,194 | 5.63 | % | $ | 13,980 | 3.95 | % | $ | 9,379 | 3.85 | % |
• | A business banking division, which focuses on providing deposit products nationwide to industry verticals (e.g., Homeowners’ Associations and Non-Profit) as well as cash management products to a variety of businesses through a dedicated sales team; |
• | An online consumer platform that delivers an enhanced banking experience with tailored products targeted to specific consumer segments. For example, one tailored product is designed for customers who are looking for full-featured demand accounts and very competitive fees and interest rates, while another product targets primarily tech-savvy, Generation X and Generation Y customers that are seeking a low-fee cost structure and a high-yield savings account; |
• | A concierge banking offer serving the needs of high net worth individuals with premium products and dedicated service; |
• | Financial advisory firms who introduce their clients to our deposit products through Axos Advisor; |
• | Relationships with affinity groups where we gain access to the affinity group’s members; |
• | A call center that opens accounts through self-generated internet leads, third-party purchased leads, affinity relationships, and our retention and cross-sell efforts to our existing customer base; |
• | A prepaid card division, which provides card issuing and BIN sponsorship services to companies and generates low cost deposits; and |
• | A bankruptcy and non-bankruptcy trustee and fiduciary service business who introduce their clients to our deposit products. |
◦ | Purchase Rewards. Customers can earn cash back by using their VISA® Debit Card at select merchants. |
◦ | Mobile Banking. Customers can access with Touch ID on eligible devices, review account balances, transfer funds, deposit checks and pay bills from the convenience of their mobile phone. |
◦ | Mobile Deposit. Customers can instantly deposit checks from their smart phones using our Mobile App. |
◦ | Online Bill Payment Service. Customers can automatically pay their bills online from their account. |
◦ | Peer to Peer payments. Customers can securely send money via email or text messaging through this service. |
◦ | My Deposit. Customers can scan checks with this remote deposit solution from their home computers. Scanned images will be electronically transmitted for deposit directly to their account. |
◦ | Text Message Banking. Customers can view their account balances, transaction history, and transfer funds between their accounts via these text message commands from their mobile phones. |
◦ | Unlimited ATM reimbursements. With certain checking accounts, Customers are reimbursed for any fees incurred using an ATM (excludes international ATM transactions). This gives them access to any ATM in the nation, for free. |
◦ | Secure Email. Customers can send and receive secure emails from our customer service department without concern for the security of their information. |
◦ | InterBank Transfer. Customers can transfer money to their accounts at other financial institutions from their online banking platform. |
◦ | VISA® Debit Cards or ATM Cards. Customers may choose to receive either a free VISA® Debit or an ATM card upon account opening. Customers can access their accounts worldwide at ATMs and any other locations that accept VISA® Debit cards. |
◦ | Overdraft Protection. Eligible Customers can enroll in one of our overdraft protection programs. |
◦ | Digital Wallets. Our Apple Pay™, Samsung Pay™ and Android Pay™ solutions provide the same ease to pay as a debit card with an eligible device. The mobile experience is easy and seamless. |
◦ | Cash Deposit through Reload @ the Register. Customers can visit any Walmart, Safeway, ACE Cash Express, CVS Pharmacy, Dollar General, Dollar Tree, Family Dollar, Kroger, Rite Aid, 7-Eleven and Walgreens, and ask to load cash into their account at the register. A fee is applied. |
At June 30, | ||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||
Non-interest-bearing, prepaid and other | 3,743,334 | 3,535,904 | 3,113,128 | 1,816,266 | 553,245 | |||||||||
Checking and savings accounts | 311,067 | 270,082 | 274,962 | 292,012 | 31,461 | |||||||||
Time deposits | 23,447 | 2,309 | 2,748 | 4,807 | 5,515 | |||||||||
Total number of deposit accounts | 4,077,848 | 3,808,295 | 3,390,838 | 2,113,085 | 590,221 |
At June 30, | ||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Amount | Rate1 | Amount | Rate1 | Amount | Rate1 | Amount | Rate1 | Amount | Rate1 | ||||||||||||||||||||||||
Non-interest-bearing | $ | 1,441,930 | — | $ | 1,015,355 | — | $ | 848,544 | — | $ | 588,774 | — | $ | 309,339 | — | |||||||||||||||||||
Interest-bearing: | ||||||||||||||||||||||||||||||||||
Demand | 2,709,014 | 2.06 | % | 2,519,845 | 1.60 | % | 2,593,491 | 0.89 | % | 1,916,525 | 0.63 | % | 1,224,308 | 0.48 | % | |||||||||||||||||||
Savings | 2,466,214 | 1.48 | % | 2,482,430 | 1.31 | % | 2,651,176 | 0.81 | % | 2,484,994 | 0.69 | % | 2,126,792 | 0.67 | % | |||||||||||||||||||
Total demand and savings | 5,175,228 | 1.78 | % | 5,002,275 | 1.46 | % | 5,244,667 | 0.85 | % | 4,401,519 | 0.66 | % | 3,351,100 | 0.60 | % | |||||||||||||||||||
Time deposits | 2,366,015 | 2.43 | % | 1,967,720 | 2.32 | % | 806,296 | 2.46 | % | 1,053,758 | 1.96 | % | 791,478 | 1.99 | % | |||||||||||||||||||
Total interest-bearing | 7,541,243 | 1.99 | % | 6,969,995 | 1.70 | % | 6,050,963 | 1.06 | % | 5,455,277 | 0.91 | % | 4,142,578 | 0.87 | % | |||||||||||||||||||
Total deposits | $ | 8,983,173 | 1.67 | % | $ | 7,985,350 | 1.48 | % | $ | 6,899,507 | 0.93 | % | $ | 6,044,051 | 0.82 | % | $ | 4,451,917 | 0.81 | % |
For the Fiscal Year Ended June 30, | ||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Average Balance | Interest Expense | Avg. Rate Paid | Average Balance | Interest Expense | Avg. Rate Paid | Average Balance | Interest Expense | Avg. Rate Paid | |||||||||||||||||||||||
Demand | $ | 1,494,040 | $ | 25,321 | 1.69 | % | $ | 2,381,000 | $ | 28,807 | 1.21 | % | $ | 2,197,000 | $ | 16,049 | 0.73 | % | ||||||||||||||
Savings | 2,412,793 | 36,070 | 1.49 | % | 2,325,238 | 25,206 | 1.08 | % | 2,422,769 | 18,507 | 0.76 | % | ||||||||||||||||||||
Time deposits | 2,322,039 | 55,689 | 2.40 | % | 990,635 | 25,838 | 2.61 | % | 941,919 | 21,938 | 2.33 | % | ||||||||||||||||||||
Total interest-bearing deposits | $ | 6,228,872 | $ | 117,080 | 1.88 | % | $ | 5,696,873 | $ | 79,851 | 1.40 | % | $ | 5,561,688 | $ | 56,494 | 1.02 | % | ||||||||||||||
Total deposits | $ | 7,456,157 | $ | 117,080 | 1.57 | % | $ | 6,749,817 | $ | 79,851 | 1.18 | % | $ | 6,336,099 | $ | 56,494 | 0.89 | % |
For the Fiscal Year Ended June 30, | |||||||||||||||||||||
2016 | 2015 | ||||||||||||||||||||
(Dollars in thousands) | Average Balance | Interest Expense | Avg. Rate Paid | Average Balance | Interest Expense | Avg. Rate Paid | |||||||||||||||
Demand | $ | 1,460,266 | $ | 8,750 | 0.60 | % | $ | 1,549,207 | $ | 10,165 | 0.66 | % | |||||||||
Savings | 2,189,157 | 15,861 | 0.72 | % | 1,313,088 | 10,544 | 0.80 | % | |||||||||||||
Time deposits | 852,590 | 18,056 | 2.12 | % | 790,661 | 14,024 | 1.77 | % | |||||||||||||
Total interest-bearing deposits | $ | 4,502,013 | $ | 42,667 | 0.95 | % | $ | 3,652,956 | $ | 34,733 | 0.95 | % | |||||||||
Total deposits | $ | 5,241,777 | $ | 42,667 | 0.81 | % | $ | 3,908,277 | $ | 34,733 | 0.89 | % |
At June 30, | |||||||||||||||||||
(Dollars in thousands) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||
Within 12 months | $ | 1,306,072 | $ | 1,259,119 | $ | 187,536 | $ | 497,825 | $ | 373,999 | |||||||||
13 to 24 months | 351,374 | 97,226 | 14,149 | 41,668 | 73,118 | ||||||||||||||
25 to 36 months | 99,502 | 11,118 | 74,631 | 5,463 | 36,991 | ||||||||||||||
37 to 48 months | 126,525 | 35,981 | 3,305 | 71,518 | 4,605 | ||||||||||||||
49 months and thereafter | 482,542 | 564,276 | 526,675 | 437,284 | 302,765 | ||||||||||||||
Total | $ | 2,366,015 | $ | 1,967,720 | $ | 806,296 | $ | 1,053,758 | $ | 791,478 |
Term to Maturity | |||||||||||||||||||
(Dollars in thousands) | Within Three Months | Over Three Months to Six Months | Over Six Months to One Year | Over One Year | Total | ||||||||||||||
Fiscal year end | |||||||||||||||||||
June 30, 2019 | $ | 151,176 | $ | 363,486 | $ | 376,714 | $ | 335,201 | $ | 1,226,577 | |||||||||
June 30, 2018 | 96,837 | 75,464 | 33,125 | 41,569 | 246,995 | ||||||||||||||
June 30, 2017 | 71,771 | 21,137 | 71,266 | 606,892 | 771,066 | ||||||||||||||
June 30, 2016 | 100,048 | 133,603 | 228,532 | 539,726 | 1,001,909 | ||||||||||||||
June 30, 2015 | 37,842 | 189,604 | 106,826 | 386,837 | 721,109 |
At or For The Fiscal Years Ended June 30, | |||||||||||||||||||
(Dollars in thousands) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||
Advances from the FHLB: | |||||||||||||||||||
Average balance outstanding | $ | 1,397,460 | $ | 1,296,120 | $ | 798,982 | $ | 855,029 | $ | 700,805 | |||||||||
Maximum amount outstanding at any month-end during the period | $ | 3,424,000 | $ | 2,240,000 | $ | 1,317,000 | $ | 1,129,000 | $ | 1,075,000 | |||||||||
Balance outstanding at end of period | $ | 458,500 | $ | 457,000 | $ | 640,000 | $ | 727,000 | $ | 753,000 | |||||||||
Average interest rate at end of period | 2.32 | % | 2.14 | % | 1.79 | % | 1.53 | % | 1.36 | % | |||||||||
Average interest rate during period | 2.35 | % | 1.76 | % | 1.55 | % | 1.31 | % | 1.27 | % | |||||||||
Securities sold under agreements to repurchase: | |||||||||||||||||||
Average balance outstanding | $ | — | $ | 5,575 | $ | 33,068 | $ | 35,000 | $ | 36,562 | |||||||||
Maximum amount outstanding at any month-end during the period | $ | — | $ | 20,000 | $ | 35,000 | $ | 35,000 | $ | 45,000 | |||||||||
Balance outstanding at end of period | $ | — | $ | — | $ | 20,000 | $ | 35,000 | $ | 35,000 | |||||||||
Average interest rate at end of period | — | % | — | % | 4.25 | % | 4.38 | % | 4.38 | % | |||||||||
Average interest rate during period | — | % | 4.11 | % | 4.43 | % | 4.44 | % | 4.47 | % | |||||||||
Borrowings, subordinated notes and debentures: | |||||||||||||||||||
Average balance outstanding | $ | 104,287 | $ | 54,522 | $ | 55,873 | $ | 22,025 | $ | 5,155 | |||||||||
Maximum amount outstanding at any month-end during the period | $ | 214,477 | $ | 54,552 | $ | 56,511 | $ | 58,185 | $ | 5,155 | |||||||||
Balance outstanding at end of period | $ | 168,929 | $ | 54,552 | $ | 54,463 | $ | 58,066 | $ | 5,155 | |||||||||
Average interest rate at end of period | 4.78 | % | 6.55 | % | 6.57 | % | 6.27 | % | 2.68 | % | |||||||||
Average interest rate during period | 5.39 | % | 6.70 | % | 6.62 | % | 5.90 | % | 2.77 | % |
• | directly or indirectly or acting in concert with one or more persons, owns, controls, or has the power to vote 25% or more of the voting securities of a company; |
• | controls in any manner the election of a majority of the directors (or any individual who performs similar functions in respect of any company, including a trustee under a trust) of the board; or |
• | directly or indirectly exercises a controlling influence over the management or policies of the bank. |
• | The savings association is in compliance with its fully phased-in capital requirements; |
• | The loans comply with applicable loan-to-value requirements; and |
• | The aggregate amount of loans made under this authority does not exceed 150% of unimpaired capital and surplus. |
• | Be required to file an application and await approval from the OCC before it makes a capital distribution; |
• | Be required to file a notice 30 days before the capital distribution; or |
• | Be permitted to make the capital distribution without notice or application to the OCC. |
• | supervision, examination and enforcement by the CFPB with respect to consumer financial protection laws; |
• | a modified methodology for calculating FDIC insurance assessments and potentially higher assessment rates as a result of institutions with $10 billion or more in assets being required to bear a greater portion of the cost of raising the reserve ratio to 1.35% as required by the Dodd-Frank Act; |
• | heightened compliance standards under the Volcker Rule; and |
• | enhanced supervision as a larger financial institution. |
• | adversely affect the interest rates paid or received on, the revenue and expenses associate with, and the value of our floating-rate obligations, loans, deposits, derivatives, and other financial instruments tied to LIBOR rates, or other securities or financial arrangements given LIBOR’s role in determining market interest rates globally; |
• | prompt inquiries or other actions from regulators in respect of our preparation and readiness for the replacement of LIBOR with an alternative reference rate; |
• | result in disputes, litigation or other actions with counterparties regarding the interpretation and enforceability of certain fallback language in LIBOR-based securities; and |
• | require the transition to or development of appropriate systems and analytics to effectively transition our risk management processes from LIBOR-based products to those based on the applicable alternative pricing benchmark. |
• | Having a large and increasing number of customers who use our bank for their banking needs; |
• | Our ability to attract, hire and retain key personnel as our business grows; |
• | Our ability to secure additional capital as needed; |
• | The relevance of our products and services to customer needs and demands and the rate at which we and our competitors introduce or modify new products and services; |
• | Our ability to offer products and services with fewer employees than competitors; |
• | The satisfaction of our customers with our customer service; |
• | Ease of use of our websites and smartphone applications; |
• | Our ability to provide a secure and stable technology platform for financial services that provides us with reliable and effective operational, financial and information systems; and |
• | Integration of our broker-dealer and registered investment-advisory businesses. |
Period | 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 Repurchases (dollars in thousands) | |||||||||||||
Quarter Ended June 30, 2019 | |||||||||||||
April 1, 2019 to April 30, 2019 | — | $ | — | — | $ | — | |||||||
May 1, 2019 to May 31, 2019 | 149,039 | $ | 28.30 | — | $ | — | |||||||
June 1, 2019 to June 30, 2019 | 155,785 | $ | 27.74 | 304,824 | $ | 8,380 | |||||||
For the Three Months Ended June 30, 2019 | 304,824 | $ | 28.02 | 304,824 | $ | 8,380 | |||||||
Stock Retained in Net Settlement | |||||||||||||
April 1, 2019 to April 30, 2019 | 2,040 | ||||||||||||
May 1, 2019 to May 31, 2019 | 160 | ||||||||||||
June 1, 2019 to June 30, 2019 | 160,158 | ||||||||||||
For the Three Months Ended June 30, 2019 | 162,358 |
Plan Category | (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | (b) Weighted-average exercise price of outstanding options and units granted | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | ||||||
Equity compensation plans approved by security holders | — | $ | — | 1,705,631 | |||||
Equity compensation plans not approved by security holders | N/A | N/A | N/A | ||||||
Total | — | $ | — | 1,705,631 |
At or for the Fiscal Years Ended June 30, | |||||||||||||||||||
(Dollars in thousands, except per share amounts) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||
Selected Balance Sheet Data: | |||||||||||||||||||
Total assets | $ | 11,220,238 | $ | 9,539,504 | $ | 8,501,680 | $ | 7,599,304 | $ | 5,823,719 | |||||||||
Loans, net of allowance for loan losses | 9,382,124 | 8,432,289 | 7,374,493 | 6,354,679 | 4,928,618 | ||||||||||||||
Loans held for sale, at fair value | 33,260 | 35,077 | 18,738 | 20,871 | 25,430 | ||||||||||||||
Loans held for sale, at cost | 4,800 | 2,686 | 6,669 | 33,530 | 77,891 | ||||||||||||||
Allowance for loan losses | 57,085 | 49,151 | 40,832 | 35,826 | 28,327 | ||||||||||||||
Securities—trading | — | — | 8,327 | 7,584 | 7,832 | ||||||||||||||
Securities—available for sale | 227,513 | 180,305 | 264,470 | 265,447 | 163,361 | ||||||||||||||
Securities—held to maturity | — | — | — | 199,174 | 225,555 | ||||||||||||||
Securities borrowed | 144,706 | N/A | N/A | N/A | N/A | ||||||||||||||
Customer, broker-dealer and clearing receivables | 203,192 | N/A | N/A | N/A | N/A | ||||||||||||||
Total deposits | 8,983,173 | 7,985,350 | 6,899,507 | 6,044,051 | 4,451,917 | ||||||||||||||
Securities sold under agreements to repurchase | — | — | 20,000 | 35,000 | 35,000 | ||||||||||||||
Advances from the FHLB | 458,500 | 457,000 | 640,000 | 727,000 | 753,000 | ||||||||||||||
Borrowings, subordinated debentures and other borrowings | 168,929 | 54,552 | 54,463 | 56,016 | 5,155 | ||||||||||||||
Securities loaned | 198,356 | N/A | N/A | N/A | N/A | ||||||||||||||
Customer, broker-dealer and clearing payables | 238,604 | N/A | N/A | N/A | N/A | ||||||||||||||
Total stockholders’ equity | 1,073,050 | 960,513 | 834,247 | 683,590 | 533,526 | ||||||||||||||
Selected Income Statement Data: | |||||||||||||||||||
Interest and dividend income | $ | 564,887 | $ | 475,074 | $ | 387,286 | $ | 317,707 | $ | 244,364 | |||||||||
Interest expense | 156,282 | 106,580 | 74,059 | 56,696 | 45,419 | ||||||||||||||
Net interest income | 408,605 | 368,494 | 313,227 | 261,011 | 198,945 | ||||||||||||||
Provision for loan and lease losses | 27,350 | 25,800 | 11,061 | 9,700 | 11,200 | ||||||||||||||
Net interest income after provision for loan losses | 381,255 | 342,694 | 302,166 | 251,311 | 187,745 | ||||||||||||||
Non-interest income | 82,757 | 70,941 | 68,132 | 66,340 | 30,590 | ||||||||||||||
Non-interest expense | 251,206 | 173,936 | 137,605 | 112,756 | 77,478 | ||||||||||||||
Income before income tax expense | 212,806 | 239,699 | 232,693 | 204,895 | 140,857 | ||||||||||||||
Income tax expense | 57,675 | 87,288 | 97,953 | 85,604 | 58,175 | ||||||||||||||
Net income | $ | 155,131 | $ | 152,411 | $ | 134,740 | $ | 119,291 | $ | 82,682 | |||||||||
Net income attributable to common stock | $ | 154,822 | $ | 152,102 | $ | 134,431 | $ | 118,982 | $ | 82,373 | |||||||||
Per Common Share Data: | |||||||||||||||||||
Net income: | |||||||||||||||||||
Basic | $ | 2.50 | $ | 2.41 | $ | 2.11 | $ | 1.87 | $ | 1.35 | |||||||||
Diluted | $ | 2.48 | $ | 2.37 | $ | 2.10 | $ | 1.87 | $ | 1.34 | |||||||||
Adjusted earnings per common share (Non-GAAP) | $ | 2.75 | $ | 2.39 | N/A | N/A | N/A | ||||||||||||
Book value per common share | $ | 17.47 | $ | 15.24 | $ | 13.05 | $ | 10.73 | $ | 8.51 | |||||||||
Tangible book value per common share (Non-GAAP) | $ | 15.10 | $ | 13.99 | $ | 12.94 | $ | 10.67 | $ | 8.48 | |||||||||
Weighted average number of common shares outstanding: | |||||||||||||||||||
Basic1 | 61,898,447 | 63,136,232 | 63,656,542 | 63,597,259 | 61,177,908 | ||||||||||||||
Diluted1 | 62,382,065 | 64,147,220 | 63,915,100 | 63,672,280 | 61,404,364 | ||||||||||||||
Common shares outstanding at end of period1 | 61,128,817 | 62,688,064 | 63,536,244 | 63,219,392 | 62,075,004 |
At or for the Fiscal Years Ended June 30, | |||||||||||||||||||
(Dollars in thousands, except per share amounts) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||
Performance Ratios and Other Data: | |||||||||||||||||||
Loan and lease originations for investment | $ | 6,934,259 | $ | 5,922,801 | $ | 4,182,701 | $ | 3,633,911 | $ | 3,271,911 | |||||||||
Loan originations for sale | $ | 1,471,906 | $ | 1,564,165 | $ | 1,375,443 | $ | 1,363,025 | $ | 1,048,982 | |||||||||
Loan and lease purchases | $ | 11,009 | $ | — | $ | 276,917 | $ | 140,493 | $ | 2,452 | |||||||||
Return on average assets | 1.51 | % | 1.68 | % | 1.68 | % | 1.75 | % | 1.61 | % | |||||||||
Return on average common stockholders’ equity | 15.40 | % | 17.05 | % | 17.78 | % | 19.43 | % | 18.34 | % | |||||||||
Interest rate spread2 | 3.66 | % | 3.79 | % | 3.74 | % | 3.70 | % | 3.79 | % | |||||||||
Net interest margin3 | 4.07 | % | 4.11 | % | 3.95 | % | 3.91 | % | 3.92 | % | |||||||||
Net interest margin - Banking segment only3 | 4.14 | % | 4.14 | % | N/A | N/A | N/A | ||||||||||||
Efficiency ratio4 | 51.12 | % | 39.58 | % | 36.08 | % | 34.44 | % | 33.75 | % | |||||||||
Efficiency ratio - Banking segment only4 | 40.51 | % | 34.55 | % | N/A | N/A | N/A | ||||||||||||
Capital Ratios: | |||||||||||||||||||
Equity to assets at end of period | 9.56 | % | 10.07 | % | 9.81 | % | 8.99 | % | 9.16 | % | |||||||||
Axos Financial, Inc: | |||||||||||||||||||
Tier 1 leverage (core) capital to adjusted average assets | 8.75 | % | 9.45 | % | 9.95 | % | 9.12 | % | 9.59 | % | |||||||||
Common equity tier 1 capital (to risk-weighted assets) | 11.43 | % | 13.27 | % | 14.66 | % | 14.42 | % | 14.98 | % | |||||||||
Tier 1 capital (to risk-weighted assets) | 11.49 | % | 13.34 | % | 14.75 | % | 14.53 | % | 15.12 | % | |||||||||
Total capital (to risk-weighted assets) | 12.91 | % | 14.84 | % | 16.38 | % | 16.36 | % | 15.91 | % | |||||||||
Axos Bank: | |||||||||||||||||||
Tier 1 leverage (core) capital to adjusted average assets | 9.21 | % | 8.88 | % | 9.60 | % | 8.78 | % | 9.25 | % | |||||||||
Common equity tier 1 capital (to risk-weighted assets) | 12.14 | % | 12.53 | % | 14.25 | % | 14.00 | % | 14.58 | % | |||||||||
Tier 1 capital (to risk-weighted assets) | 12.14 | % | 12.53 | % | 14.25 | % | 14.00 | % | 14.58 | % | |||||||||
Total capital (to risk-weighted assets) | 12.89 | % | 13.27 | % | 14.97 | % | 14.75 | % | 15.38 | % | |||||||||
Axos Clearing: | |||||||||||||||||||
Net capital | $ | 21,669 | N/A | N/A | N/A | N/A | |||||||||||||
Excess capital | $ | 17,858 | N/A | N/A | N/A | N/A | |||||||||||||
Net capital as percentage of aggregate debit item | 11.37 | % | N/A | N/A | N/A | N/A | |||||||||||||
Net capital in excess of 5% aggregate debit item | $ | 12,142 | N/A | N/A | N/A | N/A | |||||||||||||
Asset Quality Ratios: | |||||||||||||||||||
Net annualized charge-offs (recoveries) to average loans outstanding5 | 0.19 | % | 0.19 | % | 0.06 | % | (0.01 | )% | 0.03 | % | |||||||||
Non-performing loans and leases to total loans and leases | 0.51 | % | 0.37 | % | 0.38 | % | 0.50 | % | 0.62 | % | |||||||||
Non-performing assets to total assets | 0.50 | % | 0.43 | % | 0.35 | % | 0.42 | % | 0.55 | % | |||||||||
Allowance for loan and lease losses to total loans and leases held for investment at end of period | 0.60 | % | 0.58 | % | 0.55 | % | 0.56 | % | 0.57 | % | |||||||||
Allowance for loan and lease losses to non-performing loans and leases | 117.84 | % | 157.40 | % | 143.81 | % | 112.45 | % | 91.88 | % |
For Twelve Months Ended June 30, | |||||||
(Dollars in thousands, except per share amounts) | 2019 | 2018 | |||||
Net income | $ | 155,131 | $ | 152,411 | |||
Acquisition-related costs | 6,714 | 1,470 | |||||
Excess FDIC expense | 1,111 | — | |||||
Other costs | 15,299 | — | |||||
Income taxes | (6,267 | ) | (535 | ) | |||
Adjusted earnings (Non-GAAP) | $ | 171,988 | $ | 153,346 | |||
Adjusted EPS (Non-GAAP) | $ | 2.75 | $ | 2.39 |
At the Fiscal Years Ended June 30, | |||||||||||||||||||
(Dollars in thousands, except per share amounts) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||
Total stockholders’ equity | $ | 1,073,050 | $ | 960,513 | $ | 834,247 | $ | 683,590 | $ | 533,526 | |||||||||
Less: preferred stock | 5,063 | 5,063 | 5,063 | 5,063 | 5,063 | ||||||||||||||
Common stockholders’ equity | 1,067,987 | 955,450 | 829,184 | 678,527 | 528,463 | ||||||||||||||
Less: mortgage servicing rights, carried at fair value | 9,784 | 10,752 | 7,200 | 3,943 | 2,098 | ||||||||||||||
Less: goodwill and intangible assets | 134,893 | 67,788 | — | — | — | ||||||||||||||
Tangible common stockholders’ equity (Non-GAAP) | $ | 923,310 | $ | 876,910 | $ | 821,984 | $ | 674,584 | $ | 526,365 | |||||||||
Common shares outstanding at end of period | 61,128,817 | 62,688,064 | 63,536,244 | 63,219,392 | 62,075,004 | ||||||||||||||
Tangible book value per common share (Non-GAAP) | $ | 15.10 | $ | 13.99 | $ | 12.94 | $ | 10.67 | $ | 8.48 |
For the Fiscal Years Ended June 30, | ||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Average Balance1 | Interest Income / Expense | Average Yields Earned / Rates Paid | Average Balance1 | Interest Income / Expense | Average Yields Earned / Rates Paid | Average Balance1 | Interest Income / Expense | Average Yields Earned / Rates Paid | |||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Loans and leases2,3 | $ | 8,974,820 | $ | 525,317 | 5.85 | % | $ | 7,893,072 | $ | 446,991 | 5.66 | % | $ | 6,819,102 | $ | 358,849 | 5.26 | % | ||||||||||||||
Interest-earning deposits in other financial institutions | 631,228 | 13,495 | 2.14 | % | 807,348 | 12,450 | 1.54 | % | 658,580 | 5,204 | 0.79 | % | ||||||||||||||||||||
Investment securities | 210,189 | 13,943 | 6.63 | % | 209,434 | 11,335 | 5.41 | % | 393,334 | 16,889 | 4.29 | % | ||||||||||||||||||||
Securities borrowed and margin lending | 173,829 | 8,746 | 5.03 | % | N/A | N/A | — | % | N/A | N/A | — | % | ||||||||||||||||||||
Stock of the regulatory agencies | 41,078 | 3,386 | 8.24 | % | 61,222 | 4,298 | 7.02 | % | 55,577 | 6,344 | 11.41 | % | ||||||||||||||||||||
Total interest-earning assets | 10,031,144 | 564,887 | 5.63 | % | 8,971,076 | 475,074 | 5.30 | % | 7,926,593 | 387,286 | 4.89 | % | ||||||||||||||||||||
Non-interest-earning assets | 234,993 | 100,380 | 116,545 | |||||||||||||||||||||||||||||
Total assets | $ | 10,266,137 | $ | 9,071,456 | $ | 8,043,138 | ||||||||||||||||||||||||||
Liabilities and Stockholders’ Equity: | ||||||||||||||||||||||||||||||||
Interest-bearing demand and savings | $ | 3,906,833 | $ | 61,391 | 1.57 | % | $ | 4,706,238 | $ | 54,013 | 1.15 | % | $ | 4,619,769 | $ | 34,556 | 0.75 | % | ||||||||||||||
Time deposits | 2,322,039 | 55,689 | 2.40 | % | 990,635 | 25,838 | 2.61 | % | 941,919 | 21,938 | 2.33 | % | ||||||||||||||||||||
Securities sold under agreements to repurchase | — | — | — | % | 5,575 | 229 | 4.11 | % | 33,068 | 1,465 | 4.43 | % | ||||||||||||||||||||
Securities loaned | 221,469 | 748 | 0.34 | % | N/A | N/A | — | % | N/A | N/A | — | % | ||||||||||||||||||||
Advances from the FHLB | 1,397,460 | 32,834 | 2.35 | % | 1,296,120 | 22,848 | 1.76 | % | 798,982 | 12,403 | 1.55 | % | ||||||||||||||||||||
Borrowings, subordinated notes and debentures | 104,287 | 5,620 | 5.39 | % | 54,522 | 3,652 | 6.70 | % | 55,873 | 3,697 | 6.62 | % | ||||||||||||||||||||
Total interest-bearing liabilities | 7,952,088 | 156,282 | 1.97 | % | 7,053,090 | 106,580 | 1.51 | % | 6,449,611 | 74,059 | 1.15 | % | ||||||||||||||||||||
Non-interest-bearing demand deposits | 1,227,285 | 1,052,944 | 774,411 | |||||||||||||||||||||||||||||
Other non-interest-bearing liabilities | 76,651 | 68,361 | 58,040 | |||||||||||||||||||||||||||||
Stockholders’ equity | 1,010,113 | 897,061 | 761,076 | |||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 10,266,137 | $ | 9,071,456 | $ | 8,043,138 | ||||||||||||||||||||||||||
Net interest income | $ | 408,605 | $ | 368,494 | $ | 313,227 | ||||||||||||||||||||||||||
Interest rate spread4 | 3.66 | % | 3.79 | % | 3.74 | % | ||||||||||||||||||||||||||
Net interest margin5 | 4.07 | % | 4.11 | % | 3.95 | % |
Fiscal Year Ended June 30, 2019 vs 2018 | |||||||||||
Increase (Decrease) Due to | |||||||||||
(Dollars in thousands) | Volume | Rate | Total Increase (Decrease) | ||||||||
Increase (decrease) in interest income: | |||||||||||
Loans and leases | $ | 62,915 | $ | 15,411 | $ | 78,326 | |||||
Federal funds sold | — | ||||||||||
Interest-earning deposits in other financial institutions | (3,102 | ) | 4,147 | 1,045 | |||||||
Investment securities | 41 | 2,567 | 2,608 | ||||||||
Securities borrowed and margin lending | 8,746 | — | 8,746 | ||||||||
Stock of the regulatory agencies | (1,574 | ) | 662 | (912 | ) | ||||||
Total increase (decrease) in interest income | $ | 67,026 | $ | 22,787 | $ | 89,813 | |||||
Increase (decrease) in interest expense: | |||||||||||
Interest-bearing demand and savings | $ | (10,207 | ) | $ | 17,585 | $ | 7,378 | ||||
Time deposits | 32,090 | (2,239 | ) | 29,851 | |||||||
Securities sold under agreements to repurchase | (229 | ) | — | (229 | ) | ||||||
Securities loaned | 748 | — | 748 | ||||||||
Advances from the FHLB | 1,889 | 8,097 | 9,986 | ||||||||
Other borrowings | 2,797 | (829 | ) | 1,968 | |||||||
Total increase (decrease) in interest expense | $ | 27,088 | $ | 22,614 | $ | 49,702 |
For the Fiscal Year Ended June 30, | |||||||
(Dollars in thousands) | 2019 | 2018 | |||||
Realized gain on securities: | $ | 709 | $ | (18 | ) | ||
Unrealized loss on securities: | |||||||
Total impairment losses | (1,666 | ) | (6,271 | ) | |||
Loss (gain) recognized in other comprehensive income | 845 | 6,115 | |||||
Total unrealized loss on securities | (821 | ) | (156 | ) | |||
Prepayment penalty fee income | 5,851 | 3,862 | |||||
Gain on sale – other | 6,160 | 5,734 | |||||
Mortgage banking income | 5,267 | 13,755 | |||||
Broker-dealer fee income | 11,737 | — | |||||
Banking and service fees | 53,854 | 47,764 | |||||
Total non-interest income | $ | 82,757 | $ | 70,941 |
For the Fiscal Year Ended June 30, | |||||||
(Dollars in thousands) | 2019 | 2018 | |||||
Salaries and related costs | $ | 127,433 | $ | 100,975 | |||
Data processing and internet | 24,150 | 17,400 | |||||
Advertising and promotional | 14,710 | 15,500 | |||||
Depreciation and amortization | 16,471 | 8,574 | |||||
Occupancy and equipment | 8,571 | 6,063 | |||||
Professional services | 11,916 | 5,280 | |||||
FDIC and regulator fees | 9,005 | 4,860 | |||||
Broker-dealer clearing charges | 2,822 | — | |||||
Real estate owned and repossessed vehicles | 913 | 260 | |||||
General and administrative expenses | 35,215 | 15,024 | |||||
Total non-interest expense | $ | 251,206 | $ | 173,936 |
Fiscal Year Ended June 30, 2019 | |||||||||||||||
(Dollars in thousands) | Banking Business | Securities Business | Corporate/Eliminations | Axos Consolidated | |||||||||||
Net interest income | $ | 404,500 | $ | 7,564 | $ | (3,459 | ) | $ | 408,605 | ||||||
Provision for loan losses | 27,350 | — | — | 27,350 | |||||||||||
Non-interest income | 70,917 | 12,071 | (231 | ) | 82,757 | ||||||||||
Non-interest expense | 192,588 | 34,430 | 24,188 | 251,206 | |||||||||||
Income before taxes | $ | 255,479 | $ | (14,795 | ) | $ | (27,878 | ) | $ | 212,806 |
Fiscal Year Ended June 30, 2018 | |||||||||||||||
(Dollars in thousands) | Banking Business | Securities Business | Corporate/Eliminations | Axos Consolidated | |||||||||||
Net interest income | $ | 371,661 | $ | — | $ | (3,167 | ) | $ | 368,494 | ||||||
Provision for loan losses | 25,800 | — | — | 25,800 | |||||||||||
Non-interest income | 70,788 | — | 153 | 70,941 | |||||||||||
Non-interest expense | 152,877 | — | 21,059 | 173,936 | |||||||||||
Income before taxes | $ | 263,772 | $ | — | $ | (24,073 | ) | $ | 239,699 |
Fiscal Year Ended | |||||
June 30, 2019 | June 30, 2018 | ||||
Efficiency ratio | 40.51 | % | 34.55 | % | |
Return on average assets | 1.83 | % | 1.82 | % | |
Interest rate spread | 3.72 | % | 3.83 | % | |
Net interest margin | 4.14 | % | 4.14 | % |
For the Fiscal Years Ended June 30, | |||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||
(Dollars in thousands) | Average Balance 1 | Interest Income/ Expense | Average Yields Earned/Rates Paid | Average Balance 1 | Interest Income/Expense | Average Yields Earned/Rates Paid | |||||||||||||||
Assets: | |||||||||||||||||||||
Loans and Leases 2,3 | $ | 8,974,624 | $ | 525,307 | 5.85 | % | $ | 7,893,047 | $ | 446,989 | 5.66 | % | |||||||||
Interest-earning deposits in other financial institutions | 540,047 | 12,285 | 2.27 | % | 807,348 | 12,450 | 1.54 | % | |||||||||||||
Investment securities 3 | 208,234 | 13,929 | 6.69 | % | 209,412 | 11,332 | 5.41 | % | |||||||||||||
Stock of the regulatory agencies, at cost | 40,000 | 3,378 | 8.45 | % | 61,222 | 4,292 | 7.01 | % | |||||||||||||
Total interest-earning assets | 9,762,905 | 554,899 | 5.68 | % | 8,971,029 | 475,063 | 5.30 | % | |||||||||||||
Non-interest-earning assets | 189,802 | 93,109 | |||||||||||||||||||
Total Assets | $ | 9,952,707 | $ | 9,064,138 | |||||||||||||||||
Liabilities and Stockholder's Equity: | |||||||||||||||||||||
Interest-bearing demand and savings | $ | 3,964,429 | $ | 61,845 | 1.56 | % | $ | 4,764,859 | $ | 54,481 | 1.14 | % | |||||||||
Time deposits | 2,322,039 | 55,689 | 2.40 | % | 990,635 | 25,838 | 2.61 | % | |||||||||||||
Securities sold under agreements to repurchase | — | — | — | % | 5,575 | 229 | 4.11 | % | |||||||||||||
Advances from the FHLB | 1,397,460 | 32,834 | 2.35 | % | 1,296,120 | 22,848 | 1.76 | % | |||||||||||||
Borrowings, subordinated notes and debentures | 1,112 | 31 | 2.70 | % | 97 | 4 | 4.12 | % | |||||||||||||
Total interest-bearing liabilities | 7,685,040 | 150,399 | 1.96 | % | 7,057,286 | 103,400 | 1.47 | % | |||||||||||||
Non-interest-bearing demand deposits | 1,236,508 | 1,056,413 | |||||||||||||||||||
Other non-interest-bearing liabilities | 58,004 | 65,289 | |||||||||||||||||||
Stockholder's equity | 973,155 | 885,150 | |||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 9,952,707 | $ | 9,064,138 | |||||||||||||||||
Net interest income | $ | 404,500 | $ | 371,663 | |||||||||||||||||
Interest rate spread 4 | 3.72 | % | 3.83 | % | |||||||||||||||||
Net interest margin 5 | 4.14 | % | 4.14 | % |
1 | Average balances are obtained from daily data. |
2 | Loans and leases include loans held for sale, loan premiums and unearned fees. |
3 | Interest income includes reductions for amortization of loan and investment securities premiums and earnings from accretion of discounts and loan fees. Loans and leases include average balances of $28.7 million and $29.3 million of Community Reinvestment Act loans which are taxed at a reduced rate for the 2019 and 2018 twelve-month periods, respectively. |
4 | Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate paid on interest-bearing liabilities. |
5 | Net interest margin represents annualized net interest income as a percentage of average interest-earning assets. |
Fiscal Year Ended June 30, 2019 vs 2018 | |||||||||||
Increase (Decrease) Due to | |||||||||||
(Dollars in thousands) | Volume | Rate | Total Increase (Decrease) | ||||||||
Increase (decrease) in interest income: | |||||||||||
Loans and leases | $ | 62,907 | $ | 15,411 | $ | 78,318 | |||||
Interest-earning deposits in other financial institutions | (4,915 | ) | 4,750 | (165 | ) | ||||||
Investment securities | (64 | ) | 2,661 | 2,597 | |||||||
Stock of the regulatory agencies | (1,681 | ) | 767 | (914 | ) | ||||||
Total increase (decrease) in interest income | $ | 56,247 | $ | 23,589 | $ | 79,836 | |||||
Increase (decrease) in interest expense: | |||||||||||
Interest-bearing demand and savings | $ | (10,228 | ) | $ | 17,592 | $ | 7,364 | ||||
Time deposits | 32,090 | (2,239 | ) | 29,851 | |||||||
Securities sold under agreements to repurchase | (229 | ) | — | (229 | ) | ||||||
Advances from the FHLB | 1,889 | 8,098 | 9,987 | ||||||||
Other borrowings | 27 | (1 | ) | 26 | |||||||
Total increase (decrease) in interest expense | $ | 23,549 | $ | 23,450 | $ | 46,999 |
(Dollars in thousands) | As of and for the Three Months ended June 30, 2019 | ||
Compensation as a % of net revenue | 35.0 | % | |
FDIC insured program balances at the Bank (end of period) | $ | 341,576 | |
Customer margin balances (end of period) | $ | 189,193 | |
Customer funds on deposit, including short credits (end of period) | $ | 206,469 | |
Clearing: | |||
Total tickets | 595,962 | ||
Correspondents (end of period) | 62 | ||
Securities lending: | |||
Interest-earning assets – stock borrowed (end of period) | $ | 203,192 | |
Interest-bearing liabilities – stock loaned (end of period) | $ | 198,356 |
Fiscal Year Ended June 30, 2018 vs 2017 | |||||||||||
Increase (Decrease) Due to | |||||||||||
(Dollars in thousands) | Volume | Rate | Total Increase (Decrease) | ||||||||
Increase/(decrease) in interest income: | |||||||||||
Loan and Leases | $ | 59,441 | $ | 28,701 | $ | 88,142 | |||||
Interest-earning deposits in other financial institutions | 1,393 | 5,853 | 7,246 | ||||||||
Investment securities | (9,217 | ) | 3,663 | (5,554 | ) | ||||||
Stock of the FHLB, at cost | 592 | (2,638 | ) | (2,046 | ) | ||||||
Total increase/(decrease) in interest income | $ | 52,209 | $ | 35,579 | $ | 87,788 | |||||
Increase/(decrease) in interest expense: | |||||||||||
Interest-bearing demand and savings | $ | 660 | $ | 18,797 | $ | 19,457 | |||||
Time deposits | 1,174 | 2,726 | 3,900 | ||||||||
Securities sold under agreements to repurchase | (1,137 | ) | (99 | ) | (1,236 | ) | |||||
Advances from the FHLB | 8,577 | 1,868 | 10,445 | ||||||||
Other borrowings | (90 | ) | 45 | (45 | ) | ||||||
Total increase/(decrease) in interest expense | $ | 9,184 | $ | 23,337 | $ | 32,521 |
For the Fiscal Year Ended June 30, | |||||||
(Dollars in thousands) | 2018 | 2017 | |||||
Total realized gain (loss) on securities | (18 | ) | 3,920 | ||||
Unrealized loss on securities: | |||||||
Total impairment losses | (6,271 | ) | (10,937 | ) | |||
Loss (gain) recognized in other comprehensive income | 6,115 | 8,973 | |||||
Net impairment loss recognized in earnings | (156 | ) | (1,964 | ) | |||
Fair value gain (loss) on trading securities | — | 743 | |||||
Total unrealized loss on securities | (156 | ) | (1,221 | ) | |||
Prepayment penalty fee income | 3,862 | 4,574 | |||||
Gain on sale-other | 5,734 | 4,487 | |||||
Mortgage banking income | 13,755 | 14,284 | |||||
Banking and service fees | 47,764 | 42,088 | |||||
Total non-interest income | $ | 70,941 | $ | 68,132 |
For the Fiscal Year Ended June 30, | |||||||
(Dollars in thousands) | 2018 | 2017 | |||||
Salaries and related costs | $ | 100,975 | $ | 81,821 | |||
Data processing and internet | 17,400 | 13,323 | |||||
Advertising and promotional | 15,500 | 9,367 | |||||
Depreciation and amortization | 8,574 | 6,094 | |||||
Occupancy and equipment | 6,063 | 5,612 | |||||
Professional services | 5,280 | 4,980 | |||||
FDIC and regulator fees | 4,860 | 4,330 | |||||
Real estate owned and repossessed vehicles | 260 | 498 | |||||
Other general and administrative | 15,024 | 11,580 | |||||
Total non-interest expense | $ | 173,936 | $ | 137,605 |
At June 30, | |||||||||||||||||||
(Dollars in thousands) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||
Non-performing assets: | |||||||||||||||||||
Non-accrual loans and leases: | |||||||||||||||||||
Single family real estate secured: | |||||||||||||||||||
Mortgage | $ | 46,005 | $ | 28,446 | $ | 23,377 | $ | 28,400 | $ | 22,842 | |||||||||
Home equity | — | 16 | 16 | 33 | 9 | ||||||||||||||
Multifamily real estate secured | 2,108 | 232 | 4,255 | 2,218 | 5,399 | ||||||||||||||
Commercial real estate secured | — | — | — | 254 | 2,128 | ||||||||||||||
Total non-accrual loans secured by real estate | 48,113 | 28,694 | 27,648 | 30,905 | 30,378 | ||||||||||||||
Auto and recreational vehicle secured | 115 | 60 | 157 | 278 | 453 | ||||||||||||||
Commercial & Industrial | — | 2,361 | 314 | — | — | ||||||||||||||
Other | 216 | 111 | 274 | 676 | — | ||||||||||||||
Total non-performing loans and leases | 48,444 | 31,226 | 28,393 | 31,859 | 30,831 | ||||||||||||||
Foreclosed real estate | 7,449 | 9,385 | 1,353 | 207 | 1,225 | ||||||||||||||
Repossessed vehicles | 36 | 206 | 60 | 45 | 15 | ||||||||||||||
Total non-performing assets | $ | 55,929 | $ | 40,817 | $ | 29,806 | $ | 32,111 | $ | 32,071 | |||||||||
Total non-performing loans and leases as a percentage of total loans and leases | 0.51 | % | 0.37 | % | 0.38 | % | 0.50 | % | 0.62 | % | |||||||||
Total non-performing assets as a percentage of total assets | 0.50 | % | 0.43 | % | 0.35 | % | 0.42 | % | 0.55 | % |
Single Family Real Estate Secured: | ||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Mortgage | Home Equity | Warehouse and Other | Multi-family Real Estate Secured | Commercial Real Estate Secured | Auto and RV Secured | Factoring | Commercial & Industrial | Other | Total | Total Allowance as a % of Total Loans | |||||||||||||||||||||||||||||||
Balance at June 30, 2014 | $ | 7,959 | $ | 134 | $ | 1,259 | $ | 3,785 | $ | 1,035 | $ | 812 | $ | 279 | $ | 3,048 | $ | 62 | $ | 18,373 | 0.51 | % | ||||||||||||||||||||
Provision for loan losses | 6,305 | (1 | ) | 620 | 922 | 224 | 288 | 13 | 2,834 | (5 | ) | 11,200 | ||||||||||||||||||||||||||||||
Charge-offs | (747 | ) | (43 | ) | — | (344 | ) | (156 | ) | (271 | ) | — | — | — | (1,561 | ) | ||||||||||||||||||||||||||
Recoveries | 147 | 32 | — | — | — | 124 | — | — | 12 | 315 | ||||||||||||||||||||||||||||||||
Balance at June 30, 2015 | 13,664 | 122 | 1,879 | 4,363 | 1,103 | 953 | 292 | 5,882 | 69 | 28,327 | 0.57 | % | ||||||||||||||||||||||||||||||
Provision for loan and lease losses | 5,040 | (134 | ) | 806 | (311 | ) | (1,056 | ) | 854 | (47 | ) | 1,748 | 2,800 | 9,700 | ||||||||||||||||||||||||||||
Charge-offs | (205 | ) | (3 | ) | — | (114 | ) | (147 | ) | (339 | ) | — | — | — | (808 | ) | ||||||||||||||||||||||||||
Transfers to held for sale | — | — | — | — | — | — | — | — | (2,727 | ) | (2,727 | ) | ||||||||||||||||||||||||||||||
Recoveries | 167 | 38 | — | — | 982 | 147 | — | — | — | 1,334 | ||||||||||||||||||||||||||||||||
Balance at June 30, 2016 | 18,666 | 23 | 2,685 | 3,938 | 882 | 1,615 | 245 | 7,630 | 142 | 35,826 | 0.56 | % | ||||||||||||||||||||||||||||||
Provision for loan and lease losses | 2,308 | (6 | ) | (387 | ) | 323 | 110 | 990 | 156 | 2,251 | 5,316 | 11,061 | ||||||||||||||||||||||||||||||
Charge-offs | (1,115 | ) | (23 | ) | — | — | (23 | ) | (433 | ) | — | — | (3,502 | ) | (5,096 | ) | ||||||||||||||||||||||||||
Transfers to held for sale | — | — | — | — | — | — | — | — | (1,828 | ) | (1,828 | ) | ||||||||||||||||||||||||||||||
Recoveries | 113 | 25 | — | 377 | 39 | 207 | — | — | 108 | 869 | ||||||||||||||||||||||||||||||||
Balance at June 30, 2017 | 19,972 | 19 | 2,298 | 4,638 | 1,008 | 2,379 | 401 | 9,881 | 236 | 40,832 | 0.55 | % | ||||||||||||||||||||||||||||||
Provision for loan and lease losses | 632 | (18 | ) | 69 | 372 | (159 | ) | 1,390 | 44 | 6,357 | 17,113 | 25,800 | ||||||||||||||||||||||||||||||
Charge-offs | (271 | ) | (1 | ) | (287 | ) | — | — | (803 | ) | — | — | (14,617 | ) | (15,979 | ) | ||||||||||||||||||||||||||
Transfers to held for sale | — | — | — | — | — | — | — | — | (2,307 | ) | (2,307 | ) | ||||||||||||||||||||||||||||||
Recoveries | 35 | 14 | — | — | — | 212 | — | — | 544 | 805 | ||||||||||||||||||||||||||||||||
Balance at June 30, 2018 | 20,368 | 14 | 2,080 | 5,010 | 849 | 3,178 | 445 | 16,238 | 969 | 49,151 | 0.58 | % | ||||||||||||||||||||||||||||||
Provision for loan and lease losses | 1,317 | (12 | ) | 4,247 | (1,022 | ) | 195 | 2,605 | (112 | ) | 2,286 | 17,846 | 27,350 | |||||||||||||||||||||||||||||
Charge-offs | (799 | ) | — | — | — | — | (1,156 | ) | — | (1,149 | ) | (16,559 | ) | (19,663 | ) | |||||||||||||||||||||||||||
Transfers to held for sale | — | — | — | — | — | — | — | — | (2,356 | ) | (2,356 | ) | ||||||||||||||||||||||||||||||
Recoveries | 396 | 11 | — | 109 | — | 191 | — | — | 1,896 | 2,603 | ||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | 21,282 | $ | 13 | $ | 6,327 | $ | 4,097 | $ | 1,044 | $ | 4,818 | $ | 333 | $ | 17,375 | $ | 1,796 | $ | 57,085 | 0.60 | % |
At June 30, | ||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||||||||||
(Dollars in thousands) | Amount of Allowance | Loan Category as a % of Total Loans | Amount of Allowance | Loan Category as a % of Total Loans | Amount of Allowance | Loan Category as a % of Total Loans | Amount of Allowance | Loan Category as a % of Total Loans | Amount of Allowance | Loan Category as a % of Total Loans | ||||||||||||||||||||||||
Single family real estate secured: | ||||||||||||||||||||||||||||||||||
Mortgage | $ | 21,282 | 45.3 | % | $ | 20,368 | 49.3 | % | $ | 19,972 | 52.4 | % | $ | 18,666 | 57.5 | % | $ | 13,664 | 59.6 | % | ||||||||||||||
Home equity | 13 | — | % | 14 | — | % | 19 | — | % | 23 | — | % | 122 | 0.1 | % | |||||||||||||||||||
Warehouse & Other | 6,327 | 8.7 | % | 2,080 | 4.8 | % | 2,298 | 6.1 | % | 2,685 | 8.4 | % | 1,879 | 7.7 | % | |||||||||||||||||||
Multifamily real estate secured | 4,097 | 20.6 | % | 5,010 | 21.1 | % | 4,638 | 21.7 | % | 3,938 | 21.5 | % | 4,363 | 23.7 | % | |||||||||||||||||||
Commercial real estate secured | 1,044 | 3.4 | % | 849 | 2.6 | % | 1,008 | 2.2 | % | 882 | 1.9 | % | 1,103 | 1.2 | % | |||||||||||||||||||
Auto & RV secured | 4,818 | 3.1 | % | 3,178 | 2.5 | % | 2,379 | 2.1 | % | 1,615 | 1.2 | % | 953 | 0.3 | % | |||||||||||||||||||
Factoring | 333 | 1.0 | % | 445 | 2.1 | % | 401 | 2.1 | % | 245 | 1.5 | % | 292 | 2.4 | % | |||||||||||||||||||
Commercial & Industrial | 17,375 | 17.5 | % | 16,238 | 17.4 | % | 9,881 | 13.3 | % | 7,630 | 8.0 | % | 5,882 | 5.0 | % | |||||||||||||||||||
Other | 1,796 | 0.4 | % | 969 | 0.2 | % | 236 | 0.1 | % | 142 | — | % | 69 | — | % | |||||||||||||||||||
Total | $ | 57,085 | 100.0 | % | $ | 49,151 | 100.0 | % | $ | 40,832 | 100.0 | % | $ | 35,826 | 100.0 | % | $ | 28,327 | 100.0 | % |
At June 30, 2019 | |||||||||||||||||||
Payments Due by Period | |||||||||||||||||||
(Dollars in thousands) | Total | Less than One Year | One to Three Years | Three to Five Years | More than Five Years | ||||||||||||||
Long-term debt obligations1, 2 | $ | 559,832 | $ | 302,104 | $ | 127,629 | $ | 35,486 | $ | 94,613 | |||||||||
Time deposits2 | 2,497,083 | 1,347,281 | 490,890 | 179,278 | 479,634 | ||||||||||||||
Operating lease obligations3 | 91,834 | 8,634 | 17,411 | 18,288 | 47,501 | ||||||||||||||
Total | $ | 3,148,749 | $ | 1,658,019 | $ | 635,930 | $ | 233,052 | $ | 621,748 |
Axos Financial, Inc. | Axos Bank | “Well Capitalized” Ratio | Minimum Capital Ratio | ||||||||||||||||||
(Dollars in thousands) | June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | |||||||||||||||||
Regulatory Capital: | |||||||||||||||||||||
Tier 1 | $ | 938,143 | $ | 893,338 | $ | 932,366 | $ | 837,985 | |||||||||||||
Common equity tier 1 | $ | 933,080 | $ | 888,275 | $ | 932,366 | $ | 837,985 | |||||||||||||
Total capital (to risk-weighted assets) | $ | 1,053,855 | $ | 993,650 | $ | 989,678 | $ | 887,297 | |||||||||||||
Assets: | |||||||||||||||||||||
Average adjusted | $ | 10,717,011 | $ | 9,450,894 | $ | 10,124,487 | $ | 9,509,891 | |||||||||||||
Total risk-weighted | $ | 8,161,588 | $ | 6,694,963 | $ | 7,679,738 | $ | 6,686,634 | |||||||||||||
Regulatory Capital Ratios: | |||||||||||||||||||||
Tier 1 leverage (core) capital to adjusted average assets | 8.75 | % | 9.45 | % | 9.21 | % | 8.88 | % | 5.00 | % | 4.00 | % | |||||||||
Common equity tier 1 capital (to risk-weighted assets) | 11.43 | % | 13.27 | % | 12.14 | % | 12.53 | % | 6.50 | % | 4.50 | % | |||||||||
Tier 1 capital (to risk-weighted assets) | 11.49 | % | 13.34 | % | 12.14 | % | 12.53 | % | 8.00 | % | 6.00 | % | |||||||||
Total capital (to risk-weighted assets) | 12.91 | % | 14.84 | % | 12.89 | % | 13.27 | % | 10.00 | % | 8.00 | % |
(Dollars in thousands) | Axos Clearing | ||
Net capital | $ | 21,669 | |
Less: required net capital | 3,811 | ||
Excess capital | $ | 17,858 | |
Net capital as a percentage of aggregate debit items | 11.37 | % | |
Net capital in excess of 5% aggregate debit items | $ | 12,142 |
Term to Repricing, Repayment, or Maturity at | |||||||||||||||||||
June 30, 2019 | |||||||||||||||||||
(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 | $ | 642,908 | $ | — | $ | — | $ | — | $ | 642,908 | |||||||||
Mortgage-backed and other investment securities1 | 197,094 | 541 | 9,055 | 19,138 | 225,828 | ||||||||||||||
Stock of the FHLB, at cost | 17,250 | — | — | — | 17,250 | ||||||||||||||
Loans, net of allowance for loan and lease losses2 | 4,473,342 | 1,228,965 | 3,673,261 | 6,546 | 9,382,114 | ||||||||||||||
Loans held for sale | 38,060 | — | — | — | 38,060 | ||||||||||||||
Total interest-earning assets | 5,368,654 | 1,229,506 | 3,682,316 | 25,684 | 10,306,160 | ||||||||||||||
Non-interest-earning assets | — | — | — | — | 260,653 | ||||||||||||||
Total assets | $ | 5,368,654 | $ | 1,229,506 | $ | 3,682,316 | $ | 25,684 | $ | 10,566,813 | |||||||||
Interest-bearing liabilities: | |||||||||||||||||||
Interest-bearing deposits3 | $ | 1,158,509 | $ | 5,323,226 | $ | 662,351 | $ | 422,723 | $ | 7,566,809 | |||||||||
Advances from the FHLB | 261,000 | 25,000 | 142,500 | 30,000 | 458,500 | ||||||||||||||
Other borrowings | 28,830 | — | — | 57,093 | 85,923 | ||||||||||||||
Total interest-bearing liabilities | 1,448,339 | 5,348,226 | 804,851 | 509,816 | 8,111,232 | ||||||||||||||
Other non-interest-bearing liabilities | — | — | — | — | 1,445,904 | ||||||||||||||
Stockholders’ equity | — | — | — | — | 1,009,677 | ||||||||||||||
Total liabilities and equity | $ | 1,448,339 | $ | 5,348,226 | $ | 804,851 | $ | 509,816 | $ | 10,566,813 | |||||||||
Net interest rate sensitivity gap | $ | 3,920,315 | $ | (4,118,720 | ) | $ | 2,877,465 | $ | (484,132 | ) | $ | 2,194,928 | |||||||
Cumulative gap | $ | 3,920,315 | $ | (198,405 | ) | $ | 2,679,060 | $ | 2,194,928 | $ | 2,194,928 | ||||||||
Net interest rate sensitivity gap—as a % of interest-earning assets | 38.04 | % | (39.96 | )% | 27.92 | % | (4.70 | )% | 21.30 | % | |||||||||
Cumulative gap—as a % of cumulative interest-earning assets | 38.04 | % | (1.93 | )% | 25.99 | % | 21.30 | % | 21.30 | % |
As of June 30, 2019 | |||||||||||||
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 | $ | 403,391 | 2.8 | % | $ | 395,181 | 0.4 | % | |||||
Base | $ | 392,343 | — | % | $ | 393,690 | — | % | |||||
Down 200 basis points | $ | 379,278 | (3.3 | )% | $ | 388,170 | (1.4 | )% |
As of June 30, 2019 | |||||||||
(Dollars in thousands) | Market Value of Equity | Percentage Change from Base | MVE as a Percentage of Assets | ||||||
Up 300 basis points | $ | 1,242,360 | 30.8 | % | 11.8 | % | |||
Up 200 basis points | $ | 1,197,416 | 26.1 | % | 11.2 | % | |||
Up 100 basis points | $ | 1,094,106 | 15.2 | % | 10.2 | % | |||
Base | $ | 949,817 | — | % | 8.7 | % | |||
Down 100 basis points | $ | 809,450 | (14.8 | )% | 7.4 | % |
DESCRIPTION | PAGE | |
Reports of Independent Registered Public Accounting Firms | ||
Consolidated Balance Sheets at June 30, 2019 and 2018 | ||
Consolidated Statements of Income for the years ended June 30, 2019, 2018 and 2017 | ||
Consolidated Statements of Comprehensive Income for the years ended June 30, 2019, 2018 and 2017 | ||
Consolidated Statements of Stockholders’ Equity for the years ended June 30, 2019, 2018 and 2017 | ||
Consolidated Statements of Cash Flows for the years ended June 30, 2019, 2018 and 2017 | ||
Notes to Consolidated Financial Statements |
• | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions of our assets; |
• | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and |
• | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
(a)(1). | Financial Statements: See Part II, Item 8—Financial Statements and Supplementary data. |
(a)(2). | Financial Statement Schedules: All financial statement schedules have been omitted as they are either not required, not applicable, or the information is otherwise included. |
(a)(3). | Exhibits: |
Exhibit Number | Description | Incorporated By Reference to | |
2.1 | Agreement and Plan of Merger, by and among Axos Clearing, LLC, Axos Clarity MergeCo., Inc., Cor Securities Holdings, Inc., the Seller Parties thereto and the Holder Representative, dated September 28, 2018 | ||
3.1 | Certificate of Incorporation of the Company, filed with the Delaware Secretary of State on July 6, 1999 | ||
3.1.1 | Certificate of Amendment of Certificate of Incorporation of the Company, filed with the Delaware Secretary of State on August 19, 1999 | ||
3.1.2 | Certificate of Amendment of Certificate of Incorporation of the Company, filed with the Delaware Secretary of State on February 25, 2003 | ||
3.1.3 | Certificate of Amendment of Certificate of Incorporation of the Company, filed with the Delaware Secretary of State on January 25, 2005 | ||
3.1.4 | Certificate Eliminating Reference to a Series of Shares from the Certificate of Incorporation of the Company | ||
3.1.5 | Certificate of Amendment of Certificate of Incorporation of the Company, filed with the Delaware Secretary of State on October 25, 2013 | ||
3.1.6 | Certificate of Amendment of Certificate of Incorporation of the Company, filed with the Delaware Secretary of State on November 5, 2015 | ||
3.1.7 | Certificate of Amendment of Certificate of Incorporation of the Company, filed with the Delaware Secretary of State on September 11, 2018 | ||
3.2 | By-laws | ||
4.1 | Certificate of Designation-Series A – 6% Cumulative Nonparticipating Perpetual Preferred Stock, Convertible through January 1, 2009 | ||
4.2 | Subordinated Indenture, dated as of March 3, 2016, between BofI Holding, Inc. and U.S. Bank National Association, as trustee. | ||
4.3 | First Supplemental Indenture, dated as of March 3, 2016, between BofI Holding, Inc. and U.S. Bank National Association, as trustee. | ||
4.4 | Global Note to represent the 6.25% Subordinated Notes due February 28, 2026 of BofI Holding, Inc. |
Exhibit Number | Description | Incorporated By Reference to | |
4.5 | Amendment No.1 dated March 24, 2016 to First Supplemental Indenture, dated as of March 3, 2016, between BofI Holding, Inc. and U.S. Bank National Association, as trustee. | ||
4.6 | Form of Common Stock Certificate of the Company | ||
4.7 | Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 | ||
10.1 | Form of Indemnification Agreement between the Company and each of its executive officers and directors | ||
10.2* | Amended and Restated 1999 Stock Option Plan, as amended | ||
10.3* | 2004 Stock Incentive Plan, as amended November 20, 2007 | ||
10.4* | 2004 Employee Stock Purchase Plan, including forms of agreements thereunder | ||
10.5* | First Amended Employment Agreement, dated April 22, 2010, between Bank of Internet USA and Andrew J. Micheletti. | ||
10.6 | Amended and Restated Declaration of Trust of BofI Trust I dated December 16, 2004 | ||
10.7* | Amended and Restated Employment Agreement, dated May 26, 2011, between the Company and subsidiaries, and Gregory Garrabrants | ||
10.7.1* | Second Amended and Restated Employment Agreement, dated June 30, 2017, between the Company and subsidiaries, and Gregory Garrabrants | ||
10.8 | Lease Agreement dated December 5, 2011 between La Jolla Village, LLC and the Company | ||
10.9* | BofI Holding, Inc. 2014 Stock Incentive Plan | ||
10.10* | Amendment to BofI Holding, Inc. 2014 Stock Incentive Plan | ||
10.11* | Description of Amendment to Employment Letter between Eshel Bar-Adon and BofI Federal Bank | ||
10.12* | Description of Amendment to Employment Letter between Brian Swanson and BofI Federal Bank | ||
10.12.1* | Description of Amendment to Employment Letter between Brian Swanson and BofI Federal Bank | ||
10.13 | Program Management Agreement, dated August 31, 2015, by and among BofI Federal Bank, H&R Block, Inc. and Emerald Financial Services, LLC | ||
10.13.1 | Emerald Advance Receivables Participation Agreement, dated August 31, 2015, by and among BofI Federal Bank, H&R Block, Inc., Emerald Financial Services, LLC and HRB Participant I, LLC | ||
10.13.2 | Guaranty Agreement, dated August 31, 2015, by and among BofI Federal Bank and H&R Block, Inc. |
Exhibit Number | Description | Incorporated By Reference to | |
10.14* | Description of Amendment to Employment Letter between Thomas Constantine and BofI Federal Bank | ||
10.15 | Office Space Lease Between Pacifica Tower LLC and BofI Holding, Inc. | ||
10.16 | Sixth Amendment to Office Space Lease Between 4350 La Jolla Village LLC and BofI Holding, Inc. | ||
10.17 | Purchase Agreement between Nationwide Bank and BofI Federal Bank, dated August 3, 2018 | ||
10.18 | Guaranty of Payment and Performance of Agreement and Plan of Merger, executed by the Company in favor of Cor Securities Holdings, Inc. on September 28, 2018 | ||
21.1 | Subsidiaries of the Company consist of Axos Bank (federal charter), BofI Trust I (Delaware charter), Axos Clearing LLC (Delaware), and Axos Invest, Inc. (Delaware) | ||
23.1 | Consent of BDO USA, LLP, Independent Registered Public Accounting Firm | ||
24.1 | Power of Attorney, incorporated by reference to the signature page to this report. | Signature page to this report. | |
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.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. | |
101.SCH** | XBRL Taxonomy Extension Schema Document | Filed herewith. | |
101.CAL** | XBRL Taxonomy Extension Calculation Linkbase Document | Filed herewith. | |
101.DEF** | XBRL Taxonomy Extension Definition Linkbase Document | Filed herewith. | |
101.LAB** | XBRL Taxonomy Extension Label Linkbase Document | Filed herewith. | |
101.PRE** | XBRL Taxonomy Extension Presentation Linkbase Document | Filed herewith. |
AXOS FINANCIAL, INC. | ||||
Date: | August 27, 2019 | By: | /s/ Gregory Garrabrants | |
Gregory Garrabrants President and Chief Executive Officer |
Signature | Title | |
/s/ Gregory Garrabrants | Chief Executive Officer (Principal Executive Officer), Director | |
Gregory Garrabrants | ||
/s/ Andrew J. Micheletti | Chief Financial Officer (Principal Financial Officer) | |
Andrew J. Micheletti | ||
/s/ Derrick K. Walsh | Chief Accounting Officer (Principal Accounting Officer) | |
Derrick K. Walsh | ||
/s/ Paul Grinberg | Chairman | |
Paul Grinberg | ||
/s/ Nicholas A. Mosich | Vice Chairman | |
Nicholas A. Mosich | ||
/s/ James S. Argalas | Director | |
James S. Argalas | ||
/s/ J. Brandon Black | Director | |
J. Brandon Black | ||
/s/ Gary Burke | Director | |
Gary Burke | ||
/s/ James Court | Director | |
James Court | ||
/s/ Edward J. Ratinoff | Director | |
Edward J. Ratinoff | ||
/s/ Uzair Dada | Director | |
Uzair Dada | ||
DESCRIPTION | PAGE | |
Report of Independent Registered Public Accounting Firm | ||
Consolidated Balance Sheets at June 30, 2019 and 2018 | ||
Consolidated Statements of Income for the years ended June 30, 2019, 2018 and 2017 | ||
Consolidated Statements of Comprehensive Income for the years ended June 30, 2019, 2018 and 2017 | ||
Consolidated Statements of Stockholders’ Equity for the years ended June 30, 2019, 2018 and 2017 | ||
Consolidated Statements of Cash Flows for the years ended June 30, 2019, 2018 and 2017 | ||
Notes to Consolidated Financial Statements |
• | Testing the design and operating effectiveness of controls relating to management’s review of loans and leases, assignment of risk ratings, consistency of application of accounting policies and appropriateness of utilization of observable peer data when there are limited incurred historical losses. |
• | Evaluating the reasonableness of assumptions and sources of data used by management in forming the qualitative loss factors by performing retrospective review of historic loan and lease loss experience and analyzing historical data used in developing the assumptions, including assessment of whether there were additional qualitative considerations relevant to the portfolio. |
• | Evaluating the appropriateness of inputs and factors that the Company used in forming the qualitative loss factors and assessing whether such inputs and factors were relevant, reliable, and reasonable for the purpose used. |
• | Testing the appropriateness of the Company’s loan rating policy and the consistency of its application. |
• | Testing the mathematical accuracy and computation of the allowance for loan and lease losses by re-performing or independently calculating significant elements of the allowance based on relevant source documents. |
• | Assessing management’s application of accounting guidance related to business combinations and management’s determination of whether a transaction was an acquisition of a business as defined within the ASC 805 framework. |
• | Assessing the reasonableness of significant underlying assumptions through (i) evaluating historical performance of the target entity, (ii) assessing performance against market trends, industry metrics, and guideline companies, and (iii) performing sensitivity analysis and evaluating potential effect of changes in certain assumptions. |
• | Utilizing BDO valuation specialist to assist in assessing complex assumptions incorporated into the various valuation models, including performing sensitivity analysis around the discounted cash flow or net asset value assumptions and terminal value assumptions. |
AXOS FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS | |||||||
At June 30, | |||||||
(Dollars in thousands, except par and stated value) | 2019 | 2018 | |||||
ASSETS | |||||||
Cash and due from banks | $ | $ | |||||
Cash segregated for regulatory purposes | |||||||
Federal funds sold | |||||||
Total cash, cash equivalents, cash segregated, and federal funds sold | |||||||
Securities - available for sale | |||||||
Stock of regulatory agencies | |||||||
Loans held for sale, carried at fair value | |||||||
Loans held for sale, carried at lower of cost or fair value | |||||||
Loans and leases—net of allowance of $57,085 as of June 2019 and $49,151 as of June 2018 | |||||||
Mortgage servicing rights, carried at fair value | |||||||
Other real estate owned and repossessed vehicles | |||||||
Securities borrowed | |||||||
Customer, broker-dealer and clearing receivables | |||||||
Goodwill and other intangible assets—net | |||||||
Other assets | |||||||
TOTAL ASSETS | $ | $ | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Deposits: | |||||||
Non-interest bearing | $ | $ | |||||
Interest bearing | |||||||
Total deposits | |||||||
Advances from the Federal Home Loan Bank | |||||||
Borrowings, subordinated notes and debentures | |||||||
Securities loaned | |||||||
Customer, broker-dealer and clearing payables | |||||||
Accounts payable and accrued liabilities and other liabilities | |||||||
Total liabilities | |||||||
COMMITMENTS AND CONTINGENCIES (Note 17) | |||||||
STOCKHOLDERS’ EQUITY: | |||||||
Preferred stock—$0.01 par value; 1,000,000 shares authorized; | |||||||
Series A—$10,000 stated value and liquidation preference per share; 515 shares issued and outstanding as of June 2019 and June 2018 | |||||||
Common stock—$0.01 par value; 150,000,000 shares authorized, 66,563,922 shares issued and 61,128,817 shares outstanding as of June 2019, 65,796,060 shares issued and 62,688,064 shares outstanding as of June 2018 | |||||||
Additional paid-in capital | |||||||
Accumulated other comprehensive income (loss)—net of tax | ( | ) | |||||
Retained earnings | |||||||
Treasury stock, at cost; 5,435,105 shares as of June 2019 and 3,107,996 shares as of June 2018 | ( | ) | ( | ) | |||
Total stockholders’ equity | |||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ |
AXOS FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME | |||||||||||
Year Ended June 30, | |||||||||||
(Dollars in thousands, except earnings per share) | 2019 | 2018 | 2017 | ||||||||
INTEREST AND DIVIDEND INCOME: | |||||||||||
Loans and leases, including fees | $ | $ | $ | ||||||||
Securities borrowed and customer receivables | |||||||||||
Investments | |||||||||||
Total interest and dividend income | |||||||||||
INTEREST EXPENSE: | |||||||||||
Deposits | |||||||||||
Advances from the Federal Home Loan Bank | |||||||||||
Securities loaned | |||||||||||
Other borrowings | |||||||||||
Total interest expense | |||||||||||
Net interest income | |||||||||||
Provision for loan and lease losses | |||||||||||
Net interest income, after provision for loan and lease losses | |||||||||||
NON-INTEREST INCOME: | |||||||||||
Realized gain (loss) on sale of securities | ( | ) | |||||||||
Other-than-temporary loss on securities: | |||||||||||
Total impairment losses | ( | ) | ( | ) | ( | ) | |||||
Loss (gain) recognized in other comprehensive income | |||||||||||
Net impairment loss recognized in earnings | ( | ) | ( | ) | ( | ) | |||||
Fair value gain (loss) on trading securities | |||||||||||
Total unrealized loss on securities | ( | ) | ( | ) | ( | ) | |||||
Prepayment penalty fee income | |||||||||||
Gain on sale - other | |||||||||||
Mortgage banking income | |||||||||||
Broker-dealer fee income | |||||||||||
Banking and service fees | |||||||||||
Total non-interest income | |||||||||||
NON-INTEREST EXPENSE: | |||||||||||
Salaries and related costs | |||||||||||
Data processing and internet | |||||||||||
Advertising and promotional | |||||||||||
Depreciation and amortization | |||||||||||
Occupancy and equipment | |||||||||||
Broker-dealer clearing charges | |||||||||||
Professional services | |||||||||||
FDIC and regulatory fees | |||||||||||
Real estate owned and repossessed vehicles | |||||||||||
General and administrative expense | |||||||||||
Total non-interest expense | |||||||||||
INCOME BEFORE INCOME TAXES | |||||||||||
INCOME TAXES | |||||||||||
NET INCOME | $ | $ | $ | ||||||||
NET INCOME ATTRIBUTABLE TO COMMON STOCK | $ | $ | $ | ||||||||
COMPREHENSIVE INCOME | $ | $ | $ | ||||||||
Basic earnings per share | $ | $ | $ | ||||||||
Diluted earnings per share | $ | $ | $ |
Year Ended June 30, | |||||||||||
(Dollars in thousands) | 2019 | 2018 | 2017 | ||||||||
NET INCOME | $ | $ | $ | ||||||||
Net unrealized gain (loss) from available-for-sale securities, net of tax expense (benefit) of $562, $(2,449), and $3,363 for the years ended June 30, 2019, 2018 and 2017, respectively. | ( | ) | |||||||||
Other-than-temporary impairment on securities recognized in other comprehensive income, net of tax expense (benefit) of $(251), $1,918 and $3,195 for the years ended June 30, 2019, 2018 and 2017, respectively. | ( | ) | |||||||||
Reclassification of net (gain) loss from available-for-sale securities included in income, net of tax expense (benefit) of $191, $(104) and $1,536 for the years ended June 30, 2019, 2018 and 2017, respectively. | ( | ) | ( | ) | |||||||
Other comprehensive income (loss) | ( | ) | |||||||||
Comprehensive income | $ | $ | $ |
AXOS FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss), Net of Income Tax | Treasury Stock | Total | |||||||||||||||||||||||||||||||||
Number of Shares | |||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Shares | Amount | Issued | Treasury | Outstanding | Amount | |||||||||||||||||||||||||||||||||
Balance as of June 30, 2016 | $ | ( | ) | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Cash dividends on preferred stock | — | — | — | — | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||||||||||
Stock-based compensation expense and restricted stock unit vesting | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||||||||||||||||
Balance as of June 30, 2017 | $ | ( | ) | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||||||||||||
Cash dividends on preferred stock | — | — | — | — | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | ( | ) | ( | ) | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||
Stock-based compensation expense and restricted stock unit vesting | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||||||||||||||||
Balance as of June 30, 2018 | $ | ( | ) | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Cash dividends on preferred stock | — | — | — | — | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | ( | ) | ( | ) | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||
Stock-based compensation expense and restricted stock unit vesting | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||||||||||||||||
Balance as of June 30, 2019 | $ | ( | ) | $ | $ | $ | $ | $ | ( | ) | $ |
AXOS FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
Year Ended June 30, | |||||||||||
(Dollars in thousands) | 2019 | 2018 | 2017 | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income | $ | $ | $ | ||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
Accretion of discounts on securities | ( | ) | ( | ) | ( | ) | |||||
Net accretion of discounts on loans and leases | ( | ) | ( | ) | ( | ) | |||||
Amortization of borrowing costs | |||||||||||
Stock-based compensation expense | |||||||||||
Valuation of financial instruments carried at fair value | ( | ) | |||||||||
Net (gain)/loss on sale of investment securities | ( | ) | ( | ) | |||||||
Impairment charge on securities | |||||||||||
Provision for loan and lease losses | |||||||||||
Broker-dealer reserve for bad debt | |||||||||||
Deferred income taxes | ( | ) | ( | ) | |||||||
Origination of loans held for sale | ( | ) | ( | ) | ( | ) | |||||
Unrealized (gain) loss on loans held for sale | ( | ) | ( | ) | |||||||
Gain on sales of loans held for sale | ( | ) | ( | ) | ( | ) | |||||
Proceeds from sale of loans held for sale | |||||||||||
Change in fair value of mortgage servicing rights | ( | ) | |||||||||
(Gain) loss on sale of other real estate and foreclosed assets | ( | ) | ( | ) | ( | ) | |||||
Depreciation and amortization | |||||||||||
Net changes in assets and liabilities which provide (use) cash: | |||||||||||
Accrued interest receivable | ( | ) | ( | ) | |||||||
Securities borrowed | |||||||||||
Customer, broker-dealer and clearing receivables | |||||||||||
Other assets | ( | ) | ( | ) | |||||||
Securities loaned | ( | ) | |||||||||
Customer, broker-dealer and clearing payables | ( | ) | |||||||||
Accrued interest payable | ( | ) | |||||||||
Accounts payable and accrued liabilities | |||||||||||
Net cash provided by operating activities | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Purchases of investment securities | ( | ) | ( | ) | ( | ) | |||||
Proceeds from sales of securities | |||||||||||
Proceeds from repayment of securities | |||||||||||
Purchase of stock of regulatory agencies | ( | ) | ( | ) | ( | ) | |||||
Proceeds from redemption of stock of regulatory agencies | |||||||||||
Origination of loans and leases held for investment | ( | ) | ( | ) | ( | ) | |||||
Proceeds from sale of loans held for investment | |||||||||||
Origination of mortgage warehouse loans, net | ( | ) | ( | ) | ( | ) | |||||
Purchases of loans and leases, net of discounts and premiums | ( | ) | ( | ) | |||||||
Principal repayments on loans and leases | |||||||||||
Proceeds from sales of other real estate owned and repossessed assets | |||||||||||
Cash paid for deposit acquisition | ( | ) | |||||||||
Cash paid for acquisition | ( | ) | |||||||||
Acquisition of business activity, net of cash paid | |||||||||||
Purchases of furniture, equipment and software | ( | ) | ( | ) | ( | ) | |||||
Net cash used in investing activities | ( | ) | ( | ) | ( | ) |
AXOS FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
Year Ended June 30, | |||||||||||
(Dollars in thousands) | 2019 | 2018 | 2017 | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Net increase in deposits | $ | $ | $ | ||||||||
Repayment of the Federal Home Loan Bank term advances | ( | ) | ( | ) | ( | ) | |||||
Net proceeds (repayment) of Federal Home Loan Bank other advances | ( | ) | |||||||||
Net proceeds (repayment) of other borrowings | ( | ) | ( | ) | |||||||
Tax payments related to settlement of restricted stock units | ( | ) | ( | ) | ( | ) | |||||
Repurchase of treasury stock | ( | ) | ( | ) | |||||||
Tax benefit from vesting of restricted stock grants | |||||||||||
Cash dividends paid on preferred stock | ( | ) | ( | ) | ( | ) | |||||
Net proceeds from issuance of subordinated notes | |||||||||||
Net cash provided by financing activities | |||||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | ( | ) | |||||||||
CASH AND CASH EQUIVALENTS—Beginning of year | $ | $ | $ | ||||||||
CASH AND CASH EQUIVALENTS—End of year | $ | $ | $ | ||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||||||
Interest paid on deposits and borrowed funds | $ | $ | $ | ||||||||
Income taxes paid | $ | $ | $ | ||||||||
Transfers to other real estate and repossessed vehicles | $ | $ | $ | ||||||||
Transfers from loans and leases held for investment to loans held for sale | $ | $ | $ | ||||||||
Transfers from loans held for sale to loans and leases held for investment | $ | $ | $ | ||||||||
Loans held for investment sold, cash not received | $ | $ | $ | ||||||||
Securities transferred from held-to-maturity to available for sale portfolio | $ | $ | $ | ||||||||
Preferred stock dividends declared but not paid | $ | $ | $ |
June 30, | |||||||
(Dollars in thousands, except per share data) | 2019 | 2018 | |||||
Non-interest income | |||||||
Deposit service fees | $ | $ | |||||
Card fees | |||||||
Broker-dealer clearing fees | |||||||
Bankruptcy trustee and fiduciary service fees | |||||||
Non-interest income (in-scope of Topic 606) | |||||||
Non-interest income (out-of-scope of Topic 606) | |||||||
Total non-interest income | $ | $ |
(Dollars in thousands) | January 28, 2019 | ||
ASSETS | |||
Cash and due from banks | $ | ||
Cash segregated for regulatory purposes | |||
Securities, available for sale | |||
Stock of the regulatory agencies, at cost | |||
Securities borrowed | |||
Customer, broker-dealer and clearing receivables | |||
Other assets | |||
Total identifiable assets | $ | ||
LIABILITIES | |||
Borrowings, subordinated notes and debentures | $ | ||
Securities loaned | |||
Customer, broker-dealer and clearing payables | |||
Accounts payable and accrued liabilities | |||
Total identifiable liabilities | $ | ||
Provisional resulting goodwill | $ | ||
Intangible assets | |||
Total cash paid | $ | ||
Borrowings, subordinated notes and debentures issued | $ | ||
Total fair value of consideration paid | $ |
(Dollars in thousands) | April 4, 2018 | ||
Fair value of consideration paid | |||
Cash | $ | ||
Total consideration paid | $ | ||
Fair value of assets acquired | |||
Intangible assets | $ | ||
Other assets | |||
Total assets | $ | ||
Fair value of net assets acquired | $ | ||
Goodwill incident to acquisition | $ |
Level 1: | Quoted prices in active markets for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. | |
Level 2: | Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets include securities with quoted prices that are traded less frequently than exchange-traded instruments and whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. | |
Level 3: | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models such as discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. |
June 30, 2019 | |||||||||||||||
(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—Available-for-Sale: | |||||||||||||||
Agency Debt | $ | $ | $ | $ | |||||||||||
Agency RMBS | |||||||||||||||
Non-Agency RMBS | |||||||||||||||
Municipal | |||||||||||||||
Asset-backed securities and structured notes | |||||||||||||||
Total—Securities—Available-for-Sale | $ | $ | $ | $ | |||||||||||
Loans Held for Sale | $ | $ | $ | $ | |||||||||||
Mortgage servicing rights | $ | $ | $ | $ | |||||||||||
Other assets—Derivative instruments | $ | $ | $ | $ | |||||||||||
LIABILITIES: | |||||||||||||||
Other liabilities—Derivative instruments | $ | $ | $ | $ | |||||||||||
June 30, 2018 | |||||||||||||||
(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—Available-for-Sale: | |||||||||||||||
Agency RMBS | $ | $ | $ | $ | |||||||||||
Non-Agency RMBS | |||||||||||||||
Municipal | |||||||||||||||
Asset-backed securities and structured notes | |||||||||||||||
Total—Securities—Available-for-Sale | $ | $ | $ | $ | |||||||||||
Loans Held for Sale | $ | $ | $ | $ | |||||||||||
Mortgage servicing rights | $ | $ | $ | $ | |||||||||||
Other assets—Derivative Instruments | $ | $ | $ | $ | |||||||||||
LIABILITIES: | |||||||||||||||
Other liabilities—Derivative instruments | $ | $ | $ | $ |
Year Ended June 30, 2019 | |||||||||||||||||||
(Dollars in thousands) | Securities- Trading: Collateralized Debt Obligations | Securities- Available-for- Sale: Non- Agency RMBS | Mortgage Servicing Rights | Derivative Instruments, net | Total | ||||||||||||||
Assets: | |||||||||||||||||||
Opening Balance | $ | $ | $ | $ | $ | ||||||||||||||
Transfers into Level 3 | |||||||||||||||||||
Transfers out of Level 3 | |||||||||||||||||||
Total gains or losses for the period: | |||||||||||||||||||
Included in earnings—Sale of securities | ( | ) | ( | ) | |||||||||||||||
Included in earnings—Fair value gain(loss) on trading securities | |||||||||||||||||||
Included in earnings—Mortgage banking income | ( | ) | ( | ) | |||||||||||||||
Included in other comprehensive income | |||||||||||||||||||
Purchases, issues, sales and settlements: | |||||||||||||||||||
Purchases | |||||||||||||||||||
Issues | |||||||||||||||||||
Sales | ( | ) | ( | ) | |||||||||||||||
Settlements | ( | ) | ( | ) | |||||||||||||||
Other-than-temporary impairment | ( | ) | ( | ) | |||||||||||||||
Closing balance | $ | $ | $ | $ | $ | ||||||||||||||
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) |
Year Ended June 30, 2018 | |||||||||||||||||||
(Dollars in thousands) | Securities- Trading: Collateralized Debt Obligations | Securities- Available-for- Sale: Non- Agency RMBS | Mortgage Servicing Rights | Derivative Instruments, net | Total | ||||||||||||||
Assets: | |||||||||||||||||||
Opening Balance | $ | $ | $ | $ | $ | ||||||||||||||
Transfers into Level 3 | |||||||||||||||||||
Transfers out of Level 3 | |||||||||||||||||||
Total gains or losses for the period: | |||||||||||||||||||
Included in earnings—Sale of securities | ( | ) | ( | ) | |||||||||||||||
Included in earnings—Fair value gain(loss) on trading securities | |||||||||||||||||||
Included in earnings—Mortgage banking income | ( | ) | ( | ) | ( | ) | |||||||||||||
Included in other comprehensive income | ( | ) | ( | ) | |||||||||||||||
Purchases, issues, sales and settlements: | |||||||||||||||||||
Purchases | |||||||||||||||||||
Issues | |||||||||||||||||||
Sales | ( | ) | ( | ) | ( | ) | |||||||||||||
Settlements | ( | ) | ( | ) | |||||||||||||||
Other-than-temporary impairment | ( | ) | ( | ) | |||||||||||||||
Closing balance | $ | $ | $ | $ | $ | ||||||||||||||
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
June 30, 2019 | ||||||
(Dollars in thousands) | Fair Value | Valuation Technique | Unobservable Inputs | Range (Weighted Average) | ||
Securities – Non-agency RMBS | $ | Discounted Cash Flow | Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate over LIBOR | 2.9 to 32.5% (10.0%) 1.5 to 10.2% (4.4%) 40.0 to 68.3% (59.4%) 2.7 to 6.9% (4.1%) | ||
Mortgage Servicing Rights | $ | Discounted Cash Flow | Projected Constant Prepayment Rate, Life (in years), Discount Rate | 4.7 to 33.7% (10.1%) 1.9 to 8.8 (6.4) 9.5 to 13.0% (9.8%) | ||
Derivative Instruments | $ | Sales Comparison Approach | Projected Sales Profit of Underlying Loans | 0.4 to 0.8% (0.6%) |
June 30, 2018 | ||||||
(Dollars in thousands) | Fair Value | Valuation Technique | Unobservable Inputs | Range (Weighted Average) | ||
Securities – Non-agency RMBS | $ | Discounted Cash Flow | Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate over LIBOR | 2.5 to 25.8% (14.1%) 1.5 to 10.6% (5.1%) 40.0 to 68.0% (58.9%) 2.7 to 7.1% (4.2%) | ||
Mortgage Servicing Rights | $ | Discounted Cash Flow | Projected Constant Prepayment Rate, Life (in years), Discount Rate | 6.0 to 26.6% (9.1%) 2.4 to 9.5 (6.9) 9.5 to 13.0% (9.9%) | ||
Derivative Instruments | $ | Sales Comparison Approach | Projected Sales Profit of Underlying Loans | 0.1 to 0.4% (0.3%) |
Year Ended June 30, | |||||||||||
(Dollars in thousands) | 2019 | 2018 | 2017 | ||||||||
Interest income on investments | $ | $ | $ | ||||||||
Fair value adjustment | |||||||||||
Total | $ | $ | $ |
June 30, 2019 | |||||||||||||||
(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 | |||||||||||
Impaired loans and leases: | |||||||||||||||
Single family real estate secured: | |||||||||||||||
Mortgage | $ | $ | $ | $ | |||||||||||
Multifamily real estate secured | |||||||||||||||
Auto and RV secured | |||||||||||||||
Other | |||||||||||||||
Total | $ | $ | $ | $ | |||||||||||
Other real estate owned and foreclosed assets: | |||||||||||||||
Single family real estate | $ | $ | $ | $ | |||||||||||
Autos and RVs | |||||||||||||||
Total | $ | $ | $ | $ | |||||||||||
June 30, 2018 | |||||||||||||||
(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 | |||||||||||
Impaired loans and leases: | |||||||||||||||
Single family real estate secured: | |||||||||||||||
Mortgage | $ | $ | $ | $ | |||||||||||
Home equity | |||||||||||||||
Multifamily real estate secured | |||||||||||||||
Auto and RV secured | |||||||||||||||
Commercial & Industrial | |||||||||||||||
Other | |||||||||||||||
Total | $ | $ | $ | $ | |||||||||||
Other real estate owned and foreclosed assets: | |||||||||||||||
Single family real estate | $ | $ | $ | $ | |||||||||||
Autos and RVs | |||||||||||||||
Total | $ | $ | $ | $ |
At June 30, | |||||||||||
(Dollars in thousands) | 2019 | 2018 | 2017 | ||||||||
Aggregate fair value | $ | $ | $ | ||||||||
Contractual balance | |||||||||||
Gain | $ | $ | $ |
At June 30, | |||||||||||
(Dollars in thousands) | 2019 | 2018 | 2017 | ||||||||
Interest income | $ | $ | $ | ||||||||
Change in fair value | ( | ) | |||||||||
Total | $ | $ | $ |
June 30, 2019 | ||||||
(Dollars in thousands) | Fair Value | Valuation Technique | Unobservable Input | Range (Weighted Average)1 | ||
Impaired loans and leases: | ||||||
Single family real estate secured: Mortgage | $ | Sales comparison approach | Adjustment for differences between the comparable sales | -83.2 to 80.0% (-2.0%) | ||
Multifamily real estate secured | $ | Sales comparison approach and income approach | Adjustment for differences between the comparable sales and adjustments for differences in net operating income expectations, capitalization rate | -87.9 to 102.7% (-0.1%) | ||
Auto and RV secured | $ | Sales comparison approach | Adjustment for differences between the comparable sales | -49.0 to 24.0% (2.6%) | ||
Other | $ | Discounted cash flow | Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate | 0.0 to 0.0% (0.0%) 0.0 to 10.0% (5.0%) 100.0 to 100.0% (100.0%) -2.2 to 1.1% (-0.6%) | ||
Other real estate owned and foreclosed assets: | ||||||
Single family real estate | $ | Sales comparison approach | Adjustment for differences between the comparable sales | -46.3 to 53.0% (5.3%) | ||
Autos and RVs | $ | Sales comparison approach | Adjustment for differences between the comparable sales | -13.6 to 56.3% (8.0%) |
June 30, 2018 | ||||||
(Dollars in thousands) | Fair Value | Valuation Technique | Unobservable Input | Range (Weighted Average)1 | ||
Impaired loans and leases: | ||||||
Single family real estate secured: | ||||||
Mortgage | $ | Sales comparison approach | Adjustment for differences between the comparable sales | -48.8 to 66.7% (2.3%) | ||
Home equity | $ | Sales comparison approach | Adjustment for differences between the comparable sales | 0.0 to 14.9% (7.4%) | ||
Multifamily real estate secured | $ | Sales comparison approach and income approach | Adjustment for differences between the comparable sales and adjustments for differences in net operating income expectations, capitalization rate | -15.5 to 46.4% (15.4%) | ||
Auto and RV secured | $ | Sales comparison approach | Adjustment for differences between the comparable sales | -2.0 to 71.5% (24.0%) | ||
Commercial & Industrial | $ | Discounted cash flow | Discount Rate | -33.8 to 0.0% (-16.9%) | ||
Other | $ | Discounted cash flow | Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate | 0.0 to 0.0% (0.0%) 0.0 to 10.0% (5.0%) 100.0 to 100.0% (100.0%) -1.0 to 2.5% (0.8%) | ||
Other real estate owned and foreclosed assets: | ||||||
Single family real estate | $ | Sales comparison approach | Adjustment for differences between the comparable sales | -14.1 to 27.3% (0.5%) | ||
Autos and RVs | $ | Sales comparison approach | Adjustment for differences between the comparable sales | -33.9 to 60.5% (7.9%) |
June 30, 2019 | |||||||||||||||||||
(Dollars in thousands) | Carrying Amount | Level 1 | Level 2 | Level 3 | Total Fair Value | ||||||||||||||
Financial assets: | |||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||||||
Securities available-for-sale | |||||||||||||||||||
Loans held for sale, at fair value | |||||||||||||||||||
Loans held for sale, at lower of cost or fair value | |||||||||||||||||||
Loans and leases held for investment—net | |||||||||||||||||||
Securities borrowed | |||||||||||||||||||
Customer, broker-dealer and clearing receivables | |||||||||||||||||||
Accrued interest receivable | |||||||||||||||||||
Mortgage servicing rights | |||||||||||||||||||
Financial liabilities: | |||||||||||||||||||
Total deposits | |||||||||||||||||||
Advances from the Federal Home Loan Bank | |||||||||||||||||||
Borrowings, subordinated notes and debentures | |||||||||||||||||||
Securities loaned | |||||||||||||||||||
Customer, broker-dealer and clearing payables | |||||||||||||||||||
Accrued interest payable |
June 30, 2018 | |||||||||||||||||||
(Dollars in thousands) | Carrying Amount | Level 1 | Level 2 | Level 3 | Total Fair Value | ||||||||||||||
Financial assets: | |||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||||||
Securities trading | |||||||||||||||||||
Loans held for sale, at fair value | |||||||||||||||||||
Loans held for sale, at lower of cost or fair value | |||||||||||||||||||
Loans and leases held for investment—net | |||||||||||||||||||
Accrued interest receivable | |||||||||||||||||||
Mortgage servicing rights | |||||||||||||||||||
Financial liabilities: | |||||||||||||||||||
Total deposits | |||||||||||||||||||
Advances from the Federal Home Loan Bank | |||||||||||||||||||
Subordinated notes and debentures | |||||||||||||||||||
Accrued interest payable |
June 30, 2019 | |||||||||||||||
Available-for-sale | |||||||||||||||
(Dollars in thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||
Mortgage-backed securities (RMBS): | |||||||||||||||
U.S agencies1 | $ | $ | $ | ( | ) | $ | |||||||||
Non-agency2 | ( | ) | |||||||||||||
Total mortgage-backed securities | ( | ) | |||||||||||||
Non-RMBS: | |||||||||||||||
U.S. agencies1 | |||||||||||||||
Municipal | ( | ) | |||||||||||||
Asset-backed securities and structured notes | ( | ) | |||||||||||||
Total Non-RMBS | ( | ) | |||||||||||||
Total debt securities | $ | $ | $ | ( | ) | $ |
June 30, 2018 | |||||||||||||||
Available-for-sale | |||||||||||||||
(Dollars in thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||
Mortgage-backed securities (RMBS): | |||||||||||||||
U.S. agencies1 | $ | $ | $ | ( | ) | $ | |||||||||
Non-agency2 | ( | ) | |||||||||||||
Total mortgage-backed securities | ( | ) | |||||||||||||
Non-RMBS: | |||||||||||||||
Municipal | ( | ) | |||||||||||||
Asset-backed securities and structured notes | ( | ) | |||||||||||||
Total Non-RMBS | ( | ) | |||||||||||||
Total debt securities | $ | $ | $ | ( | ) | $ |
June 30, 2019 | |||||||||||||||||||||||
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 | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||
Non-agency | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Total RMBS securities | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Non-RMBS: | |||||||||||||||||||||||
Municipal debt | ( | ) | ( | ) | |||||||||||||||||||
Asset-backed securities and structured notes | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Total Non-RMBS | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Total debt securities | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||
June 30, 2018 | |||||||||||||||||||||||
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 | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||
Non-agency | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Total RMBS securities | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Non-RMBS: | |||||||||||||||||||||||
Municipal debt | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Asset-backed securities and structured notes | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Total Non-RMBS | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Total debt securities | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) |
At June 30, | |||||||||||
(Dollars in thousands) | 2019 | 2018 | 2017 | ||||||||
Beginning balance | $ | $ | ( | ) | $ | ( | ) | ||||
Additions for the amounts related to the credit loss for which an other-than-temporary impairment was not previously recognized | ( | ) | ( | ) | ( | ) | |||||
Increases to the amount related to the credit loss for which other-than-temporary impairment was previously recognized | ( | ) | ( | ) | |||||||
Credit losses realized for securities sold | |||||||||||
Ending balance | $ | ( | ) | $ | ( | ) |
At June 30, | |||||||||||
(Dollars in thousands) | 2019 | 2018 | 2017 | ||||||||
Proceeds | $ | $ | $ | ||||||||
Gross realized gains | $ | $ | $ | ||||||||
Gross realized loss | ( | ) | ( | ) | ( | ) | |||||
Net gain on securities | $ | $ | ( | ) | $ |
At June 30, | |||||||
(Dollars in thousands) | 2019 | 2018 | |||||
Available-for-sale debt securities—net unrealized gains | $ | $ | ( | ) | |||
Available-for-sale debt securities—non-credit related | ( | ) | |||||
Subtotal | ( | ) | |||||
Tax (provision) benefit | ( | ) | |||||
Net unrealized gain (loss) on investment securities in accumulated other comprehensive loss | $ | $ | ( | ) |
June 30, 2019 | |||||||
Available-for-sale | |||||||
(Dollars in thousands) | Amortized Cost | Fair Value | |||||
RMBS—U.S. agencies1: | |||||||
Due within one year | $ | $ | |||||
Due one to five years | |||||||
Due five to ten years | |||||||
Due after ten years | |||||||
Total RMBS—U.S. agencies1 | |||||||
RMBS—Non-agency: | |||||||
Due within one year | |||||||
Due one to five years | |||||||
Due five to ten years | |||||||
Due after ten years | |||||||
Total RMBS—Non-agency | |||||||
Non-RMBS: | |||||||
Due within one year | |||||||
Due one to five years | |||||||
Due five to ten years | |||||||
Due after ten years | |||||||
Total Non-RMBS | |||||||
Total | $ | $ |
At June 30, | |||||||
(Dollars in thousands) | 2019 | 2018 | |||||
Single family real estate secured: | |||||||
Mortgage | $ | $ | |||||
Home equity | |||||||
Warehouse and other1 | |||||||
Multifamily real estate secured | |||||||
Commercial real estate secured | |||||||
Auto and RV secured | |||||||
Factoring | |||||||
Commercial & Industrial | |||||||
Other | |||||||
Total gross loans and leases | |||||||
Allowance for loan and lease losses | ( | ) | ( | ) | |||
Unaccreted discounts and loan and lease fees | ( | ) | ( | ) | |||
Total net loans and leases | $ | $ |
At June 30, | |||||||||||
(Dollars in thousands) | 2019 | 2018 | 2017 | ||||||||
Balance—beginning of period | $ | $ | $ | ||||||||
Provision for loan and lease loss | |||||||||||
Charged off | ( | ) | ( | ) | ( | ) | |||||
Transfers to held for sale | ( | ) | ( | ) | ( | ) | |||||
Recoveries | |||||||||||
Balance—end of period | $ | $ | $ |
At June 30, | |||||||||||
(Dollars in thousands) | 2019 | 2018 | 2017 | ||||||||
Nonaccrual loans and leases—90+ days past due plus other nonaccrual loans and leases | $ | $ | $ | ||||||||
Troubled debt restructured loans and leases—non-accrual | |||||||||||
Troubled debt restructured loans and leases—performing | |||||||||||
Total impaired loans and leases | $ | $ | $ |
June 30, 2019 | |||||||||||||||||||||||||||||||||||||||
Single Family | |||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Mortgage | Home Equity | Warehouse & Other | Multi- family real estate secured | Commercial real estate secured | Auto and RV secured | Factoring | Commercial & Industrial | Other | Total | |||||||||||||||||||||||||||||
Balance at July 1, 2018 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Provision for loan and lease loss | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
Charge-offs | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
Transfers to held for sale | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ |
June 30, 2018 | |||||||||||||||||||||||||||||||||||||||
Single Family | |||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Mortgage | Home Equity | Warehouse & Other | Multi- family real estate secured | Commercial real estate secured | Auto and RV secured | Factoring | Commercial & Industrial | Other | Total | |||||||||||||||||||||||||||||
Balance at July 1, 2017 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Provision for loan and lease loss | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||
Charge-offs | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||
Transfers to held for sale | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2018 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ |
June 30, 2017 | |||||||||||||||||||||||||||||||||||||||
Single Family | |||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Mortgage | Home Equity | Warehouse & Other | Multi- family real estate secured | Commercial real estate secured | Auto and RV secured | Factoring | Commercial & Industrial | Consumer & Other | Total | |||||||||||||||||||||||||||||
Balance at July 1, 2016 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Provision for loan and lease loss | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||
Charge-offs | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||
Transfers to held for sale | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2017 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ |
June 30, 2019 | |||||||||||||||||||||||||||
(Dollars in thousands) | Unpaid Principal Balance | Principal Balance Adjustment1 | Recorded Investment | Accrued Interest/Origination Fees | Total | Related Allocation of General Allowance | Related Allocation of Specific Allowance | ||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||||||
Single family real estate secured: | |||||||||||||||||||||||||||
Mortgage | |||||||||||||||||||||||||||
In-house originated | $ | $ | $ | $ | $ | $ | — | $ | — | ||||||||||||||||||
Purchased | — | — | |||||||||||||||||||||||||
Auto and RV secured | |||||||||||||||||||||||||||
In-house originated | — | — | |||||||||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||
Single family real estate secured: | |||||||||||||||||||||||||||
Mortgage | |||||||||||||||||||||||||||
In-house originated | |||||||||||||||||||||||||||
Purchased | |||||||||||||||||||||||||||
Multifamily real estate secured | |||||||||||||||||||||||||||
In-house originated | |||||||||||||||||||||||||||
Auto and RV secured | |||||||||||||||||||||||||||
In-house originated | |||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
As a % of total gross loans and leases | % | % | % | % | % | % | % |
June 30, 2018 | |||||||||||||||||||||||||||
(Dollars in thousands) | Unpaid Principal Balance | Principal Balance Adjustment1 | Recorded Investment | Accrued Interest/Origination Fees | Total | Related Allocation of General Allowance | Related Allocation of Specific Allowance | ||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||||||
Single family real estate secured: | |||||||||||||||||||||||||||
Mortgage | |||||||||||||||||||||||||||
In-house originated | $ | $ | $ | $ | $ | $ | — | $ | — | ||||||||||||||||||
Purchased | — | — | |||||||||||||||||||||||||
Multifamily real estate secured | |||||||||||||||||||||||||||
Purchased | — | — | |||||||||||||||||||||||||
Auto and RV secured | |||||||||||||||||||||||||||
In-house originated | — | — | |||||||||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||
Single family real estate secured: | |||||||||||||||||||||||||||
Mortgage | |||||||||||||||||||||||||||
In-house originated | |||||||||||||||||||||||||||
Purchased | |||||||||||||||||||||||||||
Home equity | |||||||||||||||||||||||||||
In-house originated | |||||||||||||||||||||||||||
Commercial & Industrial | |||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
As a % of total gross loans and leases | % | % | % | % | % | % | % |
June 30, 2019 | |||||||||||||||||||||||||||||||||||||||
Single Family | |||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Mortgage | Home Equity | Warehouse & Other | Multi- family real estate secured | Commercial real estate secured | Auto and RV secured | Factoring | Commercial & Industrial | Other | Total | |||||||||||||||||||||||||||||
Allowance for loan and lease losses: | |||||||||||||||||||||||||||||||||||||||
Ending allowance balance attributable to loans and leases: | |||||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment– general allowance | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Individually evaluated for impairment– specific allowance | |||||||||||||||||||||||||||||||||||||||
Collectively evaluated for impairment | |||||||||||||||||||||||||||||||||||||||
Total ending allowance balance | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Loans and leases: | |||||||||||||||||||||||||||||||||||||||
Loans and leases individually evaluated for impairment 1 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Loans and leases collectively evaluated for impairment | |||||||||||||||||||||||||||||||||||||||
Principal loan and lease balance | |||||||||||||||||||||||||||||||||||||||
Unaccreted discounts and loan and lease fees | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
Total recorded investment in loans and leases | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ |
June 30, 2018 | |||||||||||||||||||||||||||||||||||||||
Single Family | |||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Mortgage | Home Equity | Warehouse & Other | Multi- family real estate secured | Commercial real estate secured | Auto and RV secured | Factoring | Commercial & Industrial | Other | Total | |||||||||||||||||||||||||||||
Allowance for loan and lease losses: | |||||||||||||||||||||||||||||||||||||||
Ending allowance balance attributable to loans and leases: | |||||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment – general allowance | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Individually evaluated for impairment – specific allowance | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Collectively evaluated for impairment | |||||||||||||||||||||||||||||||||||||||
Total ending allowance balance | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Loans and leases: | |||||||||||||||||||||||||||||||||||||||
Loans and leases individually evaluated for impairment 1 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Loans and leases collectively evaluated for impairment | |||||||||||||||||||||||||||||||||||||||
Principal loan and lease balance | |||||||||||||||||||||||||||||||||||||||
Unaccreted discounts and loan and lease fees | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
Total recorded investment in loans and leases | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ |
At June 30, | |||||||
(Dollars in thousands) | 2019 | 2018 | |||||
Nonaccrual loans and leases: | |||||||
Single Family Real Estate Secured: | |||||||
Mortgage | |||||||
In-house originated | $ | $ | |||||
Purchased | |||||||
Home Equity | |||||||
In-house originated | |||||||
Multifamily Real Estate Secured | |||||||
In-house originated | |||||||
Purchased | |||||||
Total nonaccrual loans secured by real estate | |||||||
Auto and RV Secured | |||||||
Commercial and Industrial | |||||||
Other | |||||||
Total nonaccrual loans and leases | $ | $ | |||||
Nonaccrual loans and leases to total loans and leases | % | % |
June 30, 2019 | |||||||||||||||||||||||||||||||||||||||
Single Family | |||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Mortgage | Home Equity | Warehouse & Other | Multi- family real estate secured | Commercial real estate secured | Auto and RV secured | Factoring | Commercial & Industrial | Other | Total | |||||||||||||||||||||||||||||
Performing | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Nonaccrual | |||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ |
June 30, 2018 | |||||||||||||||||||||||||||||||||||||||
Single Family | |||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Mortgage | Home Equity | Warehouse & Other | Multi- family real estate secured | Commercial real estate secured | Auto and RV secured | Factoring | Commercial & Industrial | Other | Total | |||||||||||||||||||||||||||||
Performing | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Nonaccrual | |||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ |
June 30, 2019 | |||||||||||||||||||
(Dollars in thousands) | Pass | Special Mention | Substandard | Doubtful | Total | ||||||||||||||
Single family real estate secured: | |||||||||||||||||||
Mortgage | |||||||||||||||||||
In-house originated | $ | $ | $ | $ | $ | ||||||||||||||
Purchased | |||||||||||||||||||
Home equity | |||||||||||||||||||
In-house originated | |||||||||||||||||||
Warehouse and other1 | |||||||||||||||||||
In-house originated | |||||||||||||||||||
Multifamily real estate secured | |||||||||||||||||||
In-house originated | |||||||||||||||||||
Purchased | |||||||||||||||||||
Commercial real estate secured | |||||||||||||||||||
In-house originated | |||||||||||||||||||
Purchased | |||||||||||||||||||
Auto and RV secured | |||||||||||||||||||
In-house originated | |||||||||||||||||||
Factoring | |||||||||||||||||||
Commercial & Industrial | |||||||||||||||||||
Other | |||||||||||||||||||
Total | $ | $ | $ | $ | $ | ||||||||||||||
As of % of gross loans and leases | % | % | % | % | % |
June 30, 2018 | |||||||||||||||||||
(Dollars in thousands) | Pass | Special Mention | Substandard | Doubtful | Total | ||||||||||||||
Single family real estate secured: | |||||||||||||||||||
Mortgage | |||||||||||||||||||
In-house originated | $ | $ | $ | $ | $ | ||||||||||||||
Purchased | |||||||||||||||||||
Home equity | |||||||||||||||||||
In-house originated | |||||||||||||||||||
Warehouse and other | |||||||||||||||||||
In-house originated | |||||||||||||||||||
Multifamily real estate secured | |||||||||||||||||||
In-house originated | |||||||||||||||||||
Purchased | |||||||||||||||||||
Commercial real estate secured | |||||||||||||||||||
In-house originated | |||||||||||||||||||
Purchased | |||||||||||||||||||
Auto and RV secured | |||||||||||||||||||
In-house originated | |||||||||||||||||||
Factoring | |||||||||||||||||||
Commercial & Industrial | |||||||||||||||||||
Other | |||||||||||||||||||
Total | $ | $ | $ | $ | $ | ||||||||||||||
As of % of gross loans and leases | % | % | % | % | % |
June 30, 2019 | |||||||||||||||
(Dollars in thousands) | 30-59 Days Past Due | 60-89 Days Past Due | 90+ Days Past Due | Total | |||||||||||
Single family real estate secured: | |||||||||||||||
Mortgage | |||||||||||||||
In-house originated | $ | $ | $ | $ | |||||||||||
Purchased | |||||||||||||||
Multifamily real estate secured | |||||||||||||||
In-house originated | |||||||||||||||
Auto and RV secured | |||||||||||||||
In-house originated | |||||||||||||||
Other | |||||||||||||||
Total | $ | $ | $ | $ | |||||||||||
As a % of gross loans and leases | % | % | % | % |
June 30, 2018 | |||||||||||||||
(Dollars in thousands) | 30-59 Days Past Due | 60-89 Days Past Due | 90+ Days Past Due | Total | |||||||||||
Single family real estate secured: | |||||||||||||||
Mortgage | |||||||||||||||
In-house originated | $ | $ | $ | $ | |||||||||||
Purchased | |||||||||||||||
Home equity | |||||||||||||||
In-house originated | |||||||||||||||
Multifamily real estate secured | |||||||||||||||
In-house originated | |||||||||||||||
Auto and RV secured | |||||||||||||||
In-house originated | |||||||||||||||
Commercial & Industrial | |||||||||||||||
Other | |||||||||||||||
Total | $ | $ | $ | $ | |||||||||||
As a % of gross loans and leases | % | % | % | % |
6. | OFFSETTING OF SECURITIES FINANCING AGREEMENTS |
(Dollars in thousands) | Gross Assets / Liabilities | Amounts Offset | Net Balance Sheet Amount | Financial Collateral | Net Assets / Liabilities | ||||||||||||||
Assets: | |||||||||||||||||||
Securities borrowed | $ | $ | $ | $ | $ | ||||||||||||||
Liabilities: | |||||||||||||||||||
Securities loaned | $ | $ | $ | $ | $ |
7. | CUSTOMER, BROKER-DEALER AND CLEARING RECEIVABLES AND PAYABLES |
(Dollars in thousands) | June 30, 2019 | ||
Receivables: | |||
Customers | $ | ||
Broker-dealer and clearing organizations: | |||
Receivable from broker-dealers1 | |||
Securities failed to deliver | |||
Other | |||
Total customer, broker-dealer and clearing receivables | $ | ||
Payables: | |||
Customers | $ | ||
Broker-dealer and clearing organizations: | |||
Payable to broker-dealers | |||
Securities failed to receive | |||
Total customer, broker-dealer and clearing payables | $ |
At June 30, | |||||||
(Dollars in thousands) | 2019 | 2018 | |||||
Leasehold improvements | $ | $ | |||||
Furniture and fixtures | |||||||
Computer hardware and equipment | |||||||
Software | |||||||
Total | |||||||
Less accumulated depreciation and amortization | ( | ) | ( | ) | |||
Furniture, equipment and software—net1 | $ | $ |
(Dollars in thousands) | Total | ||
Balance at July 1, 2018 | $ | ||
Goodwill incident to acquisitions | |||
Balance at June 30, 2019 | $ |
June 30, 2019 | June 30, 2018 | |||||||||||||||||||||||
(Dollars in thousands) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
Covenant not to compete | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Customer relationships | ||||||||||||||||||||||||
Customer deposit intangible | ||||||||||||||||||||||||
Developed technologies | ||||||||||||||||||||||||
Trade name | ||||||||||||||||||||||||
Total intangible assets | $ | $ | $ | $ | $ | $ |
Weighted-Average Useful Lives (Years) | |
Covenant not to compete | |
Customer relationships | |
Customer deposit intangible | |
Developed technologies | |
Trade name |
(Dollars in thousands) | Amortization Expense | ||
For the fiscal year ending June 30, | |||
2020 | $ | ||
2021 | |||
2022 | |||
2023 | |||
2024 | |||
Thereafter | |||
Total | $ |
At June 30, | |||||||||||||
2019 | 2018 | ||||||||||||
(Dollars in thousands) | Amount | Rate1 | Amount | Rate1 | |||||||||
Non-interest bearing | $ | — | % | $ | — | % | |||||||
Interest bearing: | |||||||||||||
Demand | % | % | |||||||||||
Savings | % | % | |||||||||||
% | % | ||||||||||||
Time deposits: | |||||||||||||
$250 and under | % | % | |||||||||||
Greater than $250 | % | % | |||||||||||
Total time deposits | % | % | |||||||||||
Total interest bearing2 | % | % | |||||||||||
Total deposits | $ | % | $ | % |
At June 30, | |||
(Dollars in thousands) | 2019 | ||
Within 12 months | $ | ||
13 to 24 months | |||
25 to 36 months | |||
37 to 48 months | |||
49 to 60 months | |||
Thereafter | |||
Total | $ |
At June 30, | |||||||||||||
2019 | 2018 | ||||||||||||
(Dollars in thousands) | Amount | Weighted- Average Rate | Amount | Weighted- Average Rate | |||||||||
Within one year1 | $ | % | $ | % | |||||||||
After one but within two years | % | % | |||||||||||
After two but within three years | % | % | |||||||||||
After three but within four years | % | % | |||||||||||
After four but within five years | % | % | |||||||||||
After five years | % | % | |||||||||||
Total | $ | % | $ | % |
(Dollars in thousands) | June 30, 2019 | June 30, 2018 | |||||
Borrowings from other banks | $ | $ | |||||
Subordinated loans | |||||||
Subordinated notes | |||||||
Subordinated debentures | |||||||
Less unamortized issuance costs | |||||||
Total borrowings, subordinated notes and debentures | $ | $ |
At June 30, | |||||||||||
(Dollars in thousands) | 2019 | 2018 | 2017 | ||||||||
Current: | |||||||||||
Federal | $ | $ | $ | ||||||||
State | |||||||||||
Deferred: | |||||||||||
Federal | ( | ) | ( | ) | |||||||
State | ( | ) | ( | ) | |||||||
( | ) | ( | ) | ||||||||
Total | $ | $ | $ |
At June 30, | ||||||||
2019 | 2018 | 2017 | ||||||
Statutory federal tax rate | % | % | % | |||||
Increase (decrease) resulting from: | ||||||||
State taxes—net of federal tax benefit | % | % | % | |||||
Tax reform deferred tax remeasurement | % | % | % | |||||
Cash surrender value | ( | )% | ( | )% | ( | )% | ||
Tax credits | ( | )% | ( | )% | ( | )% | ||
Non-taxable income | ( | )% | ( | )% | ( | )% | ||
Excess benefit RSU vesting | ( | )% | ( | )% | % | |||
Other | % | % | % | |||||
Effective tax rate | % | % | % |
At June 30, | |||||||
(Dollars in thousands) | 2019 | 2018 | |||||
Deferred tax assets: | |||||||
Allowance for loan and lease losses and charge-offs | $ | $ | |||||
State taxes | |||||||
Stock-based compensation expense | |||||||
Unrealized net (gains) losses on securities | |||||||
Deferred bonus / vacation | |||||||
Securities impaired | |||||||
Deferred loan fees | |||||||
Net operating loss carryforward | |||||||
Total deferred tax assets | |||||||
Deferred tax liabilities: | |||||||
Acquisition intangible asset | ( | ) | |||||
FHLB stock dividend | ( | ) | ( | ) | |||
Other assets—prepaids | ( | ) | ( | ) | |||
Depreciation and amortization | ( | ) | ( | ) | |||
Unrealized net gains on securities | ( | ) | |||||
Total deferred tax liabilities | ( | ) | ( | ) | |||
Net deferred tax asset1 | $ | $ |
(Dollars in thousands) | 2019 | 2018 | 2017 | ||||||||
Balance—beginning of period | $ | $ | $ | ||||||||
Additions—current year tax positions | |||||||||||
Additions—prior year tax positions | |||||||||||
Reductions—prior year tax positions | ( | ) | ( | ) | ( | ) | |||||
Total liability for unrecognized tax positions—end of period | $ | $ | $ |
At June 30, | |||||||||||||||||
2019 | 2018 | 2017 | |||||||||||||||
Issued | Outstanding | Issued | Outstanding | Issued | Outstanding | ||||||||||||
Beginning of year: | |||||||||||||||||
Repurchase of treasury stock | ( | ) | ( | ) | |||||||||||||
Common stock issued through grants of restricted stock units | |||||||||||||||||
End of year: |
(Dollars in thousands) | Stock Award Compensation Expense | ||
For the fiscal year ending June 30: | |||
2020 | $ | ||
2021 | |||
2022 | |||
2023 | |||
2024 | |||
Thereafter | |||
Total | $ |
Restricted Stock Units1 | Weighted-Average Grant-Date Fair Value1 | ||||||
Non-vested balance at June 30, 2016 | $ | ||||||
Granted | |||||||
Vested | ( | ) | |||||
Canceled | ( | ) | |||||
Non-vested balance at June 30, 2017 | $ | ||||||
Granted | |||||||
Vested | ( | ) | |||||
Canceled | ( | ) | |||||
Non-vested balance at June 30, 2018 | $ | ||||||
Granted | |||||||
Vested | ( | ) | |||||
Canceled | ( | ) | |||||
Non-vested balance at June 30, 2019 | $ |
At June 30, | |||||||||||
(Dollars in thousands, except per share data) | 2019 | 2018 | 2017 | ||||||||
Earnings Per Common Share | |||||||||||
Net income | $ | $ | $ | ||||||||
Preferred stock dividends | ( | ) | ( | ) | ( | ) | |||||
Net income attributable to common shareholders | $ | $ | $ | ||||||||
Average common shares issued and outstanding | |||||||||||
Average unvested RSUs | |||||||||||
Total qualifying shares | |||||||||||
Earnings per common share | $ | $ | $ | ||||||||
Diluted Earnings Per Common Share | |||||||||||
Dilutive net income attributable to common shareholders | $ | $ | $ | ||||||||
Average common shares issued and outstanding | |||||||||||
Dilutive effect of average unvested RSUs | |||||||||||
Total dilutive common shares outstanding | |||||||||||
Diluted earnings per common share | $ | $ | $ |
(Dollars in thousands) | Future minimum lease payments | ||
2020 | $ | ||
2021 | |||
2022 | |||
2023 | |||
2024 | |||
Thereafter | |||
Total | $ |
Axos Financial, Inc. | Axos Bank | “Well Capitalized” Ratio | Minimum Capital Ratio | ||||||||||||||||||
(Dollars in thousands) | June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | |||||||||||||||||
Regulatory Capital: | |||||||||||||||||||||
Tier 1 | $ | $ | $ | $ | |||||||||||||||||
Common equity tier 1 | $ | $ | $ | $ | |||||||||||||||||
Total capital (to risk-weighted assets) | $ | $ | $ | $ | |||||||||||||||||
Assets: | |||||||||||||||||||||
Average adjusted | $ | $ | $ | $ | |||||||||||||||||
Total risk-weighted | $ | $ | $ | $ | |||||||||||||||||
Regulatory Capital Ratios: | |||||||||||||||||||||
Tier 1 leverage (core) capital to adjusted average assets | % | % | % | % | % | % | |||||||||||||||
Common equity tier 1 capital (to risk-weighted assets) | % | % | % | % | % | % | |||||||||||||||
Tier 1 capital (to risk-weighted assets) | % | % | % | % | % | % | |||||||||||||||
Total capital (to risk-weighted assets) | % | % | % | % | % | % |
(Dollars in thousands) | Axos Clearing | ||
Net capital | $ | ||
Less: required net capital | |||
Excess capital | $ | ||
Net capital as a percentage of aggregate debit items | % | ||
Net capital in excess of 5% aggregate debit items | $ |
Axos Financial, Inc. (Parent Company Only) CONDENSED BALANCE SHEETS | |||||||
At June 30, | |||||||
(Dollars in thousands) | 2019 | 2018 | |||||
ASSETS | |||||||
Cash and due from banks | $ | $ | |||||
Loans | |||||||
Other assets | |||||||
Investment in subsidiary | |||||||
Total assets | $ | $ | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Borrowings, subordinated notes and debentures | $ | $ | |||||
Accounts payable and accrued liabilities and other liabilities | |||||||
Total liabilities | |||||||
Stockholders’ equity | |||||||
Total liabilities and stockholders’ equity | $ | $ |
Axos Financial, Inc. (Parent Company Only) STATEMENTS OF INCOME | |||||||||||
Year Ended June 30, | |||||||||||
(Dollars in thousands) | 2019 | 2018 | 2017 | ||||||||
Interest income | $ | $ | $ | ||||||||
Interest expense | |||||||||||
Net interest (expense) income | ( | ) | ( | ) | ( | ) | |||||
Net interest (expense) income, after provision for loan losses | ( | ) | ( | ) | ( | ) | |||||
Non-interest income (loss) | |||||||||||
Non-interest expense and tax benefit1 | |||||||||||
Income (loss) before dividends from subsidiary and equity in undistributed income of subsidiary | ( | ) | ( | ) | ( | ) | |||||
Dividends from subsidiary | |||||||||||
Equity in undistributed earnings of subsidiary | |||||||||||
Net income | $ | $ | $ | ||||||||
Comprehensive income | $ | $ | $ |
Axos Financial, Inc. (Parent Company Only) STATEMENT OF CASH FLOWS | |||||||||||
Year Ended June 30, | |||||||||||
(Dollars in thousands) | 2019 | 2018 | 2017 | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income | $ | $ | $ | ||||||||
Adjustments to reconcile net income to net cash used in operating activities: | |||||||||||
Accretion of discounts on securities | ( | ) | |||||||||
Amortization of borrowing costs | |||||||||||
Impairment charge on securities | ( | ) | |||||||||
Net gain on investment securities | ( | ) | |||||||||
Stock-based compensation expense | |||||||||||
Equity in undistributed earnings of subsidiary | ( | ) | ( | ) | ( | ) | |||||
Decrease (increase) in other assets | ( | ) | ( | ) | |||||||
Increase (decrease) in other liabilities | |||||||||||
Net cash provided by (used in) operating activities | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Proceeds from sale of available-for-sale securities | |||||||||||
Origination of loans and leases held for investment | ( | ) | |||||||||
Proceeds from principal repayments on loans | |||||||||||
Investment in subsidiary | ( | ) | ( | ) | |||||||
Net cash provided by (used in) investing activities | ( | ) | ( | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Tax effect from vesting of restricted stock units | |||||||||||
Tax payments related to the settlement of restricted stock units | ( | ) | ( | ) | ( | ) | |||||
Repurchase of treasury stock | ( | ) | ( | ) | |||||||
Proceeds from issuance of subordinated notes | |||||||||||
Cash dividends on preferred stock | ( | ) | ( | ) | ( | ) | |||||
Net cash provided by (used in) financing activities | ( | ) | ( | ) | ( | ) | |||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | ( | ) | |||||||||
CASH AND CASH EQUIVALENTS—Beginning of year | |||||||||||
CASH AND CASH EQUIVALENTS—End of year | $ | $ | $ |
Quarters Ended in Fiscal Year 2019 | |||||||||||||||
(Dollars in thousands, except per share data) | June 30, | March 31, | December 31, | September 30, | |||||||||||
Interest and dividend income | $ | $ | $ | $ | |||||||||||
Interest expense | |||||||||||||||
Net interest income | |||||||||||||||
Provision for loan and lease losses | |||||||||||||||
Net interest income after provision for loan and lease losses | |||||||||||||||
Non-interest income | |||||||||||||||
Non-interest expense | |||||||||||||||
Income before income tax expense | |||||||||||||||
Income tax expense | |||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Net income attributable to common stock | $ | $ | $ | $ | |||||||||||
Basic earnings per share | $ | $ | $ | $ | |||||||||||
Diluted earnings per share | $ | $ | $ | $ |
Quarters Ended in Fiscal Year 2018 | |||||||||||||||
(Dollars in thousands, except per share data) | June 30, | March 31, | December 31, | September 30, | |||||||||||
Interest and dividend income | $ | $ | $ | $ | |||||||||||
Interest expense | |||||||||||||||
Net interest income | |||||||||||||||
Provision for loan and lease losses | |||||||||||||||
Net interest income after provision for loan and lease losses | |||||||||||||||
Non-interest income | |||||||||||||||
Non-interest expense | |||||||||||||||
Income before income tax expense | |||||||||||||||
Income tax expense | |||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Net income attributable to common stock | $ | $ | $ | $ | |||||||||||
Basic earnings per share | $ | $ | $ | $ | |||||||||||
Diluted earnings per share | $ | $ | $ | $ |
23. | SEGMENT REPORTING |
Year Ended June 30, 2019 | |||||||||||||||
(Dollars in thousands) | Banking Business | Securities Business | Corporate/Eliminations | Axos Consolidated | |||||||||||
Net interest income | $ | $ | $ | ( | ) | $ | |||||||||
Provision for loan losses | |||||||||||||||
Non-interest income | ( | ) | |||||||||||||
Non-interest expense | |||||||||||||||
Income before taxes | $ | $ | ( | ) | $ | ( | ) | $ |
Year Ended June 30, 2018 | |||||||||||||||
(Dollars in thousands) | Banking Business | Securities Business | Corporate/Eliminations | Axos Consolidated | |||||||||||
Net interest income | $ | $ | $ | ( | ) | $ | |||||||||
Provision for loan losses | |||||||||||||||
Non-interest income | |||||||||||||||
Non-interest expense | |||||||||||||||
Income before taxes | $ | $ | $ | ( | ) | $ |
June 30, 2019 | |||||||||||||||
(Dollars in thousands) | Banking Business | Securities Business | Corporate/Eliminations | Axos Consolidated | |||||||||||
Goodwill | $ | $ | $ | $ | |||||||||||
Total assets | $ | $ | $ | $ |
June 30, 2018 | |||||||||||||||
(Dollars in thousands) | Banking Business | Securities Business | Corporate/Eliminations | Axos Consolidated | |||||||||||
Goodwill | $ | $ | $ | $ | |||||||||||
Total assets | $ | $ | $ | $ |
• | indebtedness for borrowed or purchased money, whether or not evidenced by bonds, debentures, notes, or other written instruments; |
• | obligations under letters of credit; |
• | indebtedness or other obligations with respect to commodity contracts, interest rate and currency swap agreements, cap, floor, and collar agreements, currency spot and forward contracts, and other similar agreements or arrangements designed to protect against fluctuations in currency exchange or interest rates; and |
• | guarantees, endorsements (other than by endorsement of negotiable instruments for collection in the ordinary course of business), and other similar contingent obligations in respect of obligations of others of a type described in the preceding bullets, whether or not classified as a liability on a balance sheet prepared in accordance with accounting principles generally accepted in the United States; |
• | a “Tax Event” defined in the First Supplemental Indenture to mean the receipt by us of an opinion of independent tax counsel to the effect that an amendment to, or change (including any announced prospective change) in, the laws or any regulations of the United States or any political subdivision or taxing authority, or as a result of any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which change or amendment |
• | a “Tier 2 Capital Event” defined in the First Supplemental Indenture to mean the receipt by us of an opinion of independent bank regulatory counsel to the effect that, as a result of (a) any amendment to, or change (including any announced prospective change) in, the laws or any regulations thereunder of the United States or any rules, guidelines or policies of an applicable regulatory authority for the Company or (b) any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or which pronouncement or decision is announced on or after the date of original issuance of the Notes, the Subordinated Notes do not constitute, or within 90 days of the date of such opinion will not constitute, Tier 2 Capital (or its then equivalent if we were subject to such capital requirement) for purposes of capital adequacy guidelines of the Board of Governors of the Federal Reserve (or any successor regulatory authority with jurisdiction over savings and loan holding companies), as then in effect and applicable to us that would preclude the Notes from being included as Tier 2 Capital; or |
• | the Company is required to register as an investment company pursuant to the Investment Company Act of 1940. |
• | the entry of a decree or order for relief in respect of the Company by a court having jurisdiction in the premises in an involuntary case under any applicable bankruptcy, insolvency, or reorganization law, now or hereafter in effect, and the decree or order continues unstayed and in effect for a period of 60 consecutive days; |
• | the commencement by the Company of a voluntary case under any applicable bankruptcy, insolvency, or reorganization law, now or hereafter in effect, or the consent by the Company to the entry of a decree or order for relief in an involuntary case under any such law; or |
• | in the event a receiver, conservator or similar official is appointed for the Company's principal banking subsidiary (currently, the Bank). |
• | such holder has previously given written notice to the trustee of a continuing event of default with respect to the Notes; |
• | the holders of not less than 25% in principal amount of the Notes shall have made written request to the trustee to institute proceedings in respect of such event of default in its own name as trustee under the indenture; |
• | such holder or holders have offered to the trustee reasonable indemnity against the costs, expenses, and liabilities to be incurred in complying with such request; |
• | the trustee for 60 days after its receipt of such notice, request, and offer of indemnity has failed to institute any such proceeding; and |
• | no direction inconsistent with such written request has been given to the trustee during such 60 day-period by the holders of a majority in principal amount of the outstanding Notes. |
• | irrevocably depositing with the trustee, as trust funds in trust, money or U.S. government obligations (generally, securities that are obligations of or guaranteed by the United States of America), or a combination of money and U.S. government obligations, in each case sufficient, without reinvestment, in the opinion of a nationally recognized firm of independent public accountants, to pay and discharge the principal of and interest on the Notes on the date on which the principal becomes due and payable in accordance with the terms of the Notes or the indenture, whether at the stated maturity date, or by declaration of acceleration, call for redemption, or otherwise; and |
• | satisfying certain other conditions precedent specified in the indenture, including, among other things, the delivery of an opinion of counsel that the holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the Defeasance and will be subject to federal income tax in the same amounts, in the same manner, and at the same times as would have been the case if the Defeasance had not occurred. |
• | change the stated maturity of the principal of, or any installment of interest on, any Note; |
• | reduce the principal amount or rate of interest of any Note; |
• | the place of payment where any Note or any interest is payable; |
• | impair the right to institute suit for the enforcement of any payment on or after its stated maturity; |
• | modify the provisions of the indenture with respect to the subordination of the Notes in a manner adverse to the holders of the Notes; or |
• | reduce the percentage in principal amount of the outstanding Notes the consent of whose holders is required for any supplemental indenture, or the consent of whose holders is required for any waiver of compliance with the provisions of or defaults under the indenture and the consequences thereof under the indenture. |
• | if we consolidate with or merge into any other person or convey, transfer or lease our assets substantially as an entirety to any other person, the person formed by such consolidation or into which we merge, or the person that acquires our assets, is a corporation organized and validly existing under the laws of the United States of America, any of its states or the District of Columbia, which person must expressly assume, by a supplemental indenture, the due and punctual payment of the principal of and interest on the Notes and the performance or observance of our covenants under the indenture; |
• | immediately after giving effect to such transaction and treating any indebtedness that becomes an obligation of us or our subsidiaries as a result of such transaction as having been incurred by us or such subsidiary at the time of |
• | we have complied with our obligations to deliver certain documentation to the trustee. |
1. | I have reviewed this annual report on Form 10-K 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; and |
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. |
Date: | August 27, 2019 | |
/s/ GREGORY GARRABRANTS | ||
GREGORY GARRABRANTS | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) |
1. | I have reviewed this annual report on Form 10-K 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; and |
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. |
Date: | August 27, 2019 | |
/s/ ANDREW J. MICHELETTI | ||
ANDREW J. MICHELETTI | ||
Executive Vice President and Chief Financial Officer | ||
(Principal Financial Officer) |
(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. |
Date: | August 27, 2019 | /s/ GREGORY GARRABRANTS |
GREGORY GARRABRANTS | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) |
(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. |
Date: | August 27, 2019 | |
/s/ ANDREW J. MICHELETTI | ||
ANDREW J. MICHELETTI | ||
Executive Vice President and Chief Financial Officer | ||
(Principal Financial Officer) |
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
---|---|---|
Assets: | ||
Loans - Net Allowance for Loan Losses | $ 57,085 | $ 49,151 |
Stockholders' Equity: | ||
Preferred stock, par or stated value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares, issued (in shares) | 66,563,922 | 65,796,060 |
Common stock, shares outstanding (in shares) | 61,128,817 | 62,688,064 |
Treasury stock, shares (in shares) | 5,435,105 | 3,107,996 |
Series A Preferred Stock | ||
Stockholders' Equity: | ||
Preferred stock, par or stated value (in dollars per share) | $ 10,000 | $ 10,000 |
Preferred stock, liquidation preference value (in dollars per share) | $ 10,000 | $ 10,000 |
Preferred stock, shares issued (in shares) | 515 | 515 |
Preferred stock, shares outstanding (in shares) | 515 | 515 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Statement of Comprehensive Income [Abstract] | |||
NET INCOME | $ 155,131 | $ 152,411 | $ 134,740 |
Net unrealized gain (loss) from available-for-sale securities, net of tax expense (benefit) of $562, $(2,449), and $3,363 for the years ended June 30, 2019, 2018 and 2017, respectively. | 1,741 | (5,493) | 5,218 |
Other-than-temporary impairment on securities recognized in other comprehensive income, net of tax expense (benefit) of $(251), $1,918 and $3,195 for the years ended June 30, 2019, 2018 and 2017, respectively. | (594) | 4,197 | 4,957 |
Reclassification of net (gain) loss from available-for-sale securities included in income, net of tax expense (benefit) of $191, $(104) and $1,536 for the years ended June 30, 2019, 2018 and 2017, respectively. | (518) | 196 | (2,384) |
Other comprehensive income (loss) | 629 | (1,100) | 7,791 |
Comprehensive income | $ 155,760 | $ 151,311 | $ 142,531 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (PARENTHETICAL) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Statement of Comprehensive Income [Abstract] | |||
Net tax expense (benefit) for net unrealized gain (loss) from available-for-sale securities | $ 562 | $ (2,449) | $ 3,363 |
Net tax expense (benefit) for other-than-temporary impairment on securities recognized in other comprehensive income | (251) | 1,918 | 3,195 |
Net tax expense (benefit) for reclassification of net (gain) loss from available-for-sale securities included in income | $ 191 | $ (104) | $ 1,536 |
ORGANIZATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ORGANIZATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ORGANIZATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation. The consolidated financial statements include the accounts of Axos Financial, Inc. 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, WiseBanyan, Inc., a registered investment advisor, and WiseBanyan Securities, LLC, an introducing broker dealer. All significant intercompany balances have been eliminated in consolidation. Axos Financial, Inc. was incorporated in the State of Delaware on July 6, 1999 for the purpose of organizing and launching an Internet-based savings bank. Axos Bank (the “Bank”), which opened for business over the Internet on July 4, 2000, is subject to regulation and examination by the Office of the Comptroller of the Currency (“OCC”), its primary regulator. The Federal Deposit Insurance Corporation (“FDIC”) insures the Bank’s deposit accounts up to the maximum allowable amount. Use of Estimates. In preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan and lease losses, the assessment for other-than-temporary impairment on investment securities and the fair value of certain financial instruments. Business. The Bank provides consumer and business banking products through the online distribution channels and affinity partners. The Bank’s deposit products are demand accounts, savings accounts and time deposits marketed to consumers and businesses located in all fifty states. The Bank’s primary lending products are residential single family and multifamily mortgage loans. The Bank’s business is primarily concentrated in the State of California and is subject to the general economic conditions of that state. Cash and Cash Equivalents. The Bank’s cash, due from banks, money market mutual funds and federal funds sold, all of which have original maturities within 90 days, consist of cash and cash equivalents. Net cash flows are reported for customer deposit transactions. Cash segregated for regulatory purposes. Federal Reserve Board regulations require depository institutions to maintain certain minimum reserve balances. Included within this are cash balances required by the Federal Reserve Bank of San Francisco of the Bank. In addition this line item includes qualified deposits in special reserve bank accounts for the exclusive benefit of Axos Clearing customers in accordance with Rule 15c3-3 of the Securities Exchange Act of 1934 (the “Exchange Rate”) and other regulations. Interest Rate Risk. The Bank’s assets and liabilities are generally monetary in nature and interest rate changes have an effect on the Bank’s performance. The Bank decreases the effect of interest rate changes on its performance by striving to match maturities and interest sensitivity between loans and deposits. A significant change in interest rates could have a material effect on the Bank’s results of operations. Concentration of Credit Risk. The Bank’s loan portfolio was collateralized by various forms of real estate with approximately 72.2% of the mortgage portfolio located in California at June 30, 2019. The Bank’s loan portfolio contains concentrations of credit in multifamily, single family, commercial, and home equity loans. The Bank believes its underwriting standards combined with its low LTV requirements substantially mitigate the risk of loss which may result from these concentrations. Brand Partnership Products. Through its strategic partnerships division, the Bank has agreements with third-party service providers (“Program Managers”) possessing demonstrated expertise in managing programs involving marketing and processing financial products such as credit, debit, and prepaid cards, and small business and consumer loans. These relationships include the Company’s relationships with H&R Block, Inc., Netspend and BFS Capital, among others. As delineated by the related contracts, a Program Manager provides program management services in its areas of expertise subject to the Bank’s continuing control and active supervision of the subject program. Underwriting standards and credit decisioning remain with the Bank in all cases. Each of these relationships is designed to allow the Bank to leverage the Program Manager’s knowledge and experience to distribute program-related financial products to a broad and increasing base of customers. With respect to credit products, the Bank generally originates the resulting receivable for sale, but may, in its discretion, retain such receivable. The Bank performs extensive due diligence with respect to each Program Manager and program, and maintains a regimen of comprehensive risk management and strict compliance oversight with respect to all programs. Through our agreement with H&R Block, Inc. (“H&R Block”) and its wholly-owned subsidiaries the Bank provides H&R Block-branded financial products and services. The products and services that represent the primary focus and the majority of transactional volume that the Bank processes are described in detail below. The first product is Emerald Prepaid Mastercard® services. The Bank entered into agreements to offer this product in August 2015. Under the agreements, the Bank is responsible for the primary oversight and control of the prepaid card programs of a wholly-owned subsidiary of H&R Block. The Bank holds the prepaid card customer deposits for those cards issued under the prepaid programs in non-interest bearing accounts and earns a fixed fee paid by H&R Block’s subsidiary for each automated clearing house (“ACH”) transaction processed through the prepaid card customer accounts. A portion of H&R Block’s customers use the Emerald Card as an option to receive federal and state income tax refunds. The prepaid customer deposits are included in non-interest bearing deposit liabilities on the balance sheet of the Company and the ACH fee income is included in the income statement under the line banking and service fees. The second product is Refund Transfer. The Bank entered into agreements to offer this product in August 2015. The Bank is responsible for the primary oversight and control of the refund transfer program of a wholly-owned subsidiary of H&R Block. The Bank opens a temporary bank account for each H&R Block customer who is receiving an income tax refund and elects to defer payment of his or her tax preparation fees. After the Internal Revenue Service and any state income tax authorities transfer the refund into the customer’s account, the net funds are transferred to the customer and the temporary deposit account is closed. The Bank earns a fixed fee paid by H&R Block for each of the H&R Block customers electing a Refund Transfer. The fees are earned primarily in the quarters ending March 31st and are included in the income statement under the line banking and service fees. The third product is Emerald Advance. The Bank entered into agreements to offer this product in August 2015. Under the agreements the Bank is responsible for the underwriting guidelines and credit policies for unsecured consumer lines of credit offered to H&R Block customers. The Bank offers and funds unsecured lines of credit to consumers primarily through the H&R Block tax preparation offices and earns interest income and fee income. The Bank retains 10% of the Emerald Advance and sells the remainder to H&R Block. Emerald Advance is a seasonal product and the was no remaining balance as of June 30, 2019. The lines of credit are included in loans and leases on the balance sheet of the Company and the interest income and fee income are included in the income statement under the line loans and leases interest and dividend income. The fourth product is an interest-free Refund Advance loan. The Bank exclusively originated and funded all of H&R Block’s interest-free Refund Advance loans to tax preparation clients for the 2019 and 2018 tax seasons. The Bank performed the credit underwriting, loan origination, and funding associated with the interest-free Refund Advance loans in the current tax season and received fees from H&R Block for operating the program. No fee is charged to the tax preparation client. Repayment of the Refund Advance loan is deducted from the client’s tax refund proceeds; if an insufficient refund to repay the Refund Advance loan is received, there is no recourse to the client, no negative credit reporting occurs in respect of the client and no collection efforts are made against the client. This agreement is an expansion of the services Axos provided to H&R Block in the 2017 tax season when the Bank participated through purchases of the loans with other providers in the Refund Advance loan program. During the 2017 tax season, the Bank purchased the Refund Advance loans from a third-party bank at a discount and recorded the accretion of the loan discount as interest income, reported on the income statement under the interest and dividend income line item. During the 2018 tax season, the Bank recorded the fees received from H&R Block as interest income on loans, reported on the income statement under the interest and dividend income line item. The H&R Block-branded financial services products introduce seasonality into the Company’s quarterly reports on Form 10-Q in the unaudited condensed consolidated income statements through the banking and service fees category of non-interest income and the other general and administrative category of non-interest expense, with the peak income and expense in these categories typically occurring during the Company’s third fiscal quarter ended March 31. Securities. Debt securities are classified as held-to-maturity and carried at amortized cost when management has both the positive intent and ability to hold them to maturity. Debt securities are classified as available-for-sale when they might be sold before maturity. Securities available-for-sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. Securities available-for-sale are reported at estimated fair value, with unrealized gains and losses, net of the related tax effects, excluded from operations and reported as a separate component of accumulated other comprehensive income or loss. The fair values of securities traded in active markets are obtained from market quotes. If quoted prices in active markets are not available, we determine the fair values by utilizing industry-standard tools to calculate the net present value of the expected cash flows available to the securities. For securities other than non-agency RMBS, we use observable market participant inputs and categorize these securities as Level II in determining fair value. Trading securities refer to certain types of assets that banks hold for resale at a profit or when the Company elects to account for certain securities at fair value. Increases or decreases in the fair value of trading securities are recognized in earnings as they occur. During the quarter ended September 30, 2016, the Company elected to reclassify all of its held-to-maturity securities to available-for-sale. See Note 4 – “Securities” for further information. Gains and losses on securities sales are based on a comparison of sales proceeds and the amortized cost of the security sold using the specific identification method. Purchases and sales are recognized on the trade date. Interest income includes amortization of purchase premiums or discounts. Premiums and discounts on securities are amortized or accreted using the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. The Company’s portfolios of available-for-sale securities are reviewed quarterly for other-than-temporary impairment. In performing this review, management considers (1) the length of time and extent that fair value has been less than amortized cost, (2) the financial condition and near term prospects of the issuer, (3) the impact of changes in market interest rates on the market value of the security and (4) how to record an impairment by assessing whether the Company intends to sell it or is more likely than not that it will be required to sell a security in an unrealized loss position before the Company recovers the security’s amortized cost. If either of these criteria for (4) is met, the entire difference between amortized cost and fair value is recognized in earnings. Alternatively, if neither of the criteria for (4) are met, the amount of impairment recognized in earnings is limited to the amount related to credit losses, while impairment related to other factors is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. Loans and Leases. Loans and leases that management has the intent and ability to hold for the foreseeable future or until maturity are reported at the principal balance outstanding, net of unearned interest, deferred purchase premiums and discounts, deferred loan and lease origination fees and costs, and an allowance for loan and lease losses. Interest income is accrued on the unpaid principal balance. Premiums and discounts on loans purchased as well as loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method. The Company provides equipment financing to its customers through a variety of lease arrangements. The most common arrangement is a direct financing (capital) lease. For direct financing leases, lease receivables are recorded on the balance sheet but the leased property is not, although the Company generally retains legal title to the leased property until the end of each lease. Direct financing leases are stated at the net amount of minimum lease payments receivable, plus any unguaranteed residual value, less the amount of unearned income and net acquisition discount at the reporting date. Direct lease origination costs are amortized over the life of the lease portfolio. Leases acquired in an acquisition are initially measured and recorded at their fair value on the acquisition date. Purchase discounts or premiums on acquired leases are recognized as an adjustment to interest income over the contractual life of the leases using the effective interest method or taken into income when the related leases are paid off. All equipment financing leases are subject to our allowance for loans and leases. Recognition of interest income on all portfolio segments is generally discontinued at the time the loan or lease is 90 days delinquent unless the loan and lease is well secured and in process of collection. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not received for loans and leases placed on nonaccrual, is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost recovery method, until qualifying for return to accrual status. Loans and leases are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Seasonal fluctuations in the Other loan classification and its associated allowance for loan and lease losses primarily relate to tax season H&R Block-related loan products. These products are generally short term in nature, in that they are intended to be repaid within a few weeks or months of origination; if they are not repaid timely, they are generally charged off in their entirety at 120 days delinquent, consistent with regulatory guidance for unsecured consumer loan products. The Company provides general loan loss reserves for its H&R Block-related loans based upon prior years’ loss experience with consideration for current year loan performance. While they do incur higher proportional default and charge-off rates than the remainder of the Company’s loan and lease portfolio, these asset quality attributes are within expectations of the design of the products. Loans Held for Sale. U.S. government agency (“agency”) loans originated and intended for sale in the secondary market are carried at fair value. Net unrealized gains and losses are recognized through mortgage banking income in the income statement. The Bank sells its mortgage loans with either servicing released or servicing retained depending upon market pricing. Gains and losses on loan sales are recorded as mortgage banking income or other gains on sale, based on the difference between sales proceeds and carrying value. Non-agency loans held for sale are carried at the lower of cost or fair value. 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. Loans that were originated with the intent and ability to hold for the foreseeable future (loans held for investment) but which have been subsequently designated as being held for sale for risk management or liquidity needs are carried at the lower of cost or fair value calculated using pools of loans with similar characteristics. There may be times when loans have been classified as held for sale and cannot be sold. Loans transferred to a long-term investment classification from held-for-sale are transferred at the lower of cost or fair value on the transfer date. Any difference between the carrying amount of the loan and its outstanding principal balance is recognized as an adjustment to yield by the interest method. A loan cannot be classified as a long-term investment unless the Bank has both the ability and the intent to hold the loan for the foreseeable future or until maturity. Allowance for Loan and Lease Losses. The allowance for loan and lease losses is maintained at a level estimated to provide for probable incurred losses in the loan and lease portfolio held for investment. Management determines the adequacy of the allowance based on reviews of individual loans and leases and pools of loans, recent loss experience, current economic conditions, the risk characteristics of the various categories of loans and other pertinent factors. This evaluation is inherently subjective and requires estimates that are susceptible to significant revision as more information becomes available. The allowance is increased by the provision for loan and lease losses, which is charged against current period operating results, and recoveries of loans and leases previously charged-off. The allowance is decreased by the amount of charge-offs of loans and leases deemed uncollectible. Allocations of the allowance may be made for specific loans and leases but the entire allowance is available for any loan or lease that, in management’s judgment, should be charged off. The allowance for loan and lease losses includes general reserves and may include specific reserves. Specific reserves may be provided for impaired loans and leases considered Troubled Debt Restructurings (“TDRs”). All other impaired loans and leases are written down through charge-offs to the fair value of collateral, less estimated selling cost, and no specific or general reserve is provided. A loan or lease is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan or lease agreement. Loans and leases for which terms have been modified resulting in a concession and for which the borrower is experiencing financial difficulties are considered TDRs and classified as impaired. A loan or lease is measured for impairment generally two different ways. If the loan or lease is primarily dependent upon the borrower to make payments, then impairment is calculated by comparing the present value of the expected future payments discounted at the effective loan rate to the carrying value of the loan. If the loan or lease is collateral dependent, the net proceeds from the sale of the collateral is compared to the carrying value of the loan or lease. If the calculated amount is less than the carrying value of the loan or lease, the loan or lease has impairment. A general reserve is included in the allowance for loan and lease losses and is determined by adding the results of a quantitative and a qualitative analysis to all other loans and leases not measured for impairment at the reporting date. The quantitative analysis determines the Bank’s actual annual historic charge-off rates for the previous three fiscal years and applies the average historic rates to the outstanding loan and lease balances in each pool, the product of which is the general reserve amount. The qualitative analysis considers one or more of the following factors: changes in lending policies and procedures, changes in economic conditions, changes in the content of the portfolio, changes in lending management, changes in the volume of delinquency rates, changes to the scope of the loan and lease review system, changes in the underlying collateral of the loans and leases, changes in credit concentrations and any changes in the requirements to the credit loss calculations. A loss rate is estimated and applied to those loans and leases affected by the qualitative factors. The following portfolio segments have been identified: single family secured mortgage, home equity secured mortgage, single family warehouse and other, multi-family secured mortgage, commercial real estate and land secured mortgage, auto secured and recreational vehicles, factoring, commercial and industrial (“C&I”) and other. General loan and lease loss reserves are calculated by grouping each mortgage loan or lease by collateral type and by grouping the LTV ratios of each loan within the collateral type. An estimated allowance rate for each LTV group within each type of loan and lease is multiplied by the total principal amount in the group to calculate the required general reserve attributable to that group. Management uses an allowance rate that provides a larger loss allowance for loans with greater LTV ratios. General loan loss reserves for C&I loans are determined through a loan level grading system to base its projected loss rates. A matrix was created with a base loss rate with additional potential industry and volume risk adjustments, to calculate a loss rating for each deal. Given the lack of historical loss experience for this segment at the Company, an allowance loss range is based upon historical peer loss rates. General loan loss reserves for consumer loans are calculated by grouping each loan by credit score (e.g., FICO) at origination and applying an estimated allowance rate to each group. In addition to credit score grading, general loan loss reserves are increased for all consumer loans determined to be 90 days or more past due. Specific reserves or direct charge-offs are calculated when an internal asset review of a loan or lease identifies a significant adverse change in the financial position of the borrower or the value of the collateral. The specific reserve or direct charge-off is based on discounted cash flows, observable market prices or the estimated value of underlying collateral. Specific loan or lease charge-offs on impaired loans or leases are recorded as a write-off and a decrease to the allowance in the period the impairment is identified. A loan or lease is classified as a TDR when management determines that an existing borrower is in financial distress and the borrower’s loan or lease terms are modified to provide the borrower a financial concession (e.g., lower payment) that would not otherwise be provided by another lender based upon borrower’s current financial condition. TDRs are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a TDR is considered to be a collateral dependent loan or lease, the loan or lease is reported, net, at the fair value of the collateral less cost to sell. For TDRs that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan and lease losses. If the present value of estimated cash flows under the modified terms of a TDR discounted at the original loan or lease effective rate is less than the book value of the loan or lease before the TDR, the excess is specifically allocated to the loan or lease in the allowance for loan and lease losses. Mortgage Servicing Rights. Mortgage servicing assets are recognized when rights are acquired through sale of loans. The Company measures its servicing asset using the fair value method. Under the fair value method, the servicing rights are included in other assets on the consolidated balance sheet at fair value. The changes in fair value are reported in earnings in the period in which the changes occur and the adjustments are included in Non-Interest Income - Mortgage banking income in the consolidated statements of income. Mortgage Banking Derivatives. Commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans are accounted for as free standing derivatives. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the interest on the loan is locked. The Company enters into forward commitments for the future delivery of mortgage loans when interest rate locks are entered into, in order to hedge the change in interest rates resulting from its commitments to fund the loans. Changes in the fair values of these derivatives are included in mortgage banking income. Furniture, Equipment and Software. Fixed asset purchases in excess of five hundred dollars are capitalized and recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which are three to seven years. Leasehold improvements are amortized over the lesser of the assets’ useful lives or the lease term. Furniture, equipment and software are included in the other assets line on the consolidated balance sheet. Income Taxes. Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred income tax assets and liabilities are determined using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is determined based on the tax effects of the temporary differences between the book and tax bases of the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws. The Company records a valuation allowance when management believes it is more likely than not that deferred tax assets will not be realized. An income tax position will be recognized as a benefit only if it is more likely than not that it will be sustained upon IRS examination, based upon its technical merits. Once that status is met, the amount recorded will be the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. The Company adopted ASU 2016-09 effective July 1, 2017. As a result of the adoption, the Company recorded $2.0 million and $2.4 million of income tax benefits for the fiscal year ended June 30, 2019 and June 30, 2018, respectively, related to excess tax benefits from stock compensation. Prior to 2018, such excess tax benefits were generally recorded directly in stockholders’ equity. This accounting standard may potentially increase the volatility in the Company’s effective tax rates. Securities Borrowed and Securities Loaned. Securities borrowed and securities loaned transactions are reported as collateralized financings and recorded at the amount of cash collateral advanced or received. Securities borrowed transactions require the Company to deposit cash with the lender. With respect to securities loaned, the Company receives collateral in the form of cash in an amount in excess of the fair value of securities loaned. The Company monitors the fair value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded, as necessary. Customer, Broker-Dealer and Clearing Receivables and Payables. Customer, broker-dealer and clearing receivables include receivables of the Company’s broker-dealer subsidiaries, which represent amounts due on cash and margin transactions and are generally collateralized by securities owned by clients. These receivables, primarily consisting of floating-rate loans collateralized by customer-owned securities, are charged interest at rates similar to other such loans made throughout the industry. The receivables are reported at their outstanding principal balance net of allowance for doubtful accounts. When a receivable is considered to be impaired, the amount of the impairment is generally measured based on the fair value of the securities acting as collateral, which is measured based on current prices from independent sources, such as listed market prices or broker-dealer price quotations. Securities owned by customers, including those that collateralize margin or other similar transactions, are not reflected in the balance sheet. Also included in these accounts are receivables and payables from brokers and dealers and clearing organizations as well as securities failed to deliver and receive. Business Combinations. Mergers and acquisitions are accounted for in accordance with ASC 805 “Business Combinations” using the acquisition method of accounting. Assets and liabilities acquired and assumed are generally recorded at their fair values as of the date of the transaction. The excess of purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill. Significant estimates and judgments are involved in the fair valuation and purchase price allocation process. Goodwill and Other Intangible Assets. Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Other intangible assets represent purchased assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. Intangible assets that have finite lives, such as core deposit intangibles, are amortized over their estimated useful lives and subject to periodic impairment testing. Intangible assets (other than goodwill) are amortized to expense using accelerated or straight-line methods over their respective estimated useful lives. Goodwill is subject to impairment testing at the reporting unit level, which is conducted at least annually. The Company performs impairment testing during the third quarter of each year or when events or changes in circumstances indicate the assets might be impaired. The Company performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing updated qualitative factors, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it does not have to perform the two-step goodwill impairment test. Determining the fair value of a reporting unit under the first step of the goodwill impairment test and determining the fair value of individual assets and liabilities of a reporting unit under the second step of the goodwill impairment test are judgmental and often involve the use of significant estimates and assumptions. Similarly, estimates and assumptions are used in determining the fair value of other intangible assets. Estimates of fair value are primarily determined using discounted cash flows, market comparisons and recent transactions. These approaches use significant estimates and assumptions including projected future cash flows, discount rates reflecting the market rate of return, projected growth rates and determination and evaluation of appropriate market comparables. Future events could cause the Company to conclude that goodwill or other intangibles have become impaired, which would result in recording an impairment loss. Any resulting impairment loss could have a material adverse impact on the Company’s financial condition and results of operations. 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) by the sum of the weighted-average number of common shares outstanding during the year and the unvested average of participating restricted stock units (“RSU”). 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 Company accounts for unvested stock-based compensation awards containing non-forfeitable rights to dividends or dividend equivalents (collectively, “dividends”) as participating securities and includes the awards in the EPS calculation using the two-class method. The Company has granted restricted stock units under the 2004 Plan to certain directors and employees, which entitle the recipients to receive non-forfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. These unvested awards meet the definition of participating securities. Under the two class method, all earnings (distributed and undistributed) are allocated to each class of common stock and participating securities, based on their respective rights to receive dividends. Under the 2014 Plan, restricted stock units have no shareholder rights, meaning they are not entitled to dividends and are considered nonparticipating. These nonparticipating restricted stock units are not included in the basic earnings per common share calculation and are included in the diluted earnings per common share calculation using the treasury stock method. Stock-Based Compensation. Compensation cost is recognized for stock options and restricted stock unit awards issued to employees, based on the fair value of these awards at the date of grant. A Black–Scholes model is utilized to estimate fair value of the stock options, while market price of the Company’s common stock at the date of grant is used for restricted stock unit awards, except for the Chief Executive Officer’s restricted stock unit awards under an employment agreement effective July 1, 2017. For the Chief Executive Officer’s restricted stock unit awards under an employment agreement effective July 1, 2017, a Monte Carlo simulation is utilized to estimate the value of path-dependent options in order to determine the fair value of the restricted stock unit award. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with only a service condition that have a graded vesting schedule, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. For awards that contain a market condition and have a graded vesting schedule compensation cost is recognized using an accelerated attribution method over the requisite service period for the awards. Stock of Regulatory Agencies. The Bank is a member of the Federal Home Loan Bank (“FHLB”) system. Members are required to own a certain amount of FHLB stock based on the level of borrowings and other factors. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Axos Securities is a member of the Depository Trust & Clearing Corporation (DTCC), a financial services company providing clearing and settlement services to the financial markets. Members are required to own a certain amount of DTCC stock based on the clearing levels and other factors. DTCC stock is carried at fair value, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Cash Surrender Value of Life Insurance. The Bank has purchased life insurance policies on certain key executives. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other amounts due that are probable at settlement. Cash surrender value of life insurance is included in the other assets line on the consolidated balance sheet. Loan Commitments and Related Financial Instruments. Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. The allowance for loan commitments is included in Accounts payable and accrued liabilities and other liabilities and adjustments to the allowance run through provision for loan and lease loses. Comprehensive Income. Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available-for-sale, which are also recognized as separate components of equity. Loss Contingencies. Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are now such matters that will have a material effect on the financial statements. Dividend Restriction. Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to the holding company. As of June 30, 2019, there are no dividend restrictions on the Bank or the Company. Fair Value of Financial Instruments. Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 3. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. Revenue Recognition. On July 1, 2018, the Company adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, and all subsequent amendments using a modified retrospective approach. The implementation of the new standard did not have a material impact on the measurement, timing, or recognition of revenue. Accordingly, no cumulative effect adjustment to opening retained earnings was deemed necessary. Results for reporting periods beginning after July 1, 2018 are presented under Topic 606, while prior period amounts were not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. The core principle of Topic 606 is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard affects all entities that either enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other guidance. Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain non-interest income streams such as gain or loss associated with mortgage servicing rights, financial guarantees, derivatives, and income from bank owned life insurance are also not within the scope of the new guidance. Topic 606 is applicable to non-interest income such as deposit related fees, interchange fees, merchant related income. However, the recognition of these revenue streams did not change significantly upon adoption of Topic 606. Non-interest income considered to be within the scope of Topic 606 is discussed below. Deposit Service Fees. Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), monthly service fees, check orders, and other deposit account related fees. The Company’s performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied and related revenue recognized, when incurred. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts. Fees, Exchange, and Other Service Charges. Fees, exchange, and other service charges are primarily comprised of debit and credit card income, ATM fees, merchant services income, and other service charges. Debit and credit card income is primarily comprised of interchange fees earned whenever the Company’s debit and credit cards are processed through card payment networks such as Visa. ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. Other service charges include revenue from processing wire transfers, bill pay service, cashier’s checks, and other services. The Company’s performance obligation for fees, exchange, and other service charges are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month. Broker dealer clearing fees. The Company earns revenues for executing, settling and clearing securities transactions for other broker-dealers on a fully disclosed basis. Trade execution and clearing services, when provided together, represent a single performance obligation as the services are not separately identifiable in the context of the contract. Revenues associated with combined trade execution and clearing services, as well as trade execution services on a standalone basis, are recognized at a point in time on trade-date. The Company believes that the performance obligation is satisfied on the trade date because that is when the underlying security or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to/from the customer. The Company also earns revenues for custody services which are separately identifiable and represent a distinct performance obligation which is recognized over time as the customer simultaneously receives and consumes the benefits. Certain clearing or custody related fees represent a modification of the original contract as they are distinct services. All trade and execution services are priced at their standalone selling price. Clearing and other fees are generally deducted from the introducing brokers’ commissions on a monthly basis. Bankruptcy Trustee and Fiduciary Service Fees. Bankruptcy Trustee and Fiduciary Service income is primarily comprised of fees earned from the Monthly Basis Point Fee and Bank Account Service Charge. The products and services provided to the Trustee also indirectly provide additional deposits to the other banks. One of the uses of the increased deposits by the other banks is to fund the fees paid. The performance obligation is satisfied when the deposits are increased (or decreased) at the end of each month. The expected value method will be used to calculate and record the estimated revenue at the beginning of each month with a subsequent reconciliation to actual at the end of each month. The following presents non-interest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the periods indicated.
Contract Balances. A contract asset or receivable is recognized if the Company performs a service or transfers a good in advance of receiving consideration. A contract liability is recognized if the Company receives consideration (or has the unconditional right to receive consideration) in advance of performance. As of June 30, 2019, the Company’s contract assets and liabilities were not considered material. Contract Acquisition Costs. The Company uses the practical expedient to expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in less than one year. In adopting the guidance in Topic 606, the Company did not capitalize any contract acquisition costs. Other. Income from bank owned life insurance is accounted for in accordance with ASC 325, Investments - Other. Lending related income includes fees earned from gains or losses on the sale of loans, SBA income, and letter of credit fees. Gains and losses on the sale of loans and SBA income are recognized pursuant to ASC 860, Transfers and Servicing. Fees related to standby letters of credit are accounted for in accordance with ASC 440, Commitments. Net gain or loss on sales / valuations of repossessed and other assets is presented as a component of non-interest expense, but may also be presented as a component of non-interest income in the event that a net gain is recognized. Net gain or loss on sales of repossessed and other assets are accounted for in accordance with ASC 610, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets. New Accounting Pronouncements. Accounting Standards Adopted During Fiscal 2019 In November 2016, the FASB issued ASU 2016-18, Restricted Cash (Topic 326):Restricted Cash. This ASU will amend the guidance in ASC Topic 230, Statement of Cash Flows, and is intended to reduce the diversity in the classification and presentation of changes in restricted cash on the statement of cash flows. The amendments within this ASU will require that the reconciliation of the beginning-of-period and end-of-period cash and cash equivalents amounts shown on the statement of cash flows include restricted cash and restricted cash equivalents. If restricted cash and restricted cash equivalents are presented separately from cash and cash equivalents on the balance sheet, an entity will be required to reconcile the amounts presented on the statement of cash flows to the amounts on the balance sheet. An entity will also be required to disclose information regarding the nature of the restrictions. ASU 2016-18 requires retrospective application and is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with early adoption permitted. The Company adopted this standard on March 31, 2019. The new guidance did not have a significant impact on the Company’s consolidated financial statements at the time of adoption. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is deemed to be a business. Determining whether a transferred set constitutes a business is important because the accounting for a business combination differs from that of an asset acquisition. The definition of a business also affects the accounting for dispositions. Under the new standard, when substantially all of the fair value of assets acquired is concentrated in a single asset, or a group of similar assets, the assets acquired would not represent a business and business combination accounting would not be required. The new standard may result in more transactions being accounted for as asset acquisitions rather than business combinations. The Company adopted this standard on July 1, 2018. The new guidance did not have a significant impact on the Company’s consolidated financial statements at the time of adoption. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment: The objective of this guidance is to simplify an entity’s required test for impairment of goodwill by eliminating Step 2 from the goodwill impairment test. In Step 2 an entity measured a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. In computing the implied fair value of goodwill, an entity had to determine the fair value at the impairment date of its assets and liabilities, including any unrecognized assets and liabilities, following a procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Under this Update, an entity should perform its annual or quarterly goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount and record an impairment charge for the excess of the carrying amount over the reporting unit’s fair value. The loss recognized should not exceed the total amount of goodwill allocated to the reporting unit and the entity must consider the income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. This guidance is effective for a public business entity that is an SEC filer for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The new guidance did not have a significant impact on the Company’s consolidated financial statements at the time of adoption. Accounting Standards Issued But Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases, as amended in July 2018 by ASU 2018-10 Codification Improvements to Topic 842, Leases and ASU 2018-11 Leases (Topic 842): Targeted Improvements. The new standard establishes a right-of-use model that requires a lessee to record a right of use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASUs 2016-02, 2018-10 and 2018-11 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is anticipated for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company has completed its review of contracts and does not expect a material impact on the Company’s consolidated financial statements and regulatory capital and risk-weighted assets or results from operations. In June 2016, the FASB issued ASU 2016-13 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which (i) significantly changes the impairment model for most financial assets that are measured at amortized cost and certain other instruments from an incurred loss model to an expected loss model; and (ii) provides for recording credit losses on available-for-sale debt securities through an allowance account. ASU 2016-13 also requires certain incremental disclosures. ASU 2016-13 should be applied on a modified-retrospective transition approach that would require a cumulative-effect adjustment to the opening retained earnings in the statement of financial condition as of the date of adoption. A prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. The guidance will be effective for the Company’s financial statements that include periods beginning July 1, 2020. The Company has completed the development the of implementation plan and is in the process of model development. The Company expects ASU 2016-13 to have a material impact on the Company’s consolidated financial statements. In March 2017, the FASB issued guidance within ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities. The amendments in ASU 2017-08 to Subtopic 310-20, Receivables-Nonrefundable Fees and Other Costs, shorten the amortization period for certain purchased callable debt securities held at a premium to the earliest call date, which more closely align the amortization period of premiums and discounts to expectations incorporated in market pricing on the underlying securities. Under current GAAP, entities generally amortize the premium as an adjustment of yield over the contractual life of the instrument. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The amendments in this ASU should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The ASU expands and refines hedge accounting for both financial and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The new standard must be adopted using a modified retrospective transition with a cumulative effect adjustment recorded to opening retained earnings as of the initial adoption date. The Company does not anticipate that this guidance will have a material impact on its consolidated financial statements. In June 2018, the FASB issued guidance within ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting. The amendments in ASU 2018-07 to Topic 718, Compensation-Stock Compensation, are intended to align the accounting for share-based payment awards issued to employees and nonemployees. Changes to the accounting for nonemployee awards include: 1) equity classified share-based payment awards issued to nonemployees will now be measured on the grant date, instead of the previous requirement to remeasure the awards through the performance completion date; 2) for performance conditions, compensation cost associated with the award will be recognized when achievement of the performance condition is probable, rather than upon achievement of the performance condition; and 3) the current requirement to reassess the classification (equity or liability) for nonemployee awards upon vesting will be eliminated, except for awards in the form of convertible instruments. The new guidance also clarifies that any share-based payment awards issued to customers should be evaluated under ASC 606, Revenue from Contracts with Customers. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company’s share-based payment awards to nonemployees consist only of grants made to the Company’s nonemployee Directors as compensation solely related to each individual’s role as a nonemployee Director. As such, in accordance with ASC 718, the Company accounts for these share-based payment awards to its nonemployee Directors in the same manner as share-based payment awards for its employees. Accordingly, the amendments in this guidance will not have an effect on the accounting for the Company’s share-based payment awards to its nonemployee Directors. In August 2018, the FASB issued guidance within ASU 2018-13, Fair Value Measurement Disclosure Framework (Topic 820) - Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in ASU 2018-13 require a nonpublic entity to disclose transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities. Public companies are also now required to disclose the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. Under current GAAP, entities are required to disclose a roll forward for Level 3 fair value measurements. The amendments in this ASU related to changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this ASU. The Company does not anticipate that this guidance will have a material impact on its consolidated financial statements. The Company will adopt this standard on July 1, 2019.
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ACQUISITIONS |
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ACQUISITIONS | ACQUISITIONS The Company completed two business acquisitions and two asset acquisitions during the fiscal year ended June 30, 2019 and one business acquisition during the fiscal year ended June 30, 2018. The pro forma results of operations and the results of operations for the acquisitions since the acquisition date have not been separately disclosed because the effects were not material to the consolidated financial statements. The Company has included the financial results of the acquired businesses in its consolidated financial statements subsequent to the acquisition dates. The business acquisitions have been accounted for under the acquisition method of accounting. The assets, both tangible and intangible, were recorded at their estimated fair values as of the transaction date. The Company made significant estimates and exercised judgment in estimating fair values and accounting for such acquired assets and liabilities. The purchase transactions are detailed below. MWABank deposit acquisition. On March 15, 2019, the Bank closed the deposit assumption agreement with MWA Bank and acquired approximately $173 million of deposits, including approximately $151 million of checking, savings and money market accounts and $22 million of time deposits, from MWABank. Axos did not acquire any assets, employees or branches in this transaction. The Bank received cash equal to the book value of the deposit liabilities. WiseBanyan. On February 26, 2019 the Company’s subsidiary, Axos Securities, LLC, had completed the acquisition of WiseBanyan Holding, Inc. and its subsidiaries (collectively “WiseBanyan”). Headquartered in Las Vegas, Nevada, WiseBanyan is a provider of personal financial and investment management services through a proprietary technology platform. WiseBanyan currently serves approximately 24,000 clients with approximately $150 million of assets under management. The Company paid $3.2 million in cash to acquire the assets of WiseBanyan and recorded $2.7 million in intangible assets.The Company purchased the whole WiseBanyan business and has the entire voting interest. Goodwill is not expected to be deducted for tax purposes. COR Securities Holdings. On January 28, 2019 (“Acquisition Date”), Axos Clearing, LLC and Axos Clarity MergeCo., Inc. completed the acquisition of COR Securities Holdings Inc.(“COR Securities”), the parent company of COR Clearing LLC (“COR Clearing”), pursuant to the terms of the Agreement and Plan of Merger, dated as of September 28, 2018 (the “Merger Agreement”). Headquartered in Omaha, Nebraska, COR Clearing is a full-service correspondent clearing firm for independent broker-dealers. Established as a part of Mutual of Omaha Insurance Company and spun off as Legent Clearing in 2002, COR Clearing provides clearing, settlement, custody, and securities and margin lending to more than sixty introducing broker-dealers and 90,000 customers. The total cash consideration of approximately $80.9 million was funded with existing capital. The Company issued subordinated notes totaling $7.5 million to the principal stockholders of COR Securities in an equal principal amount, with a maturity of 15 months, to serve as the sole source of payment of indemnification obligations of the principal stakeholders of COR Securities under the Merger Agreement. The acquisition of COR Securities is being accounted for as a business combination using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration paid are recorded at estimated fair values on the Acquisition Date. The Company recorded goodwill for a provisional amount of $34.9 million and an additional $20.1 million in intangible assets as of the Acquisition Date. The estimated fair values of the acquired assets and assumed liabilities are subject to refinement as additional information relative to closing date fair values becomes available. Any subsequent measurement period adjustments to the fair values of acquired assets and liabilities assumed, identifiable intangible assets, or other purchase accounting adjustments will result in adjustments to goodwill no later than within the first 12 months following the closing date of acquisition. Included in the professional services line of the statement of income the Company recognized $0.4 million in transaction costs. The acquisition will enable the Company to expand its banking business to a new customer base through independent broker-dealers and consumer account relationships, scale entry into wealth management through technology-driven platforms, and increase and diversify fee revenue, all of which will improve key operating metrics. The goodwill recognized results from the expected synergies and potential earnings from this combination. The consideration paid for COR Securities common equity was $88.4 and the provisional fair values of acquired identifiable assets and liabilities assumed as of the Acquisition Date were as follows:
Nationwide Bank deposit acquisition. On November 16, 2018, the Bank completed the acquisition of substantially all of Nationwide Bank’s (“Nationwide”) deposits at the time of closing, adding $2.4 billion in deposits, including $661.4 million in checking, savings and money market accounts and $1.7 billion in time deposit accounts. The Bank received cash for the deposit balances transferred less a premium of $13.5 million, recorded in intangibles, commensurate with the fair market value of the deposits purchased. Bankruptcy trustee and fiduciary services business of Epiq Systems, Inc. On April 4, 2018, the Company completed the acquisition of the bankruptcy trustee and fiduciary services business of Epiq Systems, Inc. (“Epiq”). The assets acquired by the Company include comprehensive software solutions, trustee customer relationships, trade name, accounts receivable and fixed assets. The business provides specialized software and consulting services to Chapter 7 bankruptcy and non-Chapter 7 trustees and fiduciaries in all fifty states. This business is expected to generate fee income from bank partners and bankruptcy cases, as well as opportunities to source low cost deposits. No deposits were acquired as part of the transaction. Under the terms of the purchase agreement, the aggregate purchase price included the payment of $70.0 million in cash. The Company acquired assets with approximate fair values of $32.7 million of intangible assets, including customer relationships, developed technologies, a covenant not to compete and the trade name, and $1.6 million of accounts receivable and fixed assets, resulting in $35.7 million of goodwill. Transaction-related expenses were de minimis. The following table sets forth the approximate fair value of assets acquired from Epiq on the consolidated balance sheets as of April 4, 2018:
The Company recognized goodwill of $35.7 million as of April 4, 2018, which is calculated as the excess of the consideration exchanged as compared to the fair value of identifiable assets acquired. Goodwill resulted from expanded product lines and low-cost funding opportunities and is expected to be deductible for tax purposes. During the fiscal year ended June 30, 2019, the Company settled the working capital with Epiq. See Note 9 to the consolidated financial statements for further information on goodwill and other intangible assets.
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FAIR VALUE |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE | 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 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 standard describes three levels of inputs that may be used to measure fair value:
When available, the Company generally uses quoted market prices to determine fair value. In some cases where a market price is available, the Company will make use of acceptable practical expedients (such as matrix pricing) to calculate fair value, in which case the items are classified in Level 2. The Company considers relevant and observable market prices in its valuations where possible. The frequency of transactions, the size of the bid-ask spread and the nature of the participants are some of the factors the Company uses to help determine whether a market is active and orderly or inactive and not orderly. Price quotes based upon transactions that are not orderly are not considered to be determinative of fair value and are given little, if any, weight in measuring fair value. If quoted market prices are not available, fair value is based upon internally developed valuation techniques that use, where possible, current market-based or independently sourced market parameters, such as interest rates, credit spreads, housing value forecasts, etc. Items valued using such internally generated valuation techniques are classified according to the lowest level input or value driver that is significant to the valuation. Thus, an item may be classified in Level 3 even though there may be some significant inputs that are readily observable. The following section describes the valuation methodologies used by the Company to measure various financial instruments at fair value, including an indication of the level in the fair-value hierarchy in which each instrument is generally classified: Securities—trading and available-for-sale. Trading securities are recorded at fair value. Available-for-sale securities are recorded at fair value and consist of residential mortgage-backed securities (“RMBS”) issued by U.S. agencies, RMBS issued by non-agencies, municipal securities as well as other Non-RMBS securities. Fair value for U.S. agency securities and municipal securities are generally based on quoted market prices of similar securities used to form a dealer quote or a pricing matrix. There continues to be significant illiquidity in the market for RMBS issued by non-agencies, impacting the availability and reliability of transparent pricing. As orderly quoted market prices are not available, the Level 3 fair values for these securities are determined by the Company utilizing industry-standard tools to calculate the net present value of the expected cash flows available to the securities from the underlying mortgage assets. The Company computes Level 3 fair values for each non-agency RMBS in the same manner (as described below) whether available-for-sale or held-to-maturity. To determine the performance of the underlying mortgage loan pools, the Company estimates prepayments, defaults, and loss severities based on a number of macroeconomic factors, including housing price changes, unemployment rates, interest rates and borrower attributes such as credit score and loan documentation at the time of origination. The Company inputs for each security a projection of monthly default rates, loss severity rates and voluntary prepayment rates for the underlying mortgages for the remaining life of the security to determine the expected cash flows. The projections of default rates are derived by the Company from the historic default rate observed in the pool of loans collateralizing the security, increased by and decreased by the forecasted increase or decrease in the national unemployment rate. The projections of loss severity rates are derived by the Company from the historic loss severity rate observed in the pool of loans, increased by or decreased by the forecasted increase or decrease in the national home price appreciation (“HPA”) index. The largest factors influencing the Company’s modeling of the monthly default rate are unemployment and HPA, as a strong correlation exists. The most updated unemployment rate reported in May 2019 was 3.6%. Consensus estimates for unemployment are that the rate will begin to increase. Going forward, the Company is projecting lower monthly default rates. The Company projects that severities will continue to improve. To determine the discount rates used to compute the present value of the expected cash flows for these non-agency RMBS securities, the Company separates the securities by the borrower characteristics in the underlying pool. Specifically, “prime” securities generally have borrowers with higher FICO scores and better documentation of income. “Alt-A” securities generally have borrowers with a lower FICO and less documentation of income. “Pay-option ARMs” are Alt-A securities with borrowers that tend to pay the least amount of principal (or increase their loan balance through negative amortization). The Company calculates separate discount rates for prime, Alt-A and Pay-option ARM non-agency RMBS securities using market-participant assumptions for risk, capital and return on equity. The range of annual default rates used in the Company’s projections at June 30, 2019 are from 1.5% up to 10.2%. The range of loss severity rates applied to each default used in the Company’s projections at June 30, 2019 are from 40.0% up to 68.3% based upon individual bond historical performance. The default rates and the severities are projected for every non-agency RMBS security held by the Company and will vary monthly based upon the actual performance of the security and the macroeconomic factors discussed above. The Company applies its discount rates to the projected monthly cash flows, which already reflect the full impact of all forecasted losses using the assumptions described above. When calculating present value of the expected cash flows at June 30, 2019, the Company computed its discount rates as a spread between 272 and 686 basis points over the LIBOR Index using the LIBOR forward curve. The Bank’s estimate of fair value for non-agency securities using Level 3 pricing is highly subjective and is based on the Bank’s estimate of voluntary prepayments, default rates, severities and discount margins, which are forecasted monthly over the remaining life of each security. Changes in one or more of these assumptions can cause a significant change in the estimated fair value. For further details see the table later in this note that summarizes quantitative information about level 3 fair value measurements. Loans Held for Sale. Loans held for sale at fair value are primarily single-family residential loans. The fair value of residential loans held for sale is determined by pricing for comparable assets or by existing forward sales commitment prices with investors. Impaired Loans and Leases. Impaired loans and leases are loans and leases which are inadequately protected by the current net worth and paying capacity of the borrowers or the collateral pledged. The accrual of interest income has been discontinued for impaired loans and leases. The impaired loans and leases are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. The Company assesses loans and leases individually and identifies impairment when the loan or lease is classified as impaired or has been restructured or management has serious doubts about the future collectibility of principal and interest, even though the loans and leases may currently be performing. The fair value of an impaired loan or lease is determined based on an observable market price or current appraised value of the underlying collateral. The fair value of impaired loans and leases with specific write-offs or allocations of the allowance for loan and lease losses are generally based on recent real estate appraisals or internal valuation analyses consistent with the methodology used in real estate appraisals and include other third-party valuations and analysis of cash flows. These appraisals and analyses are updated at least on an annual basis. The Company primarily obtains real estate appraisals and in the rare cases where an appraisal cannot be obtained, the Company performs an internal valuation analysis. These appraisals and analyses may utilize a single valuation approach or a combination of approaches including comparable sales and income approaches. The sales comparison approach uses at least three recent similar property sales to help determine the fair value of the property being appraised. The income approach is calculated by taking the net operating income generated by the collateral property of the rent collected and dividing it by an assumed capitalization rate. Adjustments are routinely made in the process by the appraisers to account for differences between the comparable sales and income data available. When measuring the fair value of the impaired loan or lease based upon the projected sale of the underlying collateral, the Company subtracts the costs expected to be incurred for the transfer of the underlying collateral, which includes items such as sales commissions, delinquent taxes and insurance premiums. These adjustments to the estimated fair value of nonaccrual loans and leases may result in increases or decreases to the provision for loan and lease losses recorded in current earnings. Such adjustments are typically significant and result in a Level 3 classification for the inputs for determining fair value. Other Real Estate Owned and Repossessed Vehicles. Non-recurring adjustments to certain commercial and residential real estate properties classified as other real estate owned (“OREO”) are measured at the lower of carrying amount or fair value, less costs to sell. Fair values are generally based on third party appraisals of the property, resulting in a Level 3 classification. In cases where the carrying amount exceeds the fair value, less costs to sell, an impairment loss is recognized. Mortgage Servicing Rights. The Company initially records all mortgage servicing rights (“MSRs”) at fair value and accounts for MSRs at fair value during the life of the MSR, with changes in fair value recorded through mortgage banking income in the income statement. Fair value adjustments encompass market-driven valuation changes as well as modeled amortization involving the run-off of value that occurs due to the passage of time as individual loans are paid by borrowers. Market expectations about loan duration, and correspondingly the expected term of future servicing cash flows, may vary from time to time due to changes in expected prepayment activity, especially when interest rates rise or fall. Market expectations of increased loan prepayment speeds may negatively impact the fair value of the single family MSRs. Fair value is also dependent on the discount rate used in calculating present value, which is imputed from observable market activity and market participants and results in Level 3 classification. Management reviews and adjusts the discount rate on an ongoing basis. An increase in the discount rate would reduce the estimated fair value of the MSRs asset. Mortgage Banking Derivatives. In connection with mortgage banking activities, the Company enters into commitments to fund mortgage loans (interest rate locks) and forward sale commitments for the future delivery of these mortgage loans. If interest rates increase, the value of the Company’s interest rate locks are adversely impacted. The Company attempts to economically hedge the risk of the overall change in the fair value of interest rate locks with forward sales commitments. The fair value of interest rate locks is estimated based on changes in mortgage interest rates from the date the interest on the loan is locked, adjusted for items such as estimated fallout and costs to originate the loan. The fair value of forward sale commitments is based upon prices in active secondary markets for identical securities or based on quoted market prices of similar assets used to form a dealer quote or a pricing matrix. If no such quoted price exists, the fair value of a commitment is determined by quoted prices for a similar commitment or commitments, adjusted for the specific attributes of each commitment. The following table sets forth the Company’s financial assets and liabilities measured at fair value on a recurring basis. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:
The following table presents 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:
The table below summarizes the quantitative information about Level 3 fair value measurements as of the dates indicated:
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 changes in unrealized gains and losses and interest income recorded in earnings for Level 3 trading assets and liabilities that are still held at the periods indicated:
The table below summarizes the fair value of assets measured for impairment on a non-recurring basis:
Impaired loans and leases measured for impairment on a non-recurring basis using the fair value of the collateral for collateral-dependent loans have a carrying amount of $48,444 at June 30, 2019 and life to date charge-offs of $3,503. Impaired loans had a related allowance of $422 at June 30, 2019. At June 30, 2018, such impaired loans had a carrying amount of $31,226 and life to date charge-offs of $3,294, and a related allowance of $278. 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 $7,485 after charge-offs of $1,008 at June 30, 2019. Our other real estate owned and foreclosed assets had a net carrying amount was $9,591 after charge-offs of $301 during the year ended June 30, 2018. 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 non-accrual as of June 30, 2019 and June 30, 2018. The aggregate fair value, contractual balance (including accrued interest), and unrealized gain was as follows:
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:
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:
1 For impaired loans and other real estate owned 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.
1 For impaired loans and other real estate owned 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. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amount and estimated fair values of financial instruments at year-end were as follows:
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.
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SECURITIES |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SECURITIES | SECURITIES The amortized cost, carrying amount and fair value for the securities available-for-sale for the following periods were:
1 U.S. government-backed or government sponsored enterprises including Fannie Mae, Freddie Mac and Ginnie Mae. 2 Private sponsors of securities collateralized primarily by pools of 1-4 family residential first mortgages. Primarily super senior securities secured by prime, Alt-A or pay-option ARM mortgages. The Company’s non-agency RMBS available-for-sale portfolio with a total fair value of $13,025 at June 30, 2019 consists of fourteen different issues of super senior securities. During the fiscal year ended June 30, 2018, the Company sold its two mezzanine z-tranche securities for a gain of $153. Debt securities with evidence of credit quality deterioration since issuance and for which it is probable at purchase that the Company will be unable to collect all of the par value of the security are accounted for under ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (“ASC Topic 310-30”). Under ASC Topic 310-30, the excess of cash flows expected at acquisition over the purchase price is referred to as the accretable yield and is recognized in interest income over the remaining life of the security. During the fiscal year ended June 30, 2018, the Company sold its one senior support security for a loss of $861. The face amounts of debt securities available-for-sale that were pledged to secure borrowings at June 30, 2019 and 2018 were $3,555 and $2,540 respectively. 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:
There were twenty-one securities that were in a continuous loss position at June 30, 2019 for a period of more than 12 months. There were three securities that were in a continuous loss position at June 30, 2019 for a period of less than 12 months. There were twenty-six securities that were in a continuous loss position at June 30, 2018 for a period of more than 12 months. There were eleven securities that were in a continuous loss position at June 30, 2018 for a period of less than 12 months. The following table summarizes amounts of anticipated credit loss recognized in the income statement through other-than-temporary impairment charges, which reduced non-interest income:
At June 30, 2019, one non-agency RMBS with a total carrying amount of $3,143 was determined to have cumulative credit losses of $821. Cumulative credit losses of $1,964 were recognized in earnings during fiscal 2017, $156 was recognized in earnings during fiscal 2018 and $821 was recognized in earnings through other-than-temporary impairment, during fiscal 2019. The Company measures its non-agency RMBS in an unrealized loss position at the end of the reporting period for other-than-temporary impairment by comparing the present value of the cash flows currently expected to be collected from the security with its amortized cost basis. If the calculated present value is lower than the amortized cost, the difference is the credit component of other-than-temporary impairment of its debt securities. The excess of present value over the fair value of the security, if any, is the noncredit component of the other-than-temporary impairment. If the Company does not intend to sell the security and will not be required to sell the security before recovery of its amortized cost basis, the credit component of other-than-temporary impairment is recorded as a loss in earnings and the noncredit component of other-than-temporary impairment is recorded in comprehensive income, net of the related income tax benefit. If the Company does not intend to hold the security, or will be required to sell the security prior to a recovery of the amortized cost basis of the security, the credit component and noncredit component of the other-than-temporary impairment is recorded as a loss in earnings. To determine the cash flows expected to be collected and to calculate the present value for purposes of testing for other-than-temporary impairment, the Company utilizes the same industry-standard tool and the same cash flows as those calculated for Level 3 fair values as discussed in Note 3 – Fair Value. The discount rates used to compute the present value of the expected cash flows for purposes of testing for the credit component of the other-than-temporary impairment are either the implicit rate calculated in each of the Company’s securities at acquisition or the last accounting yield. The Company calculates the implicit rate at acquisition based on the contractual terms of the security, considering scheduled payments (and minimum payments in the case of pay-option ARMs) without prepayment assumptions. Once the discount rate (or discount margin in the case of floating rate securities) is calculated as described above, the discount is used in the industry-standard model to calculate the present value of the cash flows. During the fiscal year ended June 30, 2018, total proceeds of $8,700 and net realized gains of $282 were realized from the sale of two trading securities with a carrying value of $8,327. During the fiscal year ended June 30, 2019, the company sold six available-for-sale securities with a carrying value of $15,131 resulting in a $709 gain. The gross gains and losses realized through earnings upon the sale of available-for-sale securities were as follows:
The Company records unrealized gains and unrealized losses in accumulated other comprehensive loss as follows:
The expected maturity distribution of the Company’s mortgage-backed securities and the contractual maturity distribution of the Company’s Non-RMBS securities:
1 Residential mortgage-backed security (RMBS) distributions include impact of expected prepayments and other timing factors.
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LOANS, LEASES & ALLOWANCE FOR LOAN AND LEASE LOSSES |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOANS, LEASES & ALLOWANCE FOR LOAN AND LEASE LOSSES | LOANS, LEASES & ALLOWANCE FOR LOAN AND LEASE LOSSES For the Company’s single family, commercial and multifamily loans, the allowance methodology takes into consideration the risk that the original borrower information may have adversely changed in two ways. First, in calculating the quantitative factor for the Company’s general loan and lease loss allowance, the actual loss experience is tracked and stratified by original LTV and year of origination. As a result, the Company uses relatively higher loss rates across the LTV bands for loans originated and purchased in years 2005 through 2008 compared to the same LTV ranges for loans originated before 2005 or after 2008. Second, the Company uses a number of qualitative factors to reflect additional risk. One qualitative loss factor is real estate valuation risk which is applied to each LTV band primarily based upon the year the real estate loan was originated or purchased. Based upon price appreciation indices, multifamily property values in years 2005 through 2008 experienced significant declines. As a result, the Company applies a relatively higher qualitative loss factor rate across the LTV bands for loans originated and purchased in years 2005 through 2008 compared to the same LTV ranges for loans originated or purchased before 2005 or after 2008. Lastly, the Company separates its allowance for loan and lease losses into loans originated and purchased categories in order to reflect the additional risk associated with purchased loans. For the Company’s home equity loans, the allowance methodology takes into consideration the risk that the original borrower information may have adversely changed in two ways. First, in calculating the quantitative factor for the Company’s general loan loss allowance, the actual loss experience is tracked and stratified by original combined LTV (“CLTV”) of the first and second liens. As a result, the Company allocates higher loss rates in proportion to the greater the CLTV. Second, the Company uses a number of qualitative factors to reflect additional risk. The Company does not have any individual purchased home equity loans in its portfolio and given the limited time frame under which the Company originated home equity loans, 2006-2009, no additional risk allocation is used. For the Company’s single family – warehouse lines, the allowance methodology takes into consideration the structure of these loans, as they remain in the portfolio for a short period (usually less than a month) and have higher credit protection allocated compared to traditional single family originations. A matrix was created to reflect most current operating levels of capital and line usage, which calculates a loss rating to assign to each originator. For the Company’s factoring loans, the allowance methodology takes into consideration the credit quality of the insurance company or state. The Company obtains credit ratings for these entities through agencies such as A.M. Best and allocates an allowance allocation based on these ratings. For the Company’s C&I leveraged loans, equipment finance leases and bridge loans, the allowance methodology incorporates a loan level grading system, which generally aligns with the credit rating. Industry loss rates are applied to determine the loss allowance for each of these loans based upon their internal grading. The credit rating incorporates multiple borrower attributes including, but not limited to, underlying collateral and pledged assets, income generated by the property or assets, borrower’s liquidity and access to liquid funds, strength of the borrower’s industry, stability of the borrower’s market, the size of the company, collateral diversity, facility exit strategies and borrower guarantees. Equipment direct finance leases are derecognized from the balance sheet and the net investment in the lease is recorded. This net investment is the sum of the present value of future lease payments and any unguaranteed residual value. Interest income is recorded using the effective interest rate of the lease. For the Company’s automobile (“auto”) and recreational vehicle (“RV”) loan portfolio, the allowance methodology takes into consideration potential adverse changes to the borrower’s financial condition since time of origination. The general loan loss reserves for auto and RV are stratified based upon borrower FICO scores. First, to account for potential deterioration of borrower’s credit history since time of origination, due to downturn in the economy or other factors, the Company uses the origination FICO scores to drive the allowance on a semi-annual basis. The Company believes that current borrower credit history is a better predictor of potential loss than that was used at time of origination. Second, the Company uses qualitative factors such as; changes in the economy, volume, and changes in the underlying collateral to capture additional risk when finalizing its calculation of the allowance for loan and lease losses. Loan and lease segment risk characteristics. The Company considers its loan and lease classes to be the same as its loan and lease segments. The following are loan and lease segment risk characteristics of the Company’s loan and lease portfolio: Single family mortgage secured. The Company originates both fixed-rate and adjustable-rate loans secured by one-to-four family residences located in the U.S. The Company’s lending policies generally limit the maximum LTV ratio on one-to-four family loans to 80% of the lesser of the appraised value or the purchase price, plus pledged collateral. Terms of maturity typically range from 15 to 30 years. The Company attempts to mitigate residential lending risks by adhering to its underwriting policies in evaluating the collateral and the credit-worthiness of the borrower. Home equity. The Company also originates home equity lines of credit and second mortgage loans. Home equity lines of credit and second mortgage loans have a greater credit risk than one-to-four family residential mortgage loans because they are secured by mortgages subordinated to the existing first mortgage on the property, which may or may not be held by the Company. The Company attempts to mitigate residential lending risks by adhering to its underwriting policies in evaluating the collateral and the credit-worthiness of the borrower. Warehouse and other. Single family warehouse loans consist of short-term, secured advances to mortgage bankers on a revolving basis. These facilities enable the mortgage originators to close loans in their own names and temporarily finance inventories of closed mortgage loans until they can be sold to an approved investor. Commercial specialty and lender finance loans secured by single family real estate are originated to businesses secured by first liens on single family mortgage loans. These loans are generally collateralized by single family mortgage loans that are secured by first liens on single family real estate. The Company attempts to mitigate residential lending risks by adhering to its underwriting policies in evaluating the collateral and the credit-worthiness of the borrower. Multifamily. The Company originates loans secured by multifamily real estate (more than four units). These loans involve a greater degree of risk than one-to-four family residential mortgage loans as these loans are usually greater in amount, dependent on the cash flow capacity of the project, and may be more difficult to evaluate and monitor. Repayment of loans secured by multifamily properties frequently depends on the successful operation and management of the properties. Consequently, repayment of such loans may be affected by adverse conditions in the real estate market or economy. The Company attempts to mitigate these risks by thoroughly evaluating the global financial condition of the borrower, the management experience of the borrower, and the quality of the collateral property securing the loan. Commercial real estate. The Company originates loans across the U.S. secured by small commercial real estate properties. These are primarily cash flow loans that share characteristics of both real estate and commercial business loans. The primary source of repayment is frequently cash flow from the operation of the collateral property and secondarily through liquidation of the collateral. These loans are generally higher risk than other classifications of loans in that they typically involve higher loan amounts, are dependent on the management experience of the owners, and may be adversely affected by conditions in the real estate market or the economy. Owner-occupied commercial real estate loans are generally of lower credit risk than non-owner occupied commercial real estate loans as the borrowers’ businesses are likely dependent on the properties. Underwriting for these loans is primarily dependent on the repayment capacity derived from the operation of the occupying business rather than rents paid by third parties. The Company attempts to mitigate these risks by generally limiting the maximum LTV ratio to 65%-80%, depending on property type, and scrutinizing the financial condition of the borrower, the quality of the collateral and the management of the property securing the loan. Auto and RV. Auto and RV loans primarily consist of direct and indirect auto loans and legacy RV loans. These auto and RV loans were originated across the U.S. The collateral for these auto and RV loans is comprised of a mix of new and used autos and RVs. Auto and RV loans generally have shorter terms to maturity than mortgage loans. Auto and RV loans generally involve a greater degree of risk than do residential mortgage loans, particularly in the case of auto and RV loans, which are secured by rapidly depreciating and mobile assets. In such cases, any repossessed collateral for a defaulted auto and RV loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation. The Company attempts to mitigate these risks by adhering to its underwriting policies in evaluating the credit-worthiness of the borrower. Factoring. Factoring loans are originated through the wholesale and retail purchase of state lottery prize and structured settlement annuities. These annuities are high credit quality deferred payment receivables having a state lottery commission or primarily highly rated insurance company payor. Purchases of state lottery prize or structured settlement annuities are governed by specific state statutes requiring judicial approval of each transaction. No transaction is funded before an order approving such transaction has been entered by a court of competent jurisdiction. The Company’s commission-based sales force originates contracts for the retail purchase of such payments from leads generated by the Company’s dedicated research department through the use of proprietary research techniques. The Company attempts to mitigate these risks by adhering to its underwriting policies in evaluating the credit-worthiness of the state or insurer. Commercial and industrial. Commercial and industrial loans and leases are primarily made based on the operating cash flows of the borrower or conversion of working capital assets to cash and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers may be volatile and the value of the collateral securing these loans and leases may be difficult to measure. Most commercial and industrial loans and leases are secured by the assets being financed or other business assets such as accounts receivable or inventory and generally include personal guarantees based on a review of personal financial statements. Although commercial and industrial loans and leases are often collateralized by equipment, inventory, accounts receivable or other business assets, the liquidation of collateral in the event of a borrower default may be an insufficient source of repayment, because accounts receivable may be uncollectible and inventories and equipment may be obsolete or of limited use. Accordingly, the repayment of a commercial and industrial loan or lease primarily depends on the credit-worthiness of the borrower and guarantors, while the liquidation of collateral is a secondary and potentially insufficient source of repayment. The Company attempts to mitigate these risks by adhering to its underwriting policies in evaluating the management of the business and the credit-worthiness of borrowers and guarantors. Other. The Company originates other loans, which include unsecured consumer loans and other small balance business and consumer loans. Other consumer loans generally have shorter terms to maturity than mortgage loans. Other consumer loans generally involve a greater degree of risk than do residential mortgage loans, particularly in the case of consumer loans that are unsecured. In such cases, it is not possible to repossess collateral for a defaulted consumer loan and as such there may not exist an adequate source of repayment of the outstanding loan balance as a result of the absence of security. The Company attempts to mitigate these risks by adhering to its underwriting policies in evaluating the credit-worthiness of the borrower. The following table sets forth the composition of the loan and lease portfolio as of the dates indicated:
1 The balance of single family warehouse loans was $301,999 at June 30, 2019 and $175,508 at June 30, 2018. The remainder of the balance was attributable to commercial specialty and lender finance loans secured by single family real estate. The following table summarizes activity in the allowance for loan and lease losses for the periods indicated:
Loans loans held for investment transfered to loans held for sale classification are carried at the lower of cost or fair value. At the time of transfer into the held for sale classification, any amount by which cost exceeds fair value is accounted for as a charge against the allowance for loan and lease losses, shown in the transfers to held for sale in the table above. The following table summarizes the composition of the impaired loans and leases:
At June 30, 2019, the carrying value of impaired loans and leases is net of write offs of $2,415. At June 30, 2019, $48,444 of impaired loans and leases had no specific allowance allocations. The average carrying value of impaired loans and leases was $39,468 and $30,420 for the fiscal years ended June 30, 2019 and 2018, respectively. The interest income recognized during the periods of impairment is insignificant for those loans and leases impaired at June 30, 2019 or 2018. At June 30, 2019 and 2018, there were no loans or leases still accruing past due 90 days or more, unless the Company received principal and interest from the servicer despite the borrower’s delinquency. Cash receipts for loans and leases impaired is recorded against principal. The Company considers the servicer’s recovery of such advances in evaluating whether such loans should continue to accrue. A loan or lease is considered impaired when, based on current information and events, it is probable that we will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan or lease agreement. Factors that we consider in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans or leases that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan or lease’s effective interest rate or the fair value of the collateral if repayment of the loan or lease is expected from the sale of collateral. 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 was one refinanced related party loan in the amount of $1,306 during the fiscal year ended June 30, 2019. During the fiscal year 2018, the Company originated no new related party loans and did not execute any interest rate modifications of existing loans. Total principal payments on related party loans were $461 and $341 during the years ended June 30, 2019 and 2018, respectively. At June 30, 2019 and 2018, these loans amounted to $13,342 and $8,956, respectively, and are included in loans held for investment. Interest earned on these loans was $326 and $81 during the years ended June 30, 2019 and 2018, respectively. The Company’s loan and lease portfolio consists of approximately 11.7% fixed interest rate loans and 88.3% adjustable interest rate loans as of June 30, 2019. The Company’s adjustable rate loans are generally based upon indices using U.S. Treasury rates, LIBOR and Eleventh District Cost of Funds. At June 30, 2019 and 2018, purchased loans serviced by others were $57,667 or 0.61% and $64,536 or 0.76% respectively, of the loan portfolio. Allowance for Loan and Lease Losses. The Company is committed to maintaining the allowance for loan and lease losses at a level that is considered to be commensurate with estimated probable incurred credit losses in the portfolio. Although the adequacy of the allowance is reviewed quarterly, management performs an ongoing assessment of the risks inherent in the portfolio. While the Company believes that the allowance for loan and lease losses is adequate at June 30, 2019, future additions to the allowance will be subject to continuing evaluation of estimated and known, as well as inherent, risks in the loan and lease portfolio. Allowance for Credit Loss Disclosures. The assessment of the adequacy of the Company’s allowance for loan and lease losses is based upon a number of quantitative and qualitative factors, including levels and trends of past due and nonaccrual loans, changes in the volume and mix of loans, collateral values and charge-off history. Based on historical performance, the Company divides the LTV analysis into two classes, separating purchased loans from the loans underwritten directly by the Company since mortgage loans originated by the Company experience lower estimated loss rates. The Company provides general loan loss reserves for its auto and RV loans based upon the borrower’s credit score at the time of origination and the Company’s loss experience to date. The Company obtains updated credit scores for its auto and RV borrowers approximately every six months. The updated credit score will result in a higher or lower general loan loss allowance depending on the change in borrowers’ FICO scores and the resulting shift in loan balances among the five FICO bands from which the Company measures and calculates its reserves. For the general loss reserve, the Company does not use individually updated credit scores or valuations for the real estate collateralizing its real estate loans. The allowance for loan and lease losses for the auto and RV loan portfolio at June 30, 2019 was determined by classifying each outstanding loan according to the original FICO score and providing loss rates. The Company provides general loan loss reserves for mortgage loans based upon the size and class of the mortgage loan and the LTV at date of origination. The allowance for each class is determined by dividing the outstanding unpaid balance for each loan by the LTV and applying a loss rate. The Company originates and purchases mortgage loans with terms that may include repayments that are less than the repayments for fully amortizing loans, including interest only loans, option adjustable-rate mortgages, and other loan types that permit payments that may be smaller than interest accruals. The Companies 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 payment, not the interest only payment. The Company’s Credit Committee 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 June 30, 2019, the Company had $1.3 billion of interest only loans and $1.6 million of option adjustable-rate mortgage loans. Through June 30, 2019, the net amount of deferred interest on these loan types was not material to the financial position or operating results of the Company. The Company’s commercial real estate secured portfolio consists of loans well collateralized by commercial real estate. The Company’s commercial and industrial portfolio primarily consists of real estate-backed and asset-backed loans and leases to businesses and non-bank lenders. The Company’s other portfolios consist of receivables factoring for businesses and consumers and other small balance business and consumer loans. The Company allocates its allowance for loan and lease losses for these asset types based on qualitative factors which consider various attributes captured in the credit rating, the value of the collateral and the financial position of the issuer of the receivables. The following tables summarize activity in the allowance for loan and lease losses by portfolio classes for the periods indicated:
The following tables present our loans and leases evaluated individually for impairment by portfolio class for the periods indicated:
1 Impaired loans with an allowance recorded do not have any charge-offs. Principal balance adjustments on impaired loans with an allowance recorded represent interest payments that have been applied to the book balance as a result of the loans’ non-accrual status. The following tables present the balance in the allowance for loan and lease losses and the recorded investment in loans and leases by portfolio segment and based on impairment evaluation method:
1 Loans and leases evaluated for impairment include TDRs that have been performing for more than six months.
1 Loans and leases evaluated for impairment include TDRs that have been performing for more than six months. Credit Quality Disclosure. Nonaccrual loans and leases consisted of the following as of the dates indicated:
Approximately 1.29% of our nonaccrual loans and leases at June 30, 2019 were considered TDRs, compared to 3.30% at June 30, 2018. Borrowers who 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 and lease category to performing and return to accrual status. Approximately 94.97% of the Bank’s nonaccrual loans and leases are single family first mortgages already written down to 44.94% in aggregate, of the original appraisal value of the underlying properties. The following tables provide the outstanding unpaid balance of loans and leases that are performing and nonaccrual by portfolio class as of the dates indicated:
Interest recognized on performing loans temporarily modified as TDRs was $0, $0, and $7 for the years ended June 30, 2019, 2018 and 2017 respectively. The average balances of performing TDRs and nonaccrual loans was $0 and $39,468 for the year ended June 30, 2019, $0 and $30,420 for the year ended June 30, 2018 and $125 and $34,154 for the year ended June 30, 2017, respectively. The Company had no TDRs classified as performing loans at June 30, 2019 or 2018. Credit Quality Indicators. The Company categorizes loans and leases into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans and leases individually by classifying the loans and leases as to credit risk. The Company uses the following definitions for risk ratings. Pass. Loans and leases classified as pass are well protected by the current net worth and paying capacity of the obligor or by the fair value, less cost to acquire and sell, of any underlying collateral in a timely manner. Special Mention. Loans and leases classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or lease or of the institution’s credit position at some future date. Substandard. Loans and leases classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans and leases so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful. Loans and leases classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The Company reviews and grades loans and leases following a continuous loan and lease review process, featuring coverage of all loan and lease types and business lines at least quarterly. Continuous reviewing provides more effective risk monitoring because it immediately tests for potential impacts caused by changes in personnel, policy, products or underwriting standards. The following tables present the composition of our loan and lease portfolio by credit quality indicator as of the dates indicated:
1 The $56.7 million included in the substandard column for Warehouse and other single family real estate secured category consists of a single loan, which was fully repaid in July 2019.
The Company considers the performance of the loan and lease portfolio and its impact on the allowance for loan and lease losses. 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 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:
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OFFSETTING OF SECURITIES FINANCING AGREEMENTS |
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Offsetting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OFFSETTING OF SECURITIES FINANCING AGREEMENTS | OFFSETTING OF SECURITIES FINANCING AGREEMENTS The Company enters into securities borrowed and securities loaned transactions. The Company executes these transactions to facilitate customer match-book activity, cover short positions and customer securities lending. The Company manages credit exposure from certain transactions by entering into master securities lending agreements. The relevant agreements allow for the efficient closeout of transactions, liquidation and set-off of collateral against the net amount owed by the counterparty following a default. Default events generally include, among other things, failure to pay, insolvency or bankruptcy of a counterparty. The following table presents information about the offsetting of these instruments and related collateral amounts as of June 30, 2019:
The securities loaned transactions represent equities with an overnight and open maturity classification.
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CUSTOMER, BROKER-DEALER AND CLEARING RECEIVABLES AND PAYABLES |
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Brokers and Dealers [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CUSTOMER, BROKER-DEALER AND CLEARING RECEIVABLES AND PAYABLES | CUSTOMER, BROKER-DEALER AND CLEARING RECEIVABLES AND PAYABLES Customer, broker-dealer and clearing receivables and payables consisted of the following at June 30, 2019:
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FURNITURE, EQUIPMENT AND SOFTWARE |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FURNITURE, EQUIPMENT AND SOFTWARE | FURNITURE, EQUIPMENT AND SOFTWARE A summary of the cost and accumulated depreciation and amortization for leasehold improvements, furniture, equipment and software is as follows:
1Furniture, equipment and software are included in the other assets line on the consolidated balance sheet. Depreciation and amortization expense in respect of leasehold improvements, furniture, equipment and software for the years ended June 30, 2019, 2018 and 2017 was $11,667, $7,923 and $6,094, respectively.
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GOODWILL AND INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The Company’s goodwill of $71.2 million as of June 30, 2019 increased from the $35.7 million at June 30, 2018 as a result of the acquisition of COR Clearing, which is a full-service correspondent clearing firm for introducing broker-dealers. Company recorded goodwill on April 4, 2018 incident to its acquisition of the bankruptcy trustee and fiduciary services business of Epiq. Management has evaluated and continues to monitor all key factors impacting the carrying value of the Company’s recorded goodwill and long-lived assets. Adverse changes in the Company’s actual or expected operating results, market capitalization, business climate, economic factors or other negative events that may be outside the control of management could result in material non-cash impairment charges in the future. The following table summarizes the activity in the Company’s goodwill balance as of the dates indicated:
The Company’s acquired intangible assets are summarized as follows as of the dates indicated:
The weighted-average useful lives of intangible assets at the time of acquisition were as follows:
The amortization expense for intangible assets that are subject to amortization was $4,803 for the year ended June 30, 2019. Each intangible asset subject to amortization is amortized using the straight-line method over the estimated useful life of the asset. Estimated future amortization expense related to finite-lived intangible assets at June 30, 2019 is as follows:
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DEPOSITS |
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Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEPOSITS | DEPOSITS Deposit accounts are summarized as follows:
1 Based on weighted-average stated interest rates at end of period. 2 The total interest-bearing includes brokered deposits of $1,124.0 million and $2,055.9 million as of June 30, 2019 and June 30, 2018, respectively, of which $796.7 million and $1,692.8 million, respectively, are time deposits classified as $250 and under. The scheduled maturities of time deposits are as follows:
At June 30, 2019 and 2018, the Company had deposits from certain executive officers, directors and their affiliates in the amount of $5,623 and $4,964, respectively.
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ADVANCES FROM THE FEDERAL HOME LOAN BANK |
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Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ADVANCES FROM THE FEDERAL HOME LOAN BANK | ADVANCES FROM THE FEDERAL HOME LOAN BANK At June 30, 2019 and 2018, the Company’s fixed-rate FHLB advances had interest rates that ranged from 1.36% to 2.89% with a weighted average of 2.39% and ranged from 1.36% to 3.32% with a weighted average of 2.14%, respectively. Fixed-rate advances from FHLB are scheduled to mature as follows:
1. Within one year category includes of term advances of $231,000 and $147,500 at June 30, 2019 and 2018, respectively. The Company’s advances from the FHLB were collateralized by certain real estate loans with an aggregate unpaid balance of $4,684,088 and $4,687,166 at June 30, 2019 and 2018, respectively, by the Company’s investment in capital stock of the FHLB of San Francisco and by its investment in mortgage-backed securities. Generally, each advance carries a prepayment penalty and is payable in full at its maturity date. The maximum amounts advanced at any month-end during the period from the FHLB were $3,424,000, $2,240,000, and $1,317,000 during the years ended June 30, 2019, 2018, and 2017, respectively. At June 30, 2019, the Company had $1,952,094 available immediately and $350 available with additional collateral for advances from the FHLB for terms up to ten years.
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BORROWINGS, SUBORDINATED NOTES AND DEBENTURES |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BORROWINGS, SUBORDINATED NOTES AND DEBENTURES | BORROWINGS, SUBORDINATED NOTES AND DEBENTURES The following table sets forth the composition of the borrowings, subordinated notes and debentures as of the dates indicated:
Borrowings from other banks. Axos Clearing has a total of $155.0 million uncommitted secured lines of credit available for borrowing as needed. As of June 30, 2019, there was $106.8 million outstanding. These credit facilities bear interest at rates based on the Federal Funds rate and are due upon demand. The weighted average interest rate on the borrowings at June 30, 2019 was 3.84%. Axos Clearing has a $35.0 million committed unsecured line of credit available for limited purpose borrowing. As of June 30, 2019, there was $0.0 million outstanding. This credit facility bears interest at rates based on the Federal Funds rate and are due upon demand. The unsecured line of credit requires Axos Clearing operate in accordance of specific covenants surrounding capital and debt ratios. Axos Clearing was in compliance of all covenants as of June 30, 2019. Subordinated Loans. The Company issued subordinated notes totaling $7.5 million on January 28, 2019, to the principal stockholders of COR Securities in an equal principal amount, with a maturity of 15 months, to serve as the sole source of payment of indemnification obligations of the principal stakeholders of COR Securities under the Merger Agreement. Interest accrues at a rate of 6.25% per annum. During the three months ended June 30, 2019, $0.1 million of subordinated loans were repaid. Subordinated Notes. In March 2016, the Company completed the sale of $51,000 aggregate principal amount of its 6.25% Subordinated Notes due February 28, 2026 (the “Notes”). The Company received $51,000 in gross proceeds as a part of this transaction, before the 3.15% underwriting discount and other offering expenses. The Notes mature on February 28, 2026 and accrue interest at a rate of 6.25% per annum, with interest payable quarterly. The Notes may be redeemed on or after March 31, 2021, 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. Junior Subordinated Debentures. On December 13, 2004, the Company entered into an agreement to form an unconsolidated trust which issued $5,000 of trust preferred securities in a transaction that closed on December 16, 2004. The net proceeds from the offering were used to purchase $5,155 of junior subordinated debentures (“Debentures”) of the Company with a stated maturity date of February 23, 2035. The Debentures are the sole assets of the trust. The trust preferred securities are mandatorily redeemable upon maturity, or upon earlier redemption as provided in the indenture. The Company has the right to redeem the Debentures in whole (but not in part) on or after specific dates, at a redemption price specified in the indenture plus any accrued but unpaid interest through the redemption date. Interest accrues at the rate of three-month LIBOR plus 2.4% for a rate of 4.92% as of June 30, 2019, with interest paid quarterly starting February 16, 2005. The Bank has the ability to borrow short-term from the Federal Reserve Bank Discount Window. At June 30, 2019 and 2018 there were no amounts outstanding and the available borrowings from this source were $1,601,962 and $917,017, respectively. The 2019 available borrowings would be collateralized by residential real estate loans, certain C&I loans. The Bank has additional unencumbered collateral that could be pledged to the Federal Reserve Bank Discount Window to increase borrowing liquidity. The Bank has federal funds lines of credit with two major banks totaling $35,000. At June 30, 2019 and 2018 the Bank had no outstanding balances on these lines.
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INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES The provision for income taxes is as follows:
The differences between the statutory federal income tax rate and the effective tax rates are summarized as follows:
The components of the net deferred tax asset are as follows:
1Net deferred tax asset is included in the other assets line on the consolidated balance sheet. The Company establishes a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of June 30, 2019 and 2018, the Company believes that it will have sufficient earnings to realize its deferred tax asset and has not provided an allowance. The following is a reconciliation of the beginning and ending amount of unrecognized tax positions for the periods presented:
The Company is subject to federal income tax and income tax of state taxing authorities. The Company’s federal income tax returns for the years ended June 30, 2016, 2017, and 2018 and its state taxing authorities income tax returns for the years ended June 30, 2015, 2016, 2017 and 2018 are open to audit under the statutes of limitations by the Internal Revenue Service and state taxing authorities. As a result of legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) that was enacted on December 22, 2017, during the quarter ended December 31, 2017, the Company revised its estimated annual effective rate to reflect a change in the federal statutory rate from 35.0% to 21.0%. The Tax Act makes broad and complex changes to the U.S. tax code that affect the Company’s fiscal year ended June 30, 2018, including reducing the U.S. federal corporate statutory tax rate to 21.0% beginning January 1, 2018, which results in a blended federal corporate statutory tax rate of 28.1% for the Company’s fiscal year ended June 30, 2018 that is based on the applicable tax rates before and after the Tax Act and the number of days in the fiscal year. During the quarter ended December 31, 2017, the Company revalued the deferred tax balance to reflect the new corporate tax rate, which resulted in a decrease in net deferred tax assets of $9,189. As a result, income tax expense reported for the fiscal year ended June 30, 2018 was adjusted to reflect the effects of the change in the tax law and the application of the newly enacted rates to existing deferred balances. During the quarter ended March 31, 2019 the Company acquired COR Securities Holdings. The Company recognized a deferred tax liability of $2.2 million. The ending COR Securities Holding deferred tax liability for the quarter ended June 30, 2019 has been updated to reflect activity since the acquisition. Additionally, the Company received tax credits for the year ended June 30, 2019. These tax credits reduced the effective tax rate by approximately 1.55%.
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STOCKHOLDERS' EQUITY |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Common Stock. Changes in common stock issued and outstanding were as follows:
Common Stock Repurchases. On March 17, 2016, the Board of Directors of the Company, authorized a program to repurchase up to $100 million of common stock. The new share repurchase authorization replaces the previous share repurchase plan approved on July 5, 2005. 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 of Directors of the Company. As of June 30, 2019, the Company has repurchased a total of $91.6 million, or 3,242,843 common shares at an average price of $28.25 per share with $8.4 million remaining under the current board authorized stock repurchase program. The Company accounts for treasury stock using the cost method as a reduction of shareholders’ equity in the accompanying consolidated financial statements. On August 2, 2019, the Board of Directors of the Company authorized an additional program to repurchase up to $100 million of AX common stock. This share repurchase authorization is in addition to the existing share repurchase plan and has similar characteristics. Preferred Stock. On October 28, 2003, the Company commenced a private placement of Series A-6% Cumulative Nonparticipating Perpetual Preferred Stock (the “Series A preferred stock”). The Series A preferred stock pays a six percent (6%) per annum cumulative dividend payable quarterly and the Company’s right to redeem some or all of the remaining 515 shares at $10,000 face value outstanding shares. During the fiscal year ended June 30, 2004, the Company issued $6,750 of Series A preferred stock, convertible through January 1, 2009, representing 675 shares at $10,000 face value, less issuance costs of $113. Before the expiration of the conversion right, holders of the Series A converted 160 shares of Series A preferred to common stock. The Company has declared dividends to holders of its Series A preferred stock totaling $309 for each of the years ended June 30, 2019, 2018, and 2017, respectively.
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STOCK-BASED COMPENSATION |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company has an equity incentive plan, the 2014 Stock Incentive Plan (“2014 Plan”), which provides for the granting of non-qualified and incentive stock options, restricted stock and restricted stock units, stock appreciation rights and other awards to employees, directors and consultants. The Plan is designed to encourage selected employees and directors to improve operations and increase profits, and to accept or continue employment or association with the Company through participation in the growth in the value of the common stock. The Plan requires that option exercise prices be not less than fair market value per share of common stock on the option grant date for incentive and non-qualified options. The options issued under the Plans generally vest in between three and five years. Option expiration dates are established by the Plans’ administrator but may not be later than ten years after the date of the grant. 2014 Stock Incentive Plan. In September and October 2014, the Company’s Board of Directors and stockholders approved the 2014 Plan, respectively. The maximum number of shares of common stock available for issuance under the 2014 Plan is 3,680,000. Restricted Stock Units. During the fiscal year ended June 30, 2017, the Company’s Board of Directors granted 555,611 restricted stock units to employees and directors. The chief executive officer received 288,000 restricted stock units, which vest ratably on each of the four fiscal year ends after the issue date. All other restricted stock unit awards granted during the year ended June 30, 2017, vest over three years, one-third on each anniversary of the grant date and 570,764 shares were vested and issued and 92,251 shares were canceled as of June 30, 2017. During the fiscal year ended June 30, 2018, the Company’s Board of Directors granted 587,022 restricted stock units to employees and directors. The chief executive officer received 160,000 restricted stock units, which vest ratably on each of the four fiscal year ends after the issue date. All other restricted stock unit awards granted during the year ended June 30, 2018, vest over three years, one-third on each anniversary of the grant date and 629,755 shares were vested and issued and 123,858 shares were canceled as of June 30, 2018. During the fiscal year ended June 30, 2019, the Company’s Board of Directors granted 623,249 restricted stock units to employees and directors. The chief executive officer received 480,000 restricted stock units, which vest ratably on each of the four fiscal year ends after the issue date. All other restricted stock unit awards granted during the year ended June 30, 2019, vest over three years, one-third on each anniversary of the grant date and 699,223 shares were vested and issued and 90,909 shares were canceled as of June 30, 2019. Effective July 1, 2017 the Company entered into an employment agreement with its Chief Executive Officer (the “Agreement”) that authorizes an award of restricted stock units (the “RSU award”). The RSU award is an equity-based award and carries a service condition and a market condition that incorporates a measurement of the Company’s total stock return to shareholders in comparison to the total stock return of the ABA Nasdaq Community Bank Index. The accounting grant date of the RSU award is July 1, 2017 and expensing of the RSU award began on this date at the fair value measurement amount as determined by the Company’s valuation process. The Company utilized a Monte Carlo simulation to estimate the value of path-dependent options and determined the fair value using an expected return based on the 5-year US Treasury constant maturity rate, an equity volatility based on 6-month and 1-year historical daily trading history, market capitalization, and stock price for the RSU award. As of July 1, 2017, the estimated fair value of the RSU award was $20.5 million, which vests in five tranches over a total period of nine years. Unrecognized compensation expense to be expensed over the remaining seven years related to the non-vested RSU award is $11.6 million at June 30, 2019 and is included in the table below. The actual RSU award in future years is determined by the actual performance of Company’s total stock return in comparison to the total stock return of the ABA Nasdaq Community Bank Index. The Company’s income before income taxes and net income for the years ended June 30, 2019, 2018 and 2017 included stock compensation expense of $23,439, $20,399 and $14,535, respectively. The income tax benefit was $6,351, $7,429 and $6,119, respectively. The Company recognizes compensation expense based upon the grant-date fair value divided by the service period between each vesting date. At June 30, 2019 unrecognized compensation expense related to non-vested awards aggregated to $37,214 and is expected to be recognized in future periods as follows:
The following table presents the status and changes in restricted stock units for the periods indicated:
The total fair value of shares vested during the years ended June 30, 2019, 2018 and 2017 was $22,100, $20,866 and $12,941, respectively.
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EARNINGS PER COMMON SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER COMMON SHARE | EARNINGS PER COMMON SHARE The following table presents the calculation of basic and diluted EPS:
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COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Operating Leases. The Company leases office space under operating lease agreements scheduled to expire at various dates. The Company pays property taxes, insurance and maintenance expenses related to its leases. Rent expense for the years ended June 30, 2019, 2018, and 2017 was $7,802, $5,429, and $5,108, respectively. Pursuant to the terms of these non-cancelable lease agreements in effect at June 30, 2019, future minimum lease payments are as follows:
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 filed a notice of appeal and opening brief and the Company has filed its answering brief. 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 opening brief and the Company has filed its answering brief. 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 May 23, 2019, the Court dismissed the second amended complaint with prejudice. On June 20, 2019, the plaintiff filed a notice of appeal to the United States Court of Appeals for the Ninth Circuit. 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.
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OFF-BALANCE-SHEET ACTIVITIES |
12 Months Ended |
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Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
OFF-BALANCE-SHEET ACTIVITIES | 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, 2019, the Company had fixed and variable rate commitments to originate or purchase loans and leases with an aggregate outstanding principal balance of $65,768 and $687,078 for total commitments to originate of $752,846. For June 30, 2019, the Company’s fixed rate commitments to originate had a weighted-average rate of 3.92%. For June 30, 2018, the Company had fixed and variable rate commitments to originate or purchase loans and leases with an aggregate outstanding principal balance of $86,453 and $720,582 for total commitments to originate of $785,980. For June 30, 2018, the Company’s fixed rate commitments to originate had a weighted average rate of 4.68%. At June 30, 2019, the Company also had fixed and variable rate commitments to sell loans with an aggregate outstanding principal balance of $92,320 and $1,897 for total commitments to sell of $94,217. For June 30, 2018, the Company had fixed and variable rate commitments to sell of $86,453 and $1,131 for total commitments to sell of $87,584. At June 30, 2019 and 2018, 66.1% and 61.9% 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 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, 2019, non-customer and customer margin securities of approximately $441,081 and stock borrowings of approximately $144,706 were available to the Company to utilize as collateral on various borrowings or for other purposes. The Company utilized $198,356 of these available securities as collateral for securities loaned, $154,994 for bank loans, and $5,750 for OCC margin requirements.
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MINIMUM REGULATORY CAPITAL REQUIREMENTS |
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MINIMUM REGULATORY CAPITAL REQUIREMENTS | MINIMUM REGULATORY CAPITAL REQUIREMENTS The Company and Bank are subject to regulatory capital adequacy requirements promulgated by federal bank regulatory agencies. Failure by the 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 the consolidated financial statements. The Federal Reserve establishes capital requirements for the Company and the OCC has similar requirements for the Bank. The following tables present regulatory capital information for the Company and Bank. Information presented for June 30, 2019, reflects the Basel III capital requirements that became effective January 1, 2015 for both the Company and Bank. Under these capital requirements and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of the Company and Bank’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The 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 the Company and Bank to maintain certain minimum capital amounts and ratios. Federal bank regulators require the 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%. At June 30, 2019, the Company and Bank met all the capital adequacy requirements to which they were subject. At June 30, 2019, the Company and Bank were “well capitalized” under the regulatory framework for prompt corrective action. To be “well capitalized,” the 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. Management believes that no conditions or events have occurred since June 30, 2019 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 the Company’s and Bank’s further growth and to maintain their “well capitalized” status. The Bank’s capital amounts, capital ratios and capital requirements under Basel III were as follows:
Beginning January 1, 2016, Basel III implements 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 will be 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 June 30, 2019, the Company and Bank are in compliance with the capital conservation buffer requirement. The final provision related to this follows implements a new capital conservation buffer requirement for a banking organization to maintain a common equity capital ratio more than 2.5% above the minimum common equity Tier 1 capital, Tier 1 capital and total risk-based capital ratios in order to avoid limitations on capital distributions, including dividend payments, and certain discretionary bonus payments. The capital conservation buffer requirement was phased in, beginning on January 1, 2016 at 0.625%, with additional 0.625% percent increments annually, and became fully phased in at 2.5% on January 1, 2019. Inclusive of the fully phased-in capital conservation buffer, the common equity Tier 1 capital, Tier 1 risk-based capital and total risk-based capital ratio minimums are 7.0%, 8.5% and 10.5%, respectively. A banking organization with a buffer of less than the required amount is subject to increasingly stringent limitations on such distributions and payments as the buffer approaches zero. The new rule also generally prohibits a banking organization from making such distributions or payments during any quarter if its eligible retained income is negative and its capital conservation buffer ratio was 2.5% or less at the end of the previous quarter. The eligible retained income of a banking organization is defined as its net income for the four calendar quarters preceding the current calendar quarter, based on the organization’s quarterly regulatory reports, net of any distributions and associated tax effects not already reflected in net income. 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. On June 30, 2019, 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. At June 30, 2019, the net capital position of Axos Clearing was as follows:
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 June 30, 2019, the Company had a deposit requirement of $198.3 million and maintained a deposit of $204.7 million. Certain broker-dealers have chosen to maintain brokerage customer accounts at the 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 June 30, 2019, the Company had a deposit requirement of $3.4 million and maintained a deposit of $1.7 million. On July 1, 2019, Axos Clearing made a deposit to satisfy the deposit requirement.
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EMPLOYEE BENEFIT PLAN |
12 Months Ended |
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Jun. 30, 2019 | |
Compensation Related Costs [Abstract] | |
EMPLOYEE BENEFIT PLAN | EMPLOYEE BENEFIT PLAN The Company has two 401(k) plans whereby substantially all of its employees may participate in one of the plans. Employees may contribute up to 100% of their compensation subject to certain limits based on federal tax laws. The Company provides an employer matching contribution to each of the 401(k) plans based on an employee’s designated deferral of their eligible compensation. For the fiscal years ended June 30, 2019, 2018, and 2017, expenses attributable to the plans amounted to $2,391, $1,501, and $1,288, respectively.
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PARENT-ONLY CONDENSED FINANCIAL INFORMATION |
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Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PARENT-ONLY CONDENSED FINANCIAL INFORMATION | PARENT-ONLY CONDENSED FINANCIAL INFORMATION The following Axos Financial, Inc. (Parent company only) financial information should be read in conjunction with the consolidated financial statements of the Company and the other notes to the consolidated financial statements:
1 Includes tax benefits of $10,749, $11,140, and $8,518 for the years ended June 30, 2019, 2018, and 2017, respectively.
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QUARTERLY FINANCIAL INFORMATION (UNAUDITED) |
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QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
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SEGMENT REPORTING |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING | SEGMENT REPORTING The operating segments reported below are the segments of the Company for which separate financial information is available and for which 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. 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. The Securities Business includes the Clearing Broker-Dealer, Registered Investment Advisor, and Introducing Broker-Dealer lines of businesses. These lines of business offer products such as clearing and execution of securities transactions, margin lending to correspondents and their customers, and lending proprietary and conduit securities independently to their own customers as well as to Banking Business clients. The products offered by the lines of business in the Securities Business primarily generate net interest and non-banking service fee income. 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. All costs, except certain corporate administration costs and income taxes, have been allocated to the reportable segments. Therefore, combined amounts agree to the consolidated totals. In order to reconcile the two segments to the consolidated totals, the Company includes parent-only activities and intercompany eliminations. The following tables present the operating results, goodwill, and assets of the segments:
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ORGANIZATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation. The consolidated financial statements include the accounts of Axos Financial, Inc. 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, WiseBanyan, Inc., a registered investment advisor, and WiseBanyan Securities, LLC, an introducing broker dealer. All significant intercompany balances have been eliminated in consolidation. | |||||||||||||||||||||
Use of Estimates | Use of Estimates. In preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan and lease losses, the assessment for other-than-temporary impairment on investment securities and the fair value of certain financial instruments.
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Cash and Cash Equivalents | Cash and Cash Equivalents. The Bank’s cash, due from banks, money market mutual funds and federal funds sold, all of which have original maturities within 90 days, consist of cash and cash equivalents. Net cash flows are reported for customer deposit transactions.
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Interest Rate Risk | Interest Rate Risk. The Bank’s assets and liabilities are generally monetary in nature and interest rate changes have an effect on the Bank’s performance. The Bank decreases the effect of interest rate changes on its performance by striving to match maturities and interest sensitivity between loans and deposits. A significant change in interest rates could have a material effect on the Bank’s results of operations.
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Concentration of Credit Risk | Concentration of Credit Risk. The Bank’s loan portfolio was collateralized by various forms of real estate with approximately 72.2% of the mortgage portfolio located in California at June 30, 2019. The Bank’s loan portfolio contains concentrations of credit in multifamily, single family, commercial, and home equity loans. The Bank believes its underwriting standards combined with its low LTV requirements substantially mitigate the risk of loss which may result from these concentrations. Credit Quality Indicators. The Company categorizes loans and leases into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans and leases individually by classifying the loans and leases as to credit risk. The Company uses the following definitions for risk ratings. Pass. Loans and leases classified as pass are well protected by the current net worth and paying capacity of the obligor or by the fair value, less cost to acquire and sell, of any underlying collateral in a timely manner. Special Mention. Loans and leases classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or lease or of the institution’s credit position at some future date. Substandard. Loans and leases classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans and leases so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful. Loans and leases classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The Company reviews and grades loans and leases following a continuous loan and lease review process, featuring coverage of all loan and lease types and business lines at least quarterly. Continuous reviewing provides more effective risk monitoring because it immediately tests for potential impacts caused by changes in personnel, policy, products or underwriting standards.
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Brand Partnership Products | Brand Partnership Products. Through its strategic partnerships division, the Bank has agreements with third-party service providers (“Program Managers”) possessing demonstrated expertise in managing programs involving marketing and processing financial products such as credit, debit, and prepaid cards, and small business and consumer loans. These relationships include the Company’s relationships with H&R Block, Inc., Netspend and BFS Capital, among others. As delineated by the related contracts, a Program Manager provides program management services in its areas of expertise subject to the Bank’s continuing control and active supervision of the subject program. Underwriting standards and credit decisioning remain with the Bank in all cases. Each of these relationships is designed to allow the Bank to leverage the Program Manager’s knowledge and experience to distribute program-related financial products to a broad and increasing base of customers. With respect to credit products, the Bank generally originates the resulting receivable for sale, but may, in its discretion, retain such receivable. The Bank performs extensive due diligence with respect to each Program Manager and program, and maintains a regimen of comprehensive risk management and strict compliance oversight with respect to all programs. Through our agreement with H&R Block, Inc. (“H&R Block”) and its wholly-owned subsidiaries the Bank provides H&R Block-branded financial products and services. The products and services that represent the primary focus and the majority of transactional volume that the Bank processes are described in detail below. The first product is Emerald Prepaid Mastercard® services. The Bank entered into agreements to offer this product in August 2015. Under the agreements, the Bank is responsible for the primary oversight and control of the prepaid card programs of a wholly-owned subsidiary of H&R Block. The Bank holds the prepaid card customer deposits for those cards issued under the prepaid programs in non-interest bearing accounts and earns a fixed fee paid by H&R Block’s subsidiary for each automated clearing house (“ACH”) transaction processed through the prepaid card customer accounts. A portion of H&R Block’s customers use the Emerald Card as an option to receive federal and state income tax refunds. The prepaid customer deposits are included in non-interest bearing deposit liabilities on the balance sheet of the Company and the ACH fee income is included in the income statement under the line banking and service fees. The second product is Refund Transfer. The Bank entered into agreements to offer this product in August 2015. The Bank is responsible for the primary oversight and control of the refund transfer program of a wholly-owned subsidiary of H&R Block. The Bank opens a temporary bank account for each H&R Block customer who is receiving an income tax refund and elects to defer payment of his or her tax preparation fees. After the Internal Revenue Service and any state income tax authorities transfer the refund into the customer’s account, the net funds are transferred to the customer and the temporary deposit account is closed. The Bank earns a fixed fee paid by H&R Block for each of the H&R Block customers electing a Refund Transfer. The fees are earned primarily in the quarters ending March 31st and are included in the income statement under the line banking and service fees. The third product is Emerald Advance. The Bank entered into agreements to offer this product in August 2015. Under the agreements the Bank is responsible for the underwriting guidelines and credit policies for unsecured consumer lines of credit offered to H&R Block customers. The Bank offers and funds unsecured lines of credit to consumers primarily through the H&R Block tax preparation offices and earns interest income and fee income. The Bank retains 10% of the Emerald Advance and sells the remainder to H&R Block. Emerald Advance is a seasonal product and the was no remaining balance as of June 30, 2019. The lines of credit are included in loans and leases on the balance sheet of the Company and the interest income and fee income are included in the income statement under the line loans and leases interest and dividend income. The fourth product is an interest-free Refund Advance loan. The Bank exclusively originated and funded all of H&R Block’s interest-free Refund Advance loans to tax preparation clients for the 2019 and 2018 tax seasons. The Bank performed the credit underwriting, loan origination, and funding associated with the interest-free Refund Advance loans in the current tax season and received fees from H&R Block for operating the program. No fee is charged to the tax preparation client. Repayment of the Refund Advance loan is deducted from the client’s tax refund proceeds; if an insufficient refund to repay the Refund Advance loan is received, there is no recourse to the client, no negative credit reporting occurs in respect of the client and no collection efforts are made against the client. This agreement is an expansion of the services Axos provided to H&R Block in the 2017 tax season when the Bank participated through purchases of the loans with other providers in the Refund Advance loan program. During the 2017 tax season, the Bank purchased the Refund Advance loans from a third-party bank at a discount and recorded the accretion of the loan discount as interest income, reported on the income statement under the interest and dividend income line item. During the 2018 tax season, the Bank recorded the fees received from H&R Block as interest income on loans, reported on the income statement under the interest and dividend income line item. The H&R Block-branded financial services products introduce seasonality into the Company’s quarterly reports on Form 10-Q in the unaudited condensed consolidated income statements through the banking and service fees category of non-interest income and the other general and administrative category of non-interest expense, with the peak income and expense in these categories typically occurring during the Company’s third fiscal quarter ended March 31.
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Securities | Securities. Debt securities are classified as held-to-maturity and carried at amortized cost when management has both the positive intent and ability to hold them to maturity. Debt securities are classified as available-for-sale when they might be sold before maturity. Securities available-for-sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. Securities available-for-sale are reported at estimated fair value, with unrealized gains and losses, net of the related tax effects, excluded from operations and reported as a separate component of accumulated other comprehensive income or loss. The fair values of securities traded in active markets are obtained from market quotes. If quoted prices in active markets are not available, we determine the fair values by utilizing industry-standard tools to calculate the net present value of the expected cash flows available to the securities. For securities other than non-agency RMBS, we use observable market participant inputs and categorize these securities as Level II in determining fair value. Trading securities refer to certain types of assets that banks hold for resale at a profit or when the Company elects to account for certain securities at fair value. Increases or decreases in the fair value of trading securities are recognized in earnings as they occur. During the quarter ended September 30, 2016, the Company elected to reclassify all of its held-to-maturity securities to available-for-sale. See Note 4 – “Securities” for further information. Gains and losses on securities sales are based on a comparison of sales proceeds and the amortized cost of the security sold using the specific identification method. Purchases and sales are recognized on the trade date. Interest income includes amortization of purchase premiums or discounts. Premiums and discounts on securities are amortized or accreted using the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. The Company’s portfolios of available-for-sale securities are reviewed quarterly for other-than-temporary impairment. In performing this review, management considers (1) the length of time and extent that fair value has been less than amortized cost, (2) the financial condition and near term prospects of the issuer, (3) the impact of changes in market interest rates on the market value of the security and (4) how to record an impairment by assessing whether the Company intends to sell it or is more likely than not that it will be required to sell a security in an unrealized loss position before the Company recovers the security’s amortized cost. If either of these criteria for (4) is met, the entire difference between amortized cost and fair value is recognized in earnings. Alternatively, if neither of the criteria for (4) are met, the amount of impairment recognized in earnings is limited to the amount related to credit losses, while impairment related to other factors is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis.
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Loans and Leases | Loans and Leases. Loans and leases that management has the intent and ability to hold for the foreseeable future or until maturity are reported at the principal balance outstanding, net of unearned interest, deferred purchase premiums and discounts, deferred loan and lease origination fees and costs, and an allowance for loan and lease losses. Interest income is accrued on the unpaid principal balance. Premiums and discounts on loans purchased as well as loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method. The Company provides equipment financing to its customers through a variety of lease arrangements. The most common arrangement is a direct financing (capital) lease. For direct financing leases, lease receivables are recorded on the balance sheet but the leased property is not, although the Company generally retains legal title to the leased property until the end of each lease. Direct financing leases are stated at the net amount of minimum lease payments receivable, plus any unguaranteed residual value, less the amount of unearned income and net acquisition discount at the reporting date. Direct lease origination costs are amortized over the life of the lease portfolio. Leases acquired in an acquisition are initially measured and recorded at their fair value on the acquisition date. Purchase discounts or premiums on acquired leases are recognized as an adjustment to interest income over the contractual life of the leases using the effective interest method or taken into income when the related leases are paid off. All equipment financing leases are subject to our allowance for loans and leases. Recognition of interest income on all portfolio segments is generally discontinued at the time the loan or lease is 90 days delinquent unless the loan and lease is well secured and in process of collection. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not received for loans and leases placed on nonaccrual, is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost recovery method, until qualifying for return to accrual status. Loans and leases are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Seasonal fluctuations in the Other loan classification and its associated allowance for loan and lease losses primarily relate to tax season H&R Block-related loan products. These products are generally short term in nature, in that they are intended to be repaid within a few weeks or months of origination; if they are not repaid timely, they are generally charged off in their entirety at 120 days delinquent, consistent with regulatory guidance for unsecured consumer loan products. The Company provides general loan loss reserves for its H&R Block-related loans based upon prior years’ loss experience with consideration for current year loan performance. While they do incur higher proportional default and charge-off rates than the remainder of the Company’s loan and lease portfolio, these asset quality attributes are within expectations of the design of the products.
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Loans Held for Sale | Loans Held for Sale. U.S. government agency (“agency”) loans originated and intended for sale in the secondary market are carried at fair value. Net unrealized gains and losses are recognized through mortgage banking income in the income statement. The Bank sells its mortgage loans with either servicing released or servicing retained depending upon market pricing. Gains and losses on loan sales are recorded as mortgage banking income or other gains on sale, based on the difference between sales proceeds and carrying value. Non-agency loans held for sale are carried at the lower of cost or fair value. 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. Loans that were originated with the intent and ability to hold for the foreseeable future (loans held for investment) but which have been subsequently designated as being held for sale for risk management or liquidity needs are carried at the lower of cost or fair value calculated using pools of loans with similar characteristics. There may be times when loans have been classified as held for sale and cannot be sold. Loans transferred to a long-term investment classification from held-for-sale are transferred at the lower of cost or fair value on the transfer date. Any difference between the carrying amount of the loan and its outstanding principal balance is recognized as an adjustment to yield by the interest method. A loan cannot be classified as a long-term investment unless the Bank has both the ability and the intent to hold the loan for the foreseeable future or until maturity.
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Allowance for Loan and Lease Losses | Allowance for Loan and Lease Losses. The allowance for loan and lease losses is maintained at a level estimated to provide for probable incurred losses in the loan and lease portfolio held for investment. Management determines the adequacy of the allowance based on reviews of individual loans and leases and pools of loans, recent loss experience, current economic conditions, the risk characteristics of the various categories of loans and other pertinent factors. This evaluation is inherently subjective and requires estimates that are susceptible to significant revision as more information becomes available. The allowance is increased by the provision for loan and lease losses, which is charged against current period operating results, and recoveries of loans and leases previously charged-off. The allowance is decreased by the amount of charge-offs of loans and leases deemed uncollectible. Allocations of the allowance may be made for specific loans and leases but the entire allowance is available for any loan or lease that, in management’s judgment, should be charged off. The allowance for loan and lease losses includes general reserves and may include specific reserves. Specific reserves may be provided for impaired loans and leases considered Troubled Debt Restructurings (“TDRs”). All other impaired loans and leases are written down through charge-offs to the fair value of collateral, less estimated selling cost, and no specific or general reserve is provided. A loan or lease is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan or lease agreement. Loans and leases for which terms have been modified resulting in a concession and for which the borrower is experiencing financial difficulties are considered TDRs and classified as impaired. A loan or lease is measured for impairment generally two different ways. If the loan or lease is primarily dependent upon the borrower to make payments, then impairment is calculated by comparing the present value of the expected future payments discounted at the effective loan rate to the carrying value of the loan. If the loan or lease is collateral dependent, the net proceeds from the sale of the collateral is compared to the carrying value of the loan or lease. If the calculated amount is less than the carrying value of the loan or lease, the loan or lease has impairment. A general reserve is included in the allowance for loan and lease losses and is determined by adding the results of a quantitative and a qualitative analysis to all other loans and leases not measured for impairment at the reporting date. The quantitative analysis determines the Bank’s actual annual historic charge-off rates for the previous three fiscal years and applies the average historic rates to the outstanding loan and lease balances in each pool, the product of which is the general reserve amount. The qualitative analysis considers one or more of the following factors: changes in lending policies and procedures, changes in economic conditions, changes in the content of the portfolio, changes in lending management, changes in the volume of delinquency rates, changes to the scope of the loan and lease review system, changes in the underlying collateral of the loans and leases, changes in credit concentrations and any changes in the requirements to the credit loss calculations. A loss rate is estimated and applied to those loans and leases affected by the qualitative factors. The following portfolio segments have been identified: single family secured mortgage, home equity secured mortgage, single family warehouse and other, multi-family secured mortgage, commercial real estate and land secured mortgage, auto secured and recreational vehicles, factoring, commercial and industrial (“C&I”) and other. General loan and lease loss reserves are calculated by grouping each mortgage loan or lease by collateral type and by grouping the LTV ratios of each loan within the collateral type. An estimated allowance rate for each LTV group within each type of loan and lease is multiplied by the total principal amount in the group to calculate the required general reserve attributable to that group. Management uses an allowance rate that provides a larger loss allowance for loans with greater LTV ratios. General loan loss reserves for C&I loans are determined through a loan level grading system to base its projected loss rates. A matrix was created with a base loss rate with additional potential industry and volume risk adjustments, to calculate a loss rating for each deal. Given the lack of historical loss experience for this segment at the Company, an allowance loss range is based upon historical peer loss rates. General loan loss reserves for consumer loans are calculated by grouping each loan by credit score (e.g., FICO) at origination and applying an estimated allowance rate to each group. In addition to credit score grading, general loan loss reserves are increased for all consumer loans determined to be 90 days or more past due. Specific reserves or direct charge-offs are calculated when an internal asset review of a loan or lease identifies a significant adverse change in the financial position of the borrower or the value of the collateral. The specific reserve or direct charge-off is based on discounted cash flows, observable market prices or the estimated value of underlying collateral. Specific loan or lease charge-offs on impaired loans or leases are recorded as a write-off and a decrease to the allowance in the period the impairment is identified. A loan or lease is classified as a TDR when management determines that an existing borrower is in financial distress and the borrower’s loan or lease terms are modified to provide the borrower a financial concession (e.g., lower payment) that would not otherwise be provided by another lender based upon borrower’s current financial condition. TDRs are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a TDR is considered to be a collateral dependent loan or lease, the loan or lease is reported, net, at the fair value of the collateral less cost to sell. For TDRs that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan and lease losses. If the present value of estimated cash flows under the modified terms of a TDR discounted at the original loan or lease effective rate is less than the book value of the loan or lease before the TDR, the excess is specifically allocated to the loan or lease in the allowance for loan and lease losses. For the Company’s single family, commercial and multifamily loans, the allowance methodology takes into consideration the risk that the original borrower information may have adversely changed in two ways. First, in calculating the quantitative factor for the Company’s general loan and lease loss allowance, the actual loss experience is tracked and stratified by original LTV and year of origination. As a result, the Company uses relatively higher loss rates across the LTV bands for loans originated and purchased in years 2005 through 2008 compared to the same LTV ranges for loans originated before 2005 or after 2008. Second, the Company uses a number of qualitative factors to reflect additional risk. One qualitative loss factor is real estate valuation risk which is applied to each LTV band primarily based upon the year the real estate loan was originated or purchased. Based upon price appreciation indices, multifamily property values in years 2005 through 2008 experienced significant declines. As a result, the Company applies a relatively higher qualitative loss factor rate across the LTV bands for loans originated and purchased in years 2005 through 2008 compared to the same LTV ranges for loans originated or purchased before 2005 or after 2008. Lastly, the Company separates its allowance for loan and lease losses into loans originated and purchased categories in order to reflect the additional risk associated with purchased loans. For the Company’s home equity loans, the allowance methodology takes into consideration the risk that the original borrower information may have adversely changed in two ways. First, in calculating the quantitative factor for the Company’s general loan loss allowance, the actual loss experience is tracked and stratified by original combined LTV (“CLTV”) of the first and second liens. As a result, the Company allocates higher loss rates in proportion to the greater the CLTV. Second, the Company uses a number of qualitative factors to reflect additional risk. The Company does not have any individual purchased home equity loans in its portfolio and given the limited time frame under which the Company originated home equity loans, 2006-2009, no additional risk allocation is used. For the Company’s single family – warehouse lines, the allowance methodology takes into consideration the structure of these loans, as they remain in the portfolio for a short period (usually less than a month) and have higher credit protection allocated compared to traditional single family originations. A matrix was created to reflect most current operating levels of capital and line usage, which calculates a loss rating to assign to each originator. For the Company’s factoring loans, the allowance methodology takes into consideration the credit quality of the insurance company or state. The Company obtains credit ratings for these entities through agencies such as A.M. Best and allocates an allowance allocation based on these ratings. For the Company’s C&I leveraged loans, equipment finance leases and bridge loans, the allowance methodology incorporates a loan level grading system, which generally aligns with the credit rating. Industry loss rates are applied to determine the loss allowance for each of these loans based upon their internal grading. The credit rating incorporates multiple borrower attributes including, but not limited to, underlying collateral and pledged assets, income generated by the property or assets, borrower’s liquidity and access to liquid funds, strength of the borrower’s industry, stability of the borrower’s market, the size of the company, collateral diversity, facility exit strategies and borrower guarantees. Equipment direct finance leases are derecognized from the balance sheet and the net investment in the lease is recorded. This net investment is the sum of the present value of future lease payments and any unguaranteed residual value. Interest income is recorded using the effective interest rate of the lease. For the Company’s automobile (“auto”) and recreational vehicle (“RV”) loan portfolio, the allowance methodology takes into consideration potential adverse changes to the borrower’s financial condition since time of origination. The general loan loss reserves for auto and RV are stratified based upon borrower FICO scores. First, to account for potential deterioration of borrower’s credit history since time of origination, due to downturn in the economy or other factors, the Company uses the origination FICO scores to drive the allowance on a semi-annual basis. The Company believes that current borrower credit history is a better predictor of potential loss than that was used at time of origination. Second, the Company uses qualitative factors such as; changes in the economy, volume, and changes in the underlying collateral to capture additional risk when finalizing its calculation of the allowance for loan and lease losses.
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Mortgage Servicing Rights | Mortgage Servicing Rights. Mortgage servicing assets are recognized when rights are acquired through sale of loans. The Company measures its servicing asset using the fair value method. Under the fair value method, the servicing rights are included in other assets on the consolidated balance sheet at fair value. The changes in fair value are reported in earnings in the period in which the changes occur and the adjustments are included in Non-Interest Income - Mortgage banking income in the consolidated statements of income.
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Mortgage Banking Derivatives | Mortgage Banking Derivatives. Commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans are accounted for as free standing derivatives. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the interest on the loan is locked. The Company enters into forward commitments for the future delivery of mortgage loans when interest rate locks are entered into, in order to hedge the change in interest rates resulting from its commitments to fund the loans. Changes in the fair values of these derivatives are included in mortgage banking income.
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Furniture, Equipment and Software | Furniture, Equipment and Software. Fixed asset purchases in excess of five hundred dollars are capitalized and recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which are three to seven years. Leasehold improvements are amortized over the lesser of the assets’ useful lives or the lease term. | |||||||||||||||||||||
Income Taxes | Income Taxes. Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred income tax assets and liabilities are determined using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is determined based on the tax effects of the temporary differences between the book and tax bases of the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws. The Company records a valuation allowance when management believes it is more likely than not that deferred tax assets will not be realized. An income tax position will be recognized as a benefit only if it is more likely than not that it will be sustained upon IRS examination, based upon its technical merits. Once that status is met, the amount recorded will be the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. The Company adopted ASU 2016-09 effective July 1, 2017. As a result of the adoption, the Company recorded $2.0 million and $2.4 million of income tax benefits for the fiscal year ended June 30, 2019 and June 30, 2018, respectively, related to excess tax benefits from stock compensation. Prior to 2018, such excess tax benefits were generally recorded directly in stockholders’ equity. This accounting standard may potentially increase the volatility in the Company’s effective tax rates.
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Securities Borrowed and Securities Loaned | Securities Borrowed and Securities Loaned. Securities borrowed and securities loaned transactions are reported as collateralized financings and recorded at the amount of cash collateral advanced or received. Securities borrowed transactions require the Company to deposit cash with the lender. With respect to securities loaned, the Company receives collateral in the form of cash in an amount in excess of the fair value of securities loaned. The Company monitors the fair value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded, as necessary.
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Customer, Broker-Dealer and Clearing Receivables and Payables | Customer, Broker-Dealer and Clearing Receivables and Payables. Customer, broker-dealer and clearing receivables include receivables of the Company’s broker-dealer subsidiaries, which represent amounts due on cash and margin transactions and are generally collateralized by securities owned by clients. These receivables, primarily consisting of floating-rate loans collateralized by customer-owned securities, are charged interest at rates similar to other such loans made throughout the industry. The receivables are reported at their outstanding principal balance net of allowance for doubtful accounts. When a receivable is considered to be impaired, the amount of the impairment is generally measured based on the fair value of the securities acting as collateral, which is measured based on current prices from independent sources, such as listed market prices or broker-dealer price quotations. Securities owned by customers, including those that collateralize margin or other similar transactions, are not reflected in the balance sheet. Also included in these accounts are receivables and payables from brokers and dealers and clearing organizations as well as securities failed to deliver and receive.
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Business Combinations | Business Combinations. Mergers and acquisitions are accounted for in accordance with ASC 805 “Business Combinations” using the acquisition method of accounting. Assets and liabilities acquired and assumed are generally recorded at their fair values as of the date of the transaction. The excess of purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill. Significant estimates and judgments are involved in the fair valuation and purchase price allocation process.
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Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets. Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Other intangible assets represent purchased assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. Intangible assets that have finite lives, such as core deposit intangibles, are amortized over their estimated useful lives and subject to periodic impairment testing. Intangible assets (other than goodwill) are amortized to expense using accelerated or straight-line methods over their respective estimated useful lives. Goodwill is subject to impairment testing at the reporting unit level, which is conducted at least annually. The Company performs impairment testing during the third quarter of each year or when events or changes in circumstances indicate the assets might be impaired. The Company performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing updated qualitative factors, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it does not have to perform the two-step goodwill impairment test. Determining the fair value of a reporting unit under the first step of the goodwill impairment test and determining the fair value of individual assets and liabilities of a reporting unit under the second step of the goodwill impairment test are judgmental and often involve the use of significant estimates and assumptions. Similarly, estimates and assumptions are used in determining the fair value of other intangible assets. Estimates of fair value are primarily determined using discounted cash flows, market comparisons and recent transactions. These approaches use significant estimates and assumptions including projected future cash flows, discount rates reflecting the market rate of return, projected growth rates and determination and evaluation of appropriate market comparables. Future events could cause the Company to conclude that goodwill or other intangibles have become impaired, which would result in recording an impairment loss. Any resulting impairment loss could have a material adverse impact on the Company’s financial condition and results of operations.
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Earnings per Common Share | 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) by the sum of the weighted-average number of common shares outstanding during the year and the unvested average of participating restricted stock units (“RSU”). 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 Company accounts for unvested stock-based compensation awards containing non-forfeitable rights to dividends or dividend equivalents (collectively, “dividends”) as participating securities and includes the awards in the EPS calculation using the two-class method. The Company has granted restricted stock units under the 2004 Plan to certain directors and employees, which entitle the recipients to receive non-forfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. These unvested awards meet the definition of participating securities. Under the two class method, all earnings (distributed and undistributed) are allocated to each class of common stock and participating securities, based on their respective rights to receive dividends. Under the 2014 Plan, restricted stock units have no shareholder rights, meaning they are not entitled to dividends and are considered nonparticipating. These nonparticipating restricted stock units are not included in the basic earnings per common share calculation and are included in the diluted earnings per common share calculation using the treasury stock method.
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Stock-Based Compensation | Stock-Based Compensation. Compensation cost is recognized for stock options and restricted stock unit awards issued to employees, based on the fair value of these awards at the date of grant. A Black–Scholes model is utilized to estimate fair value of the stock options, while market price of the Company’s common stock at the date of grant is used for restricted stock unit awards, except for the Chief Executive Officer’s restricted stock unit awards under an employment agreement effective July 1, 2017. For the Chief Executive Officer’s restricted stock unit awards under an employment agreement effective July 1, 2017, a Monte Carlo simulation is utilized to estimate the value of path-dependent options in order to determine the fair value of the restricted stock unit award. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with only a service condition that have a graded vesting schedule, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. For awards that contain a market condition and have a graded vesting schedule compensation cost is recognized using an accelerated attribution method over the requisite service period for the awards.
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Stock of Regulatory Agencies | Stock of Regulatory Agencies. The Bank is a member of the Federal Home Loan Bank (“FHLB”) system. Members are required to own a certain amount of FHLB stock based on the level of borrowings and other factors. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Axos Securities is a member of the Depository Trust & Clearing Corporation (DTCC), a financial services company providing clearing and settlement services to the financial markets. Members are required to own a certain amount of DTCC stock based on the clearing levels and other factors. DTCC stock is carried at fair value, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value.
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Cash Surrender Value of Life Insurance | Cash Surrender Value of Life Insurance. The Bank has purchased life insurance policies on certain key executives. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other amounts due that are probable at settlement. Cash surrender value of life insurance is included in the other assets line on the consolidated balance sheet.
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Loan Commitments and Related Financial Instruments | Loan Commitments and Related Financial Instruments. Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. The allowance for loan commitments is included in Accounts payable and accrued liabilities and other liabilities and adjustments to the allowance run through provision for loan and lease loses.
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Comprehensive Income | Comprehensive Income. Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available-for-sale, which are also recognized as separate components of equity.
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Loss Contingencies | Loss Contingencies. Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are now such matters that will have a material effect on the financial statements.
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Dividend Restriction | Dividend Restriction. Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to the holding company. | |||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments. Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 3. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. The following section describes the valuation methodologies used by the Company to measure various financial instruments at fair value, including an indication of the level in the fair-value hierarchy in which each instrument is generally classified: Securities—trading and available-for-sale. Trading securities are recorded at fair value. Available-for-sale securities are recorded at fair value and consist of residential mortgage-backed securities (“RMBS”) issued by U.S. agencies, RMBS issued by non-agencies, municipal securities as well as other Non-RMBS securities. Fair value for U.S. agency securities and municipal securities are generally based on quoted market prices of similar securities used to form a dealer quote or a pricing matrix. There continues to be significant illiquidity in the market for RMBS issued by non-agencies, impacting the availability and reliability of transparent pricing. As orderly quoted market prices are not available, the Level 3 fair values for these securities are determined by the Company utilizing industry-standard tools to calculate the net present value of the expected cash flows available to the securities from the underlying mortgage assets. The Company computes Level 3 fair values for each non-agency RMBS in the same manner (as described below) whether available-for-sale or held-to-maturity. To determine the performance of the underlying mortgage loan pools, the Company estimates prepayments, defaults, and loss severities based on a number of macroeconomic factors, including housing price changes, unemployment rates, interest rates and borrower attributes such as credit score and loan documentation at the time of origination. The Company inputs for each security a projection of monthly default rates, loss severity rates and voluntary prepayment rates for the underlying mortgages for the remaining life of the security to determine the expected cash flows. The projections of default rates are derived by the Company from the historic default rate observed in the pool of loans collateralizing the security, increased by and decreased by the forecasted increase or decrease in the national unemployment rate. The projections of loss severity rates are derived by the Company from the historic loss severity rate observed in the pool of loans, increased by or decreased by the forecasted increase or decrease in the national home price appreciation (“HPA”) index. The largest factors influencing the Company’s modeling of the monthly default rate are unemployment and HPA, as a strong correlation exists. The most updated unemployment rate reported in May 2019 was 3.6%. Consensus estimates for unemployment are that the rate will begin to increase. Going forward, the Company is projecting lower monthly default rates. The Company projects that severities will continue to improve. To determine the discount rates used to compute the present value of the expected cash flows for these non-agency RMBS securities, the Company separates the securities by the borrower characteristics in the underlying pool. Specifically, “prime” securities generally have borrowers with higher FICO scores and better documentation of income. “Alt-A” securities generally have borrowers with a lower FICO and less documentation of income. “Pay-option ARMs” are Alt-A securities with borrowers that tend to pay the least amount of principal (or increase their loan balance through negative amortization). The Company calculates separate discount rates for prime, Alt-A and Pay-option ARM non-agency RMBS securities using market-participant assumptions for risk, capital and return on equity. The range of annual default rates used in the Company’s projections at June 30, 2019 are from 1.5% up to 10.2%. The range of loss severity rates applied to each default used in the Company’s projections at June 30, 2019 are from 40.0% up to 68.3% based upon individual bond historical performance. The default rates and the severities are projected for every non-agency RMBS security held by the Company and will vary monthly based upon the actual performance of the security and the macroeconomic factors discussed above. The Company applies its discount rates to the projected monthly cash flows, which already reflect the full impact of all forecasted losses using the assumptions described above. When calculating present value of the expected cash flows at June 30, 2019, the Company computed its discount rates as a spread between 272 and 686 basis points over the LIBOR Index using the LIBOR forward curve. The Bank’s estimate of fair value for non-agency securities using Level 3 pricing is highly subjective and is based on the Bank’s estimate of voluntary prepayments, default rates, severities and discount margins, which are forecasted monthly over the remaining life of each security. Changes in one or more of these assumptions can cause a significant change in the estimated fair value. For further details see the table later in this note that summarizes quantitative information about level 3 fair value measurements. Loans Held for Sale. Loans held for sale at fair value are primarily single-family residential loans. The fair value of residential loans held for sale is determined by pricing for comparable assets or by existing forward sales commitment prices with investors. Impaired Loans and Leases. Impaired loans and leases are loans and leases which are inadequately protected by the current net worth and paying capacity of the borrowers or the collateral pledged. The accrual of interest income has been discontinued for impaired loans and leases. The impaired loans and leases are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. The Company assesses loans and leases individually and identifies impairment when the loan or lease is classified as impaired or has been restructured or management has serious doubts about the future collectibility of principal and interest, even though the loans and leases may currently be performing. The fair value of an impaired loan or lease is determined based on an observable market price or current appraised value of the underlying collateral. The fair value of impaired loans and leases with specific write-offs or allocations of the allowance for loan and lease losses are generally based on recent real estate appraisals or internal valuation analyses consistent with the methodology used in real estate appraisals and include other third-party valuations and analysis of cash flows. These appraisals and analyses are updated at least on an annual basis. The Company primarily obtains real estate appraisals and in the rare cases where an appraisal cannot be obtained, the Company performs an internal valuation analysis. These appraisals and analyses may utilize a single valuation approach or a combination of approaches including comparable sales and income approaches. The sales comparison approach uses at least three recent similar property sales to help determine the fair value of the property being appraised. The income approach is calculated by taking the net operating income generated by the collateral property of the rent collected and dividing it by an assumed capitalization rate. Adjustments are routinely made in the process by the appraisers to account for differences between the comparable sales and income data available. When measuring the fair value of the impaired loan or lease based upon the projected sale of the underlying collateral, the Company subtracts the costs expected to be incurred for the transfer of the underlying collateral, which includes items such as sales commissions, delinquent taxes and insurance premiums. These adjustments to the estimated fair value of nonaccrual loans and leases may result in increases or decreases to the provision for loan and lease losses recorded in current earnings. Such adjustments are typically significant and result in a Level 3 classification for the inputs for determining fair value. Other Real Estate Owned and Repossessed Vehicles. Non-recurring adjustments to certain commercial and residential real estate properties classified as other real estate owned (“OREO”) are measured at the lower of carrying amount or fair value, less costs to sell. Fair values are generally based on third party appraisals of the property, resulting in a Level 3 classification. In cases where the carrying amount exceeds the fair value, less costs to sell, an impairment loss is recognized. Mortgage Servicing Rights. The Company initially records all mortgage servicing rights (“MSRs”) at fair value and accounts for MSRs at fair value during the life of the MSR, with changes in fair value recorded through mortgage banking income in the income statement. Fair value adjustments encompass market-driven valuation changes as well as modeled amortization involving the run-off of value that occurs due to the passage of time as individual loans are paid by borrowers. Market expectations about loan duration, and correspondingly the expected term of future servicing cash flows, may vary from time to time due to changes in expected prepayment activity, especially when interest rates rise or fall. Market expectations of increased loan prepayment speeds may negatively impact the fair value of the single family MSRs. Fair value is also dependent on the discount rate used in calculating present value, which is imputed from observable market activity and market participants and results in Level 3 classification. Management reviews and adjusts the discount rate on an ongoing basis. An increase in the discount rate would reduce the estimated fair value of the MSRs asset. Mortgage Banking Derivatives.
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Revenue Recognition | Contract Balances. A contract asset or receivable is recognized if the Company performs a service or transfers a good in advance of receiving consideration. A contract liability is recognized if the Company receives consideration (or has the unconditional right to receive consideration) in advance of performance. As of June 30, 2019, the Company’s contract assets and liabilities were not considered material. Contract Acquisition Costs. The Company uses the practical expedient to expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in less than one year. In adopting the guidance in Topic 606, the Company did not capitalize any contract acquisition costs. Other. Income from bank owned life insurance is accounted for in accordance with ASC 325, Investments - Other. Lending related income includes fees earned from gains or losses on the sale of loans, SBA income, and letter of credit fees. Gains and losses on the sale of loans and SBA income are recognized pursuant to ASC 860, Transfers and Servicing. Fees related to standby letters of credit are accounted for in accordance with ASC 440, Commitments. Net gain or loss on sales / valuations of repossessed and other assets is presented as a component of non-interest expense, but may also be presented as a component of non-interest income in the event that a net gain is recognized. Net gain or loss on sales of repossessed and other assets are accounted for in accordance with ASC 610, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets. Revenue Recognition. On July 1, 2018, the Company adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, and all subsequent amendments using a modified retrospective approach. The implementation of the new standard did not have a material impact on the measurement, timing, or recognition of revenue. Accordingly, no cumulative effect adjustment to opening retained earnings was deemed necessary. Results for reporting periods beginning after July 1, 2018 are presented under Topic 606, while prior period amounts were not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. The core principle of Topic 606 is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard affects all entities that either enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other guidance. Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain non-interest income streams such as gain or loss associated with mortgage servicing rights, financial guarantees, derivatives, and income from bank owned life insurance are also not within the scope of the new guidance. Topic 606 is applicable to non-interest income such as deposit related fees, interchange fees, merchant related income. However, the recognition of these revenue streams did not change significantly upon adoption of Topic 606. Non-interest income considered to be within the scope of Topic 606 is discussed below. Deposit Service Fees. Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), monthly service fees, check orders, and other deposit account related fees. The Company’s performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied and related revenue recognized, when incurred. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts. Fees, Exchange, and Other Service Charges. Fees, exchange, and other service charges are primarily comprised of debit and credit card income, ATM fees, merchant services income, and other service charges. Debit and credit card income is primarily comprised of interchange fees earned whenever the Company’s debit and credit cards are processed through card payment networks such as Visa. ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. Other service charges include revenue from processing wire transfers, bill pay service, cashier’s checks, and other services. The Company’s performance obligation for fees, exchange, and other service charges are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month. Broker dealer clearing fees. The Company earns revenues for executing, settling and clearing securities transactions for other broker-dealers on a fully disclosed basis. Trade execution and clearing services, when provided together, represent a single performance obligation as the services are not separately identifiable in the context of the contract. Revenues associated with combined trade execution and clearing services, as well as trade execution services on a standalone basis, are recognized at a point in time on trade-date. The Company believes that the performance obligation is satisfied on the trade date because that is when the underlying security or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to/from the customer. The Company also earns revenues for custody services which are separately identifiable and represent a distinct performance obligation which is recognized over time as the customer simultaneously receives and consumes the benefits. Certain clearing or custody related fees represent a modification of the original contract as they are distinct services. All trade and execution services are priced at their standalone selling price. Clearing and other fees are generally deducted from the introducing brokers’ commissions on a monthly basis. Bankruptcy Trustee and Fiduciary Service Fees. Bankruptcy Trustee and Fiduciary Service income is primarily comprised of fees earned from the Monthly Basis Point Fee and Bank Account Service Charge. The products and services provided to the Trustee also indirectly provide additional deposits to the other banks. One of the uses of the increased deposits by the other banks is to fund the fees paid. The performance obligation is satisfied when the deposits are increased (or decreased) at the end of each month. The expected value method will be used to calculate and record the estimated revenue at the beginning of each month with a subsequent reconciliation to actual at the end of each month.
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New Accounting Pronouncements | New Accounting Pronouncements. Accounting Standards Adopted During Fiscal 2019 In November 2016, the FASB issued ASU 2016-18, Restricted Cash (Topic 326):Restricted Cash. This ASU will amend the guidance in ASC Topic 230, Statement of Cash Flows, and is intended to reduce the diversity in the classification and presentation of changes in restricted cash on the statement of cash flows. The amendments within this ASU will require that the reconciliation of the beginning-of-period and end-of-period cash and cash equivalents amounts shown on the statement of cash flows include restricted cash and restricted cash equivalents. If restricted cash and restricted cash equivalents are presented separately from cash and cash equivalents on the balance sheet, an entity will be required to reconcile the amounts presented on the statement of cash flows to the amounts on the balance sheet. An entity will also be required to disclose information regarding the nature of the restrictions. ASU 2016-18 requires retrospective application and is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with early adoption permitted. The Company adopted this standard on March 31, 2019. The new guidance did not have a significant impact on the Company’s consolidated financial statements at the time of adoption. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is deemed to be a business. Determining whether a transferred set constitutes a business is important because the accounting for a business combination differs from that of an asset acquisition. The definition of a business also affects the accounting for dispositions. Under the new standard, when substantially all of the fair value of assets acquired is concentrated in a single asset, or a group of similar assets, the assets acquired would not represent a business and business combination accounting would not be required. The new standard may result in more transactions being accounted for as asset acquisitions rather than business combinations. The Company adopted this standard on July 1, 2018. The new guidance did not have a significant impact on the Company’s consolidated financial statements at the time of adoption. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment: The objective of this guidance is to simplify an entity’s required test for impairment of goodwill by eliminating Step 2 from the goodwill impairment test. In Step 2 an entity measured a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. In computing the implied fair value of goodwill, an entity had to determine the fair value at the impairment date of its assets and liabilities, including any unrecognized assets and liabilities, following a procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Under this Update, an entity should perform its annual or quarterly goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount and record an impairment charge for the excess of the carrying amount over the reporting unit’s fair value. The loss recognized should not exceed the total amount of goodwill allocated to the reporting unit and the entity must consider the income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. This guidance is effective for a public business entity that is an SEC filer for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The new guidance did not have a significant impact on the Company’s consolidated financial statements at the time of adoption. Accounting Standards Issued But Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases, as amended in July 2018 by ASU 2018-10 Codification Improvements to Topic 842, Leases and ASU 2018-11 Leases (Topic 842): Targeted Improvements. The new standard establishes a right-of-use model that requires a lessee to record a right of use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASUs 2016-02, 2018-10 and 2018-11 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is anticipated for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company has completed its review of contracts and does not expect a material impact on the Company’s consolidated financial statements and regulatory capital and risk-weighted assets or results from operations. In June 2016, the FASB issued ASU 2016-13 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which (i) significantly changes the impairment model for most financial assets that are measured at amortized cost and certain other instruments from an incurred loss model to an expected loss model; and (ii) provides for recording credit losses on available-for-sale debt securities through an allowance account. ASU 2016-13 also requires certain incremental disclosures. ASU 2016-13 should be applied on a modified-retrospective transition approach that would require a cumulative-effect adjustment to the opening retained earnings in the statement of financial condition as of the date of adoption. A prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. The guidance will be effective for the Company’s financial statements that include periods beginning July 1, 2020. The Company has completed the development the of implementation plan and is in the process of model development. The Company expects ASU 2016-13 to have a material impact on the Company’s consolidated financial statements. In March 2017, the FASB issued guidance within ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities. The amendments in ASU 2017-08 to Subtopic 310-20, Receivables-Nonrefundable Fees and Other Costs, shorten the amortization period for certain purchased callable debt securities held at a premium to the earliest call date, which more closely align the amortization period of premiums and discounts to expectations incorporated in market pricing on the underlying securities. Under current GAAP, entities generally amortize the premium as an adjustment of yield over the contractual life of the instrument. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The amendments in this ASU should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The ASU expands and refines hedge accounting for both financial and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The new standard must be adopted using a modified retrospective transition with a cumulative effect adjustment recorded to opening retained earnings as of the initial adoption date. The Company does not anticipate that this guidance will have a material impact on its consolidated financial statements. In June 2018, the FASB issued guidance within ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting. The amendments in ASU 2018-07 to Topic 718, Compensation-Stock Compensation, are intended to align the accounting for share-based payment awards issued to employees and nonemployees. Changes to the accounting for nonemployee awards include: 1) equity classified share-based payment awards issued to nonemployees will now be measured on the grant date, instead of the previous requirement to remeasure the awards through the performance completion date; 2) for performance conditions, compensation cost associated with the award will be recognized when achievement of the performance condition is probable, rather than upon achievement of the performance condition; and 3) the current requirement to reassess the classification (equity or liability) for nonemployee awards upon vesting will be eliminated, except for awards in the form of convertible instruments. The new guidance also clarifies that any share-based payment awards issued to customers should be evaluated under ASC 606, Revenue from Contracts with Customers. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company’s share-based payment awards to nonemployees consist only of grants made to the Company’s nonemployee Directors as compensation solely related to each individual’s role as a nonemployee Director. As such, in accordance with ASC 718, the Company accounts for these share-based payment awards to its nonemployee Directors in the same manner as share-based payment awards for its employees. Accordingly, the amendments in this guidance will not have an effect on the accounting for the Company’s share-based payment awards to its nonemployee Directors. In August 2018, the FASB issued guidance within ASU 2018-13, Fair Value Measurement Disclosure Framework (Topic 820) - Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in ASU 2018-13 require a nonpublic entity to disclose transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities. Public companies are also now required to disclose the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. Under current GAAP, entities are required to disclose a roll forward for Level 3 fair value measurements. The amendments in this ASU related to changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this ASU. The Company does not anticipate that this guidance will have a material impact on its consolidated financial statements. The Company will adopt this standard on July 1, 2019.
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Fair Value Measurement | 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 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 standard describes three levels of inputs that may be used to measure fair value:
When available, the Company generally uses quoted market prices to determine fair value. In some cases where a market price is available, the Company will make use of acceptable practical expedients (such as matrix pricing) to calculate fair value, in which case the items are classified in Level 2. The Company considers relevant and observable market prices in its valuations where possible. The frequency of transactions, the size of the bid-ask spread and the nature of the participants are some of the factors the Company uses to help determine whether a market is active and orderly or inactive and not orderly. Price quotes based upon transactions that are not orderly are not considered to be determinative of fair value and are given little, if any, weight in measuring fair value. If quoted market prices are not available, fair value is based upon internally developed valuation techniques that use, where possible, current market-based or independently sourced market parameters, such as interest rates, credit spreads, housing value forecasts, etc. Items valued using such internally generated valuation techniques are classified according to the lowest level input or value driver that is significant to the valuation. Thus, an item may be classified in Level 3 even though there may be some significant inputs that are readily observable.
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Loans and Leases Segment Risk Characteristics | Loan and lease segment risk characteristics. The Company considers its loan and lease classes to be the same as its loan and lease segments. The following are loan and lease segment risk characteristics of the Company’s loan and lease portfolio: Single family mortgage secured. The Company originates both fixed-rate and adjustable-rate loans secured by one-to-four family residences located in the U.S. The Company’s lending policies generally limit the maximum LTV ratio on one-to-four family loans to 80% of the lesser of the appraised value or the purchase price, plus pledged collateral. Terms of maturity typically range from 15 to 30 years. The Company attempts to mitigate residential lending risks by adhering to its underwriting policies in evaluating the collateral and the credit-worthiness of the borrower. Home equity. The Company also originates home equity lines of credit and second mortgage loans. Home equity lines of credit and second mortgage loans have a greater credit risk than one-to-four family residential mortgage loans because they are secured by mortgages subordinated to the existing first mortgage on the property, which may or may not be held by the Company. The Company attempts to mitigate residential lending risks by adhering to its underwriting policies in evaluating the collateral and the credit-worthiness of the borrower. Warehouse and other. Single family warehouse loans consist of short-term, secured advances to mortgage bankers on a revolving basis. These facilities enable the mortgage originators to close loans in their own names and temporarily finance inventories of closed mortgage loans until they can be sold to an approved investor. Commercial specialty and lender finance loans secured by single family real estate are originated to businesses secured by first liens on single family mortgage loans. These loans are generally collateralized by single family mortgage loans that are secured by first liens on single family real estate. The Company attempts to mitigate residential lending risks by adhering to its underwriting policies in evaluating the collateral and the credit-worthiness of the borrower. Multifamily. The Company originates loans secured by multifamily real estate (more than four units). These loans involve a greater degree of risk than one-to-four family residential mortgage loans as these loans are usually greater in amount, dependent on the cash flow capacity of the project, and may be more difficult to evaluate and monitor. Repayment of loans secured by multifamily properties frequently depends on the successful operation and management of the properties. Consequently, repayment of such loans may be affected by adverse conditions in the real estate market or economy. The Company attempts to mitigate these risks by thoroughly evaluating the global financial condition of the borrower, the management experience of the borrower, and the quality of the collateral property securing the loan. Commercial real estate. The Company originates loans across the U.S. secured by small commercial real estate properties. These are primarily cash flow loans that share characteristics of both real estate and commercial business loans. The primary source of repayment is frequently cash flow from the operation of the collateral property and secondarily through liquidation of the collateral. These loans are generally higher risk than other classifications of loans in that they typically involve higher loan amounts, are dependent on the management experience of the owners, and may be adversely affected by conditions in the real estate market or the economy. Owner-occupied commercial real estate loans are generally of lower credit risk than non-owner occupied commercial real estate loans as the borrowers’ businesses are likely dependent on the properties. Underwriting for these loans is primarily dependent on the repayment capacity derived from the operation of the occupying business rather than rents paid by third parties. The Company attempts to mitigate these risks by generally limiting the maximum LTV ratio to 65%-80%, depending on property type, and scrutinizing the financial condition of the borrower, the quality of the collateral and the management of the property securing the loan. Auto and RV. Auto and RV loans primarily consist of direct and indirect auto loans and legacy RV loans. These auto and RV loans were originated across the U.S. The collateral for these auto and RV loans is comprised of a mix of new and used autos and RVs. Auto and RV loans generally have shorter terms to maturity than mortgage loans. Auto and RV loans generally involve a greater degree of risk than do residential mortgage loans, particularly in the case of auto and RV loans, which are secured by rapidly depreciating and mobile assets. In such cases, any repossessed collateral for a defaulted auto and RV loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation. The Company attempts to mitigate these risks by adhering to its underwriting policies in evaluating the credit-worthiness of the borrower. Factoring. Factoring loans are originated through the wholesale and retail purchase of state lottery prize and structured settlement annuities. These annuities are high credit quality deferred payment receivables having a state lottery commission or primarily highly rated insurance company payor. Purchases of state lottery prize or structured settlement annuities are governed by specific state statutes requiring judicial approval of each transaction. No transaction is funded before an order approving such transaction has been entered by a court of competent jurisdiction. The Company’s commission-based sales force originates contracts for the retail purchase of such payments from leads generated by the Company’s dedicated research department through the use of proprietary research techniques. The Company attempts to mitigate these risks by adhering to its underwriting policies in evaluating the credit-worthiness of the state or insurer. Commercial and industrial. Commercial and industrial loans and leases are primarily made based on the operating cash flows of the borrower or conversion of working capital assets to cash and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers may be volatile and the value of the collateral securing these loans and leases may be difficult to measure. Most commercial and industrial loans and leases are secured by the assets being financed or other business assets such as accounts receivable or inventory and generally include personal guarantees based on a review of personal financial statements. Although commercial and industrial loans and leases are often collateralized by equipment, inventory, accounts receivable or other business assets, the liquidation of collateral in the event of a borrower default may be an insufficient source of repayment, because accounts receivable may be uncollectible and inventories and equipment may be obsolete or of limited use. Accordingly, the repayment of a commercial and industrial loan or lease primarily depends on the credit-worthiness of the borrower and guarantors, while the liquidation of collateral is a secondary and potentially insufficient source of repayment. The Company attempts to mitigate these risks by adhering to its underwriting policies in evaluating the management of the business and the credit-worthiness of borrowers and guarantors. Other. The Company originates other loans, which include unsecured consumer loans and other small balance business and consumer loans. Other consumer loans generally have shorter terms to maturity than mortgage loans. Other consumer loans generally involve a greater degree of risk than do residential mortgage loans, particularly in the case of consumer loans that are unsecured. In such cases, it is not possible to repossess collateral for a defaulted consumer loan and as such there may not exist an adequate source of repayment of the outstanding loan balance as a result of the absence of security. The Company attempts to mitigate these risks by adhering to its underwriting policies in evaluating the credit-worthiness of the borrower.
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ORGANIZATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Schedule of Non-interest Income, Segregated by Revenue Streams | The following presents non-interest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the periods indicated.
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ACQUISITIONS (Tables) |
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Schedule of Fair Value of Acquired Assets and Liabilities Assumed | The following table sets forth the approximate fair value of assets acquired from Epiq on the consolidated balance sheets as of April 4, 2018:
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FAIR VALUE (Tables) |
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Schedule of Fair Value Assets and Liabilities Measured on Recurring Basis | The following table sets forth the Company’s financial assets and liabilities measured at fair value on a recurring basis. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:
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Schedule of Level 3, Fair Value, Assets Measured on Recurring Basis | The following table presents 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:
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Schedule of Level 3, Change in Unrealized Gain (Loss) and Interest income Included in Earnings | The table below summarizes changes in unrealized gains and losses and interest income recorded in earnings for Level 3 trading assets and liabilities that are still held at the periods indicated:
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Schedule of Fair Value Assets Measured on Nonrecurring Basis | The table below summarizes the fair value of assets measured for impairment on a non-recurring basis:
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Schedule of Fair Value, Loans Held For Sale | The aggregate fair value, contractual balance (including accrued interest), and unrealized gain was as follows:
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:
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Schedule of Fair Value, by Balance Sheet Grouping | The carrying amount and estimated fair values of financial instruments at year-end were as follows:
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Fair Value, Measurements, Recurring | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Inputs, Assets, Quantitative Information | The table below summarizes the quantitative information about Level 3 fair value measurements as of the dates indicated:
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Fair Value, Measurements, Nonrecurring | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Inputs, Assets, Quantitative Information | 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:
1 For impaired loans and other real estate owned 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.
1 For impaired loans and other real estate owned 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. |
SECURITIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amortized Cost, Carrying Amount and Fair Value of Available-for-sale Securities | The amortized cost, carrying amount and fair value for the securities available-for-sale for the following periods were:
1 U.S. government-backed or government sponsored enterprises including Fannie Mae, Freddie Mac and Ginnie Mae. 2 Private sponsors of securities collateralized primarily by pools of 1-4 family residential first mortgages. Primarily super senior securities secured by prime, Alt-A or pay-option ARM mortgages.
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Schedule of Available-for-sale Securities in Unrealized Loss Position | 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:
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Schedule of Anticipated Credit Losses Recognized in Income Statement Through Other Than Temporary Impairment | The following table summarizes amounts of anticipated credit loss recognized in the income statement through other-than-temporary impairment charges, which reduced non-interest income:
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Schedule of Realized Gain (Loss) on Sale of Available-for-Sale Securities | The gross gains and losses realized through earnings upon the sale of available-for-sale securities were as follows:
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Schedule of Unrealized Gain (Loss) on Securities in Accumulated Other Comprehensive Loss | The Company records unrealized gains and unrealized losses in accumulated other comprehensive loss as follows:
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Schedule of Contractual Maturities of Available-for-sale Securities | The expected maturity distribution of the Company’s mortgage-backed securities and the contractual maturity distribution of the Company’s Non-RMBS securities:
1 Residential mortgage-backed security (RMBS) distributions include impact of expected prepayments and other timing factors.
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LOANS, LEASES & ALLOWANCE FOR LOAN AND LEASE LOSSES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loans by Class | The following table sets forth the composition of the loan and lease portfolio as of the dates indicated:
1 The balance of single family warehouse loans was $301,999 at June 30, 2019 and $175,508 at June 30, 2018. The remainder of the balance was attributable to commercial specialty and lender finance loans secured by single family real estate.
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Schedule of Allowance for Credit Losses on Financing Receivables | The following tables present the balance in the allowance for loan and lease losses and the recorded investment in loans and leases by portfolio segment and based on impairment evaluation method:
1 Loans and leases evaluated for impairment include TDRs that have been performing for more than six months.
1 Loans and leases evaluated for impairment include TDRs that have been performing for more than six months. The following tables summarize activity in the allowance for loan and lease losses by portfolio classes for the periods indicated:
The following table summarizes activity in the allowance for loan and lease losses for the periods indicated:
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Schedule of Impaired Financing Receivables | The following tables present our loans and leases evaluated individually for impairment by portfolio class for the periods indicated:
1 Impaired loans with an allowance recorded do not have any charge-offs. Principal balance adjustments on impaired loans with an allowance recorded represent interest payments that have been applied to the book balance as a result of the loans’ non-accrual status. The following table summarizes the composition of the impaired loans and leases:
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Schedule of Financing Receivables, Nonaccrual Status | Nonaccrual loans and leases consisted of the following as of the dates indicated:
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Schedule of Loans Performing and Nonaccrual | The following tables provide the outstanding unpaid balance of loans and leases that are performing and nonaccrual by portfolio class as of the dates indicated:
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Schedule of Financing Receivable Credit Quality Indicators | The following tables present the composition of our loan and lease portfolio by credit quality indicator as of the dates indicated:
1 The $56.7 million included in the substandard column for Warehouse and other single family real estate secured category consists of a single loan, which was fully repaid in July 2019.
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Schedule of Past Due Financing Receivables | 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:
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OFFSETTING OF SECURITIES FINANCING AGREEMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Offsetting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Securities Financing Transactions - Assets | The following table presents information about the offsetting of these instruments and related collateral amounts as of June 30, 2019:
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Schedule of Securities Financing Transactions - Liabilities | The following table presents information about the offsetting of these instruments and related collateral amounts as of June 30, 2019:
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CUSTOMER, BROKER-DEALER AND CLEARING RECEIVABLES AND PAYABLES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brokers and Dealers [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Due to (from) Broker-Dealers and Clearing Organizations | Customer, broker-dealer and clearing receivables and payables consisted of the following at June 30, 2019:
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FURNITURE, EQUIPMENT AND SOFTWARE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property, Plant and Equipment | A summary of the cost and accumulated depreciation and amortization for leasehold improvements, furniture, equipment and software is as follows:
1Furniture, equipment and software are included in the other assets line on the consolidated balance sheet.
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GOODWILL AND INTANGIBLE ASSETS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Activity in the Company's Goodwill Balance | The following table summarizes the activity in the Company’s goodwill balance as of the dates indicated:
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Schedule of Company's Acquired Intangible Assets | The Company’s acquired intangible assets are summarized as follows as of the dates indicated:
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Schedule of Weighted Average Useful Life of Acquired Intangible Assets | The weighted-average useful lives of intangible assets at the time of acquisition were as follows:
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Schedule of Estimated Future Amortization Expense of Acquired Intangible Assets | Estimated future amortization expense related to finite-lived intangible assets at June 30, 2019 is as follows:
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DEPOSITS (Tables) |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deposits | Deposit accounts are summarized as follows:
1 Based on weighted-average stated interest rates at end of period. 2 The total interest-bearing includes brokered deposits of $1,124.0 million and $2,055.9 million as of June 30, 2019 and June 30, 2018, respectively, of which $796.7 million and $1,692.8 million, respectively, are time deposits classified as $250 and under.
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Schedule of Maturities For Total Time Deposits | The scheduled maturities of time deposits are as follows:
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ADVANCES FROM THE FEDERAL HOME LOAN BANK (Tables) |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Federal Home Loan Bank, Advances, by Maturity | Fixed-rate advances from FHLB are scheduled to mature as follows:
1. Within one year category includes of term advances of $231,000 and $147,500 at June 30, 2019 and 2018, respectively. |
BORROWINGS, SUBORDINATED NOTES AND DEBENTURES (Tables) |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Borrowings, Subordinated Notes and Debentures | The following table sets forth the composition of the borrowings, subordinated notes and debentures as of the dates indicated:
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INCOME TAXES (Tables) |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Provision for Income Taxes | The provision for income taxes is as follows:
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Schedule of Effective Income Tax Rate Reconciliation | The differences between the statutory federal income tax rate and the effective tax rates are summarized as follows:
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Schedule of Net Deferred Tax Asset | The components of the net deferred tax asset are as follows:
1Net deferred tax asset is included in the other assets line on the consolidated balance sheet.
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Schedule of Unrecognized Tax Benefits Roll Forward | The following is a reconciliation of the beginning and ending amount of unrecognized tax positions for the periods presented:
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STOCKHOLDERS' EQUITY (Tables) |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Common Stock Issued and Outstanding | Changes in common stock issued and outstanding were as follows:
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STOCK-BASED COMPENSATION (Tables) |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Unrecognized Compensation Cost, Nonvested Awards | At June 30, 2019 unrecognized compensation expense related to non-vested awards aggregated to $37,214 and is expected to be recognized in future periods as follows:
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Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | The following table presents the status and changes in restricted stock units for the periods indicated:
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EARNINGS PER COMMON SHARE (Tables) |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Calculation of Basic and Diluted EPS | The following table presents the calculation of basic and diluted EPS:
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COMMITMENTS AND CONTINGENCIES (Tables) |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Contractual Obligation, Fiscal Year Maturity Schedule | Pursuant to the terms of these non-cancelable lease agreements in effect at June 30, 2019, future minimum lease payments are as follows:
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MINIMUM REGULATORY CAPITAL REQUIREMENTS (Tables) |
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Banking and Thrift [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | The Bank’s capital amounts, capital ratios and capital requirements under Basel III were as follows:
At June 30, 2019, the net capital position of Axos Clearing was as follows:
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PARENT-ONLY CONDENSED FINANCIAL INFORMATION (Tables) |
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Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Balance Sheets | The following Axos Financial, Inc. (Parent company only) financial information should be read in conjunction with the consolidated financial statements of the Company and the other notes to the consolidated financial statements:
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Statements of Income |
1 Includes tax benefits of $10,749, $11,140, and $8,518 for the years ended June 30, 2019, 2018, and 2017, respectively.
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Statements of Cash Flows |
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QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Tables) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information |
|
SEGMENT REPORTING (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The following tables present the operating results, goodwill, and assets of the segments:
|
ORGANIZATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - NARRATIVE (Details) |
12 Months Ended | |
---|---|---|
Jun. 30, 2019
USD ($)
state
|
Jun. 30, 2018
USD ($)
|
|
Concentration Risk [Line Items] | ||
Number of states in which the bank operates | state | 50 | |
Concentration risk, geographic area | California | |
Income tax benefits related to excess tax benefits from stock compensation | $ 2,000,000.0 | $ 2,400,000 |
Fixed assets, estimated useful lives | $ 500 | |
H and R Block Bank Deposits | Other | Emerald Advance | ||
Concentration Risk [Line Items] | ||
Loans and leases interest and dividend retainer fee (as percent) | 10.00% | |
Remaining balance | $ 0 | |
Minimum | ||
Concentration Risk [Line Items] | ||
Fixed assets, cost capitalization threshold | 3 years | |
Maximum | ||
Concentration Risk [Line Items] | ||
Fixed assets, cost capitalization threshold | 7 years | |
Mortgage loans | Geographic concentration risk | CALIFORNIA | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 72.20% |
ACQUISITIONS - FAIR VALUE OF ASSETS AND LIABILITIES ACQUIRED (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Jan. 28, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
LIABILITIES | ||||
Goodwill | $ 71,222 | $ 35,719 | ||
Total cash paid | $ 0 | $ 70,002 | $ 0 | |
Axos Clearing | ||||
ASSETS | ||||
Cash and due from banks | $ 16,604 | |||
Cash segregated for regulatory purposes | 142,016 | |||
Securities, available for sale | 9,585 | |||
Stock of the regulatory agencies, at cost | 2,431 | |||
Securities borrowed | 157,898 | |||
Customer, broker-dealer and clearing receivables | 234,352 | |||
Other assets | 5,487 | |||
Total identifiable assets | 568,373 | |||
LIABILITIES | ||||
Borrowings, subordinated notes and debentures | 85,100 | |||
Securities loaned | 203,041 | |||
Customer, broker-dealer and clearing payables | 240,110 | |||
Accounts payable and accrued liabilities | 7,383 | |||
Total identifiable liabilities | 535,634 | |||
Goodwill | 35,501 | |||
Intangible assets | 20,120 | |||
Total cash paid | 80,860 | |||
Borrowings, subordinated notes and debentures issued | 7,500 | |||
Total consideration paid | $ 88,360 |
ACQUISITIONS - FAIR VALUE OF ASSETS ACQUIRED (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Apr. 04, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Business Acquisition [Line Items] | ||||
Cash | $ 0 | $ 70,002 | $ 0 | |
Goodwill incident to acquisition | $ 71,222 | $ 35,719 | ||
EPIC Systems, Inc. | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 70,002 | |||
Total consideration paid | 70,002 | |||
Intangible assets | 32,720 | |||
Other assets | 1,563 | |||
Total identifiable assets | 34,283 | |||
Fair value of net assets acquired | 34,283 | |||
Goodwill incident to acquisition | $ 35,719 |
FAIR VALUE - LEVEL 3 UNREALIZED GAIN (LOSS) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Fair value adjustment | $ 0 | $ 0 | $ 743 |
Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Interest income on investments | 0 | 0 | 311 |
Fair value adjustment | 0 | 0 | 743 |
Total | $ 0 | $ 0 | $ 1,054 |
FAIR VALUE - LOANS HELD-FOR-SALE (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Fair Value Disclosures [Abstract] | |||
Aggregate fair value | $ 33,260 | $ 35,077 | $ 18,738 |
Contractual balance | 32,342 | 34,415 | 18,311 |
Gain | 918 | 662 | 427 |
Interest income | 1,006 | 903 | 602 |
Change in fair value | 544 | 181 | (514) |
Total | $ 1,550 | $ 1,084 | $ 88 |
FAIR VALUE - FAIR VALUE BY BALANCE SHEET GROUPING (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
---|---|---|---|
Financial assets: | |||
Securities trading | $ 8,327 | ||
Loans held for sale, carried at fair value | $ 33,260 | 35,077 | $ 18,738 |
Loans held for sale, at lower of cost or fair value | 4,800 | 2,686 | |
Securities borrowed | 144,706 | 0 | |
Financial liabilities: | |||
Securities loaned | 198,356 | 0 | |
Carrying (Reported) Amount, Fair Value Disclosure | |||
Financial assets: | |||
Cash and cash equivalents | 857,368 | 622,850 | |
Securities trading | 180,305 | ||
Securities available-for-sale | 227,513 | ||
Loans held for sale, carried at fair value | 33,260 | 35,077 | |
Loans held for sale, at lower of cost or fair value | 4,800 | 2,686 | |
Loans and leases held for investment—net | 9,382,124 | 8,432,289 | |
Securities borrowed | 144,706 | ||
Customer, broker-dealer and clearing receivables | 203,192 | ||
Accrued interest receivable | 38,988 | 26,729 | |
Mortgage servicing rights | 9,784 | 10,752 | |
Financial liabilities: | |||
Total deposits | 8,983,173 | 7,985,350 | |
Advances from the Federal Home Loan Bank | 458,500 | 457,000 | |
Subordinated notes and debentures | 168,929 | 54,552 | |
Securities loaned | 198,356 | ||
Customer, broker-dealer and clearing payables | 238,604 | ||
Accrued interest payable | 2,882 | 1,753 | |
Fair Value | |||
Financial assets: | |||
Cash and cash equivalents | 857,368 | 622,850 | |
Securities trading | 180,305 | ||
Securities available-for-sale | 227,513 | ||
Loans held for sale, carried at fair value | 33,260 | 35,077 | |
Loans held for sale, at lower of cost or fair value | 4,990 | 2,734 | |
Loans and leases held for investment—net | 9,630,061 | 8,466,494 | |
Securities borrowed | 144,720 | ||
Customer, broker-dealer and clearing receivables | 203,355 | ||
Accrued interest receivable | 38,988 | 26,729 | |
Mortgage servicing rights | 9,784 | 10,752 | |
Financial liabilities: | |||
Total deposits | 8,758,861 | 7,584,928 | |
Advances from the Federal Home Loan Bank | 461,156 | 453,326 | |
Subordinated notes and debentures | 169,212 | 51,693 | |
Securities loaned | 198,197 | ||
Customer, broker-dealer and clearing payables | 229,987 | ||
Accrued interest payable | 2,882 | 1,753 | |
Level 1 | |||
Financial assets: | |||
Cash and cash equivalents | 857,368 | 622,850 | |
Securities trading | 0 | ||
Securities available-for-sale | 0 | ||
Loans held for sale, carried at fair value | 0 | 0 | |
Loans held for sale, at lower of cost or fair value | 0 | 0 | |
Loans and leases held for investment—net | 0 | 0 | |
Securities borrowed | 0 | ||
Customer, broker-dealer and clearing receivables | 0 | ||
Accrued interest receivable | 0 | 0 | |
Mortgage servicing rights | 0 | 0 | |
Financial liabilities: | |||
Total deposits | 0 | 0 | |
Advances from the Federal Home Loan Bank | 0 | 0 | |
Subordinated notes and debentures | 0 | 0 | |
Securities loaned | 0 | ||
Customer, broker-dealer and clearing payables | 0 | ||
Accrued interest payable | 0 | 0 | |
Level 2 | |||
Financial assets: | |||
Cash and cash equivalents | 0 | 0 | |
Securities trading | 162,862 | ||
Securities available-for-sale | 214,488 | ||
Loans held for sale, carried at fair value | 33,260 | 35,077 | |
Loans held for sale, at lower of cost or fair value | 0 | 0 | |
Loans and leases held for investment—net | 0 | 0 | |
Securities borrowed | 0 | ||
Customer, broker-dealer and clearing receivables | 0 | ||
Accrued interest receivable | 0 | 0 | |
Mortgage servicing rights | 0 | 0 | |
Financial liabilities: | |||
Total deposits | 8,758,861 | 7,584,928 | |
Advances from the Federal Home Loan Bank | 461,156 | 453,326 | |
Subordinated notes and debentures | 169,212 | 51,693 | |
Securities loaned | 0 | ||
Customer, broker-dealer and clearing payables | 0 | ||
Accrued interest payable | 2,882 | 1,753 | |
Level 3 | |||
Financial assets: | |||
Cash and cash equivalents | 0 | 0 | |
Securities trading | 17,443 | ||
Securities available-for-sale | 13,025 | ||
Loans held for sale, carried at fair value | 0 | 0 | |
Loans held for sale, at lower of cost or fair value | 4,990 | 2,734 | |
Loans and leases held for investment—net | 9,630,061 | 8,466,494 | |
Securities borrowed | 144,720 | ||
Customer, broker-dealer and clearing receivables | 203,355 | ||
Accrued interest receivable | 38,988 | 26,729 | |
Mortgage servicing rights | 9,784 | 10,752 | |
Financial liabilities: | |||
Total deposits | 0 | 0 | |
Advances from the Federal Home Loan Bank | 0 | 0 | |
Subordinated notes and debentures | 0 | 0 | |
Securities loaned | 198,197 | ||
Customer, broker-dealer and clearing payables | 229,987 | ||
Accrued interest payable | $ 0 | $ 0 |
SECURITIES - CARRYING AMOUNT AND FAIR VALUE OF SECURITIES (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||||||||||
Available-for-sale, Amortized Cost | $ 226,607 | $ 180,997 | ||||||||
Available-for-sale, Unrealized Gains | 2,512 | 2,537 | ||||||||
Available-for-sale, Unrealized Losses | (1,606) | (3,229) | ||||||||
Available-for-sale, Fair Value | 227,513 | 180,305 | ||||||||
Total mortgage-backed securities | ||||||||||
Debt Securities, Available-for-sale [Line Items] | ||||||||||
Available-for-sale, Amortized Cost | 22,975 | 32,486 | ||||||||
Available-for-sale, Unrealized Gains | 405 | 268 | ||||||||
Available-for-sale, Unrealized Losses | (769) | (2,385) | ||||||||
Available-for-sale, Fair Value | 22,611 | 30,369 | ||||||||
U.S Agencies | ||||||||||
Debt Securities, Available-for-sale [Line Items] | ||||||||||
Available-for-sale, Amortized Cost | [1] | 9,486 | 13,102 | |||||||
Available-for-sale, Unrealized Gains | [1] | 179 | 152 | |||||||
Available-for-sale, Unrealized Losses | [1] | (79) | (328) | |||||||
Available-for-sale, Fair Value | [1] | 9,586 | [2] | 12,926 | ||||||
Non-agency | ||||||||||
Debt Securities, Available-for-sale [Line Items] | ||||||||||
Available-for-sale, Amortized Cost | [3] | 13,489 | 19,384 | |||||||
Available-for-sale, Unrealized Gains | [3] | 226 | 116 | |||||||
Available-for-sale, Unrealized Losses | [3] | (690) | (2,057) | |||||||
Available-for-sale, Fair Value | [3] | 13,025 | 17,443 | |||||||
Total Non-RMBS | ||||||||||
Debt Securities, Available-for-sale [Line Items] | ||||||||||
Available-for-sale, Amortized Cost | 203,632 | 148,511 | ||||||||
Available-for-sale, Unrealized Gains | 2,107 | 2,269 | ||||||||
Available-for-sale, Unrealized Losses | (837) | (844) | ||||||||
Available-for-sale, Fair Value | 204,902 | 149,936 | ||||||||
U.S. Agencies | ||||||||||
Debt Securities, Available-for-sale [Line Items] | ||||||||||
Available-for-sale, Amortized Cost | [1] | 1,682 | ||||||||
Available-for-sale, Unrealized Gains | [1] | 3 | ||||||||
Available-for-sale, Unrealized Losses | [1] | 0 | ||||||||
Available-for-sale, Fair Value | [1] | 1,685 | ||||||||
Municipal | ||||||||||
Debt Securities, Available-for-sale [Line Items] | ||||||||||
Available-for-sale, Amortized Cost | 21,974 | 20,953 | ||||||||
Available-for-sale, Unrealized Gains | 16 | 2 | ||||||||
Available-for-sale, Unrealized Losses | (828) | (743) | ||||||||
Available-for-sale, Fair Value | 21,162 | 20,212 | ||||||||
Asset-backed securities and structured notes | ||||||||||
Debt Securities, Available-for-sale [Line Items] | ||||||||||
Available-for-sale, Amortized Cost | 179,976 | 127,558 | ||||||||
Available-for-sale, Unrealized Gains | 2,088 | 2,267 | ||||||||
Available-for-sale, Unrealized Losses | (9) | (101) | ||||||||
Available-for-sale, Fair Value | $ 182,055 | $ 129,724 | ||||||||
|
SECURITIES - NARRATIVE (Details) $ in Thousands |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Jun. 30, 2019
USD ($)
security
|
Jun. 30, 2018
USD ($)
security
|
Jun. 30, 2017
USD ($)
|
Jun. 30, 2016
USD ($)
|
|||
Marketable Securities [Line Items] | ||||||
Securities - available for sale | $ 227,513 | $ 180,305 | ||||
Gain on sale of available-for-sale securities | 842 | 1,269 | $ 7,386 | |||
Loss on sale of senior support securities | 861 | |||||
Debt securities available-for-sale and held-to-maturity pledged to secure borrowings | $ 3,555 | $ 2,540 | ||||
Securities in a continuous loss position for a period of more than 12 months | security | 21 | 26 | ||||
Securities in a continuous loss position for a period of less than 12 months | security | 3 | 11 | ||||
Proceeds from sale of trading securities | $ 8,700 | |||||
Gain on sale of trading securities | $ 282 | |||||
Number of trading securities sold | security | 2 | |||||
Securities trading | $ 8,327 | |||||
Number of available-for-sale securities sold | security | 6 | |||||
Carrying value of available-for-sale securities sold | $ 15,131 | |||||
Gain on sale of available-for-sale securities | 709 | (300) | 3,920 | |||
Non-Agency RMBS | ||||||
Marketable Securities [Line Items] | ||||||
Securities - available for sale | [1] | $ 13,025 | 17,443 | |||
Number of securities with cumulative credit losses | security | 1 | |||||
Carrying amount of securities with cumulative credit losses | $ 3,143 | |||||
Credit losses recognized in earnings | 821 | 0 | 15,528 | $ 20,865 | ||
Other than temporary impairment recognized in earnings | $ 821 | $ 156 | $ 1,964 | |||
RMBS, Super Senior Securities | ||||||
Marketable Securities [Line Items] | ||||||
Available-for-sale, number of securities | security | 14 | |||||
RMBS, Mezzanine Z-Tranche Securities | ||||||
Marketable Securities [Line Items] | ||||||
Available-for-sale, number of securities | security | 2 | |||||
Gain on sale of available-for-sale securities | $ 153 | |||||
RMBS, Senior-Support Securities | ||||||
Marketable Securities [Line Items] | ||||||
Number of senior support securities sold | security | 1 | |||||
|
SECURITIES - SCHEDULE OF SECURITIES IN CONTINUOUS UNREALIZED LOSS POSITION (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale securities in loss position for less than 12 months, Fair Value | $ 177 | $ 11,277 |
Available-for-sale securities in loss position for less than 12 months, Gross Unrealized Losses | (4) | (49) |
Available-for-sale securities in loss position for more than 12 months, Fair Value | 27,915 | 41,181 |
Available-for-sale securities in loss position for more than 12 months, Gross Unrealized Losses | (1,602) | (3,180) |
Available-for-sale securities in loss position, Total, Fair Value | 28,092 | 52,458 |
Available-for-sale securities in loss position, Total, Gross Unrealized Losses | (1,606) | (3,229) |
Total mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale securities in loss position for less than 12 months, Fair Value | 76 | 48 |
Available-for-sale securities in loss position for less than 12 months, Gross Unrealized Losses | (3) | (2) |
Available-for-sale securities in loss position for more than 12 months, Fair Value | 13,139 | 22,692 |
Available-for-sale securities in loss position for more than 12 months, Gross Unrealized Losses | (766) | (2,383) |
Available-for-sale securities in loss position, Total, Fair Value | 13,215 | 22,740 |
Available-for-sale securities in loss position, Total, Gross Unrealized Losses | (769) | (2,385) |
U.S Agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale securities in loss position for less than 12 months, Fair Value | 44 | 12 |
Available-for-sale securities in loss position for less than 12 months, Gross Unrealized Losses | (2) | (1) |
Available-for-sale securities in loss position for more than 12 months, Fair Value | 4,612 | 6,825 |
Available-for-sale securities in loss position for more than 12 months, Gross Unrealized Losses | (77) | (327) |
Available-for-sale securities in loss position, Total, Fair Value | 4,656 | 6,837 |
Available-for-sale securities in loss position, Total, Gross Unrealized Losses | (79) | (328) |
Non-agency | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale securities in loss position for less than 12 months, Fair Value | 32 | 36 |
Available-for-sale securities in loss position for less than 12 months, Gross Unrealized Losses | (1) | (1) |
Available-for-sale securities in loss position for more than 12 months, Fair Value | 8,527 | 15,867 |
Available-for-sale securities in loss position for more than 12 months, Gross Unrealized Losses | (689) | (2,056) |
Available-for-sale securities in loss position, Total, Fair Value | 8,559 | 15,903 |
Available-for-sale securities in loss position, Total, Gross Unrealized Losses | (690) | (2,057) |
Total Non-RMBS | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale securities in loss position for less than 12 months, Fair Value | 101 | 11,229 |
Available-for-sale securities in loss position for less than 12 months, Gross Unrealized Losses | (1) | (47) |
Available-for-sale securities in loss position for more than 12 months, Fair Value | 14,776 | 18,489 |
Available-for-sale securities in loss position for more than 12 months, Gross Unrealized Losses | (836) | (797) |
Available-for-sale securities in loss position, Total, Fair Value | 14,877 | 29,718 |
Available-for-sale securities in loss position, Total, Gross Unrealized Losses | (837) | (844) |
Municipal | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale securities in loss position for less than 12 months, Fair Value | 0 | 1,740 |
Available-for-sale securities in loss position for less than 12 months, Gross Unrealized Losses | 0 | (17) |
Available-for-sale securities in loss position for more than 12 months, Fair Value | 12,997 | 12,326 |
Available-for-sale securities in loss position for more than 12 months, Gross Unrealized Losses | (828) | (726) |
Available-for-sale securities in loss position, Total, Fair Value | 12,997 | 14,066 |
Available-for-sale securities in loss position, Total, Gross Unrealized Losses | (828) | (743) |
Asset-backed securities and structured notes | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale securities in loss position for less than 12 months, Fair Value | 101 | 9,489 |
Available-for-sale securities in loss position for less than 12 months, Gross Unrealized Losses | (1) | (30) |
Available-for-sale securities in loss position for more than 12 months, Fair Value | 1,779 | 6,163 |
Available-for-sale securities in loss position for more than 12 months, Gross Unrealized Losses | (8) | (71) |
Available-for-sale securities in loss position, Total, Fair Value | 1,880 | 15,652 |
Available-for-sale securities in loss position, Total, Gross Unrealized Losses | $ (9) | $ (101) |
SECURITIES - OTHER THAN TEMPORARY IMPAIRMENT, CREDIT LOSSES RECOGNIZED IN EARNINGS (Details) - Non-Agency RMBS - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward] | |||
Beginning balance | $ 0 | $ (15,528) | $ (20,865) |
Additions for the amounts related to the credit loss for which an other-than-temporary impairment was not previously recognized | (821) | (7) | (342) |
Increases to the amount related to the credit loss for which other-than-temporary impairment was previously recognized | 0 | (149) | (1,622) |
Credit losses realized for securities sold | 0 | 15,684 | 7,301 |
Ending balance | $ (821) | $ 0 | $ (15,528) |
SECURITIES - REALIZED GAIN (LOSS) ON INVESTMENTS (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Investments, Debt and Equity Securities [Abstract] | |||
Proceeds | $ 15,863 | $ 44,013 | $ 161,048 |
Gross realized gains | 842 | 1,269 | 7,386 |
Gross realized loss | (133) | (1,569) | (3,466) |
Net (loss) gain on securities | $ 709 | $ (300) | $ 3,920 |
SECURITIES - UNREALIZED GAIN (LOSS) ON INVESTMENTS (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Available-for-sale debt securities—net unrealized gains | $ 905 | $ (692) |
Available-for-sale debt securities—non-credit related | (845) | 0 |
Subtotal | 60 | (692) |
Tax (provision) benefit | (44) | 79 |
Net unrealized gain (loss) on investment securities in accumulated other comprehensive loss | $ 16 | $ (613) |
SECURITIES - INVESTMENTS CLASSIFIED BY CONTRACTUAL MATURITY DATE (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Available-for-Sale Amortized Cost | ||||||||||
Total | $ 226,607 | |||||||||
Available-for-Sale, Fair Value | ||||||||||
Total | 227,513 | $ 180,305 | ||||||||
Agency RMBS | ||||||||||
Available-for-Sale Amortized Cost | ||||||||||
Due within one year | [1] | 862 | ||||||||
Due one to five years | [1] | 2,905 | ||||||||
Due five to ten years | [1] | 2,674 | ||||||||
Due after ten years | [1] | 3,045 | ||||||||
Total | [1] | 9,486 | ||||||||
Available-for-Sale, Fair Value | ||||||||||
Due within one year | [1] | 861 | ||||||||
Due one to five years | [1] | 2,917 | ||||||||
Due five to ten years | [1] | 2,708 | ||||||||
Due after ten years | [1] | 3,100 | ||||||||
Total | [2] | 9,586 | [1] | 12,926 | ||||||
Non-Agency RMBS | ||||||||||
Available-for-Sale Amortized Cost | ||||||||||
Due within one year | 1,877 | |||||||||
Due one to five years | 5,938 | |||||||||
Due five to ten years | 3,824 | |||||||||
Due after ten years | 1,850 | |||||||||
Total | 13,489 | |||||||||
Available-for-Sale, Fair Value | ||||||||||
Due within one year | 1,820 | |||||||||
Due one to five years | 5,699 | |||||||||
Due five to ten years | 3,659 | |||||||||
Due after ten years | 1,847 | |||||||||
Total | [3] | 13,025 | 17,443 | |||||||
Non-RMBS | ||||||||||
Available-for-Sale Amortized Cost | ||||||||||
Due within one year | 22,552 | |||||||||
Due one to five years | 168,208 | |||||||||
Due five to ten years | 8,266 | |||||||||
Due after ten years | 4,606 | |||||||||
Total | 203,632 | |||||||||
Available-for-Sale, Fair Value | ||||||||||
Due within one year | 23,279 | |||||||||
Due one to five years | 169,578 | |||||||||
Due five to ten years | 7,613 | |||||||||
Due after ten years | 4,432 | |||||||||
Total | $ 204,902 | $ 149,936 | ||||||||
|
LOANS, LEASES & ALLOWANCE FOR LOAN AND LEASE LOSSES - COMPOSITION OF LOANS (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2016 |
||
---|---|---|---|---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Principal loan and lease balance | $ 9,449,310 | $ 8,517,686 | ||||
Allowance for loan and lease losses | (57,085) | (49,151) | $ (40,832) | $ (35,826) | ||
Unaccreted discounts and loan and lease fees | (10,101) | (36,246) | ||||
Total net loans and leases | 9,382,124 | 8,432,289 | ||||
Mortgage | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Principal loan and lease balance | 4,278,822 | 4,198,941 | ||||
Allowance for loan and lease losses | (21,282) | (20,368) | (19,972) | (18,666) | ||
Unaccreted discounts and loan and lease fees | 8,724 | 9,187 | ||||
Home equity | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Principal loan and lease balance | 2,258 | 2,306 | ||||
Allowance for loan and lease losses | (13) | (14) | (19) | (23) | ||
Unaccreted discounts and loan and lease fees | 66 | 48 | ||||
Warehouse & Other | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Principal loan and lease balance | 820,559 | 412,085 | ||||
Allowance for loan and lease losses | (6,327) | (2,080) | (2,298) | (2,685) | ||
Unaccreted discounts and loan and lease fees | (1,773) | (706) | ||||
Multifamily real estate secured | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Principal loan and lease balance | 1,948,513 | 1,800,919 | ||||
Allowance for loan and lease losses | (4,097) | (5,010) | (4,638) | (3,938) | ||
Unaccreted discounts and loan and lease fees | 5,090 | 5,063 | ||||
Commercial real estate secured | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Principal loan and lease balance | 326,154 | 220,379 | ||||
Allowance for loan and lease losses | (1,044) | (849) | (1,008) | (882) | ||
Unaccreted discounts and loan and lease fees | 649 | 836 | ||||
Auto and RV secured | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Principal loan and lease balance | 290,894 | 213,522 | ||||
Allowance for loan and lease losses | (4,818) | (3,178) | (2,379) | (1,615) | ||
Unaccreted discounts and loan and lease fees | 2,631 | 2,065 | ||||
Factoring | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Principal loan and lease balance | 93,091 | 169,885 | ||||
Allowance for loan and lease losses | (333) | (445) | (401) | (245) | ||
Unaccreted discounts and loan and lease fees | (21,627) | (48,039) | ||||
Commercial & Industrial | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Principal loan and lease balance | 1,653,314 | 1,481,051 | ||||
Allowance for loan and lease losses | (17,375) | (16,238) | (9,881) | (7,630) | ||
Unaccreted discounts and loan and lease fees | (3,169) | (3,884) | ||||
Other | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Principal loan and lease balance | 35,705 | 18,598 | ||||
Allowance for loan and lease losses | (1,796) | (969) | $ (236) | $ (142) | ||
Unaccreted discounts and loan and lease fees | (692) | (816) | ||||
Single family warehouse loans | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Principal loan and lease balance | 301,999 | 175,508 | ||||
Residential Portfolio Segment | Mortgage | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Principal loan and lease balance | 4,278,822 | 4,198,941 | ||||
Residential Portfolio Segment | Home equity | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Principal loan and lease balance | 2,258 | 2,306 | ||||
Residential Portfolio Segment | Warehouse & Other | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Principal loan and lease balance | [1] | 820,559 | 412,085 | |||
Residential Portfolio Segment | Multifamily real estate secured | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Principal loan and lease balance | 1,948,513 | 1,800,919 | ||||
Commercial Real Estate Portfolio Segment | Commercial real estate secured | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Principal loan and lease balance | 326,154 | 220,379 | ||||
Consumer Portfolio Segment | Auto and RV secured | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Principal loan and lease balance | 290,894 | 213,522 | ||||
Unallocated Financing Receivables | Factoring | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Principal loan and lease balance | 93,091 | 169,885 | ||||
Unallocated Financing Receivables | Other | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Principal loan and lease balance | 35,705 | 18,598 | ||||
Commercial Portfolio Segment | Commercial & Industrial | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Principal loan and lease balance | $ 1,653,314 | $ 1,481,051 | ||||
|
LOANS, LEASES & ALLOWANCE FOR LOAN AND LEASE LOSSES - ACTIVITY FOR ALLOWANCE FOR LOAN LOSSES (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||
Balance, beginning of period | $ 49,151 | $ 40,832 | $ 49,151 | $ 40,832 | $ 35,826 | ||||||
Provision for loan and lease loss | $ 2,800 | $ 19,000 | $ 4,950 | $ 600 | $ 3,900 | $ 16,900 | $ 4,000 | $ 1,000 | 27,350 | 25,800 | 11,061 |
Charged off | (19,663) | (15,979) | (5,096) | ||||||||
Transfers to held for sale | (2,356) | (2,307) | (1,828) | ||||||||
Recoveries | 2,603 | 805 | 869 | ||||||||
Balance, end of period | $ 57,085 | $ 49,151 | $ 57,085 | $ 49,151 | $ 40,832 |
LOANS, LEASES & ALLOWANCE FOR LOAN AND LEASE LOSSES - IMPAIRED LOANS (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
---|---|---|---|
Receivables [Abstract] | |||
Nonaccrual loans and leases—90 days past due plus other nonaccrual loans and leases | $ 47,821 | $ 30,197 | $ 26,815 |
Troubled debt restructured loans and leases—non-accrual | 623 | 1,029 | 1,578 |
Troubled debt restructured loans and leases—performing | 0 | 0 | 0 |
Total impaired loans and leases | $ 48,444 | $ 31,226 | $ 28,393 |
LOANS, LEASES & ALLOWANCE FOR LOAN AND LEASE LOSSES - LOANS NARRATIVE (Details) |
12 Months Ended | |
---|---|---|
Jun. 30, 2019
USD ($)
loan
|
Jun. 30, 2018
USD ($)
loan
|
|
Financing Receivable, Impaired [Line Items] | ||
Write offs on impaired loans | $ 2,415,000 | |
Impaired loans with no specific allowance | 48,444,000 | |
Average carrying value of impaired loans | 39,468,000 | $ 30,420,000 |
Loans past due ninety days or more and still accruing | $ 0 | $ 0 |
Loans with related parties, number of loans refinanced | loan | 1 | |
Loans with related parties, amount of loans refinanced | $ 1,306,000 | |
Number of new related party loans | loan | 0 | |
Principal payments received on related party loans | 461,000 | $ 341,000 |
Ending balance of related party loans | 13,342,000 | 8,956,000 |
Interest earned on related party loans | 326,000 | 81,000 |
Purchased loans serviced by others, amount | $ 57,667,000 | $ 64,536,000 |
Purchased loans serviced by others, percent of portfolio | 0.61% | 0.76% |
Fixed Interest Rate | ||
Financing Receivable, Impaired [Line Items] | ||
Percent of loans by interest rate type | 11.70% | |
Adjustable Interest Rate | ||
Financing Receivable, Impaired [Line Items] | ||
Percent of loans by interest rate type | 88.30% | |
Single Family Mortgage Secured | ||
Financing Receivable, Impaired [Line Items] | ||
LTV ratio | 80.00% | |
Single Family Mortgage Secured | Minimum | ||
Financing Receivable, Impaired [Line Items] | ||
Loan term | 15 years | |
Single Family Mortgage Secured | Maximum | ||
Financing Receivable, Impaired [Line Items] | ||
Loan term | 30 years | |
Commercial Real Estate | Minimum | ||
Financing Receivable, Impaired [Line Items] | ||
LTV ratio | 65.00% | |
Commercial Real Estate | Maximum | ||
Financing Receivable, Impaired [Line Items] | ||
LTV ratio | 80.00% |
LOANS, LEASES & ALLOWANCE FOR LOAN AND LEASE LOSSES - ALLOWANCE FOR CREDIT LOSS NARRATIVE (Details) - Multifamily real estate secured $ in Millions |
Jun. 30, 2019
USD ($)
|
---|---|
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Interest only loans | $ 1,300.0 |
Option adjustable-rate mortgage loans | $ 1.6 |
LOANS, LEASES & ALLOWANCE FOR LOAN AND LEASE LOSSES - ALLOWANCE FOR LOAN LOSS BY CLASS (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||
Balance, beginning of period | $ 49,151 | $ 40,832 | $ 49,151 | $ 40,832 | $ 35,826 | ||||||
Provision for loan and lease loss | $ 2,800 | $ 19,000 | $ 4,950 | 600 | $ 3,900 | $ 16,900 | $ 4,000 | 1,000 | 27,350 | 25,800 | 11,061 |
Charge-offs | (19,663) | (15,979) | (5,096) | ||||||||
Transfers to held for sale | (2,356) | (2,307) | (1,828) | ||||||||
Recoveries | 2,603 | 805 | 869 | ||||||||
Balance, end of period | 57,085 | 49,151 | 57,085 | 49,151 | 40,832 | ||||||
Mortgage | |||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||
Balance, beginning of period | 20,368 | 19,972 | 20,368 | 19,972 | 18,666 | ||||||
Provision for loan and lease loss | 1,317 | 632 | 2,308 | ||||||||
Charge-offs | (799) | (271) | (1,115) | ||||||||
Transfers to held for sale | 0 | 0 | 0 | ||||||||
Recoveries | 396 | 35 | 113 | ||||||||
Balance, end of period | 21,282 | 20,368 | 21,282 | 20,368 | 19,972 | ||||||
Home equity | |||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||
Balance, beginning of period | 14 | 19 | 14 | 19 | 23 | ||||||
Provision for loan and lease loss | (12) | (18) | (6) | ||||||||
Charge-offs | 0 | (1) | (23) | ||||||||
Transfers to held for sale | 0 | 0 | 0 | ||||||||
Recoveries | 11 | 14 | 25 | ||||||||
Balance, end of period | 13 | 14 | 13 | 14 | 19 | ||||||
Warehouse & Other | |||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||
Balance, beginning of period | 2,080 | 2,298 | 2,080 | 2,298 | 2,685 | ||||||
Provision for loan and lease loss | 4,247 | 69 | (387) | ||||||||
Charge-offs | 0 | (287) | 0 | ||||||||
Transfers to held for sale | 0 | 0 | 0 | ||||||||
Recoveries | 0 | 0 | 0 | ||||||||
Balance, end of period | 6,327 | 2,080 | 6,327 | 2,080 | 2,298 | ||||||
Multifamily real estate secured | |||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||
Balance, beginning of period | 5,010 | 4,638 | 5,010 | 4,638 | 3,938 | ||||||
Provision for loan and lease loss | (1,022) | 372 | 323 | ||||||||
Charge-offs | 0 | 0 | 0 | ||||||||
Transfers to held for sale | 0 | 0 | 0 | ||||||||
Recoveries | 109 | 0 | 377 | ||||||||
Balance, end of period | 4,097 | 5,010 | 4,097 | 5,010 | 4,638 | ||||||
Commercial real estate secured | |||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||
Balance, beginning of period | 849 | 1,008 | 849 | 1,008 | 882 | ||||||
Provision for loan and lease loss | 195 | (159) | 110 | ||||||||
Charge-offs | 0 | 0 | (23) | ||||||||
Transfers to held for sale | 0 | 0 | 0 | ||||||||
Recoveries | 0 | 0 | 39 | ||||||||
Balance, end of period | 1,044 | 849 | 1,044 | 849 | 1,008 | ||||||
Auto and RV secured | |||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||
Balance, beginning of period | 3,178 | 2,379 | 3,178 | 2,379 | 1,615 | ||||||
Provision for loan and lease loss | 2,605 | 1,390 | 990 | ||||||||
Charge-offs | (1,156) | (803) | (433) | ||||||||
Transfers to held for sale | 0 | 0 | 0 | ||||||||
Recoveries | 191 | 212 | 207 | ||||||||
Balance, end of period | 4,818 | 3,178 | 4,818 | 3,178 | 2,379 | ||||||
Factoring | |||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||
Balance, beginning of period | 445 | 401 | 445 | 401 | 245 | ||||||
Provision for loan and lease loss | (112) | 44 | 156 | ||||||||
Charge-offs | 0 | 0 | 0 | ||||||||
Transfers to held for sale | 0 | 0 | 0 | ||||||||
Recoveries | 0 | 0 | 0 | ||||||||
Balance, end of period | 333 | 445 | 333 | 445 | 401 | ||||||
Commercial & Industrial | |||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||
Balance, beginning of period | 16,238 | 9,881 | 16,238 | 9,881 | 7,630 | ||||||
Provision for loan and lease loss | 2,286 | 6,357 | 2,251 | ||||||||
Charge-offs | (1,149) | 0 | 0 | ||||||||
Transfers to held for sale | 0 | 0 | 0 | ||||||||
Recoveries | 0 | 0 | 0 | ||||||||
Balance, end of period | 17,375 | 16,238 | 17,375 | 16,238 | 9,881 | ||||||
Other | |||||||||||
Allowance for Loan and Lease Losses [Roll Forward] | |||||||||||
Balance, beginning of period | $ 969 | $ 236 | 969 | 236 | 142 | ||||||
Provision for loan and lease loss | 17,846 | 17,113 | 5,316 | ||||||||
Charge-offs | (16,559) | (14,617) | (3,502) | ||||||||
Transfers to held for sale | (2,356) | (2,307) | (1,828) | ||||||||
Recoveries | 1,896 | 544 | 108 | ||||||||
Balance, end of period | $ 1,796 | $ 969 | $ 1,796 | $ 969 | $ 236 |
LOANS, LEASES & ALLOWANCE FOR LOAN AND LEASE LOSSES - LOANS INDIVIDUALLY EVALUATED FOR IMPAIRMENT (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
|||
---|---|---|---|---|---|
With an allowance recorded: | |||||
Unpaid Principal Balance | $ 51,947 | $ 32,331 | |||
Principal Balance Adjustment | [1] | 3,503 | 3,294 | ||
Recorded Investment | 48,444 | 29,037 | |||
Accrued Interest/Origination Fees | 1,108 | 101 | |||
Total | 49,552 | 29,138 | |||
Related Allocation of General Allowance | 422 | 278 | |||
Related Allocation of Specific Allowance | $ 0 | $ 0 | |||
As a % of total gross loans and leases | |||||
Unpaid Principal Balance | 0.55% | 0.38% | |||
Principal Balance Adjustment | [1] | 0.04% | 0.04% | ||
Recorded Investment | 0.51% | 0.34% | |||
Accrued Interest/Origination Fees | 0.01% | 0.00% | |||
Total | 0.52% | 0.34% | |||
Related Allocation of General Allowance | 0.00% | 0.00% | |||
Related Allocation of Specific Allowance | 0.00% | 0.00% | |||
Mortgage | In-house originated | |||||
With no related allowance recorded: | |||||
Unpaid Principal Balance | $ 4,874 | $ 1,584 | |||
Principal Balance Adjustment | [1] | 1,775 | 951 | ||
Recorded Investment | 3,099 | 633 | |||
Accrued Interest/Origination Fees | 255 | 78 | |||
Total | 3,354 | 711 | |||
With an allowance recorded: | |||||
Unpaid Principal Balance | 40,758 | 24,607 | |||
Principal Balance Adjustment | [1] | 348 | 47 | ||
Recorded Investment | 40,410 | 24,560 | |||
Accrued Interest/Origination Fees | 731 | 0 | |||
Total | 41,141 | 24,560 | |||
Related Allocation of General Allowance | 393 | 247 | |||
Related Allocation of Specific Allowance | 0 | 0 | |||
Mortgage | Purchased | |||||
With no related allowance recorded: | |||||
Unpaid Principal Balance | 2,237 | 3,598 | |||
Principal Balance Adjustment | [1] | 1,142 | 1,739 | ||
Recorded Investment | 1,095 | 1,859 | |||
Accrued Interest/Origination Fees | 0 | 0 | |||
Total | 1,095 | 1,859 | |||
With an allowance recorded: | |||||
Unpaid Principal Balance | 1,418 | 1,394 | |||
Principal Balance Adjustment | [1] | 17 | 0 | ||
Recorded Investment | 1,401 | 1,394 | |||
Accrued Interest/Origination Fees | 109 | 21 | |||
Total | 1,510 | 1,415 | |||
Related Allocation of General Allowance | 12 | 14 | |||
Related Allocation of Specific Allowance | 0 | 0 | |||
Multifamily real estate secured | In-house originated | |||||
With an allowance recorded: | |||||
Unpaid Principal Balance | 2,108 | ||||
Principal Balance Adjustment | [1] | 0 | |||
Recorded Investment | 2,108 | ||||
Accrued Interest/Origination Fees | 9 | ||||
Total | 2,117 | ||||
Related Allocation of General Allowance | 3 | ||||
Related Allocation of Specific Allowance | 0 | ||||
Multifamily real estate secured | Purchased | |||||
With no related allowance recorded: | |||||
Unpaid Principal Balance | 480 | ||||
Principal Balance Adjustment | [1] | 248 | |||
Recorded Investment | 232 | ||||
Accrued Interest/Origination Fees | 0 | ||||
Total | 232 | ||||
Auto and RV secured | In-house originated | |||||
With no related allowance recorded: | |||||
Unpaid Principal Balance | 326 | 369 | |||
Principal Balance Adjustment | [1] | 221 | 309 | ||
Recorded Investment | 105 | 60 | |||
Accrued Interest/Origination Fees | 4 | 2 | |||
Total | 109 | 62 | |||
With an allowance recorded: | |||||
Unpaid Principal Balance | 10 | ||||
Principal Balance Adjustment | [1] | 0 | |||
Recorded Investment | 10 | ||||
Accrued Interest/Origination Fees | 0 | ||||
Total | 10 | ||||
Related Allocation of General Allowance | 1 | ||||
Related Allocation of Specific Allowance | 0 | ||||
Home equity | In-house originated | |||||
With an allowance recorded: | |||||
Unpaid Principal Balance | 16 | ||||
Principal Balance Adjustment | [1] | 0 | |||
Recorded Investment | 16 | ||||
Accrued Interest/Origination Fees | 0 | ||||
Total | 16 | ||||
Related Allocation of General Allowance | 1 | ||||
Related Allocation of Specific Allowance | 0 | ||||
Commercial & Industrial | |||||
With an allowance recorded: | |||||
Unpaid Principal Balance | 172 | ||||
Principal Balance Adjustment | [1] | 0 | |||
Recorded Investment | 172 | ||||
Accrued Interest/Origination Fees | 0 | ||||
Total | 172 | ||||
Related Allocation of General Allowance | 9 | ||||
Related Allocation of Specific Allowance | 0 | ||||
Other | |||||
With an allowance recorded: | |||||
Unpaid Principal Balance | 216 | 111 | |||
Principal Balance Adjustment | [1] | 0 | 0 | ||
Recorded Investment | 216 | 111 | |||
Accrued Interest/Origination Fees | 0 | 0 | |||
Total | 216 | 111 | |||
Related Allocation of General Allowance | 13 | 7 | |||
Related Allocation of Specific Allowance | $ 0 | $ 0 | |||
|
LOANS, LEASES & ALLOWANCE FOR LOAN AND LEASE LOSSES - ALLOWANCE FOR LOAN LOSS BY PORTFOLIO CLASS (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
|||
---|---|---|---|---|---|
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Individually evaluated for impairment– general allowance | $ 422 | $ 278 | |||
Individually evaluated for impairment– specific allowance | 0 | 0 | |||
Collectively evaluated for impairment | 56,663 | 48,873 | |||
Total ending allowance balance | 57,085 | 49,151 | |||
Loans and leases individually evaluated for impairment | [1] | 48,444 | 29,037 | ||
Loans and leases collectively evaluated for impairment | 9,400,866 | 8,488,649 | |||
Principal loan and lease balance | 9,449,310 | 8,517,686 | |||
Unaccreted discounts and loan and lease fees | (10,101) | (36,246) | |||
Total recorded investment in loans and leases | 9,439,209 | 8,481,440 | |||
Mortgage | |||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Individually evaluated for impairment– general allowance | 405 | 261 | |||
Individually evaluated for impairment– specific allowance | 0 | 0 | |||
Collectively evaluated for impairment | 20,877 | 20,107 | |||
Total ending allowance balance | 21,282 | 20,368 | |||
Loans and leases individually evaluated for impairment | [1] | 46,005 | 28,446 | ||
Loans and leases collectively evaluated for impairment | 4,232,817 | 4,170,495 | |||
Principal loan and lease balance | 4,278,822 | 4,198,941 | |||
Unaccreted discounts and loan and lease fees | 8,724 | 9,187 | |||
Total recorded investment in loans and leases | 4,287,546 | 4,208,128 | |||
Home equity | |||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Individually evaluated for impairment– general allowance | 0 | 1 | |||
Individually evaluated for impairment– specific allowance | 0 | 0 | |||
Collectively evaluated for impairment | 13 | 13 | |||
Total ending allowance balance | 13 | 14 | |||
Loans and leases individually evaluated for impairment | [1] | 0 | 16 | ||
Loans and leases collectively evaluated for impairment | 2,258 | 2,290 | |||
Principal loan and lease balance | 2,258 | 2,306 | |||
Unaccreted discounts and loan and lease fees | 66 | 48 | |||
Total recorded investment in loans and leases | 2,324 | 2,354 | |||
Warehouse & Other | |||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Individually evaluated for impairment– general allowance | 0 | 0 | |||
Individually evaluated for impairment– specific allowance | 0 | 0 | |||
Collectively evaluated for impairment | 6,327 | 2,080 | |||
Total ending allowance balance | 6,327 | 2,080 | |||
Loans and leases individually evaluated for impairment | [1] | 0 | 0 | ||
Loans and leases collectively evaluated for impairment | 820,559 | 412,085 | |||
Principal loan and lease balance | 820,559 | 412,085 | |||
Unaccreted discounts and loan and lease fees | (1,773) | (706) | |||
Total recorded investment in loans and leases | 818,786 | 411,379 | |||
Multifamily real estate secured | |||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Individually evaluated for impairment– general allowance | 3 | 0 | |||
Individually evaluated for impairment– specific allowance | 0 | 0 | |||
Collectively evaluated for impairment | 4,094 | 5,010 | |||
Total ending allowance balance | 4,097 | 5,010 | |||
Loans and leases individually evaluated for impairment | [1] | 2,108 | 232 | ||
Loans and leases collectively evaluated for impairment | 1,946,405 | 1,800,687 | |||
Principal loan and lease balance | 1,948,513 | 1,800,919 | |||
Unaccreted discounts and loan and lease fees | 5,090 | 5,063 | |||
Total recorded investment in loans and leases | 1,953,603 | 1,805,982 | |||
Commercial real estate secured | |||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Individually evaluated for impairment– general allowance | 0 | 0 | |||
Individually evaluated for impairment– specific allowance | 0 | 0 | |||
Collectively evaluated for impairment | 1,044 | 849 | |||
Total ending allowance balance | 1,044 | 849 | |||
Loans and leases individually evaluated for impairment | [1] | 0 | 0 | ||
Loans and leases collectively evaluated for impairment | 326,154 | 220,379 | |||
Principal loan and lease balance | 326,154 | 220,379 | |||
Unaccreted discounts and loan and lease fees | 649 | 836 | |||
Total recorded investment in loans and leases | 326,803 | 221,215 | |||
Auto and RV secured | |||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Individually evaluated for impairment– general allowance | 1 | 0 | |||
Individually evaluated for impairment– specific allowance | 0 | 0 | |||
Collectively evaluated for impairment | 4,817 | 3,178 | |||
Total ending allowance balance | 4,818 | 3,178 | |||
Loans and leases individually evaluated for impairment | [1] | 115 | 60 | ||
Loans and leases collectively evaluated for impairment | 290,779 | 213,462 | |||
Principal loan and lease balance | 290,894 | 213,522 | |||
Unaccreted discounts and loan and lease fees | 2,631 | 2,065 | |||
Total recorded investment in loans and leases | 293,525 | 215,587 | |||
Factoring | |||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Individually evaluated for impairment– general allowance | 0 | 0 | |||
Individually evaluated for impairment– specific allowance | 0 | 0 | |||
Collectively evaluated for impairment | 333 | 445 | |||
Total ending allowance balance | 333 | 445 | |||
Loans and leases individually evaluated for impairment | [1] | 0 | 0 | ||
Loans and leases collectively evaluated for impairment | 93,091 | 169,885 | |||
Principal loan and lease balance | 93,091 | 169,885 | |||
Unaccreted discounts and loan and lease fees | (21,627) | (48,039) | |||
Total recorded investment in loans and leases | 71,464 | 121,846 | |||
Commercial & Industrial | |||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Individually evaluated for impairment– general allowance | 0 | 9 | |||
Individually evaluated for impairment– specific allowance | 0 | 0 | |||
Collectively evaluated for impairment | 17,375 | 16,229 | |||
Total ending allowance balance | 17,375 | 16,238 | |||
Loans and leases individually evaluated for impairment | [1] | 0 | 172 | ||
Loans and leases collectively evaluated for impairment | 1,653,314 | 1,480,879 | |||
Principal loan and lease balance | 1,653,314 | 1,481,051 | |||
Unaccreted discounts and loan and lease fees | (3,169) | (3,884) | |||
Total recorded investment in loans and leases | 1,650,145 | 1,477,167 | |||
Other | |||||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||||
Individually evaluated for impairment– general allowance | 13 | 7 | |||
Individually evaluated for impairment– specific allowance | 0 | 0 | |||
Collectively evaluated for impairment | 1,783 | 962 | |||
Total ending allowance balance | 1,796 | 969 | |||
Loans and leases individually evaluated for impairment | [1] | 216 | 111 | ||
Loans and leases collectively evaluated for impairment | 35,489 | 18,487 | |||
Principal loan and lease balance | 35,705 | 18,598 | |||
Unaccreted discounts and loan and lease fees | (692) | (816) | |||
Total recorded investment in loans and leases | $ 35,013 | $ 17,782 | |||
|
LOANS, LEASES & ALLOWANCE FOR LOAN AND LEASE LOSSES - NONACCRUAL LOANS (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
---|---|---|
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans and leases | $ 48,444 | $ 31,226 |
Total nonaccrual loans secured by real estate | $ 48,113 | $ 28,694 |
Nonaccrual loans and leases to total loans (as percent) | 0.51% | 0.37% |
Mortgage | In-house originated | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans and leases | $ 43,509 | $ 25,193 |
Mortgage | Purchased | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans and leases | 2,496 | 3,253 |
Home equity | In-house originated | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans and leases | 0 | 16 |
Multifamily real estate secured | In-house originated | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans and leases | 2,108 | 0 |
Multifamily real estate secured | Purchased | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans and leases | 0 | 232 |
Auto and RV secured | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans and leases | 115 | 60 |
Commercial & Industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans and leases | 0 | 2,361 |
Other | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans and leases | $ 216 | $ 111 |
LOANS, LEASES & ALLOWANCE FOR LOAN AND LEASE LOSSES - NONACCRUAL LOANS NARRATIVE (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019
USD ($)
loan
|
Jun. 30, 2018
USD ($)
loan
|
Jun. 30, 2017
USD ($)
|
|
Financing Receivable, Impaired [Line Items] | |||
Ratio of nonaccrual loans considered TDRs | 1.29% | 3.30% | |
Term which borrowers make timely payments after TDRs are considered nonaccrual | 6 months | ||
Interest recognized on performing loans temporarily modified as TDRs | $ 0 | $ 0 | $ 7 |
Average balances of performing TDR's | 0 | 0 | 125 |
Average balances of impaired loans and leases | $ 39,468 | $ 30,420 | $ 34,154 |
Number of TDR loans classified as performing loans | loan | 0 | 0 | |
Nonaccrual | Mortgage | |||
Financing Receivable, Impaired [Line Items] | |||
Ratio of nonaccrual loans that are single family mortgage | 94.97% | ||
Value after write-downs of original appraised value, percent | 44.94% |
LOANS, LEASES & ALLOWANCE FOR LOAN AND LEASE LOSSES - UNPAID PRINCIPAL BALANCE FOR PERFORMING AND NONACCRUAL (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
---|---|---|
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | $ 9,449,310 | $ 8,517,686 |
Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 9,400,866 | 8,486,460 |
Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 48,444 | 31,226 |
Mortgage | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 4,278,822 | 4,198,941 |
Mortgage | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 4,232,817 | 4,170,495 |
Mortgage | Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 46,005 | 28,446 |
Home equity | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 2,258 | 2,306 |
Home equity | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 2,258 | 2,290 |
Home equity | Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 16 |
Warehouse & Other | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 820,559 | 412,085 |
Warehouse & Other | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 820,559 | 412,085 |
Warehouse & Other | Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 0 |
Multifamily real estate secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 1,948,513 | 1,800,919 |
Multifamily real estate secured | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 1,946,405 | 1,800,687 |
Multifamily real estate secured | Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 2,108 | 232 |
Commercial real estate secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 326,154 | 220,379 |
Commercial real estate secured | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 326,154 | 220,379 |
Commercial real estate secured | Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 0 |
Auto and RV secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 290,894 | 213,522 |
Auto and RV secured | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 290,779 | 213,462 |
Auto and RV secured | Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 115 | 60 |
Factoring | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 93,091 | 169,885 |
Factoring | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 93,091 | 169,885 |
Factoring | Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 0 |
Commercial & Industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 1,653,314 | 1,481,051 |
Commercial & Industrial | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 1,653,314 | 1,478,690 |
Commercial & Industrial | Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 2,361 |
Other | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 35,705 | 18,598 |
Other | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 35,489 | 18,487 |
Other | Nonaccrual | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | $ 216 | $ 111 |
LOANS, LEASES & ALLOWANCE FOR LOAN AND LEASE LOSSES - LOANS BY CREDIT QUALITY INDICATOR (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
---|---|---|
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | $ 9,449,310 | $ 8,517,686 |
As of % of gross loans and leases | 100.00% | 100.00% |
Mortgage | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | $ 4,278,822 | $ 4,198,941 |
Mortgage | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 4,237,195 | 4,159,204 |
Mortgage | Purchased | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 41,628 | 39,737 |
Home equity | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 2,258 | 2,306 |
Home equity | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 2,258 | 2,306 |
Warehouse and other | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 820,559 | 412,085 |
Warehouse and other | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 820,559 | 412,085 |
Multifamily real estate secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 1,948,513 | 1,800,919 |
Multifamily real estate secured | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 1,893,059 | 1,735,051 |
Multifamily real estate secured | Purchased | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 55,454 | 65,868 |
Commercial real estate secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 326,154 | 220,379 |
Commercial real estate secured | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 318,628 | 212,235 |
Commercial real estate secured | Purchased | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 7,525 | 8,144 |
Auto and RV secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 290,894 | 213,522 |
Auto and RV secured | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 290,894 | 213,522 |
Factoring | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 93,091 | 169,885 |
Commercial & Industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 1,653,314 | 1,481,051 |
Other | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 35,705 | 18,598 |
Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | $ 9,280,236 | $ 8,451,270 |
As of % of gross loans and leases | 98.20% | 99.20% |
Pass | Mortgage | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | $ 4,155,408 | $ 4,113,537 |
Pass | Mortgage | Purchased | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 38,534 | 36,024 |
Pass | Home equity | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 2,258 | 2,290 |
Pass | Warehouse and other | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 742,297 | 412,085 |
Pass | Multifamily real estate secured | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 1,890,524 | 1,731,068 |
Pass | Multifamily real estate secured | Purchased | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 54,514 | 64,663 |
Pass | Commercial real estate secured | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 318,628 | 212,235 |
Pass | Commercial real estate secured | Purchased | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 7,525 | 6,226 |
Pass | Auto and RV secured | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 290,691 | 213,455 |
Pass | Factoring | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 93,091 | 169,885 |
Pass | Commercial & Industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 1,651,506 | 1,471,433 |
Pass | Other | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 35,260 | 18,369 |
Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | $ 61,863 | $ 31,343 |
As of % of gross loans and leases | 0.70% | 0.40% |
Special Mention | Mortgage | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | $ 37,219 | $ 19,403 |
Special Mention | Mortgage | Purchased | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 598 | 461 |
Special Mention | Home equity | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 0 |
Special Mention | Warehouse and other | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 21,600 | 0 |
Special Mention | Multifamily real estate secured | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 427 | 3,983 |
Special Mention | Multifamily real estate secured | Purchased | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 0 |
Special Mention | Commercial real estate secured | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 0 |
Special Mention | Commercial real estate secured | Purchased | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 1,918 |
Special Mention | Auto and RV secured | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 68 | 0 |
Special Mention | Factoring | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 0 |
Special Mention | Commercial & Industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 1,722 | 5,460 |
Special Mention | Other | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 229 | 118 |
Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | $ 107,211 | $ 32,884 |
As of % of gross loans and leases | 1.10% | 0.40% |
Substandard | Mortgage | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | $ 44,568 | $ 26,264 |
Substandard | Mortgage | Purchased | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 2,496 | 3,252 |
Substandard | Home equity | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 16 |
Substandard | Warehouse and other | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 56,662 | 0 |
Substandard | Multifamily real estate secured | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 2,108 | 0 |
Substandard | Multifamily real estate secured | Purchased | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 940 | 1,205 |
Substandard | Commercial real estate secured | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 0 |
Substandard | Commercial real estate secured | Purchased | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 0 |
Substandard | Auto and RV secured | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 135 | 67 |
Substandard | Factoring | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 0 |
Substandard | Commercial & Industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 86 | 1,969 |
Substandard | Other | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 216 | 111 |
Doubtful | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | $ 0 | $ 2,189 |
As of % of gross loans and leases | 0.00% | 0.00% |
Doubtful | Mortgage | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | $ 0 | $ 0 |
Doubtful | Mortgage | Purchased | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 0 |
Doubtful | Home equity | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 0 |
Doubtful | Warehouse and other | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 0 |
Doubtful | Multifamily real estate secured | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 0 |
Doubtful | Multifamily real estate secured | Purchased | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 0 |
Doubtful | Commercial real estate secured | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 0 |
Doubtful | Commercial real estate secured | Purchased | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 0 |
Doubtful | Auto and RV secured | In-house originated | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 0 |
Doubtful | Factoring | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 0 |
Doubtful | Commercial & Industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | 0 | 2,189 |
Doubtful | Other | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Gross loans and leases | $ 0 | $ 0 |
LOANS, LEASES & ALLOWANCE FOR LOAN AND LEASE LOSSES - PAST DUE LOANS (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
---|---|---|
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | $ 69,625 | $ 38,425 |
As a % of gross loans and leases | 0.73% | 0.45% |
Mortgage | In-house originated | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | $ 63,324 | $ 33,079 |
Mortgage | Purchased | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 1,686 | 1,642 |
Home equity | In-house originated | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 16 | |
Multifamily real estate secured | In-house originated | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 3,272 | 410 |
Auto and RV secured | In-house originated | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 648 | 315 |
Commercial & Industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 2,662 | |
Other | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 695 | 301 |
30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | $ 14,646 | $ 9,257 |
As a % of gross loans and leases | 0.15% | 0.11% |
30-59 Days Past Due | Mortgage | In-house originated | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | $ 12,008 | $ 7,830 |
30-59 Days Past Due | Mortgage | Purchased | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 228 | 354 |
30-59 Days Past Due | Home equity | In-house originated | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 0 | |
30-59 Days Past Due | Multifamily real estate secured | In-house originated | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 1,684 | 410 |
30-59 Days Past Due | Auto and RV secured | In-house originated | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 476 | 284 |
30-59 Days Past Due | Commercial & Industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 300 | |
30-59 Days Past Due | Other | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 250 | 79 |
60-89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | $ 16,000 | $ 3,478 |
As a % of gross loans and leases | 0.17% | 0.04% |
60-89 Days Past Due | Mortgage | In-house originated | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | $ 15,616 | $ 3,240 |
60-89 Days Past Due | Mortgage | Purchased | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 0 | 105 |
60-89 Days Past Due | Home equity | In-house originated | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 0 | |
60-89 Days Past Due | Multifamily real estate secured | In-house originated | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 0 | 0 |
60-89 Days Past Due | Auto and RV secured | In-house originated | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 155 | 22 |
60-89 Days Past Due | Commercial & Industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 0 | |
60-89 Days Past Due | Other | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 229 | 111 |
90 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | $ 38,979 | $ 25,690 |
As a % of gross loans and leases | 0.41% | 0.30% |
90 Days Past Due | Mortgage | In-house originated | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | $ 35,700 | $ 22,009 |
90 Days Past Due | Mortgage | Purchased | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 1,458 | 1,183 |
90 Days Past Due | Home equity | In-house originated | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 16 | |
90 Days Past Due | Multifamily real estate secured | In-house originated | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 1,588 | 0 |
90 Days Past Due | Auto and RV secured | In-house originated | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 17 | 9 |
90 Days Past Due | Commercial & Industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | 2,362 | |
90 Days Past Due | Other | ||
Financing Receivable, Past Due [Line Items] | ||
Past due gross loans and leases | $ 216 | $ 111 |
OFFSETTING OF SECURITIES FINANCING AGREEMENTS (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
|
---|---|
Assets: | |
Securities borrowed, gross assets | $ 144,706 |
Securities borrowed, amounts offset | 0 |
Securities borrowed, net balance sheet amount | 144,706 |
Securities borrowed, financial collateral | 144,706 |
Securities borrowed, net assets | 0 |
Liabilities: | |
Securities loaned, gross liabilities | 198,356 |
Securities loaned, amounts offset | 0 |
Securities loaned, net balance sheet amount | 198,356 |
Securities loaned, financial collateral | 198,356 |
Securities loaned, net liabilities | $ 0 |
CUSTOMER, BROKER-DEALER AND CLEARING RECEIVABLES AND PAYABLES (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
||
---|---|---|---|---|
Receivables: | ||||
Customers | $ 188,384 | |||
Receivable from broker-dealers | [1] | 11,022 | ||
Securities failed to deliver | 3,092 | |||
Other | 694 | |||
Total customer, broker-dealer and clearing receivables | 203,192 | $ 0 | ||
Payables: | ||||
Customers | 219,162 | |||
Payable to broker-dealers | 10,995 | |||
Securities failed to receive | 8,447 | |||
Total customer, broker-dealer and clearing payables | 238,604 | $ 0 | ||
Broker-dealer reserve for bad debt | $ 17,100 | |||
|
FURNITURE, EQUIPMENT AND SOFTWARE (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|||
Property, Plant and Equipment [Line Items] | |||||
Furniture, equipment and software, gross | $ 75,451 | $ 48,839 | |||
Less accumulated depreciation and amortization | (42,280) | (27,385) | |||
Furniture, equipment and software—net | [1] | 33,171 | 21,454 | ||
Depreciation and amortization | 11,667 | 7,923 | $ 6,094 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Furniture, equipment and software, gross | 5,481 | 1,953 | |||
Furniture and fixtures | |||||
Property, Plant and Equipment [Line Items] | |||||
Furniture, equipment and software, gross | 7,049 | 5,418 | |||
Computer hardware and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Furniture, equipment and software, gross | 20,991 | 13,863 | |||
Software | |||||
Property, Plant and Equipment [Line Items] | |||||
Furniture, equipment and software, gross | $ 41,930 | $ 27,605 | |||
|
GOODWILL AND INTANGIBLE ASSETS - ACTIVITY IN GOODWILL BALANCE (Details) $ in Thousands |
12 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | $ 35,719 |
Goodwill [Roll Forward] | |
Balance at July 1, 2018 | 35,719 |
Goodwill incident to acquisitions | 35,503 |
Balance at June 30, 2019 | $ 71,222 |
GOODWILL AND INTANGIBLE ASSETS - SUMMARY OF ACQUIRED INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 69,125 | $ 32,720 |
Accumulated Amortization | 5,454 | 651 |
Net Carrying Amount | 63,671 | 32,069 |
Covenant not to compete | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 930 | 930 |
Accumulated Amortization | 291 | 58 |
Net Carrying Amount | 639 | 872 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 31,310 | 9,820 |
Accumulated Amortization | 1,886 | 243 |
Net Carrying Amount | 29,424 | 9,577 |
Customer deposit intangible | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 13,545 | 0 |
Accumulated Amortization | 1,436 | 0 |
Net Carrying Amount | 12,109 | 0 |
Developed technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 23,050 | 21,680 |
Accumulated Amortization | 1,720 | 326 |
Net Carrying Amount | 21,330 | 21,354 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 290 | 290 |
Accumulated Amortization | 121 | 24 |
Net Carrying Amount | $ 169 | $ 266 |
GOODWILL AND INTANGIBLE ASSETS - WEIGHTED AVERAGE USEFUL LIFE OF ACQUIRED INTANGIBLE ASSETS (Details) |
12 Months Ended |
---|---|
Jun. 30, 2019 | |
Covenant not to compete | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted-Average Useful Lives (Years) | 4 years |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted-Average Useful Lives (Years) | 12 years |
Customer deposit intangible | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted-Average Useful Lives (Years) | 10 years |
Developed technologies | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted-Average Useful Lives (Years) | 5 years |
Trade name | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted-Average Useful Lives (Years) | 3 years |
GOODWILL AND INTANGIBLE ASSETS - ESTIMATED FUTURE AMORTIZATION EXPENSE OF ACQUIRED INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of expense of intangible assets | $ 4,803 | |
For the fiscal year ending June 30, | ||
2020 | 9,503 | |
2021 | 9,795 | |
2022 | 8,441 | |
2023 | 8,020 | |
2024 | 7,551 | |
Thereafter | 20,361 | |
Net Carrying Amount | $ 63,671 | $ 32,069 |
DEPOSITS - SUMMARY OF DEPOSIT ACCOUNTS (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
|||||
---|---|---|---|---|---|---|---|
Non-interest bearing | |||||||
Non-interest bearing, Amount | $ 1,441,930 | $ 1,015,355 | |||||
Interest bearing: | |||||||
Demand, Amount | $ 2,709,014 | $ 2,519,845 | |||||
Demand, Rate | [1] | 2.06% | 1.60% | ||||
Savings, Amount | $ 2,466,214 | $ 2,482,430 | |||||
Savings, Rate | [1] | 1.48% | 1.31% | ||||
Total demand and savings, Amount | $ 5,175,228 | $ 5,002,275 | |||||
Total demand and savings, Rate | [1] | 1.78% | 1.46% | ||||
Time deposits: | |||||||
$250 and under, Amount | $ 1,866,811 | $ 1,837,274 | |||||
$250 and under, Rate | [1] | 2.47% | 2.34% | ||||
Greater than $250, Amount | $ 499,204 | $ 130,446 | |||||
Greater than $250, Rate | [1] | 2.27% | 2.05% | ||||
Total time deposits, Amount | $ 2,366,015 | $ 1,967,720 | |||||
Total time deposits, Rate | [1] | 2.43% | 2.32% | ||||
Total interest bearing, Amount | $ 7,541,243 | $ 6,969,995 | |||||
Total interest bearing, Rate | [1],[2] | 1.99% | 1.70% | ||||
Total deposits | $ 8,983,173 | $ 7,985,350 | |||||
Total deposits, Rate | [1] | 1.67% | 1.48% | ||||
Time deposits acquired through broker relationships | $ 1,124,000 | $ 2,055,900 | |||||
Time deposits acquired through broker relationships, $250,000 and under | $ 796,700 | $ 1,692,800 | |||||
|
DEPOSITS - SCHEDULED MATURITIES OF TIME DEPOSITS (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
---|---|---|
Deposits [Abstract] | ||
Within 12 months | $ 1,306,072 | |
13 to 24 months | 351,374 | |
25 to 36 months | 99,502 | |
37 to 48 months | 126,525 | |
49 to 60 months | 24,978 | |
Thereafter | 457,564 | |
Total time deposits, Amount | 2,366,015 | $ 1,967,720 |
Deposits from principal officers, directors and their affiliates | $ 5,623 | $ 4,964 |
ADVANCES FROM THE FEDERAL HOME LOAN BANK - NARRATIVE (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Federal Home Loan Bank, Advances [Line Items] | |||
Weighted average rate percentage | 2.39% | 2.14% | |
Advances, collateral pledged | $ 4,684,088 | $ 4,687,166 | |
Advances, maximum amount | 3,424,000 | $ 2,240,000 | $ 1,317,000 |
Advances, amount available immediately | 1,952,094 | ||
Advances, amount available with additional collateral | $ 350 | ||
Advances, amount available with additional collateral, term | 10 years | ||
Minimum | |||
Federal Home Loan Bank, Advances [Line Items] | |||
Interest rate percentage | 1.36% | 1.36% | |
Maximum | |||
Federal Home Loan Bank, Advances [Line Items] | |||
Interest rate percentage | 2.89% | 3.32% |
ADVANCES FROM THE FEDERAL HOME LOAN BANK - SCHEDULED MATURITIES (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
|||
---|---|---|---|---|---|
Amount | |||||
Within one year | [1] | $ 286,000 | $ 229,500 | ||
After one but within two years | 65,000 | 55,000 | |||
After two but within three years | 50,000 | 65,000 | |||
After three but within four years | 27,500 | 50,000 | |||
After four but within five years | 0 | 27,500 | |||
After five years | 30,000 | 30,000 | |||
Total | $ 458,500 | $ 457,000 | |||
Weighted-Average Rate | |||||
Within one year | [1] | 2.38% | 2.02% | ||
After one but within two years | 2.30% | 1.79% | |||
After two but within three years | 2.47% | 2.30% | |||
After three but within four years | 2.08% | 2.47% | |||
After four but within five years | 0.00% | 2.08% | |||
After five years | 2.82% | 2.82% | |||
Total | 2.39% | 2.14% | |||
Term advances | $ 231,000 | $ 147,500 | |||
|
BORROWINGS, SUBORDINATED NOTES AND DEBENTURES - SCHEDULE OF BORROWINGS, SUBORDINATED NOTES AND DEBENTURES (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
---|---|---|
Debt Instrument [Line Items] | ||
Less unamortized issuance costs | $ 1,426 | $ 1,603 |
Total borrowings, subordinated notes and debentures | 168,929 | 54,552 |
Borrowings from other banks | ||
Debt Instrument [Line Items] | ||
Long-term debt | 106,800 | 0 |
Subordinated loans | ||
Debt Instrument [Line Items] | ||
Long-term debt | 7,400 | 0 |
Subordinated notes | ||
Debt Instrument [Line Items] | ||
Long-term debt | 51,000 | 51,000 |
Subordinated debentures | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 5,155 | $ 5,155 |
BORROWINGS, SUBORDINATED NOTES AND DEBENTURES - NARRATIVE (Details) |
1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Jan. 28, 2019
USD ($)
|
Dec. 13, 2004
USD ($)
|
Mar. 31, 2016
USD ($)
|
Jun. 30, 2019
USD ($)
bank
|
Jun. 30, 2019
USD ($)
bank
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2017
USD ($)
|
|
Debt Instrument [Line Items] | |||||||
Borrowings, subordinated notes and debentures | $ 168,929,000 | $ 168,929,000 | $ 54,552,000 | ||||
Proceeds from issuance of subordinated notes | 7,400,000 | 0 | $ 0 | ||||
Borrowings from other banks | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 35,000,000 | $ 35,000,000 | |||||
Federal funds lines of credit, number of banks | bank | 2 | 2 | |||||
Credit line amount outstanding | $ 0 | $ 0 | 0 | ||||
Federal Reserve Bank Advances | |||||||
Debt Instrument [Line Items] | |||||||
Short-term borrowings outstanding | 0 | 0 | 0 | ||||
Maximum borrowing capacity | 1,601,962,000 | 1,601,962,000 | $ 917,017,000 | ||||
Secured lines of credit | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | 155,000,000.0 | 155,000,000.0 | |||||
Borrowings, subordinated notes and debentures | $ 106,800,000 | $ 106,800,000 | |||||
Weighted average interest rate of borrowings (as percent) | 3.84% | 3.84% | |||||
Unsecured line of credit | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 35,000,000.0 | $ 35,000,000.0 | |||||
Borrowings, subordinated notes and debentures | 0.0 | $ 0.0 | |||||
Subordinated loans | |||||||
Debt Instrument [Line Items] | |||||||
Debt issued principal amount | $ 7,500,000 | ||||||
Subordinated notes maturity (in months) | 15 months | ||||||
Effective rate (as percent) | 6.25% | ||||||
Repayment of subordinated loans | $ 100,000 | ||||||
Subordinated notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt issued principal amount | $ 51,000,000 | ||||||
Effective rate (as percent) | 6.25% | ||||||
Proceeds from issuance of subordinated notes | $ 51,000,000 | ||||||
Debt issuance costs and discount (as percent) | 3.15% | ||||||
Subordinated debentures | |||||||
Debt Instrument [Line Items] | |||||||
Effective rate (as percent) | 4.92% | 4.92% | |||||
Trust preferred securities | $ 5,000,000 | ||||||
Borrowings, subordinated notes and debentures | $ 5,155,000 | $ 5,155,000 | |||||
Basis spread on variable rate (as percent) | 2.40% | ||||||
Subordinated debentures | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Description of variable rate basis | three-month LIBOR |
INCOME TAXES - COMPONENTS OF INCOME TAXES (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Current: | |||||||||||
Federal | $ 42,065 | $ 50,170 | $ 74,053 | ||||||||
State | 24,296 | 20,084 | 26,120 | ||||||||
Current income taxes | 66,361 | 70,254 | 100,173 | ||||||||
Deferred: | |||||||||||
Federal | (5,483) | 15,509 | (1,886) | ||||||||
State | (3,203) | 1,525 | (334) | ||||||||
Deferred income taxes | (8,686) | 17,034 | (2,220) | ||||||||
Total | $ 14,691 | $ 15,631 | $ 14,894 | $ 12,459 | $ 13,335 | $ 26,621 | $ 24,845 | $ 22,487 | $ 57,675 | $ 87,288 | $ 97,953 |
INCOME TAXES - EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Income Tax Disclosure [Abstract] | ||||
Statutory federal tax rate | 28.10% | 21.00% | 28.10% | 35.00% |
Increase (decrease) resulting from: | ||||
State taxes—net of federal tax benefit | 8.66% | 7.85% | 7.23% | |
Tax reform deferred tax remeasurement | 0.00% | 3.83% | 0.00% | |
Cash surrender value | (0.06%) | (0.02%) | (0.03%) | |
Tax credits | (1.55%) | (2.38%) | (0.19%) | |
Non-taxable income | (0.15%) | (0.19%) | (0.28%) | |
Excess benefit RSU vesting | (0.95%) | (1.00%) | 0.00% | |
Other | 0.15% | 0.23% | 0.37% | |
Effective tax rate | 27.10% | 36.42% | 42.10% |
INCOME TAXES - NET DEFERRED TAX ASSET (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
---|---|---|
Deferred tax assets: | ||
Allowance for loan and lease losses and charge-offs | $ 24,356 | $ 15,829 |
State taxes | 2,087 | 2,164 |
Stock-based compensation expense | 5,435 | 3,432 |
Unrealized net (gains) losses on securities | 0 | 225 |
Deferred bonus / vacation | 1,307 | 761 |
Securities impaired | 268 | 0 |
Deferred loan fees | 2,138 | 1,372 |
Net operating loss carryforward | 3,130 | 0 |
Total deferred tax assets | 38,721 | 23,783 |
Deferred tax liabilities: | ||
Acquisition intangible asset | (6,367) | 0 |
FHLB stock dividend | (837) | (833) |
Other assets—prepaids | (1,839) | (1,513) |
Depreciation and amortization | (5,598) | (3,480) |
Unrealized net gains on securities | (118) | 0 |
Total deferred tax liabilities | (14,759) | (5,826) |
Net deferred tax asset1 | $ 23,962 | $ 17,957 |
INCOME TAXES - UNRECOGNIZED TAX BENEFITS (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance—beginning of period | $ 1,135 | $ 865 | $ 880 |
Additions—current year tax positions | 107 | 142 | 180 |
Additions—prior year tax positions | 0 | 149 | 17 |
Reductions—prior year tax positions | (158) | (21) | (212) |
Total liability for unrecognized tax positions—end of period | $ 1,084 | $ 1,135 | $ 865 |
INCOME TAXES - NARRATIVE (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Dec. 31, 2017 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Mar. 31, 2019 |
|
Income Tax Disclosure [Abstract] | ||||||
Statutory federal tax rate | 28.10% | 21.00% | 28.10% | 35.00% | ||
Provisional adjustment to deferred tax assets as result of Tax Act | $ 9,189 | |||||
Deferred tax liability recognized from acquisition | $ 2,200 | |||||
Reduction in effective tax rate for tax credits received | 1.55% | 2.38% | 0.19% |
STOCKHOLDERS' EQUITY - CHANGES IN COMMON STOCK (Details) - shares |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Common Stock, Number of Shares [Roll Forward] | |||
Common stock, issued, beginning balance (in shares) | 65,796,060 | 65,115,932 | 64,513,494 |
Common stock, treasury and outstanding, beginning balance (in shares) | 62,688,064 | 63,536,244 | 63,219,392 |
Repurchase of treasury stock, issued (in shares) | 0 | 0 | 0 |
Repurchase of treasury stock, outstanding (in shares) | (2,009,352) | (1,233,491) | 0 |
Common stock issued through grants of restricted stock units, issued (in shares) | 767,862 | 680,128 | 602,438 |
Common stock issued through grants of restricted stock units, outstanding (in shares) | 450,105 | 385,311 | 316,852 |
Common stock, issued, ending balance (in shares) | 66,563,922 | 65,796,060 | 65,115,932 |
Common stock, treasury and outstanding, ending balance (in shares) | 61,128,817 | 62,688,064 | 63,536,244 |
STOCKHOLDERS' EQUITY - NARRATIVE (Details) - USD ($) |
12 Months Ended | 67 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Oct. 28, 2003 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2004 |
Jan. 01, 2009 |
Aug. 02, 2019 |
Mar. 17, 2016 |
|
Class of Stock [Line Items] | ||||||||
Share repurchased amount | $ 56,437,000 | |||||||
Purchase of treasury stock, outstanding (in shares) | 2,009,352 | 1,233,491 | 0 | |||||
Preferred stock, par or stated value (in dollars per share) | $ 0.01 | $ 0.01 | ||||||
Cash dividends on preferred stock (in dollars per share) | $ 309,000 | $ 309,000 | $ 309,000 | |||||
Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Stock repurchased program, authorized amount | $ 100,000,000 | |||||||
Share repurchased amount | $ 91,600,000 | |||||||
Purchase of treasury stock, outstanding (in shares) | 3,242,843 | |||||||
Average price of shares repurchased (in dollars per share) | $ 28.25 | |||||||
Remaining authorized repurchase amount | $ 8,400,000 | |||||||
Series A Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Preferred Stock, dividend rate percent | 6.00% | |||||||
Preferred Stock, remaining number of shares to be redeemed (in shares) | 515 | |||||||
Preferred stock, par or stated value (in dollars per share) | $ 10,000 | $ 10,000 | $ 10,000 | $ 10,000 | ||||
Value of new issues of stock | $ 6,750,000 | |||||||
Stock issued during period, shares, new issues (in shares) | 675 | |||||||
Payments of stock issuance costs | $ 113,000 | |||||||
Options surrendered in exchange (in shares) | 160 | |||||||
Cash dividends on preferred stock (in dollars per share) | $ 309,000 | $ 309,000 | $ 309,000 | |||||
Subsequent Event | Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Stock repurchased program, authorized amount | $ 100,000,000 |
STOCK-BASED COMPENSATION - NARRATIVE (Details) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Jul. 01, 2017
USD ($)
|
Jun. 30, 2019
USD ($)
shares
|
Jun. 30, 2018
USD ($)
shares
|
Jun. 30, 2017
USD ($)
shares
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ | $ 23,439 | $ 20,399 | $ 14,535 | |
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of restricted stock granted (in shares) | shares | 1,103,249 | 747,022 | 843,611 | |
Number of restricted stock cancelled (in shares) | shares | 90,909 | 123,858 | 92,251 | |
Unrecognized compensation expense related to non-vested awards | $ | $ 37,214 | |||
Stock-based compensation expense | $ | 23,439 | $ 20,399 | $ 14,535 | |
Tax benefit from stock-based compensation expense | $ | 6,351 | 7,429 | 6,119 | |
Total fair value of shares vested in the period | $ | $ 22,100 | $ 20,866 | $ 12,941 | |
Restricted Stock Units (RSUs) | Chief Executive Officer | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period for options granted | 4 years | 4 years | 4 years | |
Number of restricted stock granted (in shares) | shares | 480,000 | 160,000 | 288,000 | |
Estimated fair value of non-vested awards | $ | $ 20,500 | |||
Number of vesting tranches during requisite service period | 5 | |||
Requisite service period of equity-based award agreement based on service and market conditions | 9 years | |||
Period for recognition of unrecognized compensation expense related to non-vested awards | 7 years | |||
Unrecognized compensation expense related to non-vested awards | $ | $ 11,600 | |||
Restricted Stock Units (RSUs) | Chief Executive Officer | Year One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted shares grants, annual vesting percentage | 25.00% | 25.00% | 25.00% | |
Restricted Stock Units (RSUs) | Chief Executive Officer | Year two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted shares grants, annual vesting percentage | 25.00% | 25.00% | 25.00% | |
Restricted Stock Units (RSUs) | Chief Executive Officer | Year Three | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted shares grants, annual vesting percentage | 25.00% | 25.00% | 25.00% | |
Restricted Stock Units (RSUs) | Chief Executive Officer | Year Four | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted shares grants, annual vesting percentage | 25.00% | 25.00% | 25.00% | |
Restricted Stock Units (RSUs) | Employees and Directors | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period for options granted | 3 years | 3 years | 3 years | |
Number of restricted stock granted (in shares) | shares | 623,249 | 587,022 | 555,611 | |
Number of restricted stocks vested (in shares) | shares | 699,223 | 629,755 | 570,764 | |
Number of restricted stock cancelled (in shares) | shares | 90,909 | 123,858 | 92,251 | |
Restricted Stock Units (RSUs) | Employees and Directors | Year One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted shares grants, annual vesting percentage | 33.30% | 33.30% | 33.30% | |
Restricted Stock Units (RSUs) | Employees and Directors | Year two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted shares grants, annual vesting percentage | 33.30% | 33.30% | 33.30% | |
Restricted Stock Units (RSUs) | Employees and Directors | Year Three | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted shares grants, annual vesting percentage | 33.30% | 33.30% | 33.30% | |
Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Contractual term for options granted under the 1999 Plan | 10 years | |||
Plans | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period for options granted | 3 years | |||
Plans | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period for options granted | 5 years | |||
2014 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares available for issuance (in shares) | shares | 3,680,000 |
STOCK-BASED COMPENSATION - UNRECOGNIZED COMPENSATION EXPENSE (Details) - Restricted Stock Units (RSUs) $ in Thousands |
Jun. 30, 2019
USD ($)
|
---|---|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
2020 | $ 17,875 |
2021 | 11,818 |
2022 | 4,928 |
2023 | 1,427 |
2024 | 734 |
Thereafter | 432 |
Total | $ 37,214 |
STOCK-BASED COMPENSATION - STATUS OF CHANGE IN RESTRICTED STOCK GRANTS (Details) - Restricted Stock Units (RSUs) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Number of Units | |||
Non-vested, beginning balance (in shares) | 1,233,731 | 1,240,322 | 1,059,726 |
Granted (in shares) | 1,103,249 | 747,022 | 843,611 |
Vested (in shares) | (699,223) | (629,755) | (570,764) |
Canceled (in shares) | (90,909) | (123,858) | (92,251) |
Non-vested, ending balance (in shares) | 1,546,848 | 1,233,731 | 1,240,322 |
Weighted-Average Grant-Date Fair Value | |||
Non-vested, beginning balance (in dollars per share) | $ 24.84 | $ 22.52 | $ 22.53 |
Granted (in dollars per share) | 34.68 | 26.53 | 21.13 |
Vested (in dollars per share) | 26.74 | 22.55 | 20.86 |
Canceled (in dollars per share) | 29.46 | 23.38 | 20.26 |
Non-vested, ending balance (in dollars per share) | $ 30.73 | $ 24.84 | $ 22.52 |
EARNINGS PER COMMON SHARE - CALCULATION OF BASIC AND DILUTED EPS (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Earnings Per Common Share | |||||||||||
Net income | $ 40,634 | $ 38,821 | $ 38,835 | $ 36,841 | $ 37,117 | $ 51,253 | $ 31,658 | $ 32,383 | $ 155,131 | $ 152,411 | $ 134,740 |
Preferred stock dividends | (309) | (309) | (309) | ||||||||
Net income attributable to common shareholders | $ 40,557 | $ 38,744 | $ 38,757 | $ 36,764 | $ 37,040 | $ 51,176 | $ 31,580 | $ 32,306 | $ 154,822 | $ 152,102 | $ 134,431 |
Average common shares issued and outstanding (in shares) | 61,898,447 | 63,058,854 | 63,358,886 | ||||||||
Average unvested RSUs (in shares) | 0 | 77,378 | 297,656 | ||||||||
Total qualifying shares (in shares) | 61,898,447 | 63,136,232 | 63,656,542 | ||||||||
Basic earnings per share (in dollars per share) | $ 0.66 | $ 0.63 | $ 0.62 | $ 0.59 | $ 0.59 | $ 0.82 | $ 0.50 | $ 0.51 | $ 2.50 | $ 2.41 | $ 2.11 |
Diluted Earnings Per Common Share | |||||||||||
Dilutive net income attributable to common shareholders | $ 154,822 | $ 152,102 | $ 134,431 | ||||||||
Average common shares issued and outstanding (in shares) | 61,898,447 | 63,136,232 | 63,656,542 | ||||||||
Dilutive effect of stock options and average unvested RSUs (in shares) | 483,618 | 1,010,988 | 258,558 | ||||||||
Total dilutive common shares issued and outstanding (in shares) | 62,382,065 | 64,147,220 | 63,915,100 | ||||||||
Diluted earnings per share (in dollars per share) | $ 0.66 | $ 0.63 | $ 0.62 | $ 0.58 | $ 0.58 | $ 0.80 | $ 0.49 | $ 0.50 | $ 2.48 | $ 2.37 | $ 2.10 |
COMMITMENTS AND CONTINGENCIES - NARRATIVE (Details) $ in Thousands |
1 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2015
claim
|
Jun. 30, 2019
USD ($)
claim
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2017
USD ($)
|
Aug. 10, 2017
claim
|
|
Commitments and Contingencies Disclosure [Abstract] | |||||
Rent expense | $ | $ 7,802 | $ 5,429 | $ 5,108 | ||
Number of derivative actions filed | 2 | ||||
Number of derivative actions pending | 4 | 6 | |||
Number of consolidated cases | 2 |
COMMITMENTS AND CONTINGENCIES - FUTURE MINIMUM LEASE PAYMENTS (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
|
---|---|
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2020 | $ 8,634 |
2021 | 8,376 |
2022 | 9,035 |
2023 | 9,284 |
2024 | 9,004 |
Thereafter | 47,501 |
Total | $ 91,834 |
OFF-BALANCE-SHEET ACTIVITIES (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
---|---|---|
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet, fixed rate commitments to originate weighted-average rate | 3.92% | 4.68% |
Off-balance sheet risk, ratio of commitments to originate loans to commitments to sell | 66.10% | 61.90% |
Margin deposits available as collateral | $ 441,081 | |
Stock borrowings available as collateral | 144,706 | |
Available securities used as collateral | 154,994 | |
Available securities used as collateral for bank loans | 198,356 | |
Available securities used as collateral for OCC margin requirements | 5,750 | |
Loan purchase and origination commitments | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet, loan purchase commitment | 752,846 | $ 785,980 |
Loan purchase and origination commitments | Fixed Interest Rate | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet, loan purchase commitment | 65,768 | 86,453 |
Loan purchase and origination commitments | Variable Interest Rate | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet, loan purchase commitment | 687,078 | 720,582 |
Loan Origination Commitments | Sales commitment | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet, loan origination commitment | 94,217 | 87,584 |
Loan Origination Commitments | Fixed Interest Rate | Sales commitment | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet, loan origination commitment | 92,320 | 86,453 |
Loan Origination Commitments | Variable Interest Rate | Sales commitment | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Off-balance sheet, loan origination commitment | $ 1,897 | $ 1,131 |
MINIMUM REGULATORY CAPITAL REQUIREMENTS - CAPITAL AMOUNTS, RATIOS, AND REQUIREMENTS UNDER BASEL III (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2019 |
Jan. 01, 2019 |
|
Regulatory Capital: | |||||
Tier 1, Amount | $ 893,338 | $ 938,143 | |||
Common equity tier 1, Amount | 888,275 | 933,080 | |||
Total capital (to risk-weighted assets), Amount | 993,650 | 1,053,855 | |||
Assets: | |||||
Average adjusted, Amount | 9,450,894 | 10,717,011 | |||
Total risk-weighted, Amount | $ 6,694,963 | $ 8,161,588 | |||
Regulatory Capital Ratios: | |||||
Tier 1 leverage (core) capital to adjusted average assets, Ratio | 9.45% | 8.75% | |||
Tier 1 leverage (core) capital to adjusted average assets, Well Capitalized Ratio | 5.00% | ||||
Tier 1 leverage (core) capital to adjusted average assets, Minimum Capital Ratio | 4.00% | ||||
Common equity tier 1 capital (to risk-weighted assets), Ratio | 13.27% | 11.43% | |||
Common equity tier 1 capital (to risk-weighted assets), Well Capitalized Ratio | 6.50% | ||||
Common equity tier 1 capital (to risk-weighted assets), Minimum Capital Ratio | 4.50% | 7.00% | |||
Tier 1 capital (to risk-weighted assets), Ratio | 13.34% | 11.49% | |||
Tier 1 capital (to risk-weighted assets), Well Capitalized Ratio | 8.00% | ||||
Tier 1 capital (to risk-weighted assets), Minimum Capital Ratio | 6.00% | 8.50% | |||
Total capital (to risk-weighted assets), Ratio | 14.84% | 12.91% | |||
Total capital (to risk-weighted assets), Well Capitalized Ratio | 10.00% | ||||
Total capital (to risk-weighted assets), Minimum Capital Ratio | 8.00% | 10.50% | |||
Tier 1 capital (to risk-weighted assets) annual increase percentage | 0.625% | 0.625% | 0.625% | ||
Total capital (to risk-weighted assets) annual increase percentage | 0.625% | 0.625% | 0.625% | ||
Axos Bank | |||||
Regulatory Capital: | |||||
Tier 1, Amount | $ 837,985 | $ 932,366 | |||
Common equity tier 1, Amount | 837,985 | 932,366 | |||
Total capital (to risk-weighted assets), Amount | 887,297 | 989,678 | |||
Assets: | |||||
Average adjusted, Amount | 9,509,891 | 10,124,487 | |||
Total risk-weighted, Amount | $ 6,686,634 | $ 7,679,738 | |||
Regulatory Capital Ratios: | |||||
Tier 1 leverage (core) capital to adjusted average assets, Ratio | 8.88% | 9.21% | |||
Common equity tier 1 capital (to risk-weighted assets), Ratio | 12.53% | 12.14% | |||
Tier 1 capital (to risk-weighted assets), Ratio | 12.53% | 12.14% | |||
Total capital (to risk-weighted assets), Ratio | 13.27% | 12.89% |
MINIMUM REGULATORY CAPITAL REQUIREMENTS - NET CAPITAL POSITION (Details) - Axos Clearing $ in Thousands |
Jun. 30, 2019
USD ($)
|
---|---|
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |
Net capital | $ 21,669 |
Less: required net capital | 3,811 |
Excess capital | $ 17,858 |
Net capital as a percentage of aggregate debit items | 11.37% |
Net capital in excess of 5% aggregate debit items | $ 12,142 |
MINIMUM REGULATORY CAPITAL REQUIREMENTS - SECURITIES BUSINESS NARRATIVE (Details) - Axos Clearing, LLC $ in Millions |
Jun. 30, 2019
USD ($)
|
---|---|
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |
Deposit requirement | $ 198.3 |
Deposit maintained | 204.7 |
PAB | |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |
Deposit requirement | 3.4 |
Deposit maintained | $ 1.7 |
EMPLOYEE BENEFIT PLAN (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019
USD ($)
plan
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2017
USD ($)
|
|
Compensation Related Costs [Abstract] | |||
401(k) plan, number of plans | plan | 2 | ||
401(k) plan, maximum employee annual contribution | 100.00% | ||
401(k) plan expense | $ | $ 2,391 | $ 1,501 | $ 1,288 |
PARENT-ONLY CONDENSED FINANCIAL INFORMATION - CONDENSED BALANCE SHEETS (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2016 |
---|---|---|---|---|
ASSETS | ||||
Loans | $ 9,382,124 | $ 8,432,289 | ||
Other assets | 194,837 | 160,916 | ||
TOTAL ASSETS | 11,220,238 | 9,539,504 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||
Borrowings, subordinated notes and debentures | 168,929 | 54,552 | ||
Accounts payable and accrued liabilities and other liabilities | 99,626 | 82,089 | ||
Total liabilities | 10,147,188 | 8,578,991 | ||
Stockholders’ equity | 1,073,050 | 960,513 | $ 834,247 | $ 683,590 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 11,220,238 | 9,539,504 | ||
Parent | ||||
ASSETS | ||||
Cash and due from banks | 26,907 | 108,085 | ||
Loans | 10 | 20 | ||
Other assets | 18,761 | 10,238 | ||
Investment in subsidiary | 1,106,078 | 905,159 | ||
TOTAL ASSETS | 1,151,756 | 1,023,502 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||
Borrowings, subordinated notes and debentures | 62,129 | 54,521 | ||
Accounts payable and accrued liabilities and other liabilities | 16,577 | 8,468 | ||
Total liabilities | 78,706 | 62,989 | ||
Stockholders’ equity | 1,073,050 | 960,513 | ||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 1,151,756 | $ 1,023,502 |
PARENT-ONLY CONDENSED FINANCIAL INFORMATION - STATEMENTS OF INCOME (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Interest expense | $ 41,206 | $ 40,039 | $ 38,519 | $ 36,518 | $ 31,850 | $ 28,197 | $ 23,572 | $ 22,961 | $ 156,282 | $ 106,580 | $ 74,059 |
Net interest income | 100,437 | 129,169 | 92,720 | 86,279 | 87,048 | 116,683 | 84,213 | 80,550 | 408,605 | 368,494 | 313,227 |
Net interest income, after provision for loan and lease losses | 97,637 | 110,169 | 87,770 | 85,679 | 83,148 | 99,783 | 80,213 | 79,550 | 381,255 | 342,694 | 302,166 |
Non-interest income (loss) | 23,224 | 26,098 | 16,892 | 16,543 | 16,977 | 23,525 | 17,099 | 13,340 | 82,757 | 70,941 | 68,132 |
NET INCOME | 40,634 | 38,821 | 38,835 | 36,841 | 37,117 | 51,253 | 31,658 | 32,383 | 155,131 | 152,411 | 134,740 |
Comprehensive income | 155,760 | 151,311 | 142,531 | ||||||||
Tax benefits | $ (14,691) | $ (15,631) | $ (14,894) | $ (12,459) | $ (13,335) | $ (26,621) | $ (24,845) | $ (22,487) | (57,675) | (87,288) | (97,953) |
Parent | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Interest income | 472 | 479 | 621 | ||||||||
Interest expense | 3,931 | 3,648 | 3,613 | ||||||||
Net interest income | (3,459) | (3,169) | (2,992) | ||||||||
Net interest income, after provision for loan and lease losses | (3,459) | (3,169) | (2,992) | ||||||||
Non-interest income (loss) | 0 | 153 | 0 | ||||||||
Non-interest expense and tax benefit | 15,143 | 11,825 | 8,561 | ||||||||
Income (loss) before dividends from subsidiary and equity in undistributed income of subsidiary | (18,602) | (14,841) | (11,553) | ||||||||
Dividends from subsidiary | 80,000 | 69,800 | 6,400 | ||||||||
Equity in undistributed earnings of subsidiary | 93,733 | 97,452 | 139,893 | ||||||||
NET INCOME | 155,131 | 152,411 | 134,740 | ||||||||
Comprehensive income | 155,760 | 151,311 | 142,531 | ||||||||
Tax benefits | $ 10,749 | $ 11,140 | $ 8,518 |
PARENT-ONLY CONDENSED FINANCIAL INFORMATION - STATEMENT OF CASH FLOWS (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income | $ 40,634 | $ 38,821 | $ 38,835 | $ 36,841 | $ 37,117 | $ 51,253 | $ 31,658 | $ 32,383 | $ 155,131 | $ 152,411 | $ 134,740 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
Accretion of discounts on securities | (264) | (624) | (2,766) | ||||||||
Amortization of borrowing costs | 208 | 208 | 208 | ||||||||
Impairment charge on securities | 821 | 156 | 1,964 | ||||||||
Net gain on investment securities | (709) | 18 | (3,920) | ||||||||
Stock-based compensation expense | 23,439 | 20,399 | 14,535 | ||||||||
Decrease (increase) in other assets | (15,264) | (40,988) | 807 | ||||||||
Net cash provided by operating activities | 204,421 | 167,915 | 198,498 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Proceeds from sale of available-for-sale securities | 15,863 | 52,714 | 161,048 | ||||||||
Origination of loans and leases held for investment | (11,525) | 0 | (269,886) | ||||||||
Proceeds from principal repayments on loans | 5,846,349 | 4,818,558 | 3,427,818 | ||||||||
Net cash provided by (used in) investing activities | (931,741) | (1,026,005) | (788,731) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Tax effect from vesting of restricted stock units | 0 | 0 | 432 | ||||||||
Tax payments related to settlement of restricted stock units | (9,916) | (9,952) | (6,532) | ||||||||
Repurchase of treasury stock | (56,437) | (35,183) | 0 | ||||||||
Proceeds from issuance of subordinated notes | 7,400 | 0 | 0 | ||||||||
Cash dividends on preferred stock | (232) | (309) | (309) | ||||||||
Net cash provided by (used in) financing activities | 961,838 | 837,399 | 747,047 | ||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | 234,518 | (20,691) | 156,814 | ||||||||
CASH AND CASH EQUIVALENTS—Beginning of year | 622,850 | 643,541 | 622,850 | 643,541 | 486,727 | ||||||
CASH AND CASH EQUIVALENTS—End of year | 857,368 | 622,850 | 857,368 | 622,850 | 643,541 | ||||||
Parent | |||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income | 155,131 | 152,411 | 134,740 | ||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
Accretion of discounts on securities | 0 | (2) | 0 | ||||||||
Amortization of borrowing costs | 208 | 208 | 208 | ||||||||
Impairment charge on securities | 0 | 0 | (1) | ||||||||
Net gain on investment securities | 0 | (153) | 0 | ||||||||
Stock-based compensation expense | 23,439 | 20,399 | 14,535 | ||||||||
Equity in undistributed earnings of subsidiary | (93,733) | (97,452) | (139,893) | ||||||||
Decrease (increase) in other assets | (8,477) | (4,938) | 469 | ||||||||
Increase (decrease) in other liabilities | 7,986 | 5,528 | 316 | ||||||||
Net cash provided by operating activities | 84,554 | 76,001 | 10,374 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Proceeds from sale of available-for-sale securities | 0 | 162 | 0 | ||||||||
Origination of loans and leases held for investment | (844) | 0 | 0 | ||||||||
Proceeds from principal repayments on loans | 854 | 9 | 8 | ||||||||
Investment in subsidiary | (106,557) | (4,000) | 0 | ||||||||
Net cash provided by (used in) investing activities | (106,547) | (3,829) | 8 | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Tax effect from vesting of restricted stock units | 0 | 7 | 432 | ||||||||
Tax payments related to settlement of restricted stock units | (9,916) | (9,958) | (6,532) | ||||||||
Repurchase of treasury stock | (56,437) | (35,183) | 0 | ||||||||
Proceeds from issuance of subordinated notes | 7,400 | 0 | 0 | ||||||||
Cash dividends on preferred stock | (232) | (309) | (309) | ||||||||
Net cash provided by (used in) financing activities | (59,185) | (45,443) | (6,409) | ||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | (81,178) | 26,729 | 3,973 | ||||||||
CASH AND CASH EQUIVALENTS—Beginning of year | $ 108,085 | $ 81,356 | 108,085 | 81,356 | 77,383 | ||||||
CASH AND CASH EQUIVALENTS—End of year | $ 26,907 | $ 108,085 | $ 26,907 | $ 108,085 | $ 81,356 |
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Interest and dividend income | $ 141,643 | $ 169,208 | $ 131,239 | $ 122,797 | $ 118,898 | $ 144,880 | $ 107,785 | $ 103,511 | $ 564,887 | $ 475,074 | $ 387,286 |
Interest expense | 41,206 | 40,039 | 38,519 | 36,518 | 31,850 | 28,197 | 23,572 | 22,961 | 156,282 | 106,580 | 74,059 |
Net interest income | 100,437 | 129,169 | 92,720 | 86,279 | 87,048 | 116,683 | 84,213 | 80,550 | 408,605 | 368,494 | 313,227 |
Provision for loan and lease losses | 2,800 | 19,000 | 4,950 | 600 | 3,900 | 16,900 | 4,000 | 1,000 | 27,350 | 25,800 | 11,061 |
Net interest income, after provision for loan and lease losses | 97,637 | 110,169 | 87,770 | 85,679 | 83,148 | 99,783 | 80,213 | 79,550 | 381,255 | 342,694 | 302,166 |
Non-interest income | 23,224 | 26,098 | 16,892 | 16,543 | 16,977 | 23,525 | 17,099 | 13,340 | 82,757 | 70,941 | 68,132 |
Non-interest expense | 65,536 | 81,815 | 50,933 | 52,922 | 49,673 | 45,434 | 40,809 | 38,020 | 251,206 | 173,936 | 137,605 |
INCOME BEFORE INCOME TAXES | 55,325 | 54,452 | 53,729 | 49,300 | 50,452 | 77,874 | 56,503 | 54,870 | 212,806 | 239,699 | 232,693 |
Income tax expense | 14,691 | 15,631 | 14,894 | 12,459 | 13,335 | 26,621 | 24,845 | 22,487 | 57,675 | 87,288 | 97,953 |
NET INCOME | 40,634 | 38,821 | 38,835 | 36,841 | 37,117 | 51,253 | 31,658 | 32,383 | 155,131 | 152,411 | 134,740 |
Net income attributable to common stock | $ 40,557 | $ 38,744 | $ 38,757 | $ 36,764 | $ 37,040 | $ 51,176 | $ 31,580 | $ 32,306 | $ 154,822 | $ 152,102 | $ 134,431 |
Basic earnings per share (in dollars per share) | $ 0.66 | $ 0.63 | $ 0.62 | $ 0.59 | $ 0.59 | $ 0.82 | $ 0.50 | $ 0.51 | $ 2.50 | $ 2.41 | $ 2.11 |
Diluted earnings per share (in dollars per share) | $ 0.66 | $ 0.63 | $ 0.62 | $ 0.58 | $ 0.58 | $ 0.80 | $ 0.49 | $ 0.50 | $ 2.48 | $ 2.37 | $ 2.10 |
SEGMENT REPORTING (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019
USD ($)
|
Mar. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
Sep. 30, 2018
USD ($)
|
Jun. 30, 2018
USD ($)
|
Mar. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Sep. 30, 2017
USD ($)
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
segment
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2017
USD ($)
|
|
Segment Reporting [Abstract] | |||||||||||||
Number of operating segments | 2 | 2 | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Net interest income | $ 100,437 | $ 129,169 | $ 92,720 | $ 86,279 | $ 87,048 | $ 116,683 | $ 84,213 | $ 80,550 | $ 408,605 | $ 368,494 | $ 313,227 | ||
Provision for loan and lease loss | 2,800 | 19,000 | 4,950 | 600 | 3,900 | 16,900 | 4,000 | 1,000 | 27,350 | 25,800 | 11,061 | ||
Non-interest income (loss) | 23,224 | 26,098 | 16,892 | 16,543 | 16,977 | 23,525 | 17,099 | 13,340 | 82,757 | 70,941 | 68,132 | ||
Non-interest expense | 65,536 | 81,815 | 50,933 | 52,922 | 49,673 | 45,434 | 40,809 | 38,020 | 251,206 | 173,936 | 137,605 | ||
INCOME BEFORE INCOME TAXES | 55,325 | $ 54,452 | $ 53,729 | $ 49,300 | 50,452 | $ 77,874 | $ 56,503 | $ 54,870 | 212,806 | 239,699 | $ 232,693 | ||
Goodwill | 71,222 | 35,719 | 71,222 | $ 71,222 | $ 71,222 | 35,719 | |||||||
Total assets | 11,220,238 | 9,539,504 | 11,220,238 | 11,220,238 | 11,220,238 | 9,539,504 | |||||||
Operating segments | Banking Business | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Net interest income | 404,500 | 371,661 | |||||||||||
Provision for loan and lease loss | 27,350 | 25,800 | |||||||||||
Non-interest income (loss) | 70,917 | 70,788 | |||||||||||
Non-interest expense | 192,588 | 152,877 | |||||||||||
INCOME BEFORE INCOME TAXES | 255,479 | 263,772 | |||||||||||
Goodwill | 35,721 | 35,719 | 35,721 | 35,721 | 35,721 | 35,719 | |||||||
Total assets | 10,566,813 | 9,531,165 | 10,566,813 | 10,566,813 | 10,566,813 | 9,531,165 | |||||||
Operating segments | Securities Business | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Net interest income | 7,564 | 0 | |||||||||||
Provision for loan and lease loss | 0 | 0 | |||||||||||
Non-interest income (loss) | 12,071 | 0 | |||||||||||
Non-interest expense | 34,430 | 0 | |||||||||||
INCOME BEFORE INCOME TAXES | (14,795) | 0 | |||||||||||
Goodwill | 35,501 | 0 | 35,501 | 35,501 | 35,501 | 0 | |||||||
Total assets | 645,650 | 0 | 645,650 | 645,650 | 645,650 | 0 | |||||||
Corporate/Eliminations | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Net interest income | (3,459) | (3,167) | |||||||||||
Provision for loan and lease loss | 0 | 0 | |||||||||||
Non-interest income (loss) | (231) | 153 | |||||||||||
Non-interest expense | 24,188 | 21,059 | |||||||||||
INCOME BEFORE INCOME TAXES | (27,878) | (24,073) | |||||||||||
Goodwill | 0 | 0 | 0 | 0 | 0 | 0 | |||||||
Total assets | $ 7,775 | $ 8,339 | $ 7,775 | $ 7,775 | $ 7,775 | $ 8,339 |
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