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BORROWINGS, SUBORDINATED NOTES AND DEBENTURES
 12 Months Ended
Jun. 30, 2024
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:
(Dollars in thousands)
June 30, 2024
June 30, 2023
Borrowings from other banks$— $27,200 
Subordinated loans7,400 7,400 
Subordinated notes315,000 325,000 
Junior subordinated debentures5,155 5,155 
Total borrowings, subordinated notes and debentures, gross of unamortized issuance costs327,555 364,755 
Less unamortized issuance costs(1,876)(2,976)
Total borrowings, subordinated notes and debentures, net of unamortized issuance costs$325,679 $361,779 
Maturities of borrowings, subordinated notes and debentures are as follows:
(Dollars in thousands)
June 30, 2024
Within one year$7,400 
After one but within two years— 
After two but within three years— 
After three but within four years— 
After four but within five years— 
After five years320,155 
Total$327,555 
Borrowings from other banks. Axos Clearing has a $150 million secured line of credit available for borrowing. As of June 30, 2024, there was no amount outstanding, and as of June 30, 2023 there was $11.5 million outstanding. This credit facility bears interest at rates based on the Federal Funds rate and is due upon demand.
Axos Clearing has a $110 million unsecured line of credit available for limited purpose borrowing. As of June 30, 2024, there was no amount outstanding on this credit facility, and as of June 30, 2023 there was $15.7 million outstanding. This credit facility bears interest at rates based on the Federal Funds rate and is due upon demand. The unsecured line of credit requires Axos Clearing to operate in accordance of specific covenants surrounding capital and debt ratios. Axos Clearing was in compliance of all covenants as of June 30, 2024.
Subordinated Loans. The Company issued subordinated notes totaling $7.5 million on January 28, 2019, to the principal stockholders of Cor Securities Holdings, Inc. (“COR Securities”) in an equal principal amount, with a maturity of 15 months, to serve as the sole source of payment of indemnification obligations of the principal stockholders of COR Securities under the applicable merger agreement. Interest accrues at a rate of 6.25% per annum. During the fiscal year ended June 30, 2019, $0.1 million of subordinated loans were repaid. The Company has made an indemnification claim against the $7.4 million remaining.
Subordinated Notes. In September 2020, the Company completed the sale of $175 million aggregate principal amount of its 4.875% Fixed-to-Floating Rate Subordinated Notes due October 1, 2030 (the “2030 Notes”). The 2030 Notes mature on October 1, 2030 and accrue interest at a fixed rate per annum equal to 4.875%, payable semi-annually in arrears on April 1 and October 1 of each year, commencing on April 1, 2021. From and including October 1, 2025, to, but excluding October 1, 2030 or the date of early redemption, the 2030 Notes will bear interest at a floating rate per annum equal to three-month term SOFR plus a spread of 476 basis points, payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year, commencing on January 2026. The 2030 Notes may be redeemed on or after October 1, 2025, which date may be extended at the Company’s discretion, at a redemption price equal to principal plus accrued and unpaid interest, subject to certain conditions. Fees and costs incurred in connection with the debt offering amortize to interest expense over the term of the 2030 Notes.
In February 2022, the Company completed the sale of $150 million aggregate principal amount of its 4.00% Fixed-to-Floating Rate Subordinated Notes (the “2032 Notes”). The 2032 Notes are obligations only of Axos Financial, Inc. The 2032 Notes mature on March 1, 2032 and accrue interest at a fixed rate per annum equal to 4.00%, payable semi-annually in arrears on March 1 and September 1 of each year, commencing on September 1, 2022. From and including March 1, 2027, to, but excluding March 1, 2032 or the date of early redemption, the 2032 Notes will bear interest at a floating rate per annum equal to three-month term SOFR plus a spread of 227 basis points, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, commencing on June 1, 2027. The 2032 Notes may be redeemed on or after March 1, 2027, which date may be extended at the Company’s discretion, at a redemption price equal to principal plus accrued and unpaid interest, subject to certain conditions. Fees and costs incurred in connection with the debt offering amortize to interest expense over the term of the 2032 Notes. On March 6, 2024, the Company paid $4.2 million to repurchase $5.0 million par value of its 2032 Notes resulting in a pre-tax non-cash gain on extinguishment of $0.7 million, after accounting for unamortized issuance costs and accrued interest. On April 6, 2024, the Company paid $4.8 million to repurchase $5.0 million par value of its 2032 Notes resulting in a pre-tax non-cash gain on extinguishment of $0.2 million, after accounting for unamortized issuance costs and accrued interest. The non-cash gains are recorded in “General and administrative expense” in the Consolidated Statement of Income for the fiscal year ended June 30, 2024.
Junior Subordinated Debentures. On December 13, 2004, the Company entered into an agreement to form an unconsolidated trust which issued $5.0 million of trust preferred securities in a transaction that closed on December 16, 2004. The net proceeds from the offering were used to purchase $5.2 million of junior subordinated debentures (“Debentures”) of the Company with a stated maturity date of February 23, 2035. The Debentures are the sole assets of the trust. The trust preferred securities are mandatorily redeemable upon maturity, or upon earlier redemption as provided in the indenture. The Company has the right to redeem the Debentures in whole (but not in part) on or after specific dates, at a redemption price specified in the indenture plus any accrued but unpaid interest through the redemption date. Interest accrues at the rate of three-month term SOFR plus 0.26161% for a rate of 7.99% as of June 30, 2024, with interest paid quarterly.
Other Available Borrowings. The Bank has the ability to borrow short-term from the FRBSF Discount Window. At June 30, 2024 and 2023, there were no amounts outstanding and the available borrowings from this source were $6,976.2 million and $2,747.1 million, respectively. The 2024 available borrowings were collateralized by certain loans. The Bank has additional unencumbered collateral that could be pledged to the FRBSF Discount Window to increase borrowing liquidity.
As of June 30, 2024, the Bank has federal funds lines of credit with six major banks totaling $275.0 million. The Bank had no outstanding balances on its lines of credit as of June 30, 2024 or June 30, 2023.