Axos Financial Inc

4. AVAILABLE-FOR-SALE SECURITIES

The amortized cost and fair value of available-for-sale securities were:

1 Includes securities guaranteed by Ginnie Mae, a U.S. government agency, and the government sponsored enterprises Fannie Mae and Freddie Mac.

2 Private sponsors of securities collateralized primarily by first-lien mortgage loans on commercial properties or by pools of 1-4 family residential first mortgages. Primarily super senior securities secured by Alt-A or pay-option ARM mortgages.

No credit losses were recognized on available-for-sale securities in the three and nine months ended March 31, 2024 and March 31, 2023. Based on the underlying government guarantees and other credit protection supporting the Company’s securities, no allowance for credit losses for available-for-sale securities was recorded at March 31, 2024 and June 30, 2023. The Company has no allowance for the available-for-sale securities in an unrealized loss position based on an analysis of: (1) the credit characteristics of the securities, including the forecasted cash flows, credit ratings, credit enhancement, and external government backing, as applicable, and (2) whether the Company is intending to sell or is required to sell any securities before recovering the amortized cost basis of the securities. The unrealized losses on available-for-sale securities are primarily driven by the increase in interest rates since the securities were purchased.

The face amounts of available-for-sale securities pledged to secure borrowings at March 31, 2024 and June 30, 2023 were $0.8 million and $0.9 million, respectively.

During the nine months ended March 31, 2024, the Company sold a $4.8 million available-for-sale security with no realized gain or loss. There were no sales of available-for sale securities during the three months ended March 31, 2024 and 2023, and during the nine months ended March 31, 2023.

Securities in an unrealized loss position based on the length of time the individual securities have been in a continuous unrealized loss position were:

The components of the Company’s accumulated other comprehensive income (loss) are as follows:

The following table sets forth the expected maturity distribution of our mortgage-backed securities, which is based on assumed prepayment rates, and the maturity distribution of our municipal securities, which is based on the contractual maturity: