Axos Financial, Inc. Announces New $100 Million Stock Repurchase Program

Rhea-AI Summary

Axos Financial, Inc. (NYSE: AX) announced a $100 million share repurchase program, in addition to the existing $20 million plan. The Company may repurchase shares through various methods without a set timeline.

Financial Analyst

The announcement of Axos Financial, Inc.'s new $100 million stock repurchase program signals a strategic move that can have multiple interpretations in the financial community. On one hand, it may indicate that the company's leadership believes the stock is undervalued and repurchasing shares could potentially increase the stock price by reducing the supply in the market. This can be beneficial for shareholders as it often leads to an appreciation in share value.

However, it is also critical to assess the company's opportunity cost of capital. The decision to allocate capital to buy back shares rather than investing in growth opportunities or paying down debt might raise questions about the company's future growth prospects. Investors should examine the company's financial health, including its cash flow and debt levels, to evaluate whether this repurchase is a prudent use of funds.

Moreover, the timing and execution strategy of the buyback program can impact its effectiveness. The lack of a set start or end date provides the company with flexibility but also adds uncertainty for investors. Market conditions and stock performance will be key to watch in the coming months to gauge the program's impact.

Market Research Analyst

Stock repurchase programs are often seen as a positive signal to the market, reflecting a company's confidence in its own financial stability and future performance. For Axos Financial, this move could be seen as an attempt to convey confidence to its investors and the broader market. It's important to analyze this action in the context of the banking and financial services industry, where stock repurchase programs can also be a tool for adjusting capital structures and managing regulatory capital levels.

Investors should consider the broader industry trends, such as interest rate changes, regulatory shifts and economic indicators that could affect the sector's performance. The impact of the repurchase on Axos's earnings per share (EPS) will also be a focal point, as a reduction in the number of outstanding shares typically leads to an increase in EPS, all else being equal.

It is essential to monitor the company's subsequent quarterly reports to understand how the repurchase program is being implemented and its effect on the company's financial metrics over time.

Economist

From an economic perspective, Axos Financial's decision to authorize a substantial stock repurchase program may reflect broader economic conditions. In a low-interest-rate environment, companies often find it cheaper to finance such buybacks through debt. Conversely, in a rising interest-rate environment, the cost of borrowing increases, potentially making buybacks less attractive.

The company's assessment of alternative uses of capital is a crucial factor. If the decision is based on a lack of attractive investment opportunities, it could suggest a cautious outlook on economic growth or sector-specific challenges. Alternatively, if the repurchase is financed through excess cash reserves, it could indicate robust internal cash generation capabilities.

Understanding the macroeconomic factors at play, including monetary policy and economic growth forecasts, can provide additional context for the timing and scale of Axos's stock repurchase program.

LAS VEGAS--(BUSINESS WIRE)-- Axos Financial, Inc. (NYSE: AX) (“Axos” or the “Company”) today announced that its Board of Directors authorized a program to repurchase up to $100 million of its common stock. This new share repurchase authorization is in addition to the existing share repurchase plan approved on April 26, 2023, which has approximately $20 million remaining.

The Company may repurchase shares on the open market or through privately negotiated transactions at times and prices considered appropriate by the Company, at the discretion of management, and subject to its assessment of alternative uses of capital, stock trading price, general market conditions and other factors. There is no set start or end date for the new common stock repurchase program.

About Axos Financial, Inc.

Axos Financial, Inc., with approximately $21.6 billion in consolidated assets as of December 31, 2023, is the holding company for Axos Bank, Axos Clearing LLC and Axos Invest, Inc. Axos Bank provides consumer and business banking products nationwide through its low-cost distribution channels and affinity partners. Axos Clearing LLC (including its business division Axos Advisor Services), with approximately $34.4 billion of assets under custody and/or administration as of December 31, 2023, and Axos Invest, Inc., provide comprehensive securities clearing services to introducing broker-dealers and registered investment advisor correspondents, and digital investment advisory services to retail investors, respectively. Axos Financial, Inc.’s common stock is listed on the NYSE under the symbol “AX” and is a component of the Russell 2000® Index, the S&P SmallCap 600® Index, the KBW Nasdaq Financial Technology Index, and the Travillian Tech-Forward Bank Index. For more information on Axos Financial, Inc., please visit http://investors.axosfinancial.com.

Forward-Looking Safe Harbor Statement

This press release contains forward-looking statements that involve risks and uncertainties, including without limitation statements relating to Axos’ financial prospects and other projections of its performance and asset quality, Axos’ deposit balances and capital ratios, Axos’ ability to continue to grow profitably and increase its business, Axos’ ability to continue to diversify its lending and deposit franchises, the anticipated timing and financial performance of other offerings, initiatives, and acquisitions, expectations of the environment in which Axos operates and projections of future performance. These forward-looking statements are made on the basis of the views and assumptions of management regarding future events and performance as of the date of this press release. Actual results and the timing of events could differ materially from those expressed or implied in such forward-looking statements as a result of risks and uncertainties, including without limitation Axos’ ability to successfully integrate acquisitions and realize the anticipated benefits of the transactions, changes in the interest rate environment, monetary policy, inflation, government regulation, general economic conditions, changes in the competitive marketplace, conditions in the real estate markets in which we operate, risks associated with credit quality, our ability to attract and retain deposits and access other sources of liquidity, and the outcome and effects of litigation and other factors beyond our control. These and other risks and uncertainties detailed in Axos’ periodic reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended June 30, 2023, could cause actual results to differ materially from those expressed or implied in any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Axos undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. All written and oral forward-looking statements made in connection with this press release, which are attributable to us or persons acting on Axos’ behalf are expressly qualified in their entirety by the foregoing information.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240212434825/en/

Investor Relations Contact:

Johnny Lai, CFA

SVP, Corporate Development & Investor Relations

858-649-2218

jlai@axosfinancial.com

Source: Axos Financial, Inc.

What did Axos Financial announce regarding its common stock repurchase?

Axos Financial announced a new share repurchase program of up to $100 million, in addition to the existing $20 million plan.

How will Axos Financial repurchase its common stock?

Axos Financial may repurchase shares on the open market or through privately negotiated transactions based on various factors and management discretion.

Is there a specific start or end date for the new common stock repurchase program?

There is no set start or end date for the new common stock repurchase program announced by Axos Financial.