Capitol Federal Financial, Inc.® Reports First Quarter Fiscal Year 2022 Results
TOPEKA, Kan.–(BUSINESS WIRE)–Capitol Federal Financial, Inc.® (NASDAQ: CFFN) (the “Company”), the parent company of Capitol Federal Savings Bank (the “Bank”), announced results today for the quarter ended December 31, 2021. The Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2021 will be filed with the Securities and Exchange Commission (“SEC”) on or about February 9, 2022 and posted on our website, http://ir.capfed.com. For best viewing results, please view this release in Portable Document Format (PDF) on our website.
Highlights for the quarter include:
- net income of $22.2 million;
- basic and diluted earnings per share of $0.16;
- net interest margin of 1.99%;
- paid dividends of $41.4 million, or $0.305 per share; and
- on January 25, 2022, announced a cash dividend of $0.085 per share, payable on February 18, 2022 to stockholders of record as of the close of business on February 4, 2022.
Comparison of Operating Results for the Three Months Ended December 31, 2021 and September 30, 2021
For the quarter ended December 31, 2021, the Company recognized net income of $22.2 million, or $0.16 per share, compared to net income of $18.6 million, or $0.14 per share, for the quarter ended September 30, 2021. The increase in net income was due primarily to a higher negative provision for credit losses compared to the prior quarter and lower non-interest expense. The net interest margin increased two basis points, from 1.97% for the prior quarter to 1.99% for the current quarter, due mainly to a decrease in the cost of retail certificates of deposit.
Interest and Dividend Income
The following table presents the components of interest and dividend income for the time periods presented, along with the change measured in dollars and percent.
|
|
For the Three Months Ended |
|
|
|
|
|||||||
|
|
December 31, |
|
September 30, |
|
Change Expressed in: |
|||||||
|
|
2021 |
|
2021 |
|
Dollars |
|
Percent |
|||||
|
|
(Dollars in thousands) |
|
|
|||||||||
|
INTEREST AND DIVIDEND INCOME: |
|
|
|
|
|
|
|
|||||
|
Loans receivable |
$ |
55,788 |
|
$ |
57,139 |
|
$ |
(1,351 |
) |
|
(2.4 |
) % |
|
Mortgage-backed securities (“MBS”) |
|
4,625 |
|
|
4,900 |
|
|
(275 |
) |
|
(5.6 |
) |
|
Federal Home Loan Bank Topeka (“FHLB”) stock |
|
1,231 |
|
|
952 |
|
|
279 |
|
|
29.3 |
|
|
Investment securities |
|
808 |
|
|
750 |
|
|
58 |
|
|
7.7 |
|
|
Cash and cash equivalents |
|
14 |
|
|
27 |
|
|
(13 |
) |
|
(48.1 |
) |
|
Total interest and dividend income |
$ |
62,466 |
|
$ |
63,768 |
|
$ |
(1,302 |
) |
|
(2.0 |
) |
The decrease in interest income on loans receivable was primarily in the one-to four-family portfolio due to a reduction in the weighted average rate of the portfolio due to originations, purchases, refinances and endorsements to lower market rates and payoffs of higher rate loans, along with a reduction in commercial loan deferred fee amortization related to the Paycheck Protection Program (“PPP”). The decrease in interest income on MBS was due primarily to a decrease in the average balance of the portfolio. The increase in dividend income on FHLB stock was due mainly to a special year-end dividend of 1.00% paid by FHLB during the current quarter.
Interest Expense
The following table presents the components of interest expense for the time periods presented, along with the change measured in dollars and percent.
|
|
For the Three Months Ended |
|
|
|
|
|||||||
|
|
December 31, |
|
September 30, |
|
Change Expressed in: |
|||||||
|
|
2021 |
|
2021 |
|
Dollars |
|
Percent |
|||||
|
|
(Dollars in thousands) |
|
|
|||||||||
|
INTEREST EXPENSE: |
|
|
|
|
|
|
|
|||||
|
Deposits |
$ |
9,267 |
|
$ |
10,335 |
|
$ |
(1,068 |
) |
|
(10.3 |
) % |
|
Borrowings |
|
7,585 |
|
|
7,889 |
|
|
(304 |
) |
|
(3.9 |
) |
|
Total interest expense |
$ |
16,852 |
|
$ |
18,224 |
|
$ |
(1,372 |
) |
|
(7.5 |
) |
The decrease in interest expense on deposits was due primarily to a decrease in the weighted average rate and the average balance of the retail certificate of deposit portfolio. See “Financial Condition as of December 31, 2021″ below for additional information on deposits. The decrease in interest expense on borrowings was due to the full impact during the current quarter of certain FHLB advances being replaced at lower rates during the prior quarter.
Provision for Credit Losses
For the quarter ended December 31, 2021, the Bank recorded a negative provision for credit losses of $3.4 million, compared to a negative provision for credit losses of $1.3 million for the prior quarter. The negative provision in the current quarter was comprised of a $2.3 million decrease in the allowance for credit losses (“ACL”) for loans due primarily to a reduction in the balance of special mention commercial loans and a $1.1 million decrease in reserves for off-balance sheet credit exposures due mainly to continued improving economic conditions. See additional discussion regarding the Bank’s ACL and reserves for off-balance sheet credit exposures at December 31, 2021 in the “Asset Quality” section below.
Non-Interest Income
The following table presents the components of non-interest income for the time periods presented, along with the change measured in dollars and percent.
|
|
For the Three Months Ended |
|
|
|
|
|||||||
|
|
December 31, |
|
September 30, |
|
Change Expressed in: |
|||||||
|
|
2021 |
|
2021 |
|
Dollars |
|
Percent |
|||||
|
|
(Dollars in thousands) |
|
|
|||||||||
|
NON-INTEREST INCOME: |
|
|
|
|
|
|
|
|||||
|
Deposit service fees |
$ |
3,430 |
|
$ |
3,294 |
|
$ |
136 |
|
|
4.1 |
% |
|
Insurance commissions |
|
711 |
|
|
781 |
|
|
(70 |
) |
|
(9.0 |
) |
|
Other non-interest income |
|
1,365 |
|
|
1,228 |
|
|
137 |
|
|
11.2 |
|
|
Total non-interest income |
$ |
5,506 |
|
$ |
5,303 |
|
$ |
203 |
|
|
3.8 |
|
Non-Interest Expense
The following table presents the components of non-interest expense for the time periods presented, along with the change measured in dollars and percent.
|
|
For the Three Months Ended |
|
|
|
|
|||||||
|
|
December 31, |
|
September 30, |
|
Change Expressed in: |
|||||||
|
|
2021 |
|
2021 |
|
Dollars |
|
Percent |
|||||
|
|
(Dollars in thousands) |
|
|
|||||||||
|
NON-INTEREST EXPENSE: |
|
|
|
|
|
|
|
|||||
|
Salaries and employee benefits |
$ |
13,728 |
|
$ |
14,600 |
|
$ |
(872 |
) |
|
(6.0 |
) % |
|
Information technology and related expense |
|
4,432 |
|
|
4,354 |
|
|
78 |
|
|
1.8 |
|
|
Occupancy, net |
|
3,379 |
|
|
3,639 |
|
|
(260 |
) |
|
(7.1 |
) |
|
Regulatory and outside services |
|
1,368 |
|
|
1,476 |
|
|
(108 |
) |
|
(7.3 |
) |
|
Advertising and promotional |
|
1,064 |
|
|
1,404 |
|
|
(340 |
) |
|
(24.2 |
) |
|
Deposit and loan transaction costs |
|
697 |
|
|
638 |
|
|
59 |
|
|
9.2 |
|
|
Federal insurance premium |
|
639 |
|
|
657 |
|
|
(18 |
) |
|
(2.7 |
) |
|
Office supplies and related expense |
|
468 |
|
|
426 |
|
|
42 |
|
|
9.9 |
|
|
Other non-interest expense |
|
919 |
|
|
1,053 |
|
|
(134 |
) |
|
(12.7 |
) |
|
Total non-interest expense |
$ |
26,694 |
|
$ |
28,247 |
|
$ |
(1,553 |
) |
|
(5.5 |
) |
The decrease in salaries and employee benefits was primarily related to incentive compensation, as fiscal year 2021 incentives were finalized during the prior quarter. The decrease in occupancy, net was due mainly to decreases in utilities and building maintenance expenses. The decrease in advertising and promotional expense was due primarily to the timing of campaigns.
The Company’s efficiency ratio was 52.22% for the current quarter compared to 55.55% for the prior quarter. The improvement in the efficiency ratio was due primarily to lower non-interest expense. The efficiency ratio is a measure of a financial institution’s total non-interest expense as a percentage of the sum of net interest income (pre-provision for credit losses) and non-interest income. A lower value indicates that the financial institution is generating revenue with a lower level of expense, relative to the net interest margin and non-interest income.
Income Tax Expense
The following table presents pretax income, income tax expense, and net income for the time periods presented, along with the change measured in dollars and percent.
|
|
For the Three Months Ended |
|
|
|
|
||||||||
|
|
December 31, |
|
September 30, |
|
Change Expressed in: |
||||||||
|
|
|
2021 |
|
|
|
2021 |
|
|
Dollars |
|
Percent |
||
|
|
(Dollars in thousands) |
|
|
||||||||||
|
Income before income tax expense |
$ |
27,865 |
|
|
$ |
23,923 |
|
|
$ |
3,942 |
|
16.5 |
% |
|
Income tax expense |
|
5,679 |
|
|
|
5,370 |
|
|
|
309 |
|
5.8 |
|
|
Net income |
$ |
22,186 |
|
|
$ |
18,553 |
|
|
$ |
3,633 |
|
19.6 |
|
|
|
|
|
|
|
|
|
|
||||||
|
Effective Tax Rate |
|
20.4 |
% |
|
|
22.4 |
% |
|
|
|
|
||
The increase in income tax expense was due primarily to higher pretax income, partially offset by a lower effective tax rate in the current quarter. The effective tax rate was higher in the prior quarter due mainly to year-end adjustments of permanent tax differences, specifically the Company’s low income housing partnership amounts.
Leverage Strategy
At times, the Bank has utilized a leverage strategy to increase earnings. The leverage strategy involves borrowing on either the Bank’s FHLB line of credit or by entering into short-term FHLB advances with the proceeds from the borrowings, net of the required FHLB stock holdings, deposited at the Federal Reserve Bank of Kansas City. The leverage strategy was not in place during the current quarter or in recent years as the strategy was not profitable. The strategy did, however, become profitable again in January 2022, and management reimplemented the strategy by entering into $1.80 billion of short-term FHLB advances. It is expected that the strategy will continue to be used as long as it is profitable. The borrowing level related to the strategy may fluctuate while the strategy is in place.
Comparison of Operating Results for the Three Months Ended December 31, 2021 and 2020
The Company recognized net income of $22.2 million, or $0.16 per share, for the current quarter compared to net income of $18.9 million, or $0.14 per share, for the prior year quarter. The increase in net income was due primarily to a higher negative provision for credit losses in the current quarter and an increase in net interest income. The net interest margin increased seven basis points, from 1.92% for the prior year quarter to 1.99% for the current quarter. The increase in net interest income and net interest margin was due mainly to a reduction in the cost of retail certificates of deposit and borrowings, which outpaced the decrease in asset yields.
Interest and Dividend Income
The following table presents the components of interest and dividend income for the time periods presented, along with the change measured in dollars and percent.
|
|
For the Three Months Ended |
|
|
|
|
|||||||
|
|
December 31, |
|
Change Expressed in: |
|||||||||
|
|
2021 |
|
2020 |
|
Dollars |
|
Percent |
|||||
|
|
(Dollars in thousands) |
|
|
|||||||||
|
INTEREST AND DIVIDEND INCOME: |
|
|
|
|
|
|
|
|||||
|
Loans receivable |
$ |
55,788 |
|
$ |
60,694 |
|
$ |
(4,906 |
) |
|
(8.1 |
) % |
|
MBS |
|
4,625 |
|
|
5,710 |
|
|
(1,085 |
) |
|
(19.0 |
) |
|
FHLB Stock |
|
1,231 |
|
|
1,069 |
|
|
162 |
|
|
15.2 |
|
|
Investment securities |
|
808 |
|
|
683 |
|
|
125 |
|
|
18.3 |
|
|
Cash and cash equivalents |
|
14 |
|
|
51 |
|
|
(37 |
) |
|
(72.5 |
) |
|
Total interest and dividend income |
$ |
62,466 |
|
$ |
68,207 |
|
$ |
(5,741 |
) |
|
(8.4 |
) |
The decrease in interest income on loans receivable was due mainly to a decrease in the weighted average rate, primarily in the one- to four-family originated loan portfolio. The premium amortization related to the one- to four-family correspondent loan portfolio decreased significantly compared to the prior year quarter due to the slow-down in prepayments and endorsements; however, the decrease in the weighted average loan portfolio rate more than offset the reduction in premium amortization. The decrease in the weighted average rate for the one- to four-family originated and correspondent loan portfolios was due to endorsements and refinances to lower market rates and the origination and purchase of new loans at lower market rates.
The decrease in interest income on the MBS portfolio was due to a decrease in the weighted average yield as a result of higher premium amortization related to prepayment activity, along with purchases at lower market yields, partially offset by an increase in the average balance of the portfolio.
Interest Expense
The following table presents the components of interest expense for the time periods presented, along with the change measured in dollars and percent.
|
|
For the Three Months Ended |
|
|
|
|
|||||||
|
|
December 31, |
|
Change Expressed in: |
|||||||||
|
|
2021 |
|
2020 |
|
Dollars |
|
Percent |
|||||
|
|
(Dollars in thousands) |
|
|
|||||||||
|
INTEREST EXPENSE: |
|
|
|
|
|
|
|
|||||
|
Deposits |
$ |
9,267 |
|
$ |
14,067 |
|
$ |
(4,800 |
) |
|
(34.1 |
) % |
|
Borrowings |
|
7,585 |
|
|
10,327 |
|
|
(2,742 |
) |
|
(26.6 |
) |
|
Total interest expense |
$ |
16,852 |
|
$ |
24,394 |
|
$ |
(7,542 |
) |
|
(30.9 |
) |
The decrease in interest expense on deposits was due mainly to a decrease in the weighted average rate paid on retail certificates of deposit, money market accounts, and wholesale certificates of deposit. Retail certificates of deposit continue to reprice downward as they renew or are replaced at lower offered rates, and rates on money market accounts were also lowered between periods.
The decrease in interest expense on borrowings was due primarily to lowering the cost of FHLB advances by terminating or not renewing certain interest rate swap agreements, not replacing certain maturing FHLB advances, and prepaying certain advances during fiscal year 2021. Cash flows from the deposit portfolio were used to pay down certain FHLB advances.
Provision for Credit Losses
The Bank recorded a negative provision for credit losses during the current quarter of $3.4 million, compared to a negative provision for credit losses of $1.5 million during the prior year quarter. See additional information regarding the current quarter negative provision for credit losses in the “Comparison of Operating Results for the Three Months Ended December 31, 2021 and September 30, 2021″ section above. See additional discussion regarding the Bank’s ACL and reserve for off-balance sheet credit exposures at December 31, 2021 in the “Asset Quality” section below.
Non-Interest Income
The following table presents the components of non-interest income for the time periods presented, along with the change measured in dollars and percent.
|
|
For the Three Months Ended |
|
|
|
|
|||||||
|
|
December 31, |
|
Change Expressed in: |
|||||||||
|
|
2021 |
|
2020 |
|
Dollars |
|
Percent |
|||||
|
|
(Dollars in thousands) |
|
|
|||||||||
|
NON-INTEREST INCOME: |
|
|
|
|
|
|
|
|||||
|
Deposit service fees |
$ |
3,430 |
|
$ |
2,947 |
|
$ |
483 |
|
|
16.4 |
% |
|
Insurance commissions |
|
711 |
|
|
638 |
|
|
73 |
|
|
11.4 |
|
|
Other non-interest income |
|
1,365 |
|
|
1,485 |
|
|
(120 |
) |
|
(8.1 |
) |
|
Total non-interest income |
$ |
5,506 |
|
$ |
5,070 |
|
$ |
436 |
|
|
8.6 |
|
The increase in deposit service fees was due primarily to an increase in debit card income as a result of higher transaction volume, along with an increase in the amount per transaction. The decrease in other non-interest income was primarily related to lower income from bank-owned life insurance, due to receiving death benefits during the prior year quarter, compared to none during the current quarter.
Non-Interest Expense
The following table presents the components of non-interest expense for the time periods presented, along with the change measured in dollars and percent.
|
|
For the Three Months Ended |
|
|
|
|
|||||||
|
|
December 31, |
|
Change Expressed in: |
|||||||||
|
|
2021 |
|
2020 |
|
Dollars |
|
Percent |
|||||
|
|
(Dollars in thousands) |
|
|
|||||||||
|
NON-INTEREST EXPENSE: |
|
|
|
|
|
|
|
|||||
|
Salaries and employee benefits |
$ |
13,728 |
|
$ |
14,138 |
|
$ |
(410 |
) |
|
(2.9 |
) % |
|
Information technology and related expense |
|
4,432 |
|
|
4,233 |
|
|
199 |
|
|
4.7 |
|
|
Occupancy, net |
|
3,379 |
|
|
3,379 |
|
|
— |
|
|
— |
|
|
Regulatory and outside services |
|
1,368 |
|
|
1,585 |
|
|
(217 |
) |
|
(13.7 |
) |
|
Advertising and promotional |
|
1,064 |
|
|
838 |
|
|
226 |
|
|
27.0 |
|
|
Deposit and loan transaction costs |
|
697 |
|
|
766 |
|
|
(69 |
) |
|
(9.0 |
) |
|
Federal insurance premium |
|
639 |
|
|
621 |
|
|
18 |
|
|
2.9 |
|
|
Office supplies and related expense |
|
468 |
|
|
424 |
|
|
44 |
|
|
10.4 |
|
|
Other non-interest expense |
|
919 |
|
|
1,083 |
|
|
(164 |
) |
|
(15.1 |
) |
|
Total non-interest expense |
$ |
26,694 |
|
$ |
27,067 |
|
$ |
(373 |
) |
|
(1.4 |
) |
The decrease in salaries and employee benefits was due primarily to a decrease in loan commissions related to lower loan origination activity in the current quarter. The increase in advertising and promotional expense was due mainly to adjustments to advertising schedules during the prior year related to the Coronavirus Disease 2019 (“COVID-19”) pandemic.
The Company’s efficiency ratio was 52.22% for the current year period compared to 55.37% for the prior year period. The improvement in the efficiency ratio was due primarily to higher net interest income, as well as lower non-interest expense and higher non-interest income.
Income Tax Expense
The following table presents pretax income, income tax expense, and net income for the time periods presented, along with the change measured in dollars and percent.
|
|
For the Three Months Ended |
|
|
|
|
||||||||
|
|
December 31, |
|
Change Expressed in: |
||||||||||
|
|
|
2021 |
|
|
|
2020 |
|
|
Dollars |
|
Percent |
||
|
|
(Dollars in thousands) |
|
|
||||||||||
|
|
|
|
|
|
|
|
|
||||||
|
Income before income tax expense |
$ |
27,865 |
|
|
$ |
23,348 |
|
|
$ |
4,517 |
|
19.3 |
% |
|
Income tax expense |
|
5,679 |
|
|
|
4,450 |
|
|
|
1,229 |
|
27.6 |
|
|
Net income |
$ |
22,186 |
|
|
$ |
18,898 |
|
|
$ |
3,288 |
|
17.4 |
|
|
|
|
|
|
|
|
|
|
||||||
|
Effective Tax Rate |
|
20.4 |
% |
|
|
19.1 |
% |
|
|
|
|
||
The increase in income tax expense was due primarily to higher pretax income in the current year, as well as a higher effective tax rate compared to the prior year. The higher effective tax rate in the current quarter compared to the prior year quarter was due primarily to a lower amount of favorable provision to return adjustments compared to the prior year quarter. Management anticipates the effective income tax rate for fiscal year 2022 will be approximately 21%.
Financial Condition as of December 31, 2021
The following table summarizes the Company’s financial condition at the dates indicated.
|
|
|
|
|
|
Annualized |
|||||
|
|
December 31, |
|
September 30, |
|
Percent |
|||||
|
|
|
2021 |
|
|
|
2021 |
|
|
Change |
|
|
|
(Dollars in thousands) |
|||||||||
|
Total assets |
$ |
9,609,157 |
|
|
$ |
9,631,246 |
|
|
(0.9 |
) % |
|
Available-for-sale (“AFS”) securities |
|
1,890,653 |
|
|
|
2,014,608 |
|
|
(24.6 |
) |
|
Loans receivable, net |
|
7,095,605 |
|
|
|
7,081,142 |
|
|
0.8 |
|
|
Deposits |
|
6,648,004 |
|
|
|
6,597,396 |
|
|
3.1 |
|
|
Borrowings |
|
1,583,303 |
|
|
|
1,582,850 |
|
|
0.1 |
|
|
Stockholders’ equity |
|
1,216,660 |
|
|
|
1,242,273 |
|
|
(8.2 |
) |
|
Equity to total assets at end of period |
|
12.7 |
% |
|
|
12.9 |
% |
|
|
|
|
Average number of basic shares outstanding |
|
135,627 |
|
|
|
135,571 |
|
|
0.2 |
|
|
Average number of diluted shares outstanding |
|
135,627 |
|
|
|
135,571 |
|
|
0.2 |
|
The decrease in total assets was due primarily to a decrease in securities, partially offset by an increase in cash and cash equivalents. The increase in deposits was due primarily to an increase in non-maturity deposits, partially offset by a decrease in the certificate of deposit portfolio, as customers moved some of their funds from maturing certificates to more liquid investment options, such as the Bank’s money market accounts.
The following table summarizes loan originations and purchases and borrowing activity, along with the related weighted average rates, during the periods indicated.
|
|
For the Three Months Ended |
||||||||||||
|
|
December 31, 2021 |
|
September 30, 2021 |
||||||||||
|
|
Amount |
|
Rate |
|
Amount |
|
Rate |
||||||
|
|
(Dollars in thousands) |
||||||||||||
|
Loan originations and purchases |
|
|
|
|
|
|
|
||||||
|
One- to four-family and consumer: |
|
|
|
|
|
|
|
||||||
|
Originated |
$ |
209,440 |
|
|
2.88 |
% |
|
$ |
237,358 |
|
|
2.86 |
% |
|
Purchased |
|
130,553 |
|
|
2.65 |
|
|
|
184,562 |
|
|
2.68 |
|
|
|
|
|
|
|
|
|
|
||||||
|
Commercial: |
|
|
|
|
|
|
|
||||||
|
Originated |
|
49,245 |
|
|
3.80 |
|
|
|
43,021 |
|
|
4.08 |
|
|
Purchased |
|
36,663 |
|
|
3.35 |
|
|
|
19,600 |
|
|
4.06 |
|
|
|
$ |
425,901 |
|
|
2.96 |
|
|
$ |
484,541 |
|
|
2.95 |
|
|
Borrowing activity |
|
|
|
|
|
|
|
||||||
|
Maturities and prepayments |
$ |
(100,000 |
) |
|
3.14 |
|
|
$ |
(340,000 |
) |
|
2.73 |
|
|
New borrowings |
|
100,000 |
|
|
3.44 |
|
|
|
340,000 |
|
|
2.17 |
|
Stockholders’ Equity
During the current quarter, the Company paid cash dividends totaling $41.4 million. These cash dividends totaled $0.305 per share and consisted of a $0.22 per share cash true-up dividend related to fiscal year 2021 earnings and a regular quarterly cash dividend of $0.085 per share. On January 25, 2022, the Company announced a regular quarterly cash dividend of $0.085 per share, or approximately $11.5 million, payable on February 18, 2022 to stockholders of record as of the close of business on February 4, 2022. In the long run, management considers the Bank’s equity to total assets ratio of at least 9% an appropriate level of capital. At December 31, 2021, this ratio was 11.5%.
At December 31, 2021, Capitol Federal Financial, Inc., at the holding company level, had $70.8 million in cash on deposit at the Bank. For fiscal year 2022, it is the intention of the Board of Directors to continue the payout of 100% of the Company’s earnings to the Company’s stockholders. Dividend payments depend upon a number of factors, including the Company’s financial condition and results of operations, regulatory capital requirements, regulatory limitations on the Bank’s ability to make capital distributions to the Company, and the amount of cash at the holding company level.
There remains $44.7 million authorized under the existing stock repurchase plan for additional purchases of the Company’s common stock. Shares may be repurchased from time to time based upon market conditions, available liquidity and other factors. This plan has no expiration date; however, the Federal Reserve Bank’s existing approval for the Company to repurchase shares expires in August 2022.
The following table presents a reconciliation of total to net shares outstanding as of December 31, 2021.
|
Total shares outstanding |
138,842,784 |
|
|
Less unallocated Employee Stock Ownership Plan (“ESOP”) shares and unvested restricted stock |
(3,169,063 |
) |
|
Net shares outstanding |
135,673,721 |
|
Consistent with our goal to operate a sound and profitable financial organization, we actively seek to maintain a well-capitalized status for the Bank in accordance with regulatory standards. In April 2020, the federal bank regulatory agencies announced the issuance of two interim final rules, effective immediately, to provide temporary relief to community banking organizations. Under the interim final rules, the community bank leverage ratio (“CBLR”) requirement is a minimum of 8.5% for calendar year 2021 and 9% thereafter. As of December 31, 2021, the Bank’s CBLR was 11.6%, which exceeded the minimum requirement.
Capitol Federal Financial, Inc. is the holding company for the Bank. The Bank has 54 branch locations in Kansas and Missouri, and is one of the largest residential lenders in the State of Kansas. News and other information about the Company can be found at the Bank’s website, http://www.capfed.com.
Except for the historical information contained in this press release, the matters discussed herein may be deemed to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements about our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions. The words “may,” “could,” “should,” “would,” “will,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements involve risks and uncertainties, including: potential adverse impacts of the ongoing COVID-19 pandemic and any governmental or societal responses thereto on economic conditions in the Company’s local market areas and other market areas where the Bank has lending relationships, on other aspects of the Company’s business operations and on financial markets; changes in policies or the application or interpretation of laws and regulations by regulatory agencies and tax authorities; other governmental initiatives affecting the financial services industry; changes in accounting principles, policies or guidelines; fluctuations in interest rates; demand for loans in the Company’s and its correspondent banks’ market areas; the future earnings and capital levels of the Bank, which could affect the ability of the Company to pay dividends in accordance with its dividend policies; competition; and other risks detailed from time to time in documents filed or furnished by the Company with the SEC. Actual results may differ materially from those currently expected. These forward-looking statements represent the Company’s judgment as of the date of this release. The Company disclaims, however, any intent or obligation to update these forward-looking statements.
SUPPLEMENTAL FINANCIAL INFORMATION
| CAPITOL FEDERAL FINANCIAL, INC. AND SUBSIDIARY | |||||||
|
CONSOLIDATED BALANCE SHEETS (Unaudited) |
|||||||
|
(Dollars in thousands, except per share amounts) |
|||||||
|
|
December 31, |
|
September 30, |
||||
|
|
|
2021 |
|
|
|
2021 |
|
|
ASSETS: |
|
|
|
||||
|
Cash and cash equivalents (includes interest-earning deposits of $106,225 and $24,289) |
$ |
135,475 |
|
|
$ |
42,262 |
|
|
AFS securities, at estimated fair value (amortized cost of $1,899,027 and $2,008,456) |
|
1,890,653 |
|
|
|
2,014,608 |
|
|
Loans receivable, net (ACL of $17,535 and $19,823) |
|
7,095,605 |
|
|
|
7,081,142 |
|
|
FHLB stock, at cost |
|
75,261 |
|
|
|
73,421 |
|
|
Premises and equipment, net |
|
97,718 |
|
|
|
99,127 |
|
|
Other assets |
|
314,445 |
|
|
|
320,686 |
|
|
TOTAL ASSETS |
$ |
9,609,157 |
|
|
$ |
9,631,246 |
|
|
|
|
|
|
||||
|
LIABILITIES: |
|
|
|
||||
|
Deposits |
$ |
6,648,004 |
|
|
$ |
6,597,396 |
|
|
Borrowings |
|
1,583,303 |
|
|
|
1,582,850 |
|
|
Advance payments by borrowers for taxes and insurance |
|
38,227 |
|
|
|
72,729 |
|
|
Income taxes payable, net |
|
3,733 |
|
|
|
918 |
|
|
Deferred income tax liabilities, net |
|
3,981 |
|
|
|
5,810 |
|
|
Other liabilities |
|
115,249 |
|
|
|
129,270 |
|
|
Total liabilities |
|
8,392,497 |
|
|
|
8,388,973 |
|
|
|
|
|
|
||||
|
STOCKHOLDERS’ EQUITY: |
|
|
|
||||
|
Preferred stock, $0.01 par value; 100,000,000 shares authorized, no shares issued or outstanding |
|
— |
|
|
|
— |
|
|
Common stock, $0.01 par value; 1,400,000,000 shares authorized, 138,842,784 and 138,832,284 shares issued and outstanding as of December 31, 2021 and September 30, 2021, respectively |
|
1,388 |
|
|
|
1,388 |
|
|
Additional paid-in capital |
|
1,189,827 |
|
|
|
1,189,633 |
|
|
Unearned compensation, ESOP |
|
(30,974 |
) |
|
|
(31,387 |
) |
|
Retained earnings |
|
79,745 |
|
|
|
98,944 |
|
|
Accumulated other comprehensive (loss) income, net of tax |
|
(23,326 |
) |
|
|
(16,305 |
) |
|
Total stockholders’ equity |
|
1,216,660 |
|
|
|
1,242,273 |
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
9,609,157 |
|
|
$ |
9,631,246 |
|
Contacts
Kent Townsend
Executive Vice President,
Chief Financial Officer and Treasurer
(785) 231-6360
ktownsend@capfed.com
Investor Relations
(785) 270-6055
investorrelations@capfed.com