Capitol Federal Financial, Inc.® Reports Second 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 March 31, 2022. The Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 will be filed with the Securities and Exchange Commission (“SEC”) on or about May 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 $21.6 million;
- basic and diluted earnings per share of $0.16;
- net interest margin of 1.69% (2.01% excluding the effects of the leverage strategy);
- paid dividends of $11.5 million, or $0.085 per share; and
- on April 20, 2022, announced a cash dividend of $0.085 per share, payable on May 20, 2022 to stockholders of record as of the close of business on May 6, 2022.
Comparison of Operating Results for the Three Months Ended March 31, 2022 and December 31, 2021
For the quarter ended March 31, 2022, the Company recognized net income of $21.6 million, or $0.16 per share, compared to net income of $22.2 million, or $0.16 per share, for the quarter ended December 31, 2021. The decrease in net income was due primarily to higher non-interest expense and income tax expense, partially offset by an increase in net interest income. The net interest margin decreased 30 basis points, from 1.99% for the prior quarter to 1.69% for the current quarter. During the current quarter, the Company’s leverage strategy, which had not been in place since 2019, was reimplemented. When the leverage strategy is in place, it reduces the net interest margin due to the amount of earnings from the transaction in comparison to the size of the transaction. Excluding the effects of the leverage strategy, the net interest margin would have increased two basis points, from 1.99% for the prior quarter to 2.01% for the current quarter. The increase in the net interest margin excluding the effects of the leverage strategy was due mainly to a decrease in the cost of retail certificates of deposit.
Leverage Strategy
At times, the Bank has utilized a leverage strategy to increase earnings. The leverage strategy during the current quarter involved borrowing up to $2.10 billion either on the Bank’s line of credit with Federal Home Loan Bank Topeka (“FHLB”) or by entering into short-term FHLB advances, depending on the rates offered by FHLB. The borrowings were repaid prior to quarter end. The proceeds from the borrowings, net of the required FHLB stock holdings which yielded 5.75% from dividends during the current quarter, were deposited at the Federal Reserve Bank of Kansas City (“FRB of Kansas City”). Net income attributable to the leverage strategy is largely derived from the dividends received on FHLB stock holdings, plus the net interest rate spread between the yield on the cash deposited at the FRB of Kansas City and the rate paid on the related FHLB borrowings, less applicable federal insurance premiums and estimated taxes. Net income attributable to the leverage strategy was $545 thousand during the current quarter. Management continues to monitor the net interest rate spread and overall profitability of the strategy. It is expected that the strategy will continue to be utilized as long as it remains profitable.
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 |
|
|
|
|
|||||||
|
|
March 31, |
|
December 31, |
|
Change Expressed in: |
|||||||
|
|
|
2022 |
|
|
2021 |
|
Dollars |
|
Percent |
|||
|
|
(Dollars in thousands) |
|
|
|||||||||
|
INTEREST AND DIVIDEND INCOME: |
|
|
|
|
|
|
|
|||||
|
Loans receivable |
$ |
55,412 |
|
$ |
55,788 |
|
$ |
(376 |
) |
|
(0.7 |
) % |
|
Mortgage-backed securities (“MBS”) |
|
4,821 |
|
|
4,625 |
|
|
196 |
|
|
4.2 |
|
|
FHLB stock |
|
2,240 |
|
|
1,231 |
|
|
1,009 |
|
|
82.0 |
|
|
Investment securities |
|
800 |
|
|
808 |
|
|
(8 |
) |
|
(1.0 |
) |
|
Cash and cash equivalents |
|
949 |
|
|
14 |
|
|
935 |
|
|
6,678.6 |
|
|
Total interest and dividend income |
$ |
64,222 |
|
$ |
62,466 |
|
$ |
1,756 |
|
|
2.8 |
|
The increase in interest income on MBS was due to a decrease in premium amortization related to a slowdown in prepayment activity. The increase in dividend income on FHLB stock was due mainly to the leverage strategy being utilized during the current quarter, partially offset by a special 1.00% year-end dividend received in the prior quarter. The increase in interest income on cash and cash equivalents was due mainly to the leverage strategy being utilized 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 |
|
|
|
|
|||||||
|
|
March 31, |
|
December 31, |
|
Change Expressed in: |
|||||||
|
|
|
2022 |
|
|
2021 |
|
Dollars |
|
Percent |
|||
|
|
(Dollars in thousands) |
|
|
|||||||||
|
INTEREST EXPENSE: |
|
|
|
|
|
|
|
|||||
|
Deposits |
$ |
8,389 |
|
$ |
9,267 |
|
$ |
(878 |
) |
|
(9.5 |
) % |
|
Borrowings |
|
8,732 |
|
|
7,585 |
|
|
1,147 |
|
|
15.1 |
|
|
Total interest expense |
$ |
17,121 |
|
$ |
16,852 |
|
$ |
269 |
|
|
1.6 |
|
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. The increase in interest expense on borrowings was due to the leverage strategy being utilized during the current quarter.
Provision for Credit Losses
For the quarter ended March 31, 2022, the Bank recorded a negative provision for credit losses of $3.2 million, compared to a negative provision for credit losses of $3.4 million for the prior quarter. The negative provision in the current quarter was comprised of a $2.2 million decrease in the allowance for credit losses (“ACL”) for loans and a $952 thousand decrease in reserves for off-balance sheet credit exposures. The negative provision for credit losses associated with the ACL was due primarily to a reduction in model-calculated ACL for commercial loans due to an increase in projected prepayment speeds as a result of recent prepayment activity, as well as a decrease in the commercial loan Coronavirus Disease 2019 (“COVID-19”) modification qualitative factor due to loans exiting their deferral time periods and resuming full payments per their original contracts during the current quarter. The negative provision for credit losses associated with the reserve for off-balance sheet credit exposures was due primarily to a reduction in the reserve for commercial construction loans due mainly to a reduction in the model-calculated amount as noted for the ACL.
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 |
|
|
|
|
|||||||
|
|
March 31, |
|
December 31, |
|
Change Expressed in: |
|||||||
|
|
|
2022 |
|
|
2021 |
|
Dollars |
|
Percent |
|||
|
|
(Dollars in thousands) |
|
|
|||||||||
|
NON-INTEREST INCOME: |
|
|
|
|
|
|
|
|||||
|
Deposit service fees |
$ |
3,300 |
|
$ |
3,430 |
|
$ |
(130 |
) |
|
(3.8 |
) % |
|
Insurance commissions |
|
543 |
|
|
711 |
|
|
(168 |
) |
|
(23.6 |
) |
|
Other non-interest income |
|
1,573 |
|
|
1,365 |
|
|
208 |
|
|
15.2 |
|
|
Total non-interest income |
$ |
5,416 |
|
$ |
5,506 |
|
$ |
(90 |
) |
|
(1.6 |
) |
The decrease in insurance commissions was due primarily to the receipt of annual contingent insurance commissions, which was lower than expected, and the related accrual adjustments. The increase in other non-interest income was due mainly to a gain on a loan-related financial derivative agreement.
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 |
|
|
|
|
|||||||
|
|
March 31, |
|
December 31, |
|
Change Expressed in: |
|||||||
|
|
|
2022 |
|
|
2021 |
|
Dollars |
|
Percent |
|||
|
|
(Dollars in thousands) |
|
|
|||||||||
|
NON-INTEREST EXPENSE: |
|
|
|
|
|
|
|
|||||
|
Salaries and employee benefits |
$ |
14,023 |
|
$ |
13,728 |
|
$ |
295 |
|
|
2.1 |
% |
|
Information technology and related expense |
|
4,493 |
|
|
4,432 |
|
|
61 |
|
|
1.4 |
|
|
Occupancy, net |
|
3,493 |
|
|
3,379 |
|
|
114 |
|
|
3.4 |
|
|
Regulatory and outside services |
|
1,272 |
|
|
1,368 |
|
|
(96 |
) |
|
(7.0 |
) |
|
Advertising and promotional |
|
1,494 |
|
|
1,064 |
|
|
430 |
|
|
40.4 |
|
|
Federal insurance premium |
|
777 |
|
|
639 |
|
|
138 |
|
|
21.6 |
|
|
Deposit and loan transaction costs |
|
689 |
|
|
697 |
|
|
(8 |
) |
|
(1.1 |
) |
|
Office supplies and related expense |
|
502 |
|
|
468 |
|
|
34 |
|
|
7.3 |
|
|
Other non-interest expense |
|
1,217 |
|
|
919 |
|
|
298 |
|
|
32.4 |
|
|
Total non-interest expense |
$ |
27,960 |
|
$ |
26,694 |
|
$ |
1,266 |
|
|
4.7 |
|
The increase in advertising and promotional expense was due primarily to the timing of campaigns and sponsorships. The increase in federal insurance premium expense was due mainly to an increase in average assets as a result of the leverage strategy being utilized during the current quarter. The increase in other non-interest expense was due mainly to an increase in debit card and deposit account fraud losses, along with an increase in dues and subscriptions related to annual payments, and an increase in insurance expense due to a premium refund received in the prior quarter.
The Company’s efficiency ratio was 53.24% for the current quarter compared to 52.22% for the prior quarter. The change in the efficiency ratio was due primarily to higher 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 higher value indicates that it is costing the financial institution more money to generate revenue, 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 |
|
|
|
|
|||||||||
|
|
March 31, |
|
December 31, |
|
Change Expressed in: |
|||||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
Dollars |
|
Percent |
|||
|
|
(Dollars in thousands) |
|
|
|||||||||||
|
Income before income tax expense |
$ |
27,745 |
|
|
$ |
27,865 |
|
|
$ |
(120 |
) |
|
(0.4 |
) % |
|
Income tax expense |
|
6,122 |
|
|
|
5,679 |
|
|
|
443 |
|
|
7.8 |
|
|
Net income |
$ |
21,623 |
|
|
$ |
22,186 |
|
|
$ |
(563 |
) |
|
(2.5 |
) |
|
|
|
|
|
|
|
|
|
|||||||
|
Effective Tax Rate |
|
22.1 |
% |
|
|
20.4 |
% |
|
|
|
|
|||
The increase in income tax expense was due primarily to a higher effective tax rate in the current quarter. The lower effective tax rate in the prior quarter was due primarily to true-ups related to the preparation of the September 30, 2021 tax returns. Management anticipates the effective tax rate for fiscal year 2022 will be approximately 21%.
Comparison of Operating Results for the Six Months Ended March 31, 2022 and 2021
The Company recognized net income of $43.8 million, or $0.32 per share, for the current year period compared to net income of $39.3 million, or $0.29 per share, for the prior year period. The increase in net income was due primarily to an increase in net interest income and a higher negative provision for credit losses in the current year period, partially offset by higher income tax expense. The net interest margin decreased seven basis points, from 1.90% for the prior year period to 1.83% for the current year period. Excluding the effects of the leverage strategy, the net interest margin would have increased 10 basis points, from 1.90% for the prior year period to 2.00% for the current year period. The increase in net interest margin excluding the effects of the leverage strategy was due mainly to a reduction in the weighted average cost of retail certificates of deposit and borrowings, which outpaced the decrease in weighted average 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 Six Months Ended |
|
|
|
|
|||||||
|
|
March 31, |
|
Change Expressed in: |
|||||||||
|
|
|
2022 |
|
|
2021 |
|
Dollars |
|
Percent |
|||
|
|
(Dollars in thousands) |
|
|
|||||||||
|
INTEREST AND DIVIDEND INCOME: |
|
|
|
|
|
|
|
|||||
|
Loans receivable |
$ |
111,200 |
|
$ |
117,979 |
|
$ |
(6,779 |
) |
|
(5.7 |
) % |
|
MBS |
|
9,446 |
|
|
11,139 |
|
|
(1,693 |
) |
|
(15.2 |
) |
|
FHLB Stock |
|
3,471 |
|
|
2,020 |
|
|
1,451 |
|
|
71.8 |
|
|
Investment securities |
|
1,608 |
|
|
1,312 |
|
|
296 |
|
|
22.6 |
|
|
Cash and cash equivalents |
|
963 |
|
|
91 |
|
|
872 |
|
|
958.2 |
|
|
Total interest and dividend income |
$ |
126,688 |
|
$ |
132,541 |
|
$ |
(5,853 |
) |
|
(4.4 |
) |
The decrease in interest income on loans receivable was due primarily to a decrease in the weighted average rate on the originated and correspondent one- to four-family loan portfolio, partially offset by the increase in the average balance of the loan portfolio. The decrease in the weighted average rate was due to endorsements and refinances to lower market rates and the origination and purchase of new loans at lower market rates between periods. Premium amortization related to the one- to four-family correspondent loan portfolio decreased significantly compared to the prior year period due to the slow-down in prepayments and endorsements, partially offsetting the decrease in the weighted average rate.
The decrease in interest income on the MBS portfolio was due to a decrease in the weighted average yield as a result of purchases at lower market yields between periods, along with higher premium amortization related to prepayment activity.
The increase in dividend income on FHLB stock and the increase in interest income on cash and cash equivalents were due mainly to the leverage strategy being utilized during the current year period.
The increase in interest income on investment securities was due primarily to 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 Six Months Ended |
|
|
|
|
|||||||
|
|
March 31, |
|
Change Expressed in: |
|||||||||
|
|
|
2022 |
|
|
2021 |
|
Dollars |
|
Percent |
|||
|
|
(Dollars in thousands) |
|
|
|||||||||
|
INTEREST EXPENSE: |
|
|
|
|
|
|
|
|||||
|
Deposits |
$ |
17,656 |
|
$ |
26,596 |
|
$ |
(8,940 |
) |
|
(33.6 |
) % |
|
Borrowings |
|
16,317 |
|
|
19,059 |
|
|
(2,742 |
) |
|
(14.4 |
) |
|
Total interest expense |
$ |
33,973 |
|
$ |
45,655 |
|
$ |
(11,682 |
) |
|
(25.6 |
) |
The decrease in interest expense on deposits was due mainly to a decrease in the weighted average rate paid on retail certificates of deposit, wholesale certificates of deposit, and money market accounts. 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. This was partially offset by the leverage strategy being utilized during the current year period and not being utilized during the prior year period.
Provision for Credit Losses
The Bank recorded a negative provision for credit losses during the current year period of $6.6 million, compared to a negative provision for credit losses of $4.5 million during the prior year period. The negative provision in the current year period was comprised of a $4.5 million decrease in the ACL for loans and a $2.1 million decrease in reserves for off-balance sheet credit exposures. The negative provision for credit losses associated with the ACL in the current year period was due to (1) a reduction in model-calculated ACL for commercial loans due to an increase in projected prepayment speeds as a result of recent prepayment activity, (2) a reduction in the large-dollar special mention commercial loan qualitative factor due to two large-dollar special mention commercial loans moving to the pass classification during the December 31, 2021 quarter, (3) a decrease in the commercial loan COVID-19 modification qualitative factor due to loans exiting their deferral time periods and resuming full payments per their original contracts during the current quarter, and (4) a decrease in the economic uncertainty qualitative factor for commercial loans due to continued improvement in economic conditions. The negative provision for credit losses associated with the reserve for off-balance sheet credit exposures in the current year period was due primarily to a reduction in the commercial loan economic uncertainty qualitative factor and to a reduction in the reserves for commercial construction loans due mainly to a reduction in the model-calculated amount as noted for the ACL.
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 Six Months Ended |
|
|
|
|
|||||||
|
|
March 31, |
|
Change Expressed in: |
|||||||||
|
|
|
2022 |
|
|
2021 |
|
Dollars |
|
Percent |
|||
|
|
(Dollars in thousands) |
|
|
|||||||||
|
NON-INTEREST INCOME: |
|
|
|
|
|
|
|
|||||
|
Deposit service fees |
$ |
6,730 |
|
$ |
5,761 |
|
$ |
969 |
|
|
16.8 |
% |
|
Insurance commissions |
|
1,254 |
|
|
1,526 |
|
|
(272 |
) |
|
(17.8 |
) |
|
Gain on sale of Visa Class B shares |
|
— |
|
|
7,386 |
|
|
(7,386 |
) |
|
(100.0 |
) |
|
Other non-interest income |
|
2,938 |
|
|
2,874 |
|
|
64 |
|
|
2.2 |
|
|
Total non-interest income |
$ |
10,922 |
|
$ |
17,547 |
|
$ |
(6,625 |
) |
|
(37.8 |
) |
The increase in deposit service fees was due primarily to an increase in debit card income as a result of higher transaction and settlement volume, in addition to an increase in the average transaction amount. The decrease in insurance commissions was due primarily to the receipt of annual contingent insurance commissions, which was lower than expected, and the related accrual adjustments. During the prior year period, the Bank sold its Visa Class B shares, resulting in a $7.4 million gain, with no similar transaction during the current year period.
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 Six Months Ended |
|
|
|
|
|||||||
|
|
March 31, |
|
Change Expressed in: |
|||||||||
|
|
|
2022 |
|
|
2021 |
|
Dollars |
|
Percent |
|||
|
|
(Dollars in thousands) |
|
|
|||||||||
|
NON-INTEREST EXPENSE: |
|
|
|
|
|
|
|
|||||
|
Salaries and employee benefits |
$ |
27,751 |
|
$ |
27,535 |
|
$ |
216 |
|
|
0.8 |
% |
|
Information technology and related expense |
|
8,925 |
|
|
8,832 |
|
|
93 |
|
|
1.1 |
|
|
Occupancy, net |
|
6,872 |
|
|
6,902 |
|
|
(30 |
) |
|
(0.4 |
) |
|
Regulatory and outside services |
|
2,640 |
|
|
2,819 |
|
|
(179 |
) |
|
(6.3 |
) |
|
Advertising and promotional |
|
2,558 |
|
|
2,322 |
|
|
236 |
|
|
10.2 |
|
|
Federal insurance premium |
|
1,416 |
|
|
1,255 |
|
|
161 |
|
|
12.8 |
|
|
Deposit and loan transaction costs |
|
1,386 |
|
|
1,430 |
|
|
(44 |
) |
|
(3.1 |
) |
|
Office supplies and related expense |
|
970 |
|
|
887 |
|
|
83 |
|
|
9.4 |
|
|
Loss on interest rate swap termination |
|
— |
|
|
4,752 |
|
|
(4,752 |
) |
|
(100.0 |
) |
|
Other non-interest expense |
|
2,136 |
|
|
2,986 |
|
|
(850 |
) |
|
(28.5 |
) |
|
Total non-interest expense |
$ |
54,654 |
|
$ |
59,720 |
|
$ |
(5,066 |
) |
|
(8.5 |
) |
The increase in advertising and promotional expense was due mainly to adjustments to advertising schedules during the prior year related to the COVID-19 pandemic. During the prior year period, the Bank terminated $200.0 million of interest rate swaps, resulting in a loss of $4.8 million which was reclassified out of accumulated other comprehensive income (“AOCI”) to earnings. The decrease in other non-interest expense was due primarily to the write-down during the prior year period of a property that had previously served as one of the Bank’s branch locations.
The Company’s efficiency ratio was 52.74% for the current year period compared to 57.19% for the prior year period. The improvement in the efficiency ratio was due primarily to lower non-interest expense and higher net interest income, partially offset by lower non-interest income.
Management intends to implement a new core processing system for the Bank by September 2023. The replacement system will better position the Bank for the future and allow for the introduction of new products and services to enhance customer experiences. The implementation of the new core system and related conversion of data may result in increased third party expenses later in fiscal year 2022 and into fiscal year 2023.
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 Six Months Ended |
|
|
|
|
||||||||
|
|
March 31, |
|
Change Expressed in: |
||||||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
Dollars |
|
Percent |
||
|
|
(Dollars in thousands) |
|
|
||||||||||
|
|
|
|
|
|
|
|
|
||||||
|
Income before income tax expense |
$ |
55,610 |
|
|
$ |
49,209 |
|
|
$ |
6,401 |
|
13.0 |
% |
|
Income tax expense |
|
11,801 |
|
|
|
9,867 |
|
|
|
1,934 |
|
19.6 |
|
|
Net income |
$ |
43,809 |
|
|
$ |
39,342 |
|
|
$ |
4,467 |
|
11.4 |
|
|
|
|
|
|
|
|
|
|
||||||
|
Effective Tax Rate |
|
21.2 |
% |
|
|
20.1 |
% |
|
|
|
|
||
The increase in income tax expense was due primarily to higher pretax income in the current year period. Additionally, the effective tax rate increased slightly compared to the prior year period, and is in line with management’s anticipation of an effective tax rate of approximately 21% for fiscal year 2022.
Financial Condition as of March 31, 2022
The following table summarizes the Company’s financial condition at the dates indicated.
|
|
|
|
|
|
Annualized |
|
|
|
Annualized |
|
|
March 31, |
|
December 31, |
|
Percent |
|
September 30, |
|
Percent |
|
|
2022 |
|
2021 |
|
Change |
|
2021 |
|
Change |
|
|
(Dollars in thousands) |
||||||||
|
Total assets |
$ 9,531,296 |
|
$ 9,609,157 |
|
(3.2) % |
|
$ 9,631,246 |
|
(2.1) % |
|
Available-for-sale (“AFS”) securities |
1,780,419 |
|
1,890,653 |
|
(23.3) |
|
2,014,608 |
|
(23.2) |
|
Loans receivable, net |
7,108,810 |
|
7,095,605 |
|
0.7 |
|
7,081,142 |
|
0.8 |
|
Deposits |
6,614,844 |
|
6,648,004 |
|
(2.0) |
|
6,597,396 |
|
0.5 |
|
Borrowings |
1,583,747 |
|
1,583,303 |
|
0.1 |
|
1,582,850 |
|
0.1 |
|
Stockholders’ equity |
1,174,752 |
|
1,216,660 |
|
(13.8) |
|
1,242,273 |
|
(10.9) |
|
Equity to total assets at end of period |
12.3% |
|
12.7% |
|
|
|
12.9% |
|
|
|
Average number of basic shares outstanding |
135,677 |
|
135,627 |
|
0.1 |
|
135,571 |
|
0.2 |
|
Average number of diluted shares outstanding |
135,677 |
|
135,627 |
|
0.1 |
|
135,571 |
|
0.2 |
The decrease in total assets from September 30, 2021 and December 31, 2021 to March 31, 2022 was due primarily to a decrease in securities, partially offset by an increase in cash and cash equivalents. The decrease in stockholders’ equity from September 30, 2021 and December 31, 2021 to March 31, 2022 was due mainly to a reduction in AOCI as a result of changes in the fair value of AFS securities.
The following table summarizes loan originations and purchases and borrowing activity, along with the related weighted average rates, during the periods indicated. The borrowings presented in the table have original contractual terms of one year or longer.
|
|
For the Three Months Ended |
|
For the Six Months Ended |
|||||||||
|
|
March 31, 2022 |
|
March 31, 2022 |
|||||||||
|
|
Amount |
|
Rate |
|
Amount |
|
Rate |
|||||
|
|
(Dollars in thousands) |
|||||||||||
|
Loan originations and purchases |
|
|
|
|
|
|
|
|||||
|
One- to four-family and consumer: |
|
|
|
|
|
|
|
|||||
|
Originated |
$ |
180,117 |
|
3.08 |
% |
|
$ |
389,557 |
|
|
2.97 |
% |
|
Purchased |
|
118,096 |
|
2.81 |
|
|
|
248,649 |
|
|
2.73 |
|
|
|
|
|
|
|
|
|
|
|||||
|
Commercial: |
|
|
|
|
|
|
|
|||||
|
Originated |
|
88,034 |
|
3.96 |
|
|
|
137,279 |
|
|
3.90 |
|
|
Purchased |
|
37,394 |
|
3.25 |
|
|
|
74,057 |
|
|
3.30 |
|
|
|
$ |
423,641 |
|
3.20 |
|
|
$ |
849,542 |
|
|
3.08 |
|
|
Borrowing activity |
|
|
|
|
|
|
|
|||||
|
Maturities and prepayments |
$ |
— |
|
— |
|
|
$ |
(100,000 |
) |
|
3.14 |
|
|
New borrowings |
|
— |
|
— |
|
|
|
100,000 |
|
|
3.44 |
|
Stockholders’ Equity
During the six months ended March 31, 2022, the Company paid cash dividends totaling $52.9 million. These cash dividends totaled $0.39 per share and consisted of a $0.22 per share cash true-up dividend related to fiscal year 2021 earnings and two regular quarterly cash dividends of $0.085 per share. On April 20, 2022, the Company announced a regular quarterly cash dividend of $0.085 per share, or approximately $11.5 million, payable on May 20, 2022 to stockholders of record as of the close of business on May 6, 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 March 31, 2022, this ratio was 11.1%.
At March 31, 2022, Capitol Federal Financial, Inc., at the holding company level, had $81.1 million in cash on deposit at the Bank.
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