Capitol Federal Financial, Inc.® Reports Second Quarter Fiscal Year 2023 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, 2023. For best viewing results, please view this release in Portable Document Format (PDF) on our website, http://ir.capfed.com.
Highlights for the quarter include:
- net income of $14.2 million;
- basic and diluted earnings per share of $0.11;
- net interest margin of 1.56% (1.71% excluding the effects of the leverage strategy);
- annualized loan growth of 9.0%;
- paid dividends of $0.085 per share; and
- on April 25, 2023, announced a cash dividend of $0.085 per share, payable on May 19, 2023 to stockholders of record as of the close of business on May 5, 2023.
Comparison of Operating Results for the Three Months Ended March 31, 2023 and December 31, 2022
For the quarter ended March 31, 2023, the Company recognized net income of $14.2 million, or $0.11 per share, compared to net income of $16.2 million, or $0.12 per share, for the quarter ended December 31, 2022. The decrease in net income was due primarily to lower net interest income in the current quarter. The net interest margin decreased five basis points, from 1.61% for the prior quarter to 1.56% for the current quarter. Excluding the effects of the leverage strategy discussed below, the net interest margin decreased 17 basis points, from 1.88% for the prior quarter to 1.71% for the current quarter. The decrease in the net interest margin excluding the effects of the leverage strategy was due mainly to an increase in the cost of deposits and borrowings, partially offset by an increase in loan yields due to higher market interest rates and an increase in the average balance of loans. Management anticipates the reduction in the net interest margin will continue in the near term. See additional discussion in “Fiscal Year 2023 Outlook” below.
Liquidity, Capital, and Uninsured Deposits
For short-term liquidity needs, the Bank has access to a line of credit at the Federal Home Loan Bank Topeka (“FHLB”) in addition to the Federal Reserve Bank of Kansas City (“FRB of Kansas City”) discount window and the newly established FRB Bank Term Funding Program. The Bank did not have any borrowings from the FRB of Kansas City discount window or Bank Term Funding Program during the quarter. The Bank’s FHLB borrowing limit was 50% of the Bank’s Call Report total assets as of March 31, 2023. The amount that can be borrowed from the FRB of Kansas City’s discount window is based upon the fair value of securities pledged as collateral. Management estimated that the Bank had $2.85 billion in additional liquidity available at March 31, 2023 based on the Bank’s blanket collateral agreement with FHLB and unencumbered securities.
Accumulated other comprehensive loss was $118.6 million at March 31, 2023 of which $125.3 million was attributed to unrealized losses on available-for-sale (“AFS”) securities, partially offset by $6.6 million of unrealized gains on derivatives. The unrealized loss on AFS securities improved at March 31, 2023 from $142.1 million at December 31, 2022, due mainly to changes in market interest rates.
As of March 31, 2023, approximately $634.7 million of the Bank’s deposit portfolio was uninsured, or approximately 10% of the Bank’s Call Report deposit balance, of which approximately $348.0 million related to commercial and retail deposit accounts and the remainder was mainly comprised of fully collateralized public unit deposits and intercompany accounts. The uninsured amounts are estimates based on the methodologies and assumptions used for the Bank’s regulatory reporting requirements.
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. The weighted average yield on loans receivable increased 13 basis points and the weighted average yield on mortgage-backed securities (“MBS”) increased four basis points compared to the prior quarter.
|
|
For the Three Months Ended |
|
|
|
|
||||||||
|
|
March 31, |
December 31, |
|
Change Expressed in: |
|||||||||
|
|
2023 |
|
2022 |
|
Dollars |
|
Percent |
||||||
|
|
(Dollars in thousands) |
|
|
||||||||||
|
INTEREST AND DIVIDEND INCOME: |
|
|
|
|
|
|
|||||||
|
Loans receivable |
$ |
69,319 |
$ |
64,819 |
|
$ |
4,500 |
|
|
6.9 |
% |
||
|
Cash and cash equivalents |
|
10,977 |
|
16,671 |
|
|
(5,694 |
) |
|
(34.2 |
) |
||
|
MBS |
|
4,748 |
|
4,811 |
|
|
(63 |
) |
|
(1.3 |
) |
||
|
FHLB stock |
|
3,607 |
|
4,158 |
|
|
(551 |
) |
|
(13.3 |
) |
||
|
Investment securities |
|
895 |
|
881 |
|
|
14 |
|
|
1.6 |
|
||
|
Total interest and dividend income |
$ |
89,546 |
$ |
91,340 |
|
$ |
(1,794 |
) |
|
(2.0 |
) |
||
The increase in interest income on loans receivable was due to growth in the loan portfolio, along with an increase in the weighted average yield. The loan growth was mainly in the correspondent one-to four-family and commercial real estate loan portfolios. The increase in the weighted average yield was due primarily to originations and purchases at higher market yields, as well as disbursements on commercial construction loans at rates higher than the overall portfolio rate and upward repricing of existing adjustable-rate loans due to higher market interest rates. The decrease in interest income on cash and cash equivalents was due mainly to a decrease in the average balance of cash associated with the leverage strategy compared to the prior quarter due to a reduction in the leverage strategy usage in the current quarter, partially offset by an increase in the yield earned on balances held at the FRB of Kansas City due to higher market interest rates. The decrease in dividend income on FHLB stock was due mainly to a decrease in the average balance of FHLB stock associated with the leverage strategy, partially offset by an increase in the dividend rate paid by FHLB.
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. The weighted average rate paid on deposits increased 33 basis points and the weighted average rate paid on borrowings not associated with the leverage strategy increased 30 basis points compared to the prior quarter.
|
|
For the Three Months Ended |
|
|
|
|
||||||||
|
|
March 31, |
|
December 31, |
|
Change Expressed in: |
||||||||
|
|
2023 |
2022 |
|
Dollars |
|
Percent |
|||||||
|
|
(Dollars in thousands) |
|
|
||||||||||
|
INTEREST EXPENSE: |
|
|
|
|
|
|
|||||||
|
Borrowings |
$ |
31,447 |
$ |
33,608 |
|
$ |
(2,161 |
) |
|
(6.4 |
)% |
||
|
Deposits |
|
16,140 |
|
11,904 |
|
|
4,236 |
|
|
35.6 |
|
||
|
Total interest expense |
$ |
47,587 |
$ |
45,512 |
|
$ |
2,075 |
|
|
4.6 |
|
||
The decrease in interest expense on borrowings was due primarily to a decrease in the average balance of borrowings associated with the leverage strategy compared to the prior quarter, partially offset by an increase in the average balance of borrowings not associated with the leverage strategy to fund operational needs. The increase in interest expense on deposits was due primarily to increases in the weighted average rate paid and average balance of the certificate of deposit portfolio.
Provision for Credit Losses
For the quarter ended March 31, 2023, the Bank recorded a provision for credit losses of $891 thousand, compared to a provision for credit losses of $3.7 million for the prior quarter. The provision for credit losses in the current quarter was comprised of a $714 thousand increase in the allowance for credit losses (“ACL”) for loans and a $177 thousand increase in reserves for off-balance sheet credit exposures. The provision for credit losses associated with the ACL was due primarily to a reduction in prepayment speeds related to the commercial loan portfolio along with commercial loan growth, partially offset by a slightly improved economic forecast. The provision for credit losses associated with the reserves for off-balance sheet credit exposures was primarily related to the commercial loan portfolio for the same reasons noted above 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: |
||||||||
|
|
2023 |
|
2022 |
|
Dollars |
|
Percent |
||||||
|
|
(Dollars in thousands) |
|
|
||||||||||
|
NON-INTEREST INCOME: |
|
|
|
|
|
|
|
||||||
|
Deposit service fees |
$ |
3,122 |
|
$ |
3,461 |
|
$ |
(339 |
) |
|
(9.8 |
)% |
|
|
Insurance commissions |
|
877 |
|
|
795 |
|
|
82 |
|
|
10.3 |
|
|
|
Other non-interest income |
|
1,084 |
|
|
1,096 |
|
|
(12 |
) |
|
(1.1 |
) |
|
|
Total non-interest income |
$ |
5,083 |
|
$ |
5,352 |
|
$ |
(269 |
) |
|
(5.0 |
) |
|
The decrease in deposit service fees was due mainly to decreases in debit card income and service charges as a result of lower transaction activity 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 |
|
|
|
|
||||||||
|
|
March 31, |
|
December 31, |
|
Change Expressed in: |
||||||||
|
|
2023 |
|
2022 |
|
Dollars |
|
Percent |
||||||
|
|
(Dollars in thousands) |
|
|
||||||||||
|
NON-INTEREST EXPENSE: |
|
|
|
|
|
|
|
||||||
|
Salaries and employee benefits |
$ |
12,789 |
|
$ |
13,698 |
|
$ |
(909 |
) |
|
(6.6 |
)% |
|
|
Information technology and related expense |
|
5,789 |
|
|
5,070 |
|
|
719 |
|
|
14.2 |
|
|
|
Occupancy, net |
|
3,568 |
|
|
3,474 |
|
|
94 |
|
|
2.7 |
|
|
|
Regulatory and outside services |
|
1,305 |
|
|
1,533 |
|
|
(228 |
) |
|
(14.9 |
) |
|
|
Advertising and promotional |
|
1,333 |
|
|
833 |
|
|
500 |
|
|
60.0 |
|
|
|
Federal insurance premium |
|
1,246 |
|
|
812 |
|
|
434 |
|
|
53.4 |
|
|
|
Deposit and loan transaction costs |
|
690 |
|
|
611 |
|
|
79 |
|
|
12.9 |
|
|
|
Office supplies and related expense |
|
631 |
|
|
633 |
|
|
(2 |
) |
|
(0.3 |
) |
|
|
Other non-interest expense |
|
1,280 |
|
|
1,109 |
|
|
171 |
|
|
15.4 |
|
|
|
Total non-interest expense |
$ |
28,631 |
|
$ |
27,773 |
|
$ |
858 |
|
|
3.1 |
|
|
The decrease in salaries and employee benefits was attributable mainly to a decrease in incentive compensation. The increase in information technology and related expense was due primarily to third-party project management expenses associated with the Bank’s ongoing digital transformation project and an increase in software licensing. The decrease in regulatory and outside services was due primarily to the timing of external audit expenses and a decrease in outside consulting services. The increase in advertising and promotional expense was due mainly to the timing of campaigns and sponsorships. The increase in federal insurance premium expense was due mainly to an increase in the Federal Deposit Insurance Corporation (“FDIC”) assessment rate effective January 1, 2023.
The Company’s efficiency ratio was 60.86% for the current quarter compared to 54.27% for the prior quarter. The change in the efficiency ratio was due primarily to lower net interest income. 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 and the effective tax rate.
|
|
For the Three Months Ended |
|
|
|
|
||||||||||
|
|
March 31, |
|
December 31, |
|
Change Expressed in: |
||||||||||
|
|
2023 |
|
2022 |
|
Dollars |
|
Percent |
||||||||
|
|
(Dollars in thousands) |
|
|
||||||||||||
|
Income before income tax expense |
$ |
17,520 |
|
|
$ |
19,747 |
|
|
$ |
(2,227 |
) |
|
(11.3 |
)% |
|
|
Income tax expense |
|
3,331 |
|
|
|
3,507 |
|
|
|
(176 |
) |
|
(5.0 |
) |
|
|
Net income |
$ |
14,189 |
|
|
$ |
16,240 |
|
|
$ |
(2,051 |
) |
|
(12.6 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Effective Tax Rate |
|
19.0 |
% |
|
|
17.8 |
% |
|
|
|
|
||||
The decrease in income tax expense was due primarily to lower pretax income in the current quarter, partially offset by an increase in the effective tax rate. The lower effective tax rate in the prior quarter was due primarily to true-ups related to the preparation of the September 30, 2022 tax returns.
Comparison of Operating Results for the Six Months Ended March 31, 2023 and 2022
The Company recognized net income of $30.4 million, or $0.23 per share, for the current year period compared to net income of $43.8 million, or $0.32 per share, for the prior year period. The decrease in net income was due primarily to recording a provision for credit losses of $4.6 million for the current year compared to a release of provision of $6.6 million for the prior year period. The net interest margin decreased 24 basis points, from 1.83% for the prior year period to 1.59% for the current year period. Excluding the effects of the leverage strategy, the net interest margin decreased 21 basis points, from 2.00% for the prior year period to 1.79% for the current year period. The decrease in the net interest margin excluding the effects of the leverage strategy was due mainly to an increase in the cost of borrowings and deposits, which exceeded the increase in loan 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: |
|||||||||
|
|
2023 |
|
2022 |
|
Dollars |
|
Percent |
|||||
|
|
(Dollars in thousands) |
|
|
|||||||||
|
INTEREST AND DIVIDEND INCOME: |
|
|
|
|
|
|
|
|||||
|
Loans receivable |
$ |
134,138 |
|
$ |
111,200 |
|
$ |
22,938 |
|
20.6 |
% |
|
|
Cash and cash equivalents |
|
27,648 |
|
|
963 |
|
|
26,685 |
|
2,771.0 |
|
|
|
MBS |
|
9,559 |
|
|
9,446 |
|
|
113 |
|
1.2 |
|
|
|
FHLB stock |
|
7,765 |
|
|
3,471 |
|
|
4,294 |
|
123.7 |
|
|
|
Investment securities |
|
1,776 |
|
|
1,608 |
|
|
168 |
|
10.4 |
|
|
|
Total interest and dividend income |
$ |
180,886 |
|
$ |
126,688 |
|
$ |
54,198 |
|
42.8 |
|
|
The increase in interest income on loans receivable was due to an increase in the average balance and weighted average yield of the loan portfolio. The increase in the average balance was mainly in the correspondent one-to four-family and commercial real estate loan portfolios. The increase in the weighted average yield was due primarily to originations and purchases at higher market yields, as well as disbursements on commercial construction loans at rates higher than the overall portfolio rate and upward repricing of existing adjustable-rate loans due to higher market interest rates. The increase in interest income on cash and cash equivalents was due mainly to a higher yield on cash related to an increase in FRB interest rates. The increase in dividend income on FHLB stock was due mainly to an increase in the average balance of FHLB stock, along with a higher FHLB dividend rate compared to the prior year period.
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: |
|||||||||
|
|
2023 |
|
2022 |
|
Dollars |
|
Percent |
|||||
|
|
(Dollars in thousands) |
|
|
|||||||||
|
INTEREST EXPENSE: |
|
|
|
|
|
|
|
|||||
|
Borrowings |
$ |
65,055 |
|
$ |
16,317 |
|
$ |
48,738 |
|
298.7 |
% |
|
|
Deposits |
|
28,044 |
|
|
17,656 |
|
|
10,388 |
|
58.8 |
|
|
|
Total interest expense |
$ |
93,099 |
|
$ |
33,973 |
|
$ |
59,126 |
|
174.0 |
|
|
The increase in interest expense on borrowings was due primarily to an increase in the weighted average rate on the borrowings associated with the leverage strategy compared to the prior year period along with an increase in the average balance and weighted average rate on borrowings not associated with the leverage strategy. Interest expense on borrowings associated with the leverage strategy increased $27.3 million compared to the prior year period. Interest expense on FHLB borrowings not associated with the leverage strategy increased due to new borrowings added between periods, at market interest rates higher than the overall portfolio rate, to fund operational needs. See additional discussion in the “Financial Condition” section below. The increase in interest expense on deposits was due to an increase in the weighted average rate paid on the deposit portfolio, primarily certificates of deposit and money market accounts, partially offset by a decrease in the average balance of these portfolios.
Provision for Credit Losses
The Bank recorded a provision for credit losses during the current year period of $4.6 million, compared to a release of provision of $6.6 million during the prior year period. The provision for credit losses in the current year period was comprised of a $3.6 million increase in the ACL for loans and a $1.0 million increase in reserves for off-balance sheet credit exposures. The provision for credit losses associated with both the ACL and reserves for off-balance sheet credit exposures in the current year period was due primarily to a reduction in the projected prepayment speeds used in the model for all loan categories, along with growth in the commercial loan portfolio and commercial construction off-balance sheet credit exposures.
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: |
||||||||||
|
|
2023 |
|
2022 |
|
Dollars |
|
Percent |
||||||
|
|
(Dollars in thousands) |
|
|
||||||||||
|
NON-INTEREST INCOME: |
|
|
|
|
|
|
|
||||||
|
Deposit service fees |
$ |
6,583 |
|
$ |
6,730 |
|
$ |
(147 |
) |
|
(2.2 |
)% |
|
|
Insurance commissions |
|
1,672 |
|
|
1,254 |
|
|
418 |
|
|
33.3 |
|
|
|
Other non-interest income |
|
2,180 |
|
|
2,938 |
|
|
(758 |
) |
|
(25.8 |
) |
|
|
Total non-interest income |
$ |
10,435 |
|
$ |
10,922 |
|
$ |
(487 |
) |
|
(4.5 |
) |
|
The increase in insurance commissions was due primarily to annual contingent insurance commissions received being higher than anticipated and the related accrual adjustments, along with overall commissions being higher in the current year. The decrease in other non-interest income was due mainly to the prior year period including gains on a loan-related financial derivative agreement, with no such gains in 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: |
||||||||||
|
|
2023 |
|
2022 |
|
Dollars |
|
Percent |
||||||
|
|
(Dollars in thousands) |
|
|
||||||||||
|
NON-INTEREST EXPENSE: |
|
|
|
|
|
|
|
||||||
|
Salaries and employee benefits |
$ |
26,487 |
|
$ |
27,751 |
|
$ |
(1,264 |
) |
|
(4.6 |
)% |
|
|
Information technology and related expense |
|
10,859 |
|
|
8,925 |
|
|
1,934 |
|
|
21.7 |
|
|
|
Occupancy, net |
|
7,042 |
|
|
6,872 |
|
|
170 |
|
|
2.5 |
|
|
|
Regulatory and outside services |
|
2,838 |
|
|
2,640 |
|
|
198 |
|
|
7.5 |
|
|
|
Advertising and promotional |
|
2,166 |
|
|
2,558 |
|
|
(392 |
) |
|
(15.3 |
) |
|
|
Federal insurance premium |
|
2,058 |
|
|
1,416 |
|
|
642 |
|
|
45.3 |
|
|
|
Deposit and loan transaction costs |
|
1,301 |
|
|
1,386 |
|
|
(85 |
) |
|
(6.1 |
) |
|
|
Office supplies and related expense |
|
1,264 |
|
|
970 |
|
|
294 |
|
|
30.3 |
|
|
|
Other non-interest expense |
|
2,389 |
|
|
2,136 |
|
|
253 |
|
|
11.8 |
|
|
|
Total non-interest expense |
$ |
56,404 |
|
$ |
54,654 |
|
$ |
1,750 |
|
|
3.2 |
|
|
The decrease in salaries and employee benefits was attributable mainly to a decrease in incentive compensation. The increase in information technology and related expenses was due mainly to third-party project management expenses associated with the Bank’s ongoing digital transformation project, along with higher software licensing expenses. The increase in regulatory and outside services was due primarily to an increase in outside consulting services. The decrease in advertising and promotional expense was due mainly to the timing of campaigns and sponsorships. The increase in federal insurance premium expense was due mainly to an increase in the FDIC assessment rate, along with the leverage strategy being utilized during the majority of the current year period and being utilized for only three months during the prior year period. The increase in office supplies and related expense was due primarily to the write-off of the Bank’s remaining inventory of unissued non-contactless debit cards, which have now become obsolete. The increase in other non-interest expense was due mainly to expenses associated with the collateral received on the Bank’s interest rate swap agreements.
The Company’s efficiency ratio was 57.43% for the current year period compared to 52.74% for the prior year period. The change in the efficiency ratio was due primarily to lower net interest income and higher non-interest expense in the current year.
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 and effective tax rate.
|
|
For the Six Months Ended |
|
|
|
|
||||||||||
|
|
March 31, |
|
Change Expressed in: |
||||||||||||
|
|
2023 |
|
2022 |
|
Dollars |
|
Percent |
||||||||
|
|
(Dollars in thousands) |
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Income before income tax expense |
$ |
37,267 |
|
|
$ |
55,610 |
|
|
$ |
(18,343 |
) |
|
(33.0 |
)% |
|
|
Income tax expense |
|
6,838 |
|
|
|
11,801 |
|
|
|
(4,963 |
) |
|
(42.1 |
) |
|
|
Net income |
$ |
30,429 |
|
|
$ |
43,809 |
|
|
$ |
(13,380 |
) |
|
(30.5 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Effective Tax Rate |
|
18.3 |
% |
|
|
21.2 |
% |
|
|
|
|
||||
The decrease in income tax expense was due primarily to lower pretax income in the current year period, along with a decrease in the effective tax rate. The decrease in the effective tax rate was due primarily to lower projected pretax income in the current year, as the Company’s permanent differences, which generally reduce our tax rate, have a larger impact to the overall effective rate.
Financial Condition as of March 31, 2023
The following table summarizes the Company’s financial condition at the dates indicated.
|
|
|
|
|
|
Annualized |
|
|
|
Annualized |
|||||||||
|
|
March 31, |
|
December 31, |
|
Percent |
|
September 30, |
|
Percent |
|||||||||
|
|
2023 |
|
2022 |
|
Change |
|
2022 |
|
Change |
|||||||||
|
|
(Dollars and shares in thousands) |
|||||||||||||||||
|
Total assets |
$ |
10,085,770 |
|
|
$ |
9,929,760 |
|
|
6.3 |
% |
|
$ |
9,624,897 |
|
|
9.6 |
% |
|
|
AFS securities |
|
1,505,808 |
|
|
|
1,528,686 |
|
|
(6.0 |
) |
|
|
1,563,307 |
|
|
(7.4 |
) |
|
|
Loans receivable, net |
|
7,958,567 |
|
|
|
7,783,358 |
|
|
9.0 |
|
|
|
7,464,208 |
|
|
13.2 |
|
|
|
Deposits |
|
6,144,435 |
|
|
|
6,074,549 |
|
|
4.6 |
|
|
|
6,194,866 |
|
|
(1.6 |
) |
|
|
Borrowings |
|
2,696,604 |
|
|
|
2,645,195 |
|
|
7.8 |
|
|
|
2,132,154 |
|
|
52.9 |
|
|
|
Stockholders’ equity |
|
1,072,034 |
|
|
|
1,054,795 |
|
|
6.5 |
|
|
|
1,096,499 |
|
|
(4.5 |
) |
|
|
Equity to total assets at end of period |
|
10.6 |
% |
|
|
10.6 |
% |
|
|
|
|
11.4 |
% |
|
|
|||
|
Average number of basic shares outstanding |
|
133,150 |
|
|
|
134,641 |
|
|
(4.4 |
) |
|
|
135,773 |
|
|
(3.9 |
) |
|
|
Average number of diluted shares outstanding |
|
133,150 |
|
|
|
134,641 |
|
|
(4.4 |
) |
|
|
135,773 |
|
|
(3.9 |
) |
|
During the current quarter, total assets increased by $156.0 million, which was primarily driven by growth of $175.2 million in loans receivable, mainly in the correspondent one- to four-family and commercial real estate loan portfolios. The one- to four-family correspondent loan portfolio increased $115.3 million, or 4.9%, primarily as a result of purchasing loans that were in the pipeline as of December 31, 2022 as the Bank continues to work towards reducing new correspondent purchases to zero. Commercial loans increased $71.3 million, or 6.4%, during the current quarter, due to $42.0 million in commercial real estate originations and purchases along with $35.0 million in funding on construction loans.
Total liabilities increased $138.8 million during the current quarter due to an increase in deposits of $69.9 million, along with new borrowings of $58.4 million. The increase in deposit balances was due primarily to retail/commercial certificates of deposit, which increased $236.7 million, partially offset by a decrease in money market account balances, which decreased $159.3 million during the current quarter. The decrease in money market account balances was likely due to depositors moving funds to alternative, higher yield investment products and/or withdrawing funds for customer spending. Additionally, the Bank held a certificate of deposit promotional campaign during the current quarter which resulted in some customers electing to move funds from money market, checking and savings accounts into these higher-yielding certificates of deposit. The campaign resulted in $177.3 million in new certificates of deposit at a weighted average rate of 4.34%, the majority of which was from customer transfers of existing deposits within 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