Capitol Federal Financial(CFFN) - 2025 Q2 - Quarterly Report

Financial Performance - The Company reported net income of $30.8 million, or $0.24 per share, for the current six-month period, compared to $16.3 million, or $0.12 per share, for the prior year[111]. - For the quarter ended March 31, 2025, the company reported net income of $15.4 million, or $0.12 per share, unchanged from the prior quarter[202]. - Income before income tax expense surged to $38,351 thousand, up 98.9% from $19,285 thousand in the prior year[234]. - Net income rose to $30,830 thousand, reflecting an increase of $14,525 thousand, or 89.1%[234]. - The effective tax rate increased to 19.6% from 15.5%, influenced by higher pretax income[234]. Asset and Deposit Growth - Total assets reached $9.72 billion, a $190.6 million increase from September 30, 2024, driven by increases in cash and securities[116]. - Total deposits increased by $242.6 million to $6.37 billion, primarily due to high yield savings accounts[117]. - Total assets increased to $9,718,184 thousand, a 7.5% increase from December 31, 2024[132]. - Deposits rose by $166.4 million, or 10.7% annualized, primarily due to the high yield savings account offering[133]. - The deposit portfolio totaled $6,372,545 thousand as of March 31, 2025, with a weighted average rate of 2.28%, down from 2.34% at December 31, 2024[180]. Loan Portfolio and Quality - The Bank's asset quality remained strong, with loans 30 to 89 days delinquent at 0.18% and loans 90 or more days delinquent at 0.12%[120]. - Loans receivable, net decreased by $77.7 million during the current quarter, with a shift from one- to four-family loans to commercial loans[132]. - The one- to four-family loan portfolio decreased by $96.0 million, while commercial loans grew by $21.8 million[132]. - The total amount of one- to four-family loans 30 to 89 days delinquent was $14,440,000, which is 0.18% of total loans receivable[159]. - The total amount of loans 90 or more days delinquent or in foreclosure was $9,563,000, which is 0.12% of total loans[161]. Interest Income and Margin - The net interest margin increased by 13 basis points to 1.89% due to higher yields on loans and a shift towards the commercial loan portfolio[112]. - Total interest and dividend income for the current quarter was $98.175 million, a 0.6% increase from $97.622 million in the prior quarter[204]. - Interest income from loans receivable rose by $10.2 million or 6.7% to $162.3 million, primarily due to a shift from one- to four-family loans to higher yielding commercial loans[223]. - The average rate for total loans receivable was 4.10% as of March 31, 2025, compared to 4.07% as of December 31, 2024[137]. - The net interest margin increased by 10 basis points from 1.82% in the prior year quarter to 1.92% in the current year quarter, driven by higher yields on loans[242]. Non-Interest Income and Expenses - Non-interest income rose to $4.953 million, a 5.5% increase from $4.693 million, driven by higher insurance commissions and other non-interest income[209]. - Total non-interest expenses increased to $29.540 million, an 8.8% rise from $27.148 million, largely due to higher salaries and employee benefits[211]. - The efficiency ratio for the current quarter was 60.54%, up from 57.86% in the prior quarter, indicating increased costs relative to revenue generation[212]. - Total non-interest income increased significantly to $9,646 thousand from a loss of $4,251 thousand, marking a change of $13,897 thousand, or 326.9%[229]. Capital and Borrowings - The Bank's capital ratios exceeded well-capitalized requirements, with stockholders' equity totaling $1.04 billion[119]. - Total liabilities increased to $8.68 billion as of March 31, 2025, up from $8.50 billion at September 30, 2024, primarily due to a $242.6 million increase in deposits[178]. - The weighted average effective rate of total borrowings was 3.54% as of March 31, 2025, down from 3.62%[188]. - The Bank had total borrowings of $2.14 billion, representing approximately 22% of total assets, with $684.7 million scheduled to be repaid or mature in the next 12 months[265]. - The Bank's risk-based tier 1 capital ratio was 16.5% as of March 31, 2025, indicating strong capital adequacy[272]. Future Plans and Strategies - Management plans to launch new checking products and digital banking services for small businesses in June 2025[126]. - The bank plans to enhance its digital banking experience, including a new deposit account onboarding platform set for November 2024[127]. - Management is actively evaluating new services for commercial and small businesses to grow fee revenue streams[128]. - The Company initiated a securities strategy by selling $1.30 billion of securities, resulting in an impairment loss of $192.6 million[122]. - The Company plans to pay out a total of $0.34 per share in dividends for fiscal year 2025, contingent on earnings exceeding this amount[194].