TOPEKA, Kan.--(BUSINESS WIRE)--January 28, 2026--
Capitol Federal Financial, Inc.$(R)$ (NASDAQ: CFFN) (the "Company," "we" or "our"), the parent company of Capitol Federal Savings Bank (the "Bank"), announced preliminary results today for the quarter ended December 31, 2025. For best viewing results, please view this release in Portable Document Format (PDF) on our website, https://ir.capfed.com.
Capitol Federal Financial, Inc., ended the current quarter with total assets of $9.78 billion, stockholders' equity of $1.04 billion and net income of $20.3 million. The continued growth in assets and improvement in net income is a direct result of the strategic operational changes that the Board and management continue to execute on. Stockholders' equity decreased during the current quarter due to strategic share repurchases and dividend payments, continuing our enhancement of stockholder value.
During the current quarter, executing on our strategic initiatives resulted in our commercial loan portfolio and commercial deposits growing by $162.6 million to $2.28 billion and $19.5 million to $527.7 million, respectively. We continue to grow our commercial loan portfolio through redeploying funds received from the repayment of correspondent loans. We expect that growth in the commercial deposit base will continue to lower our cost of funds.
John B. Dicus, Chairman and CEO, stated, "We are focused on our commitment to deliver long-term value to stockholders through the disciplined execution of our strategic changes. This is reflected in a more diversified loan portfolio, and a growing and diversified deposit base, both of which provide expanded income streams. We expect these benefits to continue as we implement technology and processes that enable us to deliver more commercial products and services through our seasoned team of professionals focused on our commercial business lines. We are building on our disciplined capital management approach which has returned $2.03 billion to stockholders through share repurchases and dividends since 2010. We continue to focus on all areas of the Bank's operations that drive long-term value for stockholders."
Highlights for the current quarter include:
-- net income of $20.3 million, up from $18.8 million for the quarter
ended September 30, 2025 (the "prior quarter");
-- net interest margin increased ten basis points to 2.19% from 2.09% the
prior quarter;
-- basic and diluted earnings per share of $0.16;
-- an efficiency ratio of 53.66%, an improvement from 56.84% the prior
quarter;
-- an operating expense ratio of 1.24%, an improvement from 1.27% the
prior quarter;
-- paid dividends of $0.085 per share; and
-- repurchased 2,376,633 shares of common stock at an average price of
$6.86 per share.
Balance sheet highlights include:
-- total assets of $9.78 billion at quarter-end;
-- tangible book value per share of $7.95 at quarter-end;
-- commercial loan growth of $162.6 million, or 30.7% annualized, during
the current quarter;
-- commercial deposits growth of $19.5 million, or 15.3% annualized, since
September 30, 2025;
-- distributed $25.0 million from the Bank to the Company;
-- on December 17, 2025, the Company announced a special cash dividend of
$0.04 per share, which was paid on January 23, 2026;
-- on January 27, 2026, the Company announced a cash dividend of $0.085
per share, payable on February 20, 2026 to stockholders of record as of
the close of business on February 6, 2026.
Strategic Banking Initiatives
The Company continues its progression to a full-service commercial bank by investing in technology, people, products, and services. Our investments in technology have allowed us to launch new services and products, while our seasoned and well-connected commercial bankers, and our trust and wealth advisors deliver access to new customer groups. Our expanded product suite of treasury management services enables us to service these new customers. Increased marketing and business development efforts have increased the depth of customer relationships. As we move through the third year of our digital transformation, we are seeing our efforts bear fruit and expect progress to continue.
Strategic Actions. The long-term success of our transition to a full-service bank is predicated on management's continued focus on deepening relationships with consumer and commercial customers. Management and the Board have committed resources to support the growth of talented, skilled, and experienced bankers, investments in technology, expanded marketing and outreach, as well as the development and increased internal monitoring of performance metrics intended to ensure we are on the path to achieve our performance objectives. Through our experienced relationship managers, we deliver customized solutions using advanced digital platforms and sophisticated cash management tools. We are leveraging our centralized organizational structure to respond quickly to customers. We are actively pursuing opportunities to expand our non-interest-bearing commercial deposit base and diversify fee-based revenue streams through strategic growth in treasury management services, trust and wealth management services, insurance, and small business banking.
Commercial Lending. During the first quarter of the current fiscal year, we closed on $364.6 million in commercial loans compared to $263.1 million during the prior quarter. Commercial loans continue to grow as a percentage of our overall loan portfolio, comprising 28% of our loan portfolio at December 31, 2025, compared to 26% and 21% at September 30, 2025 and December 31, 2024, respectively. To maintain strong credit quality, in addition to disciplined underwriting and ongoing credit administration, we monitor concentration levels by collateral type, geographic location and borrowing relationship. The Bank utilizes commercial loan pricing and profitability software that provides insights on new lending opportunities based on the full customer banking relationship. We utilize software that provides market intelligence regarding competitor pricing to assist loan officers when preparing a loan offering. This enhances our ability to profitably compete with other financial institutions in our markets as well as those outside our markets.
Treasury Management. The Bank services commercial customers through a competitive suite of treasury management products and an experienced team of treasury management officers. This team is focused on the deposit and cash management needs of commercial customers and growing this line of business through the acquisition of new customers located both in our immediate market areas, and those who we lend to outside of our local market areas. In fiscal year 2026, a team of business development officers is also tasked with growing the deposit base within the small business customer segment, focused on serving small businesses in our market areas with a dedicated line of products specifically designed for these customers. Our treasury management officers and business development officers often land depository relationships independent of a lending relationship. This will be a focus area for our sales teams as well as the Bank continues to diversify funding sources and seeks to increase fee revenue tied to depository accounts. During the second quarter of fiscal year 2026, the Bank expects to introduce digital onboarding for small business customers using industry-leading risk management and screening tools, which will replace many manual verification tasks. We are evaluating additional technology in order to capture a larger share of their business with even more products and services. Within calendar year 2026, we expect to implement new technology for lockbox services, integrated accounts receivables, purchase cards, and corporate cards.
Digital Banking. We are advancing towards a seamless digital banking experience for all customers, enhancing the Bank's ability to attract and retain deposits and lower the cost to service our customers. This strategy includes a new deposit account onboarding platform and digital banking enhancements for debit cardholders, which will allow customers to begin using their card immediately online and in digital wallets without waiting for the delivery of a physical card. These enhancements are on track to be implemented in the second quarter of fiscal year 2026. The Bank is taking advantage of add-on technologies that will integrate into our digital banking experience for consumers, small businesses, and commercial customers.
Private Banking, Trust and Wealth Management. We have begun to implement private wealth management products and services, with some customers on-boarded during the first quarter of the current fiscal year. We are continuing to expand our comprehensive suite of private banking products and services which is a new line of business for the Bank. Private banking relationships are defined as customers with $5.0 million or more in personal relationships with the Bank by way of loans, deposits, or assets under management. We believe that our private banking line of business will be a gateway to driving off-balance sheet revenue and bridge the gap between high-net-worth depository customers, small business owners and key commercial customers, and corporate trustee opportunities for the Bank.
Stockholder Value. Delivering long-term sustainable stockholder value continues to be our North Star while also maintaining a strong capital position. As part of our historically robust and disciplined approach to capital management, we continue to generate returns to stockholders through dividend payments and share repurchases. Total dividends declared and paid during fiscal year 2025 were $44.3 million. During the first quarter of fiscal year 2026, the Company repurchased 2,376,633 shares for $16.3 million. Since completing our second-step conversion in December 2010, we have returned $2.03 billion to stockholders through $1.58 billion in cash dividends and $456.2 million in share repurchases. For the remainder of fiscal year 2026, it is the intention of the Board of Directors to continue the regular quarterly cash dividend of $0.085 per share and to seek further opportunities for value-enhancing share repurchases.
Comparison of Operating Results for the Three Months Ended December 31, 2025 and September 30, 2025
For the quarter ended December 31, 2025, the Company recognized net income of $20.3 million, or $0.16 per share, compared to net income of $18.8 million, or $0.14 per share, for the quarter ended September 30, 2025. The increase in net income was due primarily to higher net interest income, partially offset by higher income tax expense. The net interest margin increased ten basis points, from 2.09% for the prior quarter to 2.19% for the current quarter due mainly to growth in the higher yielding commercial loan portfolio.
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
--------------------------
September
December 31, 30, Change Expressed in:
------------------------
2025 2025 Dollars Percent
------------- ----------- ----------- -----------
(Dollars in thousands)
INTEREST AND DIVIDEND INCOME:
Loans receivable $ 89,792 $ 87,343 $ 2,449 2.8%
Mortgage-backed
securities
("MBS") 11,341 11,808 (467) (4.0)
Cash and cash
equivalents 2,773 2,148 625 29.1
Federal Home
Loan Bank
Topeka ("FHLB")
stock 2,032 2,163 (131) (6.1)
Investment
securities 51 582 (531) (91.2)
--- -------- ------- ------ -------
Total interest
and dividend
income $ 105,989 $ 104,044 $ 1,945 1.9
=== ======== ======= ======
The increase in interest income on loans receivable was due mainly to increases in the average balance and yield of the commercial loan portfolio compared to the prior quarter. The decrease in interest income on MBS and investment securities was due primarily to a decrease in the average balance of each portfolio compared to the prior quarter, as cash flows from those portfolios were used to fund commercial loan growth. The increase in interest income on cash and cash equivalents was due to an increase in the average balance.
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:
--------------------------
2025 2025 Dollars Percent
-------------- ------------- ------------- -----------
(Dollars in thousands)
INTEREST EXPENSE:
Deposits $ 37,500 $ 37,204 $ 296 0.8%
Borrowings 17,172 18,057 (885) (4.9)
--- --------- --------- ---- ------ ------
Total
interest
expense $ 54,672 $ 55,261 $ (589) (1.1)
=== ========= ========= ==== ======
The decrease in borrowings expense was due to a decrease in the average balance, due mainly to FHLB borrowings that matured between periods and were not replaced. Deposit growth was used to repay these borrowings.
Provision for Credit Losses
The Company recorded a provision for credit losses of $1.1 million during the current quarter compared to a provision for credit losses of $519 thousand for the prior quarter. The provision for credit losses in the current quarter was due primarily to commercial loan growth.
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
---------------------------
September
December 31, 30, Change Expressed in:
----------------------------
2025 2025 Dollars Percent
------------- ------------ --------------- -----------
(Dollars in thousands)
NON-INTEREST INCOME:
Deposit
service
fees $ 2,872 $ 2,873 $ (1) --%
Insurance
commissions 789 1,018 (229) (22.5)
Other
non-interest
income 1,818 1,900 (82) (4.3)
--- -------- -------- --- ------ -------
Total
non-interest
income $ 5,479 $ 5,791 $ (312) (5.4)
=== ======== ======== === ======
Insurance commissions were higher in the prior quarter, due primarily to the receipt of commissions that exceeded accruals, with no similar activity in the current quarter, along with insurance industry changes that reduced commissions on certain lines of business in the current quarter. Due to these industry changes, we are broadening our focus on commercial insurance lines during fiscal year 2026, which aligns with our strategy of expanding our commercial banking services.
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
---------------------------
September
December 31, 30, Change Expressed in:
----------------------------
2025 2025 Dollars Percent
------------- ------------ --------------- -----------
(Dollars in thousands)
NON-INTEREST EXPENSE:
Salaries and
employee
benefits $ 15,747 $ 15,936 $ (189) (1.2%)
Information
technology
and related
expense 5,134 5,053 81 1.6
Occupancy,
net 3,450 3,292 158 4.8
Regulatory
and outside
services 1,789 1,590 199 12.5
Federal
insurance
premium 1,111 1,114 (3) (0.3)
Advertising
and
promotional 1,056 1,915 (859) (44.9)
Deposit and
loan
transaction
costs 716 658 58 8.8
Office
supplies and
related
expense 481 490 (9) (1.8)
Other
non-interest
expense 992 970 22 2.3
--- -------- -------- --- ------ -------
Total
non-interest
expense $ 30,476 $ 31,018 $ (542) (1.7)
=== ======== ======== === ======
The increase in regulatory and outside services was due primarily to an increase in new relationships with outside service providers and additional services provided by current providers, of which approximately $325 thousand is not expected to recur in future periods. The decrease in advertising and promotional expense was due primarily to the timing of campaigns and seasonal sponsorships compared to the prior quarter.
The Company's efficiency ratio was 53.66% for the current quarter compared to 56.84% for the prior quarter. The improvement in the efficiency ratio was due to higher net interest income during the current quarter, supported by 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 generally indicates that it is costing the financial institution less money to generate revenue. The Company's operating expense ratio (annualized) for the current quarter was 1.24% compared to 1.27% for the prior quarter. The operating expense ratio was lower in the current quarter due to lower non-interest expense. The operating expense ratio is a measure of a financial institution's total non-interest expense as a percentage of average assets, providing insight into how efficiently the Company is managing its expenses in relation to its assets and does not take into consideration changes in interest rates.
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
--------------------------------
December 31, September 30, Change Expressed in:
--------------------------
2025 2025 Dollars Percent
---------------- -------------- ------------- -----------
(Dollars in thousands)
Income
before
income
tax
expense $ 25,214 $ 23,037 $ 2,177 9.5%
Income tax
expense 4,910 4,224 686 16.2
--- ------ --- ------ ---- ------- ------ ---
Net income $ 20,304 $ 18,813 $ 1,491 7.9
=== ====== === ====== ==== =======
Effective
Tax Rate 19.5% 18.3%
Income tax expense was higher in the current quarter due to a higher effective tax rate and higher pretax income compared to the prior quarter. The effective tax rate was higher in the current quarter than the prior quarter due primarily to a slightly higher projected state tax rate in the current fiscal year.
Comparison of Operating Results for the Three Months Ended December 31, 2025 and 2024
The Company recognized net income of $20.3 million, or $0.16 per share, for the current quarter, compared to net income of $15.4 million, or $0.12 per share, for the prior year quarter. The increase in net income was due mainly to higher net interest income, partially offset by higher non-interest expense and income tax expense. The net interest margin increased 33 basis points, from 1.86% for the prior year quarter to 2.19% for the current quarter. The increase was due mainly to growth in the higher yielding commercial loan portfolio.
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:
---------------------------- ----------------------
2025 2024 Dollars Percent
-------------- ------------ ---------- ----------
(Dollars in thousands)
INTEREST AND DIVIDEND INCOME:
Loans receivable $ 89,792 $ 81,394 $ 8,398 10.3%
MBS 11,341 11,024 317 2.9
Cash and cash
equivalents 2,773 1,871 902 48.2
FHLB stock 2,032 2,352 (320) (13.6)
Investment
securities 51 981 (930) (94.8)
-------------- ------------ ---------- ----------
Total interest and
dividend income $ 105,989 $ 97,622 $ 8,367 8.6
============== ============ ==========
The increase in interest income on loans receivable was due primarily to the continued shift of loan balances from the one- to four-family loan portfolio to higher yielding commercial loans, along with growth in the commercial loan portfolio funded with cash flows from the deposit portfolio and partially from the investment securities portfolio. Interest income on cash and cash equivalents increased due largely to an increase in the average balance compared to the prior year quarter. The decrease in interest income on investment securities was due to a decrease in average balance, due primarily to securities that were called or matured between periods and were not replaced in their entirety.
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:
--------------------------- --------------------------
2025 2024 Dollars Percent
-------------- ----------- ------------- -----------
(Dollars in thousands)
INTEREST EXPENSE:
Deposits $ 37,500 $ 37,345 $ 155 0.4%
Borrowings 17,172 18,047 (875) (4.8)
---------- ---------- ---- ------ ------
Total
interest
expense $ 54,672 $ 55,392 $ (720) (1.3)
========== ========== ==== ======
The decrease in interest expense on borrowings was due to a decrease in the average balance, which was partially offset by a higher weighted average interest rate. The decrease in the average balance of borrowings was due mainly to FHLB borrowings that matured between periods and were not renewed. Cash flows from the deposit portfolio were used, in part, to pay off maturing FHLB borrowings. The increase in the weighted average interest rate was due primarily to higher market interest rates on FHLB borrowings that matured and were renewed between periods, along with lower rate advances that were not renewed, which increased the overall rate of the remaining advances.
Provision for Credit Losses
The Company recorded a provision for credit losses of $1.1 million during the current quarter compared to a provision for credit losses of $677 thousand for the prior year quarter. See additional details in the "Comparison of Operating Results for the Three Months Ended December 31, 2025 and September 30, 2025" above for additional information regarding the provision for credit losses during the current quarter.
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:
----------------------------- --------------------------
2025 2024 Dollars Percent
-------------- ------------- ------------- -----------
(Dollars in thousands)
NON-INTEREST INCOME:
Deposit
service
fees $ 2,872 $ 2,707 $ 165 6.1%
Insurance
commissions 789 776 13 1.7
Other
non-interest
income 1,818 1,210 608 50.2
--- --------- --------- ---- ------- ------ ---
Total
non-interest
income $ 5,479 $ 4,693 $ 786 16.7
=== ========= ========= ==== =======
Other non-interest income was higher in the current quarter due mainly to an increase in bank-owned life insurance ("BOLI") income due to a change in rates and an increase in the crediting rate as a result of updates to certain policies that were executed in the second half of the prior fiscal year.
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:
------------------------- --------------------------
2025 2024 Dollars Percent
------------- ---------- ------------- -----------
(Dollars in thousands)
NON-INTEREST EXPENSE:
Salaries and
employee
benefits $ 15,747 $ 14,232 $ 1,515 10.6%
Information
technology
and related
expense 5,134 4,550 584 12.8
Occupancy,
net 3,450 3,333 117 3.5
Regulatory
and outside
services 1,789 1,113 676 60.7
Federal
insurance
premium 1,111 1,038 73 7.0
Advertising
and
promotional 1,056 822 234 28.5
Deposit and
loan
transaction
costs 716 591 125 21.2
Office
supplies and
related
expense 481 399 82 20.6
Other
non-interest
expense 992 1,070 (78) (7.3)
--------- --------- -------- ------
Total
non-interest
expense $ 30,476 $ 27,148 $ 3,328 12.3
========= ========= ========
The increase in salaries and employee benefits was mainly attributable to an increase in full-time equivalent employees between periods, merit increases and salary adjustments to remain market competitive. The increase in information technology and related expense was due mainly to an increase in software licensing expense. The increase in regulatory and outside services was due primarily to an increase in new relationships with outside service providers and additional services provided by current providers, of which approximately $325 thousand is not expected to recur in future periods. The increase in advertising and promotional expense was due to timing of campaigns compared to the prior year quarter.
The Company's efficiency ratio was 53.66% for the current quarter compared to 57.86% for the prior year quarter. The improvement in the efficiency ratio was due primarily to higher net interest income compared to the prior year quarter, partially offset by higher non-interest expense. The Company's operating expense ratio (annualized) for the current quarter was 1.24% compared to 1.14% for the prior year quarter. The operating expense ratio was higher in the current quarter due mainly to higher non-interest expense, partially offset by higher average assets compared to the prior year quarter.
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 Three Months Ended
December 31, Change Expressed in:
-------------------------------- --------------------------
2025 2024 Dollars Percent
--------------- --------------- ------------- -----------
(Dollars in thousands)
Income
before
income
tax
expense $ 25,214 $ 19,098 $ 6,116 32.0%
Income tax
expense 4,910 3,667 1,243 33.9
------ --- ------- ---- ------- ------ ---
Net income $ 20,304 $ 15,431 $ 4,873 31.6
====== === ======= ==== =======
Effective
Tax Rate 19.5% 19.2%
Income tax expense was higher in the current quarter due mainly to higher pretax income.
Financial Condition as of December 31, 2025
The following table summarizes the Company's financial condition at the dates indicated.
Annualized
December 31, September 30, Percent
2025 2025 Change
----------- ----------- ------------
(Dollars and shares in thousands)
Total assets $ 9,778,400 $ 9,778,701 --%
AFS securities 829,704 867,216 (17.3)
Loans receivable,
net 8,176,736 8,111,961 3.2
Deposits 6,758,632 6,591,448 10.1
Borrowings 1,829,914 1,950,770 (24.8)
Stockholders' equity 1,041,320 1,047,677 (2.4)
Equity to total
assets at end of
period 10.6% 10.7%
Average number of
basic and diluted
shares outstanding 128,953,166 129,874,022 (2.8)
The loan portfolio increased $64.8 million during the current quarter as cash flows from the securities portfolio were used to fund loan growth. Commercial loans grew $162.6 million mainly in the commercial real estate portfolio, partially offset by a $98.6 million decrease in one- to four-family loans. The Bank expects to fund approximately $60.0 million of undisbursed amounts on existing commercial real estate and commercial construction loans and approximately $5.0 million of commercial real estate and commercial construction commitments during the March 31, 2026 quarter. The near-term outlook for commercial loan balances is growth of approximately 1% in the quarter ending March 31, 2026, with overall loan growth of approximately 18% for the fiscal year. It is expected that repayments from our one- to four-family loan portfolio will continue to be directed toward supporting commercial loan growth, aligning with our ongoing commitment to expand commercial banking services. Maintaining strong credit quality remains a top priority as we expand our commercial loan portfolio. The weighted average debt service coverage ratio ("DSCR") for commercial loan originations and new participations during the current quarter was 2.52x and the weighted average loan-to-value ("LTV") for commercial real estate and construction loans originated and new participations was 72%. The weighted average DSCR and LTV for our commercial real estate and construction loan portfolios was 1.73x and 63%, respectively, at December 31, 2025.
Deposits increased $167.2 million during the current quarter, due mainly to the Bank's high yield savings account offering and retail checking accounts. Management has continued to focus on retaining and growing deposits through the Bank's high yield savings account product, which, as of December 31, 2025, had an annual percentage yield of 3.80% for accounts that meet the $10 thousand balance minimum. The annual percentage yield on the high yield savings account product was decreased to 3.70% mid-January 2026.
Borrowings decreased $120.9 million due to the maturity of $100.0 million in borrowings during the current quarter that were not replaced, along with principal payments made on the Bank's amortizing FHLB advances. Cash flows from the deposit portfolio were used to pay down the borrowings portfolio during the current quarter.
The following table summarizes loan originations and participations, deposit activity, and borrowing activity, along with certain 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
------------------------------------------
December 31, 2025 September 30, 2025
-------------------- --------------------
Amount Rate Amount Rate
---------- -------- ---------- --------
(Dollars in thousands)
Loan originations and
participations
One- to
four-family and
consumer:
Originated $ 95,788 6.18% $ 88,055 6.61%
Commercial:
Originated 281,081 6.48 251,192 6.58
Participations 83,520 6.37 11,952 6.85
-------- ---- -------- ----
$ 460,389 6.40 $ 351,199 6.60
======== ========
Deposit activity
Retail
non-maturity
deposits $ 162,250 $ (19,124)
Commercial
non-maturity
deposits 19,133 88,336
Retail/Commercial
certificates of
deposit (10,231) 85,893
Borrowing activity
Maturities and
repayments (171,168) 2.34 (121,168) 3.30
New borrowings 50,000 3.64 -- --
Stockholders' Equity
Stockholders' equity totaled $1.04 billion at December 31, 2025, a decrease of $6.4 million from September 30, 2025. Consistent with our goal to operate a sound and profitable financial organization that delivers long-term stockholder value, we actively seek to maintain a well-capitalized status for the Bank in accordance with regulatory standards. As of December 31, 2025, all of the Bank's capital ratios exceeded the well-capitalized requirements, and the Bank exceeded internal policy thresholds for sensitivity to changes in interest rates. As of December 31, 2025, the Bank's community bank leverage ratio was 9.5%.
During the quarter ended December 31, 2025, the Company repurchased 2,376,633 shares of common stock at an average price of $6.86 per share, or $16.3 million in total. The Company currently has $54.8 million remaining authorized under its existing stock repurchase plan. The Company intends to continue to opportunistically repurchase stock from time to time based upon market conditions, available liquidity and other factors. Although our existing repurchase plan has no expiration date we are required to annually seek the Federal Reserve Bank of Kansas City's ("FRB") non-objection for the buyback amount. The FRB's current non-objection for the Company to repurchase up to $75 million of stock expires in February 2026. The Company is in the process of preparing the required documentation to seek the FRB's non-objection for the Company to continue to buy back its stock through the period when the current authorized amount is fully utilized. It is likely that the Company will then seek non-objection for additional stock repurchase authority.
During the quarter ended December 31, 2025, the Company paid regular quarterly cash dividends totaling $11.0 million, or $0.085 per share. On December 17, 2025, the Company announced a special cash dividend of $0.04 per share, or approximately $5.1 million, which was paid on January 23, 2026 to stockholders of record on January 9, 2026. On January 27, 2026, the Company announced a regular quarterly cash dividend of $0.085 per share, or approximately $10.8 million, payable on February 20, 2026 to stockholders of record as of the close of business on February 6, 2026. The special cash dividend, in addition to the Company's history of regular quarterly dividends and opportunistic share repurchases demonstrates Capitol Federal Financial, Inc.'s multi-channel focus on delivering stockholder value through disciplined capital allocation which balances investments in the future of the Company while simultaneously pursuing incremental opportunities to return capital to stockholders. For the remainder of fiscal year 2026, it is the intention of the Company's Board of Directors to pay out a regular quarterly cash dividend of $0.085 per share, totaling $0.34 per share for the year.
Dividend payments depend upon a number of factors, including the Company's financial condition and results of operations, regulatory capital compliance, regulatory limitations on the Bank's ability to make capital distributions to the Company, the Bank's current tax earnings and accumulated earnings and profits, and the amount of cash at the holding company level.
The Board of Directors continue to evaluate various alternatives for capital allocation to enhance stockholder value, including the repurchase of stock, the payment of additional cash dividends, or retaining earnings to support future growth. Since our second-step conversion in December 2010, we have returned $2.03 billion in capital to stockholders through dividends totaling $1.58 billion and stock repurchases totaling $456.2 million. This is supported by our holistic approach to managing the balance sheet through continuous modeling of the Bank's performance, risk management, our commitment to credit quality and periodic stress testing.
At December 31, 2025, Capitol Federal Financial, Inc., at the holding company level, had $14.9 million in cash on deposit at the Bank. During the three months ended December 31, 2025, the Bank distributed $25.0 million from the Bank to the Company. The Bank is expected to continue to be in a positive tax accumulated earnings and profit balance during fiscal year 2026, so it is anticipated that the Bank will be in a position to make earnings distributions to the Company during fiscal year 2026. Earnings distributions from the Bank to the Company will be limited to the extent necessary to prevent the Bank from re-entering a negative accumulated earnings and profit position and be required to pay the pre-1988 bad debt recapture tax on earnings moved from the Bank to the Company.
The following table presents a reconciliation of total to net shares outstanding as of December 31, 2025.
Total shares outstanding 129,836,672
Less unallocated Employee Stock Ownership Plan ("ESOP") shares
and unvested restricted stock (2,591,657)
-----------
Net shares outstanding 127,245,015
===========
Capitol Federal Financial, Inc. is the holding company for the Bank. As of December 31, 2025, the Bank had 46 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.
Forward-Looking Statements
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: 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 and the effects of inflation or a potential recession, whether caused by Federal Reserve action or otherwise; changes to existing trade policies that could affect economic activity or specific industry sectors; the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor or depositor sentiment; demand for loans in the Company's market areas; the future earnings and capital levels of the Bank and the impact of potential pre-1988 bad debt recapture, 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 Securities and Exchange Commission. 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,
2025 2025
--------- ----------
ASSETS:
Cash and cash equivalents (includes
interest-earning deposits of $210,223
and $229,566) $ 232,634 $ 252,443
Available-for-sale ("AFS"), at
estimated fair value (amortized cost
of $809,099 and $847,369) 829,704 867,216
Loans receivable, net (allowance for
credit losses ("ACL") of $24,572 and
$24,039) 8,176,736 8,111,961
FHLB stock, at cost 85,060 90,662
Premises and equipment, net 88,753 89,314
Income taxes receivable, net -- 220
Deferred federal income tax assets, net 22,744 23,826
Other assets 342,769 343,059
--------- ----------
TOTAL ASSETS $ 9,778,400 $ 9,778,701
========= ==========
LIABILITIES:
Deposits $ 6,758,632 $ 6,591,448
Borrowings 1,829,914 1,950,770
Advances by borrowers 28,523 65,416
Income taxes payable, net 237 --
Deferred state income tax liabilities,
net 2,228 2,056
Other liabilities 117,546 121,334
--------- ----------
Total liabilities 8,737,080 8,731,024
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value;
100,000,000 shares authorized, no
shares issued or outstanding -- --
Common stock, $.01 par value;
1,400,000,000 shares authorized,
129,836,672 and 132,204,305
shares issued and outstanding as of
December 31, 2025 and September 30,
2025, respectively 1,298 1,322
Additional paid-in capital 1,126,227 1,142,711
Unearned compensation, ESOP (24,367) (24,780)
Accumulated deficit (78,044) (87,331)
Accumulated other comprehensive income
("AOCI"), net of tax 16,206 15,755
--------- ----------
Total stockholders' equity 1,041,320 1,047,677
--------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 9,778,400 $ 9,778,701
========= ==========
See accompanying notes to consolidated financial statements.
CAPITOL FEDERAL FINANCIAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands)
For the Three Months Ended
-----------------------------------------------
December 31, September 30, December 31,
2025 2025 2024
-------------- --------------- --------------
INTEREST AND DIVIDEND
INCOME:
Loans receivable $ 89,792 $ 87,343 $ 81,394
MBS 11,341 11,808 11,024
Cash and cash equivalents 2,773 2,148 1,871
FHLB stock 2,032 2,163 2,352
Investment securities 51 582 981
---------- ----------- ----------
Total interest and
dividend income 105,989 104,044 97,622
INTEREST EXPENSE:
Deposits 37,500 37,204 37,345
Borrowings 17,172 18,057 18,047
---------- ----------- ----------
Total interest expense 54,672 55,261 55,392
---------- ----------- ----------
NET INTEREST INCOME 51,317 48,783 42,230
PROVISION FOR CREDIT
LOSSES 1,106 519 677
---------- ----------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR CREDIT
LOSSES 50,211 48,264 41,553
NON-INTEREST INCOME:
Deposit service fees 2,872 2,873 2,707
Insurance commissions 789 1,018 776
Other non-interest income 1,818 1,900 1,210
---------- ----------- ----------
Total non-interest
income 5,479 5,791 4,693
NON-INTEREST EXPENSE:
Salaries and employee
benefits 15,747 15,936 14,232
Information technology
and related expense 5,134 5,053 4,550
Occupancy, net 3,450 3,292 3,333
Regulatory and outside
services 1,789 1,590 1,113
Federal insurance premium 1,111 1,114 1,038
Advertising and
promotional 1,056 1,915 822
Deposit and loan
transaction costs 716 658 591
Office supplies and
related expense 481 490 399
Other non-interest
expense 992 970 1,070
---------- ----------- ----------
Total non-interest
expense 30,476 31,018 27,148
---------- ----------- ----------
INCOME BEFORE INCOME TAX
EXPENSE 25,214 23,037 19,098
INCOME TAX EXPENSE 4,910 4,224 3,667
---------- ----------- ----------
NET INCOME $ 20,304 $ 18,813 $ 15,431
========== =========== ==========
Average Balance Sheets
The following tables present the average balances of our assets, liabilities, and stockholders' equity, and the related annualized weighted average yields and rates on our interest-earning assets and interest-bearing liabilities for the periods indicated, as well as selected performance ratios and other information for the periods shown. Weighted average yields are derived by dividing annualized income by the average balance of the related assets, and weighted average rates are derived by dividing annualized expense by the average balance of the related liabilities, for the periods shown. Average outstanding balances are derived from average daily balances. The weighted average yields and rates include amortization of fees, costs, premiums and discounts, which are considered adjustments to yields/rates. Weighted average yields on tax-exempt securities are not calculated on a fully taxable equivalent basis.
For the Three Months Ended
------------------------------------------------------------------------------------------------------------
December 31, 2025 September 30, 2025 December 31, 2024
---------------------------------- ---------------------------------- ------------------------------------
Average Interest Average Interest Average Interest
Outstanding Earned/ Yield/ Outstanding Earned/ Yield/ Outstanding Earned/ Yield/
Amount Paid Rate Amount Paid Rate Amount Paid Rate
------------- -------- --------- ------------- -------- --------- ------------- ---------- ---------
(Dollars in thousands)
Assets:
Interest-earning
assets:
One- to four-family
loans:
Originated $ 3,748,022 $ 36,490 3.89% $ 3,794,781 $ 36,521 3.85% $ 3,925,427 $ 36,375 3.71%
Purchased 2,113,076 17,469 3.31 2,167,994 17,668 3.26 2,338,395 18,984 3.25
--------- ------- ----- --------- ------- ----- --------- ------ -----
Total one- to
four-family loans 5,861,098 53,959 3.68 5,962,775 54,189 3.63 6,263,822 55,359 3.54
--------- ------- ----- --------- ------- ----- --------- ------ -----
Commercial loans:
Commercial real
estate 1,776,342 26,456 5.83 1,670,205 24,317 5.70 1,303,095 18,755 5.63
Commercial and
industrial 215,211 3,868 7.03 196,992 3,515 6.98 132,026 2,217 6.57
Commercial
construction 198,300 3,316 6.54 182,855 3,050 6.53 171,627 2,784 6.35
--------- ------- ----- --------- ------- ----- --------- ------ -----
Total commercial
loans 2,189,853 33,640 6.01 2,050,052 30,882 5.89 1,606,748 23,756 5.79
Consumer loans 114,588 2,193 7.59 113,979 2,272 7.91 110,661 2,279 8.19
--------- ------- ----- --------- ------- ----- --------- ------ -----
Total loans
receivable(1) 8,165,539 89,792 4.36 8,126,806 87,343 4.27 7,981,231 81,394 4.05
--------- ------- ----- --------- ------- ----- --------- ------ -----
MBS(2) 826,320 11,341 5.49 860,833 11,808 5.49 781,252 11,024 5.64
Investment
securities(2)(3) 4,000 51 5.13 45,467 582 5.13 72,561 981 5.41
FHLB stock 88,223 2,032 9.14 94,288 2,163 9.10 99,151 2,352 9.41
Cash and cash
equivalents 274,154 2,773 3.96 192,755 2,148 4.36 154,752 1,871 4.73
--------- ------- ----- --------- ------- ----- --------- ------ -----
Total interest-earning
assets 9,358,236 105,989 4.49 9,320,149 104,044 4.43 9,088,947 97,622 4.27
Other
non-interest-earning
assets 468,876 468,378 463,322
--------- --------- ---------
Total assets $ 9,827,112 $ 9,788,527 $ 9,552,269
========= ========= =========
Liabilities and
stockholders' equity:
Interest-bearing
liabilities:
Checking $ 881,139 503 0.23 $ 869,328 497 0.23 $ 865,738 531 0.24
High yield savings 507,126 4,970 3.89 427,416 4,229 3.93 126,047 1,322 4.17
Other savings 422,933 79 0.07 428,106 81 0.07 441,486 100 0.09
Money market 1,241,106 3,925 1.25 1,244,320 4,037 1.29 1,245,714 4,212 1.34
Retail certificates 2,823,991 26,213 3.68 2,787,294 26,596 3.79 2,812,034 29,755 4.20
Commercial
certificates 61,917 555 3.56 60,637 553 3.62 57,859 636 4.36
Wholesale
certificates 124,247 1,255 4.01 118,066 1,211 4.07 69,487 789 4.50
--------- ------- ----- --------- ------- ----- --------- ------ -----
Total deposits 6,062,459 37,500 2.45 5,935,167 37,204 2.49 5,618,365 37,345 2.64
Borrowings 1,911,552 17,172 3.56 2,027,086 18,057 3.53 2,171,476 18,047 3.30
--------- ------- ----- --------- ------- ----- --------- ------ -----
Total
interest-bearing
liabilities 7,974,011 54,672 2.72 7,962,253 55,261 2.75 7,789,841 55,392 2.82
Non-interest-bearing
deposits 609,471 587,128 544,548
Other
non-interest-bearing
liabilities 192,207 189,471 186,227
Stockholders' equity 1,051,423 1,049,675 1,031,653
--------- --------- ---------
Total liabilities and
stockholders' equity $ 9,827,112 $ 9,788,527 $ 9,552,269
========= ========= =========
(Continued)
Net interest income(4) $ 51,317 $ 48,783 $ 42,230
======= ======= ======
Net interest-earning
assets $ 1,384,225 $ 1,357,896 $ 1,299,106
========= ========= =========
Net interest margin(5) 2.19 2.09 1.86
Ratio of interest-earning assets to
interest-bearing liabilities 1.17x 1.17x 1.17x
Selected performance
ratios:
Return on average assets
(annualized)(6) 0.83% 0.77% 0.65%
Return on average equity
(annualized)(7) 7.72 7.17 5.98
Average equity to
average assets 10.70 10.72 10.80
Operating expense
ratio(8) 1.24 1.27 1.14
Efficiency ratio(9) 53.66 56.84 57.86
(1) Balances are adjusted for unearned loan fees and deferred costs. Loans
that are 90 or more days delinquent are included in the loans
receivable average balance with a yield of zero percent.
(2) AFS security yields are based upon amortized cost which is adjusted for
premiums and discounts.
(3) There were no nontaxable securities in the average balance of
securities for the quarters ended December 31, 2025, September 30,
2025, or December 31, 2024.
(4) Net interest income represents the difference between interest income
earned on interest-earning assets and interest paid on interest-bearing
liabilities. Net interest income depends on the average balance of
interest-earning assets and interest-bearing liabilities, and the
interest rates earned or paid on them.
(5) Net interest margin represents annualized net interest income as a
percentage of average interest-earning assets. Management believes the
net interest margin is important to investors as it is a profitability
measure for financial institutions.
(6) Return on average assets represents annualized net income as a
percentage of total average assets. Management believes that the return
on average assets is important to investors as it shows the Company's
profitability in relation to the Company's average assets.
(7) Return on average equity represents annualized net income as a
percentage of total average equity. Management believes that the return
on average equity is important to investors as it shows the Company's
profitability in relation to the Company's average equity.
(8) The operating expense ratio represents annualized non-interest expense
as a percentage of average assets. Management believes the operating
expense ratio is important to investors as it provides insight into how
efficiently the Company is managing its expenses in relation to its
assets. It is a financial measurement ratio that does not take into
consideration changes in interest rates.
(9) The efficiency ratio represents non-interest expense as a percentage of
the sum of net interest income (pre-provision for credit losses) and
non-interest income. Management believes the efficiency ratio is
important to investors as it 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 generally indicates that it is costing the financial
institution less money to generate revenue, related to its net interest
margin and non-interest income.
Loan Portfolio
The following table presents information related to the composition of our loan portfolio in terms of dollar amounts, weighted average rates, and percentage of total as of the dates indicated.
December 31, 2025 September 30, 2025 December 31, 2024
-------------------------------- -------------------------------- --------------------------------
% of % of % of
Amount Rate Total Amount Rate Total Amount Rate Total
----------- -------- --------- ----------- -------- --------- ----------- -------- ---------
(Dollars in thousands)
One- to
four-family:
Originated $3,725,622 3.82% 45.4% $3,774,134 3.78% 46.4% $3,907,809 3.64% 49.0%
Purchased 2,065,179 3.50 25.2 2,114,447 3.49 26.0 2,286,876 3.45 28.7
Construction 15,228 6.14 0.2 16,054 6.17 0.2 19,165 6.35 0.2
--------- ---- ----- --------- ---- ----- --------- ---- -----
Total 5,806,029 3.71 70.8 5,904,635 3.68 72.6 6,213,850 3.58 77.9
Commercial:
Commercial real
estate 1,874,506 5.74 22.9 1,709,990 5.82 21.0 1,353,482 5.48 17.0
Commercial and
industrial 219,909 6.74 2.7 210,119 6.92 2.6 131,267 6.66 1.7
Commercial
construction 184,227 6.83 2.2 195,886 6.42 2.4 161,744 6.14 2.0
--------- ---- ----- --------- ---- ----- --------- ---- -----
Total 2,278,642 5.93 27.8 2,115,995 5.98 26.0 1,646,493 5.64 20.7
Consumer loans:
Home equity 107,490 7.76 1.3 104,809 8.15 1.3 103,006 8.31 1.3
Other 7,814 5.56 0.1 8,436 5.55 0.1 9,680 5.77 0.1
--------- ---- ----- --------- ---- ----- --------- ---- -----
Total 115,304 7.61 1.4 113,245 7.96 1.4 112,686 8.09 1.4
--------- ---- ----- --------- ---- ----- --------- ---- -----
Total loans
receivable 8,199,975 4.38 100.0% 8,133,875 4.34 100.0% 7,973,029 4.07 100.0%
===== ===== =====
Less:
ACL 24,572 24,039 24,997
Deferred loan
fees/discounts 31,125 31,268 30,973
Premiums/deferred
costs (32,458) (33,393) (36,497)
--------- --------- ---------
Total loans
receivable, net $8,176,736 $8,111,961 $7,953,556
========= ========= =========
Loan Activity: The following table summarizes activity in the loan portfolio, along with weighted average rates where applicable, for the periods indicated, excluding changes in ACL, deferred loan fees/discounts, and premiums/deferred costs. Loans that were paid off as a result of refinances are included in repayments. Loan endorsements are not included in the activity in the following table because a new loan is not generated at the time of the endorsement. The endorsed balance and rate are included in the ending loan portfolio balance and rate. Commercial loan renewals are not included in the activity presented in the following table unless new funds are disbursed at the time of renewal. The renewal balance and rate are included in the ending loan portfolio balance and rate.
For the Three Months Ended
--------------------------------------------
December 31, 2025 September 30, 2025
--------------------- ---------------------
Amount Rate Amount Rate
----------- -------- ----------- --------
(Dollars in thousands)
Beginning balance $8,133,875 4.34% $8,043,000 4.25%
Originated and refinanced 376,869 6.40 339,247 6.59
Participations 83,520 6.37 11,952 6.85
Change in undisbursed loan
funds (44,036) 11,760
Repayments (349,905) (271,802)
Principal
(charge-offs)/recoveries,
net (119) (66)
Other (229) (216)
--------- -------- --------- --------
Ending balance $8,199,975 4.38 $8,133,875 4.34
========= =========
One- to Four-Family Loans: The following table presents, for our portfolio of one- to four-family loans, the amount, percent of total, weighted average rate, weighted average credit score, weighted average LTV ratio, and average balance per loan as of December 31, 2025. Credit scores were updated in September 2025 from a nationally recognized consumer rating agency. The LTV ratios were based on the current loan balance and either the lesser of the purchase price or original appraisal, or the most recent Bank appraisal, if available. In most cases, the most recent appraisal was obtained at the time of origination.
% of Credit Average
Amount Total Rate Score LTV Balance
---------- --------- -------- ------ ------ ---------
(Dollars in thousands)
Originated $3,725,622 64.1% 3.82% 770 57% $ 170
Purchased 2,065,179 35.6 3.50 768 60 378
Construction 15,228 0.3 6.14 778 43 331
--------- ----- ---- ------ -----
5,806,029 100.0% 3.71 769 58 212
========= =====
The following table presents origination and refinance activity for our one- to four-family loan portfolio, excluding endorsement activity, along with the weighted average rate, weighted average LTV and weighted average credit score for the quarter ended December 31, 2025. As of December 31, 2025, the Bank had one- to four-family loan and refinance commitments totaling $24.7 million at a weighted average rate of 5.97%.
Credit
Amount Rate LTV Score
--------- -------- ------ ------
(Dollars in thousands)
$ 82,388 5.89% 73% 764
Commercial Loans: The table below presents commercial loan origination and participation activity for the quarter ended December 31, 2025, along with weighted average LTV and weighted average DSCR. For commercial real estate and commercial construction loans, the LTV is calculated using the gross loan amount (composed of unpaid principal and undisbursed amounts) and the collateral value at the time of origination. For existing real estate, the "as is" value is used. If the property is to be constructed, the "as completed" value of the collateral is utilized. The DSCR is calculated based on historical borrower performance, or projected borrower performance for newly formed entities with no performance history.
Originated Participation Total Weighted Weighted
------------------ ----------------- ------------------
Amount Rate Amount Rate Amount Rate LTV DSCR
-------- -------- ------- -------- -------- -------- ---------- --------
(Dollars in thousands)
Commercial
real estate $175,230 6.31% $32,510 6.25% $207,740 6.30% 71% 2.77x
Commercial
and
industrial 34,105 6.59 -- -- 34,105 6.59 N/A 5.37
Commercial
construction 71,746 6.85 51,010 6.45 122,756 6.68 73 1.29
------- ---- ------ ---- ------- ---- ---- ---- --------
$281,081 6.48 $83,520 6.37 $364,601 6.45 72 2.52
======= ====== =======
The following table presents commercial loan disbursements, excluding lines of credit, during the periods indicated.
For the Three Months Ended
-------------------------------------------------
December 31, 2025 September 30, 2025
----------------------- ------------------------
Amount Rate Amount Rate
------------- -------- ------------- ---------
(Dollars in thousands)
Commercial real
estate $ 207,243 6.32% $ 180,502 6.41%
Commercial and
industrial 27,585 6.97 21,736 7.03
Commercial
construction 70,004 6.65 49,151 7.00
--------- ---- --------- -----
$ 304,832 6.46 $ 251,389 6.58
========= =========
The following table presents the Bank's commercial real estate and commercial construction loans by type of primary collateral as of the dates indicated. Management anticipates fully funding the majority of the undisbursed amounts, as most are not cancellable by the Bank.
September 30,
December 31, 2025 2025
------------------------------------------------------ --------------
Unpaid Undisbursed Gross Loan Gross Loan
Count Principal Amount Amount Amount
----- -------------- --------------- -------------- --------------
(Dollars in thousands)
Hotel 32 $ 616,357 $ 67,562 $ 683,919 $ 603,124
Senior housing 52 537,585 15,024 552,609 483,959
Multi-family 34 286,694 125,538 412,232 365,316
Retail building 126 314,868 88,114 402,982 334,665
Office building 73 86,540 6,583 93,123 136,058
One- to four-family
property 301 61,805 3,976 65,781 70,420
Warehouse/manufacturing 51 62,969 1,799 64,768 58,853
Land 24 34,008 593 34,601 35,605
Single use building 25 32,821 262 33,083 33,718
Other 32 25,086 630 25,716 28,192
----- --------- ------- --------- ---------
750 $2,058,733 $ 310,081 $2,368,814 $2,149,910
===== ========= ======= ========= =========
Weighted average rate 5.84% 6.68% 5.95% 5.99%
The following table presents the unpaid principal balance of non-owner occupied and owner occupied loans within the Bank's commercial real estate loan portfolio as of the dates indicated.
December 31, September 30,
2025 2025
--------------- ----------------
(Dollars in thousands)
Non-owner occupied $ 1,379,099 $ 1,271,905
Owner occupied 161,736 167,925
The following table presents management's funding expectations for the Bank's commercial real estate and commercial construction undisbursed amounts and commitments outstanding as of December 31, 2025. Due to the nature of a revolving line of credit, management is unable to project funding expectations for those balances, so those amounts are presented separately.
Projected Disbursements for the Quarters Ending
----------------------------------------------------
Revolving
March 31, June 30, September Lines of
2026 2026 30, 2026 Thereafter Credit Total
------------ ----------- ----------- ------------ -------------- ------------
(Dollars in thousands)
Undisbursed
amounts $59,605 $64,130 $47,032 $132,070 $7,244 $310,081
Commitments 4,775 8,518 8,652 56,982 -- 78,927
------ --- ------ ------ ------- ----- ------ -------
$64,380 $72,648 $55,684 $189,052 $7,244 $389,008
====== === ====== ====== ======= ===== ====== =======
Weighted
average
rate 6.65% 6.73% 6.71% 6.72% 6.91% 6.71%
The following table summarizes the Bank's commercial real estate and commercial construction loans by the state in which the collateral is located, as of the dates indicated.
September
December 31, 2025 30, 2025
-------------------------------------------- ----------
Unpaid Undisbursed Gross Loan Gross Loan
Count Principal Amount Amount Amount
----- ---------- ------------- ---------- ----------
(Dollars in thousands)
Kansas 542 $ 823,732 $ 86,977 $ 910,709 $ 799,827
Missouri 120 310,295 41,926 352,221 354,772
Texas 20 246,508 54,841 301,349 312,805
Arizona 7 129,536 23,801 153,337 122,429
California 6 94,325 16,207 110,532 96,848
New York 2 109,482 -- 109,482 109,828
Colorado 13 60,920 23,024 83,944 84,199
Tennessee 3 37,671 13,940 51,611 56,781
Washington 2 51,200 -- 51,200 --
Other 35 195,064 49,365 244,429 212,421
----- --------- --------- --------- ---------
750 $2,058,733 $ 310,081 $2,368,814 $2,149,910
===== ========= ========= ========= =========
The following table presents the Bank's commercial real estate and commercial construction loans by unpaid principal balance, aggregated by type of primary collateral and state, along with weighted average LTV and weighted average DSCR as of December 31, 2025. The LTV is calculated using the gross loan amount (composed of unpaid principal and undisbursed amounts) as of December 31, 2025 and the most current collateral value available, which is most often the value at origination/purchase. The DSCR is calculated at the time of origination and is updated at the time of subsequent loan renewals, financial reviews (for applicable loans and lending relationships), and any other time management is aware of changes that may impact the DSCR. The DSCR presented in the table below is based on the DSCR at the time of origination unless an updated DSCR has been calculated or the loan has reached the end of its stabilization period. In general, commercial borrowers with total loans of $2.5 million or more are reviewed at least annually to monitor financial performance.
Kansas Missouri Texas Arizona New York California Other Total
------------ ------------ ------------ ------------ ------------ -------------- ------------ --------------
(Dollars in thousands)
Hotel $ 41,544 $ 20,648 $141,320 $106,709 $109,482 $ 90,096 $106,558 $ 616,357
Senior housing 323,857 141,629 -- -- -- -- 72,099 537,585
Retail building 87,670 41,492 84,736 20,068 -- -- 80,902 314,868
Multi-family 199,638 53,592 20,000 -- -- -- 13,464 286,694
Office building 60,153 7,747 452 136 -- -- 18,052 86,540
Warehouse/manufacturing 38,382 17,869 -- -- -- -- 6,718 62,969
One- to four-family
property 42,110 4,264 -- 2,248 -- 1,620 11,563 61,805
Land 7,119 152 -- -- -- -- 26,737 34,008
Single use building 11,682 18,155 -- 375 -- 2,609 -- 32,821
Other 11,577 4,747 -- -- -- -- 8,762 25,086
------- ------- ------- ------- ------- ------ ------- ---------
$823,732 $310,295 $246,508 $129,536 $109,482 $ 94,325 $344,855 $2,058,733
======= ======= ======= ======= ======= ====== ======= =========
Weighted LTV 67% 66% 56% 54% 46% 51% 66% 63%
Weighted DSCR 2.03x 1.51x 1.40x 1.42x 1.55x 1.50x 1.68x 1.73x
The following table presents the unpaid principal balance of the Bank's commercial real estate and commercial construction loans aggregated by type of primary collateral, along with weighted average rate, LTV, and DSCR as of December 31, 2025.
Unpaid Weighted Weighted Weighted
Count Principal Rate LTV DSCR
----- ---------- ---------- ---------- --------
(Dollars in thousands)
Hotel 32 $ 616,357 6.31% 54% 1.31x
Senior housing 52 537,585 5.21 73 1.64
Retail building 126 314,868 5.51 61 1.93
Multi-family 34 286,694 5.97 64 1.30
Office building 73 86,540 6.43 64 3.49
Warehouse/manufacturing 51 62,969 6.34 65 2.26
One- to four-family
property 301 61,805 6.03 56 3.18
Land 24 34,008 6.24 71 4.19
Single use building 25 32,821 6.26 62 1.90
Other 32 25,086 5.89 53 2.09
----- --------- ----- --- --- ----- --------
750 $2,058,733 5.84 63 1.73
===== =========
The following table presents the Bank's commercial real estate and construction loans, including unpaid principal and undisbursed amounts, along with outstanding loan commitments as of December 31, 2025, categorized by aggregate gross loan and commitment amount, along with average loan amount, and weighted average rate, LTV, and DSCR. For loans over $60.0 million, there was $152.2 million of such loans related to hotels in Arizona and California, $143.1 million related to multi-family properties in Kansas, and $69.6 million related to senior housing in Kansas. The largest loan included in the table below was $86.0 million, which was fully disbursed as of December 31, 2025, and is collateralized by a hotel in Arizona.
Gross Loan
and
Commitment Average Weighted Weighted Weighted
Count Amounts Amount Rate LTV DSCR
----- ------------ --------- ---------- ---------- --------
(Dollars in thousands)
Greater than $60
million 5 $ 364,957 $ 72,991 6.18% 60% 1.50x
>$50 to $60 million 3 164,252 54,751 5.66 61 1.45
>$40 to $50 million 2 97,162 48,581 6.15 57 1.59
>$30 to $40 million 10 349,885 34,989 5.85 64 1.27
>$20 to $30 million 18 433,755 24,098 6.13 65 1.29
>$10 to $20 million 27 380,861 14,106 6.43 67 1.51
>$5 to $10 million 37 262,319 7,090 5.71 70 2.57
$1 to $5 million 122 283,694 2,325 5.27 58 2.18
Less than $1
million 532 110,856 208 6.35 52 3.27
----- --------- ------ ----- --- --- ----- --------
756 $ 2,447,741 3,238 5.98 63 1.71
===== =========
The following table summarizes the Bank's commercial and industrial loans by loan purpose as of the dates indicated. Of the $285.4 million of commercial and industrial loans at December 31, 2025, 59%, or $168.2 million, had a gross loan balance of $5 million or more. The largest commercial and industrial lending relationship at December 31, 2025 had a gross loan balance of $81.6 million, which represented 29% of the gross commercial and industrial loan balance at December 31, 2025. The Bank had no commercial and industrial loan commitments at December 31, 2025. Management anticipates growth in the commercial and industrial loan portfolio as the Bank advances its strategy to grow all aspects of commercial banking. However, given the inherent characteristics of these loans, balances will likely fluctuate over time.
September
December 31, 2025 30, 2025
-------------------------------------------------- ------------
Unpaid Undisbursed Gross Loan Gross Loan
Count Principal Amount Amount Amount
----- ------------ --------------- ------------ ------------
(Dollars in thousands)
Working capital 192 $101,869 $ 54,708 $156,577 $153,967
Purchase/refinance
business assets 48 49,586 306 49,892 49,805
Finance/lease
vehicle 174 32,423 2,050 34,473 36,406
Purchase equipment 63 21,275 6,391 27,666 54,201
Other 19 14,756 2,059 16,815 7,508
----- ------- ------- ------- -------
496 $219,909 $ 65,514 $285,423 $301,887
===== ======= ======= ======= =======
Weighted average
rate 6.74% 6.80% 6.75% 6.97%
The following table summarizes the Bank's commercial and industrial loans by the state in which the borrower is located, as of December 31, 2025.
Unpaid Undisbursed Gross Loan
Principal Amount Amount
----------- ------------- ------------
(Dollars in thousands)
Kansas $ 152,800 $ 60,796 $ 213,596
Arizona 11,923 -- 11,923
Missouri 10,221 760 10,981
California 7,800 2,237 10,037
Ohio 9,785 215 10,000
Other 27,380 1,506 28,886
------- --------- --------
$ 219,909 $ 65,514 $ 285,423
======= ========= ========
The following table presents the Bank's commercial and industrial loan portfolio, including unpaid principal and undisbursed amounts, along with outstanding loan commitments as of December 31, 2025, categorized by aggregate gross loan and commitment amounts and average loan amount. For loans over $15.0 million, both loans related to working capital loans in Kansas. The largest loan included in the table below was $36.0 million, of which $16.3 million was undisbursed as of December 31, 2025. This loan is part of the $81.6 million commercial and industrial relationship discussed above.
Gross Loan
and Commitment Average
Count Amounts Amount DSCR
------ ---------------- ------- -----
(Dollars in thousands)
Greater than $15 million 2 $ 54,718 $27,359 1.56x
>$10 to $15 million 3 34,845 11,615 2.37
>$5 to $10 million 10 78,650 7,865 1.39
>$1 to $5 million 27 56,447 2,091 8.37
>$500 thousand to $1 million 32 23,700 741 3.46
Less than $500 thousand 422 37,063 88 4.02
------ ---- ---------- ------ -----
496 $ 285,423 575 3.43
====== ==== ==========
Asset Quality
The following tables present loans 30 to 89 days delinquent, non-performing loans, and other real estate owned ("OREO") as of the dates indicated. The amounts in the table represent the unpaid principal balance of the loans less related charge-offs, if any. Of the loans 30 to 89 days delinquent at December 31, 2025, approximately 59% were 59 days or less delinquent. Nonaccrual loans are loans that are 90 or more days delinquent or in foreclosure and other loans required to be reported as nonaccrual pursuant to accounting and/or regulatory reporting requirements and/or internal policies, even if the loans are current. Non-performing assets include nonaccrual loans and OREO.
Loans Delinquent for 30 to 89 Days at:
--------------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31,
2025 2025 2025 2025 2024
------------------ ------------------ ------------------ ------------------ ------------------
Count Amount Count Amount Count Amount Count Amount Count Amount
----- ----------- ----- ----------- ----- ----------- ----- ----------- ----- -----------
(Dollars in thousands)
One- to
four-family:
Originated 83 $ 9,351 68 $ 7,338 77 $ 9,617 73 $ 8,072 79 $ 9,768
Purchased 21 5,767 13 3,221 15 2,958 12 3,107 12 3,020
Commercial:
Commercial
real
estate 6 2,584 7 1,236 6 1,654 5 2,472 7 18,373
Commercial
and
industrial 5 1,039 1 32 8 1,166 2 348 1 125
Consumer 29 635 22 520 27 634 24 441 35 679
----- ------ ----- ------ ----- ------ ----- ------ ----- ------
144 $19,376 111 $12,347 133 $16,029 116 $14,440 134 $31,965
===== ====== ===== ====== ===== ====== ===== ====== ===== ======
Loans 30 to 89 days
delinquent
to total loans
receivable, net 0.24% 0.15% 0.20% 0.18% 0.40%
Non-Performing Loans and OREO at:
--------------------------------------------------------------------------------------------------
December 31, September 30, June 30, March 31, December 31,
2025 2025 2025 2025 2024
------------------ ------------------ ------------------ ------------------ ------------------
Count Amount Count Amount Count Amount Count Amount Count Amount
----- ----------- ----- ----------- ----- ----------- ----- ----------- ----- -----------
(Dollars in thousands)
Loans 90 or More Days Delinquent or in
Foreclosure:
One- to
four-family:
Originated 29 $ 3,223 29 $ 2,754 23 $ 2,168 30 $ 2,814 26 $ 2,338
Purchased 6 1,469 6 1,524 6 1,875 10 2,585 12 5,099
Commercial:
Commercial
real estate 12 3,358 11 3,123 12 3,387 11 3,315 7 2,038
Commercial and
industrial 2 199 2 210 5 412 4 376 3 309
Consumer 14 218 10 94 12 176 19 473 22 356
----- ------ ----- ------ ----- ------ ----- ------ ----- ------
63 8,467 58 7,705 58 8,018 74 9,563 70 10,140
Loans 90 or more days delinquent or in
foreclosure
as a percentage
of total loans 0.10% 0.09% 0.10% 0.12% 0.13%
Nonaccrual loans less than 90 Days
Delinquent:(1)
One- to
four-family:
Commercial
real estate 4 $40,338 3 $40,249 3 $40,338 5 $ 1,128 6 $ 1,096
Commercial and
industrial 1 77 2 109 1 97 2 142 1 125
----- ------ ----- ------ ----- ------ ----- ------ ----- ------
5 40,415 5 40,358 4 40,435 7 1,270 7 1,221
----- ------ ----- ------ ----- ------ ----- ------ ----- ------
Total nonaccrual
loans 68 48,882 63 48,063 62 48,453 81 10,833 77 11,361
Nonaccrual loans as a
percentage of total
loans 0.60% 0.59% 0.60% 0.14% 0.14%
OREO:
One- to
four-family:
Originated(2) 2 $ 291 1 $ 62 1 $ 92 -- $ -- -- $ --
Consumer 1 135 1 135 -- -- -- -- -- --
----- ------ ----- ------ ----- ------ ----- ------ ----- ------
3 426 2 197 1 92 -- -- -- --
----- ------ ----- ------ ----- ------ ----- ------ ----- ------
Total
non-performing
assets 71 $49,308 65 $48,260 63 $48,545 81 $10,833 77 $11,361
===== ====== ===== ====== ===== ====== ===== ====== ===== ======
Non-performing assets as a percentage
of total assets 0.50% 0.49% 0.50% 0.11% 0.12%
(1) Includes loans required to be reported as nonaccrual pursuant to
internal policies even if the loans are current.
(2) Real estate-related consumer loans where we also hold the first
mortgage are included in the one- to four-family category as the
underlying collateral is one- to four-family property.
The following table presents the amortized cost of loans classified as special mention or substandard at the dates presented. The decrease in commercial real estate special mention loans at December 31, 2025 compared to September 30, 2025 was due mainly to a $36.1 million hotel participation loan being upgraded to pass due to an improvement in the hotel's financial results.
December 31, 2025 September 30, 2025
--------------------------- ----------------------------
Special Special
Mention Substandard Mention Substandard
------------ ------------- ------------- -------------
(Dollars in thousands)
One- to
four-family $ 14,236 $ 21,611 $ 13,055 $ 20,616
Commercial:
Commercial
real
estate 22,448 45,801 59,993 45,550
Commercial
and
industrial 579 277 399 473
Consumer 106 365 326 322
--- ------- --------- --- -------- ---------
$ 37,369 $ 68,054 $ 73,773 $ 66,961
=== ======= ========= === ======== =========
Allowance for Credit Losses: The Bank utilizes a discounted cash flow model for estimating expected credit losses for pooled loans and loan commitments. Expected credit losses are determined by calculating projected future loss rates, which are dependent upon forecasted economic indices, and applying qualitative factors when deemed appropriate by management. At December 31, 2025, management applied qualitative factors to account for large dollar commercial real estate loan concentrations and potential risk of loss in market value for newer one- to four-family loans. These qualitative factors were applied to account for credit risks not fully reflected in the discounted cash flow model.
The Company's commercial real estate loans generally have low LTVs and strong DSCRs, which serve as indicators that losses in the commercial real estate loan portfolio might be unlikely; however, because there is uncertainty surrounding the nature, timing, and amount of expected losses, management believes that in the event of a realized loss within the large dollar commercial real estate loan pool, the magnitude of such a loss could be significant. The large dollar commercial real estate loan concentration qualitative factor addresses the risk associated with a large dollar relationship deteriorating due to a loss event. As part of its analysis, management considered external data including historical commercial real estate price index trending information from a variety of sources to help determine the amount of this qualitative factor.
For one- to four-family loans, management believes there is a risk of loss in market value in an economic downturn related to, in particular, newer originations where property values have not experienced price appreciation, as compared to more seasoned loans in our portfolio, and applied a qualitative factor to account for this risk. To determine the appropriate amount of the one- to four-family loan qualitative factor as of December 31, 2025, management considered external historical home price index trending information, along with historical loan loss experience, and portfolio balance trending, the one-to four-family loan portfolio composition with regard to loan size, and management's knowledge of the Bank's loan portfolio and the one- to four-family lending industry.
The distribution of our ACL and the ratio of ACL to loans receivable, by loan type, at the dates indicated is summarized below. The decrease in the commercial ACL to loans receivable ratio as of December 31, 2025, compared to September 30, 2025, was primarily driven by changes in the composition of the commercial and industrial and commercial construction loan portfolios. These shifts affected the weighted average lives of the respective portfolios, which in turn influenced the change in the discounted cash flow results. Based on management's evaluation of the credit risk within the Bank's commercial loan portfolio, taking into consideration DSCRs and LTVs, management believes the Bank's ACL ratio for commercial loans is appropriate for the credit risk. See additional discussion regarding the Bank's commercial loan DSCRs and LTVs in the "Loan Portfolio - Commercial Loans" section above.
Ratio of ACL to Loans
Distribution of ACL Receivable
----------------------------- --------------------------
September
December 31, September 30, December 31, 30,
2025 2025 2025 2025
------------ --------------- ------------- -----------
(Dollars in thousands)
One- to
four-family $ 2,842 $ 3,046 0.05% 0.05%
Commercial:
Commercial
real estate 16,825 15,809 0.90 0.92
Commercial
and
industrial 1,826 2,499 0.83 1.19
Commercial
construction 2,871 2,468 1.56 1.26
-------- ----------- ---- ------- ----- ----
Total
commercial 21,522 20,776 0.94 0.98
Consumer 208 217 0.18 0.19
-------- ----------- ---- ------- ----- ----
Total $ 24,572 $ 24,039 0.30 0.30
======== ===========
Historically, the Bank has maintained very low delinquency ratios and net charge-off rates. Over the past two years, the Bank's highest ratio of commercial loans 90 days or more delinquent to total commercial loans at a quarter end was 0.22%. The highest such ratio for one- to four-family originated and correspondent loans, combined, was 0.10%. Total net charge-offs during the current quarter was $119 thousand. During the 10-year period ended December 31, 2025, the Bank recognized $875 thousand of total net charge-offs. As of December 31, 2025, the ACL balance was $24.6 million and the reserve for off-balance sheet credit exposures totaled $6.0 million, which management believes is adequate for the credit risk characteristics in our loan portfolio.
The following table presents ACL activity and related ratios at the dates and for the periods indicated.
At or For the Three Months Ended
--------------------------------------------
December 31, September 30,
2025 2025
------------------------ ------------------
(Dollars in thousands)
Balance at beginning of period $ 24,039 $ 22,808
Charge-offs:
One- to four-family -- (3)
Commercial (102) (62)
Consumer (21) (37)
--- -------------- --- ---------
Total charge-offs (123) (102)
--- -------------- --- ---------
Recoveries:
One- to four-family -- 12
Commercial 2 23
Consumer 2 1
--- -------------- --- --- ---------
Total recoveries 4 36
--- -------------- --- --- ---------
Net (charge-offs) recoveries (119) (66)
Provision for credit losses 652 1,297
--- -------------- --- --- ---------
Balance at end of period $ 24,572 $ 24,039
=== ============== === === =========
Ratio of net charge-offs
during the period
to average loans outstanding
during the period --% --%
Ratio of net charge-offs
(recoveries) during the
period to average
non-performing assets 0.24 0.14
ACL to non-performing loans at
end of period 50.27 50.02
ACL to loans receivable at end
of period 0.30 0.30
ACL to net charge-offs 52x 90x
(annualized)
Securities Portfolio
The following table presents the distribution of our securities portfolio, at amortized cost, at December 31, 2025. Overall, fixed-rate securities comprised 91% of our securities portfolio at December 31, 2025. The weighted average life ("WAL") is the estimated remaining maturity (in years) after three-month historical prepayment speeds and projected call option assumptions have been applied. Weighted average yields on tax-exempt securities are not calculated on a fully tax-equivalent basis.
Amount Yield WAL
-------------- --------- ---
(Dollars in thousands)
MBS $ 805,099 5.48% 4.1
Corporate bonds 4,000 5.12 6.4
---------- ----- ---
$ 809,099 5.48 4.1
==========
The following table summarizes the activity in our securities portfolio for the period presented. The weighted average yields for the beginning and ending balances are as of the first and last days of the period presented and are generally derived from recent prepayment activity on the securities in the portfolio. The beginning and ending WALs are the estimated remaining principal repayment terms (in years) after the most recent three-month historical prepayment speeds and projected call option assumptions have been applied.
For the Three Months Ended
------------------------------------
December 31, 2025
------------------------------------
Amount Yield WAL
------------------- --------- ----
(Dollars in thousands)
Beginning balance - carrying value $ 867,216 5.45% 4.8
Maturities and repayments (40,956)
Net amortization of
(premiums)/discounts 838
Purchases 1,848 6.64 3.1
Change in valuation on AFS
securities 758
----------- --------- ----
Ending balance - carrying value $ 829,704 5.48 4.1
===========
Deposit Portfolio
The following table presents the amount, weighted average rate, and percent of total for the components of our deposit portfolio at the dates presented. The decrease in the deposit portfolio rate at December 31, 2025 compared to September 30, 2025 was due mainly to lower rates on retail certificates of deposit.
December 31, 2025 September 30, 2025 December 31, 2024
------------------------------- ------------------------------- -------------------------------
% of % of % of
Amount Rate Total Amount Rate Total Amount Rate Total
---------- -------- --------- ---------- -------- --------- ---------- -------- ---------
(Dollars in thousands)
Non-interest-bearing
checking $ 641,201 --% 9.5% $ 601,371 --% 9.1% $ 556,515 --% 9.0%
Interest-bearing
checking 907,684 0.23 13.4 859,256 0.21 13.0 888,287 0.22 14.3
High yield savings 557,559 3.70 8.3 460,712 3.88 7.0 171,656 4.14 2.8
Other savings 424,280 0.07 6.3 423,942 0.07 6.5 439,407 0.07 7.1
Money market 1,229,427 1.19 18.2 1,233,487 1.29 18.7 1,235,788 1.19 19.9
Certificates of
deposit 2,998,481 3.65 44.3 3,012,680 3.74 45.7 2,914,464 4.15 46.9
--------- ---- ----- --------- ---- ----- --------- ---- -----
$6,758,632 2.18 100.0% $6,591,448 2.26 100.0% $6,206,117 2.34 100.0%
========= ===== ========= ===== ========= =====
The following table presents the amount, weighted average rate, and percent of total for the components of our deposit portfolio, split between retail non-maturity deposits, commercial non-maturity deposits, and certificates of deposit at the dates presented.
December 31, 2025 September 30, 2025 December 31, 2024
------------------------------- ------------------------------- -------------------------------
% of % of % of
Amount Rate Total Amount Rate Total Amount Rate Total
---------- -------- --------- ---------- -------- --------- ---------- -------- ---------
(Dollars in thousands)
Retail non-maturity
deposits:
Non-interest-bearing
checking $ 431,397 --% 6.4% $ 409,722 --% 6.2% $ 434,432 --% 7.0%
Interest-bearing
checking 823,946 0.08 12.2 790,783 0.08 12.0 819,644 0.09 13.2
High yield savings 557,559 3.70 8.3 460,712 3.88 7.0 171,656 4.14 2.8
Other savings 420,756 0.07 6.2 420,330 0.07 6.4 436,147 0.07 7.0
Money market 1,060,980 1.03 15.7 1,050,841 1.07 15.9 1,145,615 1.09 18.5
--------- ---- ----- --------- ---- ----- --------- ---- -----
Total 3,294,638 0.99 48.8 3,132,388 0.96 47.5 3,007,494 0.69 48.5
Commercial non-maturity
deposits:
Non-interest-bearing
checking 209,804 -- 3.1 191,649 -- 2.9 122,083 -- 2.0
Interest-bearing
checking 83,738 1.73 1.2 68,473 1.72 1.0 68,643 1.75 1.1
Savings 3,524 0.05 0.1 3,612 0.05 0.1 3,260 0.05 0.1
Money market 168,447 2.18 2.5 182,646 2.52 2.8 90,173 2.50 1.5
--------- ---- ----- --------- ---- ----- --------- ---- -----
Total 465,513 1.10 6.9 446,380 1.29 6.8 284,159 1.22 4.6
Certificates of
deposit:
Retail certificates
of deposit 2,818,392 3.63 41.7 2,828,982 3.73 43.0 2,799,418 4.14 45.1
Commercial
certificates of
deposit 62,178 3.55 0.9 61,819 3.64 0.9 56,564 4.27 0.9
Public unit
certificates of
deposit 117,911 4.02 1.7 121,879 4.06 1.8 58,482 4.48 0.9
--------- ---- ----- --------- ---- ----- --------- ---- -----
Total 2,998,481 3.65 44.3 3,012,680 3.74 45.7 2,914,464 4.15 47.0
$6,758,632 2.18 100.0% 6,591,448 2.26 100.0% 6,206,117 2.34 100.0%
========= ===== ========= ===== ========= =====
The following table presents the amount, weighted average rate, and percent of total for total retail deposits, commercial deposits, and public unit certificates of deposit at the dates noted.
December 31, 2025 September 30, 2025 December 31, 2024
------------------------------- ------------------------------- -------------------------------
% of % of % of
Amount Rate Total Amount Rate Total Amount Rate Total
---------- -------- --------- ---------- -------- --------- ---------- -------- ---------
(Dollars in thousands)
Total retail
deposits $6,113,030 2.21% 90.5% $5,961,370 2.28% 90.5% $5,806,912 2.35% 93.6%
Total
commercial
deposits 527,691 1.39 7.8 508,199 1.58 7.7 340,723 1.72 5.5
Public unit
certificates
of deposit 117,911 4.02 1.7 121,879 4.06 1.8 58,482 4.48 0.9
--------- ---- ----- --------- ---- ----- --------- ---- -----
$6,758,632 2.18 100.0% $6,591,448 2.26 100.0% $6,206,117 2.34 100.0%
========= ===== ========= ===== ========= =====
As of December 31, 2025, approximately $776.8 million (or approximately 11%) of the Bank's Call Report deposit balance was uninsured, of which approximately $599.4 million (or approximately 9% of the Bank's Call Report deposit balance) related to commercial and retail deposit accounts, with the remainder 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.
Borrowings
The following table presents the maturity of term borrowings, which consist of FHLB advances, along with associated weighted average contractual and effective rates as of December 31, 2025. Amortizing FHLB advances are presented based on their maturity dates versus their quarterly scheduled repayment dates.
Maturity by Contractual Effective
Fiscal Year Amount Rate Rate(1)
------------ ---------- ------------- -----------
(Dollars in thousands)
2026 $ 275,000 2.31 % 2.42 %
2027 740,000 3.49 3.56
2028 611,066 4.20 4.07
2029 123,750 4.45 4.45
2030 80,000 4.20 4.20
--------- -------- --- ------ ---
$1,829,816 3.64 3.65
=========
(1) The effective rate includes the impact of interest rate swaps and the
amortization of deferred prepayment penalties resulting from FHLB
advances previously prepaid.
The following table presents borrowing activity for the period shown. The borrowings presented in the table have original contractual terms of one year or longer or are tied to interest rate swaps with original contractual terms of one year or longer. Line of credit borrowings and finance leases are excluded from the table. The effective rate is shown as a weighted average and includes the impact of interest rate swaps and the amortization of deferred prepayment penalties resulting from FHLB advances previously prepaid. The weighted average maturity ("WAM") is the remaining weighted average contractual term in years. The beginning and ending WAMs represent the remaining maturity as of the first and last days of the period presented. During the current quarter, the Bank refinanced a $50.0 million fixed-rate advance with a weighted average effective rate of 4.03% and a WAL of 0.5 years and replaced it with a $50.0 million fixed-rate advance with a weighted average effective rate of 3.64% and a WAL of 2.0 years. This transaction resulted in prepayment fees of $11 thousand which will be recognized in interest expense over the life of the new FHLB advance. This activity is reflected in the table below. Management will continue to monitor opportunities for wholesale funding and may pay down FHLB advances in future periods. The Bank may also renew certain fixed-rate advances in the future using adjustable-rate advances in order to better match the repricing characteristics of its increasing commercial loan portfolio.
For the Three Months Ended
December 31, 2025
--------------------------------------
Effective
Amount Rate WAM
-------------------- ----------- ---
(Dollars in thousands)
Beginning balance $ 1,950,984 3.54% 1.5
Maturities and repayments (171,168) 2.34 --
New FHLB borrowings 50,000 3.64 2.0
------------ ------- ---
Ending balance $ 1,829,816 3.65 1.4
============
Maturities of Interest-Bearing Liabilities
The following table presents the maturity and weighted average repricing rate, which is also the weighted average effective rate, of certificates of deposit, split between retail/commercial and public unit amounts, and non-amortizing FHLB advances for the next four quarters as of December 31, 2025.
September
March 31, June 30, 30, December 31,
2026 2026 2026 2026 Total
------------ ------------ ------------ ------------ --------------
(Dollars in thousands)
Retail/Commercial
Certificates:
Amount $407,199 $636,261 $595,282 $550,620 $2,189,362
Repricing
Rate 3.64% 3.79% 3.66% 3.58% 3.68%
Public Unit
Certificates:
Amount $ 44,281 $ 9,001 $ 16,379 $ 18,000 $ 87,661
Repricing
Rate 4.12% 4.22% 3.94% 3.62% 3.99%
Term
Borrowings:
Amount $100,000 $ 50,000 $125,000 $250,000 $ 525,000
Repricing
Rate 1.60% 0.98 3.66 4.29 3.31
------- ------- ------- ------- ---------
Total
Amount $551,480 $695,262 $736,661 $818,620 $2,802,023
Repricing
Rate 3.31% 3.59% 3.67% 3.80% 3.62%
The following table sets forth the WAM information for our certificates of deposit, in years, as of December 31, 2025.
Retail certificates of deposit 0.8 Commercial certificates of deposit 0.6 Public unit certificates of deposit 0.6 Total certificates of deposit 0.8
Average Rates and Lives
At December 31, 2025, the gap between the amounts of the Bank's interest-earning assets and interest-bearing liabilities projected to mature or reprice within one year was $(1.23) billion, or (12.6%) of total assets, compared to $(983.6) million, or (10.1%) of total assets, at September 30, 2025. The change in the one-year gap amount was due primarily to an increase in the amount of projected interest-bearing liability cash flows coming due in one year exceeding a net increase in the amount of interest-earning assets in the same time period. The increase in liability cash flows was primarily related to deposits and a net increase in the amount of borrowings projected to mature within a year. The increase in the amount of deposits was due to an increase in non-maturity deposit balances between periods as well as the roll-down of the certificate of deposit portfolio as balances scheduled to mature within a year increased. The net increase in projected asset cash flows can be largely attributed to the Bank's commercial loan portfolio.
The amount of interest-bearing liabilities expected to reprice in a given period is not typically significantly impacted by changes in interest rates because the Bank's borrowings and certificate of deposit portfolios have contractual maturities and generally cannot be terminated early without a prepayment penalty. If interest rates were to increase 200 basis points, as of December 31, 2025, the Bank's one-year gap would have been projected to be $(1.46) billion, or (14.9)% of total assets. If interest rates were to decrease 200 basis points, as of December 31, 2025, the Bank's one-year gap would have been projected to be $(821.4) million, or (8.4)% of total assets. The changes in the gap amounts compared to when there is no change in rates was due to changes in the anticipated net cash flows primarily as a result of projected prepayments on mortgage-related assets in each rate environment. In higher rate environments, prepayments on mortgage-related assets are projected to be lower, and in lower rate environments, prepayments are projected to be higher.
The following table presents the weighted average yields/rates and WALs (in years), after applying prepayment, call assumptions, and decay rates for our interest-earning assets and interest-bearing liabilities as of December 31, 2025. Yields presented for interest-earning assets include the amortization of fees, costs, premiums and discounts, which are considered adjustments to the yield. The interest rate presented for term borrowings is the effective rate, which includes the impact of interest rate swaps and the amortization of deferred prepayment penalties resulting from FHLB advances previously prepaid. The WAL presented for term borrowings includes the effect of interest rate swaps.
% of % of
Amount Yield/Rate WAL Category Total
---------- ------------ --- ---------- ---------
(Dollars in thousands)
Securities $ 829,704 5.48% 3.2 8.9%
Loans receivable:
Fixed-rate one-
to four-family 4,904,673 3.53 6.6 59.8% 52.5
Fixed-rate
commercial 847,870 5.79 1.8 10.3 9.1
All other
fixed-rate
loans 30,938 7.35 7.0 0.4 0.3
--------- ----- ----- --- ----- --- -----
Total
fixed-rate
loans 5,783,481 3.88 5.9 70.5 61.9
Adjustable-rate
one- to
four-family 886,128 4.55 4.1 10.8 9.5
Adjustable-rate
commercial 1,430,772 5.87 3.5 17.5 15.3
All other
adjustable-rate
loans 99,594 7.41 3.3 1.2 1.0
--------- ----- ----- --- ----- --- -----
Total
adjustable-rate
loans 2,416,494 5.45 3.7 29.5 25.8
--------- ----- ----- --- ----- --- -----
Total loans
receivable 8,199,975 4.34 5.2 100.0% 87.7
=====
FHLB stock 85,060 9.21 1.6 0.9
Cash and cash
equivalents 232,634 3.30 -- 2.5
--------- ----- ----- --- -----
Total
interest-earning
assets $9,347,373 4.46 4.9 100.0%
========= =====
Non-maturity
deposits $3,118,950 1.21 5.0 51.0% 39.2%
Retail certificates
of deposit 2,818,392 3.63 0.8 46.1 35.5
Commercial
certificates of
deposit 62,178 3.51 0.6 1.0 0.8
Public unit
certificates of
deposit 117,911 4.02 0.6 1.9 1.5
--------- ----- ----- --- ----- --- -----
Total
interest-bearing
deposits 6,117,431 2.40 2.9 100.0% 77.0
=====
Term borrowings 1,830,867 3.65 1.4 23.0
--------- ----- ----- --- -----
Total
interest-bearing
liabilities $7,948,298 2.69 2.6 100.0%
========= =====
View source version on businesswire.com: https://www.businesswire.com/news/home/20260128109565/en/
CONTACT:
For further information contact:
Kent Townsend
Executive Vice President,
Chief Financial Officer and Treasurer
(785) 231-6360
ktownsend@capfed.com
Investor Relations
(785) 270-6055
investorrelations@capfed.com
(END) Dow Jones Newswires
January 28, 2026 09:00 ET (14:00 GMT)