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CLOSED · 03:15 ET
Market ClerkRecap
Sun Oct 25 · markets closed1 signal on Oct 2494 insider buys this week · $48.3MCIRO short report next: Oct 30The week ahead

CFFN

Capitol Federal Financial, Inc.
NASDAQ · FINANCIALS · SAVINGS INSTITUTION, FEDERALLY CHARTERED
8.40
+0.07 +0.84%
USD · close Oct 23
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Work order
41
WATCH · shorts 41
Insiders, 90 days
0
no open-market filings in 90 days
Congress, 90 days
0 / 0
no disclosures naming it
Big money
0 / 15
none of the tracked funds disclose it
Calls on record
0
nobody we score has called it yet
MKT CAP $1.1BP/E 12.9DIV YIELD —FCF YIELD 6.77%REV TTM —NET INCOME $82.8M +35.2%NET DEBT $2.7B52W 6.02 – 9.19SEC XBRL · TTM TO Invalid Date

How CFFN rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025
Text kept
32%
of sentences unchanged
Added
749
new sentences
Dropped
632
sentences removed
Length
+3,523
words, now 52,726

New in FY2025

  • The Company recognized net income of $68.0 million, or $0.52 per share, for fiscal year 2025 compared to net income of $38.0 million, or $0.29 per share, for the prior fiscal year.
  • The increase in net income was due mainly to higher net interest and non-interest income, partially offset by higher non-interest expense.
  • Non-interest income was lower in the prior fiscal year due mainly to the net losses on the sale of securities associated with the securities strategy.
  • See additional discussion regarding the securities strategy in the "Securities Strategy to Improve Earnings" section below.
  • Excluding the effects of the net loss associated with the securities strategy, earnings per share ("EPS") would have been $0.37 for the prior fiscal year.
  • The increase in EPS excluding the effects of the net loss associated with the securities strategy was due primarily to higher net interest income in the current fiscal year.
  • The net interest margin increased 19 basis points, from 1.77% for the prior fiscal year to 1.96% for the current fiscal year.
  • The increase was due mainly to higher yields on the loan portfolio due to the continued shift of loan balances from the one- to four-family loan portfolio to the higher yielding commercial loan portfolio, which outpaced the increase in the cost of deposits.
  • The Bank continues to transition from a primarily retail oriented financial institution to one with an expanded focus on commercial customers by strategically growing all aspects of commercial banking through investments in technology, people, products, and services.
  • The Bank is active in commercial lending markets even when the lending opportunity is outside of the Bank's local footprint.
  • For additional discussion, see the "Strategic Banking Initiatives" section below.
  • The Company's efficiency ratio was 58.33% for the current fiscal year compared to 66.91% for the prior fiscal year.
  • Excluding the net losses from the securities strategy, the efficiency ratio would have been 61.97% for the prior fiscal year.
  • The improvement in the efficiency ratio, excluding the net losses from the securities strategy, was due primarily to higher net interest income compared to the prior fiscal year, partially offset by higher non-interest expense.
  • The Company's operating expense ratio for the current fiscal year was 1.22% compared to 1.17% for the prior fiscal year.
  • The operating expense ratio was higher in the current fiscal year due mainly to higher non-interest expense.
  • Total assets were $9.78 billion at September 30, 2025, an increase of $251.1 million from September 30, 2024.
  • The increase was due primarily to growth in the loan portfolio, which was largely funded with deposit growth, mainly through the Bank's high yield savings account offering.
  • Total loans receivable increased $204.6 million from September 30, 2024.
  • The increase was due mainly to the commercial loan portfolio, which increased $607.0 million, or approximately 40%, during the current fiscal year, due primarily to commercial real estate loan growth.
  • The increase was partially offset by a decrease of $400.0 million in one- to four-family loans.
  • 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 grow our commercial loan portfolio.
  • The weighted average debt service coverage ratio ("DSCR") for commercial loan originations and purchases during the current fiscal year was 1.76x and the weighted average loan-to-value ("LTV") for commercial real estate and construction loans originated and purchased was 65%.
  • The weighted average DSCR and LTV for our commercial real estate and construction loans was 1.65x and 61%, respectively, at September 30, 2025.
  • At September 30, 2025, loans 30 to 89 days delinquent were 0.15% of total loans receivable, net, and loans 90 or more days delinquent or in foreclosure were 0.09% of total loans receivable, net.
  • See "Management's Discussion and Analysis of Financial Condition and Results of Operation - Asset Quality - Delinquent and nonaccrual loans and other real estate owned ("OREO")" below for additional discussion.
  • During the current fiscal year, net charge-offs ("NCOs") were $198 thousand.
  • Total liabilities at September 30, 2025 were $8.73 billion, an increase of $235.7 million from September 30, 2024.
  • The increase was due mainly to deposit growth, largely through the Bank's high yield savings account offering, which increased $364.5 million.
  • Management has continued to focus on retaining and growing deposits through the Bank's high yield savings account product, which, as of September 30, 2025, had an annual percentage yield of 4.00% for accounts that meet the $10 thousand minimum balance requirement.
  • The increase in deposits was partially offset by a $228.8 million decrease in borrowings due to principal repayments made on the Bank's amortizing FHLB advances, along with borrowings that matured but were not replaced.
  • Management estimates that the Bank had $2.92 billion in liquidity available at September 30, 2025, based on the Bank's blanket collateral agreement with FHLB and unencumbered securities.
  • Stockholders' equity totaled $1.05 billion at September 30, 2025, an increase of $15.4 million from September 30, 2024.
  • As of September 30, 2025, the Bank's capital ratios exceeded the well-capitalized requirements.
  • The Bank's community bank leverage ratio ("CBLR") as of September 30, 2025 was 9.6%.
  • During the current fiscal year, the Company paid regular quarterly cash dividends totaling $44.2 million, or $0.34 per share and repurchased 618,260 shares for $3.9 million.
  • At September 30, 2025, the gap between the Bank's interest-earning assets and interest-bearing liabilities projected to reprice within one year was $(983.6) million, or (10.1)% of total assets, compared to $(1.51) billion, or (15.8)% of total assets, at September 30, 2024.
  • As of September 30, 2025, the Bank exceeded internal policy thresholds for sensitivity to changes in interest rates.
  • Quantitative and Qualitative Disclosures About Market Risk." Securities Strategy to Improve Earnings In October 2023, the Company initiated a securities strategy (the "securities strategy") by selling $1.30 billion of securities, representing 94% of its securities portfolio.

and 709 more.

Gone since FY2024

  • In October 2023, the Company initiated a strategic securities transaction ("securities strategy") by selling $1.30 billion of securities, representing 94% of its securities portfolio.
  • Since the Company had the intent to sell the $1.30 billion of securities to maturity at September 30, 2023, the Company recognized an impairment loss on those securities of $192.6 million which was reflected in the Company's financial statements for the fiscal year ended September 30, 2023.
  • During the quarter ended December 31, 2023, the Company sold the securities and recognized $13.3 million ($10.0 million net of tax), or $0.08 per share, of additional loss related to the sale of the securities.
  • The securities strategy was designed to allow the Company to improve its earnings stream going forward, beginning in the current fiscal year, by redeploying most of the proceeds into current market rate securities and to provide liquidity to deleverage the balance sheet utilizing the remaining proceeds.
  • See additional information regarding the impact of the securities strategy on our financial measurements in "Average Balance Sheets" below.
  • With the proceeds from the sale of the securities, the Company purchased $632.0 million of securities yielding 5.75%, paid down $500.0 million of borrowings with a weighted average cost of 4.70%, and held the remaining cash at the FRB earning interest at the reserve balance rate until such time as it could be used to fund commercial loan activity or for other Bank operations.
  • A taxable net loss will be reported on the Company's September 30, 2024 federal tax return due to the net losses associated with the securities strategy, which resulted in the Bank and Company having a negative current and accumulated earnings and profit tax position.
  • This required the Bank to draw upon the pre-1988 bad debt reserves for distributions from the Bank to the Company during the current fiscal year.
  • See additional information regarding the Bank's pre-1988 bad debt recapture in "Part II, Item 8.
  • Financial Statements and Supplementary Data - Notes to Financial Statements - Note 9.
  • During the current year, the Bank was required to pay income taxes on the reductions to the pre-1988 bad debt reserves equal to the current corporate tax rate at the time of the distribution multiplied by the amount of Bank earnings paid to the Company ("pre-1988 bad debt recapture").
  • The Bank recorded $5.4 million of income tax expense on earnings distributions from the Bank to the Company during the current year due to the pre-1988 bad debt recapture.
  • As of September 30, 2024, the amount of the Bank's remaining pre-1988 bad debt reserves was $75.9 million, or $15.9 million tax effected.
  • It is currently the intention of management and the Board of Directors to make no distributions from the Bank to the Company during fiscal year 2025.
  • By not making distributions during fiscal year 2025, the Bank will not incur income tax expense related to the pre-1988 bad debt recaptures as occurred during the current year.
  • See "Financial Condition - Stockholders' Equity" section below for additional discussion.
  • The Company recognized net income of $38.0 million, or $0.29 per share, for fiscal year 2024 compared to a net loss of $101.7 million, or $(0.76) per share, for the prior fiscal year.
  • The net loss in the prior year resulted from the impairment loss on securities associated with the securities strategy.
  • Excluding the net loss associated with the securities strategy, earnings per share would have been $0.37 for the current year and $0.33 for the prior year.
  • The increase in earnings per share excluding the effects of the net loss associated with the securities strategy was due primarily to higher net interest income and a lower provision for credit losses in the current year, partially offset by higher income tax expense due primarily to the pre-1988 bad debt recapture.
  • Periodically at management's discretion, we have utilized a strategy to increase earnings which entails entering into short-term FHLB borrowings and depositing the proceeds from these FHLB borrowings, net of the cost to purchase FHLB stock to meet FHLB stock holding requirements, at the FRB of Kansas City (the "leverage strategy").
  • See additional discussion regarding the leverage strategy in "Financial Condition - Borrowings" section below.
  • When the leverage strategy is in place, it increases assets and liabilities and reduces the net interest margin due to the amount of earnings from the transaction in comparison to the size of the transaction.
  • The leverage strategy was not utilized in the current fiscal year but it was in the prior fiscal year.
  • The net interest margin increased 34 basis points, from 1.43% for the prior year to 1.77% for the current year.
  • The leverage strategy negatively impacted the net interest margin for the prior year by 12 basis points.
  • The remaining improvement in the net interest margin absent the leverage strategy was due to higher yields on securities and loans which outpaced the increase in the cost of deposits, largely in retail certificates of deposit.
  • The Company's efficiency ratio was 66.91% for the current year compared to (626.63)% for the prior year.
  • Excluding the net losses from the securities strategy, the efficiency ratio would have been 61.97% for the current year and 65.31% for the prior year.
  • The improvement in the efficiency ratio, excluding the net losses from the securities strategy, was due primarily to higher net interest income and lower non-interest expense in the current year compared to the prior year.
  • Total assets were $9.53 billion at September 30, 2024, a decrease of $649.9 million from September 30, 2023.
  • The decrease was due primarily to a $528.2 million decrease in securities, mainly as a result of the securities strategy, along with a $63.6 million decrease in the loan portfolio.
  • The loan portfolio mix shifted toward higher earning commercial loans during the current fiscal year with a $287.2 million decrease in one- to four-family loans, partially offset by a $221.5 million increase in commercial loans.
  • Management expects one- to four-family loans will continue to decrease as a percentage of total loans as cash flows generated from the one- to four-family loan portfolio will be used to fund commercial loan growth.
  • Total liabilities at September 30, 2024 were $8.50 billion, a decrease of $638.1 million from September 30, 2023.
  • The decrease was due primarily to a $699.6 million decrease in borrowings as some of the funds from the securities strategy were used to repay all $500.0 million of outstanding borrowings under the BTFP and not all maturing FHLB borrowings were replaced during the current fiscal year.
  • The decrease in borrowings was partially offset by an increase in deposits.
  • Total deposits increased $78.8 million from September 30, 2023, primarily in retail certificates of deposit, all in the 14 months or shorter term category, partially offset by a decrease in retail money market accounts as some customers elected to move funds to the Bank's certificate of deposit offerings or the Bank's higher yielding savings account offering.
  • Total stockholders' equity was $1.03 billion at September 30, 2024, a decrease of $11.8 million from September 30, 2023 due primarily to stock buybacks early in fiscal year 2024, partially offset by an increase in accumulated other comprehensive income, net of tax.
  • The improvement in accumulated other comprehensive income, net of tax, was mainly a result of the securities strategy.

and 592 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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