On October 23, 2024, Capitol Federal Financial Inc (CFFN, Financial) released its 8-K filing detailing the financial results for the fourth quarter and fiscal year ended September 30, 2024. Capitol Federal Financial Inc is a bank holding company operating through its subsidiary, Capitol Federal Savings Bank, primarily serving metropolitan areas in Kansas. The bank focuses on traditional banking activities, including deposit-taking and investing in residential mortgages.
Quarterly Performance Overview
Capitol Federal Financial Inc reported a net income of $12.1 million for the fourth quarter, translating to earnings per share (EPS) of $0.09. This result exceeded the analyst estimate of $0.08 per share. The company's net interest margin improved slightly to 1.80% from the previous quarter's 1.77%, driven by enhancements in the loan portfolio's yield.
Fiscal Year Highlights
For the fiscal year 2024, Capitol Federal Financial Inc achieved a net income of $38.0 million, or $0.29 per share, surpassing the annual EPS estimate of $0.28. The company paid dividends totaling $0.34 per share throughout the year. The net interest margin for the year was 1.77%, reflecting a strategic shift away from the leverage strategy used in the prior year.
Interest and Dividend Income
The company reported total interest and dividend income of $96.9 million for the quarter, a 2.0% increase from the previous quarter. This growth was primarily due to a 4.0% increase in interest income from loans receivable, attributed to higher yields and an increased average balance in the commercial loan portfolio.
Interest Expense and Credit Losses
Interest expense rose by 2.5% to $56.0 million, driven by higher rates on deposits and borrowings. Notably, the company recorded a provision release of $637 thousand for credit losses, contrasting with a $1.5 million provision in the previous quarter, indicating improved credit conditions.
Non-Interest Income and Expense
Non-interest income increased slightly by 1.6% to $4.8 million, with deposit service fees contributing positively. Non-interest expenses decreased by 3.3% to $27.0 million, reflecting cost management efforts, particularly in information technology and federal insurance premiums.
Balance Sheet and Financial Condition
As of September 30, 2024, Capitol Federal Financial Inc's total assets stood at $9.53 billion, a decrease from the previous year due to strategic asset sales and loan portfolio adjustments. The company focused on growing its commercial loan portfolio while reducing exposure to one- to four-family loans.
Stockholders' Equity and Dividends
Stockholders' equity decreased by $11.8 million over the year, primarily due to stock buybacks and dividend payments. The company announced a regular quarterly cash dividend of $0.085 per share, payable on November 15, 2024.
Analysis and Outlook
Capitol Federal Financial Inc's performance in the fourth quarter and fiscal year 2024 demonstrates effective management of interest margins and credit risk. The strategic shift towards commercial lending and away from the leverage strategy has positively impacted earnings. The company's ability to exceed analyst estimates in both quarterly and annual earnings per share highlights its resilience in a challenging economic environment.
Explore the complete 8-K earnings release (here) from Capitol Federal Financial Inc for further details.
