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Capitol Federal Financial, Inc. (CFFN) SEC Filing 10-Q Quarterly Report for the period ending Wednesday, March 31, 2021

Capitol Federal Financial, Inc.

CIK: 1490906 Ticker: CFFN


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NEWS RELEASE
FOR IMMEDIATE RELEASE
April 29, 2021
CAPITOL FEDERAL FINANCIAL, INC.®
REPORTS SECOND QUARTER FISCAL YEAR 2021 RESULTS

Topeka, KS - Capitol Federal Financial, Inc.® (NASDAQ: CFFN) (the "Company"), the parent company of Capitol Federal Savings Bank (the "Bank"), announced results today for the quarter ended March 31, 2021. Detailed results will be available in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, which will be filed with the Securities and Exchange Commission ("SEC") on or about May 10, 2021 and posted on our website, http://ir.capfed.com. For best viewing results, please view this release in Portable Document Format (PDF) on our website.

Highlights for the quarter include:
net income of $20.4 million;
basic and diluted earnings per share of $0.15;
net interest margin of 1.88%;
annualized deposit growth of approximately 15%;
paid dividends of $11.5 million, or $0.085 per share; and
on April 20, 2021, announced a cash dividend of $0.085 per share, payable on May 21, 2021 to stockholders of record as of the close of business on May 7, 2021.

During the current quarter, the Bank completed three unique transactions that impacted operating results:
Sold Visa Class B shares for a gain of $7.4 million.
Terminated $200.0 million of fixed-pay swaps with an average cost at the time of termination of 2.62% and realized a loss of $4.8 million. The estimated earn-back period of the loss is approximately 15 months.
Wrote down the value of a branch we intend to sell by $1.2 million.
For the quarter ended March 31, 2021, the Bank also recorded a negative provision for credit losses of $3.0 million.

Since the onset of the Coronavirus Disease 2019 ("COVID-19") pandemic, the Bank has lowered its rates offered on all deposit products except retail checking and savings accounts. The impact of reducing rates offered on our certificate of deposit products has been to lower the cost of deposits as certificates of deposit reprice to a lower rate when they mature and as new accounts are opened. Additionally, certain borrowings were repaid or restructured over the past year using funds obtained through deposit growth, which reduced interest expense on borrowings. Over this time, we lowered rates for our loan products. In late February 2021, as market interest rates began to increase, we began to increase our offered loan rates in our market areas. Despite this recent increase, the yield on the loan portfolio will likely continue to decrease in the near term due to the high levels of prepayments, refinances and endorsements, but not at the same magnitude as the past year. With significant cash inflows realized due to investment securities being called and prepayments on loans and mortgage-backed securities ("MBS") over the past year and the current yields on reinvested funds into new securities being lower than existing portfolio yields, the yield on our investments has been reduced significantly.

Comparison of Operating Results for the Three Months Ended March 31, 2021 and December 31, 2020

For the quarter ended March 31, 2021, the Company recognized net income of $20.4 million, or $0.15 per share, compared to net income of $18.9 million, or $0.14 per share, for the quarter ended December 31, 2020. The increase was due primarily to an increase in non-interest income resulting mainly from the sale of VISA Class B shares, partially offset by an increase in non-interest expense due to the termination of $200.0 million of interest rate swaps. The net interest margin decreased four basis points, from 1.92% for the prior quarter to 1.88% for the current quarter. The decrease in the net interest margin was due mainly to a decrease in the loan portfolio and securities portfolio average yields, along with a change in asset mix as cash flows from the loan portfolio have been invested into lower yielding securities, partially offset by a decrease in the average cost of borrowings and deposits. Our net interest margin could continue to decrease if our interest-earning assets continue to reprice to lower market rates at a faster pace than our
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The following information was filed by Capitol Federal Financial, Inc. (CFFN) on Thursday, April 29, 2021 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Capitol Federal Financial, Inc.'s Definitive Proxy Statement (Form DEF 14A) filed after their 2021 10-K Annual Report includes:

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Inside Capitol Federal Financial, Inc.'s 10-Q Quarterly Report:

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Document And Entity Information
Consolidated Balance Sheets
Consolidated Balance Sheets (Parenthetical)
Consolidated Statements Of Cash Flows
Consolidated Statements Of Comprehensive Income
Consolidated Statements Of Comprehensive Income (Parenthetical)
Consolidated Statements Of Income
Consolidated Statements Of Stockholders' Equity
Consolidated Statements Of Stockholders' Equity (Parenthetical)
Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income (Details)
Accumulated Other Comprehensive Income (Tables)
Borrowed Funds
Borrowed Funds (Narrative) (Details)
Earnings Per Share
Earnings Per Share (Details)
Earnings Per Share (Tables)
Fair Value Of Financial Instruments
Fair Value Of Financial Instruments (Narrative) (Details)
Fair Value Of Financial Instruments (Schedule Of Carrying Amounts And Estimated Fair Values Of Financial Instruments) (Details)
Fair Value Of Financial Instruments (Schedule Of Fair Value Assets Measured On A Recurring Basis) (Details)
Fair Value Of Financial Instruments (Tables)
Loans Receivable And Allowance For Credit Losses
Loans Receivable And Allowance For Credit Losses (Allowance For Credit Losses) (Details)
Loans Receivable And Allowance For Credit Losses (Classified Loans) (Details)
Loans Receivable And Allowance For Credit Losses (Delinquent Loans) (Details)
Loans Receivable And Allowance For Credit Losses (Impaired Loans) (Details)
Loans Receivable And Allowance For Credit Losses (Loans, Nonaccrual) (Details)
Loans Receivable And Allowance For Credit Losses (Loans, Past Due Aging Analysis) (Details)
Loans Receivable And Allowance For Credit Losses (Narrative) (Details)
Loans Receivable And Allowance For Credit Losses (Reserve For Off-Balance Sheet Credit Exposures) (Details)
Loans Receivable And Allowance For Credit Losses (Summary Of Loan Portfolio Segment Disaggregated By The Company's Impairment Method) (Details)
Loans Receivable And Allowance For Credit Losses (Summary Of Loans Receivable) (Details)
Loans Receivable And Allowance For Credit Losses (Tables)
Loans Receivable And Allowance For Credit Losses (Troubled Debt Restructurings On Financing Receivables That Subsequently Defaulted) (Details)
Loans Receivable And Allowance For Credit Losses (Troubled Debt Restructurings On Financing Receivables) (Details)
Securities
Securities (Amortized Cost, Estimated Fair Value, And Gross Unrealized Gains And Losses Of Afs And Htm Securities) (Details)
Securities (Narrative) (Details)
Securities (Schedule Of Carrying Value Of Securities Pledged As Collateral) (Details)
Securities (Schedule Of Contractual Maturities) (Details)
Securities (Schedule Of Estimated Fair Value And Gross Unrealized Losses Of Securities In Continuous Unrealized Loss Position) (Details)
Securities (Schedule Of Taxable And Non-Taxable Components Of Interest Income) (Details)
Securities (Tables)
Summary Of Significant Accounting Policies
Summary Of Significant Accounting Policies (Cumulative-Effect Adjustment) (Details)
Summary Of Significant Accounting Policies (Narrative) (Details)
Summary Of Significant Accounting Policies (Policies)
Summary Of Significant Accounting Policies (Tables)

Material Contracts, Statements, Certifications & more

Capitol Federal Financial, Inc. provided additional information to their SEC Filing as exhibits

Ticker: CFFN
CIK: 1490906
Form Type: 10-Q Quarterly Report
Accession Number: 0001490906-21-000038
Submitted to the SEC: Mon May 10 2021 9:52:36 AM EST
Accepted by the SEC: Mon May 10 2021
Period: Wednesday, March 31, 2021
Industry: Savings Institution Federally Chartered

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