Capitol Federal Financial, Inc.

What they do

Capitol Federal Financial operates through its wholly-owned subsidiary, Capitol Federal Savings Bank, headquartered in Topeka, Kansas. The Bank attracts deposits from the general public and businesses and invests primarily in commercial loans (secured by real estate or for commercial and industrial purposes) and permanent first-mortgage loans on one- to four-family residences. It also invests in securities and mortgage-backed securities, and funds activities through deposits and Federal Home Loan Bank of Topeka borrowings. The Bank offers deposit accounts (savings, money market, checking, certificates of deposit), treasury management services, and is expanding private banking and trust and wealth management products.

Revenue drivers

• Commercial loan portfolio — Fastest growing segment; $2.47 billion at June 30, 2026, up from $2.11 billion at September 30, 2025. Higher-yielding than single-family loans, driving net interest income growth.
• Single-family residential loans — Largest loan category; $5.60 billion at June 30, 2026, down from $5.90 billion at September 30, 2025. Funds are being redeployed to commercial lending.
• Net interest income — Primary revenue source; difference between interest earned on loans/securities/cash and interest paid on deposits/borrowings. Net interest income was $53.5 million in the quarter ended June 30, 2026.
• Deposit accounts and fees — Deposits totaled $6.85 billion at June 30, 2026. Provides funding and fee-based income from treasury management and other services.

Recent performance

For the nine months ended June 30, 2026, net income was $64.0 million, or $0.51 per share, up from $49.2 million, or $0.38 per share, in the prior-year period, driven mainly by higher net interest income. Net interest margin expanded 33 basis points to 2.25% for the nine-month period and was 2.31% for the quarter ended June 30, 2026. Fiscal 2025 net income was $68.0 million, or $0.52 per share, compared to $38.0 million, or $0.29 per share, in fiscal 2024. Total assets were $9.66 billion and stockholders' equity was $1.02 billion at June 30, 2026. The Bank reported strong asset quality with low delinquency and charge-off ratios.

Strategy

The company is strategically transitioning from a retail-oriented to a commercial-focused bank by growing the commercial loan portfolio, investing in technology, products, and people, and expanding treasury management and trust and wealth services. It is redeploying cash flows from the single-family portfolio into higher-yielding commercial loans, while also growing commercial deposits. Management continues to enhance stockholder value through share repurchases and dividends, including a special dividend in January 2026. The Bank suspended purchases of correspondent one- to four-family loans in June 2024.

Risks

• Interest rate risk — Gap between interest-earning assets and interest-bearing liabilities repricing within one year was negative $(1.13) billion, or (11.7%) of total assets, exposing the company to rising or falling rate environments.
• Credit risk on commercial loans — As the commercial portfolio grows, credit risk increases; elevated delinquencies or charge-offs could require increased allowance for credit losses.
• Regulatory capital distributions — The Bank's ability to distribute capital to the Company is subject to regulatory non-objection, which could affect the Company's dividend and share repurchase plan.
• Economic conditions — Changes in real estate values, unemployment, and general economic trends, including a potential recession, could adversely affect loan demand, credit quality, and deposit flows.

Outlook

Management expects continued progress from strategic banking initiatives, including further growth in the commercial loan portfolio and expansion of trust and wealth services. The company anticipates continued share repurchases 'to the extent market opportunities present themselves' and has maintained a regular cash dividend of $0.085 per share. The commercial loan growth target is exemplified by the 22.5% annualized growth since September 30, 2025.