TOPEKA, Kan., Feb. 4 /PRNewswire-FirstCall/ -- Capitol Federal Financial
(Nasdaq: CFFN) today announced results for the December 31, 2004 quarter.
Detailed results of the quarter are available on Form 10-Q which will be filed
today and on our web-site, http://www.capfed.com/html/relations.html . Points
for the quarter include:
-- net income of $18.6 million, up from $4.6 million one year ago,
-- diluted earnings per share of $0.25 and
-- efficiency ratio of 37.25%.
In addition, the Board of Directors declared a $0.50 per share dividend on
January 25, 2005 to holders of record on February 4, 2005, payable on February
18, 2005, and announced an enhancement to its current dividend policy.
Results of Operations for the Quarter Ended December 31, 2004
Capitol Federal Financial (the "Company") reported net income of
$18.6 million, up from $4.6 million for the same period one year ago. The
increase in net income was primarily due to an increase in the net interest
margin of 96 basis points between periods.
The increase in the net interest margin was primarily due to a decrease in
the rate paid on Federal Home Loan Bank ("FHLB") advances. The average rate
on FHLB advances decreased 205 basis points compared to the same period one
year ago primarily due to refinancing certain FHLB advances in July 2004 and,
to a lesser extent, interest rate swaps on previously hedged advances. The
increase in the net interest margin was also due to a 30 basis point decrease
in the average rate paid on certificates of deposit and a $73.3 million
decrease in the average balance of certificates of deposit.
The increase in the net interest margin compared to the same period one
year ago was also due to an overall increase in the average yield of interest-
earning assets of 16 basis points and an increase in the average balance of
interest-earning assets of $14.5 million.
Financial Condition as of December 31, 2004
Total assets increased $8.5 million from September 30, 2004. Our
portfolio of loans increased $147.6 million since September 30, 2004,
primarily due to the purchase of mortgage loans during the quarter. Cash and
cash equivalents decreased $60.5 million since September 30, 2004. Investment
securities decreased $50.3 million from September 30, 2004. The portfolio of
mortgage-related securities decreased $15.8 million since September 30, 2004.
Our balance of non-performing assets remained low, with non-performing assets
representing 0.10% of total assets.
Total liabilities decreased $5.9 million from September 30, 2004 to
$7.70 billion at December 31, 2004. The decrease was primarily due to a
decrease of $27.9 million in advance payments by borrowers for taxes and
insurance due to the timing of escrow payments. The decrease was offset by an
increase of $23.1 million in deposits.
Stockholders' equity increased $14.4 million from September 30, 2004 to
$846.8 million at December 31, 2004.
Management's Discussion of Dividends
In addition to declaring a $0.50 per share dividend on January 25, 2005,
the Board approved an enhanced dividend policy. In December of each year, the
Company plans to pay a special dividend equal to 25% of the excess of the
prior fiscal year reported net income over the amount required to meet the
Company's current dividend policy of $2.00 per public share each fiscal year.
If the fiscal year reported net income does not exceed the amount required to
meet the Company's current dividend policy, it is the Board's intent to
continue to pay dividends at the current level.
Because the Company has a relatively unique corporate structure, the
reporting of certain information under generally accepted accounting
principles in the United States of America ("GAAP") is not necessarily
reflective of the process considered by the Board in connection with its
dividend policy. The earnings per share amounts in the following table are
presented in accordance with GAAP. Included in the GAAP earnings per share
calculations are the average shares held by the Company's majority
shareholder, Capitol Federal Savings Bank MHC ("MHC"). MHC has waived all
previous dividends from the Company. It is expected that MHC will continue to
waive future dividends except to the extent dividends are needed to fund its
continuing operations.
The following is a reconciliation of the denominators of the basic and
diluted earnings per share calculations.
Three Months Ended
December 31,
(Dollars in thousands, except per share amounts) 2004 2003
Net income $18,573 $4,618
Average common shares outstanding 72,226,139 71,082,485
Average committed ESOP shares outstanding 548 548
Total basic average common shares
outstanding 72,226,687 71,083,033
Effect of dilutive RRP shares 2,698 225,459
Effect of dilutive stock options 774,600 1,335,626
Total diluted average common shares
outstanding 73,003,985 72,644,118
Net earnings per share:
Basic $0.26 $0.06
Diluted $0.25 $0.06
The inclusion of shares held by MHC understates earnings available to
public shareholders of CFFN stock. The following table is presented to
provide a better understanding of the information the Board of Directors
reviews when considering the amount of dividends to declare. The table
presents basic and diluted earnings per share, excluding shares held by MHC
from the earnings per share calculation. The following information is not
presented in accordance with GAAP.
Three Months Ended
December 31,
(Dollars in thousands, except per share amounts) 2004 2003
Net income $18,573 $4,618
Basic average common shares outstanding 72,226,687 71,083,033
Average shares held by MHC (52,192,817) (52,192,817)
Total adjusted basic average shares held
by public shareholders 20,033,870 18,890,216
Effect of dilutive RRP shares 2,698 225,459
Effect of dilutive stock options 774,600 1,335,626
Total adjusted diluted average shares held
by public shareholders 20,811,168 20,451,301
Net earnings per share, available to public
shareholders:
Basic $0.93 $0.24
Diluted $0.89 $0.23
The following table shows the number of shares eligible to receive
dividends, at December 31, 2004, with the waiver of all dividends by MHC:
Total voting shares outstanding at September 30, 2004 73,990,801
Options exercised, net 82,290
Total voting shares outstanding at December 31, 2004 74,073,091
Unvested shares in ESOP (1,814,746)
Shares held by MHC (52,192,817)
Total shares eligible to receive dividends at December
31, 2004 20,065,528
Capitol Federal Financial is the holding company for Capitol Federal
Savings Bank. Capitol Federal Savings Bank has 37 branch locations in Kansas,
8 of which are in-store branches. Capitol Federal Savings Bank employs 685
full time equivalent employees in the operation of its business and is one of
the largest residential lenders in the State of Kansas.
Except for the historical information contained in this press release, the
matters discussed may be deemed to be forward-looking statements, within the
meaning of the Private Securities Litigation Reform Act of 1995, that involve
risks and uncertainties, including changes in economic conditions in the
Company's market area, changes in policies by regulatory agencies,
fluctuations in interest rates, demand for loans in the Company's market area,
the future earnings and capital levels of Capitol Federal Savings Bank 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 the Company's SEC reports. Actual strategies and results in future periods
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.
SOURCE Capitol Federal Financial
-0- 02/04/2005
/CONTACT: Jim Wempe, Vice President, Investor Relations,
+1-785-270-6055, jwempe@capfed.com , or Kent Townsend, Senior Vice President,
Controller, +1-785-231-6360, ktownsend@capfed.com , both of Capitol Federal
Financial/
/Web site: http://www.capfed.com /
(CFFN)
CO: Capitol Federal Financial
ST: Kansas
IN: FIN
SU: ERN DIV
JK-AB
-- CGF011 --
6812 02/04/200508:57 ESThttp://www.prnewswire.com