TOPEKA, Kan., May 5 /PRNewswire-FirstCall/ -- Capitol Federal Financial
(Nasdaq: CFFN) today announced results for the March 31, 2005 quarter.
Detailed results of the quarter are available on Form 10-Q which will be filed
today and posted on our web-site, http://www.capfed.com/html/relations.html .
Points for the quarter include:
-- net income of $17.5 million, up from $9.6 million one year ago,
-- diluted earnings per share of $0.24 and
-- efficiency ratio of 38.94%.
In addition, the Board of Directors declared a $0.50 per share dividend on
April 26, 2005 to holders of record on May 6, 2005, payable on May 20, 2005.
Results of Operations for the Quarter Ended March 31, 2005
Capitol Federal Financial (the "Company") reported net income of
$17.5 million, up from $9.6 million for the same period one year ago. The
increase in net income was primarily due to an increase in net interest and
dividend income of $12.0 million between the two quarters.
The increase in net interest and dividend income was primarily due to a
decrease in interest expense on Federal Home Loan Bank ("FHLB") advances. The
average rate on the FHLB advances decreased 140 basis points compared to the
prior year quarter due to refinancing certain FHLB advances in July 2004. The
refinancing of FHLB advances reduced interest expense on the FHLB advances by
$12.4 million compared to the prior year quarter. The reduction in interest
expense was partially offset by a $3.0 million increase in interest expense on
the variable-rate portion of the interest rate swaps due to the increase in
the one month LIBOR rate between the two periods.
The increase in net interest and dividend income compared to the same
quarter one year ago was also due to an increase of $3.9 million in interest
income on interest-earning assets. The average yield of interest-earning
assets increased 14 basis points and the average balance of interest-earning
assets increased $95.2 million.
Results of Operations for the Six Months Ended March 31, 2005
The Company recognized net income of $36.1 million compared to net income
of $14.2 million for the same period one year ago, an increase of
$21.9 million. The increase in net income was primarily due to an increase in
net interest and dividend income of $32.0 million between the two periods.
The increase in net interest and dividend income was primarily due to a
decrease in interest expense on FHLB advances. The average rate on FHLB
advances decreased 172 basis points compared to the prior year six month
period due to refinancing certain FHLB advances in July 2004. The refinancing
of FHLB advances reduced the interest expense on the FHLB advances by
$24.1 million compared to the prior year period.
The increase in net interest and dividend income was also due to a
$7.5 million increase in interest income on interest-earning assets. The
average yield of interest-earning assets increased 15 basis points and the
average balance of interest-earning assets increased $55.2 million.
Financial Condition as of March 31, 2005
Total assets decreased $42.3 million from September 30, 2004. The
decrease in assets was mainly attributed to a decrease in investment
securities of $132.5 million, a decrease in cash and cash equivalents of
$107.6 million and a decrease in mortgage-related securities of
$102.6 million, offset by an increase in loans receivable of $299.5 million.
Our portfolio of loans increased primarily due to the purchase of mortgage
loans during the period. Our balance of non-performing assets remained low,
with non-performing assets representing 0.09% of total assets.
Total liabilities decreased $67.5 million from September 30, 2004 to
$7.64 billion at March 31, 2005. The decrease was primarily due to a decrease
of $76.1 million in deposits.
Stockholders' equity increased $25.2 million from September 30, 2004 to
$857.7 million at March 31, 2005. The increase was primarily due to net
income of $36.1 million for the first six months of fiscal year 2005.
Management's Discussion of Dividends
We strive to enhance shareholder value while maintaining a strong capital
position. We continue to provide returns to shareholders through our dividend
payments. On April 26, 2005, the Board declared a dividend of $0.50 per share
which will be paid on May 20, 2005 to holders of record on May 6, 2005. Due
to the waiver of dividends by the Company's majority shareholder, Capitol
Federal Savings Bank MHC ("MHC"), the dividend of $0.50 per share will be paid
only on public shares. Total dividends declared during the first six months
of fiscal year 2005 were $1.00 per share. On January 25, 2005, the Board
approved an enhanced dividend policy. In December of each year, the Company
will 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 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 MHC. 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 Six Months Ended
March 31, March 31,
2005 2004 2005 2004
(Dollars in thousands, except per share amounts)
Net income $17,482 $9,610 $36,055 $14,228
Average common shares
outstanding 72,421,545 71,265,583 72,322,769 71,173,534
Average committed ESOP
shares outstanding 50,970 50,964 25,482 25,618
Total basic average
common shares
outstanding 72,472,515 71,316,547 72,348,251 71,199,152
Effect of dilutive
RRP shares 2,455 244,369 2,524 235,161
Effect of dilutive
stock options 620,933 1,212,387 699,107 1,275,911
Total diluted average
common shares
outstanding 73,095,903 72,773,303 73,049,882 72,710,224
Net earnings per share:
Basic $0.24 $0.14 $0.50 $0.20
Diluted $0.24 $0.13 $0.49 $0.19
Because of the waiver of dividends by MHC, 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 Six Months Ended
March 31, March 31,
2005 2004 2005 2004
(Dollars in thousands, except per share amounts)
Net income $17,482 $9,610 $36,055 $14,228
Basic average common
shares outstanding 72,472,515 71,316,547 72,348,251 71,199,152
Average shares held
by MHC (52,192,817) (52,192,817) (52,192,817) (52,192,817)
Total adjusted basic
average shares held
by public
shareholders 20,279,698 19,123,730 20,155,434 19,006,335
Effect of dilutive
RRP shares 2,455 244,369 2,524 235,161
Effect of dilutive
stock options 620,933 1,212,387 699,107 1,275,911
Total adjusted diluted
average shares held by
public shareholders 20,903,086 20,580,486 20,857,065 20,517,407
Net earnings per share,
available to public
shareholders:
Basic $0.86 $0.51 $1.79 $0.75
Diluted $0.84 $0.46 $1.73 $0.69
The following table shows the number of shares eligible to receive
dividends at March 31, 2005. The unvested shares in ESOP receive dividends
that are recorded through compensation expense. MHC has waived its right to
dividends.
Total voting shares outstanding at September 30, 2004 73,990,801
Treasury stock acquisitions (81,337)
Net RRP grants (net of forfeitures) 11,200
Options exercised, net 494,818
Total voting shares outstanding at March 31, 2005 74,415,482
Unvested shares in ESOP (1,814,746)
Shares held by MHC (52,192,817)
Total shares eligible to receive dividends at March 31, 2005 20,407,919
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 667
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- 05/05/2005
/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
-- CGTH039 --
4967 05/05/200509:08 EDThttp://www.prnewswire.com