TOPEKA, Kan., Feb. 6 /PRNewswire-FirstCall/ -- Capitol Federal Financial
(Nasdaq: CFFN) (the "Company") announced results today for the quarter ending
December 31, 2005. Detailed results of the quarter are available in the
Company's Quarterly Report on Form 10-Q for the three months ended December
31, 2005, which will be filed today and posted on our web-site,
http://www.capfed.com/html/relations.html. Highlights for the quarter
include:
* net income of $13.3 million,
* diluted earnings per share of $0.18 and
* efficiency ratio of 44.24%.
During the quarter, the board of directors declared a $0.30 per share
special year end dividend that was paid on December 2, 2005. On January 24,
2006, the board of directors declared a $0.50 per share dividend to holders of
record on February 3, 2006 which is payable on February 17, 2006. That brings
cumulative dividends, since the Company's initial public offering, to $10.18
per share.
Results of Operations for the Quarter Ended December 31, 2005
Total interest and dividend income for the quarter was $101.9 million
compared to $99.8 million for the same quarter one year ago. The $2.1 million
increase was primarily attributed to a $9.5 million increase in interest
income on loans receivable as a result of loan portfolio growth. The increase
was partially offset by a decrease in interest income on mortgage-related and
investment securities.
Interest expense on Federal Home Loan Bank ("FHLB") advances for the
quarter was $39.8 million compared to $34.5 million for the prior year
quarter. The $5.3 million increase was primarily a result of an increase in
the paying rate on the interest rate swaps and, to a lesser extent, an
increase in the weighted average rate on the FHLB advances.
Interest expense on deposits for the quarter was $27.2 million compared to
$23.1 million for the prior year quarter. The $4.1 million increase was
primarily a result of an increase in the average rate on the certificate of
deposit and money market portfolios which was partially offset by a decrease
in the average balance of each portfolio.
Net income for the quarter was $13.3 million compared to $18.6 million for
the prior year quarter. The decrease in net income was primarily a result of
a $9.8 million increase in interest expense which was partially offset by a
$2.1 million increase in interest and dividend income and a $2.7 million
decrease in income tax expense as a result of reduced earnings.
Financial Condition as of December 31, 2005
Total assets at December 31, 2005 were $8.32 billion compared to $8.41
billion at September 30, 2005. The decrease in assets was mainly attributed
to a decrease in mortgage-related securities of $177.7 million which was
partially offset by an increase in loans receivable of $100.9 million. There
were no purchases of mortgage-related securities during the quarter.
Total liabilities decreased $88.0 million from $7.54 billion at September
30, 2005 to $7.46 billion at December 31, 2005. The decrease was a result of
a $41.0 million decrease in FHLB advances due primarily to the pay down on
FHLB borrowings, a $31.1 million decrease in advance payments by borrowers for
taxes and insurance due to the timing of escrow payments and a $23.1 million
decrease in deposits due primarily to a decrease in the certificate of deposit
portfolio.
Stockholders' equity decreased $2.8 million during the quarter to $862.2
million at December 31, 2005. The decrease was primarily a result of $16.4
million in dividend payments partially offset by $13.3 million in net income.
Management's Discussion of Dividends
We strive to enhance shareholder value while maintaining a strong capital
position. We continue to provide returns to stockholders through our dividend
payments. On January 24, 2006, the board of directors declared a dividend of
$0.50 per share which will be paid on February 17, 2006 to stockholders of
record on February 3, 2006. Due to Capitol Federal Savings Bank MHC's ("MHC")
waiver of dividends, the dividend of $0.50 per share will be paid only on
public shares. Our cash dividend payout policy is continually reviewed by
management and the board of directors, and our ability to pay dividends under
the policy depends upon a number of factors including the Company's financial
condition, results of operations, regulatory capital requirements of the Bank,
other regulatory limitations on the Bank's ability to make capital
distributions to the Company and the continued waiver of dividends by MHC.
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 of directors 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
December 31,
2005 2004
(Dollars in thousands,
except per share amounts)
Net income $13,313 $18,573
Average common shares outstanding 72,649,222 72,226,139
Average committed ESOP shares outstanding 548 548
Total basic average common shares
outstanding 72,649,770 72,226,687
Effect of dilutive RRP shares 3,496 2,698
Effect of dilutive stock options 318,278 774,600
Total diluted average common
shares outstanding 72,971,544 73,003,985
Net earnings per share:
Basic $0.18 $0.26
Diluted $0.18 $0.25
Because of the waiver of dividends by MHC, the inclusion of shares held by
MHC understates earnings available to be paid out through dividends 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,
2005 2004
Net income $13,313 $18,573
Basic average common shares outstanding 72,649,770 72,226,687
Average shares held by MHC (52,192,817) (52,192,817)
Total adjusted basic average shares
held by public shareholders 20,456,953 20,033,870
Effect of dilutive RRP shares 3,496 2,698
Effect of dilutive stock options 318,278 774,600
Total adjusted diluted average shares
held by public shareholders 20,778,727 20,811,168
Net earnings per share, available
to public shareholders:
Basic $0.65 $0.93
Diluted $0.64 $0.89
The following table shows the number of shares eligible to receive
dividends at December 31, 2005. The unvested shares in the ESOP receive
dividends that are recorded through compensation expense. MHC has waived its
right to dividends.
Total voting shares outstanding at September 30, 2005 74,286,889
Treasury stock acquisitions (55,239)
RRP grants, net 2,500
Options exercised, net 1,850
Total voting shares outstanding at December 31, 2005 74,236,000
Unvested shares in ESOP (1,613,108)
Shares held by MHC (52,192,817)
Total shares eligible to receive dividends
at December 31, 2005 20,430,075
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 666
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- 02/06/2006
/CONTACT: Jim Wempe, Vice President, Investor Relations, +1-785-270-6055,
jwempe@capfed.com, or Kent Townsend, Executive Vice President, Chief Financial
Officer and Treasurer, +1-785-231-6360, ktownsend@capfed.com/
/Web site: http://www.capfed.comhttp://www.capfed.com/html/relations.html /
(CFFN)
CO: Capitol Federal Financial
ST: Kansas
IN: FIN
SU: ERN
JC
-- NYM119 --
2012 02/06/200608:45 ESThttp://www.prnewswire.com