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Capitol Federal Financial, Inc.® Reports First Quarter Fiscal Year 2022 Results

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 December 31, 2021. The Company's Quarterly Report on Form 10-Q for the quarter ended December 31, 2021 will be filed with the Securities and Exchange Commission ("SEC") on or about February 9, 2022 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 $22.2 million;
  • basic and diluted earnings per share of $0.16;
  • net interest margin of 1.99%;
  • paid dividends of $41.4 million, or $0.305 per share; and
  • on January 25, 2022, announced a cash dividend of $0.085 per share, payable on February 18, 2022 to stockholders of record as of the close of business on February 4, 2022.

Comparison of Operating Results for the Three Months Ended December 31, 2021 and September 30, 2021

For the quarter ended December 31, 2021, the Company recognized net income of $22.2 million, or $0.16 per share, compared to net income of $18.6 million, or $0.14 per share, for the quarter ended September 30, 2021. The increase in net income was due primarily to a higher negative provision for credit losses compared to the prior quarter and lower non-interest expense. The net interest margin increased two basis points, from 1.97% for the prior quarter to 1.99% for the current quarter, due mainly to a decrease in the cost of retail certificates of deposit.

Interest and Dividend Income

The following table presents the components of interest and dividend income for the time periods presented, along with the change measured in dollars and percent.

 

For the Three Months Ended

 

 

 

 

 

December 31,

 

September 30,

 

Change Expressed in:

 

2021

 

2021

 

Dollars

 

Percent

 

(Dollars in thousands)

 

 

INTEREST AND DIVIDEND INCOME:

 

 

 

 

 

 

 

Loans receivable

$

55,788

 

$

57,139

 

$

(1,351

)

 

(2.4

) %

Mortgage-backed securities ("MBS")

 

4,625

 

 

4,900

 

 

(275

)

 

(5.6

)

Federal Home Loan Bank Topeka ("FHLB") stock

 

1,231

 

 

952

 

 

279

 

 

29.3

 

Investment securities

 

808

 

 

750

 

 

58

 

 

7.7

 

Cash and cash equivalents

 

14

 

 

27

 

 

(13

)

 

(48.1

)

Total interest and dividend income

$

62,466

 

$

63,768

 

$

(1,302

)

 

(2.0

)

The decrease in interest income on loans receivable was primarily in the one-to four-family portfolio due to a reduction in the weighted average rate of the portfolio due to originations, purchases, refinances and endorsements to lower market rates and payoffs of higher rate loans, along with a reduction in commercial loan deferred fee amortization related to the Paycheck Protection Program ("PPP"). The decrease in interest income on MBS was due primarily to a decrease in the average balance of the portfolio. The increase in dividend income on FHLB stock was due mainly to a special year-end dividend of 1.00% paid by FHLB during the current quarter.

Interest Expense

The following table presents the components of interest expense for the time periods presented, along with the change measured in dollars and percent.

 

For the Three Months Ended

 

 

 

 

 

December 31,

 

September 30,

 

Change Expressed in:

 

2021

 

2021

 

Dollars

 

Percent

 

(Dollars in thousands)

 

 

INTEREST EXPENSE:

 

 

 

 

 

 

 

Deposits

$

9,267

 

$

10,335

 

$

(1,068

)

 

(10.3

) %

Borrowings

 

7,585

 

 

7,889

 

 

(304

)

 

(3.9

)

Total interest expense

$

16,852

 

$

18,224

 

$

(1,372

)

 

(7.5

)

The decrease in interest expense on deposits was due primarily to a decrease in the weighted average rate and the average balance of the retail certificate of deposit portfolio. See "Financial Condition as of December 31, 2021" below for additional information on deposits. The decrease in interest expense on borrowings was due to the full impact during the current quarter of certain FHLB advances being replaced at lower rates during the prior quarter.

Provision for Credit Losses

For the quarter ended December 31, 2021, the Bank recorded a negative provision for credit losses of $3.4 million, compared to a negative provision for credit losses of $1.3 million for the prior quarter. The negative provision in the current quarter was comprised of a $2.3 million decrease in the allowance for credit losses ("ACL") for loans due primarily to a reduction in the balance of special mention commercial loans and a $1.1 million decrease in reserves for off-balance sheet credit exposures due mainly to continued improving economic conditions. See additional discussion regarding the Bank's ACL and reserves for off-balance sheet credit exposures at December 31, 2021 in the "Asset Quality" section below.

Non-Interest Income

The following table presents the components of non-interest income for the time periods presented, along with the change measured in dollars and percent.

 

For the Three Months Ended

 

 

 

 

 

December 31,

 

September 30,

 

Change Expressed in:

 

2021

 

2021

 

Dollars

 

Percent

 

(Dollars in thousands)

 

 

NON-INTEREST INCOME:

 

 

 

 

 

 

 

Deposit service fees

$

3,430

 

$

3,294

 

$

136

 

 

4.1

%

Insurance commissions

 

711

 

 

781

 

 

(70

)

 

(9.0

)

Other non-interest income

 

1,365

 

 

1,228

 

 

137

 

 

11.2

 

Total non-interest income

$

5,506

 

$

5,303

 

$

203

 

 

3.8

 

Non-Interest Expense

The following table presents the components of non-interest expense for the time periods presented, along with the change measured in dollars and percent.

 

For the Three Months Ended

 

 

 

 

 

December 31,

 

September 30,

 

Change Expressed in:

 

2021

 

2021

 

Dollars

 

Percent

 

(Dollars in thousands)

 

 

NON-INTEREST EXPENSE:

 

 

 

 

 

 

 

Salaries and employee benefits

$

13,728

 

$

14,600

 

$

(872

)

 

(6.0

) %

Information technology and related expense

 

4,432

 

 

4,354

 

 

78

 

 

1.8

 

Occupancy, net

 

3,379

 

 

3,639

 

 

(260

)

 

(7.1

)

Regulatory and outside services

 

1,368

 

 

1,476

 

 

(108

)

 

(7.3

)

Advertising and promotional

 

1,064

 

 

1,404

 

 

(340

)

 

(24.2

)

Deposit and loan transaction costs

 

697

 

 

638

 

 

59

 

 

9.2

 

Federal insurance premium

 

639

 

 

657

 

 

(18

)

 

(2.7

)

Office supplies and related expense

 

468

 

 

426

 

 

42

 

 

9.9

 

Other non-interest expense

 

919

 

 

1,053

 

 

(134

)

 

(12.7

)

Total non-interest expense

$

26,694

 

$

28,247

 

$

(1,553

)

 

(5.5

)

The decrease in salaries and employee benefits was primarily related to incentive compensation, as fiscal year 2021 incentives were finalized during the prior quarter. The decrease in occupancy, net was due mainly to decreases in utilities and building maintenance expenses. The decrease in advertising and promotional expense was due primarily to the timing of campaigns.

The Company's efficiency ratio was 52.22% for the current quarter compared to 55.55% for the prior quarter. The improvement in the efficiency ratio was due primarily to lower non-interest expense. The efficiency ratio is a measure of a financial institution's total non-interest expense as a percentage of the sum of net interest income (pre-provision for credit losses) and non-interest income. A lower value indicates that the financial institution is generating revenue with a lower level of expense, relative to the net interest margin and non-interest income.

Income Tax Expense

The following table presents pretax income, income tax expense, and net income for the time periods presented, along with the change measured in dollars and percent.

 

For the Three Months Ended

 

 

 

 

 

December 31,

 

September 30,

 

Change Expressed in:

 

 

2021

 

 

 

2021

 

 

Dollars

 

Percent

 

(Dollars in thousands)

 

 

Income before income tax expense

$

27,865

 

 

$

23,923

 

 

$

3,942

 

16.5

%

Income tax expense

 

5,679

 

 

 

5,370

 

 

 

309

 

5.8

 

Net income

$

22,186

 

 

$

18,553

 

 

$

3,633

 

19.6

 

 

 

 

 

 

 

 

 

Effective Tax Rate

 

20.4

%

 

 

22.4

%

 

 

 

 

The increase in income tax expense was due primarily to higher pretax income, partially offset by a lower effective tax rate in the current quarter. The effective tax rate was higher in the prior quarter due mainly to year-end adjustments of permanent tax differences, specifically the Company's low income housing partnership amounts.

Leverage Strategy

At times, the Bank has utilized a leverage strategy to increase earnings. The leverage strategy involves borrowing on either the Bank's FHLB line of credit or by entering into short-term FHLB advances with the proceeds from the borrowings, net of the required FHLB stock holdings, deposited at the Federal Reserve Bank of Kansas City. The leverage strategy was not in place during the current quarter or in recent years as the strategy was not profitable. The strategy did, however, become profitable again in January 2022, and management reimplemented the strategy by entering into $1.80 billion of short-term FHLB advances. It is expected that the strategy will continue to be used as long as it is profitable. The borrowing level related to the strategy may fluctuate while the strategy is in place.

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

The Company recognized net income of $22.2 million, or $0.16 per share, for the current quarter compared to net income of $18.9 million, or $0.14 per share, for the prior year quarter. The increase in net income was due primarily to a higher negative provision for credit losses in the current quarter and an increase in net interest income. The net interest margin increased seven basis points, from 1.92% for the prior year quarter to 1.99% for the current quarter. The increase in net interest income and net interest margin was due mainly to a reduction in the cost of retail certificates of deposit and borrowings, which outpaced the decrease in asset yields.

Interest and Dividend Income

The following table presents the components of interest and dividend income for the time periods presented, along with the change measured in dollars and percent.

 

For the Three Months Ended

 

 

 

 

 

December 31,

 

Change Expressed in:

 

2021

 

2020

 

Dollars

 

Percent

 

(Dollars in thousands)

 

 

INTEREST AND DIVIDEND INCOME:

 

 

 

 

 

 

 

Loans receivable

$

55,788

 

$

60,694

 

$

(4,906

)

 

(8.1

) %

MBS

 

4,625

 

 

5,710

 

 

(1,085

)

 

(19.0

)

FHLB Stock

 

1,231

 

 

1,069

 

 

162

 

 

15.2

 

Investment securities

 

808

 

 

683

 

 

125

 

 

18.3

 

Cash and cash equivalents

 

14

 

 

51

 

 

(37

)

 

(72.5

)

Total interest and dividend income

$

62,466

 

$

68,207

 

$

(5,741

)

 

(8.4

)

The decrease in interest income on loans receivable was due mainly to a decrease in the weighted average rate, primarily in the one- to four-family originated loan portfolio. The premium amortization related to the one- to four-family correspondent loan portfolio decreased significantly compared to the prior year quarter due to the slow-down in prepayments and endorsements; however, the decrease in the weighted average loan portfolio rate more than offset the reduction in premium amortization. The decrease in the weighted average rate for the one- to four-family originated and correspondent loan portfolios was due to endorsements and refinances to lower market rates and the origination and purchase of new loans at lower market rates.

The decrease in interest income on the MBS portfolio was due to a decrease in the weighted average yield as a result of higher premium amortization related to prepayment activity, along with purchases at lower market yields, partially offset by an increase in the average balance of the portfolio.

Interest Expense

The following table presents the components of interest expense for the time periods presented, along with the change measured in dollars and percent.

 

For the Three Months Ended

 

 

 

 

 

December 31,

 

Change Expressed in:

 

2021

 

2020

 

Dollars

 

Percent

 

(Dollars in thousands)

 

 

INTEREST EXPENSE:

 

 

 

 

 

 

 

Deposits

$

9,267

 

$

14,067

 

$

(4,800

)

 

(34.1

) %

Borrowings

 

7,585

 

 

10,327

 

 

(2,742

)

 

(26.6

)

Total interest expense

$

16,852

 

$

24,394

 

$

(7,542

)

 

(30.9

)

The decrease in interest expense on deposits was due mainly to a decrease in the weighted average rate paid on retail certificates of deposit, money market accounts, and wholesale certificates of deposit. Retail certificates of deposit continue to reprice downward as they renew or are replaced at lower offered rates, and rates on money market accounts were also lowered between periods.

The decrease in interest expense on borrowings was due primarily to lowering the cost of FHLB advances by terminating or not renewing certain interest rate swap agreements, not replacing certain maturing FHLB advances, and prepaying certain advances during fiscal year 2021. Cash flows from the deposit portfolio were used to pay down certain FHLB advances.

Provision for Credit Losses

The Bank recorded a negative provision for credit losses during the current quarter of $3.4 million, compared to a negative provision for credit losses of $1.5 million during the prior year quarter. See additional information regarding the current quarter negative provision for credit losses in the "Comparison of Operating Results for the Three Months Ended December 31, 2021 and September 30, 2021" section above. See additional discussion regarding the Bank's ACL and reserve for off-balance sheet credit exposures at December 31, 2021 in the "Asset Quality" section below.

Non-Interest Income

The following table presents the components of non-interest income for the time periods presented, along with the change measured in dollars and percent.

 

For the Three Months Ended

 

 

 

 

 

December 31,

 

Change Expressed in:

 

2021

 

2020

 

Dollars

 

Percent

 

(Dollars in thousands)

 

 

NON-INTEREST INCOME:

 

 

 

 

 

 

 

Deposit service fees

$

3,430

 

$

2,947

 

$

483

 

 

16.4

%

Insurance commissions

 

711

 

 

638

 

 

73

 

 

11.4

 

Other non-interest income

 

1,365

 

 

1,485

 

 

(120

)

 

(8.1

)

Total non-interest income

$

5,506

 

$

5,070

 

$

436

 

 

8.6

 

The increase in deposit service fees was due primarily to an increase in debit card income as a result of higher transaction volume, along with an increase in the amount per transaction. The decrease in other non-interest income was primarily related to lower income from bank-owned life insurance, due to receiving death benefits during the prior year quarter, compared to none during the current quarter.

Non-Interest Expense

The following table presents the components of non-interest expense for the time periods presented, along with the change measured in dollars and percent.

 

For the Three Months Ended

 

 

 

 

 

December 31,

 

Change Expressed in:

 

2021

 

2020

 

Dollars

 

Percent

 

(Dollars in thousands)

 

 

NON-INTEREST EXPENSE:

 

 

 

 

 

 

 

Salaries and employee benefits

$

13,728

 

$

14,138

 

$

(410

)

 

(2.9

) %

Information technology and related expense

 

4,432

 

 

4,233

 

 

199

 

 

4.7

 

Occupancy, net

 

3,379

 

 

3,379

 

 

 

 

 

Regulatory and outside services

 

1,368

 

 

1,585

 

 

(217

)

 

(13.7

)

Advertising and promotional

 

1,064

 

 

838

 

 

226

 

 

27.0

 

Deposit and loan transaction costs

 

697

 

 

766

 

 

(69

)

 

(9.0

)

Federal insurance premium

 

639

 

 

621

 

 

18

 

 

2.9

 

Office supplies and related expense

 

468

 

 

424

 

 

44

 

 

10.4

 

Other non-interest expense

 

919

 

 

1,083

 

 

(164

)

 

(15.1

)

Total non-interest expense

$

26,694

 

$

27,067

 

$

(373

)

 

(1.4

)

The decrease in salaries and employee benefits was due primarily to a decrease in loan commissions related to lower loan origination activity in the current quarter. The increase in advertising and promotional expense was due mainly to adjustments to advertising schedules during the prior year related to the Coronavirus Disease 2019 ("COVID-19") pandemic.

The Company's efficiency ratio was 52.22% for the current year period compared to 55.37% for the prior year period. The improvement in the efficiency ratio was due primarily to higher net interest income, as well as lower non-interest expense and higher non-interest income.

Income Tax Expense

The following table presents pretax income, income tax expense, and net income for the time periods presented, along with the change measured in dollars and percent.

 

For the Three Months Ended

 

 

 

 

 

December 31,

 

Change Expressed in:

 

 

2021

 

 

 

2020

 

 

Dollars

 

Percent

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

Income before income tax expense

$

27,865

 

 

$

23,348

 

 

$

4,517

 

19.3

%

Income tax expense

 

5,679

 

 

 

4,450

 

 

 

1,229

 

27.6

 

Net income

$

22,186

 

 

$

18,898

 

 

$

3,288

 

17.4

 

 

 

 

 

 

 

 

 

Effective Tax Rate

 

20.4

%

 

 

19.1

%

 

 

 

 

The increase in income tax expense was due primarily to higher pretax income in the current year, as well as a higher effective tax rate compared to the prior year. The higher effective tax rate in the current quarter compared to the prior year quarter was due primarily to a lower amount of favorable provision to return adjustments compared to the prior year quarter. Management anticipates the effective income tax rate for fiscal year 2022 will be approximately 21%.

Financial Condition as of December 31, 2021

The following table summarizes the Company's financial condition at the dates indicated.

 

 

 

 

 

Annualized

 

December 31,

 

September 30,

 

Percent

 

 

2021

 

 

 

2021

 

 

Change

 

(Dollars in thousands)

Total assets

$

9,609,157

 

 

$

9,631,246

 

 

(0.9

) %

Available-for-sale ("AFS") securities

 

1,890,653

 

 

 

2,014,608

 

 

(24.6

)

Loans receivable, net

 

7,095,605

 

 

 

7,081,142

 

 

0.8

 

Deposits

 

6,648,004

 

 

 

6,597,396

 

 

3.1

 

Borrowings

 

1,583,303

 

 

 

1,582,850

 

 

0.1

 

Stockholders' equity

 

1,216,660

 

 

 

1,242,273

 

 

(8.2

)

Equity to total assets at end of period

 

12.7

%

 

 

12.9

%

 

 

Average number of basic shares outstanding

 

135,627

 

 

 

135,571

 

 

0.2

 

Average number of diluted shares outstanding

 

135,627

 

 

 

135,571

 

 

0.2

 

The decrease in total assets was due primarily to a decrease in securities, partially offset by an increase in cash and cash equivalents. The increase in deposits was due primarily to an increase in non-maturity deposits, partially offset by a decrease in the certificate of deposit portfolio, as customers moved some of their funds from maturing certificates to more liquid investment options, such as the Bank's money market accounts.

The following table summarizes loan originations and purchases and borrowing activity, along with the related weighted average rates, during the periods indicated.

 

For the Three Months Ended

 

December 31, 2021

 

September 30, 2021

 

Amount

 

Rate

 

Amount

 

Rate

 

(Dollars in thousands)

Loan originations and purchases

 

 

 

 

 

 

 

One- to four-family and consumer:

 

 

 

 

 

 

 

Originated

$

209,440

 

 

2.88

%

 

$

237,358

 

 

2.86

%

Purchased

 

130,553

 

 

2.65

 

 

 

184,562

 

 

2.68

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

Originated

 

49,245

 

 

3.80

 

 

 

43,021

 

 

4.08

 

Purchased

 

36,663

 

 

3.35

 

 

 

19,600

 

 

4.06

 

 

$

425,901

 

 

2.96

 

 

$

484,541

 

 

2.95

 

Borrowing activity

 

 

 

 

 

 

 

Maturities and prepayments

$

(100,000

)

 

3.14

 

 

$

(340,000

)

 

2.73

 

New borrowings

 

100,000

 

 

3.44

 

 

 

340,000

 

 

2.17

 

Stockholders' Equity

During the current quarter, the Company paid cash dividends totaling $41.4 million. These cash dividends totaled $0.305 per share and consisted of a $0.22 per share cash true-up dividend related to fiscal year 2021 earnings and a regular quarterly cash dividend of $0.085 per share. On January 25, 2022, the Company announced a regular quarterly cash dividend of $0.085 per share, or approximately $11.5 million, payable on February 18, 2022 to stockholders of record as of the close of business on February 4, 2022. In the long run, management considers the Bank's equity to total assets ratio of at least 9% an appropriate level of capital. At December 31, 2021, this ratio was 11.5%.

At December 31, 2021, Capitol Federal Financial, Inc., at the holding company level, had $70.8 million in cash on deposit at the Bank. For fiscal year 2022, it is the intention of the Board of Directors to continue the payout of 100% of the Company's earnings to the Company's stockholders. Dividend payments depend upon a number of factors, including the Company's financial condition and results of operations, regulatory capital requirements, regulatory limitations on the Bank's ability to make capital distributions to the Company, and the amount of cash at the holding company level.

There remains $44.7 million authorized under the existing stock repurchase plan for additional purchases of the Company's common stock. Shares may be repurchased from time to time based upon market conditions, available liquidity and other factors. This plan has no expiration date; however, the Federal Reserve Bank's existing approval for the Company to repurchase shares expires in August 2022.

The following table presents a reconciliation of total to net shares outstanding as of December 31, 2021.

Total shares outstanding

138,842,784

 

Less unallocated Employee Stock Ownership Plan ("ESOP") shares and unvested restricted stock

(3,169,063

)

Net shares outstanding

135,673,721

 

Consistent with our goal to operate a sound and profitable financial organization, we actively seek to maintain a well-capitalized status for the Bank in accordance with regulatory standards. In April 2020, the federal bank regulatory agencies announced the issuance of two interim final rules, effective immediately, to provide temporary relief to community banking organizations. Under the interim final rules, the community bank leverage ratio ("CBLR") requirement is a minimum of 8.5% for calendar year 2021 and 9% thereafter. As of December 31, 2021, the Bank's CBLR was 11.6%, which exceeded the minimum requirement.

Capitol Federal Financial, Inc. is the holding company for the Bank. The Bank has 54 branch locations in Kansas and Missouri, and is one of the largest residential lenders in the State of Kansas. News and other information about the Company can be found at the Bank's website, http://www.capfed.com.

Except for the historical information contained in this press release, the matters discussed herein may be deemed to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements about our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions. The words "may," "could," "should," "would," "will," "believe," "anticipate," "estimate," "expect," "intend," "plan," and similar expressions are intended to identify forward-looking statements. Forward-looking statements involve risks and uncertainties, including: potential adverse impacts of the ongoing COVID-19 pandemic and any governmental or societal responses thereto on economic conditions in the Company's local market areas and other market areas where the Bank has lending relationships, on other aspects of the Company's business operations and on financial markets; changes in policies or the application or interpretation of laws and regulations by regulatory agencies and tax authorities; other governmental initiatives affecting the financial services industry; changes in accounting principles, policies or guidelines; fluctuations in interest rates; demand for loans in the Company's and its correspondent banks' market areas; the future earnings and capital levels of the 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 documents filed or furnished by the Company with the SEC. Actual results 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.

SUPPLEMENTAL FINANCIAL INFORMATION

CAPITOL FEDERAL FINANCIAL, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS (Unaudited)

(Dollars in thousands, except per share amounts)

 

 

December 31,

 

September 30,

 

 

2021

 

 

 

2021

 

ASSETS:

 

 

 

Cash and cash equivalents (includes interest-earning deposits of $106,225 and $24,289)

$

135,475

 

 

$

42,262

 

AFS securities, at estimated fair value (amortized cost of $1,899,027 and $2,008,456)

 

1,890,653

 

 

 

2,014,608

 

Loans receivable, net (ACL of $17,535 and $19,823)

 

7,095,605

 

 

 

7,081,142

 

FHLB stock, at cost

 

75,261

 

 

 

73,421

 

Premises and equipment, net

 

97,718

 

 

 

99,127

 

Other assets

 

314,445

 

 

 

320,686

 

TOTAL ASSETS

$

9,609,157

 

 

$

9,631,246

 

 

 

 

 

LIABILITIES:

 

 

 

Deposits

$

6,648,004

 

 

$

6,597,396

 

Borrowings

 

1,583,303

 

 

 

1,582,850

 

Advance payments by borrowers for taxes and insurance

 

38,227

 

 

 

72,729

 

Income taxes payable, net

 

3,733

 

 

 

918

 

Deferred income tax liabilities, net

 

3,981

 

 

 

5,810

 

Other liabilities

 

115,249

 

 

 

129,270

 

Total liabilities

 

8,392,497

 

 

 

8,388,973

 

 

 

 

 

STOCKHOLDERS' EQUITY:

 

 

 

Preferred stock, $0.01 par value; 100,000,000 shares authorized, no shares issued or outstanding

 

 

 

 

 

Common stock, $0.01 par value; 1,400,000,000 shares authorized, 138,842,784 and 138,832,284 shares issued and outstanding as of December 31, 2021 and September 30, 2021, respectively

 

1,388

 

 

 

1,388

 

Additional paid-in capital

 

1,189,827

 

 

 

1,189,633

 

Unearned compensation, ESOP

 

(30,974

)

 

 

(31,387

)

Retained earnings

 

79,745

 

 

 

98,944

 

Accumulated other comprehensive (loss) income, net of tax

 

(23,326

)

 

 

(16,305

)

Total stockholders' equity

 

1,216,660

 

 

 

1,242,273

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

9,609,157

 

 

$

9,631,246

 

CAPITOL FEDERAL FINANCIAL, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(Dollars in thousands)

 

 

For the Three Months Ended

 

December 31,

 

September 30,

 

December 31,

 

 

2021

 

 

 

2021

 

 

 

2020

 

INTEREST AND DIVIDEND INCOME:

 

 

 

 

 

Loans receivable

$

55,788

 

 

$

57,139

 

 

$

60,694

 

MBS

 

4,625

 

 

 

4,900

 

 

 

5,710

 

FHLB stock

 

1,231

 

 

 

952

 

 

 

1,069

 

Investment securities

 

808

 

 

 

750

 

 

 

683

 

Cash and cash equivalents

 

14

 

 

 

27

 

 

 

51

 

Total interest and dividend income

 

62,466

 

 

 

63,768

 

 

 

68,207

 

 

 

 

 

 

 

INTEREST EXPENSE:

 

 

 

 

 

Deposits

 

9,267

 

 

 

10,335

 

 

 

14,067

 

Borrowings

 

7,585

 

 

 

7,889

 

 

 

10,327

 

Total interest expense

 

16,852

 

 

 

18,224

 

 

 

24,394

 

 

 

 

 

 

 

NET INTEREST INCOME

 

45,614

 

 

 

45,544

 

 

 

43,813

 

 

 

 

 

 

 

PROVISION FOR CREDIT LOSSES

 

(3,439

)

 

 

(1,323

)

 

 

(1,532

)

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES

 

49,053

 

 

 

46,867

 

 

 

45,345

 

 

 

 

 

 

 

NON-INTEREST INCOME:

 

 

 

 

 

Deposit service fees

 

3,430

 

 

 

3,294

 

 

 

2,947

 

Insurance commissions

 

711

 

 

 

781

 

 

 

638

 

Other non-interest income

 

1,365

 

 

 

1,228

 

 

 

1,485

 

Total non-interest income

 

5,506

 

 

 

5,303

 

 

 

5,070

 

 

 

 

 

 

 

NON-INTEREST EXPENSE:

 

 

 

 

 

Salaries and employee benefits

 

13,728

 

 

 

14,600

 

 

 

14,138

 

Information technology and related expense

 

4,432

 

 

 

4,354

 

 

 

4,233

 

Occupancy, net

 

3,379

 

 

 

3,639

 

 

 

3,379

 

Regulatory and outside services

 

1,368

 

 

 

1,476

 

 

 

1,585

 

Advertising and promotional

 

1,064

 

 

 

1,404

 

 

 

838

 

Deposit and loan transaction costs

 

697

 

 

 

638

 

 

 

766

 

Federal insurance premium

 

639

 

 

 

657

 

 

 

621

 

Office supplies and related expense

 

468

 

 

 

426

 

 

 

424

 

Other non-interest expense

 

919

 

 

 

1,053

 

 

 

1,083

 

Total non-interest expense

 

26,694

 

 

 

28,247

 

 

 

27,067

 

INCOME BEFORE INCOME TAX EXPENSE

 

27,865

 

 

 

23,923

 

 

 

23,348

 

INCOME TAX EXPENSE

 

5,679

 

 

 

5,370

 

 

 

4,450

 

NET INCOME

$

22,186

 

 

$

18,553

 

 

$

18,898

 

Average Balance Sheets

The following tables present the average balances of our assets, liabilities, and stockholders' equity, and the related annualized weighted average yields and rates on our interest-earning assets and interest-bearing liabilities for the periods indicated, as well as selected performance ratios and other information for the periods shown. Weighted average yields are derived by dividing annualized income by the average balance of the related assets, and weighted average rates are derived by dividing annualized expense by the average balance of the related liabilities, for the periods shown. Average outstanding balances are derived from average daily balances. The weighted average yields and rates include amortization of fees, costs, premiums and discounts, which are considered adjustments to yields/rates. Weighted average yields on tax-exempt securities are not calculated on a fully taxable equivalent basis.

For the Three Months Ended

 

December 31, 2021

 

September 30, 2021

 

December 31, 2020

 

Average

 

Interest

 

 

 

Average

 

Interest

 

 

 

Average

 

Interest

 

 

 

Outstanding

 

Earned/

 

Yield/

 

Outstanding

 

Earned/

 

Yield/

 

Outstanding

 

Earned/

 

Yield/

 

Amount

 

Paid

 

Rate

 

Amount

 

Paid

 

Rate

 

Amount

 

Paid

 

Rate

Assets:

(Dollars in thousands)

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One- to four-family loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Originated

$

3,971,049

 

$

32,422

 

3.27

%

 

$

3,974,876

 

$

32,979

 

3.32

%

 

$

3,949,489

 

$

35,961

 

3.64

%

Correspondent purchased

 

2,035,631

 

 

12,746

 

2.50

 

 

 

2,024,372

 

 

12,942

 

2.56

 

 

 

2,064,912

 

 

12,932

 

2.50

 

Bulk purchased

 

170,537

 

 

610

 

1.43

 

 

 

177,233

 

 

730

 

1.65

 

 

 

205,803

 

 

1,112

 

2.16

 

Total one- to four-family loans

 

6,177,217

 

 

45,778

 

2.96

 

 

 

6,176,481

 

 

46,651

 

3.02

 

 

 

6,220,204

 

 

50,005

 

3.22

 

Commercial loans

 

841,217

 

 

8,943

 

4.16

 

 

 

811,731

 

 

9,378

 

4.52

 

 

 

770,096

 

 

9,404

 

4.78

 

Consumer loans

 

92,794

 

 

1,067

 

4.56

 

 

 

95,449

 

 

1,110

 

4.61

 

 

 

110,048

 

 

1,285

 

4.65

 

Total loans receivable(1)

 

7,111,228

 

 

55,788

 

3.13

 

 

 

7,083,661

 

 

57,139

 

3.21

 

 

 

7,100,348

 

 

60,694

 

3.41

 

MBS(2)

 

1,435,562

 

 

4,625

 

1.29

 

 

 

1,510,421

 

 

4,900

 

1.30

 

 

 

1,302,074

 

 

5,710

 

1.75

 

Investment securities(2)(3)

 

523,931

 

 

808

 

0.62

 

 

 

500,104

 

 

750

 

0.60

 

 

 

431,493

 

 

683

 

0.63

 

FHLB stock

 

73,481

 

 

1,231

 

6.64

 

 

 

72,699

 

 

952

 

5.19

 

 

 

85,187

 

 

1,069

 

4.99

 

Cash and cash equivalents

 

37,221

 

 

14

 

0.15

 

 

 

69,501

 

 

27

 

0.15

 

 

 

201,468

 

 

51

 

0.10

 

Total interest-earning assets

 

9,181,423

 

 

62,466

 

2.71

 

 

 

9,236,386

 

 

63,768

 

2.75

 

 

 

9,120,570

 

 

68,207

 

2.98

 

Other non-interest-earning assets

 

412,115

 

 

 

 

 

 

445,371

 

 

 

 

 

 

453,422

 

 

 

 

Total assets

$

9,593,538

 

 

 

 

 

$

9,681,757

 

 

 

 

 

$

9,573,992

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and stockholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking

$

1,052,413

 

 

179

 

0.07

 

 

$

1,023,926

 

 

183

 

0.07

 

 

$

900,674

 

 

223

 

0.10

 

Savings

 

520,770

 

 

70

 

0.05

 

 

 

514,253

 

 

71

 

0.05

 

 

 

442,906

 

 

68

 

0.06

 

Money market

 

1,767,134

 

 

825

 

0.19

 

 

 

1,729,080

 

 

907

 

0.21

 

 

 

1,474,720

 

 

1,184

 

0.32

 

Retail certificates

 

2,298,678

 

 

7,835

 

1.35

 

 

 

2,374,089

 

 

8,651

 

1.45

 

 

 

2,591,007

 

 

11,794

 

1.81

 

Commercial certificates

 

169,200

 

 

272

 

0.64

 

 

 

204,262

 

 

352

 

0.68

 

 

 

154,829

 

 

384

 

0.99

 

Wholesale certificates

 

199,692

 

 

86

 

0.17

 

 

 

246,739

 

 

171

 

0.27

 

 

 

251,634

 

 

414

 

0.66

 

Total deposits

 

6,007,887

 

 

9,267

 

0.61

 

 

 

6,092,349

 

 

10,335

 

0.67

 

 

 

5,815,770

 

 

14,067

 

0.96

 

Borrowings(4)

 

1,589,258

 

 

7,585

 

1.88

 

 

 

1,582,554

 

 

7,889

 

1.97

 

 

 

1,775,380

 

 

10,327

 

2.30

 

Total interest-bearing liabilities

 

7,597,145

 

 

16,852

 

0.88

 

 

 

7,674,903

 

 

18,224

 

0.94

 

 

 

7,591,150

 

 

24,394

 

1.28

 

Non-interest-bearing deposits

 

550,492

 

 

 

 

 

 

539,575

 

 

 

 

 

 

460,190

 

 

 

 

Other non-interest-bearing liabilities

 

209,890

 

 

 

 

 

 

220,294

 

 

 

 

 

 

240,476

 

 

 

 

Stockholders' equity

 

1,236,011

 

 

 

 

 

 

1,246,985

 

 

 

 

 

 

1,282,176

 

 

 

 

Total liabilities and stockholders' equity

$

9,593,538

 

 

 

 

 

$

9,681,757

 

 

 

 

 

$

9,573,992

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income(5)

 

 

$

45,614

 

 

 

 

 

$

45,544

 

 

 

 

 

$

43,813

 

 

Net interest-earning assets

$

1,584,278

 

 

 

 

 

$

1,561,483

 

 

 

 

 

$

1,529,420

 

 

 

 

Net interest margin(6)

 

 

 

 

1.99

 

 

 

 

 

 

1.97

 

 

 

 

 

 

1.92

 

Ratio of interest-earning assets to interest-bearing liabilities

 

1.21x

 

 

 

 

 

1.20x

 

 

 

 

 

1.20x

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected performance ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (annualized)

 

 

 

0.93

%

 

 

 

 

 

0.77

%

 

 

 

 

 

0.79

%

Return on average equity (annualized)

 

 

 

7.18

 

 

 

 

 

 

5.95

 

 

 

 

 

 

5.90

 

Average equity to average assets

 

 

 

 

12.88

 

 

 

 

 

 

12.88

 

 

 

 

 

 

13.39

 

Operating expense ratio(7)

 

 

 

 

1.11

 

 

 

 

 

 

1.17

 

 

 

 

 

 

1.13

 

Efficiency ratio(8)

 

 

 

 

52.22

 

 

 

 

 

 

55.55

 

 

 

 

 

 

55.37

 

(1)

Balances are adjusted for unearned loan fees and deferred costs. Loans that are 90 or more days delinquent are included in the loans receivable average balance with a yield of zero percent.

(2)

AFS securities are adjusted for unamortized purchase premiums or discounts.

(3)

The average balance of investment securities includes an average balance of nontaxable securities of $4.0 million, $4.9 million, and $9.1 million for the quarters ended December 31, 2021, September 30, 2021, and December 31, 2020, respectively.

(4)

The FHLB advance amounts and rates included in this line include the effect of interest rate swaps and are net of deferred prepayment penalties.

(5)

Net interest income represents the difference between interest income earned on interest-earning assets and interest paid on interest-bearing liabilities. Net interest income depends on the average balance of interest-earning assets and interest-bearing liabilities, and the interest rates earned or paid on them.

(6)

Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.

(7)

The operating expense ratio represents annualized non-interest expense as a percentage of average assets.

(8)

The efficiency ratio represents non-interest expense as a percentage of the sum of net interest income (pre-provision for credit losses) and non-interest income.

 

Loan Portfolio

The following table presents information related to the composition of our loan portfolio in terms of dollar amounts, weighted average rates, and percentages as of the dates indicated.

 

December 31, 2021

 

September 30, 2021

 

December 31, 2020

 

 

 

 

 

% of

 

 

 

 

 

% of

 

 

 

 

 

% of

 

Amount

 

Rate

 

Total

 

Amount

 

Rate

 

Total

 

Amount

 

Rate

 

Total

 

(Dollars in thousands)

One- to four-family:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Originated

$

3,941,568

 

 

3.15

%

 

55.5

%

 

$

3,956,064

 

 

3.18

%

 

55.8

%

 

$

3,946,073

 

 

3.39

%

 

56.2

%

Correspondent purchased

 

1,991,944

 

 

2.97

 

 

28.0

 

 

 

2,003,477

 

 

3.02

 

 

28.2

 

 

 

1,974,086

 

 

3.40

 

 

28.1

 

Bulk purchased

 

165,339

 

 

1.52

 

 

2.3

 

 

 

173,662

 

 

1.65

 

 

2.4

 

 

 

199,673

 

 

2.24

 

 

2.8

 

Construction

 

47,508

 

 

2.76

 

 

0.7

 

 

 

39,142

 

 

2.82

 

 

0.6

 

 

 

32,871

 

 

3.22

 

 

0.5

 

Total

 

6,146,359

 

 

3.05

 

 

86.5

 

 

 

6,172,345

 

 

3.09

 

 

87.0

 

 

 

6,152,703

 

 

3.36

 

 

87.6

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

687,518

 

 

3.98

 

 

9.6

 

 

 

676,908

 

 

4.00

 

 

9.6

 

 

 

609,936

 

 

4.23

 

 

8.7

 

Commercial and industrial

 

76,254

 

 

3.85

 

 

1.1

 

 

 

66,497

 

 

3.83

 

 

0.9

 

 

 

69,378

 

 

3.41

 

 

1.0

 

Construction

 

105,702

 

 

4.04

 

 

1.5

 

 

 

85,963

 

 

4.03

 

 

1.2

 

 

 

84,564

 

 

3.89

 

 

1.2

 

Total

 

869,474

 

 

3.98

 

 

12.2

 

 

 

829,368

 

 

3.99

 

 

11.7

 

 

 

763,878

 

 

4.12

 

 

10.9

 

Consumer loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home equity

 

84,400

 

 

4.59

 

 

1.2

 

 

 

86,274

 

 

4.60

 

 

1.2

 

 

 

97,717

 

 

4.64

 

 

1.4

 

Other

 

7,825

 

 

4.13

 

 

0.1

 

 

 

8,086

 

 

4.19

 

 

0.1

 

 

 

9,328

 

 

4.40

 

 

0.1

 

Total

 

92,225

 

 

4.55

 

 

1.3

 

 

 

94,360

 

 

4.57

 

 

1.3

 

 

 

107,045

 

 

4.62

 

 

1.5

 

Total loans receivable

 

7,108,058

 

 

3.18

 

 

100.0

%

 

 

7,096,073

 

 

3.21

 

 

100.0

%

 

 

7,023,626

 

 

3.46

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACL

 

17,535

 

 

 

 

 

 

 

19,823

 

 

 

 

 

 

 

26,125

 

 

 

 

 

Discounts/unearned loan fees

 

29,363

 

 

 

 

 

 

 

29,556

 

 

 

 

 

 

 

28,825

 

 

 

 

 

Premiums/deferred costs

 

(34,445

)

 

 

 

 

 

 

(34,448

)

 

 

 

 

 

 

(35,418

)

 

 

 

 

Total loans receivable, net

$

7,095,605

 

 

 

 

 

 

$

7,081,142

 

 

 

 

 

 

$

7,004,094

 

 

 

 

 

Loan Activity: The following table summarizes activity in the loan portfolio, along with weighted average rates where applicable, for the periods indicated, excluding changes in ACL, discounts/unearned loan fees, and premiums/deferred costs. Loans that were paid off as a result of refinances are included in repayments. Loan endorsements are not included in the activity in the following table because a new loan is not generated at the time of the endorsement. The endorsed balance and rate are included in the ending loan portfolio balance and rate. Commercial loan renewals are not included in the activity in the following table unless new funds are disbursed at the time of renewal. The renewal balance and rate are included in the ending loan portfolio balance and rate.

 

For the Three Months Ended

 

December 31, 2021

 

September 30, 2021

 

Amount

 

Rate

 

Amount

 

Rate

 

(Dollars in thousands)

Beginning balance

$

7,096,073

 

 

3.21

%

 

$

7,051,625

 

 

3.26

%

Originated and refinanced

 

258,685

 

 

3.05

 

 

 

280,379

 

 

3.05

 

Purchased and participations

 

167,216

 

 

2.80

 

 

 

204,162

 

 

2.81

 

Change in undisbursed loan funds

 

(21,926

)

 

 

 

 

(6,656

)

 

 

Repayments

 

(391,779

)

 

 

 

 

(433,374

)

 

 

Principal recoveries/(charge-offs), net

 

31

 

 

 

 

 

4

 

 

 

Other

 

(242

)

 

 

 

 

(67

)

 

 

Ending balance

$

7,108,058

 

 

3.18

 

 

$

7,096,073

 

 

3.21

 

One- to Four-Family Loans: The following table presents, for our portfolio of one- to four-family loans, the amount, percent of total, weighted average credit score, weighted average loan-to-value ("LTV") ratio, and average balance per loan as of December 31, 2021. Credit scores were updated in September 2021 from a nationally recognized consumer rating agency. The LTV ratios were based on the current loan balance and either the lesser of the purchase price or original appraisal, or the most recent Bank appraisal, if available. In most cases, the most recent appraisal was obtained at the time of origination.

 

 

 

 

 

% of

 

Credit

 

 

 

Amount

 

Rate

 

Total

 

Score

 

LTV

 

(Dollars in thousands)

Originated

$

3,941,568

 

3.15

%

 

64.6

%

 

771

 

61

%

Correspondent purchased

 

1,991,944

 

2.97

 

 

32.7

 

 

766

 

64

 

Bulk purchased

 

165,339

 

1.52

 

 

2.7

 

 

771

 

58

 

 

$

6,098,851

 

3.05

 

 

100.0

%

 

769

 

62

 

The following table presents originated and correspondent purchased activity in our one- to four-family loan portfolio, excluding endorsement activity, along with associated weighted average rates, weighted average LTVs and weighted average credit scores for the three months ended December 31, 2021.

 

 

 

 

 

 

 

Credit

 

Amount

 

Rate

 

LTV

 

Score

 

(Dollars in thousands)

Originated

$

194,107

 

2.75

%

 

70

%

 

764

Correspondent purchased

 

130,553

 

2.65

 

 

72

 

 

775

 

$

324,660

 

2.71

 

 

71

 

 

769

The following table summarizes our one- to four-family loan origination and refinance commitments and one- to four-family correspondent loan purchase commitments as of December 31, 2021, along with associated weighted average rates.

 

Amount

 

Rate

 

(Dollars in thousands)

Originate/refinance

$

84,954

 

2.85

%

Correspondent

 

66,225

 

2.63

 

 

$

151,179

 

2.75

 

Commercial Loans: During the current quarter, the Bank originated $49.2 million of commercial loans and entered into commercial loan participations totaling $36.7 million. The Bank also processed commercial loan disbursements, excluding lines of credit, of approximately $70.6 million at a weighted average rate of 3.89%.

The following table presents the Bank's commercial real estate and commercial construction loans and loan commitments by type of primary collateral, as of December 31, 2021. Because the commitments to pay out undisbursed funds are not cancellable by the Bank, unless the loan is in default, we generally anticipate fully funding the related projects.

 

 

 

Unpaid

 

Undisbursed

 

Gross Loan

 

Outstanding

 

 

 

% of

 

Count

 

Principal

 

Amount

 

Amount

 

Commitments

 

Total

 

Total

 

 

 

(Dollars in thousands)

Senior housing

34

 

$

237,020

 

 

$

58,909

 

 

$

295,929

 

 

$

 

 

$

295,929

 

 

27.6

%

Retail building

140

 

 

170,725

 

 

 

44,868

 

 

 

215,593

 

 

 

4,750

 

 

 

220,343

 

 

20.5

 

Hotel

11

 

 

136,717

 

 

 

51,755

 

 

 

188,472

 

 

 

6,300

 

 

 

194,772

 

 

18.2

 

Office building

93

 

 

49,717

 

 

 

60,134

 

 

 

109,851

 

 

 

1,420

 

 

 

111,271

 

 

10.4

 

Multi-family

37

 

 

55,681

 

 

 

10,158

 

 

 

65,839

 

 

 

6,503

 

 

 

72,342

 

 

6.7

 

One- to four-family property

397

 

 

61,599

 

 

 

7,693

 

 

 

69,292

 

 

 

1,716

 

 

 

71,008

 

 

6.6

 

Single use building

26

 

 

47,639

 

 

 

4,832

 

 

 

52,471

 

 

 

15,750

 

 

 

68,221

 

 

6.4

 

Other

101

 

 

34,122

 

 

 

3,765

 

 

 

37,887

 

 

 

230

 

 

 

38,117

 

 

3.6

 

 

839

 

$

793,220

 

 

$

242,114

 

 

$

1,035,334

 

 

$

36,669

 

 

$

1,072,003

 

 

100.0

%

Weighted average rate

 

 

 

3.99

%

 

 

3.92

%

 

 

3.97

%

 

 

4.18

%

 

 

3.98

%

 

 

The following table summarizes the Bank's commercial real estate and commercial construction loans and loan commitments by state as of December 31, 2021.

 

 

 

Unpaid

 

Undisbursed

 

Gross Loan

 

Outstanding

 

 

 

% of

 

Count

 

Principal

 

Amount

 

Amount

 

Commitments

 

Total

 

Total

 

 

 

(Dollars in thousands)

Kansas

639

 

$

335,579

 

$

50,753

 

$

386,332

 

$

9,996

 

$

396,328

 

37.0

%

Texas

12

 

 

138,982

 

 

130,790

 

 

269,772

 

 

3,350

 

 

273,122

 

25.5

 

Missouri

163

 

 

221,409

 

 

18,534

 

 

239,943

 

 

21,823

 

 

261,766

 

24.4

 

Colorado

6

 

 

17,438

 

 

18,114

 

 

35,552

 

 

 

 

35,552

 

3.3

 

Arkansas

3

 

 

15,414

 

 

18,262

 

 

33,676

 

 

 

 

33,676

 

3.1

 

Nebraska

6

 

 

33,366

 

 

4

 

 

33,370

 

 

 

 

33,370

 

3.1

 

Other

10

 

 

31,032

 

 

5,657

 

 

36,689

 

 

1,500

 

 

38,189

 

3.6

 

 

839

 

$

793,220

 

$

242,114

 

$

1,035,334

 

$

36,669

 

$

1,072,003

 

100.0

%

The following table presents the Bank's commercial loan portfolio and outstanding loan commitments, categorized by gross loan amount (unpaid principal plus undisbursed amounts) or outstanding loan commitment amount, as of December 31, 2021.

 

Count

 

Amount

 

(Dollars in thousands)

Greater than $30 million

4

 

$

178,756

>$15 to $30 million

16

 

 

361,649

>$10 to $15 million

7

 

 

84,921

>$5 to $10 million

17

 

 

107,297

$1 to $5 million

113

 

 

255,218

Less than $1 million

1,270

 

 

190,396

 

1,427

 

$

1,178,237

As of December 31, 2021 and September 30, 2021, there were commercial loans with an aggregate gross balance, including undisbursed amounts, of $143.5 million and $146.4 million, respectively, with modifications under the Bank's program to support and provide relief to borrowers during the COVID-19 pandemic ("COVID-19 loan modifications") that were still in their deferral period.

Asset Quality

The following tables present loans 30 to 89 days delinquent, non-performing loans, and other real estate owned ("OREO") as of the dates indicated. Loans subject to payment forbearance under the Bank's COVID-19 loan modification program are not reported as delinquent during the forbearance time period. Of the loans 30 to 89 days delinquent at December 31, 2021, approximately 73% were 59 days or less delinquent. Nonaccrual loans are loans that are 90 or more days delinquent or in foreclosure and other loans required to be reported as nonaccrual pursuant to accounting and/or regulatory reporting requirements and/or internal policies, even if the loans are current. Non-performing assets include nonaccrual loans and OREO. Of the one- to four-family COVID-19 loan modifications that had completed the deferral period by December 31, 2021, $5.7 million were 30 to 89 days delinquent and $2.3 million were 90 or more days delinquent as of December 31, 2021. In late March 2020, the Bank suspended the initiation of foreclosure proceedings for owner-occupied one- to four-family loans. At December 31, 2021, there were $5.5 million of non-performing one- to four-family loans for which foreclosure proceedings either had been initiated prior to the foreclosure suspension or would have been initiated if the foreclosure suspension were not in place. The foreclosure suspension was lifted in January 2022 resulting in foreclosure proceedings continuing or starting on a portion of the $5.5 million of such loans.

 

Loans Delinquent for 30 to 89 Days at:

 

December 31, 2021

 

September 30, 2021

 

June 30, 2021

 

March 31, 2021

 

December 31, 2020

 

Number

 

Amount

 

Number

 

Amount

 

Number

 

Amount

 

Number

 

Amount

 

Number

 

Amount

 

(Dollars in thousands)

One- to four-family:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Originated

74

 

$

7,009

 

 

48

 

$

4,156

 

 

51

 

$

5,141

 

 

45

 

$

4,151

 

 

62

 

$

5,844

 

Correspondent purchased

11

 

 

5,133

 

 

7

 

 

2,590

 

 

9

 

 

3,650

 

 

9

 

 

2,910

 

 

13

 

 

4,694

 

Bulk purchased

1

 

 

154

 

 

4

 

 

541

 

 

6

 

 

958

 

 

5

 

 

352

 

 

9

 

 

1,750

 

Commercial

2

 

 

222

 

 

2

 

 

37

 

 

1

 

 

35

 

 

5

 

 

806

 

 

8

 

 

1,047

 

Consumer

16

 

 

164

 

 

25

 

 

498

 

 

25

 

 

354

 

 

17

 

 

287

 

 

30

 

 

515

 

 

104

 

$

12,682

 

 

86

 

$

7,822

 

 

92

 

$

10,138

 

 

81

 

$

8,506

 

 

122

 

$

13,850

 

30 to 89 days delinquent loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to total loans receivable, net

 

 

0.18

%

 

 

 

 

0.11

%

 

 

 

 

0.14

%

 

 

 

 

0.12

%

 

 

 

0.20

%

 

Non-Performing Loans and OREO at:

 

December 31, 2021

 

September 30, 2021

 

June 30, 2021

 

March 31, 2021

 

December 31, 2020

 

Number

 

Amount

 

Number

 

Amount

 

Number

 

Amount

 

Number

 

Amount

 

Number

 

Amount

 

(Dollars in thousands)

Loans 90 or More Days Delinquent or in Foreclosure:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One- to four-family:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Originated

48

 

$

3,943

 

 

50

 

$

3,693

 

 

53

 

$

3,696

 

 

55

 

$

4,433

 

 

51

 

$

4,370

 

Correspondent purchased

10

 

 

3,115

 

 

10

 

 

3,210

 

 

12

 

 

4,230

 

 

10

 

 

3,749

 

 

9

 

 

3,371

 

Bulk purchased

6

 

 

1,945

 

 

9

 

 

2,974

 

 

7

 

 

2,596

 

 

10

 

 

3,172

 

 

13

 

 

3,724

 

Commercial

6

 

 

1,170

 

 

6

 

 

1,214

 

 

7

 

 

1,278

 

 

6

 

 

1,068

 

 

5

 

 

820

 

Consumer

25

 

 

477

 

 

21

 

 

498

 

 

23

 

 

445

 

 

26

 

 

531

 

 

26

 

 

473

 

 

95

 

 

10,650

 

 

96

 

 

11,589

 

 

102

 

 

12,245

 

 

107

 

 

12,953

 

 

104

 

 

12,758

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans 90 or more days delinquent or in foreclosure

as a percentage of total loans

 

 

 

0.15

%

 

 

 

 

0.16

%

 

 

 

 

0.17

%

 

 

 

 

0.19

%

 

 

 

 

0.18

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans less than 90 Days Delinquent:(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One- to four-family:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Originated

5

 

$

451

 

 

7

 

$

1,288

 

 

7

 

$

1,392

 

 

9

 

$

1,646

 

 

9

 

$

968

 

Correspondent purchased

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bulk purchased

 

 

 

 

1

 

 

131

 

 

1

 

 

131

 

 

 

 

 

 

 

 

 

Commercial

3

 

 

62

 

 

4

 

 

419

 

 

3

 

 

403

 

 

4

 

 

642

 

 

3

 

 

411

 

Consumer

 

 

 

 

1

 

 

9

 

 

 

 

 

 

 

 

 

 

1

 

 

9

 

 

8

 

 

513

 

 

13

 

 

1,847

 

 

11

 

 

1,926

 

 

13

 

 

2,288

 

 

13

 

 

1,388

 

Total nonaccrual loans

103

 

 

11,163

 

 

109

 

 

13,436

 

 

113

 

 

14,171

 

 

120

 

 

15,241

 

 

117

 

 

14,146

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans as a percentage of total loans

 

 

0.16

%

 

 

 

 

0.19

%

 

 

 

 

0.20

%

 

 

 

 

0.22

%

 

 

 

 

0.20

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OREO:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One- to four-family:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Originated(2)

2

 

$

319

 

 

3

 

$

170

 

 

3

 

$

177

 

 

2

 

$

105

 

 

3

 

$

129

 

Total non-performing assets

105

 

$

11,482

 

 

112

 

$

13,606

 

 

116

 

$

14,348

 

 

122

 

$

15,346

 

 

120

 

$

14,275

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing assets as a percentage of total assets

 

 

0.12

%

 

 

 

 

0.14

%

 

 

 

 

0.15

%

 

 

 

 

0.16

%

 

 

 

 

0.15

%

(1)

Includes loans required to be reported as nonaccrual pursuant to accounting and/or regulatory reporting requirements and/or internal policies even if the loans are current.

(2)

Real estate-related consumer loans where we also hold the first mortgage are included in the one- to four-family category as the underlying collateral is one- to four-family property.

 

The following table presents loans classified as special mention or substandard at the dates presented. The decrease in commercial special mention loans at December 31, 2021 compared to September 30, 2021 was due mainly to two commercial loans moving to the pass classification during the current quarter as the underlying economic considerations being monitored by management improved to levels deemed appropriate by the Company.

 

December 31, 2021

 

September 30, 2021

 

Special

Mention

 

Substandard

 

Special

Mention

 

Substandard

 

(Dollars in thousands)

One- to four-family

$

12,971

 

$

21,835

 

$

14,332

 

$

23,458

Commercial

 

47,093

 

 

3,362

 

 

99,729

 

 

3,259

Consumer

 

321

 

 

676

 

 

135

 

 

718

 

$

60,385

 

$

25,873

 

$

114,196

 

$

27,435

Allowance for Credit Losses: The Bank is utilizing a discounted cash flow approach for estimating expected credit losses for pooled loans and loan commitments. Management applied qualitative factors at December 31, 2021 to account for the continued economic uncertainties, along with the balance and trending of large-dollar special mention commercial loans, and commercial loan COVID-19 modifications. The economic uncertainties were related to (1) the job market, the unemployment rate and labor participation rate and how the significant federal assistance may be impacting those measures and (2) the unevenness of the recovery in certain industries in which the Bank has lending relationships.

The following table presents a summary of changes in ACL and reserve for off-balance sheet credit exposures occurring during the quarter ended December 31, 2021.

 

ACL

 

Reserve for off-

balance sheet

credit exposures

 

ACL and

Reserve for off-

balance sheet

credit exposures

 

(Dollars in thousands)

Balance at September 30, 2021

$

19,823

 

 

$

5,743

 

 

$

25,566

 

Charge-offs

 

(15

)

 

 

 

 

 

(15

)

Recoveries

 

46

 

 

 

 

 

 

46

 

Net recoveries

 

31

 

 

 

 

 

 

31

 

Provision for credit losses

 

(2,319

)

 

 

(1,120

)

 

 

(3,439

)

Balance at December 31, 2021

$

17,535

 

 

$

4,623

 

 

$

22,158

 

The negative provision for credit losses associated with the ACL was primarily due to a reduction in the large-dollar special mention commercial loan qualitative factor due to two large-dollar special mention commercial loans moving to the pass classification during the current quarter, as discussed above. Additionally, economic conditions continued to improve during the current quarter, so the economic uncertainty qualitative factor for commercial loans decreased during the current quarter. The negative provision for credit losses for off-balance sheet credit exposures was mainly related to a reduction in the commercial loan economic uncertainty qualitative factor, also due to the improved economic conditions during the current quarter.

The following tables present ACL activity and related ratios at the dates and for the periods indicated.

 

For the Three Months Ended

 

December 31, 2021

 

September 30, 2021

 

(Dollars in thousands)

Balance at beginning of period

$

19,823

 

 

$

20,724

 

Charge-offs:

 

 

 

One- to four-family

 

(4

)

 

 

(22

)

Commercial

 

(10

)

 

 

 

Consumer

 

(1

)

 

 

(4

)

Total charge-offs

 

(15

)

 

 

(26

)

Recoveries:

 

 

 

One- to four-family

 

9

 

 

 

4

 

Commercial

 

36

 

 

 

12

 

Consumer

 

1

 

 

 

14

 

Total recoveries

 

46

 

 

 

30

 

Net recoveries (charge-offs)

 

31

 

 

 

4

 

Provision for credit losses

 

(2,319

)

 

 

(905

)

Balance at end of period

$

17,535

 

 

$

19,823

 

 

 

 

 

Ratio of net charge-offs during the period to average loans outstanding during the period

 

%

 

 

%

Ratio of net charge-offs (recoveries) during the period to average non-performing assets

 

(0.25

)

 

 

(0.03

)

ACL to non-performing loans at end of period

 

157.08

 

 

 

147.54

 

ACL to loans receivable at end of period

 

0.25

 

 

 

0.28

 

ACL to net charge-offs (annualized)

N/M

(1)

 

N/M

(1)

(1)

This ratio is not presented due to loan recoveries exceeding loan charge-offs during the period.

 

The distribution of our ACL and the ratio of ACL to loans receivable, by loan type, at the dates indicated is summarized below.

 

Distribution of ACL

 

Ratio of ACL to

Loans Receivable

 

December 31,

 

September 30,

 

December 31,

 

September 30,

 

2021

 

2021

 

2021

 

2021

 

(Dollars in thousands)

 

 

 

 

One- to four-family:

 

 

 

 

 

 

 

Originated

$

1,611

 

$

1,590

 

0.04

%

 

0.04

%

Correspondent purchased

 

2,082

 

 

2,062

 

0.10

 

 

0.10

 

Bulk purchased

 

268

 

 

304

 

0.16

 

 

0.18

 

Construction

 

28

 

 

22

 

0.06

 

 

0.06

 

Total

 

3,989

 

 

3,978

 

0.06

 

 

0.06

 

Commercial:

 

 

 

 

 

 

 

Commercial real estate

 

11,257

 

 

13,706

 

1.64

 

 

2.02

 

Commercial and industrial

 

376

 

 

344

 

0.49

 

 

0.52

 

Construction

 

1,720

 

 

1,602

 

1.63

 

 

1.86

 

Total

 

13,353

 

 

15,652

 

1.54

 

 

1.89

 

Consumer

 

193

 

 

193

 

0.21

 

 

0.20

 

Total

$

17,535

 

$

19,823

 

0.25

 

 

0.28

 

Securities Portfolio

The following table presents the distribution of our securities portfolio, at amortized cost, at December 31, 2021. Overall, fixed-rate securities comprised 94% of our securities portfolio at December 31, 2021. The weighted average life ("WAL") is the estimated remaining maturity (in years) after three-month historical prepayment speeds and projected call option assumptions have been applied. Weighted average yields on tax-exempt securities are not calculated on a fully tax-equivalent basis.

 

Amount

 

Yield

 

WAL

 

(Dollars in thousands)

MBS

$

1,375,711

 

1.36

%

 

3.5

U.S. government-sponsored enterprise debentures

 

519,972

 

0.61

 

 

3.6

Municipal bonds

 

3,344

 

1.86

 

 

0.1

Total securities portfolio

$

1,899,027

 

1.15

 

 

3.5

The following table summarizes the activity in our securities portfolio for the period presented. The weighted average yields for the beginning and ending balances are as of the first and last days of the period presented and are generally derived from recent prepayment activity on the securities in the portfolio. The beginning and ending WALs are the estimated remaining principal repayment terms (in years) after three-month historical prepayment speeds have been applied.

 

For the Three Months Ended

 

December 31, 2021

 

Amount

 

Yield

 

WAL

 

(Dollars in thousands)

Beginning balance - carrying value

$

2,014,608

 

 

1.16

%

 

3.5

Maturities and repayments

 

(107,665

)

 

 

 

 

Net amortization of (premiums)/discounts

 

(1,764

)

 

 

 

 

Change in valuation on AFS securities

 

(14,526

)

 

 

 

 

Ending balance - carrying value

$

1,890,653

 

 

1.16

 

 

3.5

Deposit Portfolio

The following table presents the amount, weighted average rate, and percent of total for the components of our deposit portfolio at the dates presented.

 

December 31, 2021

 

September 30, 2021

 

December 31, 2020

 

 

 

 

 

% of

 

 

 

 

 

% of

 

 

 

 

 

% of

 

Amount

 

Rate

 

Total

 

Amount

 

Rate

 

Total

 

Amount

 

Rate

 

Total

 

(Dollars in thousands)

Non-interest-bearing checking

$

599,969

 

%

 

9.0

%

 

$

543,849

 

%

 

8.2

%

 

$

494,375

 

%

 

7.7

%

Interest-bearing checking

 

1,092,342

 

0.07

 

 

16.4

 

 

 

1,037,362

 

0.07

 

 

15.7

 

 

 

953,927

 

0.08

 

 

14.9

 

Savings

 

526,714

 

0.05

 

 

7.9

 

 

 

519,069

 

0.05

 

 

7.9

 

 

 

455,633

 

0.06

 

 

7.1

 

Money market

 

1,840,049

 

0.19

 

 

27.7

 

 

 

1,753,525

 

0.19

 

 

26.6

 

 

 

1,488,749

 

0.31

 

 

23.2

 

Retail certificates of deposit

 

2,254,560

 

1.31

 

 

33.9

 

 

 

2,341,531

 

1.41

 

 

35.5

 

 

 

2,570,135

 

1.75

 

 

40.1

 

Commercial certificates of deposit

 

137,419

 

0.64

 

 

2.1

 

 

 

190,215

 

0.66

 

 

2.9

 

 

 

207,813

 

0.83

 

 

3.2

 

Public unit certificates of deposit

 

196,951

 

0.17

 

 

3.0

 

 

 

211,845

 

0.21

 

 

3.2

 

 

 

240,210

 

0.64

 

 

3.8

 

 

$

6,648,004

 

0.53

 

 

100.0

%

 

$

6,597,396

 

0.59

 

 

100.0

%

 

$

6,410,842

 

0.84

 

 

100.0

%

Borrowings

The following table presents the maturity of term borrowings, which consist entirely of FHLB advances, along with associated weighted average contractual and effective rates as of December 31, 2021.

 

 

Term Borrowings Amount

 

 

 

 

Maturity by

 

FHLB

 

Interest rate

 

Contractual

 

Effective

Fiscal Year

 

Advances

 

swaps(1)

 

Rate

 

Rate(2)

 

 

(Dollars in thousands)

 

 

 

2022

 

$

75,000

 

$

 

0.29

%

 

0.29

%

2023

 

 

300,000

 

 

 

1.70

 

 

1.81

 

2024

 

 

150,000

 

 

165,000

 

1.32

 

 

2.46

 

2025

 

 

300,000

 

 

100,000

 

1.33

 

 

2.09

 

2026

 

 

250,000

 

 

 

0.96

 

 

1.27

 

2027

 

 

150,000

 

 

 

0.93

 

 

1.24

2028

 

 

 

 

100,000

 

0.56

 

 

3.44

 

 

 

$

1,225,000

 

$

365,000

 

1.20

 

 

1.90

 

(1)

Represents adjustable-rate FHLB advances for which the Bank has entered into interest rate swaps with a notional amount of $365.0 million to hedge the variability in cash flows associated with the advances. These advances are presented based on their contractual maturity dates and will be renewed periodically until the maturity or termination of the interest rate swaps. The expected WAL of the interest rate swaps was 3.8 years at December 31, 2021.

(2)

The effective rate includes the impact of interest rate swaps and the amortization of deferred prepayment penalties resulting from FHLB advances previously prepaid.

 

The following table presents borrowing activity for the period shown. The borrowings presented in the table have original contractual terms of one year or longer or are tied to interest rate swaps with original contractual terms of one year or longer. The effective rate is shown as a weighted average and includes the impact of interest rate swaps and the amortization of deferred prepayment penalties resulting from FHLB advances previously prepaid. The weighted average maturity ("WAM") is the remaining weighted average contractual term in years and includes the impact of interest rate swaps. The beginning and ending WAMs represent the remaining maturity at each date presented. For new borrowings, the WAMs presented are as of the date of issue.

 

For the Three Months Ended

 

December 31, 2021

 

 

 

Effective

 

 

 

Amount

 

Rate

 

WAM

 

(Dollars in thousands)

Beginning balance

$

1,590,000

 

 

1.88

%

 

3.3

Maturities and prepayments

 

(100,000

)

 

3.14

 

 

 

New FHLB borrowings

 

100,000

 

 

3.44

 

 

6.5

Ending balance

$

1,590,000

 

 

1.90

 

 

3.1

Maturities of Interest-Bearing Liabilities

The following table presents the maturity and weighted average repricing rate, which is also the weighted average effective rate, of certificates of deposit, split between retail/commercial and public unit amounts, and term borrowings for the next four quarters as of December 31, 2021.

 

March 31,

 

June 30,

 

September 30,

 

December 31,

 

 

 

 

2022

 

 

 

2022

 

 

 

2022

 

 

 

2022

 

 

Total

 

(Dollars in thousands)

Retail/Commercial Certificates:

 

 

 

 

 

 

 

 

Amount

$

335,106

 

 

$

372,663

 

 

$

425,009

 

 

$

314,564

 

 

$

1,447,342

 

Repricing Rate

 

1.12

%

 

 

1.01

%

 

 

1.39

%

 

 

1.24

%

 

 

1.20

%

Public Unit Certificates:

 

 

 

 

 

 

 

 

 

Amount

$

83,428

 

 

$

66,181

 

 

$

29,003

 

 

$

5,000

 

 

$

183,612

 

Repricing Rate

 

0.25

%

 

 

0.11

%

 

 

0.09

%

 

 

0.10

%

 

 

0.17

%

Term Borrowings:(1)

 

 

 

 

 

 

 

 

 

Amount

$

 

 

$

 

 

$

75,000

 

 

$

 

 

$

75,000

 

Repricing Rate

 

%

 

 

%

 

 

0.29

%

 

 

%

 

 

0.29

%

Total

 

 

 

 

 

 

 

 

 

Amount

$

418,534

 

 

$

438,844

 

 

$

529,012

 

 

$

319,564

 

 

$

1,705,954

 

Repricing Rate

 

0.94

%

 

 

0.88

%

 

 

1.17

%

 

 

1.22

%

 

 

1.05

%

(1)

The maturity date for FHLB advances tied to interest rate swaps is based on the maturity date of the related interest rate swap

 

The following table sets forth the WAM information for our certificates of deposit, in years, as of December 31, 2021.

Retail certificates of deposit

1.2

Commercial certificates of deposit

0.5

Public unit certificates of deposit

0.4

Total certificates of deposit

1.1

Average Rates and Lives

At December 31, 2021, the Bank's gap between the amount of interest-earning assets and interest-bearing liabilities projected to reprice within one year was $(928.0) million, or (9.7)% of total assets, compared to $(664.1) million, or (6.9)% of total assets, at September 30, 2021. The change in the one-year gap amount was due primarily to an increase in the amount of non-maturity deposits projected to reprice within one year at December 31, 2021 compared to September 30, 2021. In addition, the amount of assets projected to reprice decreased due to higher interest rates, which resulted in slower prepay projections on the Bank's mortgage-related assets at December 31, 2021 compared to September 30, 2021.

The majority of interest-earning assets anticipated to reprice in the coming year are repayments and prepayments on one- to four-family loans and mortgage-backed securities, both of which include the option to prepay without a fee being paid by the contract holder. The amount of interest-bearing liabilities expected to reprice in a given period is not typically significantly impacted by changes in interest rates, because the Bank's borrowings and certificate of deposit portfolios have contractual maturities and generally cannot be terminated early without a prepayment penalty. If interest rates were to increase 200 basis points, as of December 31, 2021, the Bank's one-year gap is projected to be $(1.44) billion, or (15.0)% of total assets. The change in the gap compared to when there is no change in rates is due to lower anticipated net cash flows primarily due to lower repayments on mortgage-related assets in the higher rate environment. This compares to a one-year gap of $(1.29) billion, or (13.4)% of total assets, if interest rates were to have increased 200 basis points as of September 30, 2021.

The following table presents the weighted average yields/rates and WALs (in years), after applying prepayment, call assumptions, and decay rates for our interest-earning assets and interest-bearing liabilities as of December 31, 2021. Yields presented for interest-earning assets include the amortization of fees, costs, premiums and discounts, which are considered adjustments to the yield. The interest rate presented for term borrowings is the effective rate, which includes the impact of interest rate swaps and the amortization of deferred prepayment penalties resulting from FHLB advances previously prepaid. The WAL presented for term borrowings includes the effect of interest rate swaps.

 

Amount

 

Yield/Rate

 

WAL

 

% of Category

 

% of Total

 

(Dollars in thousands)

Securities

$

1,890,653

 

1.15

%

 

4.0

 

 

 

20.5

%

Loans receivable:

 

 

 

 

 

 

 

 

 

Fixed-rate one- to four-family

 

5,563,567

 

3.11

 

 

5.6

 

78.3

%

 

60.4

 

Fixed-rate commercial

 

454,400

 

4.15

 

 

3.6

 

6.4

 

 

4.9

 

All other fixed-rate loans

 

59,954

 

3.52

 

 

6.7

 

0.9

 

 

0.7

 

Total fixed-rate loans

 

6,077,921

 

3.19

 

 

5.5

 

85.6

 

 

66.0

 

Adjustable-rate one- to four-family

 

535,284

 

2.39

 

 

4.1

 

7.5

 

 

5.8

 

Adjustable-rate commercial

 

415,074

 

4.07

 

 

7.2

 

5.8

 

 

4.5

 

All other adjustable-rate loans

 

79,779

 

4.23

 

 

2.5

 

1.1

 

 

0.9

 

Total adjustable-rate loans

 

1,030,137

 

3.21

 

 

5.2

 

14.4

 

 

11.2

 

Total loans receivable

 

7,108,058

 

3.19

 

 

5.4

 

100.0

%

 

77.2

 

FHLB stock

 

75,261

 

6.56

 

 

3.1

 

 

 

0.8

 

Cash and cash equivalents

 

135,475

 

0.12

 

 

 

 

 

1.5

 

Total interest-earning assets

$

9,209,447

 

2.75

 

 

5.0

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

Non-maturity deposits

$

3,459,105

 

0.13

 

 

5.6

 

57.2

%

 

45.3

%

Retail certificates of deposit

 

2,254,560

 

1.31

 

 

1.2

 

37.3

 

 

29.5

 

Commercial certificates of deposit

 

137,419

 

0.64

 

 

0.5

 

2.3

 

 

1.8

 

Public unit certificates of deposit

 

196,951

 

0.17

 

 

0.4

 

3.2

 

 

2.6

 

Total deposits

 

6,048,035

 

0.58

 

 

3.7

 

100.0

%

 

79.2

 

Term borrowings

 

1,590,000

 

1.90

 

 

3.1

 

 

 

20.8

 

Total interest-bearing liabilities

$

7,638,035

 

0.86

 

 

3.5

 

 

 

100.0

%

 

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