Capitol Federal Financial, Inc.® Reports Fourth Quarter and Fiscal Year 2025 Results

Capitol Federal Financial, Inc.^® (NASDAQ:CFFN) (the "Company," "we" or "our"), the parent company of Capitol Federal Savings Bank (the "Bank"), announced preliminary results today for the quarter and fiscal year ended September 30, 2025. For best viewing results, please view this release in Portable Document Format (PDF) on our website, https://ir.capfed.com.

Capitol Federal Financial, Inc. closed fiscal year 2025 with total assets of $9.78 billion, stockholders' equity of $1.05 billion and net income of $68.0 million. Each of these amounts grew from our previous fiscal year. This growth and improvement is a direct result of the strategic operational changes that the Board and management have implemented in recent years.

These results have been enhanced by our thoughtful approach to value-creating opportunities. Capital City Bank was acquired to facilitate the expansion of the Company's product and service offerings, as well as to diversify our asset and deposit bases, thereby expanding our revenue opportunities. Since that transaction, our commercial loan portfolio and non-retail deposits have grown from $319.1 million to $2.12 billion and $194.8 million to $508.2 million, respectively. Using the strength of the Company's brand, new core operating system, and selective additions to staff, we plan to continue growing our commercial loan portfolio through redeploying funds received from the repayment of correspondent loans. We expect that growth in the commercial deposit base will continue to lower our cost of funds.

We are also still benefiting from our October 2023 securities restructuring whereby we sold $1.30 billion of securities at a yield of 1.22%, purchased $632.0 million of securities yielding 5.75%, and paid down $500.0 million of Bank Term Funding debt at 4.70%, all of which led to an increase in our net interest margin by approximately 60 basis points in fiscal year 2024, a nearly 50% increase from our net interest margin for fiscal year 2023. Our net interest margin has further improved in fiscal year 2025.

John B. Dicus, Chairman and CEO, stated that, "We are delivering value to stockholders through a more diversified balance sheet, expanded income streams, and diligent credit risk management. We expect the pace of the past two years to continue as we roll out more products and services and add to an already seasoned team of professionals focused on driving our commercial business lines. We are proud of our disciplined capital management approach which has resulted in our returning $2.01 billion to stockholders through share repurchases and dividends since our second-step conversion in 2010, and we will continue to focus on capital management decisions that drive long-term value for stockholders."

Highlights for the current quarter include:

• net income of $18.8 million, up from $18.4 million for the prior quarter;
• net interest margin increased 11 basis points to 2.09% from 1.98% the prior quarter;
• basic and diluted earnings per share of $0.14;
• an efficiency ratio of 56.84%, down from 58.26% the prior quarter;
• an operating expense ratio of 1.27%; and
• repurchased 618,260 shares of common stock at an average price of $6.23 per share.

Highlights for the fiscal year include:

• net income of $68.0 million compared to $38.0 million one year ago;
• net interest margin of 1.96%, an increase of 19 basis points from 1.77% one year ago;
• basic and diluted earnings per share of $0.52 compared to $0.29 per share one year ago;
• an efficiency ratio of 58.33% compared to 66.91% one year ago; and
• paid cash dividends of $0.34 per share.

Balance sheet highlights include:

• total assets of $9.78 billion;
• tangible book value per share of $7.85;
• commercial loan growth of $607.0 million, or 40.2%, during the fiscal year;
• commercial deposits growth of $190.2 million, or 59.8%, from September 30, 2024;
• distributed $14.0 million from the Bank to the Company due to attaining a positive balance of earnings and profit; and
• on October 28, 2025, the Company announced a cash dividend of $0.085 per share, payable on November 21, 2025 to stockholders of record as of the close of business on November 7, 2025.

Strategic Banking Initiatives

The Company is committed to the ongoing development of a full-service commercial bank and is investing in technology, people, products and services to make that happen. Our investments in technology to date have allowed the Company to launch new services and products, while the addition of seasoned and well-connected commercial bankers and trust and wealth advisors give us access to an exciting new customer group. Expanding our product suite of treasury management services enables us to service this new customer group, and expanded marketing and business development has increased the depth of customer relationships. As we complete the second year since embarking on our digital transformation, we have seen our efforts bear fruit and expect progress to accelerate going forward.

Mr. Dicus stated, "While Capitol Federal has deep roots in our retail banking markets, we are focused and committed to prudently growing our commercial banking operations as we transform our business to provide a full-service community oriented commercial bank for our customers. We believe that by doing so, we are delivering long-term sustainable value to our stockholders."

Strategic Actions. The long-term success of this transformation is predicated on management's continued focus on deepening relationships with consumer and commercial customers. Management and the Board have committed resources through the growth of talented and skilled bankers, investments in technology, expanding marketing and outreach, as well as the development and increased internal monitoring of performance metrics that ensure we are on the path to achieve our performance objectives. Through our experienced relationship managers, we deliver customized solutions using advanced digital platforms and sophisticated cash management tools. Additionally, we are leveraging our centralized organizational structure to respond quickly to customers. We are actively pursuing opportunities to expand our non-interest-bearing deposit base and diversify fee-based revenue streams through strategic growth in treasury management services, trust and wealth management services, insurance, and small business banking.

Commercial Lending. During the current fiscal year, we closed on $901.9 million in commercial loans compared to $350.6 million in the prior fiscal year and commercial loans continue to grow as a percentage of our overall loan portfolio. As of September 30, 2025, commercial loans comprised 26% of our loan portfolio compared to 19% at the prior fiscal year end. Maintaining strong credit quality remains a top priority as we expand our commercial loan portfolio. To accomplish this, in addition to disciplined underwriting and ongoing credit administration, we monitor concentration levels by collateral types, geographic location and borrowing relationships. During the current fiscal year, the Bank implemented commercial loan pricing and profitability software that provides pricing and profitability insights based on the full customer banking relationship. We also implemented software that provides market insight regarding competitor pricing to assist loan officers when preparing a loan offering. This has increased our ability to profitably compete with other banks in our markets as well as financial institutions outside of our markets.

Treasury Management. The Bank services commercial customers through a competitive suite of treasury management products and an experienced team of treasury management officers. This team is focused on the deposit and cash management needs of commercial customers and growing this line of business through acquisition of new customers located both in our immediate market areas, and those who we lend to outside of our local market areas. Additionally, this fiscal year, the Bank deployed a team of business development officers tasked with growing the deposit base within the small business customer segment, focused on serving small businesses in our market areas with a dedicated line of products specifically designed for these customers. The Bank expects to introduce digital onboarding for small business customers using industry-leading risk management and screening tools, which will replace many manual verification tasks. Additionally, as we add more sophisticated commercial clients, we are evaluating new technology in order to capture a larger share of their business with additional products and services. Within calendar year 2026, we expect to implement new technology for lockbox services, integrated accounts receivables, purchase cards and corporate cards. While the majority of our commercial deposit growth in fiscal year 2025 resulted from commercial loan covenants and provisions, our treasury management officers and business development officers often land depository relationships independent of a lending relationship. This will be a focus area for our sales teams as the Bank continues to diversify funding sources and seeks to increase fee revenue tied to depository accounts.

Digital Banking. We are advancing towards a seamless digital banking experience for all customers, enhancing the Bank's ability to attract and retain deposits. This strategy includes a new deposit account onboarding platform that was implemented in November 2024 and digital banking enhancements for debit cardholders which will allow customers to begin using their card immediately online and in digital wallets without waiting for the delivery of a physical card. These enhancements are projected to be implemented in the second quarter of fiscal year 2026. Since changing core and digital providers in August 2023, the Bank has taken advantage of our open-source platforms through the evaluation of add-on technologies that will integrate into our digital banking experience for consumers, small businesses, and commercial customers.

Private Banking, Trust and Wealth Management. We are preparing to implement a comprehensive suite of private banking products and services which is a new line of business for the Bank. During the current quarter, the Bank added several seasoned and well-connected wealth management professionals to focus on these products and services. Their expertise in private banking and related areas will support our new private banking efforts and is expected to transform our trust and wealth management business. Private banking relationships are defined as customers with $5 million or more in personal relationships with the Bank by way of loans, deposits, or assets under management. Private banking customers are expected to begin onboarding in the first quarter of fiscal year 2026. We believe that our private banking line of business will be a gateway to driving off-balance sheet revenue and bridge the gap between high-net-worth depository customers, small business owners or key commercial customers, and corporate trustee opportunities for the Bank.

Stockholder Value. Delivering long-term sustainable stockholder value will continue to be our North Star while also maintaining a strong capital position. As part of our historically robust and disciplined approach to capital management, our approach continues to generate returns to stockholders through dividend payments and share repurchases. Total dividends declared and paid during fiscal year 2025 were $44.3 million. The Company repurchased 618,260 shares for $3.9 million during fiscal year 2025, all of which occurred in the last quarter of the fiscal year. Since completing our second-step conversion in December 2010, we have returned $2.01 billion to stockholders through $1.57 billion in cash dividends and $439.9 million of share repurchases. For fiscal year 2026, it is the intention of the Board of Directors to continue the regular quarterly cash dividend of $0.085 per share and to seek further opportunities for value-enhancing share repurchases.

Comparison of Operating Results for the Three Months Ended September 30, 2025 and June 30, 2025

For the quarter ended September 30, 2025, the Company recognized net income of $18.8 million, or $0.14 per share, compared to net income of $18.4 million, or $0.14 per share, for the quarter ended June 30, 2025. The increase in net income in the current quarter was due primarily to higher net interest income, partially offset by higher non-interest expense, income tax expense and provision for credit losses. The net interest margin increased 11 basis points, from 1.98% for the prior quarter to 2.09% for the current quarter due mainly to growth in the higher yielding commercial loan portfolio.

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.

The increase in interest income on loans receivable was due mainly to increases in the average balance and yield of the commercial loan portfolio compared to the prior quarter. The decrease in interest income on MBS was due primarily to a lower average balance compared to the prior quarter, resulting from principal repayments that were not reinvested into the portfolio. The increase in interest income on cash and cash equivalents was due to an increase in the average balance. The decrease in interest income on investment securities was due mainly to a lower average balance compared to the prior quarter, resulting primarily from investments that were called and not replaced. Cash flows from MBS and investment securities and deposit growth during the current quarter were mainly used to fund commercial loan growth. Cash inflows from the securities portfolios not used for immediate commercial loan funding needs were retained in cash and cash equivalents in anticipation of future commercial loan funding and operational needs.

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.

Interest expense on deposits was higher during the current quarter, due mainly to continued growth of the Bank's high yield savings account offering, along with an increase in the average balance of retail certificates of deposit and the cost of money market accounts due to an increase in the average balance of higher tier money market accounts. Management has continued to focus on retaining and growing deposits through its high yield savings account product. See additional discussion in "Financial Condition as of September 30, 2025" below. The decrease in borrowings expense was due to a decrease in the average balance, due mainly to FHLB borrowings that matured between periods and were not replaced. Cash flows from the increase in the deposit portfolio were used to repay these borrowings.

Provision for Credit Losses

The Company recorded a provision for credit losses of $519 thousand during the current quarter compared to a release of provision for credit losses of $451 thousand for the prior quarter. The provision for credit losses in the current quarter was comprised of a $1.3 million increase in the allowance for credit losses ("ACL") for loans, partially offset by a $778 thousand decrease in the reserve for off-balance sheet credit exposures. The $1.3 million increase in the ACL was mainly related to commercial loan growth and commercial commitment fundings during the current quarter. The $778 thousand decrease in the reserve for off-balance sheet credit exposures was due mainly to a decrease in commercial off-balance sheet credit exposures as several large dollar commitments from the prior quarter were funded.

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.

During the current quarter, insurance commissions increased due primarily to the receipt of commissions that exceeded accruals. Other non-interest income increased compared to the prior quarter, due mainly to higher income from bank-owned life insurance ("BOLI") due to changes in rates and an increase in the crediting rate as a result of updates to certain policies that were executed 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.

The increase in salaries and employee benefits compared to the prior quarter was due mainly to compensation and compensation-related accruals. The increase in regulatory and outside services was due mainly to higher consulting expenses and the usage of outside services in the current quarter. The increase in advertising and promotional expense was due primarily to the timing of seasonal sponsorships and campaigns compared to the prior quarter.

The Company's efficiency ratio was 56.84% for the current quarter compared to 58.26% for the prior quarter. The improvement in the efficiency ratio was due to higher net interest income during the current quarter, partially offset by higher 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 generally indicates that it is costing the financial institution less money to generate revenue. The Company's operating expense ratio (annualized) for the current quarter was 1.27% compared to 1.23% for the prior quarter. The operating expense ratio was higher in the current quarter due to higher non-interest expense. The operating expense ratio is a measure of a financial institution's total non-interest expense as a percentage of average assets, providing insight into how efficiently the Company is managing its expenses in relation to its assets and does not take into consideration changes in interest rates.

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 and the effective tax rate.

During the prior quarter, a change in Kansas tax law was enacted that is effective October 1, 2027 for the Company and the Bank. The State of Kansas is changing the way it attributes taxable income to the state, specifically, moving from a three-factor apportionment (property, payroll and receipts) method to a single receipts method. Most of the Bank's property and payroll are located in Kansas, though a large amount of its revenue-generating activities, predominantly loan interest income, are conducted outside of Kansas. The Bank is expecting a decrease in income apportioned to Kansas starting in fiscal year 2028 due to the tax law change. As a result, as of June 30, 2025, the Bank remeasured its state deferred tax assets and liabilities expected as of October 1, 2027. The Bank recorded an $857 thousand reduction in net state income tax expense related to this law change, which is the primary reason for the lower effective tax rate and income tax expense for the prior quarter.

Comparison of Operating Results for the Years Ended September 30, 2025 and 2024

The Company recognized net income of $68.0 million, or $0.52 per share, for the current year, compared to net income of $38.0 million, or $0.29 per share, for the prior year. The increase in net income was due mainly to higher net interest and non-interest income, partially offset by higher non-interest expense. Non-interest income was lower in the prior year due mainly to the net losses on the sale of securities associated with the securities strategy. See additional discussion regarding the securities strategy in the "Securities Strategy to Improve Earnings" section below. The securities associated with the securities strategy were sold in the prior year, and in that period the Company incurred $13.3 million ($10.0 million net of tax) of net losses related to the sale of those securities. Excluding the effects of the net loss associated with the securities strategy, earnings per share would have been $0.37 for the prior year. The increase in earnings per share excluding the effects of the net loss associated with the securities strategy was due primarily to higher net interest income in the current year.

The net interest margin increased 19 basis points, from 1.77% for the prior year to 1.96% for the current year. The increase was due mainly to higher yields on the loan portfolio due to the continued shift of loan balances from the one- to four-family loan portfolio to the higher yielding commercial loan portfolio, which outpaced the increase in the cost of deposits.

Securities Strategy to Improve Earnings

In October 2023, the Company initiated a securities strategy (the "securities strategy") by selling $1.30 billion of securities, representing 94% of its securities portfolio. Since the Company did not have the intent to hold the $1.30 billion of securities to maturity at September 30, 2023, the Company recognized an impairment loss on those securities of $192.6 million which was reflected in the Company's financial statements for the quarter and fiscal year ended September 30, 2023. The securities strategy allowed the Company to improve its earnings stream going forward, beginning in the quarter ended December 31, 2023, by redeploying most of the proceeds into then-current market rate securities. The Company utilized the remaining proceeds to deleverage the balance sheet. During the quarter ended December 31, 2023, the Company completed the sale of securities and recognized $13.3 million ($10.0 million net of tax), or $0.08 per share, of additional loss. See additional information regarding the impact of the securities strategy on our financial measurements in "Supplemental Financial Information - Average Balance Sheets" below. The $1.30 billion of securities sold had a weighted average yield of 1.22% and an average duration of 3.6 years. With the proceeds from the sale of the securities, the Company purchased $632.0 million of securities yielding 5.75%, paid down $500.0 million of borrowings with a weighted average cost of 4.70%, and held the remaining cash at the Federal Reserve Bank of Kansas City ("FRB") earning interest at the reserve balance rate until such time as it could be used to fund commercial lending activities or for other Bank operations.

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.

The increase in interest income on loans receivable was due primarily to the continued shift of loan balances from the one- to four-family loan portfolio to higher yielding commercial loans. See additional discussion regarding the composition of the loan portfolio in the "Financial Condition as of September 30, 2025" section below. The increase in interest income on MBS was due mainly to an increase in the average balance of the portfolio, due mainly to securities purchases between periods. Interest income on cash and cash equivalents decreased due largely to a decrease in the average balance, along with a decrease in the weighted average yield compared to the prior year due to lower FRB interest rates. The decrease in the average balance was mainly a result of the securities strategy in the prior year, as not all proceeds from the sale of securities were immediately redeployed. The decrease in interest income on investment securities was due to a decrease in average balance, due primarily to the securities purchased as part of the securities strategy being called or maturing during fiscal year 2024 and not being replaced in their entirety. The cash flows from the investment securities portfolio that were not reinvested were generally invested in the MBS 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.

The increase in interest expense on deposits was due primarily to growth in the high yield savings account, and to a lesser extent, an increase in the average balance of retail certificates of deposits. The increases were partially offset by a decrease in the weighted average rate paid on, and in the average balance of, money market accounts. See additional discussion regarding high yield savings in the "Financial Condition as of September 30, 2025" section below.

The decrease in interest expense on borrowings was due to a decrease in the average balance, which was partially offset by a higher weighted average interest rate. The decrease in the average balance of borrowings was due mainly to FHLB borrowings that matured between periods and were not renewed, along with a decrease in borrowings under the Federal Reserve's Bank Term Funding Program ("BTFP"), which were repaid during the prior year using a portion of the proceeds from the securities strategy. Cash flows from the deposit portfolio were generally used to pay off maturing FHLB borrowings. The increase in the weighted average interest rate was due primarily to higher market interest rates on FHLB borrowings that matured and were renewed between periods.

Provision for Credit Losses

The Company recorded a provision for credit losses of $745 thousand during the current year compared to a provision for credit losses of $1.3 million for the prior year. The provision for credit losses in the current year was comprised of a $1.2 million increase in the ACL for loans, partially offset by a $457 thousand decrease in the reserve for off-balance sheet credit exposures. The increase in ACL for loans was due to commercial loan growth during the current year, partially offset by an update to the ACL model's regression analyses implemented during the current year which largely impacted the commercial loan portfolio. See additional details in the "Supplemental Financial Information - Allowance for Credit Losses" discussion below. The decrease in the reserve for off-balance sheet credit exposures was due mainly to a decrease in commercial off-balance sheet credit exposures.

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.

The increase in deposit service fees was due mainly to growth in treasury management service fees. The increase in insurance commissions was due primarily to the receipt of commissions exceeding accrued amounts. The net loss from securities transactions in the prior year was related to the securities strategy. Other non-interest income was higher in the current year due mainly to an increase in BOLI income primarily from an increase in the crediting rate as a result of updates made to certain existing policies that were executed during the current year. Additionally, in the prior year there was a net loss on a financial derivative related to a commercial lending relationship and no such loss in the current year due to the related loan being paid off in the prior year.

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.

The increase in salaries and employee benefits was mainly attributable to an increase in the number of employees between periods, merit increases and salary adjustments to remain market competitive, and a higher accrual of incentive compensation during the current year than the prior year related to the Bank's short-term performance plan. The decrease in information technology and related expense was due mainly to a decrease in usage of third-party professional services along with a decrease in depreciation expense during the current year. The decrease in regulatory and outside services was due to a reduction in usage of certain outside services compared to the prior year. The increase in advertising and promotional expense was due to timing of campaigns, including campaigns from the prior fiscal year that were delayed until the current fiscal year. The decrease in the federal insurance premium was due primarily to a decrease in the Federal Deposit Insurance Corporation ("FDIC") assessment rate as a result of the way the assessment rate was adjusted in fiscal year 2024 for the occurrence of the Bank's net loss during the quarter ended September 30, 2023. The decrease in other non-interest expense was due mainly to higher customer fraud losses in the prior year and the maturity of an interest rate swap agreement during the current year which reduced the expense associated with the collateral held in relation to the interest rate swap.

The Company's efficiency ratio was 58.33% for the current year compared to 66.91% for the prior year. Excluding the net losses from the securities strategy, the efficiency ratio would have been 61.97% for the prior year. The improvement in the efficiency ratio, excluding the net losses from the securities strategy, was due primarily to higher net interest income compared to the prior year, partially offset by higher non-interest expense. The Company's operating expense ratio for the current year was 1.22% compared to 1.17% for the prior year. The operating expense ratio was higher in the current year due mainly to higher non-interest expense.

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 and effective tax rate.

Income tax expense was lower in the current year compared to the prior year, due mainly to income tax associated with the pre-1988 bad debt recapture in the prior fiscal year, partially offset by higher pretax income in the current year. Management anticipates the effective tax rate for fiscal year 2026 will be 19% to 20%.

Fiscal Year 2026 Outlook

Salary and employee benefit expense is anticipated to increase approximately 9% from fiscal year 2025 due to the expected hiring of additional professionals, merit increases, continued staff compensation alignment with market compensation levels, and the impact of the first full year of compensation for recently hired sales professionals. Information technology expense in fiscal year 2025 was less than anticipated due primarily to projects being postponed to fiscal year 2026. It is anticipated that information technology expense will increase approximately 15% from fiscal year 2025 due to project postponements to fiscal year 2026, along with several new initiatives that are anticipated to be implemented during fiscal year 2026. Overall, non-interest expense is projected to increase 7% in fiscal year 2026 from the fiscal year 2025 amount. Management anticipates the FRB will continue to reduce rates during our 2026 fiscal year, which should allow a reduction in our deposit interest expense while our loan portfolio yield is expected to remain stable or increase due to the ongoing remixing of our loan portfolio. As a result of the strategic initiatives previously discussed, it is likely the Company will grow past $10 billion in total assets in the coming fiscal years.

Financial Condition as of September 30, 2025

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

Securities decreased $89.0 million from June 30, 2025 to September 30, 2025, due primarily to calls and principal repayments during the current quarter that were not reinvested into the portfolio. The loan portfolio increased $88.4 million during the current quarter as cash flows from the securities portfolio were used to fund loan growth. The loan portfolio mix continued to shift from one- to four-family loans to commercial loans during the current quarter, with commercial loan growth of $204.2 million, partially offset by a $113.9 million decrease in one- to four-family loans. The growth in commercial loans was due mainly to a $148.3 million increase in the commercial real estate loan portfolio during the quarter. As of September 30, 2025, the Bank expects to fund approximately $76 million of undisbursed amounts on existing commercial real estate and commercial construction loans and approximately $40 million of commercial real estate and commercial construction loan commitments during the December 31, 2025 quarter. Additionally, the Bank expects to fund approximately $26 million of undisbursed amounts and commitments related to commercial and industrial loans during the December 31, 2025 quarter.

As a result of continued high interest rates and a lack of housing inventory, which has reduced housing market transactions, our one- to four-family origination and refinance activity has slowed, directly impacting the Bank's one- to four-family loan portfolio. The Bank suspended its one- to four-family correspondent lending channels during fiscal year 2024 for the foreseeable future. Management expects the Bank's one- to four-family originated loan portfolio will continue to decrease as the affordability of housing remains challenging, there is a limited supply of homes for sale and we compete with nationwide online mortgage originators. It is expected that cash flows generated from the repayments of our one- to four-family portfolio will continue to be used to fund commercial loan growth. Maintaining strong credit quality remains a top priority as we expand our commercial loan portfolio. The weighted average debt service coverage ratio ("DSCR") for commercial loan originations and purchases during the current fiscal year was 1.68x and the weighted average loan-to-value ("LTV") for commercial real estate and construction loans originated and purchased was 74%. The weighted average DSCR and LTV for our commercial real estate and construction loans was 1.65x and 61%, respectively, at September 30, 2025.

Deposits increased $160.3 million during the current quarter due mainly to retail certificates of deposit, commercial deposits, and the Bank's high yield savings account offering. Borrowings decreased $120.8 million due to the maturity of $100.0 million in borrowings during the current quarter that were not replaced, along with principal payments made on the Bank's amortizing FHLB advances.

Total assets increased $251.1 million from September 30, 2024, due to growth in the loan portfolio, which was largely funded with deposit growth, mainly through the Bank's high yield savings account offering. The commercial loan portfolio increased $607.0 million during the current year, due primarily to commercial real estate loan growth, partially offset by a decrease of $400.0 million in one- to four-family loans.

Deposits increased $461.5 million from September 30, 2024, due mainly to the Bank's high yield savings account offering, which increased $364.5 million during the current year. Management has continued to focus on retaining and growing deposits through the Bank's high yield savings account product, which, as of September 30, 2025, had an annual percentage yield of 4.00% for accounts that meet the $10 thousand balance minimum.

Borrowings decreased $228.8 million during the current year due to principal payments made on the Bank's amortizing advances, along with borrowings that matured but were not replaced. Management estimates that the Bank had $2.92 billion in liquidity available at September 30, 2025, based on the Bank's blanket collateral agreement with FHLB and unencumbered securities.

The following table summarizes loan originations and purchases, deposit activity, and borrowing activity, along with certain related weighted average rates, during the periods indicated. The borrowings presented in the table have original contractual terms of one year or longer.

Stockholders' Equity

Stockholders' equity totaled $1.05 billion at September 30, 2025, an increase of $15.4 million from September 30, 2024. Consistent with our goal to operate a sound and profitable financial organization that delivers long-term stockholder value, we actively seek to maintain a well-capitalized status for the Bank in accordance with regulatory standards. As of September 30, 2025, the Bank's capital ratios exceeded the well-capitalized requirements, and the Bank exceeded internal policy thresholds for sensitivity to changes in interest rates. As of September 30, 2025, the Bank's community bank leverage ratio was 9.6%.

During the year ended September 30, 2025, the Company paid regular quarterly cash dividends totaling $44.3 million, or $0.34 per share. On October 28, 2025, the Company announced a regular quarterly cash dividend of $0.085 per share, or approximately $11.0 million, payable on November 21, 2025 to stockholders of record as of the close of business on November 7, 2025. For fiscal year 2026, it is the intention of the Company's Board of Directors to pay out a regular quarterly cash dividend of $0.085 per share, totaling $0.34 per share for the year.

The Board of Directors continues to evaluate various alternatives for capital allocation to enhance stockholder value, including the repurchase of stock, the payment of additional cash dividends, or retaining earnings to support future growth. Since our second-step conversion in December 2010, we have returned $2.01 billion in capital to stockholders through dividends totaling $1.57 billion and stock repurchases totaling $439.9 million. This is supported by our holistic approach to managing the balance sheet through continuous modeling of the Bank's performance, risk management, our commitment to credit quality and periodic stress testing.

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, the Bank's current tax earnings and accumulated earnings and profits, and the amount of cash at the holding company level. Through the payment of the True Blue dividend in prior years, the Company was able to provide stockholder value by reducing its excess capital. The last True Blue dividend occurred in fiscal year 2022. Management and the Board of Directors believe that a tier 1 leverage ratio of about 9% is appropriate to manage the risk profile of the Company.

At September 30, 2025, Capitol Federal Financial, Inc., at the holding company level, had $17.6 million in cash on deposit at the Bank. During the current quarter, the Bank distributed $14.0 million from the Bank to the Company. This represented the only distribution from the Bank to the Company during fiscal year 2025. Distributions from the Bank to the Company during fiscal year 2025 were limited due to the tax associated with the pre-1988 bad debt recapture which is related to the Bank's tax accumulated earnings and profits. During the current quarter, the Bank reached a point that there was sufficient taxable income earned to replenish the Bank's tax accumulated earnings and profits to a positive level, allowing the Bank to make a distribution to the Company and not have that distribution subject to the pre-1988 bad debt recapture tax. Due to the Bank's expected continuing positive tax accumulated earnings and profit balance, it is anticipated that the Bank will be in a position to make earnings distributions to the Company during fiscal year 2026. Earnings distributions from the Bank to the Company will be limited to the extent necessary to prevent the Bank from re-entering a negative accumulated earnings and profit position and have to pay the pre-1988 bad debt recapture tax on earnings moved from the Bank to the Company.

During the current quarter, the Company repurchased 618,260 shares of common stock at an average price of $6.23 per share. The Company currently has $71.1 million remaining authorized under its existing stock repurchase plan. Shares may be repurchased from time to time based upon market conditions, available liquidity and other factors. Although our existing repurchase plan has no expiration date we are required to annually seek the FRB's non-objection for the buyback amount. The FRB's current non-objection for the Company to repurchase up to $75 million of stock expires in February 2026.

The following table presents a reconciliation of total to net shares outstanding as of September 30, 2025.

Capitol Federal Financial, Inc. is the holding company for the Bank. As of September 30, 2025, the Bank had 46 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.

Forward-Looking Statements

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: 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 and the effects of inflation or a potential recession, whether caused by Federal Reserve action or otherwise; the potential imposition of new or increased tariffs or changes to existing trade policies that could affect economic activity or specific industry sectors; the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor or depositor sentiment; demand for loans in the Company's market areas; the future earnings and capital levels of the Bank and the impact of potential pre-1988 bad debt recapture, 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 Securities and Exchange Commission. 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

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.