Capitol Federal Financial, Inc. — Fourth Quarter and Fiscal Year 2026 Earnings Summary

Financial Performance:

• Reported net income of $22.4 million for the quarter ended September 30, 2026, compared to $23.6 million in the prior quarter; fiscal year 2026 net income was $86.4 million, up from $68.0 million in fiscal year 2025.
• Net interest income increased $1.3 million to $54.8 million for the quarter; fiscal year 2026 net interest income was $211.9 million, up from $180.3 million in 2025.
• Net interest margin increased eight basis points to 2.39% for the quarter (from 2.31% in Q2 2026) and 32 basis points to 2.28% for the full fiscal year 2026 (from 1.96% in 2025).
• Earnings per share (basic and diluted) were $0.18 for the quarter; fiscal year 2026 EPS was $0.69, up from $0.52 in 2025.
• Efficiency ratio was 53.79% for the quarter (vs. 52.10% in Q2 2026) and 53.00% for the full year (vs. 58.33% in 2025).
• Operating expense ratio was 1.35% for the quarter (vs. 1.29% in Q2 2026) and 1.28% for the full year (vs. 1.22% in 2025).
• Total assets were $9.67 billion at September 30, 2026.
• Stockholders' equity was $1.01 billion at September 30, 2026.
• Tangible book value per share was $8.02 at September 30, 2026, an increase of $0.17 from September 30, 2025.
• Provision for credit losses was $0 for the quarter (vs. a release of $433 thousand in Q2 2026) and $3.0 million for the full year (vs. $745 thousand in 2025).
• Non-interest expense was $32.7 million for the quarter (up 4.4% from Q2 2026) and $124.8 million for the full year (up 6.4% from 2025).
• Cash dividends paid were $10.5 million ($0.085 per share) for the quarter and $48.0 million ($0.380 per share) for the full year.

Guidance and Future Outlook:

• Commercial loan balances are anticipated to increase approximately 17% in fiscal year 2027; total loans receivable, net, are expected to increase approximately 2.5%.
• Deposits are anticipated to grow 6.2% during fiscal year 2027.
• The effective tax rate for fiscal year 2027 is projected to range between 20.0% and 21.0%.
• Non-interest expense is projected to increase 7% in fiscal year 2027 compared to fiscal year 2026.
• Salary and employee benefit expense is anticipated to increase approximately 4.8% in fiscal year 2027.
• Occupancy expense is anticipated to increase 7.4% in fiscal year 2027.
• Information technology expense is anticipated to increase approximately 22.4% in fiscal year 2027.
• Management expects to exceed $10 billion in total assets in the coming fiscal years.
• Management anticipates the Federal Reserve System will continue to increase rates during fiscal year 2027, putting pressure on deposit costs but increasing loan yields.

Business Segments and Product Lines:

• Commercial loan portfolio grew by $111.8 million during the quarter, reaching $2.58 billion at September 30, 2026, up from $2.12 billion at September 30, 2025 (a 22.2% increase).
• Commercial loans comprise 31% of the total loan portfolio at September 30, 2026, compared to 26% at September 30, 2025.
• One- to four-family loan portfolio decreased by $79.4 million during the quarter and $381.8 million during the full year, with cash flows redirected to commercial lending.
• Deposits grew $267.7 million during fiscal year 2026, primarily in retail deposits; commercial non-interest-bearing deposits increased $32.3 million (16.9%) during the year.
• Borrowings decreased $335.3 million during fiscal year 2026, reflecting a remixing of the funding base.
• New digital features for True Blue Online® (self-directed/automated investing and debit card management) are expected to launch in Q1 and Q2 of fiscal year 2027.
• Wealth management and private banking initiatives include enhanced trust and financial advisory platforms expected to be fully implemented by Q2 of fiscal year 2027.
• Treasury management initiatives for fiscal year 2027 include adding cash concentration services, new mobile features, and growth in corporate card and lockbox products.

Market and Competitive Landscape:

• The Company competes with other financial institutions inside and outside its market areas, leveraging loan pricing and profitability software to profitably compete.
• The Company positions itself to compete with fintech providers through advanced digital platforms and quality personal service.
• Management focuses on growing commercial relationships and deposits, particularly in small business and commercial customer segments.

Risks and Challenges:

• Rising interest rates are anticipated to increase deposit costs, though this is expected to be offset by higher loan yields and the replacement of lower-yielding residential loans with higher-yielding commercial loans.
• Non-interest expense is projected to rise significantly in fiscal year 2027 due to software license amortization, hardware implementation, and new initiatives.
• The Company faces risks related to changes in interest rates, inflation, potential recession, and regulatory changes, as detailed in forward-looking statements.
• Credit quality monitoring remains a priority as the commercial loan portfolio expands, with a weighted average debt service coverage ratio (DSCR) of 2.43x for new originations in the quarter and 1.78x for the existing portfolio.

Management Commentary and Tone:

• CEO John Dicus stated that fiscal year 2026 results reflect continued success in executing strategic initiatives and investments in people, technology, and products.
• President Billy Skrobacz, Jr. noted the transformation into a fully integrated commercial bank providing services under one umbrella, with a focus on remixing the balance sheet and scaling commercial capabilities.
• Management expressed confidence in the ability to deliver long-term sustainable stockholder value through earnings, dividends, and share repurchases.
• The tone indicates a disciplined approach to capital allocation and a commitment to credit quality while expanding commercial lending.

Other Key Points:

• The Company repurchased 2,512,196 shares for $21.7 million between July 1, 2026, and October 23, 2026.
• Total share repurchases for fiscal year 2026 were 8,054,222 shares for $60.6 million; subsequent repurchases through October 23, 2026, totaled 827,920 shares for $7.0 million.
• Since converting to a fully public company in December 2010 through September 30, 2026, the Company has returned $2.11 billion to stockholders ($1.61 billion in dividends and $500.6 million in repurchases).
• A special cash dividend of $0.040 per share was paid in January 2026.
• The Board of Directors announced a regular quarterly cash dividend of $0.085 per share on October 27, 2026, payable November 20, 2026.
• The Company received Federal Reserve Bank of Kansas City non-objection for an additional $75.0 million of stock repurchase authority.
• Income from bank-owned life insurance (BOLI) increased significantly for the full year 2026 ($5.5 million vs. $3.1 million in 2025) due to new policies and crediting rate updates.
• The Company had $22.1 million in cash on deposit at the Bank at the holding company level as of September 30, 2026.
• The Bank's Common Equity Tier 1 (CBLR) ratio was 9.5% as of September 30, 2026.