Capitol Federal Financial, Inc.
) dropped 0.3% on Thursday after the company's fiscal
first-quarter 2014 earnings (ended Dec 31) of 12 cents per share
missed the Zacks Consensus Estimate by a penny. However, this was
in line with the year-ago figure.
Lower-than-expected results were adversely impacted by a decline
in the top line, partially offset by lower operating expenses.
Further, credit quality was a mixed bag while strong capital
deployment activities depicted robust liquidity levels.
Capitol Federal Financial's net income fell 1.4% year over year
to $17.8 million.
Total revenue for the reported quarter came in at $77.7 million,
down 6.8% from the prior-year quarter. However, it outpaced the
Zacks Consensus Estimate of $50.0 million.
Net interest income fell 3.0% year over year to $43.8 million.
The decrease was mainly due to fall in interest and dividend
income, partially offset by lower interest expense. Also, net
interest margin declined 3 basis points to 1.98%.
Non-interest income decreased 4.6% from the year-ago quarter to
$5.5 million. All the non-interest income components declined.
Non-interest expense decreased 7.9% from the year-ago quarter to
$22.8 million. The fall was mainly due to decline in salaries and
employee benefit expenses as well as other non-interest expenses.
Asset quality was a mixed bag during the quarter. Total
nonperforming assets fell 10.4% year over year to $31.4 million
as of Dec 31, 2013.
Moreover, allowance for credit losses as a percentage of total
loans came in at 0.15% as of Dec 31, 2013, down 4 bps. However,
provision for credit losses rose significantly from $0.2 million
in the prior-year quarter to $0.5 million.
Capital Deployment Activities
Capitol Federal Financial continues with its share repurchase
plan of $175.0 million, which was approved in Nov 2012. As of Dec
31, 2013, the company bought back 4.4 million shares for $52.4
million at an average price of $11.89 per share.
Subsequent to Dec 31, 2013 through Jan 17, 2014, the company has
repurchased 2.1 million shares at an average price of $11.99 per
share. This plan has $96.9 million remaining as of Jan 17, 2014.
Performance of Other Banks
Among other companies in the same industry,
Washington Federal Inc.
) fiscal first-quarter 2014 earnings beat the Zacks Consensus
People's United Financial Inc.
First Niagara Financial Group Inc.
) reported earnings that were in line with the Zacks Consensus
Capitol Federal Financial's conservative credit culture and solid
capital position are expected to act as tailwinds. However, a
still weak interest rate scenario is expected to deter any
significant bottom-line improvement in the near term.
Currently, Capitol Federal Financial carries a Zacks Rank #3
CAPITOL FEDL FN (CFFN): Free Stock Analysis
FIRST NIAGARA (FNFG): Free Stock Analysis
PEOPLES UTD FIN (PBCT): Free Stock Analysis
WASH FEDL INC (WAFD): Free Stock Analysis
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