The Company and the Bank may from time to time make written or oral "forward-looking statements," including statements contained in documents filed or furnished by the Company with the SEC. These forward-looking statements may be included in this Quarterly Report on Form 10-Q and the exhibits attached to it, in the Company's reports to stockholders, in the Company's press releases, and in other communications by the Company, which are made in good faith pursuant to the "safe harbor" provisions 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, which are subject to significant risks and uncertainties, and are subject to change based on various factors, some of which are beyond our control. The words "may," "could," "should," "would," "believe," "anticipate," "estimate," "expect," "intend," "plan" and similar expressions are intended to identify forward-looking statements. The following factors, among others, could cause our future results to differ materially from the beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions expressed in the forward-looking statements:
•our ability to maintain overhead costs at reasonable levels;
•our ability to generate a sufficient volume of loans in order to maintain the loan portfolio balance at a level desired by management;
•our ability to invest funds in wholesale or secondary markets at favorable yields;
•our ability to access cost-effective funding and maintain sufficient liquidity;
•our ability to expand our commercial banking, treasury management, and wealth management products and services across our market areas;
•fluctuations in deposit flows;
•transactions or activities that would result in the recapture of base-year, tax basis bad debt reserves;
•the future earnings and capital levels of the Bank, the impact of potential pre-1988 bad debt recapture and the continued non-objection by our primary federal banking regulators, to the extent required, to distribute capital from the Bank to the Company, which could affect the Company's income tax expense and the Company's ability to pay dividends in accordance with its dividend policy and/or repurchase shares;
•the strength of the U.S. economy in general and in the local economies in which we conduct operations, including areas where we have purchased large amounts of correspondent loans, originated commercial loans, and entered into commercial loan participations;
•changes in real estate values, unemployment levels, general economic trends, and the level and direction of loan delinquencies and charge-offs may require changes in the estimates of the adequacy of the ACL and adversely affect our business;
•increases in classified and/or non-performing assets, which may require the Bank to increase the ACL, charge-off loans and incur elevated collection and carrying costs, or not recognize income for a period of time, related to such non-performing assets;
•results of examinations of the Bank and the Company by their respective primary federal banking regulators, including the possibility that the regulators may, among other things, require us to increase our ACL;
•changes in accounting principles, policies, or guidelines;
•the effects of, and changes in, monetary and interest rate policies of the Board of Governors of the Federal Reserve System ("FRB");
•the effects of, and changes in, trade and fiscal policies and foreign and military policies of the United States government;
•inflation, interest rate, market, monetary, and currency fluctuations and the effects of a potential economic recession or slower economic growth;
•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;
•the timely development and acceptance of new products and services and the perceived overall value of these products and services by users, including the features, pricing, and quality compared to competitors' products and services;
•the willingness of users to substitute competitors' products and services for our products and services;
•our success in gaining regulatory approval of our products and services and branching locations, when required;
•the impact of interpretations of, and changes in, financial services laws and regulations, including laws concerning taxes, banking, securities, consumer protection, trust and insurance and the impact of other governmental initiatives affecting the financial services industry;
•the ability to attract and retain skilled employees;
•implementing business initiatives may be more difficult or expensive than anticipated;
•significant litigation;
•technological changes and the costs thereof;
•our ability to maintain the security of our financial, accounting, technology, and other operating systems and facilities, including the ability to withstand cyberattacks;
•changes in consumer spending, borrowing, and saving habits; and
•our success at managing the risks involved in our business.
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This list of factors is not all inclusive. For a discussion of risks and uncertainties related to our business that could adversely impact our operations and/or financial results, see "Part I, Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2025 and Part II, Item 1A. Risk Factors within this Quarterly Report on Form 10-Q. We do not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company or the Bank.
As used in this Form 10-Q, unless we specify or the context indicates otherwise, "the Company," "we," "us," and "our" refer to Capitol Federal Financial, Inc. a Maryland corporation, and its subsidiaries. "Capitol Federal Savings," and "the Bank," refer to Capitol Federal Savings Bank, a federal savings bank and the wholly-owned subsidiary of Capitol Federal Financial, Inc.
The following discussion and analysis is intended to assist in understanding the financial condition, results of operations, liquidity, and capital resources of the Company. The Bank comprises almost all of the consolidated assets and liabilities of the Company and the Company is dependent primarily upon the performance of the Bank for the results of its operations. Because of this relationship, references to management actions, strategies and results of actions apply to both the Bank and the Company except where the context indicates otherwise. This discussion and analysis should be read in conjunction with Management's Discussion and Analysis included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2025, filed with the SEC.
Available Information
Financial and other Company information, including press releases, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports can be obtained free of charge from our investor relations website, https://ir.capfed.com. SEC filings are available on our website immediately after they are electronically filed with or furnished to the SEC, and are also available on the SEC's website at www.sec.gov.
Critical Accounting Estimates
Our most critical accounting estimate is our methodology used to determine the ACL and reserve for off-balance sheet credit exposures. This estimate is important to the presentation of our financial condition and results of operations, involves a high degree of complexity, and requires management to make difficult and subjective judgments that may require assumptions about highly uncertain matters. The use of different judgments, assumptions, and estimates could affect reported results materially. This critical accounting estimate and its application is reviewed at least annually by the audit committee of our Board of Directors. For a full discussion of our critical accounting estimates, see "Part II, Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates" in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2025.
Executive Summary
The following summary should be read in conjunction with the Management's Discussion and Analysis of Financial Condition and Results of Operations section in its entirety.
The Company recognized net income of $64.0 million, or $0.51 per share, for the current year nine-month period compared to net income of $49.2 million, or $0.38 per share, for the prior year nine-month period. The increase in net income was due mainly to higher net interest income, partially offset by higher non-interest expense and income tax expense. The net interest margin increased 33 basis points, from 1.92% for the prior year nine-month period to 2.25% for the current year nine-month period. The increase was due mainly to growth in the higher yielding commercial loan portfolio, along with a decrease in the average cost of certificates of deposit and the average balance of borrowings, partially offset by an increase in the average balance of deposits, mainly high yield savings accounts.
As a full-service consumer and commercial bank we are strategically investing in technology, products and employees, allowing us to deliver new products and services and deliver first-in-class service to our customers. For additional discussion, see the "Strategic Banking Initiatives" section below.
The Company's efficiency ratio was 52.72% for the current year nine-month period compared to 58.89% for the prior year nine-month period. The improvement in the efficiency ratio was due primarily to higher net interest income compared to the prior year period, partially offset by higher non-interest expense. The Company's operating expense ratio (annualized) for the current year nine-month period was 1.25% compared to 1.20% for the prior year nine-month period. The operating expense ratio was higher in the current year period due mainly to higher non-interest expense, partially offset by higher average assets compared to the prior year period.
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The loan portfolio totaled $8.17 billion at June 30, 2026, a $54.8 million increase from September 30, 2025, which was attributable to a $357.0 million increase in commercial loans, mainly in the commercial real estate portfolio, partially offset by a $302.4 million decrease in one- to four-family loans, as the Bank continued to redirect cash flows received from the one- to four-family loan portfolio to the commercial loan portfolio. Maintaining strong credit quality remains a top priority as we expand our commercial loan portfolio. The weighted average DSCR for commercial loan originations and new participations during the nine months ended June 30, 2026 was 2.22x and the weighted average LTV for commercial real estate and construction loans originated and new participations was 70%. The weighted average DSCR and LTV for our commercial real estate and construction loan portfolio was 1.77x and 63%, respectively, at June 30, 2026.
The Bank's asset quality remains strong, reflected in the continued low level of loan delinquency and charge-off ratios. At June 30, 2026, loans 30 to 89 days delinquent were 0.17% of total loans receivable, net, and loans 90 or more days delinquent or in foreclosure were 0.13% of total loans receivable, net. See "Management's Discussion and Analysis of Financial Condition and Results of Operation - Asset Quality - Delinquent and nonaccrual loans and OREO" below for additional discussion. During the current year nine-month period, the Bank had net charge-offs ("NCOs") of $304 thousand.
Total deposits were $6.85 billion at June 30, 2026, an increase of $259.3 million compared to September 30, 2025. The increase was mainly in retail non-maturity deposits, partially offset by a decrease in certificates of deposit. Management continues to focus on growing commercial relationships and deposits. During the nine months ended June 30, 2026, commercial non-interest-bearing deposits increased $34.5 million, or 18.0%.
Total borrowings were $1.64 billion at June 30, 2026, a decrease of $314.5 million compared to September 30, 2025, due primarily to the maturity of $250.0 million of borrowings that were not replaced, along with principal repayments made on the Bank's amortizing FHLB advances. Cash flows from the deposit portfolio were used, in part, to pay off maturing FHLB borrowings and repay amortizing FHLB advances. Management estimated that the Bank had $4.22 billion in liquidity available at June 30, 2026, based on the Bank's blanket collateral agreement with the FHLB, available brokered and public unit deposit capacity, unencumbered securities, and cash and cash equivalent balances.
Stockholders' equity totaled $1.02 billion at June 30, 2026, a decrease of $26.4 million from September 30, 2025, due to share repurchases and dividend payments, continuing our efforts to enhance stockholder value. During the nine months ended June 30, 2026, the Company repurchased 6,369,946 shares of common stock at an average price of $7.21 per share, or $45.9 million in total, and paid cash dividends totaling $37.5 million, or $0.295 per share which consisted of a $0.040 per share special cash dividend in January 2026 and three regular quarterly cash dividends totaling $0.255 per share. As of June 30, 2026, the Bank's capital ratios exceeded the well-capitalized requirements. The Bank's community bank leverage ratio ("CBLR") as of June 30, 2026 was 9.6%.
At June 30, 2026, the gap between the Bank's interest-earning assets and interest-bearing liabilities projected to reprice within one year was $(1.13) billion or (11.7%) of total assets, compared to $(983.6) million, or (10.1%) of total assets, at September 30, 2025. See additional discussion in "Part I, Item 3. Quantitative and Qualitative Disclosures About Market Risk." As of June 30, 2026, the Bank was in compliance with its internal policy thresholds for sensitivity to changes in interest rates.
Strategic Banking Initiatives
As a full-service consumer and commercial bank, we remain focused on strategic initiatives that broaden our product and service offerings, expand our customer base, and enhance the overall customer experience. These initiatives require investments in technology, tactical talent acquisitions, effective marketing and disciplined execution as we launch new services and products. Our experienced and well-connected commercial bankers and trust and wealth advisors continue to reach new customer groups. Our treasury management product suite enables us to deliver first-in-class service to new and existing customers. Our marketing and business development efforts continue to strengthen and expand our customer relationships.
Strategic Actions. The long-term success of the Bank is predicated on strengthening relationships with consumer and commercial customers. Management and the Board are utilizing committed resources to implement our strategic objectives, as well as enhancing internal monitoring of performance metrics intended to ensure we are on the right path. Through our experienced relationship managers, we deliver customized solutions using advanced digital platforms and sophisticated cash management tools. We are leveraging our centralized organizational structure to respond quickly to our customers' needs and desires.
Commercial Lending. Commercial loans continue to grow as a percentage of our total loan portfolio, comprising 30% of the portfolio at June 30, 2026, compared to 29% and 26% at March 31, 2026 and September 30, 2025, respectively. We maintain strong credit quality through disciplined underwriting, ongoing credit administration and close monitoring of concentration levels by collateral type, geographic location and borrowing relationship.
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During the current fiscal year, our commercial lenders began utilizing loan pricing and profitability software that provides insights on lending opportunities based on the full customer banking relationship and market intelligence regarding competitor pricing. As a result, we are profitably competing with other financial institutions both inside and outside our market areas, leading, in part, to the growth in our commercial lending portfolio.
Treasury Management. The Bank's competitive suite of treasury management products is supported by an experienced team of treasury management officers. This team focuses on serving the deposit and cash management needs of commercial customers, growing this line of business through the acquisition of new customers located in our local market areas, and those we lend to outside those areas.
Our team of business development officers is tasked with growing the deposit base within the small business customer segment and providing product lines specifically designed for these customers. Treasury management officers and business development officers often create depository relationships with new customers independent of a lending relationship. This is a focus area for our sales teams as the Bank diversifies funding sources and seeks to increase fee revenue tied to depository accounts.
During the current quarter, we (1) introduced digital deposit account onboarding for small business customers using industry-leading risk management and screening tools to eliminate manual screening processes and (2) implemented new technology for lockbox services, which our Treasury Management Officers are currently utilizing to work with prospective customers. We continue to evaluate additional technology in an effort to capture a larger share of this business with even more products and services.
Digital Banking. Our digital banking strategy includes a new deposit account onboarding platform 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. The Bank is deploying fintech plug-in technology that integrates into digital banking to improve customer experience, extend product offerings and deepen our share of wallet for consumers, small businesses, and commercial customers.
During the current quarter, we (1) started development to bring both self-directed and automated investing capabilities into True Blue Online®, providing customers with an investment experience directly connected to their checking or savings account and (2) initiated development for new debit card management software for True Blue Online®, continuing to improve self-service debit card management capabilities. In late July 2026, we launched an instant digital issuance application.
Wealth Management and Private Banking. Building on our strategic investments in Wealth Management and Private Banking, we made meaningful progress during the quarter that advances our long-term growth objectives. We successfully continued the implementation of enhancements to our trust and financial advisory platform, including improvements to processes, technology, and service delivery that are expected to strengthen both the client and advisor experience. This transformation is expected to continue through the remainder of the current fiscal year.
In Private Banking, we continued to deepen relationships with high-net-worth households, business owners, and commercial clients through the onboarding of new relationships that included a combination of wealth management assets, deposits, and lending opportunities. Our focus on delivering coordinated banking, lending, and wealth management solutions has enhanced client engagement and expanded opportunities across multiple lines of business.
We also continued to strengthen referral activity between Wealth Management, Retail Banking, and Commercial Banking teams. These collaborative efforts have increased the identification of opportunities to serve clients more comprehensively and support the Bank's strategy of growing fee-based revenue while deepening core customer relationships. These factors contributed to strong new client acquisition and asset growth, resulting in record assets under management at quarter-end.
The progress achieved this quarter demonstrates continued momentum in building a scalable wealth management and private banking platform that we believe will generate sustainable revenue growth, improve operating efficiency, and enhance stockholder value over time.
Stockholder Value. The intended result of our strategic initiatives is to deliver long-term sustainable stockholder value. As part of our historically robust and disciplined approach to capital management, we continue to generate returns to stockholders through dividend payments and share repurchases. At June 30, 2026, Capitol Federal Financial, Inc., at the holding company level, had $10.7 million in cash on deposit at the Bank. The Bank anticipates moving at least $34.0 million to the holding company during the quarter-ending September 30, 2026, to fund the payment of dividends and share repurchases. Total dividends paid during the third quarter of fiscal year 2026 were $10.6 million, or $0.085 per share. During the nine months ended June 30, 2026, the Company paid dividends totaling $37.5 million, or $0.295 per share. We repurchased 6,369,946 shares for $45.9 million during the first nine months of the current fiscal year. Subsequent to June 30, 2026, the Company repurchased an additional 187,476 shares for $1.6 million through August 3, 2026. Since converting to a fully public company in December 2010 through June 30, 2026, we have returned $2.09 billion to stockholders through $1.60 billion in cash dividends and $485.8 million in share repurchases. For the remainder of fiscal year
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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.
Financial Condition
The following table summarizes the Company's financial condition at the dates indicated.
Annualized Annualized
June 30, March 31, Percent September 30, Percent
2026 2026 Change 2025 Change
(Dollars and shares in thousands)
Total assets $ 9,662,184 $ 9,829,080 (6.8 %) $ 9,778,701 (1.6 %)
AFS securities 783,559 809,566 (12.8) 867,216 (12.9)
Loans receivable, net 8,166,762 8,114,205 2.6 8,111,961 0.9
Deposits 6,850,705 6,924,491 (4.3) 6,591,448 5.2
Borrowings 1,636,246 1,707,055 (16.6) 1,950,770 (21.5)
Stockholders' equity 1,021,320 1,025,726 (1.7) 1,047,677 (3.4)
Equity to total assets at end of period 10.6 % 10.4 % 10.7 %
Tangible book value per share $ 8.04 $ 7.96 4.0 $ 7.85 3.2
Average number of basic and diluted shares outstanding $ 124,009 $ 126,631 (8.3) 129,874 (6.0)
The loan portfolio increased $52.6 million during the current quarter due to commercial loan growth of $155.2 million, or a 27% annualized increase, mainly in the commercial real estate portfolio, partially offset by a decrease of $105.6 million in the one- to four-family loan portfolio. The near-term outlook for net commercial loan balances is growth of approximately 3% for the quarter ending September 30, 2026, with overall net commercial loan growth of approximately 20% for the fiscal year. Total loans receivable, net is anticipated to increase by approximately 1% for the current fiscal year. It is expected that a significant portion of repayments from our one- to four-family loan portfolio will continue to be directed toward supporting commercial loan growth. Maintaining strong credit quality remains a top priority as we expand our commercial loan portfolio. The weighted average DSCR for commercial loan originations during the current quarter was 1.96x and the weighted average LTV for commercial real estate and construction loans originated was 71%.
Deposits decreased $73.8 million during the current quarter due mainly to a decrease in certificates of deposit and, to a lesser extent, decreases in money market and checking accounts, partially offset by an increase in high yield savings accounts. Borrowings decreased $70.8 million from March 31, 2026, due to the maturity of $50.0 million in borrowings that were not replaced, along with principal repayments made on the Bank's amortizing FHLB advances. Stockholders' equity decreased $4.4 million during the current quarter, due primarily to share repurchases and dividend payments.
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Loans Receivable. The following table presents information related to the composition of our loan portfolio in terms of dollar amounts, weighted average rates, and percentage of total as of the dates indicated. One- to four-family purchased loans in the following tables include correspondent purchased loans and bulk purchased loans.
June 30, 2026 March 31, 2026 September 30, 2025
Amount Rate Amount Rate Amount Rate
(Dollars in thousands)
One- to four-family:
Originated $ 3,642,458 3.90 % $ 3,676,252 3.84 % $ 3,774,134 3.78 %
Purchased 1,949,224 3.51 2,015,434 3.50 2,114,447 3.49
Construction 10,574 6.06 16,123 6.15 16,054 6.17
Total 5,602,256 3.77 5,707,809 3.73 5,904,635 3.68
Commercial:
Commercial real estate 2,005,641 5.82 1,896,313 5.80 1,709,990 5.82
Commercial and industrial 273,854 6.69 232,182 6.76 210,119 6.92
Commercial construction 193,480 6.59 189,251 6.73 195,886 6.42
Total 2,472,975 5.98 2,317,746 5.97 2,115,995 5.98
Consumer loans:
Home equity 110,372 7.57 106,414 7.55 104,809 8.15
Other 7,136 5.56 7,327 5.71 8,436 5.55
Total 117,508 7.45 113,741 7.43 113,245 7.96
Total loans receivable 8,192,739 4.49 8,139,296 4.42 8,133,875 4.34
Less:
ACL 26,103 26,599 24,039
Deferred loan fees/discounts 30,508 30,087 31,268
Premiums/deferred costs (30,634) (31,595) (33,393)
Total loans receivable, net $ 8,166,762 $ 8,114,205 $ 8,111,961
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, deferred loan fees/discounts, and premiums/deferred costs. Loans that were paid off as a result of refinances are included in repayments. Commercial loan renewals are not included in the activity presented 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 For the Nine Months Ended
June 30, 2026 June 30, 2026 June 30, 2025
Amount Rate Amount Rate Amount Rate
(Dollars in thousands)
Beginning balance $ 8,139,296 4.42 % $ 8,133,875 4.34 % $ 7,923,251 4.02 %
Originated and refinanced 333,566 6.30 909,721 6.35 810,222 6.89
Participations 20,501 6.41 104,021 6.38 92,479 7.13
Change in undisbursed loan funds (5,460) (31,501) (26,316)
Repayments (295,016) (922,873) (754,599)
Principal (charge-offs)/recoveries, net (148) (304) (132)
Other — (200) (1,905)
Ending balance $ 8,192,739 4.49 $ 8,192,739 4.49 $ 8,043,000 4.25
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The following table presents loan origination, refinance, and participation activity for the periods indicated, excluding endorsement activity, along with associated weighted average rates and percent of total. Commercial loan renewals are not included in the activity in the following table except to the extent new funds are disbursed at the time of renewal. Loan originations, participations, and refinances are reported together.
For the Nine Months Ended
June 30, 2026 June 30, 2025
Amount Rate % of Total Amount Rate % of Total
(Dollars in thousands)
Commercial:
Commercial real estate
Fixed-rate $ 221,574 6.29 % 21.9 % $ 51,682 6.94 % 5.7 %
Adjustable-rate 167,821 6.17 16.5 289,492 6.92 32.1
389,395 6.24 38.4 341,174 6.92 37.8
Commercial and industrial
Fixed-rate 52,714 6.69 5.2 86,908 7.25 9.6
Adjustable-rate 60,394 6.56 6.0 59,053 7.47 6.6
113,108 6.62 11.2 145,961 7.34 16.2
Commercial construction
Fixed-rate 136,116 6.52 13.4 11,135 6.88 1.2
Adjustable-rate 82,425 6.69 8.1 140,483 7.28 15.6
218,541 6.58 21.5 151,618 7.25 16.8
Total commercial
Fixed-rate 410,404 6.42 40.5 149,725 7.12 16.6
Adjustable-rate 310,640 6.38 30.6 489,028 7.09 54.2
721,044 6.40 71.1 638,753 7.10 70.8
One- to four-family and consumer:
One- to four-family
Fixed-rate 159,491 6.01 15.7 144,638 6.14 16.0
Adjustable-rate 83,306 5.79 8.2 77,051 6.17 8.5
242,797 5.94 23.9 221,689 6.15 24.5
Consumer
Fixed-rate 5,934 8.07 0.6 6,068 8.13 0.7
Adjustable-rate 43,967 7.68 4.4 36,191 8.29 4.0
49,901 7.73 5.0 42,259 8.27 4.7
One- to four-family and consumer
Fixed-rate 165,425 6.09 16.3 150,706 6.22 16.7
Adjustable-rate 127,273 6.45 12.6 113,242 6.85 12.5
292,698 6.24 28.9 263,948 6.49 29.2
Total commercial, one- to four-family, and consumer
Fixed-rate 575,829 6.32 56.8 300,431 6.67 33.3
Adjustable-rate 437,913 6.40 43.2 602,270 7.04 66.7
$ 1,013,742 6.36 100.0 % $ 902,701 6.92 100.0 %
Commercial participations included above:
Fixed-rate $ 104,021 6.38 % $ 34,500 6.93 %
Adjustable-rate — — 57,979 7.26
$ 104,021 6.38 $ 92,479 7.13
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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 rate, weighted average credit score, weighted average LTV, and average balance per loan as of June 30, 2026. Credit scores were updated in September 2025 from a nationally recognized consumer rating agency. The LTVs 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 Average
Amount Total Rate Score LTV Balance
(Dollars in thousands)
Originated $ 3,642,458 65.0 % 3.90 % 770 57 % $ 171
Purchased 1,949,224 34.8 3.51 767 59 372
Construction 10,574 0.2 6.06 769 31 246
5,602,256 100.0 % 3.77 769 58 211
The following table presents origination and refinance activity for our one- to four-family loan portfolio, excluding endorsement activity, along with the weighted average rate, weighted average LTV and weighted average credit score for the time periods indicated. As of June 30, 2026, the Bank had one- to four-family loan and refinance commitments totaling $39.9 million at a weighted average rate of 6.19%.
For the Three Months Ended For the Nine Months Ended
June 30, 2026 June 30, 2026
Credit Credit
Amount Rate LTV Score Amount Rate LTV Score
(Dollars in thousands)
$ 101,202 6.04 % 75 % 773 $ 242,797 5.94 % 74 % 768
Commercial Loans - The tables below summarize commercial loan origination and participation activity for the time periods presented, along with weighted average LTV and weighted average DSCR. For commercial real estate and commercial construction loans, the LTV is calculated using the gross loan amount (comprised of unpaid principal and undisbursed amounts) and the collateral value at the time of origination. For existing real estate, the "as is" value is used. If the property is to be constructed, the "as completed" value of the collateral is utilized. The DSCR is calculated based on historical borrower performance, or projected borrower performance for newly formed entities with no performance history.
For the Three Months Ended June 30, 2026
Originated Participation Total Weighted Weighted
Amount Rate Amount Rate Amount Rate LTV DSCR
(Dollars in thousands)
Commercial real estate $ 117,960 6.09 % $ — — % $ 117,960 6.09 % 71 % 1.53x
Commercial and industrial 60,673 6.60 — — 60,673 6.60 N/A 3.40
Commercial construction 33,481 6.39 20,501 6.41 53,982 6.40 70 1.30
$ 212,114 6.29 $ 20,501 6.41 $ 232,615 6.30 71 1.96
For the Nine Months Ended June 30, 2026
Originated Participation Total Weighted Weighted
Amount Rate Amount Rate Amount Rate LTV DSCR
(Dollars in thousands)
Commercial real estate $ 356,885 6.24 % $ 32,510 6.25 % $ 389,395 6.24 % 69 % 2.29x
Commercial and industrial 113,108 6.62 — — 113,108 6.62 N/A 3.81
Commercial construction 147,030 6.65 71,511 6.44 218,541 6.58 72 1.29
$ 617,023 6.41 $ 104,021 6.38 $ 721,044 6.40 70 2.22
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The following table presents commercial loan disbursements, excluding lines of credit, during the periods indicated.
For the Three Months Ended For the Nine Months Ended
June 30, 2026 March 31, 2026 June 30, 2026 June 30, 2025
Amount Rate Amount Rate Amount Rate Amount Rate
(Dollars in thousands)
Commercial real estate $ 119,251 6.09 % $ 65,228 6.33 % $ 391,723 6.25 % $ 353,217 6.76 %
Commercial and industrial 62,919 6.64 4,147 6.45 136,211 6.80 86,105 7.38
Commercial construction 46,628 6.59 38,075 6.76 154,706 6.66 162,673 6.58
$ 228,798 6.34 $ 107,450 6.49 $ 682,640 6.45 $ 601,995 6.80
The following table presents the Bank's commercial real estate and commercial construction loans by type of primary collateral as of the dates indicated. Management anticipates fully funding the majority of the undisbursed amounts, as most are not cancellable by the Bank.
March 31, September 30,
June 30, 2026 2026 2025
Unpaid Undisbursed Gross Loan Gross Loan Gross Loan
Count Principal Amount Amount Amount Amount
(Dollars in thousands)
Hotel 33 $ 640,481 $ 51,430 $ 691,911 $ 695,290 $ 603,124
Senior housing 54 541,134 30,272 571,406 560,906 483,959
Multi-family 30 314,828 110,553 425,381 427,359 365,316
Retail building 126 281,607 74,380 355,987 360,977 334,665
Office building 78 110,295 27,783 138,078 104,141 136,058
One- to four-family property 276 118,085 12,477 130,562 81,085 70,420
Warehouse/manufacturing 52 66,445 602 67,047 65,804 58,853
Single use building 26 52,928 2,372 55,300 32,715 33,718
Land 25 47,537 651 48,188 39,747 35,605
Other 28 25,781 540 26,321 23,727 28,192
728 $ 2,199,121 $ 311,060 $ 2,510,181 $ 2,391,751 $ 2,149,910
Weighted average rate 5.89 % 6.54 % 5.97 % 5.98 % 5.99 %
The following table summarizes the unpaid principal balance of non-owner occupied and owner occupied loans within the Bank's commercial real estate loan portfolio, aggregated by primary collateral, along with weighted LTV and weighted DSCR, as of June 30, 2026.
Non-owner Occupied Owner Occupied
Unpaid Weighted Weighted Unpaid Weighted Weighted
Count Principal LTV DSCR Count Principal LTV DSCR
(Dollars in thousands)
Hotel 27 $ 604,272 54 % 1.44x – $ — — % —x
Senior housing 51 507,563 72 1.77 – — — —
Retail building 45 176,667 62 1.95 69 68,778 53 1.97
Office building 22 66,197 67 1.36 53 36,095 61 8.38
Warehouse/manufacturing 16 23,941 59 3.71 33 33,313 66 1.57
Single use building 7 23,809 65 1.33 18 29,067 64 1.64
Other 7 5,766 64 1.39 9 7,125 48 1.90
175 $ 1,408,215 62 1.65 182 $ 174,378 59 3.16
41
The following table outlines management's funding expectations for the Bank's commercial real estate and commercial construction undisbursed amounts and commitments outstanding as of June 30, 2026. Of the amounts included in the September 30, 2026 projected disbursement amount, $76.2 million was funded through August 3, 2026. Due to the nature of a revolving line of credit, management is unable to project funding expectations for those balances, so those amounts are presented separately.
Projected Disbursements for the Quarters Ending
September 30, 2026 December 31, 2026 March 31, 2027 Thereafter Revolving Lines of Credit Total
(Dollars in thousands)
Undisbursed amounts $ 63,216 $ 72,538 $ 49,871 $ 117,687 $ 7,748 $ 311,060
Commitments 57,273 3,791 22,927 211,831 5,400 301,222
$ 120,489 $ 76,329 $ 72,798 $ 329,518 $ 13,148 $ 612,282
Weighted average rate 6.17 % 6.53 % 6.52 % 5.92 % 6.64 % 6.13 %
The following table summarizes the Bank's commercial real estate and commercial construction loans by the state in which the collateral is located, as of the dates indicated.
March 31, September 30,
June 30, 2026 2026 2025
Unpaid Undisbursed Gross Loan Gross Loan Gross Loan
Count Principal Amount Amount Amount Amount
(Dollars in thousands)
Kansas 517 $ 880,790 $ 125,425 $ 1,006,215 $ 962,807 $ 799,827
Missouri 121 329,217 33,405 362,622 351,250 354,772
Texas 17 199,819 50,998 250,817 244,411 312,805
Arizona 6 138,151 14,300 152,451 153,311 122,429
California 8 122,728 23,411 146,139 123,643 96,848
New York 3 111,724 — 111,724 112,201 109,828
Other 56 416,692 63,521 480,213 444,128 353,401
728 $ 2,199,121 $ 311,060 $ 2,510,181 $ 2,391,751 $ 2,149,910
42
The following table presents the Bank's commercial real estate and commercial construction loans by unpaid principal balance, aggregated by type of primary collateral and state, along with weighted average LTV and weighted average DSCR as of June 30, 2026. The LTV is calculated using the gross loan amount (composed of unpaid principal and undisbursed amounts) as of June 30, 2026 and the most current collateral value available, which is most often the value at origination/purchase. The DSCR is calculated at the time of origination and is updated at the time of subsequent loan renewals, financial reviews (for applicable loans and lending relationships), and any other time management is aware of changes that may impact the DSCR. The DSCR presented in the table below is based on the DSCR at the time of origination unless an updated DSCR has been calculated or the loan has reached the end of its stabilization period. For construction loans, the DSCR is based on projected stabilized cash flows and the contractual loan payments when the project stabilizes. In general, commercial borrowers with total loans of $2.5 million or more are reviewed at least annually to monitor financial performance.
Kansas Missouri Texas Arizona California New York Other Total
(Dollars in thousands)
Hotel $ 40,965 $ 23,002 $ 139,313 $ 114,159 $ 97,736 $ 108,626 $ 116,680 $ 640,481
Senior housing 329,489 140,365 — — — — 71,280 541,134
Multi-family 203,027 63,537 19,944 — — — 28,320 314,828
Retail building 100,176 47,500 38,666 22,065 — — 73,200 281,607
One- to four-family property 67,867 4,273 — 1,553 1,620 — 42,772 118,085
Office building 67,644 10,236 1,896 — — 3,098 27,421 110,295
Warehouse/manufacturing 41,992 18,324 — — — — 6,129 66,445
Single use building 11,544 17,638 — 374 23,372 — — 52,928
Land 5,252 77 — — — — 42,208 47,537
Other 12,834 4,265 — — — — 8,682 25,781
$ 880,790 $ 329,217 $ 199,819 $ 138,151 $ 122,728 $ 111,724 $ 416,692 $ 2,199,121
Weighted LTV 66 % 65 % 59 % 55 % 55 % 47 % 67 % 63 %
Weighted DSCR 2.16x 1.47x 1.27x 1.48x 1.46x 1.83x 1.63x 1.77x
The following table presents the unpaid principal balance of the Bank's commercial real estate and commercial construction loans aggregated by type of primary collateral, along with weighted average rate, LTV, and DSCR as of June 30, 2026.
Unpaid Weighted Weighted Weighted
Count Principal Rate LTV DSCR
(Dollars in thousands)
Hotel 33 $ 640,481 6.14 % 55 % 1.43x
Senior housing 54 541,134 5.33 72 1.75
Multi-family 30 314,828 5.72 63 1.29
Retail building 126 281,607 6.06 62 1.87
One- to four-family property 276 118,085 5.93 63 2.00
Office building 78 110,295 6.42 66 3.65
Warehouse/manufacturing 52 66,445 6.41 65 2.33
Single use building 26 52,928 6.20 64 1.51
Land 25 47,537 6.25 73 3.96
Other 28 25,781 6.37 56 1.80
728 $ 2,199,121 5.89 63 1.77
43
The following table presents the Bank's commercial construction loans, including unpaid principal and undisbursed amounts, along with outstanding commercial construction loan commitments as of June 30, 2026, aggregated by type of primary collateral, as well as the weighted average rate, LTV, and DSCR. The DSCR presented in the table below is based on projected stabilized cash flows and the contractual loan payments when the project stabilizes. The weighted average DSCR for the office building line is below 1.15x due primarily to one $20.5 million construction loan for a leased medical office building that was originated during the current quarter with an anticipated LTV of 71% based upon the as completed appraised value. The Bank has a long-term relationship with the borrower and the borrower has extensive development experience.
Unpaid Undisbursed Gross Loan Commitment Total Weighted
Count Principal Amount Amount Amount Amount Rate LTV DSCR
(Dollars in thousands)
Multi-family 12 $ 79,099 $ 110,523 $ 189,622 $ 188,204 $ 377,826 6.54 % 57% 1.19x
Retail building 9 35,244 54,091 89,335 — 89,335 6.51 73 1.32
Hotel 7 36,208 43,949 80,157 34,305 114,462 6.80 70 1.47
Senior housing 3 33,571 26,363 59,934 — 59,934 6.36 77 1.31
Office building 3 8,003 19,048 27,051 — 27,051 6.58 75 1.13
One- to four-family property 5 1,355 8,121 9,476 — 9,476 6.54 78 1.28
Other 2 — — — 13,757 13,757 6.55 64 1.23
41 $ 193,480 $ 262,095 $ 455,575 $ 236,266 $ 691,841 6.56 64 1.26
Weighted average rate 6.59 % 6.56 % 6.57 % 6.55 % 6.56 %
Weighted LTV 69 % 69 % 69 % 55 % 64 %
Weighted DSCR 1.28x 1.27x 1.27x 1.24x 1.26x
The following table presents the Bank's commercial real estate and construction loans, including unpaid principal and undisbursed amounts, along with outstanding loan commitments as of June 30, 2026, categorized by aggregate gross loan and commitment amount, as well as average loan amount and weighted average rate, LTV, and DSCR. For amounts over $60.0 million, there were $151.4 million for loans related to hotels in Arizona and California, $142.9 million for loans related to multi-family properties in Kansas, and $69.6 million related to a loan secured by a senior housing facility in Kansas. The largest loan included in the table below was $86.0 million, which was fully disbursed as of June 30, 2026, and is collateralized by a hotel in Arizona. At the prior quarter end, there were five loans in the >$20 to $30 million category with DSCRs below 1.15x. During the current quarter the DSCR on one of those loans increased to above 1.15x and new commitments above 1.15x resulted in the overall DSCR for this category being over 1.15x at June 30, 2026. Three of the four loans in this category with DSCRs below 1.15x are each with one of our largest borrowing groups. We have over 20 years of experience with these borrowing groups and the guarantors have expertise in the operation of the properties secured by the loans. All of these loans were current as of June 30, 2026 and are being actively monitored by management. The weighted average LTV for these three loans was 67% as of June 30, 2026. The fourth loan, with an unpaid principal balance of $24.0 million, was on nonaccrual and classified as substandard as of June 30, 2026. A specific valuation allowance was established related to this loan as of June 30, 2026.
Gross Loan
and Commitment Average Weighted Weighted Weighted
Count Amounts Amount Rate LTV DSCR
(Dollars in thousands)
Greater than $60 million 5 $ 363,929 $ 72,786 5.90 % 60 % 1.51x
>$50 to $60 million 4 215,163 53,791 5.54 63 1.46
>$40 to $50 million 3 146,953 48,984 6.28 49 1.53
>$30 to $40 million 13 448,567 34,505 5.85 64 1.28
>$20 to $30 million 20 473,678 23,684 6.34 66 1.17
>$10 to $20 million 32 439,606 13,738 6.50 68 1.65
>$5 to $10 million 43 310,289 7,216 5.81 69 2.45
$1 to $5 million 131 305,027 2,328 5.45 59 2.36
Less than $1 million 491 108,191 220 6.42 52 2.99
742 $ 2,811,403 3,789 6.01 63 1.69
44
The following table summarizes the Bank's commercial and industrial loans by loan purpose as of the dates indicated, along with DSCR weighted by gross loan amount at June 30, 2026. As of June 30, 2026, 69% of the Bank's commercial and industrial gross loan balance were to borrowers located in Kansas. The Bank had five commercial and industrial loan commitments totaling $13.8 million, with a weighted average rate of 6.59%, at June 30, 2026. Management anticipates growth in the commercial and industrial loan portfolio as the Bank advances its strategy to grow all aspects of commercial banking. However, given the inherent characteristics of these loans, balances will likely fluctuate over time.
March 31, September 30,
June 30, 2026 2026 2025
Unpaid Undisbursed Gross Loan Weighted Gross Loan Gross Loan
Count Principal Amount Amount DSCR Amount Amount
(Dollars in thousands)
Working capital 199 $ 113,398 $ 43,095 $ 156,493 5.09x $ 157,380 $ 153,967
Purchase/refinance business assets 55 101,735 3,065 104,800 1.98 54,202 49,805
Finance/lease vehicle 136 27,924 — 27,924 2.29 32,845 36,406
Purchase equipment 58 17,076 5,409 22,485 1.91 29,571 54,201
Other 17 13,721 524 14,245 1.26 15,281 7,508
465 $ 273,854 $ 52,093 $ 325,947 3.46 $ 289,279 $ 301,887
Weighted average rate 6.69 % 6.61 % 6.68 % 6.74 % 6.97 %
The following table presents the Bank's commercial and industrial loan portfolio, including unpaid principal and undisbursed amounts, along with outstanding loan commitments as of June 30, 2026, categorized by aggregate gross loan and commitment amounts, as well as average loan amount, and weighted average DSCR. The largest loan included in the table below was a working capital loan with a gross balance of $36.0 million, of which $7.3 million remained undisbursed as of June 30, 2026. This loan is part of the Bank's largest commercial and industrial lending relationship, which had a total gross loan balance of $84.4 million as of June 30, 2026, representing approximately 26% of the gross commercial and industrial loan portfolio at that date. The borrower is located in Kansas and, as of June 30, 2026, also maintained an additional working capital loan with a gross loan balance greater than $15 million, for a total of two loans with a gross loan amount greater than $15 million. These two loans were current and performing as of June 30, 2026.
Gross Loan
and Commitment Average Weighted
Count Amounts Amount DSCR
(Dollars in thousands)
Greater than $15 million 3 $ 89,664 $ 29,888 1.64x
>$10 to $15 million 3 34,542 11,514 2.40
>$5 to $10 million 12 91,719 7,643 1.70
>$1 to $5 million 32 60,296 1,884 8.99
>$500 thousand to $1 million 37 27,466 742 5.66
Less than $500 thousand 383 36,080 94 3.99
470 $ 339,767 723 3.61
45
Asset Quality
Delinquent and nonaccrual loans and OREO. The following table presents the Bank's 30 to 89 day delinquent loans at the dates indicated. The amounts in the table represent the unpaid principal balance of the loans less related charge-offs, if any. Of the loans 30 to 89 days delinquent at June 30, 2026, approximately 81% were 59 days or less delinquent.
June 30, March 31, December 31,
2026 2026 2025
Count Amount Count Amount Count Amount
(Dollars in thousands)
One- to four-family:
Originated 63 $ 7,063 65 $ 6,624 83 $ 9,351
Purchased 9 2,209 10 2,366 21 5,767
Commercial:
Commercial real estate 4 2,040 7 1,554 6 2,584
Commercial and industrial 10 2,132 8 771 5 1,039
Consumer 19 499 22 570 29 635
105 $ 13,943 112 $ 11,885 144 $ 19,376
Loans 30 to 89 days delinquent
to total loans receivable, net 0.17 % 0.15 % 0.24 %
46
The following table presents the Bank's nonaccrual loans and OREO at the dates indicated. Non-performing assets consist of nonaccrual loans and OREO. The amounts in the table represent the unpaid principal balance of the loans less related charge-offs, if any. 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 the Bank's internal policies, even if the loans are current. At all dates presented, there were no loans 90 or more days delinquent that were still accruing interest.
June 30, March 31, December 31,
2026 2026 2025
Count Amount Count Amount Count Amount
(Dollars in thousands)
Loans 90 or More Days Delinquent or in Foreclosure:
One- to four-family:
Originated 33 $ 3,980 31 $ 4,130 29 $ 3,223
Purchased 12 3,694 15 5,606 6 1,469
Commercial:
Commercial real estate 10 2,821 12 2,634 12 3,358
Commercial and industrial 4 144 4 999 2 199
Consumer 9 176 9 72 14 218
68 10,815 71 13,441 63 8,467
Loans 90 or more days delinquent or in foreclosure
as a percentage of total loans 0.13 % 0.17 % 0.10 %
Nonaccrual loans less than 90 Days Delinquent:(1)
Commercial:
Commercial real estate 5 $ 39,969 6 $ 41,057 4 $ 40,338
Commercial and industrial 8 500 7 410 1 77
13 40,469 13 41,467 5 40,415
Total nonaccrual loans 81 51,284 84 54,908 68 48,882
Nonaccrual loans as a percentage of total loans 0.63 % 0.68 % 0.60 %
OREO:
One- to four-family:
Originated(2) — $ — — $ — 2 $ 291
Consumer — — 1 135 1 135
— — 1 135 3 426
Total non-performing assets 81 $ 51,284 85 $ 55,043 71 $ 49,308
Non-performing assets as a percentage
of total assets 0.53 % 0.56 % 0.50 %
(1)Includes loans required to be reported as nonaccrual pursuant to 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.
47
The following table presents the states where the properties securing ten percent or more of the total amount of the Bank's one- to four-family loans, excluding construction loans, are located and the corresponding balance of loans 30 to 89 days delinquent, 90 or more days delinquent or in foreclosure, and weighted average LTV for loans 90 or more days delinquent or in foreclosure at June 30, 2026. The amounts in the table represent the unpaid principal balance of the loans, less related charge-offs, if any. The LTVs 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.
Loans 30 to 89 Loans 90 or More Days Delinquent
One- to Four-Family Days Delinquent or in Foreclosure
State Amount % of Total Amount % of Total Amount % of Total LTV
(Dollars in thousands)
Kansas $ 3,182,981 56.8 % $ 6,129 66.1 % $ 3,846 50.1 % 51 %
Missouri 955,649 17.1 1,689 18.2 1,013 13.2 66
Other states 1,463,626 26.1 1,454 15.7 2,815 36.7 50
$ 5,602,256 100.0 % $ 9,272 100.0 % $ 7,674 100.0 % 53
The following table presents the unpaid principal balance of commercial real estate loans, aggregated by state, that were 30 to 89 days delinquent or 90 or more days delinquent or in foreclosure, and the weighted average LTV and weighted average DSCR for loans 90 or more days delinquent or in foreclosure at June 30, 2026. See additional discussion regarding the Bank's commercial real estate loan DSCRs and LTVs in the "Management's Discussion and Analysis of Financial Condition and Results of Operation - Loans Receivable - Commercial Loans" section above.
Loans 30 to 89 Loans 90 or More Days Delinquent
Days Delinquent or in Foreclosure
State Amount % of Total Amount % of Total LTV DSCR
(Dollars in thousands)
Kansas $ 2,040 100.0 % $ 2,821 100.0 % 48 % 1.74x
Other states — — — — — —
$ 2,040 100.0 % $ 2,821 100.0 % 48 1.74
Classified Loans. The following table presents the amortized cost of loans classified as special mention or substandard at the dates presented. The decrease in commercial real estate special mention loans at June 30, 2026 compared to September 30, 2025 was due mainly to a hotel participation loan being upgraded to a "pass" classification as a result of an improvement in the hotel's financial results. The majority of the substandard commercial real estate loan balance for the periods presented in the table below relates to one borrowing relationship. During the March 31, 2026 quarter, an updated appraisal was received related to the collateral securing the lending relationship. The updated appraisal was lower than the appraisal received in the prior year and as a result, a $4.0 million specific valuation allowance was recorded as of March 31, 2026 related to this lending relationship which was still in place at June 30, 2026. The loans associated with this lending relationship were on nonaccrual at all dates presented in the table below.
June 30, 2026 March 31, 2026 September 30, 2025
Special Mention Substandard Special Mention Substandard Special Mention Substandard
(Dollars in thousands)
One- to four-family $ 11,839 $ 22,620 $ 12,498 $ 24,023 $ 13,055 $ 20,616
Commercial:
Commercial real estate 15,626 44,798 22,352 45,773 59,993 45,550
Commercial and industrial 112 648 364 1,414 399 473
Consumer 142 356 166 213 326 322
$ 27,719 $ 68,422 $ 35,380 $ 71,423 $ 73,773 $ 66,961
48
Allowance for Credit Losses. The Bank utilizes a discounted cash flow model for estimating expected credit losses for pooled loans and loan commitments. Expected credit losses are determined by calculating projected future loss rates, which are dependent upon forecasted economic indices, and applying qualitative factors when deemed appropriate by management. At June 30, 2026, management applied qualitative factors to account for large dollar commercial real estate loan concentrations and potential risk of loss in market value for newer one- to four-family loans. These qualitative factors were applied to account for credit risks not fully reflected in the discounted cash flow model.
See "Part II, Item 8. Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 1. Summary of Significant Accounting Policies" in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2025 and "Part I, Item 1. Note 4. Loans Receivable and Allowance for Credit Losses" within this Quarterly Report on Form 10-Q for additional information related to the key assumptions used in the discounted cash flow model and the qualitative factors.
The distribution of our ACL and the ratio of ACL to loans receivable, by loan type, at the dates indicated is summarized below. The decrease in the ACL to loans receivable ratio as of June 30, 2026 compared to March 31, 2026, was due primarily to an update to the ACL model's regression analyses. The update entailed incorporating additional historical loss time periods for all loan categories within the ACL model and resulted in a decrease in the ACL of approximately $800 thousand, mainly within the commercial construction loan category. The historical loss experience for commercial construction loans continued to show lower historical losses resulting in a lower loss rate for this loan category. The increase in the ACL to loans receivable ratio as of June 30, 2026 compared to September 30, 2025, was due primarily to establishing a $4.0 million specific valuation related to a commercial real estate lending relationship during the March 31, 2026 quarter which continued to be in place at June 30, 2026, partially offset by improvement between periods in some of the commercial-related forecasted economic indices and an update to the ACL model's regression analyses (as discussed above). Based on management's evaluation of the credit risk within the Bank's commercial loan portfolio, taking into consideration DSCRs and LTVs, management believes the Bank's ACL ratio for commercial loans is appropriate for the credit risk. See additional discussion regarding the Bank's commercial real estate loan DSCRs and LTVs in the "Financial Condition - Loans Receivable - Commercial Loans" section above.
Distribution of ACL Ratio of ACL to Loans Receivable
June 30, March 31, September 30, June 30, March 31, September 30,
2026 2026 2025 2026 2026 2025
(Dollars in thousands)
One- to four-family:
Originated $ 1,299 $ 1,587 $ 1,730 0.04 % 0.04 % 0.05 %
Purchased 914 1,058 1,298 0.05 0.05 0.06
Construction 11 18 18 0.10 0.11 0.11
One- to four-family 2,224 2,663 3,046 0.04 0.05 0.05
Commercial:
Commercial real estate 18,701 18,973 15,809 0.93 1.00 0.92
Commercial and industrial 2,810 2,046 2,499 1.03 0.88 1.19
Commercial construction 2,185 2,716 2,468 1.13 1.44 1.26
Total 23,696 23,735 20,776 0.96 1.02 0.98
Consumer 183 201 217 0.16 0.18 0.19
Total $ 26,103 $ 26,599 $ 24,039 0.32 0.33 0.30
Historically, the Bank has maintained very low delinquency ratios and NCO rates. Over the past two years, the Bank's highest ratio of commercial loans 90 days or more delinquent to total commercial loans at a quarter end was 0.22%. The highest such ratio for one- to four-family originated and correspondent loans, combined, was 0.17%. During the 10-year period ended June 30, 2026, the Bank recognized total NCOs of $1.2 million. As of June 30, 2026, the ACL balance was $26.1 million and the reserve for off-balance sheet credit exposures totaled $6.2 million, which management believes is adequate for the credit risk characteristics in our loan portfolio.
49
The following table presents ACL activity and related ratios at the dates and for the periods indicated.
At or For the Nine Months Ended
June 30, 2026 June 30, 2025
(Dollars in thousands)
Balance at beginning of period $ 24,039 $ 23,035
Charge-offs (314) (169)
Recoveries 10 37
Net (charge-offs) recoveries (304) (132)
Provision for credit losses 2,368 (95)
Balance at end of period $ 26,103 $ 22,808
Ratio of NCOs during the period
to average non-performing assets 0.61 % 0.45 %
ACL to nonaccrual loans at end of period 50.90 47.07
ACL to loans receivable, net at end of period 0.32 0.28
ACL at end of period to NCOs
during the period (annualized) 65x 129x
The ratio of NCOs during the period to average non-performing assets was higher in the current year period compared to the prior year period due to an increase in NCOs during the current year period. The ratio of ACL to nonaccrual loans was higher at the end of the current year period compared to the prior year period due to a higher ACL balance at June 30, 2026. The increase in the ratio of the ACL to total loans as of June 30, 2026 from June 30, 2025 was due primarily to an increase in the commercial loan portfolio which has a higher ACL to loans receivable ratio than one- to four-family loans and establishing a $4.0 million specific valuation related to a commercial real estate lending relationship during the current year period, partially offset by improvement between periods in some of the commercial-related forecasted economic indices and an update to the ACL model's regression analyses. ACL at the end of the period to NCOs during the current year period (annualized) was lower compared to the prior year period due primarily to higher NCOs in the current year period. Additional information related to ACL activity by specific loan categories for the current year period can be found in "Part I, Item 1. Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 4. Loans Receivable and Allowance for Credit Losses" within this Quarterly Report on Form 10-Q.
50
The following table presents NCOs, average loans, and NCOs as a percentage of average loans, by loan type, for the periods indicated.
For the Nine Months Ended
June 30, 2026 June 30, 2025
NCOs Average Loans % of Average Loans NCOs Average Loans % of Average Loans
(Dollars in thousands)
One- to four-family:
Originated $ 10 $ 3,687,336 — % $ (7) $ 3,863,012 — %
Purchased — 2,059,731 — 113 2,286,491 —
Construction — 13,763 — — 18,126 —
Total 10 5,760,830 — 106 6,167,629 —
Commercial:
Commercial real estate 50 1,869,222 — (20) 1,379,009 —
Commercial and industrial 173 232,844 0.07 (3) 135,511 —
Commercial construction — 188,627 — — 174,518 —
Total 223 2,290,693 0.01 (23) 1,689,038 —
Consumer:
Home equity 53 107,558 0.05 45 101,178 0.04
Other 18 7,690 0.23 4 9,356 0.04
Total 71 115,248 0.06 49 110,534 0.04
$ 304 $ 8,166,771 — $ 132 $ 7,967,201 —
While management utilizes its best judgment and information available, the adequacy of the ACL and reserve for off-balance sheet credit exposures is determined by certain factors outside of the Company's control, such as the performance of our loan portfolio, changes in the economic environment, including economic uncertainty, changes in interest rates, and the view of regulatory authorities toward classification of assets and the level of ACL and reserve for off-balance sheet credit exposures. Additionally, the level of ACL and reserve for off-balance sheet credit exposures may fluctuate based on the balance and mix of the loan portfolio and off-balance sheet credit exposures. If actual results differ significantly from our assumptions, our ACL and reserve for off-balance sheet credit exposures may not be sufficient to cover inherent losses in our loan portfolio, resulting in additions to our ACL and an increase in the provision for credit losses.
Securities. The following table presents the distribution of our securities portfolio, at amortized cost, at the dates indicated. The majority of our securities are government guaranteed or issued by GSEs. Overall, fixed-rate securities comprised 91% of our securities portfolio at June 30, 2026. The WAL is the estimated remaining maturity (in years) after three-month historical prepayment speeds and projected call option assumptions have been applied. During the current fiscal year, the Bank reinvested cash flows from the securities portfolio into commercial loan growth and to pay down maturing FHLB borrowings.
June 30, 2026 March 31, 2026 September 30, 2025
Amount Yield WAL Amount Yield WAL Amount Yield WAL
(Dollars in thousands)
MBS $ 770,757 5.42 % 3.4 $ 791,659 5.44 % 4.0 $ 843,369 5.45 % 4.8
Corporate bonds 4,000 5.12 5.9 4,000 5.12 6.1 4,000 5.12 6.6
$ 774,757 5.42 3.4 $ 795,659 5.44 4.0 $ 847,369 5.45 4.8
51
The following table summarizes the activity in our securities portfolio based on the estimated fair value, which is also the carrying value, for the periods presented. The weighted average yields for the beginning and ending balances are as of the first and last days of the periods 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 and projected call option assumptions have been applied.
For the Nine Months Ended
June 30, 2026 June 30, 2025
Amount Yield WAL Amount Yield WAL
(Dollars in thousands)
Beginning balance - carrying value $ 867,216 5.45 % 4.8 $ 856,266 5.63 % 5.2
Maturities and repayments (113,127) (147,190)
Net amortization of (premiums)/discounts 2,729 2,491
Purchases 37,786 4.22 6.5 248,207 4.97 7.5
Change in valuation on AFS securities (11,045) (3,545)
Ending balance - carrying value $ 783,559 5.42 3.4 $ 956,229 5.47 4.6
Liabilities. Total liabilities were $8.64 billion at June 30, 2026, compared to $8.73 billion at September 30, 2025. The $90.2 million decrease was due primarily to a $314.5 million decrease in borrowings, partially offset by a $259.3 million increase in deposits.
Deposits. The following table presents the amount, weighted average rate and percent of total for the components of our deposit portfolio at the dates presented. The decrease in the weighted average deposit portfolio rate as of June 30, 2026 compared to March 31, 2026 was due primarily to both a reduction in the rate and a decrease in the balance of certificates of deposit, partially offset by an increase in high yield savings account balances. The decrease in the weighted average deposit portfolio rate as of March 31, 2026 compared to September 30, 2025 was due mainly to a decrease in the rate paid on retail certificates of deposit and retail money market accounts, along with an increase in the balance of retail checking accounts and commercial non-interest bearing checking account.
June 30, 2026 March 31, 2026 September 30, 2025
% of % of % of
Amount Rate Total Amount Rate Total Amount Rate Total
(Dollars in thousands)
Non-interest-bearing checking $ 671,852 — % 9.8 % $ 674,415 — % 9.7 % $ 601,371 — % 9.1 %
Interest-bearing checking 914,462 0.25 13.3 935,193 0.24 13.5 859,256 0.21 13.0
High yield savings 731,580 3.60 10.7 630,923 3.59 9.1 460,712 3.88 7.0
Other savings 433,807 0.07 6.3 438,144 0.07 6.4 423,942 0.07 6.5
Money market 1,209,512 1.13 17.7 1,231,691 1.12 17.8 1,233,487 1.29 18.7
Certificates of deposit 2,889,492 3.48 42.2 3,014,125 3.60 43.5 3,012,680 3.74 45.7
$ 6,850,705 2.09 100.0 % $ 6,924,491 2.13 100.0 % $ 6,591,448 2.26 100.0 %
52
The following table presents the amount, weighted average rate, and percent of total for the components of our deposit portfolio, split between retail non-maturity deposits, commercial non-maturity deposits, and certificates of deposit at the dates presented.
June 30, 2026 March 31, 2026 September 30, 2025
% of % of % of
Amount Rate Total Amount Rate Total Amount Rate Total
(Dollars in thousands)
Retail non-maturity deposits:
Non-interest-bearing checking $ 445,719 — % 6.5 % $ 446,629 — % 6.4 % $ 409,722 — % 6.2 %
Interest-bearing checking 828,292 0.05 12.1 857,351 0.08 12.4 790,783 0.08 12.0
High yield savings 731,580 3.60 10.7 630,923 3.59 9.1 460,712 3.88 7.0
Other savings 429,050 0.07 6.2 434,042 0.07 6.3 420,330 0.07 6.4
Money market 1,046,190 0.99 15.3 1,060,519 0.96 15.3 1,050,841 1.07 15.9
Total 3,480,831 1.08 50.8 3,429,464 0.99 49.5 3,132,388 0.96 47.5
Commercial non-maturity deposits:
Non-interest-bearing checking 226,133 — 3.3 227,786 — 3.3 191,649 — 2.9
Interest-bearing checking 86,170 2.13 1.2 77,842 2.04 1.1 68,473 1.72 1.0
Savings 4,757 0.05 0.1 4,102 0.05 0.1 3,612 0.05 0.1
Money market 163,322 2.01 2.4 171,172 2.11 2.5 182,646 2.52 2.8
Total 480,382 1.07 7.0 480,902 1.08 7.0 446,380 1.29 6.8
Certificates of deposit:
Retail certificates of deposit 2,770,322 3.47 40.4 2,872,653 3.60 41.4 2,828,982 3.73 43.0
Commercial certificates of deposit 52,088 3.39 0.8 67,169 3.52 1.0 61,819 3.64 0.9
Public unit certificates of deposit 67,082 3.93 1.0 74,303 3.96 1.1 121,879 4.06 1.8
Total 2,889,492 3.48 42.2 3,014,125 3.60 43.5 3,012,680 3.74 45.7
$ 6,850,705 2.09 100.0 % $ 6,924,491 2.13 100.0 % $ 6,591,448 2.26 100.0 %
The following table presents the amount, weighted average rate, and percent of total for total retail deposits, commercial deposits, and public unit certificates of deposit at the dates noted.
June 30, 2026 March 31, 2026 September 30, 2025
% of % of % of
Amount Rate Total Amount Rate Total Amount Rate Total
(Dollars in thousands)
Total retail deposits $ 6,251,153 2.14 % 91.2 % $ 6,302,117 2.18 % 90.9 % $ 5,961,370 2.28 % 90.5 %
Total commercial deposits 532,470 1.29 7.8 548,071 1.38 8.0 508,199 1.58 7.7
Public unit certificates of deposit 67,082 3.93 1.0 74,303 3.96 1.1 121,879 4.06 1.8
$ 6,850,705 2.09 100.0 % $ 6,924,491 2.13 100.0 % $ 6,591,448 2.26 100.0 %
As of June 30, 2026, approximately $771.4 million (or approximately 11%) of the Bank's Call Report deposit balance was uninsured, of which approximately $645.8 million (or approximately 9% of the Bank's Call Report deposit balance) related to commercial and retail deposit accounts, with the remainder mainly comprised of fully collateralized public unit deposits and intercompany accounts. The uninsured amounts are estimates based on the methodologies and assumptions used for the Bank's regulatory reporting requirements.
Borrowings. Total borrowings at June 30, 2026 were $1.64 billion, which was comprised of $1.54 billion in fixed-rate FHLB advances, $100.0 million in variable-rate FHLB advances tied to an interest rate swap, and $1.2 million in finance leases. Borrowings decreased $314.5 million from September 30, 2025 due primarily to the maturity of $250.0 million of borrowings that were not replaced, along with principal repayments made on the Bank's amortizing FHLB advances. Cash flows from the deposit portfolio were used, in part, to pay off maturing FHLB borrowings and repay amortizing FHLB advances.
53
The following table presents the maturity of term borrowings, which consist of FHLB advances, along with the associated weighted average contractual and effective rates as of June 30, 2026. Amortizing FHLB advances totaling $212.5 million are presented based on their maturity dates versus their quarterly scheduled repayment dates.
Maturity by Contractual Effective
Fiscal Year Amount Rate Rate(1)
(Dollars in thousands)
2026 $ 125,000 3.66 % 3.66 %
2027 360,000 2.58 2.72
2028 851,230 4.00 4.00
2029 231,250 3.98 4.13
2030 70,000 4.20 4.20
$ 1,637,480 3.67 3.72
(1)The effective rate includes the impact of the interest rate swap and the amortization of deferred prepayment penalties resulting from FHLB advances previously prepaid.
The following table presents borrowing activity for the periods shown. The borrowings presented in the table have original contractual terms of one year or longer or are tied to the interest rate swap which has an original contractual term longer than one year. Line of credit borrowings and finance leases are excluded from the table. The effective rate is shown as a weighted average and includes the impact of the interest rate swap 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. The beginning and ending WAMs represent the remaining maturity as of the first and last days of the period presented.
For the Three Months Ended For the Nine Months Ended
June 30, 2026 June 30, 2026 June 30, 2025
Effective Effective Effective
Amount Rate WAM Amount Rate WAM Amount Rate WAM
(Dollars in thousands)
Beginning balance $ 1,708,648 3.65 % 1.6 $ 1,950,984 3.54 % 1.5 $ 2,180,656 3.29 % 1.6
Maturities and repayments (71,168) 1.96 (738,504) 3.28 (758,504) 3.40
New FHLB borrowings — — — 425,000 3.79 2.3 650,000 4.13 2.9
Ending balance $ 1,637,480 3.72 1.4 $ 1,637,480 3.72 1.4 $ 2,072,152 3.52 1.7
The $425.0 million of new FHLB borrowings reflected in the table above in the current year nine-month period was used to prepay $425.0 million of existing advances which are included in maturities and repayments. During the March 31, 2026 quarter, the Bank prepaid $375.0 million of fixed-rate advances with a weighted average effective rate of 4.36% and a WAM of 0.9 years and replaced them with $375.0 million of fixed-rate advances with a weighted average effective rate of 3.81% and a WAM of 2.4 years. This transaction resulted in prepayment fees of $2.1 million, which will be recognized in interest expense over the life of the new FHLB advances. During the quarter ended December 31, 2025, the Bank prepaid a $50.0 million fixed-rate advance with a weighted average effective rate of 4.03% and a WAM of 0.5 years and replaced it with a $50.0 million fixed-rate advance with a weighted average effective rate of 3.64% and a WAM of 2.0 years. This transaction resulted in prepayment fees of $11 thousand, which will be recognized in interest expense over the life of the new FHLB advance. These prepayment activities are reflected in the table above.
Management will continue to monitor opportunities for wholesale funding and may pay down FHLB advances in future periods. The Bank may also renew certain fixed-rate advances in the future using adjustable-rate advances in order to better match the repricing characteristics of its increasing commercial loan portfolio.
54
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 non-amortizing FHLB advances for the next four quarters as of June 30, 2026.
September 30, December 31, March 31, June 30,
2026 2026 2027 2027 Total
(Dollars in thousands)
Retail/Commercial Certificates:
Amount $ 627,421 $ 747,961 $ 325,408 $ 603,398 $ 2,304,188
Repricing Rate 3.63 % 3.55 % 3.28 % 3.52 % 3.53 %
Public Unit Certificates:
Amount $ 17,379 $ 18,673 $ 19,000 $ 11,250 $ 66,302
Repricing Rate 3.95 % 3.63 % 4.14 % 4.04 % 3.93 %
Term Borrowings:
Amount $ 125,000 $ — $ 100,000 $ 150,000 $ 375,000
Repricing Rate 3.66 % — % 1.24 % 2.99 % 2.74 %
Total
Amount $ 769,800 $ 766,634 $ 444,408 $ 764,648 $ 2,745,490
Repricing Rate 3.64 % 3.55 % 2.86 % 3.42 % 3.43 %
The following table sets forth the WAM information for our certificates of deposit, in years, as of June 30, 2026.
Retail certificates of deposit 0.7
Commercial certificates of deposit 0.5
Public unit certificates of deposit 0.5
Total certificates of deposit 0.7
Stockholders' Equity. Stockholders' equity totaled $1.02 billion at June 30, 2026. 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 June 30, 2026, all of 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 June 30, 2026, the Bank's CBLR was 9.6%. Excluding the impact of deferred tax assets related to the Bank's net operating loss carryforward and federal tax credits, the Bank's CBLR was 9.9% as of June 30, 2026. See "Liquidity and Capital Resources" below for additional information regarding the Bank's regulatory capital requirements.
During the nine months ended June 30, 2026, the Company repurchased 6,369,946 shares of common stock at an average price of $7.21 per share, or $45.9 million in total. Subsequent to June 30, 2026 through August 3, 2026, the Company repurchased an additional 187,476 shares of common stock at an average price of $8.54 per share, or $1.6 million in total, bringing total share repurchases during fiscal year 2026 through August 3, 2026 to 6,557,422 shares for $47.5 million. As of August 3, 2026, total shares outstanding were 125,698,283. The Company intends to opportunistically repurchase stock from time to time depending 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 of Kansas City'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 2027. As of August 3, 2026 the Company had $23.6 million remaining authorized under its existing stock repurchase plan.
During the nine months ended June 30, 2026, the Company paid cash dividends totaling $37.5 million, or $0.295 per share, which consisted of a $0.040 per share special cash dividend paid in January 2026 and three regular quarterly cash dividends of $0.085 per share, totaling $0.255 per share for the quarterly cash dividends. On July 29, 2026, the Company announced a regular quarterly cash dividend of $0.085 per share, or approximately $10.5 million, payable on August 21, 2026 to stockholders of record as of the close of business on August 7, 2026. The special cash dividend paid in January 2026, in addition to the Company's history of regular quarterly dividends and opportunistic share repurchases, demonstrates the Company's multi-channel focus on delivering stockholder value through disciplined capital allocation which balances investments in the future of the Company with incremental opportunities to return capital to stockholders. Dividend payments depend upon a number of factors, including the Company's financial condition and results of operations, regulatory capital compliance, 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.
55
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 converting to a fully public company in December 2010 through June 30, 2026, we have returned $2.09 billion in capital to stockholders through dividends totaling $1.60 billion and stock repurchases totaling $485.8 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.
At June 30, 2026, Capitol Federal Financial, Inc., at the holding company level, had $10.7 million in cash on deposit at the Bank. During the nine months ended June 30, 2026, the Bank distributed $78.0 million from the Bank to the Company. Subsequent to June 30, 2026 through August 3, 2026, the Bank distributed $29.0 million from the Bank to the holding company to fund the payment of dividends and share repurchases during the quarter-ending September 30, 2026. The Bank intends to distribute up to an additional $5.0 million to the holding company by September 30, 2026. The Bank is expected to stay in a positive tax accumulated earnings and profit balance during the remainder of fiscal year 2026.
The following table presents regular quarterly cash dividends and special cash dividends paid in calendar years 2026, 2025, and 2024. The amounts represent cash dividends paid during each period shown. For the quarter ending September 30, 2026, the amount presented represents the estimated dividend payable on August 21, 2026 to stockholders of record as of the close of business on August 7, 2026.
Calendar Year
2026 2025 2024
Amount Per Share Amount Per Share Amount Per Share
(Dollars in thousands, except per share amounts)
Regular quarterly dividends paid
Quarter ended March 31 $ 10,815 $ 0.085 $ 11,062 $ 0.085 $ 11,127 $ 0.085
Quarter ended June 30 10,563 0.085 11,063 0.085 11,044 0.085
Quarter ended September 30 10,474 0.085 11,066 0.085 11,043 0.085
Quarter ended December 31 — — 11,017 0.085 11,061 0.085
Special dividends paid 5,094 0.040 — — — —
Calendar year-to-date dividends paid $ 36,946 $ 0.295 $ 44,208 $ 0.340 $ 44,275 $ 0.340
56
Operating Results
The following table presents selected income statement and other information for the quarters indicated.
For the Three Months Ended
June 30, March 31, December 31, September 30, June 30,
2026 2026 2025 2025 2025
(Dollars in thousands, except per share data)
Interest and dividend income:
Loans receivable $ 90,566 $ 89,323 $ 89,792 $ 87,343 $ 82,914
MBS 10,747 10,853 11,341 11,808 12,163
Cash and cash equivalents 1,988 2,474 2,773 2,148 1,620
FHLB stock 1,767 1,858 2,032 2,163 2,197
Investment securities 51 52 51 582 784
Total interest and dividend income 105,119 104,560 105,989 104,044 99,678
Interest expense:
Deposits 36,275 36,299 37,500 37,204 35,860
Borrowings 15,361 15,995 17,172 18,057 18,360
Total interest expense 51,636 52,294 54,672 55,261 54,220
Net interest income 53,483 52,266 51,317 48,783 45,458
Provision for credit losses (433) 2,372 1,106 519 (451)
Net interest income
(after provision for credit losses) 53,916 49,894 50,211 48,264 45,909
Non-interest income 6,668 5,459 5,479 5,791 5,288
Non-interest expense 31,342 30,274 30,476 31,018 29,564
Income tax expense 5,672 4,931 4,910 4,224 3,251
Net income $ 23,570 $ 20,148 $ 20,304 $ 18,813 $ 18,382
Efficiency ratio 52.10 % 52.45 % 53.66 % 56.84 % 58.26 %
Operating expense ratio (annualized) 1.29 1.24 1.24 1.27 1.23
Basic EPS $ 0.19 $ 0.16 $ 0.16 $ 0.14 $ 0.14
Diluted EPS 0.19 0.16 0.16 0.14 0.14
57
Comparison of Operating Results for the Three Months Ended June 30, 2026 and March 31, 2026
For the quarter ended June 30, 2026, the Company recognized net income of $23.6 million, or $0.19 per share, compared to net income of $20.1 million, or $0.16 per share, for the quarter ended March 31, 2026. The increase in net income was due primarily to a release of provision for credit losses compared to a provision expense in the prior quarter, along with increases in net interest income and non-interest income, partially offset by higher non-interest expense. The net interest margin increased seven basis points, from 2.24% for the prior quarter to 2.31% for the current quarter, due primarily to a decrease in the average balance of borrowings and 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.
For the Three Months Ended
June 30, March 31, Change Expressed in:
2026 2026 Dollars Percent
(Dollars in thousands)
INTEREST AND DIVIDEND INCOME:
Loans receivable $ 90,566 $ 89,323 $ 1,243 1.4 %
MBS 10,747 10,853 (106) (1.0)
Cash and cash equivalents 1,988 2,474 (486) (19.6)
FHLB stock 1,767 1,858 (91) (4.9)
Investment securities 51 52 (1) (1.9)
Total interest and dividend income $ 105,119 $ 104,560 $ 559 0.5
The increase in interest income on loans receivable was due to growth in the commercial loan portfolio, as a significant portion of the cash flows from the one- to four-family loan portfolio continued to be redirected into the higher yielding commercial loan portfolio, along with an increase in the yield on the commercial and one-to four-family loan portfolios. The decrease in interest income on cash and cash equivalents was due to a decrease in the average balance compared to the prior quarter as excess operating cash was used, in part, to pay off borrowings that matured during the current quarter.
Interest Expense
The following table presents the components of interest expense for the periods presented, along with the change measured in dollars and percent.
For the Three Months Ended
June 30, March 31, Change Expressed in:
2026 2026 Dollars Percent
(Dollars in thousands)
INTEREST EXPENSE:
Deposits $ 36,275 $ 36,299 $ (24) (0.1 %)
Borrowings 15,361 15,995 (634) (4.0)
Total interest expense $ 51,636 $ 52,294 $ (658) (1.3)
The decrease in interest expense on deposits was due primarily to a decrease in the average cost and average balance of retail certificates of deposit, which was almost entirely offset by an increase in the average balance of high yield savings accounts. The reduction in the cost of retail certificates of deposit was due to existing higher rate certificates of deposit renewing at lower rates. Interest expense on borrowings was lower compared to the prior quarter due to the full quarter impact of $100.0 million of FHLB borrowings that matured and were not replaced late in the prior quarter and the full quarter impact of prepaying $375.0 million of FHLB borrowings, along with $50.0 million of FHLB borrowings that matured during the current quarter that were not replaced.
Provision for Credit Losses
The Company recorded a release of provision for credit losses of $433 thousand during the current quarter compared to a provision for credit losses of $2.4 million for the prior quarter. The release of provision for credit losses in the current quarter was due primarily to an update to the ACL model's regression analyses which mainly impacted the commercial construction loan category, partially offset by commercial loan and commitment growth during the current quarter.
58
Non-Interest Income
The following table presents the components of non-interest income for the periods presented, along with the change measured in dollars and percent.
For the Three Months Ended
June 30, March 31, Change Expressed in:
2026 2026 Dollars Percent
(Dollars in thousands)
NON-INTEREST INCOME:
Deposit service fees $ 2,987 $ 2,690 $ 297 11.0 %
Income from BOLI 1,856 1,151 705 61.3
Insurance commissions 838 512 326 63.7
Other non-interest income 987 1,106 (119) (10.8)
Total non-interest income $ 6,668 $ 5,459 $ 1,209 22.1
The increase in deposit service fees was due primarily to an increase in debit card usage, which generated additional interchange and service charge income in the current quarter. The increase in BOLI income was due primarily to the receipt of death benefits in the current quarter with no such benefits received in the prior quarter, along with a full quarter impact of the purchase of $45.0 million of BOLI policies during the prior quarter. Insurance commissions were higher compared to the prior quarter due primarily to the receipt of lower than accrued contingent commissions in the prior quarter, along with improved sales during the current quarter. The decrease in other non-interest income was due mainly to higher commercial loan prepayment fees in the prior quarter.
Non-Interest Expense
The following table presents the components of non-interest expense for the periods presented, along with the change measured in dollars and percent.
For the Three Months Ended
June 30, March 31, Change Expressed in:
2026 2026 Dollars Percent
(Dollars in thousands)
NON-INTEREST EXPENSE:
Salaries and employee benefits $ 16,858 $ 15,828 $ 1,030 6.5 %
Information technology and related expense 4,787 5,425 (638) (11.8)
Occupancy, net 3,372 3,265 107 3.3
Professional and other services 1,501 1,579 (78) (4.9)
Federal insurance premium 1,103 1,110 (7) (0.6)
Advertising and promotional 1,365 645 720 111.6
Deposit and loan transaction costs 631 768 (137) (17.8)
Office supplies and related expense 442 511 (69) (13.5)
Other non-interest expense 1,283 1,143 140 12.2
Total non-interest expense $ 31,342 $ 30,274 $ 1,068 3.5
The increase in salaries and employee benefits was mainly attributable to an increase in full-time equivalent employees between periods, merit increases and salary adjustments to remain market competitive, and an increase in commissions for increased loan activity. The decrease in information technology and related expense was driven primarily by credits and reimbursements from a vendor related to contractual and service fulfillment matters. The increase in advertising and promotional was due mainly to the timing of campaigns. The decrease in deposit and loan transaction costs was due primarily to calendar year end statement processing activities in the prior quarter.
The Company's efficiency ratio was 52.10% for the current quarter compared to 52.45% for the prior quarter. 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 1.29%, compared to 1.24% for the prior quarter. 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. The operating expense ratio was higher in the current quarter due to higher non-interest expense.
59
Income Tax Expense
The following table presents pretax income, income tax expense, and net income for the periods presented, along with the change measured in dollars and percent and the effective tax rate.
For the Three Months Ended
June 30, March 31, Change Expressed in:
2026 2026 Dollars Percent
(Dollars in thousands)
Income before income tax expense $ 29,242 $ 25,079 $ 4,163 16.6 %
Income tax expense 5,672 4,931 741 15.0
Net income $ 23,570 $ 20,148 $ 3,422 17.0
Effective tax rate 19.4 % 19.7 %
60
Average Balance Sheets. The following table presents 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. All amounts are presented on a fully taxable basis for the periods presented. The weighted average yields and rates include amortization of fees, costs, premiums and discounts, which are considered adjustments to yields/rates.
For the Three Months Ended
June 30, 2026 March 31, 2026
Average Interest Average Interest
Outstanding Earned/ Yield/ Outstanding Earned/ Yield/
Amount Paid Rate Amount Paid Rate
(Dollars in thousands)
Assets:
Interest-earning assets:
One- to four-family loans:
Originated $ 3,657,542 $ 36,163 3.95 % $ 3,697,174 $ 36,229 3.92 %
Purchased 2,004,445 16,438 3.28 2,061,101 17,055 3.31
Total one- to four-family loans 5,661,987 52,601 3.72 5,758,275 53,284 3.70
Commercial loans:
Commercial real estate 1,935,982 28,038 5.73 1,896,666 27,150 5.73
Commercial and industrial 259,110 4,523 6.91 224,311 3,791 6.76
Commercial construction 191,277 3,275 6.77 176,061 3,001 6.82
Total commercial loans 2,386,369 35,836 5.94 2,297,038 33,942 5.91
Consumer loans 116,176 2,129 7.35 114,986 2,097 7.39
Total loans receivable(1) 8,164,532 90,566 4.42 8,170,299 89,323 4.37
MBS(2) 788,182 10,747 5.45 789,899 10,853 5.50
Investment securities(2) 4,000 51 5.13 4,000 52 5.13
FHLB stock 77,904 1,767 9.10 82,855 1,858 9.10
Cash and cash equivalents 215,292 1,988 3.65 271,032 2,474 3.65
Total interest-earning assets 9,249,910 105,119 4.53 9,318,085 104,560 4.49
Other non-interest-earning assets 499,604 486,394
Total assets $ 9,749,514 $ 9,804,479
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Checking $ 921,875 557 0.24 $ 905,915 542 0.24
High yield savings 674,677 6,082 3.62 587,450 5,262 3.63
Other savings 435,168 78 0.07 428,633 78 0.07
Money market 1,222,445 3,471 1.14 1,232,468 3,578 1.18
Retail certificates 2,814,027 24,786 3.53 2,842,406 25,342 3.62
Commercial certificates 67,447 588 3.49 64,107 557 3.52
Wholesale certificates 72,425 713 3.95 95,699 940 3.98
Total deposits 6,208,064 36,275 2.34 6,156,678 36,299 2.39
Borrowings 1,677,426 15,361 3.67 1,782,567 15,995 3.64
Total interest-bearing liabilities 7,885,490 51,636 2.63 7,939,245 52,294 2.67
Non-interest-bearing deposits 672,513 647,305
Other non-interest-bearing liabilities 168,254 176,382
Stockholders' equity 1,023,257 1,041,547
Total liabilities and stockholders' equity $ 9,749,514 $ 9,804,479
Net interest income(3) $ 53,483 $ 52,266
Net interest-earning assets $ 1,364,420 $ 1,378,840
Net interest margin(4) 2.31 2.24
Ratio of interest-earning assets to interest-bearing liabilities 1.17x 1.17x
Selected performance ratios:
Return on average assets (annualized)(5) 0.97 % 0.82 %
Return on average equity (annualized)(6) 9.21 7.74
Average equity to average assets 10.50 10.62
Operating expense ratio (annualized)(7) 1.29 1.24
Efficiency ratio(8) 52.10 52.45
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(1)Balances are adjusted for unearned loan fees and deferred costs. Nonaccrual loans are included in the loans receivable average balance with a yield of zero percent.
(2)AFS security yields are based upon amortized cost which is adjusted for premiums and discounts.
(3)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.
(4)Net interest margin represents annualized net interest income as a percentage of average interest-earning assets. Management believes that the net interest margin is important to investors as it is a profitability measure for financial institutions.
(5)Return on average assets represents annualized net income as a percentage of total average assets. Management believes that the return on average assets is important to investors as it shows the Company's profitability in relation to the Company's average assets.
(6)Return on average equity represents annualized net income as a percentage of total average equity. Management believes that the return on average equity is important to investors as it shows the Company's profitability in relation to the Company's average equity.
(7)The operating expense ratio represents annualized non-interest expense as a percentage of average assets. Management believes the operating expense ratio is important to investors as it provides insight into how efficiently the Company is managing its expenses in relation to its assets. It is a financial measurement ratio that does not take into consideration changes in interest rates.
(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. Management believes the efficiency ratio is important to investors as it is a measure of a financial institution's cost to generate income. A lower value generally indicates that it is costing the financial institution less money to generate revenue, related to its net interest margin and non-interest income.
Rate/Volume Analysis. The table below presents the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities, comparing the three months ended June 30, 2026 to the three months ended March 31, 2026. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (1) changes in volume, which are changes in the average balance multiplied by the previous year's average rate, and (2) changes in rate, which are changes in the average rate multiplied by the average balance from the previous year period. The net changes attributable to the combined impact of both rate and volume have been allocated proportionately to the changes due to volume and the changes due to rate.
For the Three Months Ended
June 30, 2026 vs. March 31, 2026
Increase (Decrease) Due to
Volume Rate Total
(Dollars in thousands)
Interest-earning assets:
Loans receivable $ 691 $ 552 $ 1,243
MBS (24) (82) (106)
Investment securities — (1) (1)
FHLB stock (92) 1 (91)
Cash and cash equivalents (487) 1 (486)
Total interest-earning assets 88 471 559
Interest-bearing liabilities:
Checking 15 — 15
Savings 553 267 820
Money market (21) (86) (107)
Certificates of deposit (310) (442) (752)
Borrowings (781) 147 (634)
Total interest-bearing liabilities (544) (114) (658)
Net change in net interest income $ 632 $ 585 $ 1,217
62
Comparison of Operating Results for the Nine Months Ended June 30, 2026 and 2025
The Company recognized net income of $64.0 million, or $0.51 per share, for the current year period, compared to net income of $49.2 million, or $0.38 per share, for the prior year period. The increase in net income was due mainly to higher net interest income, partially offset by higher non-interest expense and income tax expense. The net interest margin increased 33 basis points, from 1.92% for the prior year period to 2.25% for the current year period. The increase was due mainly to growth in the higher yielding commercial loan portfolio, along with a decrease in the average cost of certificates of deposit and the average balance of borrowings, partially offset by an increase in the average balance of deposits, mainly high yield savings accounts.
Interest and Dividend Income
The following table presents the components of interest and dividend income for the periods presented, along with the change measured in dollars and percent.
For the Nine Months Ended
June 30, Change Expressed in:
2026 2025 Dollars Percent
(Dollars in thousands)
INTEREST AND DIVIDEND INCOME:
Loans receivable $ 269,681 $ 245,175 $ 24,506 10.0 %
MBS 32,941 34,451 (1,510) (4.4)
Cash and cash equivalents 7,235 6,220 1,015 16.3
FHLB stock 5,657 6,834 (1,177) (17.2)
Investment securities 154 2,795 (2,641) (94.5)
Total interest and dividend income $ 315,668 $ 295,475 $ 20,193 6.8
The increase in interest income on loans receivable was due primarily to growth in the commercial loan portfolio, as cash flows from the one-to four-family loan portfolio continued to be redirected into the higher yielding commercial loan portfolio. Interest income on cash and cash equivalents increased due to an increase in the average balance compared to the prior year period, partially offset by a decrease in the weighted average yield. The increase in the average balance of cash and cash equivalents was driven primarily by carrying more cash during the current year period to support anticipated commercial loan activities, pay off maturing borrowings, and meet operational needs. The decrease in FHLB stock dividend income was due primarily to a reduction in the balance of FHLB stock due to paying off maturing FHLB borrowings between periods and repayments on amortizing FHLB borrowings, which reduced the Bank's required FHLB stock holdings. The decrease in interest income on investment securities was due primarily to a lower average balance, due mainly to securities that were called or matured between periods and were not replaced in their entirety.
Interest Expense
The following table presents the components of interest expense for the periods presented, along with the change measured in dollars and percent.
For the Nine Months Ended
June 30, Change Expressed in:
2026 2025 Dollars Percent
(Dollars in thousands)
INTEREST EXPENSE:
Deposits $ 110,074 $ 109,058 $ 1,016 0.9 %
Borrowings 48,528 54,889 (6,361) (11.6)
Total interest expense $ 158,602 $ 163,947 $ (5,345) (3.3)
Interest expense on deposits was higher during the current year period due primarily to an increase in the average balance of the Bank's high yield savings accounts, partially offset by a decrease in the cost of retail certificates of deposit. The decrease in interest expense on borrowings was due primarily to a decrease in the average balance of borrowings due to FHLB borrowings that matured between periods that were not renewed, along with continued repayments on amortizing FHLB advances. Cash flows from the increase in the deposit portfolio and excess operating cash were used to pay off maturing FHLB borrowings and repay amortizing FHLB advances.
63
Provision for Credit Losses
The Company recorded a provision for credit losses of $3.0 million during the current year period compared to a provision for credit losses of $226 thousand for the prior year period. The provision for credit losses in the current year period was due primarily to establishing a $4.0 million specific valuation allowance related to a nonaccrual commercial lending relationship, along with commercial loan and commitment growth, partially offset by improvement between periods in some of the commercial-related forecasted economic indices and an update to the ACL model's regression analyses.
Non-Interest Income
The following table presents the components of non-interest income for the periods presented, along with the change measured in dollars and percent.
For the Nine Months Ended
June 30, Change Expressed in:
2026 2025 Dollars Percent
(Dollars in thousands)
NON-INTEREST INCOME:
Deposit service fees $ 8,549 $ 8,170 $ 379 4.6 %
Income from BOLI 3,972 2,053 1,919 93.5
Insurance commissions 2,139 2,587 (448) (17.3)
Other non-interest income 2,946 2,124 822 38.7
Total non-interest income $ 17,606 $ 14,934 $ 2,672 17.9
Income from BOLI was higher in the current year period due mainly to an increase in the crediting rate as a result of updates to certain policies that were executed in the second half of the prior fiscal year, along with $45.0 million in new BOLI policies being purchased during the current year period and the receipt of higher death benefits in the current year period compared to the prior year period. Insurance commissions were lower compared to the prior year period due primarily to contingent commissions, specifically, contingent commissions received versus accrued in the current year period compared to the prior year period. Other non-interest income was higher in the current year period due mainly to increased commercial loan fee activity.
Non-Interest Expense
The following table presents the components of non-interest expense for the periods presented, along with the change measured in dollars and percent.
For the Nine Months Ended
June 30, Change Expressed in:
2026 2025 Dollars Percent
(Dollars in thousands)
NON-INTEREST EXPENSE:
Salaries and employee benefits $ 48,433 $ 44,447 $ 3,986 9.0 %
Information technology and related expense 15,346 14,637 709 4.8
Occupancy, net 10,087 10,105 (18) (0.2)
Professional and other services 4,869 3,843 1,026 26.7
Federal insurance premium 3,324 3,205 119 3.7
Advertising and promotional 3,066 3,035 31 1.0
Deposit and loan transaction costs 2,115 2,185 (70) (3.2)
Office supplies and related expense 1,434 1,206 228 18.9
Other non-interest expense 3,418 3,589 (171) (4.8)
Total non-interest expense $ 92,092 $ 86,252 $ 5,840 6.8
The increase in salaries and employee benefits was mainly attributable to an increase in full-time equivalent employees between periods, merit increases and salary adjustments to remain market competitive, as well as incentive compensation. The increase in information technology and related expense was due mainly to an increase in software licensing expense related to new agreements and applications, along with an increase in costs of existing agreements, partially offset by a vendor credit discussed above in the "Comparison of Operating Results for the Three Months Ended June 30, 2026 and March 31, 2026 - Non-Interest Expense". The increase in professional and other services was due primarily to new relationships with outside service providers and additional services provided by current providers, of which approximately $425 thousand is not expected to recur in future periods. The decrease in other non-interest expense was due mainly to higher customer fraud losses in the prior year period.
64
The Company's efficiency ratio was 52.72% for the current year period compared to 58.89% for the prior year period. The improvement in the efficiency ratio was due primarily to higher net interest income compared to the prior year period, partially offset by higher non-interest expense. The Company's operating expense ratio (annualized) for the current year period was 1.25% compared to 1.20% for the prior year period. The operating expense ratio was higher in the current year period due mainly to higher non-interest expense, partially offset by higher average assets compared to the prior year period.
Income Tax Expense
The following table presents pretax income, income tax expense, and net income for the periods presented, along with the change measured in dollars and percent and effective tax rate.
For the Nine Months Ended
June 30, Change Expressed in:
2026 2025 Dollars Percent
(Dollars in thousands)
Income before income tax expense $ 79,535 $ 59,984 $ 19,551 32.6 %
Income tax expense 15,513 10,772 4,741 44.0
Net income $ 64,022 $ 49,212 $ 14,810 30.1
Effective tax rate 19.5 % 18.0 %
Income tax expense was higher in the current year period due primarily to higher pretax income. The effective tax rate was higher in the current year period due primarily to the prior year period including a reduction in net state income tax expense due to the remeasurement of the Bank's state deferred tax assets and liabilities to account for the enactment of a Kansas tax law that changes the way taxable income is attributed to the state.
65
Average Balance Sheets. The following table presents 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. All amounts are presented on a fully taxable basis for the periods presented. The weighted average yields and rates include amortization of fees, costs, premiums and discounts, which are considered adjustments to yields/rates.
For the Nine Months Ended
June 30, 2026 June 30, 2025
Average Interest Average Interest
Outstanding Earned/ Yield/ Outstanding Earned/ Yield/
Amount Paid Rate Amount Paid Rate
(Dollars in thousands)
Assets:
Interest-earning assets:
One- to four-family loans:
Originated $ 3,701,099 $ 108,882 3.92 % $ 3,881,138 $ 109,026 3.75 %
Purchased 2,059,731 50,962 3.30 2,286,491 56,270 3.28
Total one- to four-family loans 5,760,830 159,844 3.70 6,167,629 165,296 3.57
Commercial loans:
Commercial real estate 1,869,222 81,645 5.76 1,378,851 58,109 5.56
Commercial and industrial 232,844 12,181 6.90 135,669 6,881 6.69
Commercial construction 188,627 9,593 6.71 174,518 8,282 6.26
Total commercial loans 2,290,693 103,419 5.95 1,689,038 73,272 5.72
Consumer loans 115,248 6,418 7.45 110,534 6,607 7.99
Total loans receivable(1) 8,166,771 269,681 4.38 7,967,201 245,175 4.09
MBS(2) 801,600 32,941 5.48 825,420 34,451 5.57
Investment securities(2) 4,000 154 5.13 69,778 2,795 5.34
FHLB stock 83,014 5,657 9.11 97,985 6,834 9.32
Cash and cash equivalents 253,505 7,235 3.76 182,456 6,220 4.50
Total interest-earning assets 9,308,890 315,668 4.50 9,142,840 295,475 4.30
Other non-interest-earning assets 484,895 457,719
Total assets $ 9,793,785 $ 9,600,559
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Checking $ 902,885 1,602 0.24 $ 876,079 1,513 0.23
High yield savings 589,456 16,314 3.70 235,141 7,263 4.13
Other savings 428,891 234 0.07 441,022 254 0.08
Money market 1,232,038 10,975 1.19 1,235,352 11,606 1.26
Retail certificates 2,826,740 76,341 3.61 2,780,458 84,217 4.05
Commercial certificates 64,482 1,700 3.52 58,013 1,765 4.07
Wholesale certificates 97,562 2,908 3.99 75,805 2,440 4.30
Total deposits 6,142,054 110,074 2.40 5,701,870 109,058 2.56
Borrowings 1,790,988 48,528 3.62 2,136,105 54,889 3.43
Total interest-bearing liabilities 7,933,042 158,602 2.67 7,837,975 163,947 2.80
Non-interest-bearing deposits 642,958 553,644
Other non-interest-bearing liabilities 179,006 173,034
Stockholders' equity 1,038,779 1,035,906
Total liabilities and stockholders' equity $ 9,793,785 $ 9,600,559
Net interest income(3) $ 157,066 $ 131,528
Net interest-earning assets $ 1,375,848 $ 1,304,865
Net interest margin(4) 2.25 1.92
Ratio of interest-earning assets to interest-bearing liabilities 1.17x 1.17x
Selected performance ratios:
Return on average assets (annualized)(5) 0.87 % 0.68 %
Return on average equity (annualized)(6) 8.22 6.33
Average equity to average assets 10.61 10.79
Operating expense ratio(7) 1.25 1.20
Efficiency ratio(8) 52.72 58.89
66
(1)Balances are adjusted for unearned loan fees and deferred costs. Nonaccrual loans are included in the loans receivable average balance with a yield of zero percent.
(2)AFS security yields are based upon amortized cost which is adjusted for premiums and discounts.
(3)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.
(4)Net interest margin represents annualized net interest income as a percentage of average interest-earning assets. Management believes that the net interest margin is important to investors as it is a profitability measure for financial institutions.
(5)Return on average assets represents annualized net income as a percentage of total average assets. Management believes that the return on average assets is important to investors as it shows the Company's profitability in relation to the Company's average assets.
(6)Return on average equity represents annualized net income as a percentage of total average equity. Management believes that the return on average equity is important to investors as it shows the Company's profitability in relation to the Company's average equity.
(7)The operating expense ratio represents annualized non-interest expense as a percentage of average assets. Management believes the operating expense ratio is important to investors as it provides insight into how efficiently the Company is managing its expenses in relation to its assets. It is a financial measurement ratio that does not take into consideration changes in interest rates.
(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. Management believes the efficiency ratio is important to investors as it is a measure of a financial institution's cost to generate income. A lower value generally indicates that it is costing the financial institution less money to generate revenue, related to its net interest margin and non-interest income.
Rate/Volume Analysis.
The table below presents the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities, comparing the nine months ended June 30, 2026 to the nine months ended June 30, 2025. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (1) changes in volume, which are changes in the average balance multiplied by the previous period's average rate, and (2) changes in rate, which are changes in the average rate multiplied by the average balance from the previous period. The net changes attributable to the combined impact of both rate and volume have been allocated proportionately to the changes due to volume and the changes due to rate.
For the Nine Months Ended
June 30, 2026 vs. June 30, 2025
Increase (Decrease) Due to
Volume Rate Total
(Dollars in thousands)
Interest-earning assets:
Loans receivable $ 15,909 $ 8,597 $ 24,506
MBS (985) (525) (1,510)
Investment securities (2,533) (108) (2,641)
FHLB stock (1,024) (153) (1,177)
Cash and cash equivalents 2,145 (1,130) 1,015
Total interest-earning assets 13,512 6,681 20,193
Interest-bearing liabilities:
Checking 47 41 88
Savings 4,723 4,309 9,032
Money market (31) (600) (631)
Certificates of deposit 2,214 (9,687) (7,473)
Borrowings (9,044) 2,683 (6,361)
Total interest-bearing liabilities (2,091) (3,254) (5,345)
Net change in net interest income $ 15,603 $ 9,935 $ 25,538
67
Comparison of Operating Results for the Three Months Ended June 30, 2026 and 2025
The Company recognized net income of $23.6 million, or $0.19 per share, for the quarter ended June 30, 2026, 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 was due mainly to higher net interest income and other non-interest income, partially offset by higher income tax expense and non-interest expense. The net interest margin increased 33 basis points, from 1.98% for the prior year quarter to 2.31% for the current year quarter. The increase was due mainly to growth in the higher yielding commercial loan portfolio, along with decreases in the average balance of borrowings and the cost of certificates of deposit, partially offset by an increase in the average balance of deposits, mainly high yield savings accounts.
Interest and Dividend Income
The following table presents the components of interest and dividend income for the periods presented, along with the change measured in dollars and percent.
For the Three Months Ended
June 30, Change Expressed in:
2026 2025 Dollars Percent
(Dollars in thousands)
INTEREST AND DIVIDEND INCOME:
Loans receivable $ 90,566 $ 82,914 $ 7,652 9.2 %
MBS 10,747 12,163 (1,416) (11.6)
Cash and cash equivalents 1,988 1,620 368 22.7
FHLB stock 1,767 2,197 (430) (19.6)
Investment securities 51 784 (733) (93.5)
Total interest and dividend income $ 105,119 $ 99,678 $ 5,441 5.5
The increase in interest income on loans receivable was due primarily to growth in the commercial loan portfolio, which was funded, in part, with cash flows from the one- to four-family loan portfolio. The decrease in interest income on MBS was due primarily to a lower average balance of the portfolio compared to the prior year quarter as not all portfolio repayments were reinvested back into the portfolio. The increase in interest income on cash and cash equivalents was due to an increase in the average balance during the current year quarter driven primarily by carrying more cash to support commercial loan fundings and other operational needs, partially offset by a decrease in the weighted average yield. The decrease in FHLB stock dividend income was due to a reduction in the balance of FHLB stock after paying off maturing FHLB borrowings between periods and repayments on amortizing FHLB borrowings, which reduced the Bank's required FHLB stock holdings. The decrease in interest income on investment securities was attributable primarily to a decrease in average balance, due mainly to securities that were called or matured between periods and were not replaced in their entirety. Cash flows from the MBS and investment securities portfolios that were not reinvested back into the respective portfolios were used to fund commercial loan growth and pay off maturing FHLB borrowings.
Interest Expense
The following table presents the components of interest expense for the periods presented, along with the change measured in dollars and percent.
For the Three Months Ended
June 30, Change Expressed in:
2026 2025 Dollars Percent
(Dollars in thousands)
INTEREST EXPENSE:
Deposits $ 36,275 $ 35,860 $ 415 1.2 %
Borrowings 15,361 18,360 (2,999) (16.3)
Total interest expense $ 51,636 $ 54,220 $ (2,584) (4.8)
Interest expense on deposits was higher during the current year period due primarily to an increase in the Bank's high yield savings accounts, largely offset by a decrease in the cost of retail certificates of deposit. The decrease in interest expense on borrowings was attributable to a decrease in the average balance compared to the prior year quarter, due mainly to FHLB borrowings that matured between periods and were not renewed, along with continued repayments on amortizing FHLB advances.
68
Provision for Credit Losses
The Company recorded a release of provision for credit losses of $433 thousand during the current year quarter, compared to a release of provision for credit losses of $451 thousand during the prior year quarter. See "Comparison of Operating Results for the Three Months Ended June 30, 2026 and March 31, 2026" above for additional discussion regarding the release of provision for credit losses during the current year quarter.
Non-Interest Income
The following table presents the components of non-interest income for the periods presented, along with the change measured in dollars and percent.
For the Three Months Ended
June 30, Change Expressed in:
2026 2025 Dollars Percent
(Dollars in thousands)
NON-INTEREST INCOME:
Deposit service fees $ 2,987 $ 2,867 $ 120 4.2 %
Income from BOLI 1,856 759 1,097 144.5
Insurance commissions 838 884 (46) (5.2)
Other non-interest income 987 778 209 26.9
Total non-interest income $ 6,668 $ 5,288 $ 1,380 26.1
Income from BOLI was higher in the current year quarter due mainly to $45.0 million in new BOLI policies being purchased during the current year period and the receipt of higher death benefits in the current year quarter compared to the prior year quarter. The increase in other non-interest income was due mainly to higher trust and brokerage income in the current year quarter.
Non-Interest Expense
The following table presents the components of non-interest expense for the periods presented, along with the change measured in dollars and percent.
For the Three Months Ended
June 30, Change Expressed in:
2026 2025 Dollars Percent
(Dollars in thousands)
NON-INTEREST EXPENSE:
Salaries and employee benefits $ 16,858 $ 15,277 $ 1,581 10.3 %
Information technology and related expense 4,787 5,163 (376) (7.3)
Occupancy, net 3,372 3,270 102 3.1
Professional and other services 1,501 1,261 240 19.0
Federal insurance premium 1,103 1,072 31 2.9
Advertising and promotional 1,365 1,453 (88) (6.1)
Deposit and loan transaction costs 631 715 (84) (11.7)
Office supplies and related expense 442 370 72 19.5
Other non-interest expense 1,283 983 300 30.5
Total non-interest expense $ 31,342 $ 29,564 $ 1,778 6.0
The increase in salaries and employee benefits was mainly attributable to an increase in full-time equivalent employees between periods, merit increases and salary adjustments to remain market competitive, as well as incentive compensation. The decrease in information technology and related expense was driven primarily by credits and reimbursements from a vendor related to contractual and service fulfillment matters. The increase in professional and other services was due primarily to an increase in services provided by current providers. The increase in other non-interest expense was due mainly to operating expenses in the current quarter that are not anticipated to recur in future periods.
The Company's efficiency ratio was 52.10% for the current year quarter compared to 58.26% for the prior year quarter. The improvement in the efficiency ratio was due primarily to higher net interest income during the current year quarter, partially offset by higher non-interest expense. The Company's operating expense ratio (annualized) for the current year quarter was 1.29% compared to 1.23% for the prior year quarter. The operating expense ratio was higher in the current year period due to higher non-interest expense.
69
Income Tax Expense
The following table presents pretax income, income tax expense, and net income for the periods presented, along with the change measured in dollars and percent and effective tax rate.
For the Three Months Ended
June 30, Change Expressed in:
2026 2025 Dollars Percent
(Dollars in thousands)
Income before income tax expense $ 29,242 $ 21,633 $ 7,609 35.2 %
Income tax expense 5,672 3,251 2,421 74.5
Net income $ 23,570 $ 18,382 $ 5,188 28.2
Effective tax rate 19.4 % 15.0 %
Income tax expense was higher in the current year quarter due primarily to higher pretax income and partially to a higher effective tax rate. The effective tax rate was higher in the current year quarter due primarily to the prior year quarter including a reduction in net state income tax expense due to the remeasurement of the Bank's state deferred tax assets and liabilities to account for the enactment of a Kansas tax law that changes the way taxable income is attributed to the state.
70
Average Balance Sheets. The following table presents 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. All amounts are presented on a fully taxable basis for the periods presented. The weighted average yields and rates include amortization of fees, costs, premiums and discounts, which are considered adjustments to yields/rates.
For the Three Months Ended
June 30, 2026 June 30, 2025
Average Interest Average Interest
Outstanding Earned/ Yield/ Outstanding Earned/ Yield/
Amount Paid Rate Amount Paid Rate
(Dollars in thousands)
Assets:
Interest-earning assets:
One- to four-family loans:
Originated $ 3,657,542 $ 36,163 3.95 % $ 3,838,361 $ 36,340 3.79 %
Purchased 2,004,445 16,438 3.28 2,232,868 18,454 3.31
Total one- to four-family loans 5,661,987 52,601 3.72 6,071,229 54,794 3.61
Commercial loans:
Commercial real estate 1,935,982 28,038 5.73 1,496,569 20,669 5.46
Commercial and industrial 259,110 4,523 6.91 143,479 2,478 6.83
Commercial construction 191,277 3,275 6.77 174,407 2,778 6.30
Total commercial loans 2,386,369 35,836 5.94 1,814,455 25,925 5.65
Consumer loans 116,176 2,129 7.35 110,809 2,195 7.95
Total loans receivable(1) 8,164,532 90,566 4.42 7,996,493 82,914 4.13
MBS(2) 788,182 10,747 5.45 884,321 12,163 5.50
Investment securities(2) 4,000 51 5.13 60,319 784 5.19
FHLB stock 77,904 1,767 9.10 96,564 2,197 9.13
Cash and cash equivalents 215,292 1,988 3.65 145,579 1,620 4.40
Total interest-earning assets 9,249,910 105,119 4.53 9,183,276 99,678 4.33
Other non-interest-earning assets 499,604 455,441
Total assets $ 9,749,514 $ 9,638,717
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Checking $ 921,875 557 0.24 $ 883,428 497 0.23
High yield savings 674,677 6,082 3.62 352,815 3,606 4.10
Other savings 435,168 78 0.07 438,821 77 0.07
Money market 1,222,445 3,471 1.14 1,220,567 3,700 1.22
Retail certificates 2,814,027 24,786 3.53 2,739,886 26,481 3.88
Commercial certificates 67,447 588 3.49 59,586 557 3.75
Wholesale certificates 72,425 713 3.95 91,645 942 4.12
Total deposits 6,208,064 36,275 2.34 5,786,748 35,860 2.49
Borrowings 1,677,426 15,361 3.67 2,085,696 18,360 3.53
Total interest-bearing liabilities 7,885,490 51,636 2.63 7,872,444 54,220 2.76
Non-interest-bearing deposits 672,513 564,913
Other non-interest-bearing liabilities 168,254 159,035
Stockholders' equity 1,023,257 1,042,325
Total liabilities and stockholders' equity $ 9,749,514 $ 9,638,717
Net interest income(3) $ 53,483 $ 45,458
Net interest-earning assets $ 1,364,420 $ 1,310,832
Net interest margin(4) 2.31 1.98
Ratio of interest-earning assets to interest-bearing liabilities 1.17x 1.17x
Selected performance ratios:
Return on average assets (annualized)(5) 0.97 % 0.76 %
Return on average equity (annualized)(6) 9.21 7.05
Average equity to average assets 10.50 10.81
Operating expense ratio (annualized)(7) 1.29 1.23
Efficiency ratio(8) 52.10 58.26
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(1)Balances are adjusted for unearned loan fees and deferred costs. Nonaccrual loans are included in the loans receivable average balance with a yield of zero percent.
(2)AFS security yields are based upon amortized cost which is adjusted for premiums and discounts.
(3)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.
(4)Net interest margin represents annualized net interest income as a percentage of average interest-earning assets. Management believes that the net interest margin is important to investors as it is a profitability measure for financial institutions.
(5)Return on average assets represents annualized net income as a percentage of total average assets. Management believes that the return on average assets is important to investors as it shows the Company's profitability in relation to the Company's average assets.
(6)Return on average equity represents annualized net income as a percentage of total average equity. Management believes that the return on average equity is important to investors as it shows the Company's profitability in relation to the Company's average equity.
(7)The operating expense ratio represents annualized non-interest expense as a percentage of average assets. Management believes the operating expense ratio is important to investors as it provides insight into how efficiently the Company is managing its expenses in relation to its assets. It is a financial measurement ratio that does not take into consideration changes in interest rates.
(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. Management believes the efficiency ratio is important to investors as it is a measure of a financial institution's cost to generate income. A lower value generally indicates that it is costing the financial institution less money to generate revenue, related to its net interest margin and non-interest income.
Rate/Volume Analysis.
The table below presents the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities, comparing the three months ended June 30, 2026 to the three months ended June 30, 2025. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (1) changes in volume, which are changes in the average balance multiplied by the previous year's average rate and (2) changes in rate, which are changes in the average rate multiplied by the average balance from the previous year period. The net changes attributable to the combined impact of both rate and volume have been allocated proportionately to the changes due to volume and the changes due to rate.
For the Three Months Ended June 30,
2026 vs. 2025
Increase (Decrease) Due to
Volume Rate Total
(Dollars in thousands)
Interest-earning assets:
Loans receivable $ 4,772 $ 2,880 $ 7,652
MBS (1,312) (104) (1,416)
Investment securities (723) (10) (733)
FHLB stock (423) (7) (430)
Cash and cash equivalents 679 (311) 368
Total interest-earning assets 2,993 2,448 5,441
Interest-bearing liabilities:
Checking 22 37 59
Savings 1,673 804 2,477
Money market 6 (235) (229)
Certificates of deposit 597 (2,489) (1,892)
Borrowings (3,621) 622 (2,999)
Total interest-bearing liabilities (1,323) (1,261) (2,584)
Net change in net interest income $ 4,316 $ 3,709 $ 8,025
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Liquidity and Capital Resources
Liquidity refers to our ability to generate sufficient cash to fund ongoing operations, to repay maturing certificates of deposit and other deposit withdrawals, to repay maturing borrowings, and to fund loan commitments. Liquidity management is both a daily and long-term function of our business management. The Company's most available liquid assets are represented by cash and cash equivalents and AFS securities. The Bank's primary sources of funds are deposits, FHLB borrowings, repayments and maturities of outstanding loans and MBS and other short-term investments, and funds provided by operations. The Bank's long-term borrowings primarily have been used to manage long-term liquidity needs and the Bank's interest rate risk with the intention to improve the earnings of the Bank while maintaining capital ratios that meet or exceed the regulatory standards for well-capitalized financial institutions. In addition, the Bank's focus on managing risk has provided additional liquidity capacity by maintaining a balance of MBS and investment securities available as collateral for borrowings.
We generally intend to manage cash reserves sufficient to meet short-term liquidity needs, which are routinely forecasted for 10, 60, and 365 days. Additionally, on a monthly basis, we perform a liquidity stress test in accordance with the Interagency Policy Statement on Funding and Liquidity Risk Management. The liquidity stress test incorporates both short-term and long-term liquidity scenarios in order to identify and to quantify liquidity risk. Management also monitors key liquidity statistics related to items such as wholesale funding gaps, borrowings capacity, and available unpledged collateral, as well as various liquidity ratios. In the event short-term liquidity needs exceed available cash, the Bank has access to a line of credit at the FHLB, in addition to the FRB of Kansas City's discount window.
Per FHLB's lending guidelines, total FHLB borrowings cannot exceed 40% of Bank Call Report total assets without the pre-approval of FHLB senior management. The Bank's FHLB borrowing limit was 44% of Bank Call Report total assets as of June 30, 2026, as approved by FHLB senior management. The Bank's internal policy limits total borrowings to 55% of total assets. At June 30, 2026, the Bank had total borrowings, at par, of $1.64 billion, or approximately 17% of the Bank's Call Report total assets. The borrowings balance was comprised of FHLB advances, of which $459.7 million is scheduled to be repaid (amortizing advances) or mature in the next 12 months. FHLB borrowings are secured by certain qualifying loans pursuant to a blanket collateral agreement with FHLB.
The amount that can be borrowed from the FRB of Kansas City's discount window is based upon the fair value of securities pledged as collateral. At June 30, 2026, the amount of securities pledged for the discount window was $97.9 million. At June 30, 2026, there were no borrowings from the FRB of Kansas City's discount window. Management tests the Bank's access to the FRB of Kansas City's discount window at least annually with a nominal overnight borrowing.
The Bank is a member of the American Finance Exchange ("AFX"), through which it may borrow funds on an overnight or short-term basis with other member institutions. The availability of funds changes daily. At June 30, 2026, the Bank did not have any such borrowings outstanding through the AFX.
If management observes unusual trends in the amount and frequency of line of credit utilization and/or short-term borrowings that are not in conjunction with a planned strategy, the Bank will likely utilize term wholesale borrowing sources such as FHLB advances to provide term funding. The maturities of our borrowings are generally staggered in order to mitigate the risk of a highly negative cash flow position at maturity. The Bank has used fully-amortizing FHLB advances that require periodic payments of principal over the term of the advance. This type of advance enables the Bank to start repricing its liability cash flows sooner in a down-rate environment and generally provides for favorable pricing when compared to similar long-term bullet advances with comparable average lives as a result of the current term structure of interest rates.
At June 30, 2026, the Bank had no repurchase agreements. The Bank may enter into repurchase agreements as management deems appropriate, not to exceed 15% of total assets, and subject to the total borrowings internal policy limit of 55% as discussed above.
The Bank has the ability to utilize the repayment and maturity of outstanding loans, MBS, and other investments for liquidity needs rather than reinvesting such funds into the related portfolios. At June 30, 2026, the Bank had $687.6 million of securities that were eligible but unused as collateral for borrowing or other liquidity needs. The Bank also has access to other sources of funds for liquidity purposes, such as brokered and public unit certificates of deposit. As of June 30, 2026, the Bank's policy allowed for combined brokered and public unit certificates of deposit up to 15% of total deposits. At June 30, 2026, the Bank did not have any brokered certificates of deposit, and public unit certificates of deposit were approximately 1% of total deposits. The Bank had pledged securities with an estimated fair value of $93.1 million as collateral for public unit certificates of deposit at June 30, 2026. The securities pledged as collateral for public unit certificates of deposit are held under joint custody with FHLB and generally will be released upon deposit maturity.
Management estimated that the Bank had $4.22 billion in liquidity available at June 30, 2026, based on the Bank's blanket collateral agreement with the FHLB, available brokered and public unit deposit capacity, unencumbered securities, and cash and cash equivalent balances.
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At June 30, 2026, $2.37 billion of the Bank's certificate of deposit portfolio was scheduled to mature within the next 12 months, including $66.3 million of public unit certificates of deposit and $45.0 million of commercial certificates of deposit. Based on our deposit retention experience and our current pricing strategy, we anticipate the majority of the maturing retail certificates of deposit will renew or transfer to other deposit products of the Bank at prevailing rates, although no assurance can be given in this regard. Due to the nature of public unit certificates of deposit and commercial certificates of deposit, retention rates are not as predictable as retail certificates of deposit.
While scheduled payments from the amortization of loans and MBS and payments on short-term investments are relatively predictable sources of funds, deposit flows, prepayments on loans and MBS, and calls of investment securities are greatly influenced by general interest rates, economic conditions, and competition, and are less predictable sources of funds. To the extent possible, the Bank manages the cash flows of its loan and deposit portfolios by the rates it offers customers. We anticipate we will continue to have sufficient funds, through the repayments and maturities of loans and securities, deposits and borrowings, to meet our current commitments.
Limitations on Dividends and Other Capital Distributions
Office of the Comptroller of the Currency ("OCC") regulations impose restrictions on savings institutions with respect to their ability to make distributions of capital, which include dividends and other transactions charged to the capital account. Under FRB and OCC safe harbor regulations, savings institutions generally may make capital distributions during any calendar year equal to earnings of the previous two calendar years and current year-to-date earnings (to the extent not previously distributed). A savings institution that is a subsidiary of a savings and loan holding company, such as the Company, that proposes to make a capital distribution must submit written notice to the OCC and FRB 30 days prior to such distribution. The OCC and FRB may object to the distribution during that 30-day period based on safety and soundness or other concerns. Savings institutions that desire to make a larger capital distribution, are under special restrictions, or are not, or would not be, sufficiently capitalized following a proposed capital distribution must obtain regulatory non-objection prior to making such a distribution.
The long-term ability of the Company to pay dividends to its stockholders is based primarily upon the ability of the Bank to make capital distributions to the Company. So long as the Bank remains well capitalized after each capital distribution (as evidenced by maintaining regulatory capital ratios greater than the required percentages) and operates in a safe and sound manner, it is management's belief that the OCC and FRB will continue to allow the Bank to distribute its earnings to the Company, although no assurance can be given in this regard. Management continues to evaluate the timing and amount of capital distributions to be made from the Bank to the holding company during the current fiscal year and in future periods to the extent necessary to prevent the Bank from re-entering a negative accumulated earnings and profit position in connection with the Bank's pre-1988 bad debt recapture.
Regulatory Capital
Consistent with our goal to operate a sound and profitable financial organization, we actively seek to maintain a well-capitalized status for the Bank per the regulatory framework for prompt corrective action ("PCA"). As of June 30, 2026, the Bank's CBLR was 9.6% and the Company's CBLR was 10.0%, which exceeded the requirements for the well-capitalized category under the PCA framework. The Bank's risk-based tier 1 capital ratio at June 30, 2026 was 15.8%.
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