Capitol Federal Financial (CFFN), the holding company for Capitol Federal Savings Bank, Thursday reported an increase in first quarter profit, helped by lower interest expense and higher other income. Earnings also came in above Street estimates.
Net income available to common shareholders increased to $20.97 million or $0.29 per share from $15.85 million or $0.22 per share in the same quarter a year ago.
On average, three analysts polled by Thomson Reuters expected earnings of $0.22 per share for the quarter. Analysts' estimate typically excludes one-time items.
Net income increased primarily due to a decrease in interest expense of $10.1 million and an increase in other income of $6.5 million, partially offset by a decrease in interest income of $6.4 million, an increase in the provision for loan losses of $2.6 million and an increase in income tax expense of $1.8 million.
Total interest and dividend income dropped to $98.9 million from $105.3 million in the year-ago quarter.
Decreases in interest income on mortgage-backed securities and loans receivable was due to a decrease in the average yield of both portfolios resulted decline in total interest and dividend income. This, however, was offset partially by an increase in interest income on investment securities.
Interest expense dropped to $54.0 million from $64.1 million in the comparable quarter last year primarily due to a decrease of $4.7 million in interest expense on each of Federal Home Loan Bank advances and deposits.
Interest expense on FHLB advances dropped due primarily because of the refinance of $875.0 million of FHLB advances during the second and third quarters of fiscal year 2009.
During the quarter, the Bank recorded a provision for loan losses of $3.1 million, compared to a provision of $549 thousand in the quarter ended December 31, 2008.
Total other income was $13.1 million, up from $6.6 million for the prior year quarter, primarily due to a gain on the sale of trading MBS of $6.5 million.
Total assets decreased slightly, from $8.40 billion at September 30, 2009 to $8.37 billion at December 31, 2009.
CFFN is currently trading at $32.63, up $0.07 or 0.21%, on a volume of 0.10 million shares.
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