Capitol Federal Savings :: True Blue for over 115 Years

2001 - Current

On January 23, 2001, Capitol Federal Financial held its second annual stockholders meeting having completed its first full year as a public company. In fiscal year 2000, stockholders were paid quarterly dividends totaling $0.44 per share, with an annualized increase of the dividend of 10% over the prior fiscal year rate.
The year 2001 saw Capitol Federal introduce a new, convenient service, True Blue Online®, a fully interactive, real-time and secure Internet banking alternative for our customers. In just over two months, over 10,000 customers had signed up to use this service, offering convenience for the purposes of bill payment, account balance inquiries, transferring funds and ordering checks. It further provides customers the ability to download account information to Quicken®.
Longer-term interest rates, which dropped during late 2000, remained fairly stable and encouraged home purchases and loan refinancings at attractive levels. Capitol Federal closed nearly $460 million in loans through the first six months of fiscal year 2001.
The Bank recorded six-month earnings for 2001 of $39.2 million, $2.7 million ahead of the previous year. Capital remained strong at $946.8 million, or 11.2 percent of assets.
On June 1, 2001, Governor Bill Graves and the Kansas Department of Commerce and Housing honored Capitol Federal Savings with the 2001 Governor’s Award of Excellence. This most prestigious quality award is bestowed on one Kansas company each year and is a source of pride for everyone at Capitol Federal. This award shows appreciation for the business in Kansas most exemplifying service to customers, a positive work environment and a commitment to its communities and to Kansas. When presenting the award, Governor Graves recognized Capitol Federal and its employees for their achievements and impact on the communities served by the Bank.
In 2001, the Kansas Department of Human Resources and Aging named Capitol Federal Kansas Employer of the Year, recognizing the Bank “...for providing an exemplary model to promote positive older worker images.”
“The events of September 11, 2001 will forever be etched in our memories,” Chairman Dicus stated. During this time of national tragedy, we found ourselves standing united and strong, relying heavily on the cornerstones of our American way of life. We discovered our community expanded to include New York and Washington, as Capitol Federal Foundation worked with the United Way of Greater Topeka, the American Red Cross and other agencies to send contributions to those whose lives had been forever ravaged by terror.
While the terrorist attack targeted the core of our nation’s financial system, it failed to destroy it. With heavy hearts, Capitol Federal remembers friends lost at Sandler O’Neill and Keefe, Bruyette and Woods. This event brings sympathy for the many families, friends and business associates experiencing great losses and inspires an appreciation for the relationships built among those of us within the financial community. As President Bush professed, “These acts shattered steel, but they cannot dent the steel of American resolve.”
Capitol Federal Savings started 2002 with a strong balance sheet and a sound capital position. In light of the news surrounding companies like Enron, Global Crossing and others, Capitol Federal reassured depositors that “...we have not undertaken any activity that would put depositors at risk. Capitol Federal maintains a conservative business philosophy that has been our standard for many, many years.”
On January 22, 2002, Capitol Federal Financial held its Third Annual Shareholders’ Meeting. A Topeka Capital-Journal report stated, “In a year when the stock market performed like a bear, the stock of Capitol Federal Financial performed like a bull.” Chairman Dicus announced a 28% return on investment, including dividends, for CFFN shareholders in 2001. He continued to state that at the close of fiscal year 2001 at September 30, asset growth was 4% to $8.6 billion with over $5.46 billion in total loans and over $4.37 billion in deposits. The Bank grew nearly $330 million in deposits and closed over $1.27 billion in loans. Earnings for the year exceeded the previous year by increasing $2.2 million to $77.6 million. While many in the stock market acknowledged severe losses during 2001, Capitol Federal Financial’s substantial growth in its share price reflects the strength and proficiency of its board of directors, management and the entire staff.
The Bank announced plans for the 2003 opening of its 35th office to be located at the entrance to Shawnee Crossings, a new development at the southeast corner of Highway 7 and Shawnee Mission Parkway in Shawnee, Kansas.
“As an $8.83 billion financial institution,” Chairman Dicus wrote in the Summer 2002 issue of True Blue Review, “Capitol Federal ranks among the top 15 thrifts in the nation in asset size and as one of the most efficient operations in the country. Capitol Federal values its high quality loans and the many products and services we provide through our varied points of customer contact.”
Capitol Federal Financial (CFFN) announced that the Board of Directors elected John B. Dicus as Chief Executive Officer of the Company and Capitol Federal Savings, effective January 1, 2003. He also retains his position as President of both entities. While passing his Chief Executive Officer duties to President Dicus, Chairman John C. Dicus will continue to serve as Chairman of the Board and in an executive capacity with both the Company and the Bank.
"We are extremely pleased to move John into the top leadership role at Capitol Federal Savings," said Chairman Dicus. "He has served as President and Chief Operating Officer for six years and was instrumental in the successful conclusion of the Bank's plan of reorganization and stock issuance in 1999. The Company is performing very well and the Board has great confidence in his ability to take the Company to new heights," Dicus added. Following the Fourth Annual Capitol Federal Financial Shareholders' Meeting, Topeka Capital-Journal Business Editor Michael Hooper reported, "Capitol Federal stock outperforms the market". He went on to say that CFFN stock "rose 33% in 2002 compared with an 18% decline in the Dow Jones Industrial average, a 32% decline in the Nasdaq and a 24% decline in the Standard and Poors 500. With the stock closing at $31.62 on January 21, 2003, he revealed that Capitol Federal stock is worth more than three times its initial public offering price of $10 per share in March 1999.
In his report to the stockholders, President Dicus stated that Capitol Federal Financial had paid $2 per share in dividends during 2002, with part being paid in a special year-end dividend. "We are very proud to have been able to provide this special dividend to our shareholders and hope to do it again in 2003. We also are pleased to announce that the Board of Directors voted to increase the next quarterly dividend to 22 cents, payable February 21. With the CFFN stock just up under 40%, we hope you are pleased with the value of your stock and dividend."
President Dicus announced that at the close of fiscal year 2002 on September 30, assets grew from $8.635 billion to $8.781 billion with over $4.867 billion in total loans and $4.391 billion in deposits. Earnings for fiscal 2002 rose to $89.592 million. President Dicus was pleased to announce a 31.81% efficiency ratio to shareholders.
Capitol Federal Financial finished its 2003 fiscal year with earnings of $52.0 million and a capital ratio of 11.0%. During the calendar year, Capitol Federal Financial paid $2.00 in dividends to shareholders.
Fiscal year 2003 was a challenging year as historically low interest rates persisted resulting in downward pressure on our net interest margin. Borrowers took advantage of the low interest rates as evidenced by our loan originations and modifications, which together exceed $3.7 billion for the year.
President Dicus announced to stockholders, "One of our major accomplishments this year was to prepay the entire balance due on two loans which Capitol Federal Financial obtained in 2001 to fund the repurchase of shares. By satisfying this obligation, CFFN is able to reduce its future annual cash flow requirements by approximately $24 million."
In April 2003, Capitol Federal opened its 35th office, located in the Shawnee Crossings area ofShawnee at 22400 Midland Drive. We are excited to provide this traditional branch, catering to the borrowing and savings needs of the area, located in a rapidly developing residential area of Johnson County, Kansas.
In 2003, Frederick P. Reynolds retired from the Board of Directors after 25 years of service. During his tenure, Capitol Federal increased its assets from $1.3 billion to over $8.5 billion, added 20 branch offices, changed its charter and completed a corporate restructure. We express our gratitude to Mr. Reynolds for his leadership and guidance during this exciting period in Capitol Federal’s history.
Elected to fill the position left by Mr. Reynolds is Jeffrey R. Thompson, Chief Financial Officer of Salina Vortex Corporation, a Salina-based manufacturing company. “His experience and excellent knowledge in finance,” remarked Chairman Dicus, “will help steer Capitol Federal Financial as it moves forward through the 21st century. We welcome him to our Capitol Federal team.”
For fiscal year 2004, President Dicus reported three major transactions took place that “put Capitol Federal in a better position for the future.” The first transaction was an interest rate swap conducted in December 2003, converting $800 million of the Bank’s fixed-rate debt to floating-rate debt, resulting in a savings of $15.7 million for fiscal year 2004.
In March 2004, Capitol Federal Financial (“CFFN”) issued $53.6 million in debt securities to be utilized at the holding company for cash reserves. The proceeds are for general, corporate and capital purposes, including the payment of dividends.
CFFN refinanced $2.40 billion of its FHLBank fixed-rate advances into new fixed-rate, fixed-term advances in July 2004. President Dicus stated, “This was a major transaction for the Bank…providing significant savings in interest expense, contributing $9.7 million to the 4th quarter pre-tax earnings in fiscal year 2004…”
As a result of the prepayment penalty, CFFN reported a loss of $106.3 million in fiscal year 2004. With the refinancing decision made to better position the Bank, if one excluded the prepayment penalty and the related tax impact, net income for the year was $40.3 million with an efficiency ratio of 52.35% (based on the exclusion of the one-time after-tax charge for the FHLBank refinance). Reflecting the good quality of our loans, Capitol Federal’s ratio of non-performing assets to total assets was 0.12%.
In 2004, Chairman Dicus announced the retirements of Robert B. “Bob” Maupin and Carl Quarnstrom. “With their 30 years and 20 years, respectively, as members of the board, they have been big, big contributors to the growth and direction of Capitol Federal Savings.”
Elected to serve in the positions vacated by Mr. Maupin and Mr. Quarnstrom are Jeffrey M. Johnson, president of the Flint Hills National Golf Club, Wichita, and Michael T. McCoy, M.D., orthopedic surgeon and Chief of Surgery at Stormont-Vail Regional Medical Center, Topeka. “We welcome these men as they bring a broad scope of experience and knowledge to Capitol Federal Financial to direct our company as it grows and expands into the future,” remarked President Dicus.
In June 2004, Capitol Federal opened a branch within the Corinth Hen House in Prairie Village, Kansas, the 36th branch in our network and our eighth in-store branch. In October, we opened our second branch in Manhattan at Commons Place, the 37th in our network. Both of these promising locations will support our strategy of serving customers through gathering retail deposits and originating single-family home loans.
At the end of Fiscal Year September 30, 2005, Capitol Federal total assets were $8.41 billion, with reported earnings of $65.1 million. With loans a major focus for the Bank, the balance increased from $4.75 billion in 2004 to $5.46 billion in 2005. Total deposits were $3.96 billion. President Dicus reported, “The Total Stockholders’ Equity of $865 million indicates that Capitol Federal Financial remains a very strong and stable company.” Other indicators include a strong financial performance: Efficiency Ratio of 41.19%, Operating Expense Ratio of 0.87%, Non-Performing Assets to Total Assets of 0.08% and Equity to Total Assets of 10.29% - all very good numbers compared to peers.
Also, in calendar year 2005, Capitol Federal Foundation set a new record for grants of over $3 million to numerous nonprofit and charitable organizations in Capitol Federal market areas. Included was $250,000 to ten Wichita organizations in recognition of the Bank’s 25th anniversary in the market area. Foundation total grants to date, since first initiated in 1999, reached $12.3 million.
During the Capitol Federal Financial Seventh Annual Meeting, President Dicus announced that with the Board’s declaration of a $0.50 per share dividend, payable February 17, 2006 to holders of record on February 3, 2006, “We are proud to have returned the initial investment of $10 to our stockholders who have been with us since the beginning on April 1, 1999. Today is a milestone. With the February dividend, we will have returned cumulative dividends of $10.18 per share to you. Any price appreciation from the beginning forward is just that – appreciation!”
In fiscal year 2006, Executive Vice President, Chief Financial Officer and Treasurer Neil F. M. McKay retired, and President Dicus announced the promotion of Kent G. Townsend to the vacated position. In September 2006, Capitol Federal opened its 38th office, its ninth in-store branch, within the Price Chopper at 135th and Mission Road, Leawood. Located one mile from the state line area, this new branch offers excellent convenience for customers, on both the Kansas and Missouri side.
President Dicus reported CFFN’s performance for the fiscal year ended September 30, 2006 was highlighted by net income of $48.1 million, total assets of $8.20 billion, and stockholder’s equity of $863.2 million. Total loans were $5.22 billion with total deposits at $3.90 billion. The $210.6 million decrease in assets from 2005 is related to the repayment of FHLB advances which matured in the first half of fiscal year 2006. President Dicus stated the Efficiency Ratio of 48.03% for Fiscal Year 2006 was “a respectable number compared to our peers.” He went on to declare the Non-performing Assets to Total Assets Ratio of 0.10% was “one of the leading numbers in the industry – an excellent number – an important number with today’s credit quality concerns.”
At the annual meeting on Tuesday, January 23, 2006, President Dicus announced that as of closing Monday, January 22, the stock was at $38.77. “Continuing our commitment to stockholder value,” announced President Dicus, “the Board declared a $0.50 per share dividend, payable February 16, 2007 to holders of record on February 2, 2007, making cumulative dividends to date over $12 since 1999.” There was $116 million in cash in the holding company at this time.
In his report on Capitol Federal Foundation, President Dicus reminded all of our “Commitment to Community”. The Foundation set a new record by donating over $3.25 million to numerous nonprofit and charitable organizations in our market areas during calendar year 2006. Foundation total gifts to date reached approximately $15.5 million in calendar year 2006.
President Dicus concluded by stating, “In the 7½ years since Capitol Federal went public, we have paid $245 million in dividends, with buybacks of $350 million. Proud of our dividend strategy as shown on the Dividend History chart, we will continue our efforts to return value to our shareholders.”
Beginning February 20, 2007, CMIC Financial Services partnered with Broker Dealer Financial Services Corporation*, a full-service broker-dealer, for the sale of non-deposit investment products at its licensed Capitol Federal locations.
Capitol Federal is a financial institution of people helping people “achieve the habit of thrift and joy of home ownership.” Our Mission Statement includes the objective that we “shall be the premier residential real estate lender and provider of enhanced retail financial services” in our markets. The foundation of our management strategy has always been to be a portfolio lender with excellent asset quality and to offer a wide range of retail financial services, with a commitment to cost control while maintaining a strong capital position.
It is our intention to continue to be a traditional thrift providing an exceptional level of service to our entire customer base. As part of this objective, Capitol Federal Management looks for opportunities to remain competitive and develop banking convenience through online and telephone access services from anywhere, at anytime.
Capitol Federal and its staff have made a "Commitment to Community", working to make life better by providing affordable housing for all. Capitol Federal and its people seek out and meet the needs of the communities we serve. We support civic and charitable organizations such as the United Way and American Cancer Society. Special emphasis is given to housing-related organizations and our own affordable housing programs.
Capitol Federal continues to be known as “the leader in residential mortgage lending." During a past shareholders' meeting, Chairman Dicus expressed that it is Capitol Federal's commitment to single-family mortgage lending that allows the Bank to continue its excellent earnings, thus providing a strong stock performance.
Chairman Dicus states, "Throughout its more than 110 years of service, Capitol Federal has distinguished itself with balance sheet strength, consistent earnings and sound operations. The Bank remains steadfast to operating under the principles upon which it was founded: Safety in Savings, Sound Lending Policies, Quality Customer Service and Commitment to Community. As tradition has proven, Capitol Federal will remain constant -- performing sound financial practices and providing safe, True Blue® service for our customers."

*Securities offered through Broker Dealer Financial Services Corp. Member FINRA & SIPC. Investment advice offered through Investment Advisors Corp., a Registered Investment Advisor in Missouri, Iowa, Kansas, Illinois, and Florida. Capitol Federal Savings Bank and CMIC Financial Services are separate and unrelated companies. Broker Dealer Financial Services Corp. and Investment Advisors Corp. are related companies but are unrelated to Capitol Federal Savings Bank or CMIC Financial Services.

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2001 - Current

History