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what it is
It takes deposits, makes home and business loans, and runs a regional savings bank in Kansas and Missouri.
how it gets paid
Last year Capitol Federal made $16M in revenue. Residential real estate lending was the main engine at $11.68M, or 73% of sales.
why it's growing
Revenue grew 6.5% last year. Revenue was $16M on a trailing basis and grew 6.5% vs. prior year.
what just happened
It earned $0.16 a share last quarter, ahead of the $0.15 estimate.
At a glance
B balance sheet — gets the job done, barely
65/100 earnings predictability — reasonably predictable
13.4x trailing p/e — the market's not buying it — or you found a deal
5.0% dividend yield — cash in your pocket every quarter
xvary composite: 53/100 — below average
What they do
It takes deposits, makes home and business loans, and runs a regional savings bank in Kansas and Missouri.
Capitol Federal has 46 branches across 12 counties. That is small enough to feel local and big enough to keep your paycheck nearby. Its loan book, the pile of loans it earns interest on, is 73% home loans and 26% business loans. That keeps the business plain, and plain is the point.
How they make money
$16M
annual revenue · their business grew +6.5% last year
Residential real estate lending
$11.68M
+6.5%
Commercial lending
$4.16M
+6.5%
Consumer lending
$0.16M
+6.5%
Other banking income
$0.00M
+0.0%
The products that matter
originates and holds home loans
Residential mortgages
73% of loans
This is 73% of the loan book, so your exposure is still mostly tied to housing demand, refinancing activity, and local credit quality.
73% of loans
higher-yield commercial lending
Commercial loans
$901.9M · 26% of loans
This book grew to $901.9M from $350.6M from a year ago. It is the clearest lever management has to improve profitability.
margin lever
small consumer lending book
Consumer loans
1% of loans
At 1% of loans, this segment is too small to move the story. That tells you this is basically a mortgage bank with a commercial sidecar.
1% of loans
Key numbers
5.0%
dividend yield
You get paid 5.0% to wait. That is the whole pitch when the stock sits at $6.97.
13.4x
trailing p/e
You are paying 13.4 times trailing earnings for a bank with no fireworks and a B balance sheet grade.
$8
18-month target
The target is $8, so you have about 15% upside before the market calls this fully priced.
1.96%
net interest margin
The bank keeps 1.96% after funding costs. That spread is the whole game in lending.
Financial health
B
strength
- balance sheet grade B — adequate — nothing special
- risk rank 3 — safer than 50% of stocks
- price stability 70 / 100
- net profit margin 15.7% — keeps 16 cents of every dollar in revenue
- return on equity 8% — $0.08 profit for every $1 investors have put in
B — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in CFFN 3 years ago → it's now worth $10,420.
The index would have given you $13,920.
source: institutional data · total return
What just happened
beat estimates
It earned $0.16 a share last quarter, ahead of the $0.15 estimate.
Revenue was $16M on a trailing basis and grew 6.5% vs. prior year. EPS was up 33% from the prior year’s quarter.
$16M
revenue
$0.16
eps
n/a
n/a
the number that mattered
$0.16 EPS mattered most because it beat the $0.15 estimate and showed the bank can still earn its keep.
-
capitol federal financial completed fiscal 2025 on solid note (year ended september 30th).
-
the bottom line rose 56% vs. prior year, to $0.14 per share, from $0.09 in the year-ago period.the improvement was thanks primarily to higher net interest income, partially offset by increases in noninterest expense, income tax expense, and provisions for credit losses.
-
on a full-year basis, fiscal 2025 share earnings advanced 41%, to $0.52.
-
net interest margin improved 19 basis points, to 1.96% from 1.77% in fiscal 2024, reflecting higher yields on the loan portfolio.this advancement was as a result of a continued shift away from oneto four-family residential loans toward higher-yielding commercial loans, which helped offset rising deposit costs.
-
commercial lending continues to play a more prominent role in the company’s balance sheet strategy.as of september 30th, commercial loans stood at $901.9 million, up sharply from the prior year’s $350.6 million.
source: company earnings report, 2025
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What could go wrong
The #1 risk here is credit stress hitting a mortgage-heavy book before reserves catch up.
med
Thin reserve against loan losses
Allowance for credit losses is 0.30% of total loans. That is the safety cushion for a bank whose book is still 73% residential mortgages.
If credit quality weakens, earnings can reverse fast because the reserve base is small to begin with.
med
Margin recovery stalls
Net interest margin improved to 1.96% from 1.77%, but that still is not a wide spread. Deposit costs staying high or loan yields flattening would hit the core earnings engine.
This stock looks better at 1.96% than 1.77%. If that progress fades, the 5.0% yield stops looking generous and starts looking compensatory.
med
Geographic concentration
The branch network is 46 locations across 12 counties in Kansas and Missouri. Local concentration can be a strength until the local economy is the problem.
A regional housing slowdown or local business stress would hit both sides of the balance sheet — loan demand and credit quality — at the same time.
You are not buying a diversified national bank. You are buying a local lender whose margin is recovering while its reserve cushion stays thin.
source: institutional data · regulatory filings · risk analysis
Pay attention to
key metric
net interest margin above 1.96%
This is the number that moved earnings. If margin holds or climbs, the income story works a lot better.
risk
allowance for credit losses at 0.30%
A thin reserve is manageable right up until it is not. Any material build in reserves would tell you management sees trouble coming.
trend
commercial loans after the jump to $901.9M
The book moved from $350.6M to $901.9M in a year. More growth helps spreads. Sloppy growth hurts credit later.
earnings
whether EPS stays above the $0.16 quarterly run-rate
One stronger quarter is encouraging. You want to see if the spread improvement can repeat without a matching jump in provisions.
Analyst rankings
short-term outlook
average
outlook rank 3 — in human-speak, analysts do not see a strong edge here over the next several months.
risk profile
average
risk rank 3 — typical on paper, though the 0.30% reserve means the credit setup deserves more attention than the label implies.
chart momentum
average
momentum rank 3 — the chart is not screaming anything. This is a wait-for-the-numbers stock.
earnings predictability
65 / 100
Predictability is decent, not pristine. For a bank with a changing loan mix, that means you should expect some noise quarter to quarter.
source: institutional data
Institutional activity
institutions have been net buying for 2 consecutive quarters — 111 buyers vs. 101 sellers in 3q2025. total institutional holdings: 0.1B shares. net buying for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$5
$10
$7
current price
$8
target midpoint · +15% from current · 3-5yr high: $12 (+70% · 18% ann'l return)
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