Capitol Federal Financial Inc. posted an 11 percent increase in first quarter earnings mostly thanks to lower funding costs.
The Topeka-based parent company of Capitol Federal Savings Bank said it earned $19.7 million, or 14 cents a share, in the first three months of this year. A year earlier, it had earned $17.7 million, or 12 cents a share.
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Although its loans have not increased significantly, the company posted a bigger profit because it paid less in interest on some of its own sources of funding. Specifically, its older higher cost borrowings from the Federal Home Loan Bank matured and were replaced with lower cost loans from the agency.
Capitol Federal also said it has adopted new lending rules set by the new federal agency that oversees consumer financial services.
“Our implementation of the “ability to repay” and “qualified mortgage” rules on January 10, 2014, as issued by the Consumer Financial Protection Bureau, is not anticipated to have a significant impact to our overall book of business,” the company said in its announcement.
Assets at the end of March totaled $9.12 billion, including $6.05 billion in loans.
During the quarter, Capitol Federal repurchased 4,191,195 shares of its own common stock, paying an average of $11.97 per share.