Capitol Federal Financial, Inc.

Previous wording

•our ability to expand our commercial banking and trust asset management expertise across our market areas;

Current wording

•our ability to expand our commercial banking, treasury management, and wealth management products and services across our market areas;

Previous wording

The Company recognized net income of $20.3 million, or $0.16 per share, for the current quarter, compared to net income of $15.4 million, or $0.12 per share, for the prior year quarter. 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 1.86% for the prior year quarter to 2.19% for the current quarter. The increase was due mainly to growth in the higher yielding commercial loan portfolio.

Current wording

The Company recognized net income of $40.5 million, or $0.32 per share, for the current year six-month period compared to net income of $30.8 million, or $0.24 per share, for the prior year six-month period. The increase in net income was due mainly to higher net interest income, partially offset by higher non-interest expense and a higher provision for credit losses. The net interest margin increased 33 basis points, from 1.89% for the prior year six-month period to 2.22% for the current year six-month period. The increase was due mainly to growth in the higher yielding commercial loan portfolio.

Previous wording

The Bank continues its progression from a primarily retail oriented financial institution to a full-service commercial bank by strategically growing all aspects of commercial banking through investments in technology, people, products, and services. For additional discussion, see the "Strategic Banking Initiatives" section below.

Current wording

The Bank continues its progression from a primarily retail oriented financial institution to a full-service consumer and commercial bank by strategically investing in technology, products and employees, allowing us to offer new products and services and deliver first-in-class service to our customers. For additional discussion, see the "Strategic Banking Initiatives" section below.

Previous wording

The Company's efficiency ratio was 53.66% for the current quarter compared to 57.86% for the prior year quarter. The improvement in the efficiency ratio was due primarily to higher net interest income compared to the prior year quarter, partially offset by higher non-interest expense. The Company's operating expense ratio (annualized) for the current quarter was 1.24% compared to 1.14% for the prior year quarter. The operating expense ratio was higher in the current quarter due mainly to higher non-interest expense, partially offset by higher average assets compared to the prior year quarter.

Current wording

The Company's efficiency ratio was 53.05% for the current year six-month period compared to 59.23% for the prior year six-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 six-month period was 1.24% compared to 1.18% for the prior year six-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.

Previous wording

The Bank's asset quality remains strong, reflected in the continued low level of loan delinquency and charge-off ratios. At December 31, 2025, loans 30 to 89 days delinquent were 0.24% of total loans receivable, net, and loans 90 or more days delinquent or in foreclosure were 0.10% 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 quarter, the Bank had net charge-offs ("NCOs") of $119 thousand.

Current wording

The Bank's asset quality remains strong, reflected in the continued low level of loan delinquency and charge-off ratios. At March 31, 2026, loans 30 to 89 days delinquent were 0.15% of total loans receivable, net, and loans 90 or more days delinquent or in foreclosure were 0.17% 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 six-month period, the Bank had net charge-offs ("NCOs") of $156 thousand.

Previous wording

Total borrowings were $1.83 billion at December 31, 2025, a decrease of $120.9 million compared to September 30, 2025. The decrease was due primarily to the maturity of $100.0 million in borrowings that were not replaced, along with principal payments made on the Bank's amortizing FHLB advances. Cash flows from the deposit portfolio were used to pay down borrowings during the current quarter. Management estimated that the Bank had $4.09 billion in liquidity available at December 31, 2025, 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.

Current wording

Total borrowings were $1.71 billion at March 31, 2026, a decrease of $243.7 million compared to September 30, 2025, due primarily to the maturity of $200.0 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 $4.35 billion in liquidity available at March 31, 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.

Previous wording

Stockholders' equity totaled $1.04 billion at December 31, 2025, a decrease of $6.4 million from September 30, 2025 due to strategic share repurchases and dividend payments, continuing our efforts to enhance stockholder value. During the current quarter, the Company repurchased 2,376,633 shares of common stock at an average price of $6.86 per share, or $16.3 million in total, and paid regular quarterly dividends totaling $11.0 million, or $0.085 per share. As of December 31, 2025, the Bank's capital ratios exceeded the well-capitalized requirements. The Bank's community bank leverage ratio ("CBLR") as of December 31, 2025 was 9.5%.

Current wording

Stockholders' equity totaled $1.03 billion at March 31, 2026, a decrease of $22.0 million from September 30, 2025, due to strategic share repurchases and dividend payments, continuing our efforts to enhance stockholder value. During the six months ended March 31, 2026, the Company repurchased 4,532,114 shares of common stock at an average price of $7.00 per share, or $31.7 million in total, and paid cash dividends totaling $26.9 million, or $0.210 per share which consisted of a $0.040 per share special cash dividend and two regular quarterly cash dividends totaling $0.170 per share. As of March 31, 2026, the Bank's capital ratios exceeded the well-capitalized requirements. The Bank's community bank leverage ratio ("CBLR") as of March 31, 2026 was 9.5%.

Previous wording

At December 31, 2025, the gap between the Bank's interest-earning assets and interest-bearing liabilities projected to reprice within one year was $(1.23) billion, or (12.6%) 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 December 31, 2025, the Bank was in compliance with its internal policy thresholds for sensitivity to changes in interest rates.

Current wording

At March 31, 2026, the gap between the Bank's interest-earning assets and interest-bearing liabilities projected to reprice within one year was $(792.4) million or (8.1%) 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 March 31, 2026, the Bank was in compliance with its internal policy thresholds for sensitivity to changes in interest rates.

Previous wording

The Company continues its progression to a full-service commercial bank by investing in technology, people, products, and services. Our investments in technology have allowed us to launch new services and products, while our seasoned and well-connected commercial bankers and our trust and wealth advisors deliver access to new customer groups. Our expanded product suite of treasury management services enables us to service these new customers. Increased marketing and business development efforts have increased the depth of customer relationships. As we move through the third year of our digital transformation, we are seeing our efforts bear fruit and expect progress to continue.

Current wording

Our strategic banking initiatives keep us focused on the progression towards becoming a full-service consumer and commercial bank. These initiatives have resulted in investments in technology, allowing us to launch new services and products. Our seasoned and well-connected commercial bankers and trust and wealth advisors deliver access to 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 increase, deepen and broaden our customer relationships. The focus on our strategic banking initiatives continues to bear fruit and we expect that progress to continue.

Previous wording

Strategic Actions. The long-term success of our transition to a full-service bank is predicated on management's continued focus on deepening relationships with consumer and commercial customers. Management and the Board have committed resources to support the growth of talented, skilled, and experienced bankers, investments in technology, expanded marketing and outreach, as well as the development and increased internal monitoring of performance metrics intended to ensure we are on the path to achieve our performance objectives. 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 customers. We are actively pursuing opportunities to expand our non-interest-bearing, commercial deposit base and diversify fee-based revenue streams through strategic growth in treasury management services, trust and wealth management services, insurance, and small business banking.

Current wording

Strategic Actions. The long-term success of our transition to a full-service consumer and commercial 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.

Previous wording

Commercial Lending. During the first quarter of the current fiscal year, we closed on $364.6 million in commercial loans, compared to $263.1 million during the quarter ended September 30, 2025. Commercial loans continue to grow as a percentage of our overall loan portfolio, comprising 28% of our loan portfolio at December 31, 2025, compared to 26% and 21% at September 30, 2025 and December 31, 2024, respectively. To maintain strong credit quality, in addition to disciplined underwriting and ongoing credit administration, we monitor concentration levels by collateral type, geographic location and borrowing relationship. The Bank utilizes commercial loan pricing and profitability software that provides insights on new lending opportunities based on the full customer banking relationship. We utilize software that provides market intelligence regarding competitor pricing to assist loan officers when preparing a loan offering. This enhances our ability to profitably compete with other financial institutions in our markets as well as those outside our markets.

Current wording

Commercial Lending. Commercial loans continue to grow as a percentage of our total loan portfolio, comprising 29% of the portfolio at March 31, 2026, compared to 28% and 26% at December 31, 2025 and September 30, 2025, respectively. Our disciplined underwriting, ongoing credit administration and monitoring of concentration levels by collateral type, geographic location and borrowing relationship allow us to maintain strong credit quality. Commercial lending utilizes loan pricing and profitability software that provides insights into lending opportunities based on the full customer banking relationship and market intelligence regarding competitor pricing. This enhances our ability to profitably compete with other financial institutions both inside and outside our market areas.

Previous wording

Treasury Management. The Bank services commercial customers through a competitive suite of treasury management products and an experienced team of treasury management officers. This team is focused on the deposit and cash management needs of commercial customers and growing this line of business through the acquisition of new customers located in our immediate market areas, as well as those we lend to outside of our local market areas. In fiscal year 2026, a team of business development officers is also tasked with growing the deposit base within the small business customer segment, focused on serving small businesses in our market areas with a dedicated line of products specifically designed for these customers. Our treasury management officers and business development officers often land depository relationships independent of a lending relationship. This will be a focus area for our sales teams as well as the Bank continues to diversify funding sources and seeks to increase fee revenue tied to depository accounts. During the second quarter of fiscal year 2026, the Bank expects to introduce digital onboarding for small business customers using industry-leading risk management and screening tools, which will replace many manual verification tasks. We are evaluating additional technology in order to capture a larger share of this business with even more products and services. Within calendar year 2026, we expect to implement new technology for lockbox services, integrated accounts receivables, purchase cards, and corporate cards.

Current wording

Treasury Management. The Bank offers a competitive suite of treasury management products to commercial customers who are supported by an experienced team of treasury management officers. This team is focused on the deposit and cash management needs of commercial customers and growing this line of business through the acquisition of new customers located in our local market areas, as well as those we lend to outside those areas. During the current fiscal year, a team of our business development officers have been tasked with growing the deposit base within the small business customer segment and providing product lines specifically designed for these customers. Our treasury management officers and business development officers often create depository relationships with new customers independent of a lending relationship. We expect that this will be a focus area for our sales teams as the Bank continues to diversify funding sources and seeks to increase fee revenue tied to depository accounts. During the third quarter of fiscal year 2026, the Bank expects to introduce digital onboarding for small business customers using industry-leading risk management and screening tools, which will replace many manual verification tasks. We are evaluating additional technology in order to capture a larger share of this business with even more products and services. Within calendar year 2026, we expect to implement new technology for lockbox services and integrated accounts receivables. The Bank implemented new purchase cards and corporate cards in March 2026. Revenue stream projections have not yet been determined as customer acceptance rates are still being evaluated.

Previous wording

Digital Banking. We are advancing towards a seamless digital banking experience for all customers, enhancing the Bank's ability to attract and retain deposits and lower the cost to service our customers. This 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. These enhancements are on track to be implemented in the second quarter of fiscal year 2026. The Bank is taking advantage of fintech plug-in technologies that we expect will integrate into our digital banking experience for consumers, small businesses, and commercial customers.

Current wording

Digital Banking. We are advancing towards a seamless digital banking experience for all customers, enhancing the Bank's ability to attract and retain deposits and lower the cost to service our customers. This 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. During the current quarter, the Bank successfully ran live pilots for this technology and published the mobile app to the app store. We are preparing for general release to our customers in the third quarter of fiscal year 2026. The Bank is taking advantage of fintech plug-in technologies that we expect will integrate into our digital banking experience for consumers, small businesses, and commercial customers.

Previous wording

Wealth Management. We have begun to implement private wealth management products and services, with some customers on-boarded during the first quarter of the current fiscal year. We are continuing to expand our comprehensive suite of private banking products and services which is a new line of business for the Bank. Private banking relationships are defined as customers with $5.0 million or more in personal relationships with the Bank by way of loans, deposits, or assets under management. We believe that our private banking line of business will be a gateway to driving revenue growth from off-balance sheet assets and bridge the gap between high-net-worth depository customers, small business owners and key commercial customers and create corporate trustee opportunities for the Bank.

Current wording

We continue to expand our extensive suite of private banking products and services and grow our client base in this area. We believe that deliberate and meaningful growth in this line of business will be a gateway to driving revenue growth from off-balance sheet assets and bridge the gap between high-net-worth depository customers, small business owners and key commercial customers and create additional corporate trustee opportunities for the Bank.

Previous wording

Stockholder Value. Delivering long-term sustainable stockholder value continues to be our North Star while also maintaining a strong capital position. 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. Total dividends declared and paid during fiscal year 2025 were $44.3 million. During the first quarter of fiscal year 2026, the Company repurchased 2,376,633 shares for $16.3 million and paid regular quarterly cash dividends totaling $11.0 million, or $0.085 per share. Since completing our second-step conversion in December 2010, we have returned $2.03 billion to stockholders through $1.58 billion in cash dividends and $456.2 million in share repurchases. For the remainder of fiscal year 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.

Current wording

Stockholder Value. Delivering long-term sustainable stockholder value continues to be our North Star while maintaining a strong capital position. 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 March 31, 2026, Capitol Federal Financial, Inc., at the holding company level, had $10.7 million in cash on deposit at the Bank. Subsequent to March 31, 2026 through May 6, 2026, the Bank distributed $25.0 million from the Bank to the holding company to fund the payment of dividends and share repurchases during the quarter-ending June 30, 2026. Total dividends paid during the second quarter of fiscal year 2026 were $15.9 million, or $0.125 per share. During the six months ended March 31, 2026, the Company paid dividends of $26.9 million, or $0.210 per share, and repurchased 4,532,114 shares for $31.7 million. Subsequent to March 31, 2026, the Company repurchased an additional 1,002,964 shares for $7.6 million through May 6, 2026. Since completing our second-step conversion in December 2010 through March 31, 2026, we have returned $2.06 billion to stockholders through $1.59 billion in cash dividends and $471.6 million in share repurchases. For the remainder of fiscal year 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.

Previous wording

The loan portfolio totaled $8.18 billion at December 31, 2025, a $64.8 million increase from September 30, 2025. Commercial loans grew $162.6 million, mainly in the commercial real estate portfolio, partially offset by a $98.6 million decrease in one- to four-family loans due primarily to repayments exceeding originations as cash flows from this portfolio are being used to fund commercial loan growth. It is expected that repayments from our one- to four-family loan portfolio will continue to be directed toward supporting commercial loan growth, aligning with our ongoing commitment to expand commercial banking services. The Bank expects to fund approximately $60.0 million of undisbursed amounts on existing commercial real estate and commercial construction loans and approximately $5.0 million of commercial real estate and commercial construction commitments during the March 31, 2026 quarter. The near-term projected growth for commercial loan balances is approximately 1% in the quarter ending March 31, 2026, with projected overall commercial loan growth of approximately 18% for the current fiscal year. The weighted average DSCR for commercial loan originations and new participations during the current quarter was 2.52x and the weighted average LTV for commercial real estate and construction loans originated and new participations was 72%. The weighted average DSCR and LTV for our commercial real estate and construction loan portfolio was 1.73x and 63%, respectively, at December 31, 2025.

Current wording

The loan portfolio decreased $62.5 million during the current quarter as the one- to four-family loan portfolio decreased $98.2 million from the prior quarter end, partially offset by commercial loan growth of $39.1 million, or a 1.7% increase, mainly in the commercial real estate portfolio. The Bank expects to fund approximately $60.0 million of undisbursed amounts on existing commercial real estate and commercial construction loans and approximately $84.4 million of commercial real estate and commercial construction commitments during the June 30, 2026 quarter. The near-term outlook for net commercial loan balances is growth of approximately 6% for the quarter-ending June 30, 2026, with overall net commercial loan growth of approximately 20% for the full fiscal year. Total loans receivable, net is anticipated to increase by approximately 1% for the full fiscal year. It is expected that repayments from our one- to four-family loan portfolio will continue to be directed toward supporting commercial loan growth, aligning with our ongoing commitment to expand commercial banking services. 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 1.86x and the weighted average LTV for commercial real estate and construction loans originated was 63%.

Previous wording

The loan portfolio increased $64.8 million during the current quarter, as cash flows from the securities portfolio were used to fund loan growth. Commercial loans grew $162.6 million, mainly in the commercial real estate portfolio, partially offset by a $98.6 million decrease in one- to four-family loans. Deposits increased $167.2 million during the current quarter, due mainly to the Bank's high yield savings account offering and retail checking accounts. Borrowings decreased $120.9 million due to borrowings that matured during the current quarter and were not replaced, along with principal payments made on the Bank's amortizing FHLB advances. Cash flows from the increase in the deposit portfolio were used to pay down borrowings. Stockholders' equity decreased $6.4 million during the current quarter, due primarily to strategic share repurchases and dividend payments, partially offset by net income.

Current wording

Deposits increased $165.9 million during the current quarter, due mainly to the Bank's retail non-maturity deposits. Borrowings decreased $122.9 million from December 31, 2025, due to the maturity of $100.0 million in borrowings that were not replaced, along with principal repayments made on the Bank's amortizing FHLB advances. Cash flows from the deposit portfolio were primarily used to pay down the borrowings during the current quarter. Stockholders' equity decreased $15.6 million during the current quarter, due primarily to strategic share repurchases and dividend payments.

Previous wording

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 quarter ended December 31, 2025. As of December 31, 2025, the Bank had one- to four-family loan and refinance commitments totaling $24.7 million at a weighted average rate of 5.97%.

Current wording

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 March 31, 2026, the Bank had one- to four-family loan and refinance commitments totaling $37.5 million at a weighted average rate of 5.89%.

Previous wording

Commercial Loans -The table below presents commercial loan origination and participation activity for the quarter ended December 31, 2025, 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 (composed 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.

Current wording

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.

Previous wording

The following table presents the unpaid principal balance of loans secured by non-owner occupied and owner occupied properties within the Bank's commercial real estate loan portfolio as of the dates indicated.

Current wording

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 March 31, 2026.

Previous wording

The following table presents management's funding expectations for the Bank's commercial real estate and commercial construction undisbursed amounts and commitments outstanding as of December 31, 2025. 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.

Current wording

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 March 31, 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.

Previous wording

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 December 31, 2025. The LTV is calculated using the gross loan amount (composed of unpaid principal and undisbursed amounts) as of December 31, 2025 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. In general, commercial borrowers with total loans of $2.5 million or more are reviewed at least annually to monitor financial performance.

Current wording

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 March 31, 2026. The LTV is calculated using the gross loan amount (composed of unpaid principal and undisbursed amounts) as of March 31, 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.

Previous wording

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 December 31, 2025, categorized by aggregate gross loan and commitment amount, along with average loan amount, weighted average rate, LTV, and DSCR. For loans over $60.0 million, there was $152.2 million of such loans related to hotels in Arizona and California, $143.1 million related to multi-family properties in Kansas, and $69.6 million related to senior housing in Kansas. The largest loan included in the table below was $86.0 million, which was fully disbursed as of December 31, 2025, and is collateralized by a hotel in Arizona.

Current wording

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 March 31, 2026, categorized by aggregate gross loan and commitment amount, along with average loan amount, and weighted average rate, LTV, and DSCR. For amounts over $60.0 million, there was $151.8 million secured by hotels in Arizona and California, $143.1 million secured by multi-family properties in Kansas, and $69.6 million 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 March 31, 2026, and is collateralized by a hotel in Arizona. Included in the >$20 to $30 million category are five loans with DSCRs below 1.15x. Of those five loans, four of the loans, with a gross loan amount of $99.3 million, are with three 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 securing the loans. All of these loans were current as of March 31, 2026 and are being actively monitored by management. The weighted average LTV for these four loans was 68% as of March 31, 2026. The fifth loan, with an unpaid principal balance of $24.3 million, was on nonaccrual and classified as substandard as of March 31, 2026. A specific valuation allowance was established related to this loan as of March 31, 2026. See additional discussion regarding the specific valuation allowance in the "Management's Discussion and Analysis of Financial Condition and Results of Operation - Asset Quality" section below.

Previous wording

The following table summarizes the Bank's commercial and industrial loans by loan purpose as of the dates indicated. Of the $285.4 million of commercial and industrial loans at December 31, 2025, 59%, or $168.2 million, had a gross loan balance of $5.0 million or more. The largest commercial and industrial lending relationship at December 31, 2025 had a gross loan balance of $81.6 million, which represented 29% of the gross commercial and industrial loan balance at December 31, 2025. The Bank had no commercial and industrial loan commitments at December 31, 2025. 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.

Current wording

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 March 31, 2026. The Bank had four commercial and industrial loan commitments totaling $36.6 million, with a weighted average rate of 6.83%, at March 31, 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.

Previous wording

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 December 31, 2025, categorized by aggregate gross loan and commitment amounts and average loan amount. Both loans greater than $15.0 million related to working capital loans in Kansas. The largest loan included in the table below was $36.0 million, of which $16.3 million was undisbursed as of December 31, 2025. This loan is part of the $81.6 million commercial and industrial lending relationship mentioned above.

Current wording

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 March 31, 2026, categorized by aggregate gross loan and commitment amounts, along with 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 $11.8 million remained undisbursed as of March 31, 2026. This loan is part of the Bank's largest commercial and industrial lending relationship, which had a total gross loan balance of $84.7 million, representing 29% of the gross commercial and industrial loan portfolio at March 31, 2026. The borrower is located in Kansas and, as of March 31, 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. Also included in the gross loan and commitment amounts greater than $15 million as of March 31, 2026 was a loan commitment to a borrower located in Georgia for the purchase and refinancing of business assets.

Previous wording

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 December 31, 2025 and September 30, 2025, approximately 59% and 49%, respectively, were 59 days or less delinquent.

Current wording

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 March 31, 2026, approximately 60% were 59 days or less delinquent.

Previous wording

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 December 31, 2025 compared to September 30, 2025 was due mainly to a $36.1 million hotel participation loan being upgraded to pass, due to an improvement in the hotel's financial results.

Current wording

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 March 31, 2026 compared to September 30, 2025 was due mainly to a hotel participation loan being upgraded to pass due to an improvement in the hotel's financial results. The majority of the substandard commercial real estate loan balance at the dates presented in the table below relates to one borrowing relationship. During the current quarter, an updated appraisal was received related to the collateral securing this lending relationship. The updated appraisal was lower than the appraisal received approximately one year ago and as a result, a $4.0 million specific valuation allowance was recorded as of March 31, 2026 related to this lending relationship. The loans associated with this lending relationship were on nonaccrual at all dates presented in the table below.

Previous wording

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 commercial ACL to loans receivable ratio as of December 31, 2025, compared to September 30, 2025, was primarily driven by changes in the composition of the commercial and industrial and commercial construction loan portfolios. These shifts affected the weighted average lives of the respective portfolios, which in turn influenced the discounted cash flow results compared to September 30, 2025. 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.

Current wording

The distribution of our ACL and the ratio of ACL to loans receivable, by loan type, at the dates indicated is summarized below. The increase in the ACL to loans receivable ratio as of March 31, 2026, compared to December 31, 2025 and September 30, 2025, was due primarily to establishing a specific valuation allowance related to the commercial real estate lending relationship 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.

Previous wording

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 loans was 0.12%. Total NCOs during the current quarter were $119 thousand. During the 10-year period ended December 31, 2025, the Bank recognized $875 thousand of total NCOs. As of December 31, 2025, the ACL balance was $24.6 million and the reserve for off-balance sheet credit exposures totaled $6.0 million, which management believes is adequate for the credit risk characteristics in our loan portfolio.

Current wording

Historically, the Bank has maintained very low delinquency ratios and net charge-off 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 March 31, 2026, the Bank recognized total NCOs of $904 thousand. As of March 31, 2026, the ACL balance was $26.6 million and the reserve for off-balance sheet credit exposures totaled $6.3 million, which management believes is adequate for the credit risk characteristics in our loan portfolio.

Previous wording

The ratio of NCOs to average non-performing assets was positive this quarter, compared to a negative ratio in the prior year quarter, due to a NCO this quarter versus a net recovery in the prior year quarter. The ratio of ACL to nonaccrual loans was lower at the end of the current quarter compared to the prior year quarter due to a higher balance of nonaccrual loans at December 31, 2025. The decrease in the ratio of the ACL to total loans as of December 31, 2025 from December 31, 2024 was due primarily to the regression analysis update that occurred in the second half of the prior fiscal year, partially offset by the changes in the loan portfolio mix due to continued growth in commercial loans, which have a higher ACL to loan ratio than one- to four-family loans. 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 for additional information on the regression analysis update that occurred in the prior fiscal year. Additional information related to ACL activity by specific loan categories for the current 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.

Current wording

The ratio of NCOs to average non-performing assets was lower in the current year period compared to the prior year period due to a higher average balance of non-performing assets during the six months ended March 31, 2026. The ratio of ACL to nonaccrual loans was lower at the end of the current year six-month period compared to the prior year six-month period due to a higher balance of nonaccrual loans at March 31, 2026. The increase in the ratio of the ACL to total loans as of March 31, 2026 from March 31, 2025 was due primarily to establishing a specific valuation allowance related to a nonaccrual commercial lending relationship during the current year period. 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 for additional information on the regression analysis update that occurred in the prior fiscal year. 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. ACL at the end of the period to NCOs during the period (annualized) was lower compared to the prior year six-month period, due primarily to higher NCOs in the current year six-month period.

Previous wording

Liabilities. Total liabilities were $8.74 billion at December 31, 2025, compared to $8.73 billion at September 30, 2025. The $6.1 million increase was due primarily to a $167.2 million increase in deposits, partially offset by a $120.9 million decrease in borrowings and a $36.9 million decrease in advances by borrowers due to the timing of semi-annual real estate payments.

Current wording

Liabilities. Total liabilities were $8.80 billion at March 31, 2026, compared to $8.73 billion at September 30, 2025. The $72.3 million increase was due primarily to a $333.0 million increase in deposits, partially offset by a $243.7 million decrease in borrowings.

Previous wording

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 increase in deposits from September 30, 2025 was due mainly to a $96.8 million increase in the Bank's high yield savings account offering and a $54.8 million increase in retail checking accounts. The decrease in the deposit portfolio rate at December 31, 2025 compared to September 30, 2025 and December 31, 2024 was due mainly to lower rates on retail certificates of deposit.

Current wording

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 deposit portfolio rate as of March 31, 2026 compared to December 31, 2025 was due primarily to an increase in retail checking account balances, a reduction in the rate on retail money market accounts, and a decrease in the retail certificate of deposit portfolio rate. The decrease in the 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.

Previous wording

As of December 31, 2025, approximately $776.8 million (or approximately 11%) of the Bank's Call Report deposit balance was uninsured, of which approximately $599.4 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.

Current wording

As of March 31, 2026, approximately $779.2 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.

Previous wording

Borrowings. Total borrowings at December 31, 2025 were $1.83 billion, which was comprised of $1.73 billion in fixed-rate FHLB advances, $100.0 million in variable-rate FHLB advances tied to an interest rate swap, and $1.1 million in finance leases. Borrowings decreased $120.9 million from September 30, 2025 due to the maturity of $100.0 million in borrowings during the current quarter that were not replaced, along with principal payments made on the Bank's amortizing FHLB advances. Cash flows from the increase in the deposit portfolio were used to pay down the borrowings portfolio during the current quarter. 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.

Current wording

Borrowings. Total borrowings at March 31, 2026 were $1.71 billion, which was comprised of $1.61 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 $243.7 million from September 30, 2025 due primarily to the maturity of $200.0 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 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.

Previous wording

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 December 31, 2025. Amortizing FHLB advances totaling $254.8 million are presented based on their maturity dates versus their quarterly scheduled repayment dates.

Current wording

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 March 31, 2026. Amortizing FHLB advances totaling $233.6 million are presented based on their maturity dates versus their quarterly scheduled repayment dates.

Previous wording

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. During the current quarter, the Bank refinanced a $50.0 million fixed-rate advance with a weighted average effective rate of 4.03% and a WAL of 0.5 year and replaced it with a $50.0 million fixed-rate advance with a weighted average effective rate of 3.64% and a WAL 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. This activity is reflected in the table below.

Current wording

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.

Previous wording

Stockholders' Equity. Stockholders' equity totaled $1.04 billion at December 31, 2025. 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 December 31, 2025, 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 December 31, 2025, the Bank's CBLR was 9.5%. See "Liquidity and Capital Resources" below for additional information regarding the Bank's regulatory capital requirements.

Current wording

Stockholders' Equity. Stockholders' equity totaled $1.03 billion at March 31, 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 March 31, 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 March 31, 2026, the Bank's community bank leverage ratio was 9.5%. 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 9.8% as of March 31, 2026. See "Liquidity and Capital Resources" below for additional information regarding the Bank's regulatory capital requirements.

Previous wording

During the quarter ended December 31, 2025, the Company repurchased 2,376,633 shares of common stock at an average price of $6.86 per share, or $16.3 million in total. Subsequent to December 31, 2025 and through February 4, 2026, the Company repurchased 108,000 shares at an average price of $7.51 per share. The Company currently has 54.0 million remaining authorized under its existing stock repurchase plan. The Company intends to continue to opportunistically repurchase stock from time to time based 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 Company has notified the FRB of its intent to extend the stock repurchase plan another year.

Current wording

During the six months ended March 31, 2026, the Company repurchased 4,532,114 shares of common stock at an average price of $7.00 per share, or $31.7 million in total. Subsequent to March 31, 2026 through May 6, 2026, the Company repurchased an additional 1,002,964 shares of common stock at an average price of $7.56 per share, or $7.6 million in total, bringing total share repurchases during fiscal year 2026 through May 6, 2026 to 5,535,078 shares for $39.3 million. As of May 6, 2026, total shares outstanding was 126,694,827. 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 May 6, 2026 the Company had $31.8 million remaining authorized under its existing stock repurchase plan.

Previous wording

During the quarter ended December 31, 2025, the Company paid regular quarterly cash dividends totaling $11.0 million, or $0.085 per share. On December 17, 2025, the Company announced a special cash dividend of $0.04 per share, or approximately $5.1 million, which was paid on January 23, 2026 to stockholders of record as of the close of business on January 9, 2026. On January 27, 2026, the Company announced a regular quarterly cash dividend of $0.085 per share, or approximately $10.8 million, payable on February 20, 2026 to stockholders of record as of the close of business on February 6, 2026. The special cash dividend, 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 while simultaneously pursuing incremental opportunities to return capital to stockholders.

Current wording

During the six months ended March 31, 2026, the Company paid cash dividends totaling $26.9 million, or $0.21 per share, which consisted of a $0.04 per share special cash dividend and two regular quarterly cash dividends of $0.085 per share, totaling $0.17 per share for the quarterly cash dividends. On April 28, 2026, the Company announced a regular quarterly cash dividend of $0.085 per share, or approximately $10.6 million, payable on May 15, 2026 to stockholders of record as of the close of business on May 1, 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. For the remainder of fiscal year 2026, it is the intention of the Company's Board of Directors to pay out a regular quarterly cash dividend of $0.085 per share, totaling $0.34 per share for the year. 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.

Previous wording

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 our second-step conversion in December 2010 through December 31, 2025, we have returned $2.03 billion in capital to stockholders through dividends totaling $1.58 billion and stock repurchases totaling $456.2 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.

Current wording

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 our second-step conversion in December 2010 through March 31, 2026, we have returned $2.06 billion in capital to stockholders through dividends totaling $1.59 billion and stock repurchases totaling $471.6 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.