Capitol Federal in Kansas Plans Major Stock Buyback

Flush with capital after raising roughly $1.1 billion in a stock sale late last year, Capitol Federal Financial Inc. in Topeka, Kan., now plans to deploy some of that capital by repurchasing up to 10% of its shares.

The company said in a Securities and Exchange Commission filing said its board has approved a stock repurchase program that will allow it buy back up to $193 million of stock "from time to time, depending on market conditions."

Capital deployment has been an issue for Capitol Federal since it converted from a mutual holding company to a 100% stock-owned company in December 2010. At Sept. 30, the company had a total risk-based capital-to-assets ratio of 38.3% — or nearly four times the level at which is a bank considered to be well capitalized.

The company had initially hoped to begin repurchasing stock this past summer, but it later withdrew its application after discussions with the Federal Reserve Board. Thrifts are typically prohibited from repurchasing shares until they have been fully public for a year and Capitol Federal would have needed special permission from the Fed to begin buying back shares any earlier.

Earlier this month the company did put some of the excess cash to use by paying a special one-time dividend of 10 cents on all outstanding shares.

Capitol Federal is the parent of Capitol Federal Savings Bank, a $9.5 billion-asset thrift with 45 branches in Kansas and Missouri.