Capitol Federal Financial (CFFN) in Topeka, Kan., reported lower quarterly profit as its interest income fell and compensation costs rose.
The $9.4 billion-asset company reported Monday that it earned a profit of $17.7 million in the quarter ended March 31, 8% lower than in the same period in 2012. Per-share earnings of 12 cents met analysts' expectations.
Net interest income fell 7%, to $44.3 million, as yields tightened. The net interest margin decreased by 9 basis points, to 1.97%.
Noninterest income fell 4%, to $5.9 million, as retail fees and charges dipped 9%, to $3.5 million. Noninterest expense rose 6%, to $23.2 million, as salary and benefit costs rose 15%, to $12.2 million. The higher cost of salaries and benefits was due in part to employee stock awards and special dividend payments, the company said.
Capitol Federal's asset quality improved, as total nonperforming assets fell 22%, to $33 million. It recorded no provision for loan losses, compared with a $1.5 million provision in the year-prior quarter. Chargeoffs were $457,000, a decline of nearly $4 million.