10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

Form 10-K

(Mark One)

þ          ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2011

                                                                                                 or

¨        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)

              OF THE SECURITIES EXCHANGE ACT OF 1934

     Commission file number:  001-34814

________________

Capitol Federal Financial, Inc.

(Exact name of registrant as specified in its charter)

              Maryland                                                                     27-2631712

                                      (State or other jurisdiction of incorporation                                         (I.R.S. Employer

                                   or organization)                                                          Identification No.)

                              700 Kansas Avenue, Topeka, Kansas                                                66603

(Address of principal executive offices)                                         (Zip Code)

Registrant’s telephone number, including area code:

(785) 235-1341

Securities registered pursuant to Section 12(b) of the Act:

                            Common Stock, par value $0.01 per share                          The NASDAQ Stock Market LLC

                                            (Title of Class)                                      (Name of Each Exchange on Which Registered)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes þ      No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15d of the Act.

Yes o      No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes þ     No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ     No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Act. (Check one):

Large accelerated filer þ           Accelerated filer o            Non-accelerated filer o   Smaller reporting company o

                                                                             (do not check if smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yeso Noþ

The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant, computed by reference to the average of the closing bid and asked price of such stock on the NASDAQ Stock Market as of March 31, 2011, was $1.85 billion.

As of November 18, 2011, there were issued and outstanding 167,498,133 shares of the Registrant’s common stock.

DOCUMENTS INCORPORATED BY REFERENCE

Part II of Form 10-K - Portions of the Annual Report to Stockholders for the year ended September 30, 2011.  Part III of Form 10-K - Portions of the proxy statement for the Annual Meeting of Stockholders for the year ended September 30, 2011.

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			Page No.
PART I	Item 1.	Business	4
	Item 1A.	Risk Factors	38
	Item 1B.	Unresolved Staff Comments	42
	Item 2.	Properties	42
	Item 3.	Legal Proceedings	43
	Item 4.	(Removed and Reserved)	43
PART II	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	43
	Item 6.	Selected Financial Data	43
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	44
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	44
	Item 8.	Financial Statements and Supplementary Data	44
	Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	44
	Item 9A.	Controls and Procedures	44
	Item 9B.	Other Information	44
PART III	Item 10.	Directors, Executive Officers, and Corporate Governance	44
	Item 11.	Executive Compensation	45
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	45
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	45
	Item 14.	Principal Accounting Fees and Services	45
PART IV	Item 15.	Exhibits and Financial Statement Schedules	46
SIGNATURES			47
INDEX TO EXHIBITS			48

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PRIVATE SECURITIES LITIGATION REFORM ACT—SAFE HARBOR STATEMENT

Capitol Federal Financial, Inc. (the “Company”),  and Capitol Federal Savings Bank (“Capitol Federal Savings” or the “Bank”), may from time to time make written or oral “forward-looking statements”, including statements contained in the Company’s filings with the Securities and Exchange Commission (“SEC”).  These forward-looking statements may be included in this Annual Report on Form 10-K and the exhibits attached to it, in the Company’s reports to stockholders and in other communications by the Company, which are made in good faith by us pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements include statements about our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, that are subject to significant risks and uncertainties, and are subject to change based on various factors, some of which are beyond our control.  The words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan” and similar expressions are intended to identify forward-looking statements. The following factors, among others, could cause our future results to differ materially from the plans, objectives, goals, expectations, anticipations, estimates and intentions expressed in the forward-looking statements:

·   our ability to continue to maintain overhead costs at reasonable levels;

·   our ability to continue to originate a significant volume of one- to four-family mortgage loans in our market areas or to purchase loans through correspondents;

·   our ability to acquire funds from or invest funds in wholesale or secondary markets;

·   the future earnings and capital levels of the Bank and the continued non-objection by our primary federal banking regulators, to the extent required, to distribute capital from the Bank to the Company, which could affect the ability of the Company to pay dividends in accordance with its dividend policies;

·   fluctuations in deposit flows, loan demand, and/or real estate values, as well as unemployment levels, which may adversely affect our business;

·   the credit risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs, changes in property values, and changes in estimates of the adequacy of the allowance for credit losses (“ACL”);

·   results of examinations of the Bank and the Company by their respective primary federal banking regulators, including the possibility that the regulators may, among other things, require us to increase our ACL;

·   the strength of the U.S. economy in general and the strength of the local economies in which we conduct operations;

·   the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System (“FRB”);

·   the effects of, and changes in, foreign and military policies of the United States government;

·   inflation, interest rate, market and monetary fluctuations;

·   our ability to access cost-effective funding;

·   the timely development and acceptance of our new products and services and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors’ products and services;

·   the willingness of users to substitute competitors’ products and services for our products and services;

·   our success in gaining regulatory approval of our products and services and branching locations, when required;

·   the impact of changes in financial services laws and regulations, including laws concerning taxes, banking, securities and insurance and the impact of other governmental initiatives affecting the financial services industry;

·   implementing business initiatives may be more difficult or expensive than anticipated;

·   technological changes;

·   acquisitions and dispositions;

·   changes in consumer spending and saving habits; and

·   our success at managing the risks involved in our business.

This list of important factors is not all inclusive.  We do not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company or the Bank.

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PART I

As used in this Form 10-K, unless we specify otherwise, “the Company,” “we,” “us,” and “our” refer to Capitol Federal Financial, Inc. a Maryland corporation. “Capitol Federal Savings,” and “the Bank,” refer to Capitol Federal Savings Bank, a federal savings bank and the wholly-owned subsidiary of Capitol Federal Financial, Inc.

Item 1.                      Business

General

The Company is a Maryland corporation that was incorporated in April 2010 to be the successor corporation upon completion of the mutual-to-stock conversion of Capitol Federal Savings Bank MHC (“MHC”).  The Bank is a wholly-owned subsidiary of the Company.  The Company’s common stock is traded on the Global Select tier of the NASDAQ Stock Market under the symbol “CFFN.”

In December 2010, Capitol Federal Financial completed its conversion from a mutual holding company form of organization to a stock form of organization.  Capitol Federal Financial, which owned 100% of the Bank, was succeeded by Capitol Federal Financial, Inc.  As part of the corporate reorganization, MHC’s ownership interest of Capitol Federal Financial was sold in a public stock offering.  Capitol Federal Financial, Inc. sold 118,150,000 shares of common stock at $10.00 per share in the stock offering.  The publicly held shares of Capitol Federal Financial were exchanged for new shares of common stock of Capitol Federal Financial, Inc.  The exchange ratio was 2.2637 and ensured that immediately after the corporate reorganization the public stockholders of Capitol Federal Financial (meaning those stockholders other than MHC) owned the same aggregate percentage of Capitol Federal Financial, Inc. common stock that they owned of Capitol Federal Financial common stock immediately prior to that time.  In lieu of fractional shares, Capitol Federal Financial stockholders were paid in cash.  Gross proceeds from the offering were $1.18 billion and related offering expenses were $46.7 million, of which $6.0 million were incurred and deferred in fiscal year 2010.  The net proceeds from the stock offering were $1.13 billion, of which 50%, or $567.4 million, was contributed to the Bank as a capital contribution, as required by Office of the Comptroller of the Currency (“OCC”) regulations.  The other 50%, or $567.4 million, remained at Capitol Federal Financial, Inc., of which $40.0 million was contributed to the Bank’s charitable foundation, Capitol Federal Foundation (“Foundation”), and $47.3 million was loaned to the Employee Stock Ownership Plan (“ESOP”) for its purchase of Capitol Federal Financial, Inc. shares in the stock offering.  In April 2011, the Company redeemed the outstanding Junior Subordinated Deferrable Interest Debentures (the “Debentures”) of $53.6 million using a portion of the offering proceeds from the corporate reorganization.

The Bank is a federally-chartered and insured savings bank headquartered in Topeka, Kansas.  The Bank is examined and regulated by the OCC, its primary regulator, and its deposits are insured up to applicable limits by the Deposit Insurance Fund (“DIF”), which is administered by the Federal Deposit Insurance Corporation (“FDIC”).  We primarily serve the metropolitan areas of Topeka, Wichita, Lawrence, Manhattan, Emporia and Salina, Kansas and a portion of the metropolitan area of greater Kansas City through 35 traditional and 10 in-store branches.  The Company is examined and regulated by the FRB.

We have been, and intend to continue to be, a community-oriented financial institution offering a variety of financial services to meet the needs of the communities we serve.  We generally attract retail deposits from the general public and invest those funds primarily in permanent loans secured by first mortgages on owner-occupied, one- to four-family residences.  To a much lesser extent, we also originate consumer loans, loans secured by first mortgages on non-owner-occupied one- to four-family residences, multi-family and commercial real estate loans, and construction loans.  While our primary business is the origination of one- to four-family mortgage loans funded through retail deposits, we also purchase whole one- to four-family mortgage loans from correspondent and nationwide lenders, and invest in certain investment securities and mortgage-backed securities (“MBS”) funded through retail deposits, advances from Federal Home Loan Bank (“FHLB”), and repurchase agreements.  The Company is significantly affected by prevailing economic conditions including federal monetary and fiscal policies and federal regulation of financial institutions.  Retail deposit balances are influenced by a number of factors including interest rates paid on competing personal investment products, the level of personal income, and the personal rate of savings within our market areas.  Lending activities are influenced by the demand for housing and other loans, internal and external changes in loan underwriting guidelines, as well as interest rate pricing competition from other lending institutions.  The primary sources of funds for lending activities include deposits, loan repayments, investment income, borrowings, and funds provided from operations.

Our revenues are derived principally from interest on loans, MBS and investment securities.  Our primary sources of funds are retail deposits, borrowings, repayments on and maturities of loans and MBS, calls and maturities of investment securities, and funds generated by operations.

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We offer a variety of deposit accounts having a wide range of interest rates and terms, which generally include savings accounts, money market accounts, interest-bearing and non-interest-bearing checking accounts, and certificates of deposit with terms ranging from 91 days to 96 months.

Our executive offices are located at 700 South Kansas Avenue, Topeka, Kansas 66603, and our telephone number at that address is (785) 235-1341.

Available Information

Our Internet website address is www.capfed.com.  Financial information, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports can be obtained free of charge from our website.  These reports are available on our website as soon as reasonably practicable after they are electronically filed with or furnished to the SEC.  These reports are also available on the SEC’s website at http://www.sec.gov.

Market Area and Competition

Our corporate office is located in Topeka, Kansas.  We currently have a network of 45 branches located in nine counties throughout the state of Kansas and two counties in Missouri.  We primarily serve the metropolitan areas of Topeka, Wichita, Lawrence, Manhattan, Emporia and Salina, Kansas and a portion of the metropolitan area of greater Kansas City.  In addition to providing full service banking offices, we also provide our customers telephone and internet banking capabilities.

The Bank ranked second in deposit market share, at 7.66%, in the state of Kansas as reported in the FDIC “Summary of Deposits - Market Share Report” dated June 30, 2011, which is consistent with our ranking at June 30, 2010 with a deposit market share of 7.60%.  Deposit market share is measured by total deposits, without consideration for type of deposit. We do not offer commercial deposit accounts, while many of our competitors have both commercial and retail deposits in their total deposit base. Some of our competitors also offer products and services that we do not, such as trust services and private banking, that add to their total deposits.  In recent years, there has been an entrance of new sources for deposit services in our market areas, such as credit unions, newly chartered banks (de novo institutions), and the addition of banking locations by established financial institutions which historically have not had locations in Kansas.   Consumers also have the ability to utilize online financial institutions and investment brokerages that are not confined to any specific market area.  Management considers our well-established retail banking network together with our reputation for financial strength and customer service to be major factors in our success at attracting and retaining customers in our market areas. 

The Bank is consistently one of the top one- to four-family lenders with regard to loan origination volume in the state of Kansas.  Through our strong relationships with real estate agents and marketing efforts which reflect our reputation and pricing, we attract mortgage loan business from walk-in customers, customers that apply online, and existing customers.   Competition in originating one- to four-family mortgage loans primarily comes from other savings institutions, commercial banks, credit unions, and mortgage bankers.  Other savings institutions, commercial banks, credit unions, and finance companies provide vigorous competition in consumer lending.

Currently, the Bank has two branches scheduled to open in fiscal year 2012 in our Kansas City market area.  An in-store branch in the Kansas City market area closed in late fiscal year 2011 due to the opening of a traditional branch nearby.  Management continues to consider expansion opportunities in all of our market areas.

Lending Practices and Underwriting Standards

General.  Originating and purchasing loans secured by one- to four-family residential properties is the Bank’s primary business, resulting in a loan concentration in residential first mortgage loans.  One- to four-family loans are purchased from a select group of correspondent lenders in our market areas in Kansas and Missouri, and also from a select group of correspondent lenders located generally throughout the central United States.  As a result of originating loans in our branches, along with the correspondent lenders in our local markets, the Bank has a concentration of loans secured by real property located in Kansas and Missouri.  Additionally, the Bank purchases whole one- to four-family loans in bulk packages from nationwide lenders.  The servicing rights for these loans are generally retained by the sellers.  The Bank also makes consumer loans, construction loans secured by residential or commercial properties, and real estate loans secured by multi-family or commercial properties.

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For a discussion of our market risk associated with loans see“Management’s Discussion and Analysis of Financial Condition and Results of Operations - Quantitative and Qualitative Disclosure about Market Risk” in the Annual Report to Stockholders attached as Exhibit 13 to this Annual Report on Form 10-K.

Loans over $500 thousand must be underwritten by two of our highest class of underwriters.  Any loan greater than $750 thousand must be approved by the Asset and Liability Management Committee (“ALCO”) and loans over $1.5 million must be approved by the Board of Directors.  For loans requiring ALCO and/or Board of Directors’ approval, lending management is responsible for presenting to ALCO and/or the Board of Directors information about the creditworthiness of the borrower and the value of the subject property.  Information pertaining to the creditworthiness of the borrower generally consists of a summary of the borrower’s credit history, employment stability, sources of income, assets, net worth, and debt ratios.  The value of the property must be supported by an independent appraisal report prepared in accordance with our appraisal policy.  Loans over $500 thousand are priced above the standard mortgage rate.

Under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, the maximum amount which we could have loaned to any one borrower and the borrower’s related entities at September 30, 2011 was $207.1 million.  Our largest lending relationship to a single borrower or a group of related borrowers at September 30, 2011 consisted of 12 multi-family real estate projects located in Kansas, one single-family home located in Colorado and one single-family loan located in Kansas, and five commercial real estate projects with three located in Kansas, one located in Colorado, and one located in Texas.  Total commitments and loans outstanding to this group of related borrowers was $40.2 million as of September 30, 2011.  We have over 30 years of experience with this group of borrowers.  Each of the loans to this group of borrowers was current and performing in accordance with their repayment terms at September 30, 2011, but changes in the loan agreement in fiscal year 2010 for a portion of the loans with a principal balance of $7.1 million prompted management to classify this portion of the loans as “Special Mention.”  See additional information under the heading “Multi-family and Commercial Real Estate Lending.”

The second largest lending relationship at September 30, 2011, consisted of 10 loans totaling $10.7 million.  Five loans are secured by multi-family real estate units and five are secured by one- to four-family real estate.  We have over 30 years of experience with the borrowers.  Each of the loans to this group of borrowers was current and performing in accordance with the original repayment terms at September 30, 2011.

One- to Four-Family Residential Real Estate Lending.  The Bank originates and services conventional mortgage loans, or loans not insured or guaranteed by a government agency.  The Bank also originates Federal Housing Administration (“FHA”) insured loan products which are generally sold, along with the servicing of these loans.  New loans are originated through referrals from real estate brokers and builders, our marketing efforts, and our existing and walk-in customers.  While the Bank originates both adjustable and fixed-rate loans, our ability to originate loans is dependent upon customer demand for loans in our market areas.  Demand is affected by the local housing market, competition, and the interest rate environment.  During the 2011 and 2010 fiscal years, the Bank originated and refinanced $652.3 million and $482.9 million of one- to four-family fixed-rate mortgage loans, and $107.4 million and $63.6 million of one- to four-family adjustable-rate mortgage (“ARM”) loans, respectively.

Repayment

The Bank’s one- to four-family loans are primarily fully amortizing fixed-rate or ARM loans with contractual maturities of up to 30 years, except for interest-only ARM loans, which require only the payment of interest during the interest-only period, all with payments due monthly.  Our one- to four-family loans are generally not assumable and do not contain prepayment penalties.  A “due on sale” clause, allowing the Bank to declare the unpaid principal balance due and payable upon the sale of the secured property, is generally included in the security instrument.

 Pricing

Our pricing strategy for first mortgage loan products includes setting interest rates based on secondary market prices and competitor pricing within our local lending markets.  ARM loans are offered with either a three-year, five-year, or seven-year term to the initial repricing date.  After the initial period, the interest rate for each ARM loan generally adjusts annually for the remainder of the term of the loan.  Several different indices are used to reprice our ARM loans.

Adjustable-rate loans

Current adjustable-rate one- to four-family conventional mortgage loans originated by the Bank generally provide for a specified rate limit or cap on the periodic adjustment to the interest rate, as well as a specified maximum lifetime cap and minimum rate, or floor.  As a consequence of using caps, the interest rates on these loans may not be as rate sensitive as our cost of funds.  Negative amortization of principal is not allowed.  For three, five, or seven year ARM loans, borrowers are qualified based on the principal, interest, taxes and insurance payments at either the initial rate or the fully indexed accrual rate, whichever is greater.  After the initial three, five, or seven year period, the interest rate is repriced annually and the new principal and interest payment is based on the new interest rate, remaining unpaid principal balance, and term of the ARM loan.  Our ARM loans are not automatically convertible into fixed-rate loans; however, we do allow borrowers to pay an endorsement fee to convert an ARM loan to a fixed-rate loan.  ARM loans can pose different credit risks than fixed-rate loans, primarily because as interest rates rise, the borrower’s payment also rises, increasing the potential for default.  This specific risk type is known as repricing risk.

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During 2008, the Bank discontinued offering an interest-only ARM product.  The Bank does, however, still hold in its portfolio originated and purchased interest-only ARM loans.  The interest-only ARM product was discontinued to reduce future credit risk exposure.  At the time of origination, these loans did not require principal payments for a period of up to ten years.  Borrowers were qualified based on a fully amortizing payment at the initial loan rate.  The Bank was more restrictive on debt-to-income ratios and credit scores on interest-only ARM loans than on other ARM loans to offset the potential risk of payment shock at the time the loan rate reprices and/or the principal and interest payments begin.  At September 30, 2011, $85.7 million, or approximately 2% of our one- to four-family loan portfolio, consisted of non-amortizing interest-only ARM loans.  The majority of these loans were purchased from nationwide lenders during fiscal year 2005.

Underwriting

One- to four-family loans are underwritten manually or by an internal automated underwriting system.  The system’s components closely resemble the Bank’s manual underwriting standards which are generally in accordance with Federal Home Loan Mortgage Corporation (“FHLMC”) and Federal National Mortgage Association (“FNMA”) manual underwriting guidelines.  The automated underwriting system analyzes the applicant’s data, with emphasis on credit history, employment and income history, qualifying ratios reflecting the applicant’s ability to repay, asset reserves, and loan-to-value (“LTV”) ratio.  Full documentation to support the applicant’s credit, income, and sufficient funds to cover all applicable fees and reserves at closing are required on all loans.  Loans that do not meet the automated underwriting standards are referred to a staff underwriter for manual underwriting.  Properties securing one- to four-family loans are appraised by either staff appraisers or fee appraisers, both of which are independent of the loan origination function and have been approved by the Board of Directors.

Mortgage Insurance

For a conventional mortgage with an LTV ratio in excess of 80% at the time of origination, private mortgage insurance (“PMI”) is required in order to reduce the Bank’s loss exposure to 80% of either the appraised value or the purchase price of the property, whichever is less.  The Bank will lend up to 97% of the lesser of the appraised value or purchase price for conventional one- to four-family loans, provided PMI is obtained. Management continuously monitors the claim-paying ability of our PMI counterparties.  At this time, we believe that our PMI counterparties have the ability to meet potential claim obligations we may file in the foreseeable future.

FHA loans have mortgage insurance provided by the federal government.  The loans are up to 96.5% LTV, prior to including the FHA insuring premium, which is calculated using the lesser of the appraised value or purchase price.  The loans are originated and underwritten manually according to private investor and FHA guidelines.  The Bank began offering FHA loans in September 2009 to accommodate customers who may not qualify for a conventional mortgage loan.  FHA loans are originated by the Bank with the intention of selling the loans on a flow basis to a private investor, with servicing released.  The Bank sold $8.1 million of FHA loans during fiscal year 2011.

Purchased loans

The Bank purchases conventional one- to four-family loans and the related servicing rights, on a loan-by-loan basis, from correspondent lenders located in our market areas and generally in the central United States.  At September 30, 2011, the Bank had 18 correspondent lending relationships.  The loan products offered by our correspondent lenders are underwritten by the Bank’s underwriters to standards that are at least as restrictive as the Bank’s underwriting standards.  During fiscal years 2011 and 2010, the Bank purchased $92.8 million and $67.3 million, respectively, of one- to four-family loans from correspondent lenders.  These loans generally have an interest rate 0.125% higher than loans we originate, for which we pay a premium of 0.50% of the loan balance.  We pay an additional 1.0% of the loan balance to purchase the servicing of these loans.

During fiscal year 2011, the Bank entered into 11 new correspondent lending relationships in our local market areas and in states outside our local market areas.  Additionally, during fiscal year 2011, the Bank entered into an agreement with a mortgage sub-servicer to provide loan servicing for loans originated by the Bank’s correspondent lenders in certain states.  The sub-servicer has experience servicing loans in the market areas in which we intend to purchase loans and will service the loans according to the Bank’s servicing standards, which is intended to allow the Bank greater control over servicing and help maintain a standard of loan performance. 

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The Bank also purchases conventional one- to four-family loans from nationwide lenders in bulk.  The servicing rights are generally retained by the lender/seller; however, it is the Bank’s intention for our sub-servicer to service bulk loan packages purchased from other lenders/sellers when economically feasible.  The servicing with nationwide lenders is governed by a servicing agreement, which outlines collection policies and procedures, as well as oversight requirements, such as servicer certifications attesting to and providing proof of compliance with the servicing agreement.  Each loan in a nationwide loan package is evaluated on criteria such as loan amount, credit scores, LTV ratios, geographic location, and debt ratios, and is required to be comparable to loans originated according to the Bank’s internal underwriting standards.  Before committing to purchase a pool of loans from a lender/seller, the Bank’s Chief Lending Officer or Secondary Marketing Manager reviews specific underwriting criteria of each loan in the pool, and if a loan does not meet the Bank’s underwriting standards without sufficient compensating factors, it will be removed from the pool.  Once the review of the specific criteria is complete and loans not meeting the Bank’s standards are removed from the pool, changes are sent back to the lender/seller for acceptance and pricing.  Before the pool is funded, an internal Bank underwriter or a third party reviews at least 25% of the loan files to confirm loan terms, credit scores, debt service ratios, property appraisals, and other underwriting-related documentation.  Our standard contractual agreement with the lender includes recourse options for any breach of representation or warranty with respect to the loans purchased.  The Bank did not request any nationwide lenders to repurchase loans for breach of representation during fiscal year 2011.

During fiscal year 2011, the Bank completed bulk nationwide purchases of $89.2 million of one- to four-family loans, compared to $44.1 million of bulk nationwide purchases in fiscal year 2010.  Bulk nationwide purchases enable the Bank to attain some geographic diversification in the loan portfolio.  We have experienced some performance issues and losses on some of the loans purchased from nationwide lenders prior to fiscal year 2008, the majority of which were originated between calendar years 2004 and 2006.  These loans met our underwriting standards at the time of purchase; however, as a result of the continued elevated levels of unemployment and the declines in real estate values, we have experienced an increase in non-performing purchased loans and charge-offs/losses related to those loans.  See additional discussion regarding non-performing purchased loans in “Asset Quality – Loans and Real Estate Owned.”

Loan endorsement program

In an effort to offset the impact of repayments and to retain our customers, the Bank offers existing one- to four-family loan customers whose loans have not been sold to third parties who have not been delinquent on their contractual loan payments during the previous 12 months the opportunity, for a fee, to modify their original or existing loan terms to current loan terms being offered.  The Bank does not solicit customers for this program, but considers it a valuable opportunity to retain customers who, due to our initial underwriting criteria, could likely obtain similar financing elsewhere.  During fiscal years 2011 and 2010, we endorsed $965.1 million and $545.1 million of loans, respectively.

Loan sales

Conventional one- to four-family loans may be sold on a bulk basis for portfolio restructuring or on a flow basis as loans are originated to reduce interest rate risk and/or maintain a certain liquidity position.  The Bank generally retains the servicing on these loans.  ALCO determines the criteria upon which conventional one- to four-family loans are to be originated as held-for-sale or held-for-investment.  Conventional one- to four-family loans originated as held-for-sale are to be sold in accordance with policies set forth by ALCO.  Conventional one- to four-family loans originated as held-for-investment are generally not eligible for sale unless a specific segment of the portfolio is identified for asset restructuring purposes.  Generally, the Bank will continue to service these loans.  The Bank sold $5.1 million and $34.7 million of conventional one- to four-family loans during fiscal years 2011 and 2010, respectively.  As of April 2011, we are no longer originating conventional loans for sale under the program that we sold loans under during fiscal years 2011 and 2010.

Construction Lending.  The Bank also originates construction-to-permanent loans primarily secured by one- to four-family residential real estate.  The majority of the one- to four-family construction loans are secured by property located within the Bank’s Kansas City market area.  Construction loans are obtained primarily by homeowners who will occupy the property when construction is complete.  Construction loans to builders for speculative purposes are not permitted.  Bank policy permits a limited amount of construction-to-permanent loans secured by multi-family dwellings and commercial real estate.  The application process includes submission of complete plans, specifications, and costs of the project to be constructed.  All construction loans are manually underwritten using the Bank’s internal underwriting standards. At September 30, 2011, we had $47.4 million in construction-to-permanent loans outstanding, including undisbursed loan funds, representing almost 1% of our total loan portfolio.

The Bank’s one- to four-family construction-to-permanent loan program combines the construction loan and the permanent loan into one loan allowing the borrower to secure the same interest rate throughout the construction period and the permanent loan.  The interest rate and loan products offered on the one- to four-family construction-to-permanent loan program are the same as what is offered for non-construction-to-permanent one- to four-family loans.  The loan term is longer than the non-construction one- to four-family loans due to consideration for the construction period, which is generally between 12 and 18 months.

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Construction draw requests and the supporting documentation are reviewed and approved by management prior to funding.  The Bank also performs regular documented inspections of the construction project to ensure the funds are being used for the intended purpose and the project is being completed according to the plans and specifications provided.  The Bank charges a 1% fee at closing, based on the loan amount, for these administrative requirements.  Interest is billed and collected monthly based on the amount of funds disbursed.  Once the construction period is complete, the payment method is changed from interest-only to an amortized principal and interest payment for the remaining term of the loan.

Consumer Lending.  The Bank offers a variety of secured consumer loans, including home equity loans and lines of credit, home improvement loans, auto loans, and loans secured by savings deposits.   The Bank also originates a very limited amount of unsecured loans.  The Bank does not originate any consumer loans on an indirect basis, such as contracts purchased from retailers of goods or services which have extended credit to their customers.  All consumer loans are originated in the Bank’s market areas.  At September 30, 2011, our consumer loan portfolio totaled $171.8 million, or approximately 3% of our total loan portfolio.

The majority of the consumer loan portfolio is comprised of home equity lines of credit, which have interest rates that can adjust monthly based upon changes in the Prime rate, to a maximum of 18%.  Home equity loans originated after June 2010 may be originated in amounts, together with the existing first mortgage, of up to 90% of the value of the property.  Home equity loans originated prior to June 2010 may have been originated in amounts, together with the amount of the existing first mortgage, of up to 100% of the value of the property securing the loan.  Closed-end equity home loans may be originated up to 95% of the value of the property securing the loans, taking into consideration the existing first mortgage.  The term-to-maturity of closed-end home equity and home improvement loans may be up to 20 years.  Home equity lines of credit originated after June 2010 have a seven year draw period with a ten year repayment term and generally require a payment of 1.5% of the outstanding loan balance per month during the draw period, with an amortizing payment during the repayment period.  The majority of home equity lines of credit loans originated prior to June 2010 generally require a payment of 1.5% of the outstanding loan balance per month, but have no stated term-to-maturity and no repayment period. Interest-only home equity lines of credit have a maximum term of 12 months, monthly payments of accrued interest, and a balloon payment at maturity.  Repaid principal may be re-advanced at any time, not to exceed the original credit limit of the loan.  Other consumer loan terms vary according to the type of collateral and the length of the contract.   Home equity loans, including lines of credit and home improvement loans, comprised approximately 95% of our consumer loan portfolio, or $164.5 million, at September 30, 2011.  As of September 30, 2011, 76.5% of the home equity loan portfolio was adjustable-rate.

The underwriting standards for consumer loans include a determination of the applicant’s credit history and an assessment of their ability to meet existing obligations and payments on the proposed loan. Although creditworthiness of the applicant is a primary consideration, the underwriting process also includes a comparison of the value of the security in relation to the proposed loan amount.

Consumer loans generally have shorter terms to maturity or reprice more frequently, which reduces our exposure to changes in interest rates, and usually carry higher rates of interest than do one- to four-family loans.  However, consumer loans may entail greater risk than do one- to four-family loans, particularly in the case of consumer loans that are secured by rapidly depreciable assets, such as automobiles.  In addition, consumer loan collections are dependent on the borrower’s continuing financial stability, and thus are likely to be affected by adverse personal circumstances.  Furthermore, the application of various federal and state laws, including bankruptcy and state insolvency laws, may limit the amount which can be collected on these loans.  Management believes that offering consumer loan products helps to expand and create stronger ties to our existing customer base by increasing the number of customer relationships and providing cross-marketing opportunities.

9

Multi-family and Commercial Real Estate Lending.  At September 30, 2011, multi-family and commercial real estate loans totaled $58.0 million, or approximately 1% of our total loan portfolio.  The Bank’s multi-family and commercial real estate loans are originated by the Bank or are in participation with a lead bank, and are secured primarily by multi-family dwellings and small commercial buildings generally located in the Bank’s market areas.  Approximately 12% of the multi-family and commercial real estate portfolio at September 30, 2011, or $7.1 million, represent participations with another bank.  Bank policy permits a limited amount of construction-to-permanent loans secured by multi-family dwellings and commercial real estate.  Currently there are no construction-to-permanent loans in the multi-family and commercial portfolio.  Multi-family and commercial real estate loans are granted based on the income producing potential of the property and the financial strength of the borrower.  At the time of origination, LTV ratios on multi-family and commercial real estate loans cannot exceed 80% of the appraised value of the property securing the loans.  The net operating income, which is the income derived from the operation of the property less all operating expenses, must be sufficient to cover the payments related to the outstanding debt at the time of origination.  The Bank generally requires personal guarantees of the borrowers covering a portion of the debt in addition to the security property as collateral for these loans.  Appraisals on properties securing these loans are performed by independent state certified fee appraisers approved by the Board of Directors.  Our multi-family and commercial real estate loans are originated with either a fixed or adjustable interest rate.  The interest rate on ARM loans is based on a variety of indices, generally determined through negotiation with the borrower.  While maximum maturities may extend to 30 years, these loans frequently have shorter maturities and may not be fully amortizing, requiring balloon payments of unamortized principal at maturity.

We generally do not maintain a tax or insurance escrow account for multi-family or commercial real estate loans.  In order to monitor the adequacy of cash flows on income-producing properties with a principal balance of $1.5 million or more, the borrower is notified annually to provide financial information including rental rates and income, maintenance costs and an update of real estate property tax payments, as well as personal financial information.

Our multi-family and commercial real estate loans are generally large dollar loans and involve a greater degree of credit risk than one- to four-family loans.  Such loans typically involve large balances to single borrowers or groups of related borrowers.  Because payments on multi-family and commercial real estate loans are often dependent on the successful operation or management of the properties, repayment of such loans may be subject to adverse conditions in the real estate market or the economy.  If the cash flow from the project is reduced, or if leases are not obtained or renewed, the borrower’s ability to repay the loan may be impaired.

The Bank is a participant with four other banking institutions on a commercial construction loan secured by a retail shopping center in Kansas.  At September 30, 2011, the Bank’s portion of the project had an aggregate outstanding principal balance of $7.1 million and an outstanding commitment of $160 thousand for remaining tenant finish.  92% of the shopping center was tenant leased as of September 30, 2011.  This participation is part of our largest lending relationship to a single borrower or a group of related borrowers at September 30, 2011.  Although the loans have performed per the terms of the agreement, a change in the agreement in fiscal year 2010 prompted management to classify the loans as “Special Mention”.  The loans remain classified as such at September 30, 2011.  See “Asset Quality - Loans and Real Estate Owned – Classified Assets.”

10

Loan Portfolio.  The following table presents the composition of our loan portfolio as of the dates indicated.

	September 30,
	2011						2010						2009						2008						2007
	Amount			Percent			Amount			Percent			Amount			Percent			Amount			Percent			Amount			Percent
	(Dollars in thousands)
Real Estate Loans:
One- to four-family	$	4,918,778			94.7	%	$	4,915,651			94.4	%	$	5,321,935			94.2	%	$	5,026,358			93.4	%	$	4,992,398			93.4	%
Multi-family and commercial		57,965			1.1			66,476			1.3			80,493			1.4			56,081			1.0			60,625			1.1
Construction		47,368			0.9			33,168			0.6			39,535			0.7			85,178			1.6			74,521			1.4
Total real estate loans		5,024,111			96.7			5,015,295			96.3			5,441,963			96.3			5,167,617			96.0			5,127,544			95.9
Consumer Loans:
Home equity		164,541			3.2			186,347			3.6			195,557			3.5			202,956			3.8			208,642			3.9
Other		7,224			0.1			7,671			0.1			9,430			0.2			9,272			0.2			10,440			0.2
Total consumer loans		171,765			3.3			194,018			3.7			204,987			3.7			212,228			4.0			219,082			4.1
Total loans receivable		5,195,876			100.0	%		5,209,313			100.0	%		5,646,950			100.0	%		5,379,845			100.0	%		5,346,626			100.0	%
Less:
Undisbursed loan funds		22,531						15,489						20,649						43,186						42,481
ACL		15,465						14,892						10,150						5,791						4,181
Discounts/unearned loan fees		19,093						22,267						23,549						19,252						16,621
Premiums/deferred costs		(10,947	)					(11,537	)					(11,363	)					(9,164	)					(6,728	)
Total loans receivable, net	$	5,149,734					$	5,168,202					$	5,603,965					$	5,320,780					$	5,290,071

11

The following table presents the contractual maturity of our loan portfolio at September 30, 2011.  Loans which have adjustable or renegotiable interest rates are shown as maturing in the period during which the contract is due.  The table does not reflect the effects of possible prepayments or enforcement of due on sale clauses.

	Real Estate															Consumer
						Multi-family and					Construction
	One- to Four-Family					Commercial					and Development (2)					Home Equity (3)					Other					Total
			Weighted					Weighted					Weighted					Weighted					Weighted						Weighted
			Average					Average					Average					Average					Average						Average
	Amount		Rate			Amount		Rate			Amount		Rate			Amount		Rate			Amount		Rate			Amount			Rate
	(Dollars in thousands)
Amounts due:
Within one year (1)	$	1,925		5.54	%	$	7,443		6.00	%	$	24,295		4.21	%	$	629		6.22	%	$	538		4.75	%	$	34,830			4.71	%
After one year:
Over one to two		9,852		5.13			1,401		6.38			23,073		4.33			306		6.62			1,040		7.32			35,672			4.74
Over two to three		7,008		5.55			--		--			--		--			490		6.06			1,639		4.61			9,137			5.41
Over three to five		23,934		5.41			5,722		6.41			--		--			6,556		5.34			3,601		4.35			39,813			5.45
Over five to ten		357,806		4.91			19,378		5.99			--		--			16,813		6.17			406		8.42			394,403			5.02
Over 10 to 15		1,161,048		4.33			15,510		6.15			--		--			38,337		5.46			--		--			1,214,895			4.39
After 15 years		3,357,205		4.73			8,511		6.30			--		--			101,410		5.38			--		--			3,467,126			4.75
Total due after one year		4,916,853		4.65			50,522		6.15			23,073		4.33			163,912		5.48			6,686		5.12			5,161,046			4.69
Total loans	$	4,918,778		4.65	%	$	57,965		6.13	%	$	47,368		4.27	%	$	164,541		5.48	%	$	7,224		5.10	%		5,195,876			4.69	%
Less:
Undisbursed loan funds																											22,531
ACL																											15,465
Discounts/unearned loan fees																											19,093
Premiums/deferred costs																											(10,947	)
Total loans receivable, net																										$	5,149,734

(1)  Includes demand loans, loans having no stated maturity, and overdraft loans.

(2)  Construction loans are presented based upon the term to complete construction.

(3)  For home equity loans, the maturity date calculated assumes the customer always makes the required minimum payment.  The majority of interest-only home equity lines of credit assume a balloon payment of unpaid principal at 120 months.  All other home equity lines of credit generally assume a term of 240 months.

12

The following table presents, as of September 30, 2011, the amount of loans due after September 30, 2012, and whether these loans have fixed or adjustable interest rates.

	Fixed		Adjustable		Total
	(Dollars in thousands)
Real Estate Loans:
One- to four-family	$	4,112,082	$	804,771	$	4,916,853
Multi-family and commercial		50,522		--		50,522
Construction		17,762		5,311		23,073
Consumer Loans:
Home equity		38,502		125,410		163,912
Other		2,518		4,168		6,686
Total	$	4,221,386	$	939,660	$	5,161,046

The following table shows our loan originations and refinances, loan purchases and participations, transfers, and repayment activity for the periods indicated.  Purchased loans include loans purchased from correspondent and nationwide lenders.  The table below does not include $965.1 million, $545.1 million, and $1.14 billion of loans that were endorsed during fiscal years 2011, 2010, and 2009, respectively.

	Year Ended September 30,
	2011			2010			2009
	(Dollars in thousands)
Originations and Refinances by type:
Fixed-Rate:
Real estate - one- to four-family	$	617,510		$	456,620		$	937,430
- multi-family and commercial		892			5,420			14,891
- construction		34,786			26,241			24,063
Home equity		3,426			5,429			10,069
Other consumer		1,470			1,551			1,922
Total fixed-rate		658,084			495,261			988,375
Adjustable-Rate:
Real estate - one- to four-family		96,399			60,108			33,601
- multi-family and commercial		--			--			--
- construction		10,969			3,492			2,261
Home equity		69,205			83,199			91,053
Other consumer		2,588			3,068			4,391
Total adjustable-rate		179,161			149,867			131,306
Total loans originated and refinanced		837,245			645,128			1,119,681
Purchases and Participations:
Real estate - one- to four-family		181,971			110,388			332,932
- multi-family and commercial		--			7,713			--
- construction		--			1,000			500
Total loans purchased /participations		181,971			119,101			333,432
Transfer of loans to loans held-for-sale, net		--			(194,759	)		(94,672	)
Principal repayments		(1,019,307	)		(989,826	)		(1,079,777	)
Net change in other items		(13,346	)		(17,281	)		(11,559	)
Net (decrease) increase in loan receivable	$	(13,437	)	$	(437,637	)	$	267,105

13

Asset Quality – Loans and Real Estate Owned (“REO”)

The Bank’s traditional underwriting guidelines historically have resulted in low levels of delinquencies and non-performing assets compared to national levels.  Of particular importance is the complete and full documentation required for each loan the Bank originates and purchases.  This allows the Bank to make an informed credit decision based upon a thorough assessment of the borrower’s ability to repay the loan, as of the time of origination, compared to underwriting methodologies that do not require full documentation.

In the following asset quality discussion, loans purchased from correspondent lenders are included with originated loans and loans purchased from nationwide lenders are reported as purchased loans.

For one- to four-family originated and correspondent loans and home equity loans, when a borrower fails to make a loan payment 15 days after the due date, a late charge is assessed and a notice is mailed.  Collection personnel review all delinquent loan balances more than 16 days past due.  Attempts to contact the borrower occur by personal letter and, if no response is received, by telephone, with the purpose of establishing repayment arrangements for the borrower to bring the loan current.  Repayment arrangements must be approved by a designated bank officer.  Once a loan becomes 90 days delinquent, a demand letter is issued requiring the loan to be brought current or foreclosure procedures will be implemented.  Generally, when a loan becomes 120 days delinquent, and an acceptable repayment plan has not been established, the loan is forwarded to legal counsel to initiate foreclosure.  We also monitor whether mortgagors who filed for bankruptcy are meeting their obligation to pay the mortgage debt in accordance with the terms of the bankruptcy petition. 

We monitor delinquencies on our purchased loan portfolio with reports we receive from the servicers.  We monitor these servicer reports to ensure that the servicer is upholding the terms of the servicing agreement.  The reports generally provide total principal and interest due and length of delinquency, and are used to prepare monthly management reports and perform delinquent loan trend analysis.  Management also utilizes information from the servicers to monitor property valuations and identify the need to record specific valuation allowances (“SVAs”).  The servicers handle collection efforts per the terms of the servicing agreement.

In April 2011, banking regulators reported enforcement actions against 14 banking organizations to address a pattern of misconduct and negligence in mortgage loan servicing and foreclosure processing.  The Bank was not one of the banking organizations noted in the enforcement actions.  As a result of the enforcement actions, significant changes in residential mortgage loan servicing and foreclosure processes were required at the 14 banking organizations.  Of the 14 banking organizations, there are three organizations that service loans we purchased from nationwide lenders.  During the time period under review (2009 and 2010), the Bank had 93 loans go into foreclosure with the servicers noted in the enforcement actions.  Management cannot currently estimate the cost, if any, to the Bank if deficiencies are detected in any of those loans.  We have not been notified that any deficiencies have been detected.  The OCC and the government-sponsored enterprises (“GSEs”) have issued guidance with respect to foreclosure procedures for servicers, effective in 2011.  Management is currently reviewing and implementing procedures in response to the guidance.

14

Delinquent and non-performing loans and REO

The following tables present the Company’s 30 to 89 day delinquent loans, non-performing loans, and REO at the dates indicated.  Non-performing loans are non-accrual loans that are 90 or more days delinquent or are in the process of foreclosure.  At all dates presented, there were no loans 90 or more days delinquent that were still accruing interest.  Loans classified as troubled debt restructurings (“TDRs”) are not included in delinquent or non-performing loans unless the restructured loans are 30 to 89 days or 90 or more days delinquent, respectively.  TDRs 30 to 89 days delinquent were $2.6 million and TDRs 90 or more days delinquent were $2.9 million at September 30, 2011.  REO primarily includes assets acquired in settlement of loans.  Non-performing assets include non-performing loans and REO.

	Loans Delinquent for 30 to 89 Days at September 30,
	2011					2010					2009
	Number		Amount			Number		Amount			Number		Amount
	(Dollars in thousands)
One- to four-family:
Originated		178	$	19,710			175	$	17,613			159	$	15,488
Purchased		34		6,199			34		6,047			41		10,556
Multi-family and commercial		--		--			--		--			--		--
Construction		--		--			--		--			--		--
Consumer Loans:
Home equity		43		759			50		874			40		708
Other		14		92			16		183			15		89
		269	$	26,760			275	$	24,717			255	$	26,841
30 to 89 days delinquent loans
to total loans receivable, net				0.52	%				0.48	%				0.48	%

Loans 30 to 89 days delinquent increased $2.1 million from $24.7 million at September 30, 2010 to $26.8 million at September 30, 2011.  The $2.1 million increase was primarily in the originated loan portfolio.  Our local market areas did not feel the impact of the negative economic conditions felt by a large portion of the U.S. until recently, thereby resulting in a lag in delinquencies on our originated loan portfolio compared to our purchased loan portfolio.

The table below sets forth the number, amount and categories of non-performing assets.  At all dates presented, we had no loans past due 90 days or more that were still accruing interest.  The amount of interest income on non-performing loans included in interest income was $673 thousand for the year ended September 30, 2011.  The amount of interest income that would have been recorded on non-performing loans if they were not on non-accrual status was $1.3 million for the year ended September 30, 2011.

15

	September 30,
	2011					2010					2009					2008					2007
	Number		Amount			Number		Amount			Number		Amount			Number		Amount			Number		Amount
	(Dollars in thousands)
Non-performing loans:
One- to four-family:
Originated		106	$	12,375			109	$	12,884			99	$	9,248			70	$	6,488			68	$	4,941
Purchased		46		13,749			60		18,375			70		21,259			25		6,708			9		2,163
Multi-family and commercial		--		--			--		--			--		--			--		--			--		--
Construction		--		--			--		--			--		--			--		--			--		--
Consumer Loans:
Home equity		21		380			31		685			22		367			19		379			13		207
Other		3		3			6		12			8		45			11		91			7		41
		176		26,507			206		31,956			199		30,919			125		13,666			97		7,352
Non-performing loans as a percentage
of total loans receivable, net				0.51	%				0.62	%				0.55	%				0.26	%				0.14	%
REO:
One- to four-family:
Originated (1)		74		6,942			73		6,172			48		5,702			31		2,228			26		2,036
Purchased		12		2,877			17		3,748			8		1,702			12		2,918			1		61
Multi-family and commercial		--		--			--		--			--		--			--		--			--		--
Construction		--		--			--		--			--		--			--		--			--		--
Consumer Loans:
Home equity		--		--			--		--			--		--			--		--			--		--
Other		--		--			--		--			--		--			--		--			--		--
Other (2)		1		1,502			--		--			--		--			--		--			--		--
		87		11,321			90		9,920			56		7,404			43		5,146			27		2,097
Total non-performing assets		263	$	37,828			296	$	41,876			255	$	38,323			168	$	18,812			124	$	9,449
Non-performing assets
as a percentage of total assets				0.40	%				0.49	%				0.46	%				0.23	%				0.12	%

(1)   Real estate related consumer loans are included in the one- to four-family category as the underlying collateral is a one- to four-family property.

(2)   The $1.5 million property classified as Other REO represents a single property the Bank purchased for a potential branch site but now intends to sell.

16

Non-performing loans decreased $5.5 million from $32.0 million at September 30, 2010 to $26.5 million at September 30, 2011.  The $5.5 million decrease was primarily due to a $4.6 million decrease in non-performing purchased one- to four-family loans due to the loans moving to REO, short sales, and loans paying off. 

The following table presents the average percentage of one- to four-family loans, by principal balance, that entered the 30 to 89 days delinquent category during the 12 months ended September 30, 2011 that paid off, returned to performing status, stayed 30 to 89 days delinquent, or progressed to the non-performing or REO categories.

	30-89 Day Delinquent Loan Trend Analysis
							30-89 Days			Non-
	Paid Off			Performing			Delinquent			Performing			REO			Total
Originated		3.0	%		40.1	%		41.3	%		13.4	%		2.2	%		100.0	%
Correspondent		5.2			19.4			43.6			26.9			4.9			100.0
Purchased		1.9			39.6			35.8			21.9			0.8			100.0
Total portfolio average		3.0	%		39.3	%		39.6	%		16.1	%		2.0	%		100.0	%

The following table shows the weighted average credit score and LTV information for originated, correspondent purchased and nationwide purchased one- to four-family loan portfolios at September 30, 2011.  Credit scores were most recently updated in September 2011 and were obtained from a nationally recognized consumer rating agency.  The LTV ratios were based on the unpaid principal balance and either the lesser of the purchase price or original appraisal, or the most recent bank appraisal, broker price opinion (“BPO”), or automated valuation model (“AVM”), if available.  In most cases, the most recent appraisal was obtained at the time of origination.

	Credit Score		LTV
Originated		763		66	%
Correspondent		759		64
Nationwide		740		60
		760		65	%

17

The following table presents the year of origination for originated and purchased one- to four-family loans, and the year of origination for non-performing originated and purchased one- to four-family loans at September 30, 2011.  The origination date for endorsed loans is based on when the loan was originated, rather than the endorsement date.

							Originated		Purchased		Total
Origination							Non-		Non-		Non-
Calendar	Originated		Purchased				Performing		Performing		Performing
Year	Loans		Loans		Total Loans		Loans		Loans		Total
	(Dollars in thousands)
2002 and prior	$	510,418	$	52,841	$	563,259	$	2,551	$	307	$	2,858
2003		288,288		54,384		342,672		1,767		362		2,129
2004		224,980		176,130		401,110		2,111		7,170		9,281
2005		287,480		167,273		454,753		2,186		5,910		8,096
2006		311,459		26,548		338,007		2,048		--		2,048
2007		421,399		15,620		437,019		750		--		750
2008		474,169		32,898		507,067		457		--		457
2009		741,819		10,064		751,883		60		--		60
2010		608,498		--		608,498		445		--		445
2011		514,510		--		514,510		--		--		--
	$	4,383,020	$	535,758	$	4,918,778	$	12,375	$	13,749	$	26,124

18

The following table presents the top twelve states where the properties securing our one- to four-family loans are located and the corresponding balance of 30 to 89 day delinquent loans, non-performing loans and the weighted average LTV ratios for non-performing loans at September 30, 2011.  The LTV ratios were based on the unpaid principal balance and either the lesser of the purchase price or original appraisal or the most recent bank appraisal, BPO or AVM, if available.  As a result of updated estimated fair values, the LTV of various non-performing loans in the table below are now in excess of 100%.  We have recorded SVAs on these loans, after taking into consideration potential PMI proceeds.

						Loans 30 to 89
	One- to Four-Family					Days Delinquent					Non-Performing Loans
State	Balance		% of Total			Balance		% of Total			Balance		% of Total			Average LTV
	(Dollars in thousands)
Kansas	$	3,648,579		74.2	%	$	14,761		57.0	%	$	10,973		42.0	%		77	%
Missouri		743,872		15.1			5,505		21.2			1,417		5.4			92
Nebraska		64,725		1.3			196		0.7			--		--			n/a
Illinois		50,098		1.0			50		0.2			1,712		6.6			95
Florida		36,529		0.8			304		1.2			4,082		15.6			117
New York		30,422		0.6			208		0.8			1,104		4.2			96
Texas		29,804		0.6			800		3.1			--		--			n/a
Minnesota		29,306		0.6			1,302		5.0			95		0.4			57
Colorado		24,743		0.5			356		1.4			204		0.8			85
Arizona		22,962		0.5			362		1.4			1,462		5.6			148
Connecticut		21,667		0.4			--		--			144		0.5			87
Virginia		20,467		0.4			--		--			473		1.8			108
Other states		195,604		4.0			2,065		8.0			4,458		17.1			98
	$	4,918,778		100.0	%	$	25,909		100.0	%	$	26,124		100.0	%		94	%

Troubled Debt Restructurings and Impaired Loans.A traditional TDR is a situation in which the Bank may grant a concession to a borrower experiencing financial difficulties.  Generally, the Bank grants a short-term payment accommodation to borrowers that are experiencing a temporary cash flow problem.  The most frequently used accommodation is to reduce the monthly payment amount for a period of six to 12 months, often by only requiring payments of interest and escrow during this period. These restructurings result in an extension of the maturity date of the loan.  For more severe situations requiring long-term solutions, the Bank also offers interest rate reductions to currently-offered rates and extensions of the maturity date.  The Bank does not forgive principal or interest nor does it commit to lend additional funds to debtors whose terms have been modified in TDRs.

At September 30, 2011, 2010, 2009, 2008, and 2007, the Bank had TDRs with principal balances of $50.4 million, $27.2 million, $10.8 million, $918 thousand, and $230 thousand, respectively.  At September 30, 2011, $30.7 million represent restructurings granted to borrowers experiencing financial difficulties and $19.7 million represent restructurings to market interest rates through the Bank’s loan endorsement program, which are classified as TDRs as a result of the Company adopting Accounting Standard Update (“ASU”) No. 2011-02 on July 1, 2011.  The increase in TDRs from September 30, 2010 to September 30, 2011 was primarily due to new accounting guidance and, to a lesser extent, an increase in, and continued elevated level of, unemployment which has resulted in a greater number of borrowers experiencing financial difficulties.  Of the $50.4 million of TDRs at September 30, 2011, $43.3 million were originated loans, and $2.9 million were greater than 90 days delinquent and were included in the non-performing loan balance at September 30, 2011.  The amount of interest recognized in interest income on total TDRs was $2.0 million for the year ended September 30, 2011.

19

A loan is considered impaired when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the loan agreement.  Management considers the following loans to be impaired loans: all non-accrual loans, loans classified as substandard, loans with SVAs, and TDRs that have not been performing under the new terms for 12 consecutive months or are required by the accounting literature to be classified as a TDR for the life of the loan due to a reduction in the stated interest rate to a rate lower than the current market rate for new debt with similar risk.  The table below presents the composition of impaired loans, by unpaid principal balance, at the dates presented.

	September 30,
	2011		2010		2009
	(Dollars in thousands)
Nonaccrual loans	$	23,609	$	29,505	$	30,608
Performing TDRs		43,301		24,736		10,477
Nonaccrual TDRs		2,898		2,451		314
Other impaired loans		2,240		426		--
Total impaired loans	$	72,048	$	57,118	$	41,399

Classified Assets.  Federal regulations provide for the classification of loans and other assets, such as debt and equity securities considered to be of lesser quality, as “substandard”, “doubtful” or “loss.”  In addition, the regulations also provide for a “special mention” category, which are performing loans on which known information about the collateral pledged or the possible credit problems of the borrowers have caused management to have doubts as to the ability of the borrowers to comply with present loan repayment terms and which may result in the future inclusion of such assets in the non-performing asset categories.  TDRs that were performing prior to restructuring are reported as special mention until they have been performing for 12 consecutive months under the new loan terms.  An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. “Substandard” assets include those characterized by the “distinct possibility” that the insured institution will sustain “some loss” if the deficiencies are not corrected.  TDRs that were more than 90 days delinquent at the time of restructuring are reported as substandard until they have been performing for 12 consecutive months under the new loan terms.  Assets classified as “doubtful” have all of the weaknesses inherent as those classified “substandard,” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions and values “highly questionable and improbable.”  Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted.

20

In connection with the filing of the Bank’s periodic reports with the OCC and in accordance with our asset classification policy, we regularly review the problem assets in our portfolio to determine whether any assets require classification in accordance with applicable regulations.  The following table sets forth the recorded investment of assets, less SVAs, classified as special mention, or substandard at September 30, 2011.  At September 30, 2011, there were no loans classified as doubtful or loss that were not fully reserved.

	Special Mention				Substandard
	Number		Amount		Number		Amount
	(Dollars in thousands)
Real Estate Loans:
One- to four-family
Originated		181	$	32,673		156	$	18,419
Purchased		3		447		57		15,987
Multi-family and commercial		3		7,683		--		--
Consumer Loans:
Home equity		3		50		27		592
Other		--		--		4		5
Total loans		190		40,853		244		35,003
REO:
Originated		--		--		74		6,942
Purchased		--		--		12		2,877
Total REO		--		--		86		9,819
Trust Preferred Securities (“TRUPs”)		--		--		1		2,941
Municipal bonds		--		--		23		7,337
Total classified assets		190	$	40,853		354	$	55,100

Allowance for credit losses and provision for credit losses. Management maintains an ACL to absorb known and inherent losses in the loan portfolio based on ongoing quarterly assessments of the loan portfolio.  Our ACL methodology considers a number of quantitative and qualitative factors including: the trend and composition of our delinquent and non-performing loans, results of foreclosed property and short sale transactions (historical losses and net charge-offs), increase in and establishment of SVAs, the status and trends of the local and national economies, the trends and current conditions of the residential real estate markets, and loan portfolio growth and concentrations.  Our local market areas did not experience significant fluctuations in home values over the past ten years as did other areas of the U.S., which is reflected in our charge-off experience for originated loans as compared to purchased loans.

The ACL is maintained through provisions for credit losses which are charged to income.  The provision for credit losses is established after considering the results of management’s quarterly assessment of the ACL.  The $4.1 million provision for credit losses recorded in fiscal year 2011 was primarily a result of the increase in and establishment of SVAs, primarily on purchased loans, and partially due to an increase in the general valuation allowance due to an increase in historical losses, a decline in the current Federal Housing Finance Agency (“FHFA”) home price index, primarily in Kansas and Missouri, and an increase in the recent unemployment rate trends compared to historical trends, also primarily in Kansas and Missouri.  At September 30, 2011, our ACL was $15.5 million, or 0.30% of the total loan portfolio and 58% of total non-performing loans.  This compares with an ACL of $14.9 million, or 0.29% of the total loan portfolio and 47% of total non-performing loans as of September 30, 2010.  See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies” in the Annual Report to Stockholders attached as Exhibit 13 to this Annual Report on Form 10-K for a full discussion of our ACL methodology.

21

The following table presents the Company’s activity for the ACL and related ratios at the dates and for the periods indicated. Charge-offs primarily represent losses on loans transferred to REO and short sales transactions.  Recoveries represent amounts recovered after a loan has been charged-off.  Once a loan enters REO, any future write downs or recoveries are reported in REO operations in other expenses on the consolidated statement of income; therefore, recoveries of charge-offs are rare.

	Year Ended September 30,
	2011			2010			2009			2008			2007
	(Dollars in thousands)
Balance at beginning of period	$	14,892		$	10,150		$	5,791		$	4,181		$	4,433
Charge-offs:
One- to four-family loans--originated		414			424			226			86			8
One- to four-family loans--purchased		2,928			3,707			1,781			321			--
Multi-family and commercial loans		--			--			--			--			--
Construction		--			--			--			--			--
Home equity		133			28			1			2			3
Other consumer loans		12			17			24			32			16
Total charge-offs		3,487			4,176			2,032			441			27
Recoveries:
One- to four-family loans--originated		--			--			--			--			--
One- to four-family loans--purchased		--			172			--			--			--
Multi-family and commercial loans		--			--			--			--			--
Construction		--			--			--			--			--
Home equity		--			--			--			--			--
Other consumer loans		--			--			--			--			--
Total recoveries		--			172			--			--			--
Net charge-offs		3,487			4,004			2,032			441			27
ACL on loans in the loan swap transaction		--			(135	)		--			--			--
Provision (recovery) for credit losses		4,060			8,881			6,391			2,051			(225	)
Balance at end of period	$	15,465		$	14,892		$	10,150		$	5,791		$	4,181
Ratio of net charge-offs during the
period to average loans outstanding
during the period (1)		0.07	%		0.07	%		0.04	%		--	%		--	%
Ratio of net charge-offs during the period
to average non-performing assets		8.75	%		9.99	%		7.11	%		3.12	%		0.31	%
ACL to non-performing loans at end of period		58.34	%		46.60	%		32.83	%		42.37	%		56.87	%
ACL to loans receivable, net at period end		0.30	%		0.29	%		0.18	%		0.11	%		0.08	%

(1) Ratios for the years ended September 30, 2008 and 2007 calculate to be less than 0.01%.

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The distribution of our ACL at the dates indicated is summarized as follows:

	September 30,
	2011					2010					2009					2008					2007
			Percent					Percent					Percent					Percent					Percent
			of Loans					of Loans					of Loans					of Loans					of Loans
			in Each					in Each					in Each					in Each					in Each
			Category					Category					Category					Category					Category
	Amount of		to Total			Amount of		to Total			Amount of		to Total			Amount of		to Total			Amount of		to Total
	ACL		Loans			ACL		Loans			ACL		Loans			ACL		Loans			ACL		Loans
	(Dollars in thousands)
One- to four-family:
Originated	$	4,898		84.4	%	$	3,801		83.5	%	$	3,604		81.9	%	$	3,075		80.7	%	$	2,962		77.0	%
Purchased		9,899		10.3			10,425		10.8			5,972		12.3			2,307		13.6			773		17.1
Multi-family and commercial		254		1.1			275		1.3			227		1.4			54		1.1			57		1.1
Construction		19		0.9			12		0.6			22		0.7			41		0.6			69		0.6
Consumer:
Home equity		354		3.2			319		3.6			268		3.5			229		3.8			227		4.0
Other consumer		41		0.1			60		0.2			57		0.2			85		0.2			93		0.2
	$	15,465		100.0	%	$	14,892		100.0	%	$	10,150		100.0	%	$	5,791		100.0	%	$	4,181		100.0	%

23

Investment Activities

Federally chartered savings institutions have the authority to invest in various types of liquid assets, including U.S. Treasury obligations; securities of various federal agencies; GSEs, including callable agency securities and municipal bonds; certain certificates of deposit of insured banks and savings institutions; certain bankers’ acceptances; repurchase agreements; and federal funds. Subject to various restrictions, federally chartered savings institutions may also invest their assets in investment grade commercial paper, corporate debt securities, and mutual funds whose assets conform to the investments that a federally chartered savings institution is otherwise authorized to make directly.  As a member of the FHLB, the Bank is required to maintain a specified investment in the capital stock of the FHLB.  See “Regulation - Federal Home Loan Bank System,” “Capitol Federal Savings Bank,” and“Qualified Thrift Lender test” for a discussion of additional restrictions on our investment activities.

The Chief Investment Officer has the primary responsibility for the management of the Bank’s investment portfolio, subject to the direction and guidance of ALCO.  The Chief Investment Officer considers various factors when making decisions, including the marketability, maturity, and tax consequences of the proposed investment.  The composition of the investment portfolio will be affected by various market conditions, including the slope of the yield curve, the level of interest rates, the impact on the Bank’s interest rate risk, the trend of net deposit flows, the volume of loan sales, the anticipated demand for funds via withdrawals, repayments of borrowings, and loan originations and purchases.

The general objectives of the Bank’s investment portfolio are to provide liquidity when loan demand is high, to assist in maintaining earnings when loan demand is low, and to maximize earnings while satisfactorily managing liquidity risk, interest rate risk, reinvestment risk, and credit risk.  The portfolio also intends to create a steady stream of cash flows that can be redeployed into other assets as the Bank grows the loan portfolio, or reinvested into higher yielding assets should interest rates rise.  Liquidity may increase or decrease depending upon the availability of funds and comparative yields on investments in relation to the return on loans.  Cash flow projections are reviewed regularly and updated to assure that adequate liquidity is maintained.  The net stock offering proceeds received by the Bank were primarily used to purchase securities according to the Bank’s current investment strategy.  These securities have a lower interest rate risk profile than the Bank’s long-term fixed-rate mortgage portfolio and were purchased to help shorten the overall duration of the Bank’s total assets.See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Quantitative and Qualitative Disclosure about Market Risk” in the Annual Report to Stockholders attached as Exhibit 13 to this Annual Report on Form 10-K.

The general objectives of the Company’s investment portfolio are to provide cash flows that can be used to pay dividends, repurchase stock when allowed by federal banking regulations, reinvest into higher yielding assets if interest rates rise, or pursue other corporate strategies, as deemed appropriate.  During fiscal year 2011, the Company purchased $405.8 million of investment securities with a weighted average life (“WAL”) of 1.13 years and yield of 0.42% at the time of purchase.

We classify securities as trading, available-for-sale (“AFS”) or held-to-maturity (“HTM”) at the date of purchase.  Securities that are purchased and held principally for resale in the near future are classified as trading securities and are reported at fair value, with unrealized gains and losses reported in the consolidated statements of income.  AFS securities are reported at fair value, with unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) within stockholders’ equity, net of deferred income taxes.  HTM securities are reported at cost, adjusted for amortization of premium and accretion of discount.  We have both the ability and intent to hold the HTM securities to maturity.

Management monitors the securities portfolio for other-than-temporary impairments on an ongoing basis and performs a formal review quarterly.  Management determines whether other-than-temporary impairment losses should be recognized for impaired securities by assessing all known facts and circumstances surrounding the securities.  If the Company intends to sell an impaired security or if it is more likely than not that the Company will be required to sell an impaired security before recovery of its amortized cost basis, an other-than-temporary impairment will be recognized and the difference between amortized cost and fair value will be recognized as a loss in earnings.   At September 30, 2011, no securities had been identified as other-than-temporarily impaired.

24

Investment Securities.  Our investment securities portfolio consists primarily of securities issued by GSEs (primarily FNMA, FHLMC, and FHLB) and taxable and non-taxable municipal bonds.  At September 30, 2011, our investment securities portfolio totaled $1.44 billion.  The portfolio consists of securities classified as either HTM or AFS.  See “Notes to Consolidated Financial Statements – Note 3 - Securities” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Financial Condition – Investment Securities”  in the Annual Report to Stockholders attached as Exhibit 13 to this Annual Report on Form 10-K.

During fiscal year 2011, our investment securities portfolio increased $111.8 million from $1.33 billion at September 30, 2010 to $1.44 billion at September 30, 2011.  The increase in the balance was primarily a result of purchases of $1.47 billion in short-term securities, partially offset by maturities and calls of $1.36 billion.  The purchases during fiscal year 2011 were fixed-rate and had a weighted average yield of 1.11% and a WAL of approximately 1.53 years.   See “Notes to Consolidated Financial Statements – Note 3 - Securities” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Financial Condition – Investment Securities” in the Annual Report to Stockholders attached as Exhibit 13 to this Annual Report on Form 10-K.

Mortgage-Backed Securities.  At September 30, 2011, our MBS portfolio totaled $2.41 billion.  Our MBS portfolio consists primarily of securities issued by GSEs (primarily FNMA, FHLMC and the Government National Mortgage Association (“GNMA”)), with the exception of $1.6 million, which were issued by a private issuer.  Unlike MBS issued by GSEs, the principal and interest payments of privately issued MBS are not guaranteed, although we generally receive a higher interest rate as compensation for the relative increase in credit risk.  Should the underlying mortgages in a privately issued MBS security default on their mortgage payment above the level of credit enhancement, losses could be realized. The principal and interest payments of MBS issued by GSEs are collateralized by the underlying mortgage assets with principal and interest payments guaranteed by the agencies.  The underlying mortgage assets are conforming mortgages that comply with FNMA and FHLMC underwriting guidelines, as applicable, and are therefore not considered subprime.

At September 30, 2011, the MBS portfolio included $272.0 million of collateralized mortgage obligations (“CMOs”).  CMOs are special types of pass-through debt securities in which the stream of principal and interest payments on the underlying mortgages or MBS are used to create investment classes with different maturities and, in some cases, different amortization schedules, as well as a residual interest, with each such class possessing different risk characteristics.  At September 30, 2011 none of the CMOs qualified as high risk mortgage securities as defined under OCC regulations.  Our CMOs are currently classified as either HTM or AFS.  We do not purchase residual interest bonds.

During fiscal year 2011, our MBS portfolio increased $804.2 million, from $1.61 billion at September 30, 2010, to $2.41 billion at September 30, 2011.  The increase was a result of the Bank purchasing $1.30 billion of MBS primarily with proceeds down-streamed from the Company as a result of the corporate reorganization and cash flows from called investment securities.  Of the $1.30 billion of purchases during fiscal year 2011, $919.8 million, or approximately 70%, were fixed-rate and $378.0 million, or approximately 30%, were adjustable-rate.  See “Notes to Consolidated Financial Statements – Note 3 - Securities” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Financial Condition – Mortgage-Backed Securities”  in the Annual Report to Stockholders attached as Exhibit 13 to this Annual Report on Form 10-K.

MBS generally yield less than the loans that underlie such securities because of the servicing fee retained by the servicer and the cost of payment guarantees or credit enhancements that reduce credit risk.  However, MBS are generally more liquid than individual mortgage loans and may be used to collateralize certain borrowings and public unit deposits of the Bank.  In general, MBS issued or guaranteed by FNMA and FHLMC are weighted at no more than 20% for risk-based capital purposes compared to the 50% risk-weighting assigned to most non-securitized mortgage loans.

When securities are purchased for a price other than par, the difference between the price paid and par is accreted to or amortized against the interest earned over the life of the security, depending on whether a discount or premium to par is paid.  Movements in interest rates affect prepayment rates which, in turn, affect the average lives of MBS and the speed at which the discount or premium is accreted to or amortized against earnings.

25

While MBS issued or backed by FNMA and FHLMC carry a reduced credit risk compared to whole loans, these securities remain subject to the risk that a fluctuating interest rate environment, along with other factors such as the geographic distribution of the underlying mortgage loans, may alter the prepayment rate of the underlying mortgage loans and so affect both the prepayment speed and value of the securities.  As noted above, the Bank, on some transactions, pays a premium over par value for MBS purchased.  Large premiums may cause significant negative yield adjustments due to accelerated prepayments on the underlying mortgages.

The following table sets forth the composition of our investment and MBS portfolio at the dates indicated.  Our investment securities portfolio at September 30, 2011 did not contain securities of any issuer with an aggregate book value in excess of 10% of our stockholders’ equity, excluding those issued by GSEs.

	September 30,
	2011							2010							2009
	Carrying		% of			Fair		Carrying		% of			Fair		Carrying		% of			Fair
	Value		Total			Value		Value		Total			Value		Value		Total			Value
	(Dollars in thousands)
AFS:
GSE debentures	$	748,308		50.3	%	$	748,308	$	50,255		4.7	%	$	50,255	$	229,875		14.2	%	$	229,875
Municipal bonds		2,754		0.2			2,754		2,819		0.3			2,819		2,799		0.2			2,799
TRUPs		2,941		0.2			2,941		2,796		0.3			2,796		2,110		0.1			2,110
MBS		732,436		49.3			732,436		1,004,496		94.7			1,004,496		1,389,211		85.5			1,389,211
		1,486,439		100.0			1,486,439		1,060,366		100.0			1,060,366		1,623,995		100.0			1,623,995
HTM:
GSE debentures		633,483		26.7			636,654		1,208,829		64.3			1,213,270		175,394		20.7			175,929
Municipal bonds		56,994		2.4			59,180		67,957		3.6			70,610		70,526		8.3			73,000
MBS		1,679,640		70.9			1,738,558		603,368		32.1			629,574		603,256		71.0			627,829
		2,370,117		100.0	%		2,434,392		1,880,154		100.0	%		1,913,454		849,176		100.0	%		876,758
	$	3,856,556				$	3,920,831	$	2,940,520				$	2,973,820	$	2,473,171				$	2,500,753

26

The composition and maturities of the investment and MBS portfolio at September 30, 2011 are indicated in the following table by remaining contractual maturity, without consideration of call features or pre-refunding dates.  Yields on tax-exempt investments are not calculated on a taxable equivalent basis.

	1 year or less					More than 1 to 5 years					More than 5 to 10 years					Over 10 years					Total Securities
			Weighted					Weighted					Weighted					Weighted					Weighted
	Carrying		Average			Carrying		Average			Carrying		Average			Carrying		Average			Carrying		Average			Fair
	Value		Yield			Value		Yield			Value		Yield			Value		Yield			Value		Yield			Value
	(Dollars in thousands)
AFS:
GSE debentures	$	302,154		0.39	%	$	446,154		1.16	%	$	--		--	%	$	--		--	%	$	748,308		0.85	%	$	748,308
Municipal bonds		175		3.49			423		3.62			978		3.72			1,178		3.90			2,754		3.77			2,754
TRUPs		--		--			--		--			--		--			2,941		1.60			2,941		1.60			2,941
MBS		--		--			2,659		5.84			171,088		4.88			558,689		3.98			732,436		4.20			732,436
		302,329		0.39			449,236		1.19			172,066		4.87			562,808		3.97			1,486,439		2.50			1,486,439
HTM:
GSE debentures		--		--			633,483		1.38			--		--			--		--			633,483		1.38			636,654
Municipal bonds		1,729		2.25			30,388		2.76			18,566		3.33			6,311		3.20			56,994		2.98			59,180
MBS		--		--			--		--			473,841		3.02			1,205,799		2.83			1,679,640		2.88			1,738,558
		1,729		2.25			663,871		1.44			492,407		3.03			1,212,110		2.83			2,370,117		2.48			2,434,392
	$	304,058		0.40	%	$	1,113,107		1.34	%	$	664,473		3.51	%	$	1,774,918		3.19	%	$	3,856,556		2.49	%	$	3,920,831

27

Sources of Funds

General.  Our sources of funds are deposits, borrowings, repayment of principal and interest on loans and MBS, interest earned on and maturities and calls of investment securities, and funds generated from operations.

Deposits.  We offer a variety of retail deposit accounts having a wide range of interest rates and terms.  Our deposits consist of savings accounts, money market accounts, interest-bearing and non-interest-bearing checking accounts, and certificates of deposit.  We rely primarily upon competitive pricing policies, marketing, and customer service to attract and retain deposits.  The flow of deposits is influenced significantly by general economic conditions, changes in money market and prevailing interest rates, and competition.  The variety of deposit accounts we offer has allowed us to utilize strategic pricing to obtain funds and to respond with flexibility to changes in consumer demand.  We endeavor to manage the pricing of our deposits in keeping with our asset and liability management, liquidity, and profitability objectives.  Based on our experience, we believe that our deposits are stable sources of funds.  Despite this stability, our ability to attract and maintain these deposits and the rates paid on them has been, and will continue to be, significantly affected by market conditions.

The following table sets forth our deposit flows during the periods indicated.  Included in the table are brokered and public unit deposits which totaled $190.1 million, $193.6 million, and $163.0 million at September 30, 2011, 2010, and 2009, respectively.

	Year Ended September 30,
	2011		2010		2009
	(Dollars in thousands)
Opening balance	$	4,386,310	$	4,228,609	$	3,923,883
Deposits		7,630,259		7,275,590		7,021,015
Withdrawals		7,585,217		7,198,358		6,818,534
Interest credited		63,821		80,469		102,245
Ending balance	$	4,495,173	$	4,386,310	$	4,228,609
Net increase	$	108,863	$	157,701	$	304,726

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The following table sets forth the dollar amount of deposits in the various types of deposit programs we offered for the periods indicated.

	Year Ended September 30,
	2011					2010					2009
			Percent					Percent					Percent
	Amount		of Total			Amount		of Total			Amount		of Total
	(Dollars in thousands)
Non-Certificates:
Checking	$	551,632		12.3	%	$	482,428		11.0	%	$	439,975		10.4	%
Savings		253,184		5.6			234,285		5.3			226,396		5.4
Money market		1,066,065		23.7			942,428		21.5			848,157		20.1
Total non-certificates		1,870,881		41.6			1,659,141		37.8			1,514,528		35.9
Certificates (by rate):
0.00 – 0.99%		339,803		7.6			193,959		4.4			78,036		1.8
1.00 – 1.99%		1,106,957		24.6			1,013,538		23.1			254,846		6.0
2.00 – 2.99%		775,235		17.2			777,687		17.7			971,605		23.0
3.00 – 3.99%		371,682		8.3			576,595		13.2			848,991		20.1
4.00 – 4.99%		30,615		0.7			164,763		3.8			326,087		7.7
5.00 – 5.99%		--		--			627		--			233,572		5.5
6.00 – 6.99%		--		--			--		--			944		--
Total certificates		2,624,292		58.4			2,727,169		62.2			2,714,081		64.1
	$	4,495,173		100.0	%	$	4,386,310		100.0	%	$	4,228,609		100.0	%

The following table sets forth the maturity and rate range of our certificate of deposit portfolio at September 30, 2011.

	Amount Due
				More than			More than
	1 year			1 year to			2 to 3			More than
	or less			2 years			years			3 years			Total
	(Dollars in thousands)
0.00 – 0.99%	$	271,642		$	66,993		$	1,168		$	--		$	339,803
1.00 – 1.99%		724,402			239,810			90,696			52,049			1,106,957
2.00 – 2.99%		96,222			169,874			199,280			309,859			775,235
3.00 – 3.99%		273,329			73,004			17,578			7,771			371,682
4.00 – 4.99%		24,636			5,362			293			324			30,615
	$	1,390,231		$	555,043		$	309,015		$	370,003		$	2,624,292
Weighted average rate		1.65	%		1.86	%		2.27	%		2.40	%		1.87	%
Weighted average maturity (in years)		0.44			1.49			2.57			3.73			1.37
Weighted average maturity for the retail certificate of deposit portfolio (in years)														1.36

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The following table sets forth the maturity information for our certificate of deposit portfolio as of September 30, 2011.

	Maturity
			Over		Over
	3 months		3 to 6		6 to 12		Over
	or less		months		months		12 months		Total
	(Dollars in thousands)
Retail certificates of deposit less than $100,000	$	290,103	$	240,236	$	401,861	$	809,285	$	1,741,485
Retail certificates of deposit of $100,000 or more		117,638		100,957		153,585		320,522		692,702
Brokered/Public units of $100,000 or more		51,800		27,026		7,025		104,254		190,105
Total certificates of deposit	$	459,541	$	368,219	$	562,471	$	1,234,061	$	2,624,292

The Board of Directors has authorized the utilization of brokers to obtain deposits as a source of funds.  The Bank has entered into several relationships with nationally recognized wholesale deposit brokerage firms to accept deposits from these firms.  Depending on market conditions, the Bank may use brokered deposits to fund asset growth and gather deposits that may help to manage interest rate risk.  The Bank’s policies limit the amount of brokered deposits that it may have at any time to 10% of total deposits.  The rates paid on brokered deposits plus fees are generally equivalent to rates offered by FHLB on advances and favorable to some rates paid on retail deposits.  At both September 30, 2011 and 2010, the balance of brokered deposits was $83.7 million, or approximately 2% of total deposits.

The Board of Directors also has authorized the utilization of public unit deposits as a source of funds.  The Bank’s policies limit the amount of public unit deposits that it may have at any time to 5% of total deposits.  In order to qualify to obtain such deposits, the Bank must have a branch in each county in which it collects public unit deposits, and by law, must pledge securities as collateral for all such balances in excess of the FDIC insurance limits.  At September 30, 2011 and 2010, the balance of public unit deposits was $106.4 million, or approximately 2.5% of total deposits and $109.9 million, or approximately 2.5% of total deposits, respectively.

Borrowings.  Although retail deposits are our main source of funds, we may utilize borrowings when, at the time of the borrowing, they can be invested at a positive rate spread relative to current asset yields, when we desire additional capacity to fund loan demand or when they help us meet our asset and liability management objectives.  Historically, our borrowings primarily have consisted of FHLB advances.  From time to time, we also utilize the line of credit that we maintain at FHLB.  The Bank supplements FHLB advances with repurchase agreements, wherein the Bank enters into agreements with selected counterparties to sell securities under agreements to repurchase.  These agreements are recorded as financing transactions as the Bank maintains effective control over the transferred securities.

FHLB advances are secured by a blanket pledge of our loan portfolio, as collateral.   See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” in the Annual Report to Stockholders attached as Exhibit 13 to this Annual Report on Form 10-K.  FHLB advances may be made pursuant to several different credit programs, each of which has its own interest rate, maturity, repayment, and convertible features, if any.  At September 30, 2011, we had $2.38 billion in FHLB advances.  See “Notes to Consolidated Financial Statements - Note 7” in the Annual Report to Stockholders attached as Exhibit 13 to this Annual Report on Form 10-K.

The Bank may enter into additional repurchase agreements as management deems appropriate, up to 15% of Bank assets, per Bank policy.  At September 30, 2011, repurchase agreements were $515.0 million, or approximately 5.5% of total assets.  The securities underlying the agreements continue to be carried in the Bank’s securities portfolio.  At September 30, 2011, we had securities with a fair value of $597.3 million pledged as collateral.  Repurchase agreements are made at mutually agreed upon terms between counterparties and the Bank.  The use of repurchase agreements allows for the diversification of funding sources and the use of securities that were not being leveraged as collateral.  See “Notes to Consolidated Financial Statements—Note 7” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” in the Annual Report to Stockholders attached as Exhibit 13 to this Annual Report on Form 10-K.

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The following table sets forth certain information relating to each category of borrowings for which the average short-term balance outstanding during the period was more than 29% of stockholders’ equity at the end of the period.  The maximum balance, average balance, and weighted average interest rate during fiscal year 2010 and 2009 reflect all borrowings that were scheduled to mature within one year at any month-end during fiscal year 2010 and 2009.  There were no short-term borrowings outstanding that exceeded 29% of stockholders’ equity during fiscal year 2011.

	At or for the Year Ended September 30,
	2010			2009
	(Dollars in thousands)
FHLB Advances:
Balance at end of year	$	276,000		$	350,000
Maximum balance outstanding at any month-
end during fiscal year		550,000			795,000
Average balance		423,000			396,250
Weighted average interest rate during the year		4.62	%		4.54	%
Weighted average interest rate at end of year		4.87	%		4.49	%
Repurchase Agreements:
Balance at end of year	$	200,000		$	45,000
Maximum balance outstanding at any month-
end during fiscal year		225,000			45,000
Average balance		158,750			11,250
Weighted average interest rate during the year		3.68	%		3.05	%
Weighted average interest rate at end of year		3.79	%		3.05	%

Subsidiary and Other Activities

As a federally chartered savings bank, we are permitted by federal regulations to invest up to 2% of our Bank assets, as reported to the OCC, or $182.1 million at September 30, 2011, in the stock of, or as unsecured loans to, service corporation subsidiaries.  We may invest an additional 1% of our assets, or $91.0 million at September 30, 2011, in service corporations where such additional funds are used for inner-city or community development purposes.  At September 30, 2011, the Bank had one subsidiary, Capitol Funds, Inc.  At September 30, 2011, Capitol Funds, Inc. had a capital balance of $6.3 million.  Capitol Funds, Inc. has a wholly owned subsidiary, Capitol Federal Mortgage Reinsurance Company (“CFMRC”).  CFMRC serves as a reinsurance company for the PMI companies the Bank uses in its normal course of operations, but it is no longer accepting new business.  CFMRC provides mortgage reinsurance on certain one- to four-family loans in the Bank’s portfolio.  During fiscal year 2011, Capitol Funds, Inc. reported consolidated net income of $399 thousand which included net income of $403 thousand from CFMRC.

REGULATION AND SUPERVISION

Set forth below is a description of certain laws and regulations that are applicable to Capitol Federal Financial, Inc. and the Bank.  All material information regarding these laws and regulations has been provided.

General

On July 21, 2010, the President of the United States signed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”).  This law has significantly changed the current bank regulatory structure and affected the lending, deposit, investment, trading and operating activities of financial institutions and their holding companies. See additional information regarding the Dodd-Frank Act under the heading “Risk Factors – Passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act will increase our operational and compliance costs.”

As of July 21, 2011, the OCC assumed the responsibilities and powers of the Office of Thrift Supervision (the “OTS”) with respect to the Bank, and the FRB assumed the responsibilities and powers of the OTS with respect to the Company.

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The OCC has extensive enforcement authority over all federal savings associations, including the Bank, and the FRB has enforcement authority over their holding companies, including Capitol Federal Financial, Inc.  This enforcement authority includes, among other things, the ability to assess civil money penalties, to issue cease-and-desist or removal orders and to initiate injunctive actions.  In general, these enforcement actions may be initiated for violations of laws and regulations and unsafe or unsound practices.  Other actions or inactions may provide the basis for enforcement action, including misleading or untimely reports filed.  Except under certain circumstances, public disclosure of final enforcement actions by the OCC or the FRB is required by law.

Capitol Federal Financial, Inc.

The purpose and powers of the Company are to pursue any or all of the lawful objectives of a savings and loan holding company and to exercise any of the powers accorded to a savings and loan holding company.

If the Bank fails the Qualified Thrift Lender test, within one year of such failure the Company must register as, and will become subject to, the restrictions applicable to bank holding companies, unless the Bank requalifies within the year.  The activities authorized for a bank holding company are more limited than are the activities authorized for a savings and loan holding company. If the Bank fails the test a second time, the Company must immediately register as, and become subject to, the restrictions applicable to a bank holding company. See "Qualified Thrift Lender Test."

The Company must obtain regulatory approval before acquiring control of any other depository institution. Interstate acquisitions are permitted based on specific state authorization or in a supervisory acquisition of a failing institution.

Capitol Federal Savings Bank

The Bank, as a federally chartered savings bank, is subject to regulation and oversight by the OCC extending to all aspects of its operations.  This regulation of the Bank is intended for the protection of depositors and not for the purpose of protecting stockholders.  The Bank is required to maintain minimum levels of regulatory capital and is subject to some limitations on the payment of dividends to the Company.  The Bank also is subject to regulation and examination by the FDIC, which insures the deposits of the Bank to the maximum extent permitted by law.

Office of the Comptroller of the Currency

The investment and lending authority of the Bank is prescribed by federal laws and regulations and the Bank is prohibited from engaging in any activities not permitted by such laws and regulations.

As a federally chartered savings bank, the Bank is required to meet a Qualified Thrift Lender test.  This test requires the Bank to have at least 65% of its portfolio assets, as defined by statute, in qualified thrift investments on a monthly average for nine out of every 12 months on a rolling basis.  As an alternative, the Bank may maintain 60% of its assets in those assets specified in Section 7701(a) (19) of the Internal Revenue Code.  Under either test, the Bank is required to maintain a significant portion of its assets in residential housing related loans and investments.  Any institution that fails to meet the Qualified Thrift Lender test must, within one year, either become a bank or be subject to certain restrictions on its operations, unless within the year it meets the test, and thereafter remains a Qualified Thrift Lender.  These restrictions include a prohibition against paying any dividends, except, with the prior approval of both the OCC and the FRB, for the purpose of paying obligations of a company controlling the institution.  An institution that fails the test a second time must immediately convert to a bank or be subjected to the restrictions.  Any holding company of an institution that fails the test and does not re-qualify within a year must become subject to the same statute and regulations as a bank holding company.  If such an institution has not converted to a bank within three years after it failed the test, it must divest all investments and cease all activities not permissible for both a national bank and a savings association.  Failure to meet the Qualified Thrift Lender test is a statutory violation subject to enforcement action.  As of September 30, 2011, the Bank met the Qualified Thrift Lender test.

The Bank is subject to a 35% of total assets limit on consumer loans, commercial paper and corporate debt securities, and a 20% limit on commercial non-mortgage loans.  At September 30, 2011, the Bank had 0.1% of its assets in non-real estate consumer loans, commercial paper and corporate debt securities and 0% of its assets in commercial non-mortgage loans.  Separately, the Bank has authority to invest up to 400% of its capital in loans secured by non-residential real estate.

The Bank’s relationship with its depositors and borrowers is regulated to a great extent by federal laws and regulations, especially in such matters as the ownership of savings accounts and the form and content of mortgage requirements.  In addition, the branching authority of the Bank is regulated by the OCC.  The Bank is generally authorized to branch nationwide.

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The Bank is subject to a statutory lending limit on aggregate loans to one person or a group of persons combined because of certain common interests.  That limit is equal to 15% of our unimpaired capital and surplus, except that for loans fully secured by readily marketable collateral, the limit is increased to 25%.  At September 30, 2011, the Bank's lending limit under this restriction was $207.1 million.  The Bank has no loans or loan relationships in excess of its lending limit.

We are subject to periodic examinations by the OCC.  During these examinations, the examiners may require the Bank to increase the ACL and/or recognize additional charge-offs based on their judgments, which can impact our capital and earnings.  As a federally chartered savings bank, the Bank is subject to a semi-annual assessment, based upon its total assets, to fund the operations of the OCC.

The OCC has adopted guidelines establishing safety and soundness standards on such matters as loan underwriting and documentation, asset quality, earnings standards, internal controls and audit systems, interest rate risk exposure and compensation and other employee benefits.  Any institution regulated by the OCC that fails to comply with these standards must submit a compliance plan.

Insurance of Accounts and Regulation by the FDIC

The DIF of the FDIC insures deposit accounts in the Bank. The FDIC assesses deposit insurance premiums on each FDIC-insured institution quarterly based on annualized rates for one of four risk categories applied to its deposits, subject to certain adjustments.  Each institution is assigned to one of four risk categories based on its capital, supervisory ratings, and other factors.  Well-capitalized institutions that are financially sound with only a few minor weaknesses are assigned to Risk Category I.  Risk Categories II, III and IV present progressively greater risks to the DIF.  Under the FDIC’s risk-based assessment rules, until April 1, 2011, the initial base assessment rates prior to adjustments ranged from 12 to 16 basis points for Risk Category I, and were 22 basis points for Risk Category II, 32 basis points for Risk Category III and 45 basis points for Risk Category IV.  Initial base assessment rates were subject to adjustments based on an institution’s unsecured debt, secured liabilities and brokered deposits, such that the total base assessment rates after adjustments ranged from 7 to 24 basis points for Risk Category I, 17 to 43 basis points for Risk Category II, 27 to 58 basis points for Risk Category III and 40 to 77.5 basis points for Risk Category IV.

As required by the Dodd-Frank Act, the FDIC has adopted rules effective April 1, 2011, under which insurance premium assessments are based on an institution’s total assets minus its tangible equity (defined as Tier 1 capital) instead of its deposits.  Under these rules, an institution with total assets of less than $10 billion will be assigned to a Risk Category as described above, and a range of initial base assessment rates will apply to each category, subject to adjustment downward based on unsecured debt issued by the institution and, except for an institution in Risk Category I, adjustment upward if the institution’s brokered deposits exceed 10% of its domestic deposits, to produce total base assessment rates.  Total base assessment rates range from 2.5 to 9.0 basis points for Risk Category I, 9.0 to 24 basis points for Risk Category II, 18 to 33 basis points for Risk Category III, and 30 to 45 basis points for Risk Category IV, all subject to further adjustment upward if the institution holds more than a de minimis amount of unsecured debt issued by another FDIC-insured institution.  The FDIC may increase or decrease its rates by 2.0 basis points without further rulemaking.  In an emergency, the FDIC may also impose a special assessment.

FDIC-insured institutions are required to pay an additional quarterly assessment called the FICO assessment in order to fund the interest on bonds issued to resolve thrift failures in the 1980s.  For the Bank’s fiscal year ended September 30, 2011, this assessment was 1.015 basis points for each $100 in domestic deposits.  This assessment, which may be revised based upon the level of DIF deposits, will continue until the bonds mature in the years 2017 through 2019.  For the fiscal year ended September 30, 2011, the Bank paid $498 thousand in FICO assessments.

As a result of a decline in the reserve ratio (the ratio of the net worth of the DIF to estimated insured deposits) and concerns about expected failure costs and available liquid assets in the DIF, the FDIC adopted a rule requiring each insured institution to prepay on December 30, 2009 the estimated amount of its quarterly assessments for the fourth quarter of calendar year 2009 and all quarters through the end of calendar year 2012 (in addition to the regular quarterly assessment for the third quarter of calendar year 2009 due on December 30, 2009).  The prepaid amount is recorded as an asset with a zero risk weight and the institution will continue to record quarterly expenses for deposit insurance.  For purposes of calculating the prepaid amount, assessments are measured at the institution’s assessment rate as of September 30, 2009, with a uniform increase of three basis points effective January 1, 2011, and are based on the institution’s assessment base for the third quarter of 2009, with growth assumed quarterly at an annual rate of 5%.  If events cause actual assessments during the prepayment period to vary from the prepaid amount, institutions will pay excess assessments in cash, or receive a rebate of prepaid amounts not exhausted after collection of assessments due on June 13, 2013, as applicable.  Collection of the prepayment does not preclude the FDIC from changing assessment rates or revising the risk-based assessment system in the future.

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In October 2008, the FDIC introduced the Temporary Liquidity Guarantee Program (“TLGP”).  The TLGP had two components: 1) a debt guarantee program, guaranteeing newly issued senior unsecured debt, and 2) a transaction account guarantee program (“TAGP”), providing a full guarantee of certain non-interest-bearing deposit transaction accounts.  The Bank did not issue any debt under this program.  The Bank participated in the TAGP through December 31, 2010.  The fees for this program ranged from 15-25 basis points (annualized), depending on the institution’s risk category for deposit insurance assessment purposes, assessed on amounts in covered accounts exceeding $250 thousand.  Under the Dodd-Frank Act, non-interest bearing transaction accounts receive unlimited deposit insurance coverage through December 31, 2012, and insured institutions pay no separate fee for this coverage.

Transactions with Affiliates

Transactions between the Bank and its affiliates are required to be on terms as favorable to the institution as transactions with non-affiliates, and certain of these transactions are restricted to a percentage of the Bank's capital, and, in the case of loans, require eligible collateral in specified amounts.  In addition, the Bank may not lend to any affiliate engaged in activities not permissible for a bank holding company or acquire the securities of most affiliates.

Regulatory Capital Requirements

The Bank is required to maintain specified levels of regulatory capital under regulations of the OCC.  OCC regulations state that to be adequately capitalized, an institution must have a leverage ratio of at least 4.0%, a Tier 1 risk-based capital ratio of at least 4.0% and a total risk-based capital ratio of at least 8.0%.  To be well capitalized, an institution must have a leverage ratio of at least 5.0%, a Tier 1 risk-based capital ratio of at least 6.0% and a total risk-based capital ratio of at least 10.0%.

The term leverage ratio means the ratio of Tier 1 (core) capital to adjusted total assets.  The term Tier 1 risk-based capital ratio means the ratio of Tier 1 capital to risk-weighted assets.  The term total risk-based capital ratio means the ratio of total capital to risk-weighted assets.

The term Tier 1 (core) capital generally consists of common stockholders’ equity and retained earnings and certain noncumulative perpetual preferred stock and related earnings, excluding most intangible assets.  At September 30, 2011, the Bank had $251 thousand of disallowed servicing assets, which were deducted from Tier 1 (core) capital, and $26.3 million of accumulated gains on AFS securities, net of deferred taxes, which were subtracted from Tier 1 (core) capital.

Total capital consists of the sum of an institution’s Tier 1 (core) capital and the amount of its Tier 2 capital up to the amount of its Tier 1 (core) capital.  Tier 2 capital consists generally of certain cumulative and other perpetual preferred stock, certain subordinated debt and other maturing capital instruments, the amount of the institution’s allowance for loan and lease losses up to 1.25% of risk-weighted assets and certain unrealized gains on equity securities.  At September 30, 2011, the Bank had $11.7 million of allowances for credit losses, which was less than 1.25% of risk-weighted assets.

Adjusted total assets consist of total assets as specified in the OCC Thrift Financial Report (“TFR”) less such items as disallowed servicing assets and accumulated gains/losses on AFS securities. At September 30, 2011, the Bank had $251 thousand of disallowed servicing assets and $42.3 million of accumulated gains on AFS securities which were subtracted from TFR total assets of $9.10 billion to arrive at adjusted total assets of $9.06 billion.

Risk-weighted assets are determined under the OCC capital regulations, which assign to every asset, including certain off-balance sheet items, a risk weight generally ranging from 0% to 100% based on the inherent risk of the asset.  The OCC is authorized to require the Bank to maintain an additional amount of total capital to account for concentrations of credit risk, levels of interest rate risk, equity investments in non-financial companies and the risks of non-traditional activities.  Institutions that are not well capitalized are subject to certain restrictions on brokered deposits and interest rates on deposits.  At September 30, 2011, the Bank had Tier 1 (core) capital of $1.37 billion, total risk-based capital of $1.38 billion, adjusted total assets of $9.06 billion, and risk-weighted assets of $3.61 billion.  At September 30, 2011, the Bank had a tangible equity to tangible assets ratio of 15.1%, a Tier 1 (core) capital to adjusted total assets ratio of 15.1%, a Tier 1 (core) capital to risk-weighted assets ratio of 37.9%, a total risk-based capital to risk-weighted assets ratio of 38.3%.  At September 30, 2011, the Bank was considered a well-capitalized institution under OCC regulations.  Regulatory capital is discussed further in “Notes to Consolidated Financial Statements - Note 13” in the Annual Report to Stockholders attached as Exhibit 13 to this Annual Report on Form 10-K.

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The OCC has the ability to establish an individual minimum capital requirement for a particular institution, based on its circumstances, which varies from the capital levels that would otherwise be required under the capital regulations.  The OCC has not imposed any such requirements on the Bank.

The OCC is authorized and, under certain circumstances, required to take certain actions against savings banks that fail to meet the minimum ratios for an adequately capitalized institution.  Any such institution must submit a capital restoration plan and, until such plan is approved by the OCC, may not increase its assets, acquire another institution, establish a branch or engage in any new activities, and generally may not make capital distributions.  The plan must include a guaranty by the institution’s holding company limited to the lesser of 5% of the institution’s assets when it became undercapitalized, or the amount necessary to restore the institution to adequately capitalized status.  The OCC is authorized to impose the additional restrictions on institutions that are less than adequately capitalized.

Federal regulations state that any institution that fails to comply with its capital plan or has Tier 1 risk-based or core capital ratios of less than 3.0% or a total risk-based capital ratio of less than 6.0% is considered significantly undercapitalized and must be made subject to one or more additional specified actions and operating restrictions that may cover all aspects of its operations and may include a forced merger or acquisition of the institution.  An institution with tangible equity to total assets of less than 2.0% is critically undercapitalized and becomes subject to further mandatory restrictions on its operations.  The OCC generally is authorized to reclassify an institution into a lower capital category and impose the restrictions applicable to such category if the institution is engaged in unsafe or unsound practices or is in an unsafe or unsound condition.  The imposition by the OCC of any of these measures on the Bank may have a substantial adverse effect on its operations and profitability.  In general, the FDIC must be appointed receiver for a critically undercapitalized institution whose capital is not restored within the time provided.  When the FDIC as receiver liquidates an institution, the claims of depositors and the FDIC as their successor (for deposits covered by FDIC insurance) have priority over other unsecured claims against the institution.

Community Reinvestment and Consumer Protection Laws

In connection with its lending activities, the Bank is subject to a number of federal laws designed to protect borrowers and promote lending to various sectors of the economy and population.  These include the Equal Credit Opportunity Act, the Truth-in-Lending Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, and the Community Reinvestment Act (“CRA”).  In addition, federal banking regulators, pursuant to the Gramm-Leach-Bliley Act, have enacted regulations limiting the ability of banks and other financial institutions to disclose nonpublic consumer information to non-affiliated third parties.  The regulations require disclosure of privacy policies and allow consumers to prevent certain personal information from being shared with non-affiliated parties.

The CRA requires the appropriate federal banking agency, in connection with its examination of a bank, to assess the bank’s record in meeting the credit needs of the communities served by the bank, including low and moderate income neighborhoods.  Under the CRA, institutions are assigned a rating of outstanding, satisfactory, needs to improve, or substantial non-compliance.  The Bank received a satisfactory rating in its most recent CRA evaluation.

Bank Secrecy Act /Anti-Money Laundering Laws

The Bank is subject to the Bank Secrecy Act and other anti-money laundering laws and regulations, including the USA PATRIOT Act of 2001.  These laws and regulations require the Bank to implement policies, procedures, and controls to detect, prevent, and report money laundering and terrorist financing and to verify the identity of their customers.  Violations of these requirements can result in substantial civil and criminal sanctions.  In addition, provisions of the USA PATRIOT Act require the federal financial institution regulatory agencies to consider the effectiveness of a financial institution's anti-money laundering activities when reviewing mergers and acquisitions.

Limitations on Dividends and Other Capital Distributions

The OCC regulations impose various restrictions on savings institutions with respect to their ability to make distributions of capital, which include dividends, stock redemptions or repurchases, cash-out mergers and other transactions charged to the capital account.

Generally under OCC and FRB regulations, federal savings institutions, such as the Bank, may make capital distributions during any calendar year equal to earnings of the previous two calendar years and current year-to-date earnings.  It is generally required under OCC regulations that the Bank remain well-capitalized before and after the proposed distribution.  However, an institution deemed to be in need of more than normal supervision by the OCC may have its dividend authority restricted by the OCC.  Generally, savings institutions proposing to make any capital distribution within these limits need only submit written notice to the OCC and FRB 30 days prior to such distribution.  The OCC or FRB may object to the distribution during that 30-day period based on safety and soundness and certain other concerns.  Savings institutions that desire to make a larger capital distribution, or are under special restrictions, or are not, or would not be, well-capitalized following a proposed capital distribution, however, must obtain OCC and FRB approval prior to making such distribution.  See “Regulatory Capital Requirements.”

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The long-term ability of the Company to pay dividends to its stockholders is based primarily upon the ability of the Bank to make capital distributions to the Company.  At September 30, 2011, the Bank was in compliance with the OCC regulations permitting payment of dividends up to specified amounts with prior notice to the OCC.  So long as the Bank continues to remain “well capitalized” after each capital distribution, operate in a safe and sound manner, provide the OCC and FRB with updated capital levels, and non-performing asset balances and ACL information as requested, and comply with the interest rate risk management guidelines of the OCC, it is management’s belief that the OCC and FRB will continue to allow the Bank to distribute its net income to the Company, although no assurance can be given in this regard.

Federal Securities Law

The common stock of the Company is registered with the SEC under the Securities Exchange Act of 1934, as amended.  The Company is subject to the information, proxy solicitation, insider trading restrictions and other requirements of the SEC under the Securities Exchange Act of 1934.

The Company stock held by persons who are affiliates of the Company may not be resold without registration or unless sold in accordance with certain resale restrictions.  Affiliates are generally considered to be officers, directors and principal stockholders.  If the Company meets specified current public information requirements, each affiliate of the Company will be able to sell in the public market, without registration, a limited number of shares in any three-month period.

Federal Reserve System

The FRB requires all depository institutions to maintain reserves at specified levels against their transaction accounts, primarily checking accounts.  At September 30, 2011, the Bank was in compliance with these reserve requirements.  The Bank is authorized to borrow from the Federal Reserve Bank “discount window.” Under the administration of the discount window revised January 9, 2003, an eligible institution need not exhaust other sources of funds before coming to the discount window, nor are there restrictions on the purposes for which the borrower can use primary credit.  At September 30, 2011, the Bank had no borrowings from the discount window.

Federal Home Loan Bank System

The Bank is a member of FHLB Topeka, which is one of 12 regional Federal Home Loan Banks that administers the home financing credit function of financial institutions.  Each FHLB serves as a reserve or central bank for its members within its assigned region and is funded primarily from proceeds derived from the sale of consolidated obligations of the FHLB System.  It makes loans or advances to members in accordance with policies and procedures, established by the Board of Directors of FHLB, which are subject to the oversight of the FHFA.

As a member, the Bank is required to purchase and maintain stock in FHLB.  The minimum required FHLB stock amount is 5% of the Bank’s FHLB advances and outstanding balance on the FHLB line of credit, and2% of the outstanding principal of loans sold into the Mortgage Partnership Finance ("MPF") program.  At September 30, 2011, the Bank had a balance of $126.9 million in FHLB stock, which was in compliance with this requirement.  In past years, the Bank has received dividends on its FHLB stock, although no assurance can be given that these dividends will continue.  The average yield on FHLB stock was 3.06% for fiscal year 2011.  For the year ended September 30, 2011, dividends paid by FHLB to the Bank totaled $3.8 million, which were primarily stock dividends.

Under federal law, FHLBs are required to provide funds for the resolution of troubled financial institutions and for community investment and low- and moderate-income housing.  These contributions have adversely affected the level of FHLB dividends paid and could continue to do so in the future.  A reduction in value of the Bank’s FHLB stock may result in a corresponding reduction in the Bank’s capital.

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Federal Savings and Loan Holding Company Regulation

The Company is a unitary savings and loan holding company within the meaning of the Home Owners Loan Act (“HOLA”).  As such, the Company is registered with the FRB and are subject to the FRB regulations, examinations, supervision and reporting requirements. In addition, the FRB has enforcement authority over the Company and the Bank. Among other things, this authority permits the FRB to restrict or prohibit activities that are determined to be a serious risk to the Bank.

The HOLA prohibits a savings and loan holding company (directly or indirectly, or through one or more subsidiaries) from acquiring another savings association or holding company thereof without prior written approval of the FRB; acquiring or retaining, with certain exceptions, more than 5% of a non-subsidiary savings association, a non-subsidiary holding company, or a non-subsidiary company engaged in activities other than those permitted by the HOLA; or acquiring or retaining control of a depository institution that is not federally insured.  In evaluating applications by holding companies to acquire savings associations, the FRB must consider the financial and managerial resources and future prospects of the company and institution involved, the effect of the acquisition on the risk to the insurance funds, the convenience and needs of the community and competitive factors.

TAXATION

Federal Taxation

General.  The Company and the Bank are subject to federal income taxation in the same general manner as other corporations, with some exceptions discussed below. Neither the Company nor the Bank has been subject to an IRS audit during the past five years.

Method of Accounting.  For federal income tax purposes, the Bank currently reports its income and expenses on the accrual method of accounting and uses a fiscal year ending on September 30 for filing its federal income tax return.

Minimum Tax.  The Internal Revenue Code imposes an alternative minimum tax at a rate of 20% on a base of regular taxable income plus certain tax preferences, called alternative minimum taxable income.  The alternative minimum tax is payable to the extent such alternative minimum taxable income is in excess of the regular tax.  Certain payments of alternative minimum tax may be used as credits against regular tax liabilities in future years.  Except in fiscal year 2007, during the last five years the Bank has not been subject to the alternative minimum tax.

Net Operating Loss Carryovers.  A financial institution may carryback net operating losses to the preceding two taxable years and forward to the succeeding 20 taxable years.  This provision applies to losses incurred in taxable years beginning after August 6, 1997.  In 2009, Internal Revenue Code Section 172(b)(1) was amended to allow businesses to carry back losses incurred in 2008 and 2009 for up to five years to offset 50% of the available income from the fifth year and 100% of the available income for the other four years.

State Taxation

The earnings/losses of Capitol Federal Financial, Inc. and Capitol Funds, Inc. are combined for purposes of filing a consolidated Kansas corporate tax return.  The Kansas corporate tax rate is 4.0%, plus a surcharge of 3.0% on earnings greater than $50 thousand.

The Bank files a Kansas privilege tax return.  For Kansas privilege tax purposes, for taxable years beginning after 1997, the minimum tax rate is 4.5% of earnings, which is calculated based on federal taxable income, subject to certain adjustments.  The Bank has not received notification from the state of any potential tax liability for any years still subject to audit.

Additionally, the Bank files state tax returns in various other states where it has significant purchased loans and/or foreclosure activities and therefore has economic nexus in those states.

Employees

At September 30, 2011, we had a total of 734 employees, including 141 part-time employees.  The full-time equivalent of our total employees at September 30, 2011 was 671.  Our employees are not represented by any collective bargaining group.  Management considers its employee relations to be good.

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Executive Officers of the Registrant

John B. Dicus. Age 50 years.  Mr. Dicus is Chairman of the Board of Directors, Chief Executive Officer, and President of the Bank and the Company.  He has served as Chairman since January, 2009 and Chief Executive Officer since January, 2003.  He has served as President of the Bank since 1996 and of the Company since its inception in March 1999.  Prior to accepting the responsibilities of CEO, he served as Chief Operating Officer of the Bank and the Company.  Prior to that, he served as the Executive Vice President of Corporate Services for the Bank for four years.  He has been with the Bank in various other positions since 1985.

Larry K. Brubaker.  Age 64 years.  Mr. Brubaker has been employed with the Bank since 1971 and currently serves as Executive Vice President for Corporate Services, a position he has held since 1997.  Prior to that, he was employed by the Bank as the Eastern Region Manager for seven years.

R. Joe Aleshire. Age 64 years. Mr. Aleshire has been employed with the Bank since 1973 and currently serves as Executive Vice President for Retail Operations, a position he has held since 1997.  Prior to that, he was employed by the Bank as the Wichita Area Manager for 17 years.

Kent G. Townsend. Age 50 years. Mr. Townsend serves as Executive Vice President and Chief Financial Officer of the Bank, its subsidiary, and the Company.  Mr. Townsend also serves as Treasurer for the Company, Capitol Funds, Inc. and CFMRC.  Mr. Townsend was promoted to Executive Vice President, Chief Financial Officer and Treasurer on September 1, 2005.  Prior to that, he served as Senior Vice President, a position he held since April 1999, and Controller of the Company, a position he held since March 1999.  He has served in similar positions with the Bank since September 1995.  He served as the Financial Planning and Analysis Officer with the Bank for three years and other financial related positions since joining the Bank in 1984.

Rick C. Jackson.  Age 46 years.  Mr. Jackson currently serves as Executive Vice President, Chief Lending Officer and Community Development Director of Capitol Federal Savings Bank.  He also serves as the President of Capitol Funds, Inc., a subsidiary of the Bank and President of CFMRC.  He has been with the Bank since 1993 and has held the position of Community Development Director since that time.  He has held the position of Chief Lending Officer since February 2010.

Tara D. Van Houweling.  Age 38 years.  Ms. Van Houweling has been employed with the Bank and Company since May 2003 and currently serves as First Vice President, Principal Accounting Officer and Reporting Director.  She has held the position of Reporting Director since May 2003.

Item 1A.  Risk Factors

The following is a summary of risk factors relating to the operations of the Bank and the Company.  These risk factors are not necessarily presented in order of significance.

We may be required to provide remedial consideration to borrowers whose loans we purchase from correspondent and nationwide lenders if it is discovered that the originating company did not properly comply with lending regulations during the origination process.  We purchase whole one- to four-family mortgage loans from correspondent and nationwide lenders.  While the loans purchased from our correspondent lenders are underwritten by the Bank’s underwriters and loans purchased from nationwide lenders are evaluated on a certain set of criteria before being purchased, we are still subject to some risks associated with the loan origination process itself.  By law, loan originators are required to comply with lending regulations at all times during the origination process.  Any compliance related risks associated with the origination process itself effectively gets transferred from the originating company to the Bank once the Bank has procured the asset.  Should, at any point, it be discovered that an instance of noncompliance occurred by the originating company during the origination process, the Bank would still be held responsible and required to remedy the issue for the loans it purchased from the originator.  Remedial actions can include such actions as refunding interest paid back to the borrower and adjusting the contractual interest rate on the loan to the current market rate if advantageous to the borrower.

The United States economy remains weak and unemployment levels are high.  A prolonged economic downturn, especially one affecting our geographic market area, will adversely affect our business and financial results.

We are particularly exposed to downturns in the U.S. housing market. Dramatic declines in the housing market over the past three years, with falling home prices and increasing foreclosures, unemployment and under-employment, have negatively impacted the credit performance of mortgage loans and resulted in significant write-downs of asset values by financial institutions, including GSEs, major commercial and investment banks, and regional financial institutions such as the Bank.

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The Bank’s net loan charge-offs during the fiscal years 2011, 2010, and 2009 were $3.5 million, $4.0 million, and $2.0 million respectively.  Historically, the Bank’s net loan charge-offs have been low due to the low level of non-performing loans and the amount of equity in the properties collateralizing the related loans.  During fiscal years 2011, 2010, and 2009, the Bank recorded a provision for credit losses of $4.1 million, $8.9 million, and $6.4 million, respectively.  The increases in the provision for credit losses and net loan charge-offs, compared to historical trends, were directly related to the increases in delinquent loans, non-performing loans, and losses on foreclosed property and short sale transactions, which were primarily a result of the decline in home prices and lingering negative economic conditions.  The overall amount of the provision for credit losses and net loan charge-offs has not been significant to date because of the Bank’s traditional underwriting standards and the relative economic stability of the geographic areas in our primary lending areas.

The geographic concentration of our loan portfolio and lending activities makes us vulnerable to a downturn in the local economy.  We are currently one of the largest mortgage loan originators in the state of Kansas.  Approximately 75% of our loan portfolio is comprised of loans secured by property located in Kansas, and approximately 15% is comprised of loans secured by property located in Missouri.  This makes us vulnerable to a downturn in the local economy and real estate markets.  Adverse conditions in the local economy such as inflation, unemployment, recession, natural disasters, or other factors beyond our control could impact the ability of our borrowers to repay their loans, which could impact our net interest income.  Decreases in local real estate values could adversely affect the value of the property used as collateral for our loans, which could cause us to realize a loss in the event of a foreclosure.  Currently there is not a single employer or industry in the area on which the majority of our customers are dependent.

If our allowance for credit losses is not sufficient to cover actual loan losses, our earnings could decrease.  Our borrowers may not repay their loans according to the terms of the loans, and, as a result of the recent declines in home prices, the collateral securing the payment of these loans may be insufficient to pay any remaining loan balance.  We may experience significant loan losses, which could have a material adverse effect on our operating results.  When determining the amount of the ACL, we make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans. In determining the amount of the ACL, we rely on our loan quality reviews, our experience and our evaluation of economic conditions, among other factors.  If our assumptions prove to be incorrect, our ACL may not be sufficient to cover losses inherent in our loan portfolio, resulting in additions to our allowance which is maintained through provisions for loan losses.  Material additions to our allowance could materially decrease our net income.

Our policies currently require that we maintain a higher ACL on loans we purchase from nationwide lenders as compared to the ACL maintained on those we originate.  To the extent we increase our portfolio of purchased loans from nationwide lenders, our ACL will likely increase, through a provision for credit losses, which will have an adverse effect on net income.

Our ACL at September 30, 2011, 2010, and 2009 was $15.5 million, $14.9 million, and $10.2 million, respectively.  The increase in our ACL has primarily been a result of a decline in the performance of some of our mortgage loans due to lingering negative economic conditions and the related collateral values not being sufficient to pay the outstanding loan balance due to the decline in home values.  The Bank’s non-performing loans at September 30, 2011, 2010, and 2009 were $26.5 million, $32.0 million, and $30.9 million, respectively.  Non-performing loans as a percentage of total loans at September 30, 2011, 2010, and 2009 was 0.51%, 0.62%, and 0.55%, respectively.

Changes in interest rates could have an adverse impact on our results of operations and financial condition.  Our results of operations are primarily dependent on net interest income, which is the difference between the interest earned on loans, MBS, and investment securities, and the interest paid on deposits and borrowings.  Changes in interest rates could have an adverse impact on our results of operations and financial condition because the majority of our interest-earning assets are long-term, fixed-rate loans, while the majority of our interest-bearing liabilities are shorter term, and therefore subject to a greater degree of interest rate fluctuation.  This type of risk is known as interest rate risk, and is affected by prevailing economic and competitive conditions.

The impact of changes in interest rates on assets is generally observed on the balance sheet and income statement in later periods than the impact of changes on liabilities due to the duration of assets versus liabilities, and also to the time lag between our commitment to originate or purchase a loan and the time we fund the loan, during which time interest rates may change.  Interest-bearing liabilities tend to reflect changes in interest rates closer to the time of market rate changes, so the difference in timing may have an adverse effect on our net interest income.

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Changes in interest rates can also have an adverse effect on our financial condition, as our AFS securities are reported at their estimated fair value, and therefore are impacted by fluctuations in interest rates.  We increase or decrease our stockholders’ equity, specifically accumulated other comprehensive income (loss), by the amount of change in the estimated fair value of the AFS securities, net of deferred taxes.  Decreases in the fair value of AFS securities would, therefore, adversely impact our stockholders’ equity. The balance of accumulated other comprehensive income at September 30, 2011, 2010, and 2009 was $26.7 million, $31.9 million, and $33.9 million, respectively.

Changes in interest rates, as they relate to customers, can also have an adverse impact on our financial condition and results of operations.  In times of rising interest rates, default risk may increase among customers with ARM loans as the rates on their loans adjust upward and their payments increase.  Rising interest rate environments also entice customers with ARM loans to refinance into fixed-rate loans further exposing the Bank to additional interest rate risk.  If the loan is refinanced externally, we could be unable to reinvest cash received from the resulting prepayments at rates comparable to existing loans, which subjects us to reinvestment risk.  In decreasing interest rate environments, payments received will likely be invested at the prevailing (decreased) market rate.  An influx of prepayments can result in an excess of liquidity, which could impact our net interest income if profitable reinvestment opportunities are not immediately available.  Prepayment rates are based on demographics, local economic factors, and seasonality, with the main factors affecting prepayment rates being prevailing interest rates and competition.  Fluctuations in interest rates also affect customer demand for deposit products.  Local competition for deposit dollars could affect our ability to attract deposits, or could result in us paying more for deposits.

The Bank’s one-year cumulative excess of interest-earning assets over interest-bearing liabilities as a percentage of assets at September 30, 2011 was 18.6% which signifies a positive gap position, meaning we have more interest-earning assets expected to reprice over the next 12 months than interest-bearing liabilities.  In a rising rate environment, a positive gap position would tend to result in an increase in our net interest income.  In a decreasing rate environment, a positive gap position would tend to result in a decrease in our net interest income.  For additional information about interest rate risk, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Quantitative and Qualitative Disclosures About Market Risk” in the Annual Report to Stockholders attached as Exhibit 13 to this Annual Report on Form 10-K.

Our strategies to modify our interest rate risk profile may be difficult to implement.  Our asset management strategies are designed to decrease our interest rate risk sensitivity.  One such strategy is increasing the amount of adjustable-rate and/or short-term assets.  We offer ARM loan products and work with correspondent lenders to purchase ARM and 15 year fixed-rate loans as a means to achieve this strategy.  However, lower interest rates would generally create a decrease in borrower demand for adjustable-rate assets, and there is no guarantee that any adjustable-rate assets obtained will not prepay.  Conventional mortgage loans may be sold on a bulk basis for portfolio restructuring or on a flow basis as loans are originated, which also subjects us to pricing risk in the secondary market.  Additionally, we attempt to invest in shorter-term assets in the investment portfolio as a way to reduce our interest rate sensitivity.

We are also managing our liabilities to moderate our interest rate risk sensitivity.  We are using our maturing FHLB advances and repurchase agreements to mitigate the impact of the customer demand for long-term fixed-rate mortgages by lengthening the maturities of these advances and repurchase agreements, depending on the liquidity or investment opportunities at the time we undertake additional FHLB advances or repurchase agreements.  FHLB advances and repurchase agreements will be entered into as needed or to fund the purchase of assets that provide for spreads at levels acceptable to management.

If we are unable to originate or purchase adjustable-rate assets at favorable rates or fund loan originations or securities purchases with long-term funding, we may have difficulty executing this asset management strategy and/or it may result in a reduction in profitability.

We may have unanticipated credit risk in our investment and MBS portfolio.  At September 30, 2011, $3.86 billion, or approximately 41% of our assets, consisted of investment and MBS securities, most of which were issued by, or have principal and interest payments guaranteed by, FNMA or FHLMC.

On September 7, 2008, the FHFA placed FNMA and FHLMC into federal conservatorship.  Although the federal government has committed substantial capital to FNMA and FHLMC, there can be no assurance that these credit facilities and other capital infusions will be adequate for their needs.  If the financial support is inadequate, or if additional support is not provided when needed, these companies could continue to suffer losses and could fail to honor their guarantees and other obligations.  The U.S. Treasury Secretary has suggested that the guarantee payment structure of FNMA and FHLMC should be re-examined.  The future roles of FNMA and FHLMC could be significantly reduced and the nature of their guarantees could be eliminated or considerably limited relative to historical measurements.  Any changes to the nature of the guarantees provided by FNMA and FHLMC could have a significant adverse affect on the market value and cash flows of the investment and MBS we hold, resulting in substantial losses.

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Passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act will increase our operational and compliance costs.  The Dodd-Frank Act has significantly changed, and will continue to significantly change, the current bank regulatory structure and affect the lending, deposit, investment, trading and operating activities of financial institutions and their holding companies.  The Bank’s primary federal regulator, the OTS, was eliminated in July 2011.  Now, federal thrifts are subject to regulation and supervision by the OCC, which supervises and regulates all national banks.  Existing savings and loan holding companies, such as the Company, are now subject to regulation and supervision by the FRB.  The Dodd-Frank Act requires various federal agencies to adopt a broad range of new rules and regulations, and to prepare numerous studies and reports for Congress.  The federal agencies are given significant discretion in drafting the rules and regulations, and consequently, many of the details and much of the impact of the Dodd-Frank Act may not be known for many months or years.

The Dodd-Frank Act created a new Consumer Financial Protection Bureau (“CFPB”) with broad powers to supervise and enforce consumer protection laws.  The CFPB has broad rule-making authority for a wide range of consumer protection laws that apply to all banks and savings institutions, including the authority to prohibit “unfair, deceptive or abusive” acts and practices.  The CFPB has examination and enforcement authority over all banks with more than $10 billion in assets.  Banks with $10 billion or less in assets will continue to be examined for compliance with the consumer laws by their primary bank regulators.  The Dodd-Frank Act also weakens the federal preemption rules that have been applicable for national banks and federal savings associations, and gives state attorneys general the ability to enforce federal consumer protection laws.  The Company does not currently have assets in excess of $10 billion, but it may at some point in the future.

The Dodd-Frank Act requires minimum leverage (Tier 1) and risk-based capital requirements for savings and loan holding companies (effective July 21, 2015) and bank holding companies that are no less stringent than those applicable to banks, which will limit our ability to borrow at the holding company level and invest the proceeds from such borrowings as capital in the Bank, and will exclude certain instruments that previously have been eligible for inclusion by bank holding companies as Tier 1 capital, such as trust preferred securities.

The Dodd-Frank Act also broadens the base for FDIC deposit insurance assessments.  Assessments will now be based on the average consolidated total assets less tangible equity capital of a financial institution, rather than deposits.  The Dodd-Frank Act also permanently increases the maximum amount of deposit insurance for banks, savings institutions and credit unions to $250 thousand per depositor, retroactive to January 1, 2008, and non-interest-bearing transaction accounts have unlimited deposit insurance through December 31, 2012.  The legislation also increases the required minimum reserve ratio for the DIF, from 1.15% to 1.35% of insured deposits, and directs the FDIC to offset the effects of increased assessments on depository institutions with less than $10 billion in assets.

 It is difficult to predict at this time what specific impact the Dodd-Frank Act and the yet to be written implementing rules and regulations will have on community banks.  However, it is expected that at a minimum they will increase our operating and compliance costs and could increase our interest expense.

Changes in laws and regulations and the cost of regulatory compliance with new laws and regulations may adversely affect our operations and our income.  We are subject to extensive regulation, supervision and examination by the OCC, FRB, and the FDIC.  These regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including the ability to impose restrictions on a bank’s operations, reclassify assets, determine the adequacy of a bank’s ACL and determine the level of deposit insurance premiums assessed.  Our business is highly regulated: therefore, the laws and applicable regulations are subject to frequent change.  Any change in these regulations and oversight, whether in the form of regulatory policy, new regulations or legislation or additional deposit insurance premiums could have a material impact on our operations.

The potential exists for additional federal or state laws and regulations, or changes in policy, affecting lending and funding practices, and interest rate risk management and liquidity standards.  Moreover, bank regulatory agencies have been active in responding to concerns and trends identified in examinations, and have issued many formal enforcement orders requiring capital ratios in excess of regulatory requirements.  Bank regulatory agencies, such as the OCC and the FDIC, govern the activities in which we may engage, primarily for the protection of depositors, and not for the protection or benefit of potential investors.  In addition, new laws and regulations may increase our costs of regulatory compliance and of doing business, and otherwise affect our operations.  New laws and regulations may significantly affect the markets in which we do business, the markets for and value of our loans and investments, the fees we can charge and our ongoing operations, costs and profitability.

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Higher Federal Deposit Insurance Corporation insurance premiums and special assessments will adversely affect our earnings.  Pursuant to the Dodd-Frank Act, the FDIC has established 2.0% as the designated reserve ratio (“DRR”), that is, the ratio of the DIF to the insured deposit base.  The FDIC has adopted a plan under which it will meet the statutory minimum DRR of 1.35% by September 30, 2020, the deadline imposed by the Dodd-Frank Act.  The Dodd-Frank Act requires that institutions with assets of more than $10 billion bear the effect of the increase in the statutory minimum DRR to 1.35%, from the former statutory minimum of 1.15%.  Although the Bank had less than $10 billion in assets as of September 30, 2011, in the event the Bank’s asset size grows to at least $10 billion for four consecutive quarters, the effect of this provision of the Dodd-Frank Act may be to increase the Bank’s cost of deposit insurance relative to institutions with less than $10 billion in assets. 

In 2009, the FDIC levied a five basis point special assessment on each insured depository institution’s assets minus Tier 1 capital as of June 30, 2009.  We recorded an expense of $3.8 million during the quarter ended June 30, 2009, to reflect the special assessment. 

The FDIC also required all insured institutions to prepay their estimated assessments for the fourth quarter of calendar year 2009, and for all of calendar years 2010, 2011, and 2012.  This pre-payment was due on December 30, 2009.  The assessment rate for the fourth quarter of calendar year 2009 and for calendar year 2010 was based on each institution’s total base assessment rate for the third quarter of calendar year 2009, modified to assume that the assessment rate in effect on September 30, 2009 had been in effect for the entire calendar year third quarter, and the assessment rate for calendar years 2011 and 2012 was calculated as the modified third quarter assessment rate plus an additional three basis points.  In addition, every institution’s assessment base for each period was calculated using its third quarter assessment base, adjusted quarterly for an estimated 5% annual growth rate in the assessment base through the end of calendar year 2012.  We recorded the pre-payment as a prepaid expense, which will be amortized to expense based upon actual balances insured.  Our prepayment amount for calendar years 2010, 2011, and 2012 was $25.7 million.  Future increases in our assessment rate or special assessments would decrease our earnings.

The Company’s ability to pay dividends is subject to the ability of the Bank to make capital distributions to the Company.  The long-term ability of the Company to pay dividends to its stockholders is based primarily upon the ability of the Bank to make capital distributions to the Company, and also on the availability of cash at the holding company level in the event earnings are not sufficient to pay dividends according to the cash dividend payout policy.  Under FRB and OCC safe harbor regulations, the Bank may distribute to the Company capital not exceeding net income for the current calendar year and the prior two calendar years.  At September 30, 2011, the Bank was in compliance with the FRB and OCC safe harbor regulations.  Currently, the Bank has authorization from the OCC to distribute capital from the Bank to the Company through the quarter ending December 31, 2011. 

Strong competition may limit growth and profitability.  While we are one of the largest mortgage loan originators in the state of Kansas, we compete in the same market areas as local, regional, and national banks, credit unions, mortgage brokerage firms, investment banking firms, investment brokerage firms and savings institutions.  We must also compete with online investment and mortgage brokerages and online banks that are not confined to any specific market area.  Many of these competitors operate on a national or regional level, are a conglomerate of various financial services providers housed under one corporation, or otherwise have substantially greater financial or technological resources than the Bank.  We compete primarily on the basis of the interest rates offered to depositors and the terms of loans offered to borrowers.  Should we face competitive pressure to increase deposit rates or decrease loan rates, our net interest income could be adversely affected.  Additionally, our competitors may offer products and services that we do not or cannot provide, as certain deposit and loan products fall outside of our accepted level of risk.  Our profitability depends upon our ability to compete in our local market areas.

Item 1B.   Unresolved Staff Comments

None.

Item 2.                      Properties

At September 30, 2011, we had 35 traditional branch offices and 10 in-store branch offices.  The Bank owns the office building and related land in which its home office and executive offices are located, and 25 of its other branch offices.  The Bank owns the buildings for three of its branch offices and leases the related land.  The remaining 16 branch offices, including 10 in-store locations, were leased.

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For additional information regarding our lease obligations, see “Notes to Consolidated Financial Statements - Note 5” in the Annual Report to Stockholders attached as Exhibit 13 to this Annual Report on Form 10-K.

Management believes that our current facilities are adequate to meet our present and immediately foreseeable needs, after consideration of the retrofitting and remodeling of our Home Office.  However, we will continue to monitor customer growth and expand our branching network, if necessary, to serve our customers’ needs.

Item 3.                      Legal Proceedings

The Company and the Bank are involved as plaintiff or defendant in various legal actions arising in the normal course of business.  In our opinion, after consultation with legal counsel, we believe it unlikely that such pending legal actions will have a material adverse effect on our financial condition, results of operations or liquidity.

Item 4.                      (Removed and Reserved)

PART II

Item 5.                      Market for the Registrant’s Common Stock, Related Security Holder Matters and Issuer Purchases of Equity Securities

The section entitled “Stockholder Information” of the attached Annual Report to Stockholders for the year ended September 30, 2011 is incorporated herein by reference.

See “Notes to Consolidated Financial Statements—Note 1” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Regulatory Capital” of the Annual Report to Stockholders attached as Exhibit 13 to this Annual Report on Form 10-K regarding the OCC restrictions on dividends from the Bank to the Company.

There were no stock repurchases during the three months ended September 30, 2011.  Under current regulatory restrictions, we may not repurchase our stock during the first year following the corporate reorganization except under very limited circumstances.  This one-year moratorium expires in December 2011.  The stock repurchase plan that was in effect at the time of the corporate reorganization in December 2010 ceased to exist once the reorganization was complete.  There is no repurchase plan currently in place.

The following table presents quarterly dividends paid in calendar years 2011, 2010, and 2009.  The dollar amounts represent dividends paid during the quarter.  The 2011 special year-end dividend is based upon the number of shares eligible to receive dividends outstanding on the record date of November 18, 2011.

	Calendar Year
	2011		2010		2009
	(Dollars in thousands)
Quarter ended March 31
Total quarterly dividends paid	$	12,105	$	10,739	$	10,437
Quarter ended June 30
Total quarterly dividends paid	$	12,105	$	10,496	$	10,446
Quarter ended September 30
Total quarterly dividends paid	$	12,106	$	10,496	$	10,448
Quarter ended December 31
Total quarterly dividends paid	$	12,145	$	10,597	$	10,550
Special year end/welcome dividend
Total dividends paid	$	113,031	$	6,359	$	6,119
Calendar year-to-date dividends paid	$	161,492	$	48,687	$	48,000

Item 6.                      Selected Financial Data

The section entitled “Selected Consolidated Financial Data” of the attached Annual Report to Stockholders for the fiscal years ended September 30, 2007 through September 30, 2011 is incorporated herein by reference.

43

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the attached Annual Report to Stockholders for the year ended September 30, 2011 is incorporated herein by reference.

Item 7A.  Quantitative and Qualitative Disclosure About Market Risk

The section entitled “Management Discussion of Financial Condition and Results of Operations-Quantitative and Qualitative Disclosure about Market Risk” of the attached Annual Report to Stockholders for the year ended September 30, 2011 is incorporated herein by reference.

Item 8.  Financial Statements and Supplementary Data

The section entitled “Consolidated Financial Statements” of the attached Annual Report to Stockholders for the fiscal year ended September 30, 2011 is incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, the “Act”) as of September 30, 2011.  Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that as of September 30, 2011, such disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports it files or submits under the Act is accumulated and communicated to the Company’s management (including the Chief Executive Officer and Chief Financial Officer) to allow timely decisions regarding required disclosure, and is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Internal Controls Over Financial Reporting

Management’s report on our internal control over financial reporting and the attestation report of the independent registered public accounting firm is contained in the attached Annual Report to Stockholders for the fiscal year ended September 30, 2011 and incorporated herein by reference.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Act) identified in connection with the evaluation required by Rule 13a-15(d) of the Act that occurred during the Company’s quarter ended September 30, 2011 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B.  Other Information

None.

PART III

Item 10.  Directors, Executive Officers, and Corporate Governance

Information required by this item concerning the Company’s directors and compliance with Section 16(a) of the Act is incorporated herein by reference from the definitive proxy statement for the Annual Meeting of Stockholders to be held in January 2012, a copy of which will be filed not later than 120 days after the close of the fiscal year.

Pursuant to General Instruction G(3), information concerning executive officers of the Company is included in Part I, under the caption “Executive Officers of the Registrant” of this Form 10-K.

Information required by this item regarding the audit committee of the Company’s Board of Directors, including information regarding the audit committee financial expert serving on the audit committee, is incorporated herein by reference from the definitive proxy statement for the Annual Meeting of Stockholders to be held in January 2012, a copy of which will be filed not later than 120 days after the close of the fiscal year.

44

Code of Ethics

We have adopted a written code of ethics within the meaning of Item 406 of SEC Regulation S-K that applies to our principal executive officer and senior financial officers, and to all of our other employees and our directors, a copy of which is available free of charge by contacting Jim Wempe, our Investor Relations Officer, at (785) 270-6055 or from our Internet website (www.capfed.com).

Item 11.   Executive Compensation

Information required by this item concerning compensation is incorporated herein by reference from the definitive proxy statement for the Annual Meeting of Stockholders to be held in January 2012, a copy of which will be filed not later than 120 days after the close of the fiscal year.

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information required by this item concerning security ownership of certain beneficial owners and management is incorporated herein by reference from the definitive proxy statement for the Annual Meeting of Stockholders to be held in January 2012, a copy of which will be filed not later than 120 days after the close of the fiscal year.

The following table sets forth information as of September 30, 2011 with respect to compensation plans under which shares of our common stock may be issued:

Equity Compensation Plan Information
					Number of Shares
					Remaining Available
					for Future Issuance
	Number of Shares				Under Equity
	to be issued upon		Weighted Average		Compensation Plans
	Exercise of		Exercise Price of		(Excluding Shares
	Outstanding Options,		Outstanding Options,		Reflected in the
Plan Category	Warrants and Rights		Warrants and Rights		First Column)
Equity compensation plans approved
by stockholders		906,964	$	15.09		3,215,316	(1)
Equity compensation plans not approved
by stockholders		N/A		N/A		N/A
		906,964	$	15.09		3,215,316

(1) This amount includes 358,767 shares issuable under the Company's Recognition and Retention Plan.

Item 13.  Certain Relationships and Related Transactions, and Director Independence

Information required by this item concerning certain relationships, related transactions and director independence is incorporated herein by reference from the definitive proxy statement for the Annual Meeting of Stockholders to be held in January 2012, a copy of which will be filed not later than 120 days after the close of the fiscal year.

Item 14.  Principal Accounting Fees and Services

Information required by this item concerning principal accountant fees and services is incorporated herein by reference from the definitive proxy statement for the Annual Meeting of Stockholders to be held in January 2012, a copy of which will be filed not later than 120 days after the close of the fiscal year.

45

PART IV

Item 15.  Exhibits and Financial Statement Schedules

(a)     The following is a list of documents filed as part of this report:

(1)  Financial Statements:

The following financial statements are included under Part II, Item 8 of this Form 10-K:

1.    Report of Independent Registered Public Accounting Firm.

2.    Consolidated Balance Sheets as of September 30, 2011 and 2010.

3.    Consolidated Statements of Income for the Years Ended September 30, 2011, 2010, and 2009.

4.    Consolidated Statements of Stockholders’ Equity for the Years Ended September 30, 2011, 2010, and 2009.

5.    Consolidated Statements of Cash Flows for the Years Ended September 30, 2011, 2010, and 2009.

6.    Notes to Consolidated Financial Statements for the Years Ended September 30, 2011, 2010, and 2009.

(2)  Financial Statement Schedules:

All financial statement schedules have been omitted as the information is not required under the related instructions or is not applicable.

(3)  Exhibits:

See Index to Exhibits.

46

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CAPITOL FEDERAL FINANCIAL, INC.
	Date:  November 29, 2011	By:	/s/ John B. Dicus
			John B. Dicus, Chairman, President and
			Chief Executive Officer
			(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the date indicated.
By:	/s/ John B. Dicus	By:	/s/ B. B. Andersen
	John B. Dicus, Chairman, President		B. B. Andersen, Director
	and Chief Executive Officer		Date:  November 29, 2011
	(Principal Executive Officer)
	Date:  November 29, 2011	By:	/s/ Michael T. McCoy, M.D.
			Michael T. McCoy, M.D., Director
By:	/s/ Kent G. Townsend		Date:  November 29, 2011
	Kent G. Townsend, Executive Vice President,
	Chief Financial Officer and Treasurer	By:	/s/ Marilyn S. Ward
	(Principal Financial Officer)		Marilyn S. Ward, Director
	Date:  November 29, 2011		Date:  November 29, 2011
By:	/s/ Jeffrey R. Thompson	By:	/s/ Tara D. Van Houweling
	Jeffrey R. Thompson, Director		Tara D. Van Houweling, First Vice President
	Date:  November 29, 2011		and Reporting Director
			(Principal Accounting Officer)
By:	/s/ Jeffrey M. Johnson		Date:  November 29, 2011
	Jeffrey M. Johnson, Director
	Date:  November 29, 2011
By:	/s/ Morris J. Huey II
	Morris J. Huey, Director
	Date:  November 29, 2011

47

INDEX TO EXHIBITS

Exhibit Number	Document
2.0		Amended Plan of Conversion and Reorganization filed on October 27, 2010 as Exhibit 2 to Capitol Federal Financial, Inc.’s Post Effective Amendment No. 2 Registration Statement on Form S-1 (File No. 333-166578) and incorporated herein by reference
3(i)		Charter of Capitol Federal Financial, Inc., as filed on May 6, 2010, as Exhibit 3(i) to Capitol Federal Financial, Inc.’s Registration Statement on Form S-1 (File No. 333-166578) and incorporated herein by reference
3(ii)		Bylaws of Capitol Federal Financial, Inc. as filed on May 6, 2010, as Exhibit 3(ii) to Capitol Federal Financial Inc.’s Registration Statement on Form S-1 (File No. 333-166578) and incorporated herein by reference
10.1(i)		Capitol Federal Financial’s Thrift Plan filed on November 29, 2007 as Exhibit 10.1(i) to
		the Annual Report on Form 10-K for Capitol Federal Financial and incorporated herein by reference
10.1(ii)		Capitol Federal Financial, Inc.’s Stock Ownership Plan, as amended, filed on May 10, 2011 as Exhibit 10.1(ii) to the March 31, 2011 Form 10-Q for Capitol Federal Financial, Inc., and incorporated herein by reference
10.1(iii)		Form of Change of Control Agreement with each of John B. Dicus, Kent G. Townsend, R. Joe Aleshire, Larry Brubaker, and Rick C. Jackson filed on January 20, 2011 as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K and incorporated herein by reference
10.2		Capitol Federal Financial’s 2000 Stock Option and Incentive Plan (the “Stock Option Plan”) filed on April 13, 2000 as Appendix A to Capitol Federal Financial’s Revised Proxy Statement (File No. 000-25391) and incorporated herein by reference
10.3		Capitol Federal Financial’s 2000 Recognition and Retention Plan (“RRP”) filed on April 13, 2000 as Appendix B to Capitol Federal Financial’s Revised Proxy Statement (File No. 000-25391) and incorporated herein by reference
10.4		Capitol Federal Financial Deferred Incentive Bonus Plan, as amended, filed on May 5, 2009 as Exhibit 10.4 to the March 31, 2009 Form 10-Q for Capitol Federal Financial and incorporated herein by reference
10.5		Form of Incentive Stock Option Agreement under the Stock Option Plan filed on February 4, 2005 as Exhibit 10.5 to the December 31, 2004 Form 10-Q for Capitol Federal Financial
		and incorporated herein by reference
10.6		Form of Non-Qualified Stock Option Agreement under the Stock Option Plan filed on February 4, 2005 as Exhibit 10.6 to the December 31, 2004 Form 10-Q for Capitol Federal
		Financial and incorporated herein by reference
10.7		Form of Restricted Stock Agreement under the RRP filed on February 4, 2005 as Exhibit 10.7 to the December 31, 2004 Form 10-Q for Capitol Federal Financial and incorporated
		herein by reference
10.8		Description of Named Executive Officer Salary and Bonus Arrangements
10.9		Description of Director Fee Arrangements filed on February 9, 2011 as Exhibit 10.9 to the
		December 31, 2010 Form 10-Q and incorporated herein by reference
10.10		Short-term Performance Plan filed on August 4, 2011 as Exhibit 10.10 to the June 30, 2011
		Form 10-Q and incorporated herein by reference
11		Statement re: computation of earnings per share*
13		Annual Report to Stockholders
14		Code of Ethics**
21		Subsidiaries of the Registrant
23		Consent of Independent Registered Public Accounting Firm
31.1		Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002 made by John B. Dicus, Chairman, President, and Chief Executive Officer
31.2		Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002 made by Kent G. Townsend, Executive Vice President, Chief Financial Officer and Treasurer
32		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 made by John B. Dicus, Chairman, President and Chief Executive Officer, and Kent G. Townsend, Executive Vice President, Chief Financial Officer and Treasurer
101		The following information from the Company’s Quarterly Report on Form 10-K for the fiscal year ended September 30, 2011, filed with the SEC on November 29, 2011, has been formatted in eXtensible Business Reporting Language: (i) Consolidated Balance Sheets at September 30, 2011 and September 30, 2010, (ii) Consolidated Statements of Operations for the fiscal years ended September 30, 2011, 2010, and 2009, (iii) Consolidated Statement of Stockholders’ Equity for the fiscal years ended September 30, 2011, 2010, and 2009 (iv) Consolidated Statements of Cash Flows for the fiscal years ended September 30, 2011, 2010, and 2009 and (v) Notes to the Unaudited Consolidated Financial Statements ***

*No statement is provided because the computation of per share earnings can be clearly determined from the Financial Statements included in this report.

**May be obtained free of charge from the Registrant’s Investor Relations Officer by calling (785) 270-6055 or from the Registrant’s internet website at www.capfed.com.

***Pursuant to SEC rules, this exhibit will not be deemed filed for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section.

48

EX-10.8

Capitol Federal Financial, Inc.

Exhibit 10.8

Named Executive Officer Salary and Bonus Arrangements

Base Salaries

The base salaries, effective July 1, 2011, for the executive officers (the "named executive officers") of Capitol Federal Financial, Inc. who will be named in the compensation table that appears in the Company's annual meeting proxy statement for the fiscal year ended September 30, 2011 are as follows:

Name and Title	Base Salary
John B. Dicus Chairman, President and Chief Executive Officer	$512,500
R. Joe Aleshire Executive Vice President	$235,200
Larry K. Brubaker Executive Vice President	$235,200
Kent G. Townsend Executive Vice President, Chief Financial Officer and Treasurer	$270,000
Rick C. Jackson Executive Vice President	$195,000

Bonus Plans

The Compensation Committee of the Company’s Board of Directors has approved a short-term performance plan (the “STPP”).  The STPP provides for annual bonus awards, as a percentage of base salary, to selected management personnel based on the achievement of pre-established corporate and individual performance criteria.  Awards, if any, are typically made in January for the fiscal year ended the preceding September 30th.  The STPP will expire following the payment of bonuses for fiscal year 2015.  The STPP was filed on August 4, 2011as Exhibit 10.10 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2011.

The corporate performance criteria under the STPP are comprised of targeted levels of the Company’s return on average equity, basic earnings per share and efficiency ratio.

Under the STPP, the maximum potential annual bonus awards for the executive officers whom the Company believes are likely to be named in the summary compensation table in the Company’s proxy statement for its annual meeting of stockholders following the end of fiscal year 2011 are as follows:  John B. Dicus, Chairman, President and Chief Executive Officer, 60% of base salary; Larry K. Brubaker, Executive Vice President for Corporate Services, 40% of base salary; Kent G. Townsend, Executive Vice President,Chief Financial Officer, and Treasurer, 40% of base salary; Richard J. Aleshire, Executive Vice President for Retail Operations, 40% of base salary, and Rick C. Jackson, Executive Vice President and Chief Lending Officer, 40% of base salary.

The Compensation Committee of the Company’s Board of Directors has approved a deferred incentive bonus plan (the “DIBP”).  Under the DIBP, a portion of the bonus awarded under the STPP (from $2 thousand to as much as 50% of the award, up to a maximum of $100 thousand) to an officer eligible to participate in the DIBP may be deferred under the DIBP for a three year period.  The total amount of the deferred bonus, plus up to a 50% Company match, is deemed to be invested in the Company’s common stock at the closing price as of the December 31st immediately preceding the deferral date.  If the participant is still employed at the end of the deferral period, the participant will receive a cash payment equal to the sum of: (1) the deferred amount, (2) the Company match, (3) the value of all dividend equivalents paid during the deferral period on the Company common stock in which the participant is deemed to have invested and (4) the appreciation, if any, during the deferral period on the Company common stock in which the participant is deemed to have invested.  The DIBP was filed on May 5, 2009 and is incorporated by reference as Exhibit 10.4 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2009.

EX-13

SELECTED CONSOLIDATED FINANCIAL DATA

The summary information presented below under “Selected Balance Sheet Data” and “Selected Operations Data” for, and as of the end of, each of the years ended September 30 is derived from our audited consolidated financial statements.  The following information is only a summary and you should read it in conjunction with our consolidated financial statements and notes beginning on page 52.  All share information prior to the corporate reorganization in December 2010 has been revised to reflect the 2.2637 exchange ratio.

	September 30,
	2011			2010		2009		2008		2007
	(Dollars in thousands, except per share amounts)
Selected Balance Sheet Data:
Total assets	$	9,450,799		$	8,487,130	$	8,403,680	$	8,055,249	$	7,675,886
Loans receivable, net		5,149,734			5,168,202		5,603,965		5,320,780		5,290,071
Securities:
Available-for-sale (“AFS”)		1,486,439			1,060,366		1,623,995		1,533,641		505,110
Held-to-maturity (“HTM”)		2,370,117			1,880,154		849,176		843,057		1,433,329
Capital stock of Federal Home Loan Bank (“FHLB”)		126,877			120,866		133,064		124,406		139,661
Deposits		4,495,173			4,386,310		4,228,609		3,923,883		3,922,782
Advances from FHLB		2,379,462			2,348,371		2,392,570		2,447,129		2,732,183
Other borrowings		515,000			668,609		713,609		713,581		53,524
Stockholders’ equity		1,939,529			961,950		941,298		871,216		867,631
	Year Ended September 30,
		2011			2010		2009		2008		2007
	(Dollars and counts in thousands, except per share amounts)
Selected Operations Data:
Total interest and dividend income	$	346,865		$	374,051	$	412,786	$	410,806	$	411,550
Total interest expense		178,131			204,486		236,144		276,638		305,110
Net interest and dividend income		168,734			169,565		176,642		134,168		106,440
Provision (recovery) for credit losses		4,060			8,881		6,391		2,051		(225	)
Net interest and dividend income after provision
for credit losses		164,674			160,684		170,251		132,117		106,665
Retail fees and charges		15,509			17,789		18,023		17,805		16,120
Other income		9,486			16,622		10,571		12,222		7,846
Total other income		24,995			34,411		28,594		30,027		23,966
Total other expenses		132,317			89,730		93,621		81,989		77,725
Income before income tax expense		57,352			105,365		105,224		80,155		52,906
Income tax expense		18,949			37,525		38,926		29,201		20,610
Net income		38,403			67,840		66,298		50,954		32,296
Basic earnings per share	$	0.24	(1)	$	0.41	$	0.40	$	0.31	$	0.20
Average shares outstanding		162,625			165,862		165,576		165,112		164,908
Diluted earnings per share	$	0.24	(1)	$	0.41	$	0.40	$	0.31	$	0.20
Average diluted shares outstanding		162,633			165,899		165,721		165,279		165,183

6

	2011			2010			2009			2008			2007
Selected Performance and Financial Ratios
and Other Data:
Performance Ratios:
Return on average assets		0.41	%		0.80	%		0.81	%		0.65	%		0.41	%
Return on average equity		2.20	(1)		7.09			7.27			5.86			3.72
Dividends paid per public share (2)	$	1.63		$	2.29		$	2.11		$	2.00		$	2.09
Dividend payout ratio		390.88	%		71.34	%		66.47	%		81.30	%		133.14	%
Ratio of operating expense to
average total assets		1.40	(1)		1.06			1.14			1.04			0.98
Efficiency ratio		68.30	(1)		43.99			45.62			49.93			59.60
Ratio of average interest-earning assets
to average interest-bearing liabilities		1.22	x		1.11	x		1.12	x		1.12	x		1.12	x
Interest rate spread information:
Average during period		1.42	%		1.78	%		1.86	%		1.35	%		0.93	%
End of period		1.60			1.76			1.89			1.70			0.89
Net interest margin		1.84			2.06			2.20			1.75			1.36
Asset Quality Ratios:
Non-performing assets to total assets		0.40			0.49			0.46			0.23			0.12
Non-performing loans to total loans		0.51			0.62			0.55			0.26			0.14
Allowance for credit losses (“ACL”) to
non-performing loans		58.34			46.60			32.83			42.37			56.87
ACL to loans receivable, net		0.30			0.29			0.18			0.11			0.08
Capital Ratios:
Equity to total assets at end of period		20.52			11.33			11.20			10.82			11.30
Average equity to average assets		18.50			11.30			11.08			11.05			10.91
Regulatory Capital Ratios of Capitol
Federal Savings Bank (the “Bank”)
Tangible equity		15.1			9.8			10.0			10.0			10.3
Tier 1 (core) capital		15.1			9.8			10.0			10.0			10.3
Tier 1 (core) risk-based capital		37.9			23.5			23.2			23.1			22.9
Total risk-based capital		38.3			23.8			23.3			23.0			22.8
Other Data:
Number of traditional offices		35			35			33			30			29
Number of in-store offices		10			11			9			9			9

(1)   Excluding the $40.0 million ($26.0 million, net of income tax benefit) contribution to the Capitol Federal Foundation in connection with the corporate reorganization in December 2010, basic and diluted earnings per share would have been $0.40, return on average assets would have been 0.68%, return on average equity would have been 3.69%, ratio of operating expense to average total assets would have been 0.98%, and the efficiency ratio would have been 47.65%. This adjusted financial data is not presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”).  See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Comparison of Results of Operations for the Years Ended September 30, 2011 and 2010 – Non-GAAP Presentation.”

(2)   For fiscal years 2007 through 2010, Capitol Federal Savings Bank MHC (“MHC”) owned a majority of the outstanding shares of Capitol Federal Financial common stock and waived its right to receive dividends paid on the common stock with the exception of the $0.50 per share dividend paid on 500,000 shares in February 2010.  Public shares exclude shares held by MHC, as well as unallocated shares held in the Capitol Federal Financial Employee Stock Ownership Plan (“ESOP”).  In December 2010, Capitol Federal Financial completed its conversion from a mutual holding company form of organization to a stock form of organization and all shares owned by MHC were sold in a public offering.  See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Executive Summary” for additional information.

7

MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS                                                                                                           

General Overview

Capitol Federal Financial, Inc. (the “Company”) is the holding company and the sole shareholder of Capitol Federal Savings Bank (the “Bank”).  The Company’s common stock is traded on the NASDAQ Global Select Market under the symbol “CFFN.”  The Bank comprises almost all of the consolidated assets and liabilities of the Company and the Company is dependent primarily upon the performance of the Bank for the results of its operations.  Because of this relationship, references to management actions, strategies and results of actions apply to both the Bank and the Company.

Private Securities Litigation Reform Act—Safe Harbor Statement

We may from time to time make written or oral “forward-looking statements”, including statements contained in our filings with the Securities and Exchange Commission (“SEC”).  These forward-looking statements may be included in this annual report to stockholders and in other communications by the Company, which are made in good faith by us pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements include statements about our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions that are subject to significant risks and uncertainties, and are subject to change based on various factors, some of which are beyond our control.  The words “may”, “could”, “should”, “would”, “believe”, “anticipate”, “estimate”, “expect”, “intend”, “plan” and similar expressions are intended to identify forward-looking statements. The following factors, among others, could cause our future results to differ materially from the plans, objectives, goals, expectations, anticipations, estimates and intentions expressed in the forward-looking statements:

·   our ability to continue to maintain overhead costs at reasonable levels;

·   our ability to continue to originate a significant volume of one- to four-family mortgage loans in our market areas or to purchase loans through correspondents;

·   our ability to acquire funds from or invest funds in wholesale or secondary markets;

·   the future earnings and capital levels of the Bank and the continued non-objection by our primary federal banking regulators, to the extent required, to distribute capital from the Bank to the Company, which could affect the ability of the Company to pay dividends in accordance with its dividend policies;

·   fluctuations in deposit flows, loan demand, and/or real estate values, as well as unemployment levels, which may adversely affect our business;

·   the credit risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs, changes in property values, and changes in estimates of the adequacy of the ACL;

·   results of examinations of the Bank and the Company by their respective primary federal banking regulators, including the possibility that the regulators may, among other things, require us to increase our ACL;

·   the strength of the U.S. economy in general and the strength of the local economies in which we conduct operations;

·   the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System (“FRB”);

·   the effects of, and changes in, foreign and military policies of the United States government;

·   inflation, interest rate, market and monetary fluctuations;

·   our ability to access cost-effective funding;

·   the timely development and acceptance of our new products and services and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors’ products and services;

·   the willingness of users to substitute competitors’ products and services for our products and services;

·   our success in gaining regulatory approval of our products and services and branching locations, when required;

·   the impact of changes in financial services laws and regulations, including laws concerning taxes, banking, securities and insurance and the impact of other governmental initiatives affecting the financial services industry;

·   implementing business initiatives may be more difficult or expensive than anticipated;

·   technological changes;

·   acquisitions and dispositions;

·   changes in consumer spending and saving habits; and

·   our success at managing the risks involved in our business.

9

This list of important factors is not exclusive.  We do not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company or the Bank.

The following discussion is intended to assist in understanding the financial condition and results of operations of the Company.  The discussion includes comments relating to the Bank, since the Bank is wholly owned by the Company and comprises the majority of assets and is the principal source of income for the Company.

Executive Summary

The following summary should be read in conjunction with our Management’s Discussion and Analysis of Financial Condition and Results of Operations in its entirety.

In December 2010, Capitol Federal Financial completed its conversion from a mutual holding company form of organization to a stock form of organization (the “corporate reorganization”).  Capitol Federal Financial, which owned 100% of the Bank, was succeeded by Capitol Federal Financial, Inc, a new Maryland corporation.  As part of the corporate reorganization, MHC’s ownership interest of Capitol Federal Financial was sold in a public stock offering.  Capitol Federal Financial, Inc. sold 118,150,000 shares of common stock at $10.00 per share in the stock offering.  The publicly held shares of Capitol Federal Financial were exchanged for new shares of common stock of Capitol Federal Financial, Inc.  The exchange ratio was 2.2637 and ensured that immediately after the corporate reorganization the public stockholders of Capitol Federal Financial owned the same aggregate percentage of Capitol Federal Financial, Inc. common stock that they owned of Capitol Federal Financial common stock immediately prior to that time.  In lieu of fractional shares, Capitol Federal Financial stockholders were paid in cash.  Gross proceeds from the offering were $1.18 billion and related offering expenses were $46.7 million.  The net proceeds from the stock offering were $1.13 billion, of which 50%, or $567.4 million, was contributed to the Bank as a capital contribution, as required by Office of the Comptroller of the Currency (the “OCC”) regulations.  The other 50%, or $567.4 million, remained at Capitol Federal Financial, Inc., of which $40.0 million was contributed to the Bank’s charitable foundation, Capitol Federal Foundation (the “Foundation”), and $47.3 million was loaned to the ESOP for its purchase of Capitol Federal Financial, Inc. shares in the stock offering.  In April 2011, the Company redeemed the outstanding Junior Subordinated Deferrable Interest Debentures (the “Debentures”) of $53.6 million using a portion of the offering proceeds from the corporate reorganization.

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) was signed into law.  The Dodd-Frank Act, among other things, required the Office of Thrift Supervision (the “OTS”) to be merged into the OCC.  On July 21, 2011, the OCC assumed all functions and authority from the OTS relating to federally charted savings banks, and the FRB assumed all functions and authority from the OTS relating to savings and loan holding companies.  Accordingly, effective July 21, 2011, the Bank became regulated by the OCC and the Company was regulated by the FRB.  Prior to that date, the Bank and Company were regulated by the OTS.  All references to the OTS in this filing on or after that date will refer to the successor regulator (i.e., the OCC for the Bank and the FRB for the Company), as appropriate.

We have been, and intend to continue to be, a community-oriented financial institution offering a variety of financial services to meet the needs of the communities we serve.  We generally attract retail deposits from the general public and invest those funds primarily in permanent loans secured by first mortgages on owner-occupied, one- to four-family residences.  To a much lesser extent, we also originate consumer loans, loans secured by first mortgages on non-owner-occupied one- to four-family residences, multi-family and commercial real estate loans, and construction loans.  While our primary business is the origination of one- to four-family mortgage loans funded through retail deposits, we also purchase whole one- to four-family mortgage loans from correspondent and nationwide lenders, and invest in certain investment securities and mortgage-backed securities (“MBS”) funded through retail deposits, advances from FHLB, and repurchase agreements.  The Company is significantly affected by prevailing economic conditions including federal monetary and fiscal policies and federal regulation of financial institutions.  Retail deposit balances are influenced by a number of factors including interest rates paid on competing personal investment products, the level of personal income, and the personal rate of savings within our market areas.  Lending activities are influenced by the demand for housing and other loans, changing loan underwriting guidelines, as well as interest rate pricing competition from other lending institutions.  The primary sources of funds for lending activities include deposits, loan repayments, investment income, borrowings, and funds provided from operations.

The Company’s results of operations are primarily dependent on net interest income, which is the difference between the interest earned on loans, MBS, investment securities and cash, and the interest paid on deposits and borrowings.  On a weekly basis, management reviews deposit flows, loan demand, cash levels, and changes in several market rates to assess all pricing strategies.  The Bank generally prices its first mortgage loan products based on secondary market and competitor pricing.  Generally, deposit pricing is based upon a survey of competitors in the Bank’s market areas, and the need to attract funding and retain maturing deposits.  The majority of our loans are fixed-rate products with maturities up to 30 years, while the majority of our deposits have maturity or repricing dates of less than two years.

The Federal Open Market Committee of the Federal Reserve (the “FOMC”) noted in their November 2011 meeting minutes that the economic recovery was continuing at a moderate pace, but was hampered by a weak job market, a high unemployment rate, and persistent depression in the housing sector.  The FOMC continued to maintain the target range for federal funds rate at zero to 25 basis points, which has been the range since December

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2008.  Additionally, the FOMC committed to maintain its existing policy of reinvesting principal payments from securities holdings, and intends to extend the average maturity of its securities holdings.  These actions are intended to lower long-term rates and increase economic activity.  These actions, along with previous FOMC actions, have effectively increased the amount of excess reserves in the banking system, which is intended to reduce long-term interest rates and increase liquidity in an effort to stimulate borrowing and investment.  The FOMC has also indicated that other methods of quantitative easing are a possibility, while simultaneously revealing a potential exit strategy from the accommodative monetary policies should the economic outlook and financial developments warrant it.

The historically low interest rate environment during fiscal year 2011 and the past two fiscal years has spurred an increased demand for our loan endorsement program and mortgage refinances.  Our loan endorsement program allows existing loan customers, whose loans have not been sold to third parties and who have not been delinquent on their contractual loan payments for the previous 12 months, the opportunity to modify, for a fee, their original loan terms to current loan terms being offered.  During fiscal year 2011, the Bank endorsed $965.1 million loans, with a weighted average rate decrease of 101 basis points, compared to $545.1 million during fiscal year 2010, with a weighted average rate decrease of 87 basis points.  Additionally, the Bank refinanced $292.8 million of its customers’ loans during fiscal year 2011, compared to $153.6 million during fiscal year 2010.

Total assets increased $963.7 million, from $8.49 billion at September 30, 2010 to $9.45 billion at September 30, 2011, due primarily to the stock offering proceeds from the corporate reorganization in December 2010, which were primarily used to purchase securities.  Capitol Federal Financial, Inc., the holding company, used the net stock offering proceeds to purchase laddered short-term securities in order to provide cash flows that can be used to pay dividends, repurchase stock when permitted by federal banking regulations, reinvest into higher yielding assets if interest rates rise, or pursue other corporate strategies, as deemed appropriate.  The yields on these securities are less than the yields on the Bank’s current investment portfolio due to the short-term nature of the securities.  The net stock offering proceeds received by the Bank were primarily used to purchase securities according to the Bank’s current investment strategy.  The intent of the Bank’s investment portfolio is to create a stream of cash flows that can be redeployed into other assets as the Bank grows the loan portfolio, or reinvested into higher yielding assets should interest rates rise.  These securities have a lower interest rate risk profile than the Bank’s long-term fixed-rate mortgage portfolio and were purchased to help shorten the overall duration of the Bank’s total assets.  

The one- to four-family loan portfolio remained relatively flat, at $4.92 billion for both September 30, 2011 and 2010.  During fiscal year 2011, the Bank expanded its network of correspondent lenders and also purchased $89.2 million from a nationwide lender; however, those activities were offset by an increase in refinancing activity due to low market rates, strong competition for high quality loans, as well as weak loan demand due to the slow economic recovery.

The principal balance of loans 30 to 89 days delinquent increased $2.1 million, from $24.7 million at September 30, 2010 to $26.8 million at September 30, 2011.  Non-performing loans decreased $5.5 million, from $32.0 million at September 30, 2010 to $26.5 million at September 30, 2011.  The balance of loans 30 to 89 days delinquent and non-performing loans continue to remain at historically high levels for the Bank due to persistently elevated levels of unemployment coupled with declines in real estate activity and property values, particularly in some of the states in which we have purchased loans.  Our ratio of non-performing loans to total loans decreased from 0.62% at September 30, 2010 to 0.51% at September 30, 2011.  Our ratio of non-performing assets to total assets decreased from 0.49% at September 30, 2010 to 0.40% at September 30, 2011. 

Total liabilities decreased $13.9 million, from $7.53 billion at September 30, 2010 to $7.51 billion at September 30, 2011, due primarily to a decrease of $153.6 million in other borrowings, partially offset by an increase in deposits of $108.9 million and an increase in FHLB advances of $31.1 million.  The decrease in other borrowings was due to the repayment of the Debentures of $53.6 million and the maturity of $100.0 million of repurchase agreements that were not replaced.  The increase in deposits was primarily in the money market and checking portfolios. 

Stockholders’ equity increased $977.6 million, from $962.0 million at September 30, 2010 to $1.94 billion at September 30, 2011.  The increase was due primarily to the net stock offering proceeds of $1.13 billion from the corporate reorganization in December 2010 and net income during the fiscal year, partially offset by dividends paid of $150.1 million.

Net income for fiscal year 2011 was $38.4 million, compared to $67.8 million for fiscal year 2010.  The $29.4 million, or 43.4%, decrease for the current year was due primarily to the $40.0 million ($26.0 million, net of income tax benefit) contribution to the Foundation in connection with the corporate reorganization.  Additionally, other income decreased $9.4 million, or 27.4%, from $34.4 million for the prior year to $25.0 million for the current year.  These reductions to income were partially offset by a $4.8 million decrease in the provision for credit losses between fiscal years.  Interest income for fiscal year 2011 decreased by $27.2 million, or 7.3%, compared to fiscal year 2010, but was almost entirely offset by a decrease in interest expense of $26.4 million, or 12.9%, between fiscal years.  The net interest margin decreased 22 basis points, from 2.06% for fiscal year 2010 to 1.84% for fiscal year 2011, largely due to the decrease in interest income on loans receivable.

The Bank has two branches scheduled to open in fiscal year 2012 in our Kansas City market area.  An in-store branch in the Kansas City market area closed in late fiscal year 2011 due to the opening of a traditional branch nearby.  Management continues to consider expansion opportunities in all of our market areas.

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Critical Accounting Policies

Our most critical accounting policies are the methodologies used to determine the ACL and fair value measurements.  These policies are important to the presentation of our financial condition and results of operations, involve a high degree of complexity, and require management to make difficult and subjective judgments that may require assumptions or estimates about highly uncertain matters.  The use of different judgments, assumptions, and estimates could cause reported results to differ materially.  These critical accounting policies and their application are reviewed at least annually by our audit committee.  The following is a description of our critical accounting policies and an explanation of the methods and assumptions underlying their application.

Allowance for Credit Losses.  Management maintains an ACL to absorb known and inherent losses in the loan portfolio based upon ongoing quarterly assessments of the loan portfolio.  Our methodology for assessing the appropriateness of the ACL consists of a formula analysis for general valuation allowances and specific valuation allowances (“SVAs”) for identified problem and impaired loans.  The ACL is maintained through provisions for credit losses which are charged to income.  

The methodology for determining the ACL is considered a critical accounting policy by management because of the high degree of judgment involved, the subjectivity of the assumptions used, and the potential for changes in the economic environment that could result in changes to the amount of the recorded ACL.  Additionally, bank regulators have the ability to require the Bank, as they can require all banks, to increase the ACL or recognize additional charge-offs based upon their judgments, which may differ from management’s judgments.  Although management believes that the Bank has established and maintained the ACL at appropriate levels, additions may be necessary if economic and other conditions continue or worsen substantially from the current operating environment, and/or if bank regulators require the Bank to increase the ACL and/or recognize additional charge-offs.

Our primary lending emphasis is the origination and purchase of one- to four-family mortgage loans on residential properties, and, to a lesser extent, home equity and second mortgages on one- to four-family residential properties, resulting in a loan concentration in residential first mortgage loans.  As a result of our lending practices, we also have a concentration of loans secured by real property located in Kansas and Missouri.  At September 30, 2011, approximately 75% and 15% of the Bank’s loans were secured by real property located in Kansas and Missouri, respectively.  We believe the primary risks inherent in our one- to four-family and consumer portfolios are the continued weakened economic conditions, continued high levels of unemployment or underemployment, and a continuing decline in real estate values.  Any one or a combination of these events may adversely affect borrowers’ ability or desire to repay their loans, resulting in increased delinquencies, non-performing assets, loan losses, and future levels of loan loss provisions.  Although the multi-family and commercial loan portfolio also shares the risk of continued weakened economic conditions, the primary risks for the portfolio include the ability of the borrower to sustain sufficient cash flows from leases and to control expenses to satisfy their contractual debt payments, or the ability to utilize personal and/or business resources to pay their contractual debt payments if the cash flows are not sufficient.

Management considers quantitative and qualitative factors when determining the appropriateness of the ACL.  Such factors include the trend and composition of delinquent and non-performing loans, results of foreclosed property and short sale transactions (historical losses and net charge-offs), increases in and establishment of SVAs, the current status and trends of local and national economies, particularly levels of unemployment, trends and current conditions in the real estate and housing markets, and loan portfolio growth and concentrations. Since our loan portfolio is primarily concentrated in one- to four-family real estate, we monitor one- to four-family real estate market value trends in our local market areas and geographic sections of the U.S. by reference to various industry and market reports, economic releases and surveys, and our general and specific knowledge of the real estate markets in which we lend, in order to determine what impact, if any, such trends may have on the level of our ACL.   In addition, the adequacy of the Company’s ACL is reviewed during bank regulatory examinations.  We consider any comments from our regulator when assessing the appropriateness of our ACL.  Reviewing these quantitative and qualitative factors assists management in evaluating the overall reasonableness of the ACL and whether changes need to be made to our assumptions.  We seek to apply ACL methodology in a consistent manner; however, the methodology can be modified in response to changing conditions.

Our loan portfolio is segregated into categories in the formula analysis based on certain risk characteristics such as loan type (one- to four-family, multi-family, etc.), interest payments (fixed-rate, adjustable-rate), loan source (originated or purchased), loan-to-value (“LTV”) ratios, borrower’s credit score and payment status (i.e. current or number of days delinquent).  Consumer loans, such as second mortgages and home equity lines of credit, with the same underlying collateral as a one- to four-family loan are combined with the one- to four-family loan in the formula analysis to calculate a combined LTV ratio.  All loans that are not impaired are included in a formula analysis.  Impaired loans are defined as non-accrual loans, loans classified as substandard, loans with SVAs, and troubled debt restructurings (“TDRs”) that have not yet performed under the restructured terms for 12 consecutive months or are required by the accounting literature to be classified as a TDR for the life of the loan due to a reduction in the stated interest rate to a rate lower than the current market rate for new debt with similar risk.  Quantitative loss factors are applied to each loan category in the formula analysis based on the historical net loss experience and current SVAs, adjusted for such factors as loan delinquency trends, for each respective loan category.  Additionally, qualitative loss factors that management believes impact the collectability of the loan portfolio as of the evaluation date are applied to certain loan categories.  Such qualitative factors include changes in collateral values, unemployment rates, credit scores and delinquent loan trends.  Loss factors increase as loans become classified or delinquent.

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The qualitative and quantitative factors applied in the formula analysis are reviewed quarterly by management to assess whether the factors adequately cover probable and estimable losses inherent in the loan portfolio.  Our ACL methodology permits modifications to the formula analysis in the event that, in management’s judgment, significant factors which affect the collectability of the portfolio or any category of the loan portfolio, as of the evaluation date, are not reflected in the current formula analysis.  Management’s evaluation of the qualitative factors with respect to these conditions is subject to a higher degree of uncertainty because they are not identified with a specific problem loan or portfolio segments.  There were no significant modifications to the general valuation allowance model during fiscal year 2011.

SVAs are established in connection with individual loan reviews of specifically identified problem and impaired loans.  Since the majority of our loan portfolio is composed of one- to four-family real estate, determining the estimated fair value of the underlying collateral is important in evaluating the amount of SVAs required for problem and impaired loans.  If the estimated fair value of the collateral, less estimated costs to sell, is less than the current loan balance, an SVA is established for the difference.  Generally, once a purchased loan is 90 days delinquent new collateral values are obtained through automated valuation models (“AVMs”) or broker price opinions (“BPOs”).  An updated AVM or BPO is requested every 6 months while the loan is greater than 90 days delinquent.Due to the relatively stable home values in Kansas and Missouri, we do not obtain new collateral values on originated loans until they enter foreclosure.  For originated one- to four-family loans and home equity loans that are impaired and the most recent appraisal is more than one year old, management estimates the fair value of the collateral using the most recently published Federal Housing Finance Agency (“FHFA”) index.  For those loans where the FHFA fair value estimate results in a value less than the outstanding loan balance, an updated appraisal is obtained and is used to establish the SVA. If the Bank holds the first and second mortgage, both loans are combined when evaluating the need for an SVA.

Loans with an outstanding balance of $1.5 million or more are individually reviewed annually if secured by property in one of the following categories:  multi-family (five or more units) property, unimproved land, other improved commercial property, acquisition and development of land projects, developed building lots, office building, single-use building, or retail building.  SVAs are established if the individual loan review determines a quantifiable impairment.

Fair Value Measurements.  The Company uses fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures, per the provisions of Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures.  In accordance with ASC 820, the Company groups its assets at fair value in three levels, based on the markets in which the assets are traded and the reliability of the underlying assumptions used to determine fair value, with Level 1 (quoted prices for identical assets in an active market) being considered the most reliable, and Level 3 having the most unobservable inputs and therefore being considered the least reliable.  The Company bases its fair values on the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date.  As required by ASC 820, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value.  The Company did not have any liabilities that were measured at fair value at September 30, 2011.

The Company’s AFS securities are our most significant assets measured at fair value on a recurring basis.  Changes in the fair value of AFS securities are recorded, net of tax, in accumulated other comprehensive income, which is a component of stockholders’ equity.  As part of determining fair value, the Company obtains fair values for all AFS securities from independent nationally recognized pricing services. Various modeling techniques are used to determine pricing for the Company’s securities, including option pricing and discounted cash flow models. The inputs to these models may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data.  There are some securities in the AFS portfolio that have significant unobservable inputs requiring the independent pricing services to use some judgment in pricing the related securities.  These AFS securities are classified as Level 3.  All other AFS securities are classified as Level 2.

Loans receivable and real estate owned (“REO”) are the Company’s significant assets measured at fair value on a non-recurring basis.  These non-recurring fair value adjustments involve the application of lower-of-cost-or-fair value accounting or write-downs of individual assets.  Fair value for these assets is estimated using current appraisals, AVMs, BPOs, or listing prices.  Fair values may be adjusted by management to reflect current economic and market conditions and, as such, are classified as Level 3.

Recent Accounting Pronouncements.  For a discussion of Recent Accounting Pronouncements, see “Notes to Financial Statements - Note 1 - Summary of Significant Accounting Policies.”

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Management Strategy

We are a retail-oriented financial institution dedicated to serving the needs of customers in our market areas. Our commitment is to provide qualified borrowers the broadest possible access to home ownership through our mortgage lending programs and to offer a complete set of personal banking products and services to our customers.  We strive to enhance stockholder value while maintaining a strong capital position.  To achieve these goals, we focus on the following strategies:

·   Residential Portfolio Lending.  We are one of the leading originators of one- to four-family loans in the state of Kansas.  We originate these loans primarily for our own portfolio, and we service the loans we originate.  We originate a small amount of loans held-for-sale (“LHFS”).  We also purchase one- to four-family loans from correspondent and nationwide lenders. We have increased the number of correspondent lenders during fiscal year 2011 to provide an infrastructure to support growth in the residential loan portfolio.  We offer both fixed- and adjustable-rate products with various terms to maturity and pricing options.  We also offer government-sponsored programs directed towards first time home buyers, low or moderate income borrowers, or borrowers with certain credit risk concerns.  We maintain strong relationships with local real estate agents to attract mortgage loan business.  We rely on our marketing efforts and reputation to attract mortgage business from walk-in customers, customers that apply online, and existing customers.  

·   Retail Financial Services.  We offer a wide array of deposit products and retail services for our customers.  These products include checking, savings, money market, certificates of deposit, and retirement accounts.  These products and services are provided through a branch network of 45 locations, including traditional branches and retail in-store locations, our call center which operates on extended hours, mobile banking, telephone banking and bill payment services, and online banking and bill payment services.

·   Cost Control.  We generally are very effective at controlling our costs of operations.  By using technology, we are able to centralize our lending and deposit support functions for efficient processing.  We have located our branches to serve a broad range of customers through relatively few branch locations.  Our average deposit base per traditional branch at September 30, 2011 was approximately $117.1 million.  This large average deposit base per branch helps to control costs.  Our one- to four-family lending strategy and our effective management of credit risk allows us to service a large portfolio of loans at efficient levels because it costs less to service a portfolio of performing loans.

·   Asset Quality.  We utilize underwriting standards for our lending products that are designed to limit our exposure to credit risk.  We require complete documentation for both originated and purchased loans, and make credit decisions based on our assessment of the borrower’s ability to repay the loan in accordance with its terms.  See additional discussion of asset quality in Part I, Item 1 of the Annual Report on Form 10-K.

·   Capital Position.  Our policy has always been to protect the safety and soundness of the Bank through conservative credit and operational risk management, balance sheet strength, and sound operations.  The end result of these activities is a capital ratio in excess of the well-capitalized standards set by the OCC.  We believe that maintaining a strong capital position safeguards the long-term interests of the Bank, the Company and our stockholders.

·   Stockholder Value.  We strive to enhance stockholder value while maintaining a strong capital position.  One way that we continue to provide returns to stockholders is through our dividend payments.  Total dividends declared and paid during fiscal year 2011 were $150.1 million.  The $150.1 million consisted of cash dividends of $17.0 million paid prior to the corporate reorganization, and $133.1 million paid since the corporate reorganization.  The Company’s cash dividend payout policy is reviewed quarterly by management and the Board of Directors, and the ability to pay dividends under the policy depends upon a number of factors, including the Company’s financial condition and results of operations, the Bank’s regulatory capital requirements, regulatory limitations on the Bank’s ability to make capital distributions to the Company, and the amount of cash at the holding company.  It is the Board of Directors’ intentions to continue to pay regular quarterly and special cash dividends each year.  For the first two fiscal years after our corporate reorganization we intend to pay 100% of our net income (exclusive of our contribution to the Foundation) in a combination of quarterly and special year-end dividends.  

·   Interest Rate Risk Management.  Changes in interest rates are our primary market risk as our balance sheet is almost entirely comprised of interest-earning assets and interest-bearing liabilities.  As such, fluctuations in interest rates have a significant impact not only upon our net income but also upon the cash flows related to those assets and liabilities and the market value of our assets and liabilities.  In order to maintain acceptable levels of net interest income in varying interest rate environments, we actively manage our interest rate risk and assume a moderate amount of interest rate risk consistent with board policies.

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Quantitative and Qualitative Disclosure about Market Risk

Asset and Liability Management and Market Risk

The risk associated with changes in interest rates on the earnings of the Bank and the market value of its financial assets and liabilities is known as interest rate risk.  Interest rate risk is our most significant market risk and our ability to adapt to changes in interest rates is known as interest rate risk management.  The rates of interest the Bank earns on assets and pays on liabilities generally are established contractually for a period of time.  Fluctuations in interest rates have a significant impact not only upon our net income, but also upon the cash flows of those assets and liabilities and the market value of our assets and liabilities.  Our results of operations, like those of other financial institutions, are impacted by these changes in interest rates and the interest rate sensitivity of our interest-earning assets and interest-bearing liabilities.  The analysis presented in the tables below reflects the level of market risk at the Bank and does not include the assets of the Company.  Assets of the Company are not managed in accordance with the interest rate risk objectives of the Bank.  A general discussion of the impact of the Company assets is included for each table.

The general objective of our interest rate risk management program is to determine and manage an appropriate level of interest rate risk while maximizing net interest income, in a manner consistent with our policy to reduce, to the extent possible, the exposure of our net interest income to changes in market interest rates.  The Asset and Liability Committee (“ALCO”) regularly reviews the interest rate risk exposure of the Bank by forecasting the impact of hypothetical, alternative interest rate environments on net interest income and market value of portfolio equity (“MVPE”) at various dates.  The MVPE is defined as the net of the present value of the cash flows of existing assets, liabilities and off-balance sheet instruments.  The present values are determined based upon market conditions as of the date of the analysis as well as in alternative interest rate environments providing potential changes in MVPE under those alternative interest rate environments.  Net interest income is projected in the same alternative interest rate environments as well, both with a static balance sheet and with management strategies considered.  MVPE and net interest income analyses are also conducted to estimate our sensitivity to rates for future time horizons based upon market conditions as of the date of the analysis.  In addition to the interest rate environments presented below, management also reviews the impact of non-parallel rate shock scenarios on a quarterly basis.  These scenarios consist of flattening and steepening the yield curve by changing short-term and long-term interest rates independent of each other, and simulating cash flows and valuations as a result of the simulated changes in rates.  This analysis helps management quantify the Bank’s exposure to changes in the shape of the yield curve.

Based upon management’s recommendations, the Board of Directors sets the asset and liability management policies of the Bank.  These policies are implemented by ALCO.  The purpose of ALCO is to communicate, coordinate and control asset and liability management consistent with board-approved policies.  ALCO’s objectives are to manage assets and funding sources to produce the highest profitability balanced against liquidity, capital adequacy and risk management objectives.  At each monthly meeting, ALCO recommends appropriate strategy changes.  The Chief Financial Officer, or his designee, is responsible for executing, reviewing and reporting on the results of the policy recommendations and strategies to the Board of Directors, generally on a monthly basis.

The ability to maximize net interest income is dependent largely upon the achievement of a positive interest rate spread that can be sustained despite fluctuations in prevailing interest rates.  The asset and liability repricing gap is a measure of the difference between the amount of interest-earning assets and interest-bearing liabilities which either reprice or mature within a given period of time.  The difference provides an indication of the extent to which an institution's interest rate spread will be affected by changes in interest rates.  A gap is considered positive when the amount of interest-earning assets exceeds the amount of interest-bearing liabilities maturing or repricing during the same period.  A gap is considered negative when the amount of interest-bearing liabilities exceeds the amount of interest-earning assets maturing or repricing during the same period.  Generally, during a period of rising interest rates, a negative gap within shorter repricing periods adversely affects net interest income, while a positive gap within shorter repricing periods results in an increase in net interest income.  During a period of falling interest rates, the opposite would generally be true.

Management recognizes that dramatic changes in interest rates within a short period of time can cause an increase in our interest rate risk relative to the balance sheet.  At times, ALCO may recommend increasing our interest rate risk exposure in an effort to increase our net interest margin, while maintaining compliance with established board limits for interest rate risk sensitivity.  Management believes that maintaining and improving earnings is the best way to preserve a strong capital position.  Management recognizes the need, in certain interest rate environments, to limit the Bank's exposure to changing interest rates and may implement strategies to reduce our interest rate risk which could, as a result, reduce earnings in the short-term.  To minimize the potential for adverse effects of material and prolonged changes in interest rates on our results of operations, we have adopted asset and liability management policies to better balance the maturities and repricing terms of our interest-earning assets and interest-bearing liabilities based on existing local and national interest rates.

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During periods of economic uncertainty, rising interest rates, or extreme competition for loans, the Bank’s ability to originate or purchase loans may be adversely affected.  In such situations, the Bank alternatively may invest its funds into investment securities or MBS.  These investments may have rates of interest lower than rates we could receive on loans, if we were able to originate or purchase them, potentially reducing the Bank’s interest income.

At September 30, 2011, the Bank’s one-year gap between interest-earning assets and interest-bearing liabilities was $1.69 billion, or 18.60% of total assets.  Interest-earning assets repricing to lower rates at a faster pace than interest-bearing liabilities will generally result in net interest margin compression.  Should interest rates rise, the amount of interest-earning assets that are expected to reprice will likely decrease as borrowers and agency debt issuers will have less economic incentive to lower their cost.  The amount of interest-bearing liabilities expected to reprice in a given period, however, is not usually impacted by changes in market interest rates because the maturities within the Bank’s borrowings and certificate of deposit portfolios are contractual and generally cannot be terminated early.  If rates were to increase 200 basis points, the Bank’s one-year gap would be $(127.3) million, or (1.40)% of total assets.  The majority of interest-earning assets anticipated to reprice in fiscal year 2012 are mortgages and MBS, both of which may prepay and/or be refinanced or endorsed.  As interest rates decrease, borrowers have an economic incentive to refinance or endorse loans to lower market interest rates.  This significantly increases the amount of cash flows anticipated to reprice to lower market interest rates during fiscal year 2012, as evidenced by the volume of mortgages that were endorsed and refinanced during fiscal year 2011 as a result of the decrease in market interest rates.  In addition, cash flows from the Bank’s callable investment securities are anticipated to increase during fiscal year 2012 as the issuers of these securities will likely exercise their option to call the securities in order to issue new debt securities at lower market rates.  The decrease in the net interest margin due to interest-earning assets repricing will likely be partially offset by a decrease in our cost of funds.

The shape of the yield curve also has an impact on net interest income and, therefore, the Bank’s net interest margin.  Historically, the Bank has benefited from a steeper yield curve, as the Bank’s mortgage loans are typically priced from long-term rates while deposits are priced from short-term rates.  A steeper yield curve--one with a greater difference between short-term rates and long-term rates--allows the Bank to receive a higher rate of interest on our mortgage-related assets than the rate paid for the funding of those assets, which generally results in a higher net interest margin.  As the yield curve flattens, the spread between rates received on assets and paid on liabilities becomes compressed, which generally leads to a decrease in net interest margin.

We attempt to mitigate the repricing risk of our fixed-rate one- to four-family loan portfolio by the interest rates we offer and through the terms of our endorsement program.  Management closely monitors competitors’ rates and also considers interest rate risk and net interest income when setting offered rates.  Through our endorsement program a borrower can modify the rate and/or term of their loan to terms currently offered for fixed-rate products with an equal or reduced period to maturity than the current remaining period of their existing loan, if they have not been delinquent on their payments for the previous 12 months and the loan has not been sold to a third party.  At September 30, 2011, the fixed rates offered through our endorsement program were at least 12 basis points higher than a similar new origination or refinance.  This allows the Bank to retain the endorsed loan and achieve a rate slightly above current market rate.

We manage the reinvestment risk of loan prepayments through our interest rate risk and asset management strategies.  In recent periods, principal repayments in excess of loan originations and purchases have been reinvested in shorter-term MBS and investment securities at lower market rates than our loan portfolio, which reduces our interest rate spread.  If, however, market rates were to rise, the short-term nature of the securities provides management with the opportunity to reinvest the maturing funds at a higher rate.

General assumptions used by management to evaluate the sensitivity of our financial performance to changes in interest rates presented in the tables below are utilized in, and set forth under, the gap table and related notes.  Although management finds these assumptions reasonable given the constraints described above, the interest rate sensitivity of our assets and liabilities and the estimated effects of changes in interest rates on our net interest income and MVPE indicated in the below tables could vary substantially if different assumptions were used or actual experience differs from these assumptions. To illustrate this point, the projected cumulative excess (deficiency) of interest-earning assets over interest-bearing liabilities within the three to 12 months category as a percent of total assets (“one-year gap”) is also provided for an up 200 basis point scenario, as of September 30, 2011.

16

Qualitative Disclosure about Market Risk

Percentage Change in Net Interest Income.  For each period end presented in the following table, the estimated percentage change in the Bank’s net interest income based on the indicated instantaneous, parallel and permanent change in interest rates is presented.  The percentage change in each interest rate environment represents the difference between estimated net interest income in the 0 basis point interest rate environment (“base case”, assumes the forward market and product interest rates implied by the yield curve are realized) and estimated net interest income in each alternative interest rate environment (assumes market and product interest rates have a parallel shift in rates across all maturities by the indicated change in rates).  Estimations of net interest income used in preparing the table below are based upon the assumptions that the total composition of interest-earning assets and interest-bearing liabilities does not change materially and that any repricing of assets or liabilities occurs at anticipated product and market rates for the alternative rate environments as of the dates presented.  The estimation of net interest income does not include any projected gain or loss related to the sale of loans or securities, or income derived from non-interest income sources, but does include the use of different prepayment assumptions in the alternative interest rate environments.  It is important to consider that the estimated changes in net interest income are for a cumulative four-quarter period.  These do not reflect the earnings expectations of management.

Change	Percentage Change in Net Interest Income
(in Basis Points)	At September 30,
in Interest Rates (1)	2011		2010
-100 bp	N/A		N/A
000 bp	--		--
+100 bp	4.46	%	6.44	%
+200 bp	3.75	%	4.56	%
+300 bp	-0.33	%	0.93	%

(1)   Assumes an instantaneous, permanent and parallel change in interest rates at all maturities.

At September 30, 2011, the percentage change in the net interest income projections decreased from September 30, 2010 in all interest rate shock scenarios.  For both periods, interest rates levels were historically low.  The low interest rate environments caused the weighted average life (“WAL”) of mortgage-related assets and callable agency debentures to shorten significantly as borrowers have an economic incentive to refinance their mortgages into lower interest rate loans, and agency debt issuers have an economic incentive to exercise their call options and issue lower costing debt.  In the rising interest rate scenarios, the cash flows from mortgage-related assets and callable agency debentures decrease, resulting in those assets remaining on the balance sheet until maturity at their current yields.  In addition, the cash flows that are received are reinvested into higher yielding assets than what was anticipated in the base case scenario, resulting in the yield on interest-earning assets increasing faster than the anticipated increase in the cost of interest-bearing liabilities.  However, as interest rates rise substantially, the financial incentive to refinance mortgages or call agency debentures is diminished, resulting in fewer cash flows to be reinvested at the higher market rates.  At September 30, 2011, these cash flows are diminished to such a level that the benefit of reinvesting cash flows at higher yields is more than offset by the amount of liabilities repricing to higher levels in the +300 basis point scenario.

The percentage change in the net interest income projections was lower at September 30, 2011, despite lower interest rates than the previous period.  This was primarily caused by fewer cash flows from callable agency debentures and mortgage loans expected to reprice in fiscal year 2012 due to the lengthening of the expected life of the Bank’s callable agency debentures and a reduction in the amount of adjustable-rate mortgages expected to reprice as compared to fiscal year 2011.  The change was also due to maturities and calls of investment securities during fiscal year 2011, the cash flows from which were reinvested at lower rates than during fiscal year 2010.

The securities held at the holding company are short-term bullet agency debentures and are not a component of the Bank’s interest rate risk management program.  The inclusion of these assets in the net interest income projection would have resulted in a more positive impact to the rising interest rate shock scenarios due to the short-term nature of the securities.  In addition, the cash flows from these assets do not change as interest rates rise.  As a result, these assets would provide cash flows that could be reinvested at higher interest rates.

17

Percentage Change in MVPE.  The following table sets forth the estimated percentage change in the MVPE at each period end presented based on the indicated instantaneous, parallel and permanent change in interest rates.  The percentage change in each interest rate environment represents the difference between MVPE in the base case and MVPE in each alternative interest rate environment.  The estimations of MVPE used in preparing the table below are based upon the assumptions that the total composition of interest-earning assets and interest-bearing liabilities does not change, that any repricing of assets or liabilities occurs at current product or market rates for the alternative rate environments as of the dates presented, and that different prepayment rates are used in each alternative interest rate environment.  The estimated MVPE results from the valuation of cash flows from financial assets and liabilities over the anticipated lives of each for each interest rate environment.  The table presents the effects of the change in interest rates on our assets and liabilities as they mature, repay or reprice, as shown by the change in the MVPE in changing interest rate environments.

Change	Percentage Change in MVPE
(in Basis Points)	At September 30,
in Interest Rates (1)	2011		2010
-100 bp	N/A		N/A
000 bp	--		--
+100 bp	0.61	%	0.10	%
+200 bp	-5.69	%	-8.76	%
+300 bp	-14.91	%	-22.42	%

(1)   Assumes an instantaneous, permanent and parallel change in interest rates at all maturities.

Changes in the estimated market values of our financial assets and liabilities drive changes in estimates of MVPE.  The market value of shorter term-to-maturity financial instruments are less sensitive to changes in interest rates than the market value of longer term-to-maturity financial instruments.  Because of this, our certificates of deposit (which have relatively short average lives) tend to display less sensitivity to changes in interest rates than do our mortgage-related assets (which have relatively long average lives).  The average life expected on our mortgage-related assets varies under different interest rate environments because borrowers have the ability to prepay their mortgage loans.

The Bank’s MVPE declines in the +200 and +300 interest rate environments.  As interest rates increase to these levels, the estimated fair values of the liabilities with shorter average lives do not respond to interest rates in the same manner as the longer maturity assets, such as our fixed-rate loans, which have longer average lives.  The Prepayments on fixed-rate loans in particular, and all mortgage-related assets in general, are expected to decrease significantly as interest rate rise such that projected prepayments would likely only be realized through normal changes in borrowers lives, such as divorce, death, job-related relocations, and other life changing events.  The lower prepayment expectations extend the expected average lives on these assets, relative to the assumptions in the base case, thereby increasing their sensitivity to changes in interest rates.  As the average lives of assets lengthen, the Bank’s sensitivity to rising interest rates increases.

The sensitivity of the MVPE decreased from September 30, 2010 to September 30, 2011.  This was due to the decrease in interest rates between periods, as well as the increase in the relative duration of the liability portfolio.  The decrease in interest rates resulted in a decrease in the WAL of all mortgage-related assets, as borrowers have an increased economic incentive to refinance their mortgages into lower interest rate loans, and agency debt issuers have an economic incentive to exercise their call options and issue lower costing debt.  This caused a decrease in the price sensitivity of all mortgage-related assets and callable agency debentures, and as a result, of interest-earning assets as a whole.  Since the price sensitivity of all assets is reduced in the base case, the adverse impact to rising interest rates is thereby reduced in all interest rate scenarios presented.

In an effort to mitigate the impact of rising interest rates, the Bank renewed $400.0 million of borrowings during fiscal year 2011 into new fixed-rate borrowings with terms of approximately seven years.  Additionally, the Bank structured certificate of deposit interest rates in an effort to increase the average term of the portfolio, as customers extended the term of their certificates in order to earn a higher rate of return.  Both of these actions were taken in an effort to reduce the Bank’s overall exposure to rising interest rates at September 30, 2011 as compared to September 30, 2010.

The inclusion of the holding company securities in the MVPE analysis would result in a lower level of sensitivity to the rising interest rate scenarios due to their short-term nature, which would reduce the overall WAL of assets.  This would cause the market value of total assets to be less sensitive to changes in interest rates, thereby reducing the sensitivity of the MVPE.

18

Gap Table.  The gap table summarizes the anticipated maturities or repricing of the Bank’s interest-earning assets and interest-bearing liabilities as of September 30, 2011, based on the information and assumptions set forth in the notes below.

	Within			Three to			More Than			More Than
	Three			Twelve			One Year to			Three Years			Over
	Months			Months			Three Years			to Five Years			Five Years			Total
Interest-earning assets:	(Dollars in thousands)
Loans receivable: (1)
Mortgage loans:
Fixed-rate	$	309,635		$	1,175,138		$	1,405,269		$	494,202		$	799,746		$	4,183,990
Adjustable-rate		50,864			501,504			200,145			43,504			9,833			805,850
Other loans		128,523			17,138			15,523			4,982			5,217			171,383
Investment securities (2)		170,841			457,126			151,700			297,930			3,463			1,081,060
MBS (3)		282,436			809,255			732,209			282,962			263,453			2,370,315
Other interest-earning assets		99,773			--			--			--			--			99,773
Total interest-earning assets		1,042,072			2,960,161			2,504,846			1,123,580			1,081,712			8,712,371
Interest-bearing liabilities:
Deposits:
Checking (4)		75,799			39,192			90,084			70,661			275,896			551,632
Savings (4)		89,789			10,889			25,106			19,473			107,927			253,184
Money market (4)		51,792			143,022			347,323			170,297			466,731			1,179,165
Certificates		498,217			903,642			854,747			365,475			2,211			2,624,292
Borrowings (5)		250,000			250,000			1,225,499			495,000			747,260			2,967,759
Total interest-bearing liabilities		965,597			1,346,745			2,542,759			1,120,906			1,600,025			7,576,032
Excess (deficiency) of interest-earning assets over
interest-bearing liabilities	$	76,475		$	1,613,416		$	(37,913	)	$	2,674		$	(518,313	)	$	1,136,339
Cumulative excess of interest-earning
assets over interest-bearing liabilities	$	76,475		$	1,689,891		$	1,651,978		$	1,654,652		$	1,136,339
Cumulative excess of interest-earning
assets over interest-bearing liabilities as a
percent of total assets at September 30, 2011		0.84	%		18.60	%		18.18	%		18.21	%		12.51	%
Cumulative one-year gap - interest rates +200 bp
at September 30, 2011					(1.40	)%
Cumulative one-year gap at September 30, 2010					20.69	%
Cumulative one-year gap at September 30, 2009					7.42	%

19

(1)   Adjustable-rate mortgage (“ARM”) loans are included in the period in which the rate is next scheduled to adjust or in the period in which repayments are expected to occur, or prepayments are expected to be received, prior to their next rate adjustment, rather than in the period in which the loans are due.  Fixed-rate loans are included in the periods in which they are scheduled to be repaid, based on scheduled amortization and prepayment assumptions.  Balances have been reduced for non-performing loans, which totaled $26.5 million at September 30, 2011.

(2)   Based on contractual maturities, terms to call date or pre-refunding dates as of September 30, 2011, and excludes the unrealized gain adjustment of $545 thousand on AFS investment securities.

(3)   Reflects estimated prepayments of MBS in our portfolio, and excludes the unrealized gain adjustment of $41.8 million on AFS MBS.

(4)   Although the Bank’s checking, savings and money market accounts are subject to immediate withdrawal, management considers a substantial amount of these accounts to be core deposits having significantly longer effective maturities.  The decay rates (the assumed rate at which the balance of existing accounts would decline) used on these accounts are based on assumptions developed from our actual experience with these accounts.  If all of the Bank’s checking, savings and money market accounts had been assumed to be subject to repricing within one year, interest-earning assets which were estimated to mature or reprice within one year would have exceeded interest-bearing liabilities with comparable characteristics by $116.4 million, for a cumulative one-year gap of 1.3% of total assets.

(5)   Borrowings exclude $21.0 million of deferred prepayment penalty costs and $457 thousand of deferred gain on the terminated interest rate swap agreements.

The gap table summarizes the anticipated maturities or repricing of the Bank’s interest-earning assets and interest-bearing liabilities as of September 30, 2011, based on the information and assumptions set forth in the notes above.  Cash flow projections for mortgage loans and MBS are calculated based on current interest rates.  Prepayment projections are subjective in nature, involve uncertainties and assumptions and, therefore, cannot be determined with a high degree of accuracy.  Although certain assets and liabilities may have similar maturities or periods to repricing, they may react differently to changes in market interest rates.  Assumptions may not reflect how actual yields and costs respond to market changes.  The interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types of assets and liabilities may lag behind changes in market interest rates.  Certain assets, such as ARM loans, have features that restrict changes in interest rates on a short-term basis and over the life of the asset.  In the event of a change in interest rates, prepayment and early withdrawal levels would likely deviate significantly from those assumed in calculating the gap table.  For additional information regarding the impact of changes in interest rates, see the Percentage Change in Net Interest Income and Percentage Change in MVPE discussion and tables within this section.

The decrease in the one-year gap to 18.60% at September 30, 2011 from 20.69% at September 30, 2010 was primarily due to a decrease in the amount of assets expected to reprice in fiscal year 2012.  In fiscal year 2011, the Bank experienced a high volume of calls on the Bank’s callable agency debentures, especially later in the fiscal year as interest rates decreased and agency debt issuers exercised their option to call existing debentures and issued new debt at lower interest rates.  The Bank reinvested the cash flows from the called agency debentures into new callable agency debentures with longer expected average lives, thereby reducing the amount of cash flows expected from this portfolio in fiscal year 2012.  In addition, the amount of assets expected to reprice in fiscal year 2012, as of September 30, 2011, was lower as a result of fewer ARM mortgages expected to reprice in fiscal year 2012 than that expected to reprice in fiscal year 2011, as of September 30, 2010.

As noted above, changes in interest rates have a material impact on the amount of cash flows expected to reprice in a given period, primarily on the asset side of the balance sheet.  In the +200 basis point interest rate shock scenario, the cash flows from mortgage-related assets and callable agency debentures decrease significantly as borrowers and issuers no longer have a financial incentive to refinance their mortgages or debentures.  In this scenario, the Bank’s liabilities would reprice at a faster pace than the assets.

The inclusion of the holding company securities in the gap analysis would have resulted in an increase in the one-year gap at September 30, 2011, as a majority of these assets mature in one year or less.

20

Financial Condition

Total assets increased $963.7 million, from $8.49 billion at September 30, 2010 to $9.45 billion at September 30, 2011, due primarily to the stock offering proceeds from the corporate reorganization, which were primarily used to purchase securities.

Total liabilities decreased $13.9 million, from $7.53 billion at September 30, 2010 to $7.51 billion at September 30, 2011, due primarily to a decrease of $153.6 million in other borrowings, partially offset by an increase in deposits of $108.9 million and an increase in FHLB advances of $31.1 million.  The decrease in other borrowings was due to the repayment of the Debentures of $53.6 million and the maturity of $100.0 million of repurchase agreements that were not replaced.  The increase in deposits was primarily in the money market and checking portfolios.

Stockholders’ equity increased $977.6 million, from $962.0 million at September 30, 2010 to $1.94 billion at September 30, 2011.  The increase was due primarily to the net stock offering proceeds of $1.13 billion from the corporate reorganization and net income during the fiscal year, partially offset by dividends paid of $150.1 million.

Loans Receivable.  The loans receivable portfolio decreased $18.5 million, or 0.36%, from $5.17 billion at September 30, 2010 to $5.15 billion at September 30, 2011.  The decrease in the portfolio was largely in the home equity loan portfolio, which decreased $21.8 million from $186.3 million at September 30, 2010 to $164.5 million at September 30, 2011.  The decrease in the home equity loan portfolio was due to some borrowers consolidating their home equity loans into their first mortgage loan when refinancing.  Additionally, borrowers are reducing overall debt levels and borrowing less than in previous years, in light of economic uncertainty, as evidenced by the increased level of prepayment activity and the decrease in lending volume in the consumer loan portfolio.

Included in the loan portfolio at September 30, 2011 were $163.7 million of ARM loans that were originated as interest-only. Of these interest-only loans, $131.4 million were purchased from nationwide lenders, primarily during fiscal year 2005.  Interest-only ARM loans do not typically require principal payments during their initial term, and have initial interest-only terms of either five or ten years.  The $131.4 million of purchased interest-only ARM loans had a weighted average credit score of 721 and a weighted average LTV ratio of 75% at September 30, 2011.  The credit scores were updated in September 2011.  The LTV ratios are based on the current loan balance and either the lesser of the purchase price or original appraisal, or the most recent bank appraisal, BPO, or AVM, generally if the loan is or has been nonaccrual.  In order to reduce future credit risk, the Bank has not purchased any interest-only ARM loans since 2006 and discontinued offering the product in its local markets during 2008.  At September 30, 2011, $85.7 million, or 52%, of interest-only loans were still in their interest-only payment term.  At September 30, 2011, $8.7 million, or 33% of non-performing loans, were interest-only ARMs and $2.1 million was reserved in the ACL for these loans.  Of the $8.7 million non-performing interest-only ARM loans, $5.2 million, or 59%, were still in the interest-only payment term.  Non-performing interest-only ARM loans represented approximately 5% and 10% of the total interest-only ARM loan portfolio and non-amortizing interest-only ARM loans, respectively, at September 30, 2011.

The Bank generally prices its one- to four-family loan products based upon prices available in the secondary market and competitor pricing.  During fiscal year 2011, the average daily spread between the Bank’s 30-year fixed-rate one- to four-family loan offer rate, with no points paid by the borrower, and the 10-year Treasury rate was approximately 160 basis points, while the average daily spread between the Bank’s 15-year fixed-rate one- to four-family loan offer rate and the 10-year Treasury rate was approximately 90 basis points.

21

The following table presents information concerning the composition of our loan portfolio as of September 30, 2011 and 2010. The one- to four-family loan portfolio remained relatively flat between periods, at $4.92 billion.  During fiscal year 2011, the Bank expanded its network of correspondent lenders and also purchased $89.2 million from a nationwide lender; however, those activities were offset by an increase in refinancing activity due to low market rates, strong competition for high quality loans, as well as weak loan demand due to the slow economic recovery.  Within the one- to four-family loan portfolio at September 30, 2011, 75% of the loans had a balance at origination of less than $417 thousand. The weighted average rate of the loan portfolio decreased 38 basis points from 5.07% at September 30, 2010 to 4.69% at September 30, 2011.  The decrease in the weighted average portfolio rate was due to loan endorsements, loan originations at current market rates below that of the existing portfolio, refinances, and ARMs repricing down to lower market rates.

	September 30, 2011						September 30, 2010
				Average						Average
	Amount			Rate			Amount			Rate
	(Dollars in thousands)
Real Estate Loans:
One-to four-family:
Originated	$	3,986,957			4.82	%	$	3,952,392			5.23	%
Correspondent purchased		396,063			4.75			396,956			5.20
Nationwide purchased		535,758			3.37			566,303			3.54
Multi-family and commercial		57,965			6.13			66,476			6.24
Construction		47,368			4.27			33,168			4.90
Total real estate loans		5,024,111			4.66			5,015,295			5.05
Consumer Loans:
Home equity		164,541			5.48			186,347			5.55
Other		7,224			5.10			7,671			5.66
Total consumer loans		171,765			5.46			194,018			5.55
Total loans receivable		5,195,876			4.69	%		5,209,313			5.07	%
Less:
Undisbursed loan funds		22,531						15,489
ACL		15,465						14,892
Discounts/unearned loan fees		19,093						22,267
Premiums/deferred costs		(10,947	)					(11,537	)
Total loans receivable, net	$	5,149,734					$	5,168,202

The following table presents the weighted average credit score and LTV ratio and the average loan balance for our one- to four-family loan portfolio as of September 30, 2011.  Credit scores were most recently updated in September 2011 and were obtained from a nationally recognized consumer rating agency.  The LTV ratios were based on the current loan balance and either the lesser of the purchase price or original appraisal, or the most recent bank appraisal, BPO or AVM, generally if the loan is or has been nonaccrual.  In most cases, the most recent appraisal was obtained at the time of origination.

	Credit Score		LTV			Average Balance
	(Dollars in thousands)
Originated		763		66	%	$	123
Correspondent		759		64			290
Nationwide		740		60			252
		760		65	%	$	137

22

The following table presents the WAL, which reflects prepayment assumptions, of our one- to four-family loan portfolio, excluding construction loans and non-performing loans, as of September 30, 2011.

	Principal			Average
Original Term	Balance			WAL (years)
	(Dollars in thousands)
Fixed-Rate:
<= 15 years	$	1,017,207			2.52
> 15 years		3,086,188			4.04
Adjustable-Rate:
<= 36 months		125,334			3.27
> 36 months		663,925			3.16
	$	4,892,654			3.59
Weighted average rate		4.65	%
Average remaining contractual term (in years)		21

The following table presents our fixed-rate one- to four-family loan portfolio, including construction loans and non-performing loans, and the annualized prepayment speeds for the quarter ended September 30, 2011 by interest rate tier.  Loan endorsements and refinances are considered a prepayment and are included in the prepayment speeds presented below.

			Original Term
			15 years or less								More than 15 years
					Prepayment Speed (annualized)								Prepayment Speed (annualized)
Rate			Principal		Including			Excluding			Principal		Including			Excluding
Range			Balance		Endorsements			Endorsements			Balance		Endorsements			Endorsements
			(Dollars in thousands)
< =4.50		%	$	527,235		29.30	%		8.31	%	$	922,221		19.10	%		4.10	%
	4.51 - 4.99	%		218,703		50.28			20.68			417,100		37.44			10.48
	5.00 - 5.50	%		193,663		32.01			18.40			1,206,849		55.19			15.28
	5.51 - 5.99	%		44,530		35.20			19.85			289,581		42.67			17.98
	6.00 - 6.50	%		21,833		19.47			15.21			229,681		43.53			16.19
	6.51 - 6.99	%		6,083		12.42			10.88			38,381		26.40			11.87
>=7.00		%		3,179		10.76			10.76			29,663		23.04			12.03
			$	1,015,226		34.79	%		14.10	%	$	3,133,476		41.00	%		12.12	%

23

The following table summarizes the activity in the loan portfolio for the periods indicated, excluding changes in loans in process, deferred fees, and ACL.  Loans that were paid-off as a result of refinances are included in repayments.  Purchased loans include purchases from correspondent and nationwide lenders.  Loan endorsement activity is not included in the activity in the following table because a new loan is not generated at the time of endorsement.  During fiscal year 2011 and 2010, the Bank endorsed $965.1 million and $545.1 million of loans, respectively, with a weighted average decrease in rate of 101 basis points and 87 basis points, respectively.  The endorsed balance and rate are included in the ending loan portfolio balance and rate.

	For the Three Months Ended
	September 30, 2011						June 30, 2011						March 31, 2011						December 31, 2010
	Amount			Rate			Amount			Rate			Amount			Rate			Amount			Rate
	(Dollars in thousands)
Beginning balance	$	5,211,991			4.79	%	$	5,144,050			4.81	%	$	5,163,319			4.87	%	$	5,209,313			5.07	%
Originations and refinances:
Fixed		141,123			4.11			118,438			4.55			153,272			4.33			245,251			4.08
Adjustable		47,009			3.77			37,721			4.12			43,434			3.91			50,997			3.93
Purchases:
Fixed		29,585			4.47			102,030			5.49			16,468			4.47			4,977			4.38
Adjustable		13,864			3.49			5,114			3.65			5,979			3.57			3,954			3.96
Repayments		(244,607	)					(192,682	)					(233,473	)					(348,545	)
Other (1)		(3,089	)					(2,680	)					(4,949	)					(2,628	)
Ending balance	$	5,195,876			4.69	%	$	5,211,991			4.79	%	$	5,144,050			4.81	%	$	5,163,319			4.87	%

	For the Year Ended September 30,
	2011						2010
	Amount			Rate			Amount			Rate
	(Dollars in thousands)
Beginning balance	$	5,209,313			5.07	%	$	5,646,950			5.29	%
Originations and refinances:
Fixed		658,084			4.23			495,261			4.89
Adjustable		179,161			3.92			149,867			4.48
Purchases:
Fixed		153,060			5.15			48,006			5.08
Adjustable		28,911			3.60			71,095			4.05
Repayments		(1,019,307	)					(989,826	)
Transfer of loans to LHFS, net		--						(194,759	)
Other (1)		(13,346	)					(17,281	)
Ending balance	$	5,195,876			4.69	%	$	5,209,313			5.07	%

(1)   Other consists of transfers to REO, endorsement fees advanced and reductions in commitments.

24

The following table presents the activity in our one- to four-family loan portfolio for the fiscal year ended September 30, 2011, excluding endorsement activity, and the LTV and credit score at origination.  Of the $759.7 million of one- to four-family loan originations and refinances in the table for fiscal year 2011, 80% had loan values of $417 thousand or less.  Of the $182.0 million of correspondent and nationwide loan purchases, 59% had loan values of $417 thousand or less.

						Credit
	Amount		LTV			Score
	(Dollars in thousands)
Originations	$	466,845		74	%		770
Refinances by Bank customers		292,819		67			768
Correspondent purchases		92,781		65			767
Nationwide purchases		89,190		69			740
	$	941,635		70	%		766

During fiscal year 2011, the Bank entered into correspondent lending relationships with 11 new correspondent lenders in our local market areas and also in states generally located throughout the central United States.  At September 30, 2011, the Bank had 18 correspondent lending relationships.  Additionally, during fiscal year 2011, the Bank entered into an agreement with a mortgage sub-servicer to provide loan servicing for loans originated by the Bank’s correspondent lenders in certain states.  Management continues its efforts to expand our network of lending relationships related to our nationwide bulk purchase program that would provide mortgage loans in selected geographic locations that adhere to the Bank’s underwriting standards.

Historically, the Bank’s underwriting guidelines have generally provided the Bank with loans of high quality and low delinquencies, and low levels of non-performing assets compared to national levels.  Of particular importance is the complete documentation required for each loan the Bank originates, refinances, and purchases.  This allows the Bank to make an informed credit decision based upon a thorough assessment of the borrower’s ability to repay the loan, compared to underwriting methodologies that do not require full documentation.  Non-performing loans decreased $5.5 million, from $32.0 million at September 30, 2010 to $26.5 million at September 30, 2011.  Our ratio of non-performing loans to total loans decreased from 0.62% at September 30, 2010 to 0.51% at September 30, 2011.  At September 30, 2011, our ACL was $15.5 million or 0.30% of the total loan portfolio and 58% of total non-performing loans.  This compares with an ACL of $14.9 million or 0.29% of the total loan portfolio and 47% of total non-performing loans as of September 30, 2010.  See additional discussion of asset quality in Part I, Item 1 of the Annual Report on Form 10-K.

25

Securities.  The following table presents the distribution of our MBS and investment securities portfolios, at amortized cost, at the dates indicated.  Overall, fixed-rate securities comprised 76% of these portfolios at September 30, 2011.  The WAL is the estimated remaining maturity after projected prepayment speeds and projected call option assumptions have been applied.  The increase in the WAL between September 30, 2010 and September 30, 2011 was due primarily to purchases of investment securities and MBS.  The decrease in the yield between September 30, 2010 and September 30, 2011 was primarily a result of the purchase of securities with yields lower than that of the existing portfolios, repayments of MBS with yields higher than that of the existing portfolio, and adjustable-rate MBS resetting to lower coupons due to a decline in related indices.  Yields on tax-exempt securities are not calculated on a taxable equivalent basis.  The WAL amounts represent average lives in terms of years.

	September 30, 2011							September 30, 2010
	Balance		Yield			WAL		Balance		Yield			WAL
Fixed-rate securities:	(Dollars in thousands)
U.S. government-sponsored enterprises (“GSE”) debentures	$	1,380,028		1.09	%		0.86	$	1,258,980		1.39	%		0.64
Municipal bonds		59,622		3.02			2.29		70,605		2.95			2.76
MBS		1,476,660		3.51			4.23		860,798		4.47			3.02
Total fixed-rate securities		2,916,310		2.36			2.59		2,190,383		2.64			1.64
Adjustable-rate securities:
Trust preferred securities		3,681		1.60			25.73		3,721		1.96			26.73
MBS		893,655		2.85			7.07		695,192		3.43			4.26
Total adjustable-rate securities		897,336		2.85			7.17		698,913		3.42			4.41
Total investment portfolio, at amortized cost	$	3,813,646		2.47	%		3.67	$	2,889,296		2.83	%		2.31

26

Mortgage-Backed Securities.  The balance of MBS, which primarily consists of securities of U.S. GSEs, increased $804.2 million from $1.61 billion at September 30, 2010 to $2.41 billion at September 30, 2011.  The increase was a result of purchasing MBS primarily with proceeds downstreamed from the Company as a result of the corporate reorganization and cash flows from called and matured investment securities.  The following table provides a summary of the activity in our portfolio of MBS for the periods presented.  The yields and WAL for purchases are presented as recorded at the time of purchase.  The yields for the beginning and ending balances are as of the period presented and are generally derived from recent prepayment activity on the MBS in the portfolio as of the dates presented.  The weighted average yield of the MBS portfolio decreased from September 30, 2010 to September 30, 2011 due primarily to purchases at yields lower than the overall portfolio yield, the maturity and repayment of securities with higher yields than the overall portfolio, and adjustable-rate MBS resetting to lower coupons due to a decline in related indices.  The beginning and ending WAL is the estimated remaining maturity (in years) after projected prepayment speeds have been applied.  The increase in the WAL at September 30, 2011 compared to September 30, 2010 was due primarily to purchases of new securities issued closer to current market rates with longer average lives.

	For the Three Months Ended
	September 30, 2011								June 30, 2011								March 31, 2011								December 31, 2010
	Amount			Yield			WAL		Amount			Yield			WAL		Amount			Yield			WAL		Amount			Yield			WAL
	(Dollars in thousands)
Beginning balance - carrying value	$	2,342,545			3.41	%		5.09	$	2,355,899			3.44	%		4.45	$	1,695,294			3.73	%		4.21	$	1,607,864			4.00	%		3.58
Maturities and repayments		(130,137	)							(105,142	)							(121,283	)							(123,577	)
Net amortization of premiums/   (discounts)		(1,168	)							(781	)							(689	)							(632	)
Purchases:
Fixed		157,720			2.65			4.05		92,010			2.88			4.39		501,748			3.17			4.64		168,300			2.16			3.74
Adjustable		45,564			2.12			6.24		--			--			--		282,957			2.59			4.98		49,436			2.24			5.08
Change in valuation on AFS   securities		(2,448	)							559								(2,128	)							(6,097	)
Ending balance - carrying value	$	2,412,076			3.26	%		5.31	$	2,342,545			3.41	%		5.09	$	2,355,899			3.44	%		4.45	$	1,695,294			3.73	%		4.21

	For the Year Ended September 30,
	2011								2010
	Amount			Yield			WAL		Amount			Yield			WAL
	(Dollars in thousands)
Beginning balance - carrying value	$	1,607,864			4.00	%		3.58	$	1,992,467			4.42	%		4.67
Maturities and repayments		(480,139	)							(511,308	)
Sale of securities, net of gains		--								(192,690	)
Net amortization of premiums/   (discounts)		(3,270	)							(1,741	)
Purchases:
Fixed		919,778			2.87			4.35		131,426			2.60			3.85
Adjustable		377,957			2.49			5.14		--			--			--
Fair value of securities received in   loan swap transaction		--								192,690
Change in valuation on AFS   securities		(10,114	)							(2,980	)
Ending balance - carrying value	$	2,412,076			3.26	%		5.31	$	1,607,864			4.00	%		3.58

27

The following table presents our fixed-rate MBS portfolio, at amortized cost, based on the underlying weighted average loan rate, the annualized prepayment speeds for the quarter ended September 30, 2011, and the net premium/discount by interest rate tier.  Our fixed-rate MBS portfolio is somewhat less sensitive than our fixed-rate one- to four-family loan portfolio to repricing risk due to external refinancing barriers such as unemployment, income changes, and decreases in property values, which are generally more pronounced outside of our local market areas.  However, we are unable to control the interest rates and/or governmental programs that could impact the loans in our fixed-rate MBS portfolio, and are therefore more likely to experience reinvestment risk due to principal prepayments.  Additionally, prepayments impact the amortization/accretion of premiums/discounts on our MBS portfolio.  As prepayments increase, the related premiums/discounts are amortized/accreted at a faster rate.  The amortization of premiums decreases interest income while the accretion of discounts increases interest income.  As noted in the table below, the fixed-rate MBS portfolio had a net premium of $11.1 million as of September 30, 2011.  Given that the weighted average coupon on the underlying loans in this portfolio are above current market rates, the Bank could experience an increase in the premium amortization should prepayment speeds increase significantly, potentially reducing future interest income.

			Original Term
			15 years or less						More than 15 years
						Prepayment						Prepayment						Net
			Amortized			Speed			Amortized			Speed						Premium/
Rate Range			Cost			(annualized)			Cost			(annualized)			Total			(Discount)
			(Dollars in thousands)
< =3.99		%	$	747,002			5.89	%	$	27,426			2.52	%	$	774,428		$	6,689
	4.00 - 4.50	%		166,585			16.09			25,563			2.97			192,148			4,779
	4.51 - 4.99	%		207,877			20.17			5,921			13.80			213,798			(539	)
	5.00 - 5.50	%		115,995			21.37			8,707			16.45			124,702			(55	)
	5.51 - 5.99	%		75,843			20.34			47,102			24.15			122,945			50
	6.00 - 6.50	%		13,008			18.16			18,909			15.65			31,917			63
	6.51 - 6.99	%		2,438			18.55			9,662			16.00			12,100			112
>=7.00		%		--			--			4,622			16.89			4,622			8
			$	1,328,748			11.72	%	$	147,912			13.77	%	$	1,476,660		$	11,107
Average rate				4.20	%					5.29	%					4.31	%
Average remaining contractual
term (months)				131						217						140

28

Investment Securities.  Investment securities, which consist primarily of debentures issued by GSEs and municipal investments, increased $111.8 million from $1.33 billion at September 30, 2010 to $1.44 billion at September 30, 2011.  The following table provides a summary of the activity of investment securities for the periods presented.  The beginning and ending WALs represent the estimated remaining maturity (in years) of the securities after projected call dates have been considered, based upon market rates at each date presented.  The yields for the beginning and ending balances are as of the first and last days of the periods presented.  The WAL at September 30, 2011 increased slightly from September 30, 2010 due to maturities and calls of securities during the year that were replaced with securities with a longer WAL. The decrease in the yield at September 30, 2011 compared to September 30, 2010 was a result of maturities and calls of securities during the year that were replaced with securities at a lower yield.

	For the Three Months Ended
	September 30, 2011								June 30, 2011								March 31, 2011								December 31, 2010
	Amount			Yield			WAL		Amount			Yield			WAL		Amount			Yield			WAL		Amount			Yield			WAL
	(Dollars in thousands)
Beginning balance - carrying value	$	1,621,161			1.16	%		1.05	$	1,847,915			1.17	%		1.55	$	1,347,657			1.32	%		1.61	$	1,332,656			1.47	%		0.84
Maturities and calls		(486,853	)							(326,009	)							(291,693	)							(252,728	)
Net amortization of premiums/(discounts)		(1,385	)							(1,391	)							(1,255	)							(799	)
Purchases - Fixed		310,338			1.21			1.73		99,974			1.51			2.62		793,136			0.99			1.20		268,689			1.21			1.89
Change in valuation on AFS securities		1,219								672								70								(161	)
Ending balance - carrying value	$	1,444,480			1.17	%		1.00	$	1,621,161			1.16	%		1.05	$	1,847,915			1.17	%		1.55	$	1,347,657			1.32	%		1.61
	For the Year Ended
	2011								2010
	Amount			Yield			WAL		Amount			Yield			WAL
	(Dollars in thousands)
Beginning balance - carrying value	$	1,332,656			1.47	%		0.84	$	480,704			1.93	%		1.53
Maturities and calls		(1,357,283	)							(674,183	)
Net amortization of premiums/(discounts)		(4,830	)							(4,199	)
Purchases - Fixed		1,472,137			1.11			1.53		1,530,583			1.39			1.13
Change in valuation on AFS securities		1,800								(249	)
Ending balance - carrying value	$	1,444,480			1.17	%		1.00	$	1,332,656			1.47	%		0.84

During fiscal year 2011, Capitol Federal Financial, Inc., at the holding company level, purchased $405.8 million of investment securities with a WAL of 1.13 years and a yield of 0.42% at the time of purchase.  All of the securities were classified as AFS.  The securities have laddered maturities in order to provide cash flows that can be used to pay dividends, repurchase stock when permitted by federal banking regulations, reinvest into higher yielding assets if interest rates rise, or pursue other corporate strategies, as deemed appropriate.  The yields on these securities are less than the yields on the Bank’s current investment portfolio due to the short-term nature of the securities.  At September 30, 2011, the holding company had $362.9 million in investment securities with a WAL of 0.58 years.

29

Liabilities.  Total liabilities decreased $13.9 million, from $7.53 billion at September 30, 2010 to $7.51 billion at September 30, 2011, due primarily to a decrease of $153.6 million in other borrowings, partially offset by an increase in deposits of $108.9 million and an increase in FHLB advances of $31.1 million.  The decrease in other borrowings was due to the repayment of the Debentures of $53.6 million and the maturity of $100.0 million of repurchase agreements that were not replaced.  The increase in deposits was primarily in the money market and checking portfolios. 

Deposits.  Our money market portfolio increased $123.6 million from $942.4 million at September 30, 2010 to $1.07 billion at September 30, 2011.  Of the $123.6 million increase, $39.0 million relates to the contribution to the Foundation as a result of the corporate reorganization.  It is not anticipated that the Foundation will keep the funds in the money market account for an extended period of time.  The remaining increase in the money market portfolio was due to customers reinvesting funds from maturing certificates of deposit into the money market portfolio and some customers maintaining higher cash balances due to the current economic uncertainty and in anticipation of market rates increasing, which would allow them to reinvest at higher rates.  The checking portfolio increased $69.2 million from $482.4 million at September 30, 2010 to $551.6 million at September 30, 2011.  The increase in our checking portfolio was also due to customers keeping more cash readily available, as reflected by a 15% increase in the average customer checking account balance between period ends.  If interest rates were to rise, it is possible our money market and checking account customers may move those funds to higher-yielding deposit products inside of the Bank or withdraw their funds to invest in higher yielding investments outside of the Bank.

Our certificate of deposit portfolio decreased $102.9 million from $2.73 billion at September 30, 2010 to $2.62 billion at September 30, 2011.  The $102.9 million decrease consisted primarily of medium- and short-term certificates, partially offset by an increase in our longer term certificates.  Management competitively priced our longer term certificates in order to lengthen the weighted average maturity of the retail certificate of deposit portfolio. The following table presents the amount, average rate and percentage of total deposits for checking, savings, money market and certificates at September 30, 2011 and 2010.

	At September 30,
	2011								2010
			Average			% of					Average			% of
	Amount		Rate			Total			Amount		Rate			Total
	(Dollars in thousands)
Checking	$	551,632		0.08	%		12.3	%	$	482,428		0.13	%		11.0	%
Savings		253,184		0.41			5.6			234,285		0.54			5.3
Money market		1,066,065		0.35			23.7			942,428		0.65			21.5
Certificates		2,624,292		1.87			58.4			2,727,169		2.29			62.2
	$	4,495,173		1.21	%		100.0	%	$	4,386,310		1.61	%		100.0	%

At September 30, 2011, $83.7 million in certificates were brokered deposits, unchanged from September 30, 2010.  The $83.7 million of brokered deposits at September 30, 2011 had a weighted average rate of 2.58% and a remaining term to maturity of 2.9 years.  The Bank regularly considers brokered deposits as a source of funding, provided that investment opportunities are balanced with the funding cost.  As of September 30, 2011, $106.4 million in certificates were public unit deposits, compared to $109.9 million in public unit deposits at September 30, 2010.  The $106.4 million of public unit deposits at September 30, 2011 had a weighted average rate of 0.31% and a remaining term to maturity of six months.  Management will continue to monitor the wholesale deposit market for attractive opportunities relative to the yield received from investing the proceeds.

30

Borrowings.  The following table presents FHLB advance and repurchase agreement activity for the periods presented.  The rate presented is the contractual rate, and the weighted average maturity (“WAM”) is the remaining weighted average contractual term in months.

	For the Three Months Ended
	September 30, 2011									June 30, 2011								March 31, 2011								December 31, 2010
	Amount			Rate			WAM			Amount			Rate			WAM		Amount			Rate			WAM		Amount			Rate			WAM
	(Dollars in thousands)
Beginning principal balance	$	3,041,000			3.53	%		37.48		$	2,966,000			3.55	%		38.60	$	2,991,000			3.54	%		41.23	$	2,991,000			3.70	%		35.94
Maturities and prepayments		(126,000	)		4.72						(25,000	)		2.79					(25,000	)		2.94					(300,000	)		4.55
New borrowings		--			--			--			100,000			2.82			84.00		--			--			--		300,000			3.00			83.33
Ending principal balance	$	2,915,000			3.48	%		36.02		$	3,041,000			3.53	%		37.48	$	2,966,000			3.55	%		38.60	$	2,991,000			3.54	%		41.23
	For the Year Ended September 30,
	2011								2010
	Amount			Rate			WAM			Amount			Rate			WAM
	(Dollars in thousands)
Beginning principal balance	$	2,991,000			3.70	%		35.94		$	3,086,000			3.83	%		38.68
Maturities and prepayments		(476,000	)		4.42						(395,000	)		4.32
New borrowings		400,000			2.96			83.50			300,000			3.19			84.00
Ending principal balance	$	2,915,000			3.48	%		36.02		$	2,991,000			3.70	%		35.94

In April 2011, the Company redeemed the outstanding Debentures of $53.6 million using a portion of the offering proceeds from the corporate reorganization.  See additional discussion of borrowings in “Notes to Financial Statements - Note 7 - Borrowed Funds.”

31

Stockholders’ Equity.  Stockholders’ equity increased $977.6 million, from $962.0 million at September 30, 2010 to $1.94 billion at September 30, 2011.  The increase was due primarily to the net stock offering proceeds of $1.13 billion from the corporate reorganization in December 2010 and net income during the fiscal year, partially offset by dividends paid of $150.1 million.  The $150.1 million consisted of cash dividends of $17.0 million paid prior to the corporate reorganization, and cash dividends of $133.1 million paid since the corporate reorganization.  The $17.0 million consisted of a quarterly dividend of $10.6 million and a special dividend of $6.4 million related to fiscal year 2010 earnings, per the Company’s prior dividend policy.  The $133.1 million consisted of three quarterly dividends totaling $36.3 million and the one-time special cash dividend (welcome dividend) of $96.8 million. 

On October 20, 2011, the Company declared a quarterly cash dividend of $0.075 per share, which will equate to approximately $12.1 million, payable on November 18, 2011, and a special year-end dividend of $0.10 per share, which will equate to approximately $16.2 million, payable on December 2, 2011.  The special year-end dividend is the result of the Board of Directors’ commitment to distribute to stockholders 100% of the annual earnings of Capitol Federal Financial, Inc. for the first two fiscal years following the second-step stock conversion.  The $0.10 per share special year-end dividend was determined by taking the difference between earnings per share for fiscal year 2011 (after adding back the contribution to the Foundation) of $0.40, and regular quarterly dividends declared for fiscal year 2011 of $0.30 per share.

There were no stock repurchases during fiscal year 2011.  Under current regulatory restrictions, we may not repurchase our stock during the first year following the corporate reorganization except under very limited circumstances.  This one-year moratorium expires in December 2011.  The stock repurchase plan that was in effect at the time of the corporate reorganization ceased to exist once the reorganization was complete.  There is no repurchase plan currently in place.

32

Weighted Average Yields and Rates.  The following table presents the weighted average yields earned on loans, securities and other interest-earning assets, the weighted average rates paid on deposits and borrowings and the resultant interest rate spreads at the dates indicated.  Yields on tax-exempt securities are not calculated on a tax-equivalent basis.

	At September 30,
	2011			2010			2009
Weighted average yield on:
Loans receivable		4.87	%		5.23	%		5.38	%
MBS		3.26			4.00			4.42
Investment securities		1.17			1.47			1.93
Capital stock of FHLB		3.39			2.98			2.98
Cash and cash equivalents		0.24			0.22			0.21
Combined weighted average yield on
interest-earning assets		3.81			4.33			4.89
Weighted average rate paid on:
Checking deposits		0.08			0.13			0.17
Savings deposits		0.41			0.54			0.66
Money market deposits		0.35			0.65			0.82
Certificate of deposit		1.87			2.29			3.09
FHLB advances (1)		3.71			3.96			4.13
Other borrowings		4.00			3.97			3.91
Combined weighted average rate paid on
interest-bearing liabilities		2.21			2.57			3.00
Net interest rate spread		1.60	%		1.76	%		1.89	%

(1)   Rates include the net impact of the deferred prepayment penalties related to the prepayment of certain FHLB advances and deferred gains associated with the interest rate swap terminations in prior years.

Average Balance Sheet.  The following table presents the average balances of our assets, liabilities and stockholders’ equity and the related annualized yields and rates on our interest-earning assets and interest-bearing liabilities for the periods indicated.  Average yields are derived by dividing annualized income by the average balance of the related assets and average rates are derived by dividing annualized expense by the average balance of the related liabilities, for the periods shown.  Average outstanding balances are derived from average daily balances, except for other noninterest-earning assets, other noninterest-earning liabilities and stockholders’ equity which were calculated based on month-end balances.  The yields and rates include amortization of fees, costs, premiums and discounts which are considered adjustments to yields/rates.  Yields on tax-exempt securities were not calculated on a tax-equivalent basis.

33

	Year Ended September 30,
	2011							2010							2009
	Average		Interest					Average		Interest					Average		Interest
	Outstanding		Earned/		Yield/			Outstanding		Earned/		Yield/			Outstanding		Earned/		Yield/
	Balance		Paid		Rate			Balance		Paid		Rate			Balance		Paid		Rate
Assets								(Dollars in thousands)
Interest-earning assets:
Mortgage loans (1)	$	4,966,905	$	242,057		4.87	%	$	5,198,175	$	271,154		5.22	%	$	5,296,297	$	293,685		5.55	%
Other loans		179,048		9,852		5.50			199,244		11,153		5.60			208,252		12,097		5.81
Total loans receivable		5,145,953		251,909		4.90			5,397,419		282,307		5.23			5,504,549		305,782		5.56
MBS (2)		2,044,897		71,332		3.49			1,710,074		71,859		4.20			2,110,701		97,926		4.64
Investment securities (2)(3)		1,566,937		19,077		1.22			887,955		15,682		1.77			229,766		5,533		2.41
Capital stock of FHLB		123,817		3,791		3.06			133,817		3,966		2.96			129,716		3,344		2.58
Cash and cash equivalents		306,958		756		0.25			100,411		237		0.24			72,184		201		0.28
Total interest-earning assets		9,188,562		346,865		3.77			8,229,676		374,051		4.55			8,046,916		412,786		5.13
Other noninterest-earning assets		234,315							235,324							181,829
Total assets	$	9,422,877						$	8,465,000						$	8,228,745
Liabilities and stockholders' equity
Interest-bearing liabilities:
Checking	$	518,526	$	441		0.09	%	$	471,397	$	622		0.13	%	$	426,976	$	879		0.21	%
Savings		245,994		1,225		0.49			232,651		1,323		0.57			228,879		1,873		0.82
Money market		1,024,523		5,307		0.52			914,382		6,522		0.71			814,898		8,512		1.04
Certificates		2,776,293		56,595		2.04			2,672,364		70,749		2.65			2,585,560		89,207		3.45
Total deposits		4,565,336		63,568		1.39			4,290,794		79,216		1.85			4,056,313		100,471		2.48
FHLB advances (4)		2,386,380		90,298		3.79			2,389,597		97,212		4.07			2,437,978		106,551		4.36
Repurchase agreements		581,507		23,410		3.97			654,987		26,378		3.97			660,000		26,549		3.97
Other borrowings		27,612		855		3.05			53,609		1,680		3.09			53,601		2,573		4.74
Total borrowings		2,995,499		114,563		3.82			3,098,193		125,270		4.03			3,151,579		135,673		4.29
Total interest-bearing liabilities		7,560,835		178,131		2.35			7,388,987		204,486		2.77			7,207,892		236,144		3.27
Other noninterest-bearing liabilities		118,603							119,441							108,940
Stockholders' equity		1,743,439							956,572							911,913
Total liabilities and stockholders'   equity	$	9,422,877						$	8,465,000						$	8,228,745
Net interest income (5)			$	168,734						$	169,565						$	176,642
Net interest rate spread (6)						1.42	%						1.78	%						1.86	%
Net earning assets	$	1,627,727						$	840,689						$	839,024
Net interest margin (7)						1.84	%						2.06	%						2.20	%
Ratio of interest-earning assets to
interest-bearing liabilities						1.22	x						1.11	x						1.12	x

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(1) Calculated net of unearned loan fees, deferred costs, and undisbursed loan funds.  Non-accrual loans are included in the loans receivable average balance with a yield of zero percent.  Balances include LHFS.

(2)       MBS and investment securities classified as AFS are stated at amortized cost, adjusted for unamortized purchase premiums or discounts.

(3) The average balance of investment securities includes an average balance of nontaxable securities of $63.9 million, $72.0 million, and $61.0 million for the years ended September 30, 2011, 2010, and 2009, respectively.

(4)       The balance and rate of FHLB advances are stated net of deferred gains and deferred prepayment penalties.

(5) Net interest income represents the difference between interest income earned on interest-earning assets, such as mortgage loans, investment securities, and MBS, and interest paid on interest-bearing liabilities, such as deposits, FHLB advances, and other borrowings.  Net interest income depends on the balance of interest-earning assets and interest-bearing liabilities, and the interest rates earned or paid on them.

(6)       Net interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.

(7)       Net interest margin represents net interest income as a percentage of average interest-earning assets.

35

Rate/Volume Analysis.  The table below presents the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities, comparing fiscal years 2011 to 2010 and fiscal years 2010 to 2009.  For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (1) changes in volume, which are changes in the average balance multiplied by the previous year’s average rate and (2) changes in rate, which are changes in the average rate multiplied by the average balance from the previous year.  The net changes attributable to the combined impact of both rate and volume have been allocated proportionately to the changes due to volume and the changes due to rate.

	Year Ended September 30,
	2011 vs. 2010									2010 vs. 2009
	Increase (Decrease) Due to									Increase (Decrease) Due to
	Volume			Rate			Total			Volume			Rate			Total
	(Dollars in thousands)
Interest-earning assets:
Loans receivable	$	(12,703	)	$	(17,695	)	$	(30,398	)	$	(5,867	)	$	(17,608	)	$	(23,475	)
MBS		12,749			(13,276	)		(527	)		(17,383	)		(8,684	)		(26,067	)
Investment securities		9,359			(5,964	)		3,395			11,980			(1,831	)		10,149
Capital stock of FHLB		(305	)		130			(175	)		110			512			622
Cash and cash equivalents		509			10			519			69			(33	)		36
Total interest-earning assets		9,609			(36,795	)		(27,186	)		(11,091	)		(27,644	)		(38,735	)
Interest-bearing liabilities:
Checking		56			(203	)		(147	)		86			(370	)		(284	)
Savings		73			(194	)		(121	)		30			(583	)		(553	)
Money market		716			(1,883	)		(1,167	)		942			(2,930	)		(1,988	)
Certificates		2,658			(16,871	)		(14,213	)		2,901			(21,331	)		(18,430	)
FHLB advances		(686	)		(6,228	)		(6,914	)		(1,407	)		(7,932	)		(9,339	)
Other borrowings		(3,772	)		(21	)		(3,793	)		(199	)		(865	)		(1,064	)
Total interest-bearing liabilities		(955	)		(25,400	)		(26,355	)		2,353			(34,011	)		(31,658	)
Net change in net interest and dividend income	$	10,564		$	(11,395	)	$	(831	)	$	(13,444	)	$	6,367		$	(7,077	)

36

Comparison of Results of Operations for the Years Ended September 30, 2011 and 2010

Net income for fiscal year 2011 was $38.4 million, compared to $67.8 million for fiscal year 2010.  The $29.4 million, or 43.4%, decrease for the current year was due primarily to the $40.0 million ($26.0 million, net of income tax benefit) contribution to the Foundation in connection with the corporate reorganization.  Additionally, other income decreased $9.4 million, or 27.4%, from $34.4 million for the prior year to $25.0 million for the current year.  These reductions to income were partially offset by a $4.8 million decrease in the provision for credit losses between fiscal years.  Interest income for fiscal year 2011 decreased by $27.2 million, or 7.3%, compared to fiscal year 2010, but was almost entirely offset by a decrease in interest expense of $26.4 million, or 12.9%, between fiscal years.  The net interest margin decreased 22 basis points, from 2.06% for fiscal year 2010 to 1.84% for fiscal year 2011, largely due to the decrease in interest income on loans receivable.

Interest and Dividend Income

Total interest and dividend income for fiscal year 2011 was $346.9 million, compared to $374.1 million for fiscal year 2010.  The $27.2 million decrease was primarily a result of a decrease in interest income on loans receivable of $30.4 million, partially offset by an increase in interest income on investment securities of $3.4 million.  The average yield on total interest-earning assets decreased 78 basis points year over year, from 4.55% for fiscal year 2010 to 3.77% for fiscal year 2011, primarily as a result of a decrease in the yield on the loans receivable portfolio, but also partially due to decreases in the yields on the MBS and investment securities portfolios.

Interest income on loans receivable in the current fiscal year was $251.9 million compared to $282.3 million in the prior fiscal year.  The $30.4 million decrease in interest income on loans receivable was the result of a decrease of 33 basis points in the weighted average yield to 4.90% for fiscal year 2011 and a decrease of $251.5 million in the average balance of the portfolio.  The decrease in the weighted average yield was due to loan endorsements, loan originations at current market rates below that of the existing portfolio, refinances, and ARMs repricing down to lower market rates.  The decrease in the average balance of the loan portfolio was due to principal repayments exceeding originations and purchases, especially during the first half of fiscal year 2011.

Interest income on MBS in the current fiscal year was $71.3 million compared to $71.9 million in the prior fiscal year.  The $527 thousand decrease in interest income on MBS was due to a decrease of 71 basis points in the weighted average yield to 3.49% for fiscal year 2011, partially offset by an increase of $334.8 million in the average balance of the portfolio.  The decrease in the weighted average yield was due to purchases of MBS at a lower average yield than the existing portfolio between the two periods, repayments on MBS with yields higher than the existing portfolio, and adjustable-rate securities repricing to lower market rates.  The increase in the average balance of the portfolio was due to purchases of MBS securities, primarily with proceeds from the corporate reorganization.

Interest income on investment securities in the current fiscal year was $19.1 million compared to $15.7 million in the prior fiscal year.  The $3.4 million increase in interest income on investment securities was due to a $679.0 million increase in the average balance, partially offset by a decrease of 55 basis points in the weighted average yield to 1.22% for fiscal year 2011.  The increase in the average balance was primarily a result of purchases funded with stock offering proceeds from the corporate reorganization.  The average yield decreased due to purchases at yields lower than the overall portfolio yield, and to calls and maturities of higher yielding securities.

Interest Expense

Interest expense decreased $26.4 million to $178.1 million for fiscal year 2011 from $204.5 million for fiscal year 2010.  The decrease was due primarily to a decrease in interest expense on deposits of $15.6 million, and partially to a decrease in FHLB advances of $6.9 million and other borrowings of $3.8 million. The average rate paid on interest-bearing liabilities decreased 42 basis points between years, from 2.77% for fiscal year 2010 to 2.35% for fiscal year 2011, primarily as a result of repricing in the certificate of deposit portfolio.

Interest expense on deposits for the current fiscal year was $63.6 million compared to $79.2 million in the prior fiscal year.  The $15.6 million decrease was due primarily to a decrease in interest expense on certificates, as the weighted average rate paid on the certificate of deposit portfolio decreased 61 basis points between the two years, from 2.65% for fiscal year 2010 to 2.04% fiscal year 2011.  The decrease in the rate was a result of the portfolio continuing to reprice to lower market rates.

Interest expense on FHLB advances for the current fiscal year was $90.3 million compared to $97.2 million in the prior fiscal year.  The $6.9 million decrease was due primarily due to a 28 basis point decrease in the weighted average rate of the portfolio to 3.79% for fiscal year 2011.  The decrease in the weighted average rate was a result of the renewal of maturing FHLB advances at lower rates, maturing advances that were not renewed, and the refinance of $200.0 million of advances in the third quarter of fiscal year 2010.

Interest expense on other borrowings for the current fiscal year was $24.3 million compared to $28.1 million in the prior fiscal year.  The $3.8 million decrease was due primarily to a $99.5 million decrease in the average balance primarily as a result of not replacing all maturing repurchase agreements.

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Net Interest Margin

The net interest margin, which is calculated as the difference between interest income and interest expense divided by average interest-earning assets, was 1.84% for fiscal year 2011 compared to 2.06% for fiscal year 2010.  The 22 basis point decrease was due primarily to a decrease in net interest income between fiscal years.  The average balance of interest-earning assets increased $958.9 million, or 11.7%, between years, while net interest income decreased $831 thousand, or 0.5%, between years.  The primary reason for the decrease in net interest income between years was a decrease in interest income on loans receivable due to loan endorsements, loans originated at market rates below that of the existing portfolio, refinances, and ARMs repricing down to lower market rates.

The recent decrease in market interest rates, as reflected by the shape of the yield curve, is anticipated to have a negative impact to the Company’s net interest margin during fiscal year 2012, especially if market rates remain at current levels for a sustained period of time.  Mortgage endorsements and refinances are expected to continue over the course of the upcoming year, which could result in margin compression.  Interest rates have decreased significantly during the past year and the yield curve has flattened as a result of continuously weak economic data, uncertainty about the resolution of the European debt crisis, uncertainty about fiscal actions by the U.S. Congress and additional monetary policy announcements by the FOMC.  In the fourth quarter of fiscal year 2011, the two-year Treasury yield decreased approximately 20 basis points while the 10-year Treasury yield decreased approximately 125 basis points.  Historically, the Bank has benefited from a steeper yield curve as the Bank’s mortgages are typically priced from long-term rates while deposits are priced from short-term rates.  A steeper yield curve, one with a greater difference between short-term rates and long-term rates, allows the Bank to receive a higher rate of interest on our mortgage-related assets than the rate paid for the funding for those assets, which generally results in a higher net interest margin.  As the yield curve flattens, the spread between rates received on assets and paid on liabilities becomes compressed, which generally leads to a decrease in net interest margin.

Provision for Credit Losses

The Bank recorded a provision for credit losses of $4.1 million during fiscal year 2011, compared to a provision of $8.9 million for fiscal year 2010.  The provision recorded in fiscal year 2011 was primarily a result of the increase in and establishment of SVAs, primarily on purchased loans, and partially due to an increase in the general valuation allowance due to an increase in historical losses, a decline in the current FHFA home price index, primarily in Kansas and Missouri, and an increase in the recent unemployment rate trends compared to historical trends, also primarily in Kansas and Missouri.

Other Income and Expense

Total other income was $25.0 million for fiscal year 2011 compared to $34.4 million for fiscal year 2010.  The $9.4 million, or 27.4%, decrease was due primarily to no gains on the sale of securities in the current fiscal year, compared to a $6.5 million gain in the prior fiscal year.  Additionally, retail fees decreased $2.3 million between fiscal years as a result of the amendments to Regulation E that prohibit automatic enrollment in overdraft protection programs without the customer’s consent, and other income, net decreased by $1.8 million due primarily to a decrease in net gains on loan sales.  Management is analyzing the Bank’s deposit account fee structure and plans to make adjustments to its fee structure to ensure that fees accurately reflect the costs of the Bank to provide services to customers.  It is unlikely, however, that all of the revenue lost as a result of changes to Regulation E will be recovered.

Total other expenses for fiscal year 2011 were $132.3 million, compared to $89.7 million in fiscal year 2010.  The $42.6 million, or 47.5%, increase was due primarily to a $40.0 million cash contribution to the Foundation in connection with the corporate reorganization. Additionally, salaries and employee benefits and other expenses, net, both increased $2.2 million and mortgage servicing activity, net, increased $1.8 million from fiscal year 2010.  The increase in salaries and employee benefits was due to $2.7 million of compensation expense related to the welcome dividend paid on unallocated ESOP shares, which is not expected to reoccur in fiscal year 2012.  The increase in other expenses, net, was primarily related to REO operations, which increased $1.7 million compared to fiscal year 2010.  The increase in mortgage servicing activity, net, was due to impairment and valuation allowances during the current fiscal year as a result of an increase in prepayment speeds.  The increases in the expenses noted above, were partially offset by decreases of $2.3 million in advertising and promotional expense and $2.2 million in federal insurance premium expense.

Effective October 31, 2010, the Bank discontinued its debit card rewards program.  The discontinuation of the program resulted in a $1.5 million decrease in advertising and promotional expense for fiscal year 2011 compared to fiscal year 2010.  The remaining decrease in advertising and promotional expense was due to an overall decrease in advertising in fiscal year 2011 as compared to fiscal year 2010.  Advertising expense is expected to increase approximately $1.0 million in fiscal year 2012 as compared to fiscal year 2011.

In February 2011, the Federal Deposit Insurance Corporation adopted a new assessment structure for insured institutions effective April 2011.  One of the significant changes includes using average total Bank consolidated assets minus average tangible equity for the assessment base instead of average deposits and secured liabilities for the period.  As a result of the change, the deposit insurance assessment decreased by $2.2 million in fiscal year 2011 compared to fiscal year 2010, and is anticipated to decrease by approximately $700 thousand in fiscal year 2012.

38

A provision of the Dodd-Frank Act, commonly referred to as the “Durbin Amendment,” directed the FRB to analyze the debit card payments system and fix the interchange rates based upon their measure of actual costs for institutions with assets greater than $10 billion.  Currently this has no direct impact on the Company because total Bank assets are less than $10 billion.  Based upon the FRB’s new interchange rate for issuers exceeding $10 billion in total assets and the Bank’s debit card transaction volume, it is estimated that the related fee income could decrease by $3.1 million annually from current levels if the Bank exceeds $10 billion in assets.  Although the Bank is currently exempt from the provisions of the rule on the basis of asset size, there is still some uncertainty about the potential impact on the interchange rates for issuers below that level. 

Income Tax Expense

Income tax expense for fiscal year 2011 was $18.9 million compared to $37.5 million for fiscal year 2010.  The decrease in income tax expense between years was primarily a result of the $40.0 million contribution to the Foundation, which resulted in $14.0 million of income tax benefit.  The effective income tax rate for fiscal year 2011 was 33.0% compared to 35.6% for fiscal year 2010.  The decrease in the effective tax rate between periods was due primarily to a $686 thousand adjustment related to income tax expense recognized in the prior years.  Excluding that adjustment, the effective income tax rate would have been 34.2% for fiscal year 2011.  The remaining difference between the effective income tax rates was due primarily to an increase in low income housing credits in the current fiscal year and in deductible expenses associated with the ESOP in the current fiscal year as a result of the $0.60 per share welcome dividend.  Due to pre-tax income being lower than the prior year, all of the items impacting the income tax rate had a larger impact to the overall effective tax rate than in the prior year.  Management anticipates the effective tax rate for fiscal year 2012 to be approximately 36%.

Non-GAAP Presentation

The following table presents the Company’s selected financial results and performance ratios for fiscal year 2011.  Because of the magnitude and non-recurring nature of the $40.0 million contribution to the Foundation in connection with the corporate reorganization, management believes it is important for comparability purposes to present selected financial results and performance ratios excluding the contribution to the Foundation.  The adjusted financial results and ratios are not presented in accordance with GAAP.

	For the Fiscal Year Ended
	September 30, 2011
	Actual			Contribution			Adjusted (1)
	(GAAP)			to Foundation			(Non-GAAP)
	(Dollars in thousands, except per share data)
Net income (2)	$	38,403		$	(26,000	)	$	64,403
Operating expenses		132,317			40,000			92,317
Basic earnings per share		0.24			(0.16	)		0.40
Diluted earnings per share		0.24			(0.16	)		0.40
Return on average assets (annualized)		0.41	%		(0.27	) %		0.68	%
Return on average equity (annualized)		2.20			(1.49	)		3.69
Operating expense ratio		1.40			0.42			0.98
Efficiency ratio		68.30	%		20.65	%		47.65	%

(1) The adjusted financial results and ratios are not presented in accordance with GAAP as the amounts and ratios exclude the effect of the contribution to the Foundation, net of income tax benefit.

(2) The net adjustment for the contribution to the Foundation of $26.0 million reflects the $14.0 million income tax benefit associated with the $40.0 million contribution.

39

Comparison of Results of Operations for the Years Ended September 30, 2010 and 2009

For fiscal year 2010, the Company recognized net income of $67.8 million compared to net income of $66.3 million in fiscal year 2009.  The $1.5 million increase in net income was primarily a result of a $5.8 million increase in other income, a $3.9 million decrease in other expenses and a $1.4 million decrease in income tax expense, partially offset by a $7.1 million decrease in net interest income and a $2.5 million increase in provision for credit losses.

Interest and Dividend Income

Total interest and dividend income for fiscal year 2010 was $374.1 million compared to $412.8 million for the fiscal year 2009.  The $38.7 million decrease was a result of a $26.0 million decrease in interest income on MBS and a $23.5 million decrease in interest income on loans receivable, partially offset by a $10.2 million increase in interest income on investment securities.

Interest income on loans receivable in fiscal year 2010 was $282.3 million compared to $305.8 million in fiscal year 2009.  The $23.5 million decrease was a result of a 33 basis point decrease in the weighted average yield of the portfolio to 5.23% for fiscal year 2010, as well as a $107.1 million decrease in the average balance of the loan portfolio between the two periods.  The decrease in the weighted average yield was due to loan endorsements and refinances, originations and purchases at market rates lower than the existing portfolio, and repayments of loans with rates higher than the portfolios.  The decrease in the average balance was due to the loan swap transaction, where $194.8 million of originated fixed-rate mortgage loans were swapped for MBS, and principal repayments outpacing originations and purchases during the fiscal year 2010.

Interest income on MBS in fiscal year 2010 was $71.9 million compared to $97.9 million in fiscal year 2009.  The $26.0 million decrease was due primarily to a decrease of $400.6 million in the average balance, as well as a 44 basis point decrease in the weighted average portfolio yield to 4.20% for fiscal year 2010.  The decrease in the average balance of the portfolio was due to principal repayments which were not replaced in their entirety; rather, the proceeds were reinvested into the investment securities portfolio.   The weighted average yield decreased between the two periods due to an increase of prepayments on MBS with yields higher than the existing portfolio, repricing of adjustable-rate securities to lower market rates, and, to a lesser extent, purchases of MBS at lower yields than the existing portfolio between the two periods.

Interest income on investment securities in fiscal year 2010 was $15.7 million compared to $5.5 million in fiscal year 2009.  The $10.2 million increase was primarily a result of an increase of $658.2 million in the average balance of the portfolio, partially offset by a 64 basis point decrease in the weighted average portfolio yield to 1.77% for fiscal year 2010.  The average portfolio balance increased as a result of purchases funded with proceeds from the loan swap transaction, MBS and loan principal repayments and, to a lesser extent, from an increase in retail deposits.  The decrease in the weighted average yield of the portfolio was attributed to maturities and calls of securities with yields greater than the remaining portfolio, and to investments made at lower market yields than the overall portfolio yield.

Interest Expense

Total interest expense for fiscal year 2010 was $204.5 million, compared to $236.1 million in fiscal year 2009.  The $31.6 million decrease was primarily due to a decrease in interest expense on deposits of $21.3 million and a decrease in interest expense on FHLB advances of $9.4 million.

Interest expense on deposits in fiscal year 2010 was $79.2 million compared to $100.5 million in the fiscal year 2009.  The $21.3 million decrease was primarily a result of a decrease in the rates on the entire deposit portfolio, primarily the certificate of deposit and money market portfolios, as these portfolios repriced to lower market rates.  The average rate paid on the deposit portfolio decreased 63 basis points to 1.85% for the current fiscal year.  The decrease in interest expense was partially offset by a $234.5 million increase in the average balance of the deposit portfolio, particularly the certificate of deposit and money market portfolios.

Interest expense on FHLB advances in fiscal year 2010 was $97.2 million compared to $106.6 million in the fiscal year 2009.  The $9.4 million decrease in interest expense was a result of the refinancing of $875.0 million of advances during the second and third quarters of fiscal year 2009, and the refinancing of $200.0 million of advances and the renewal of $100.0 million of advances during the third quarter of fiscal year 2010 at rates lower than the existing portfolio.

Net Interest Margin

The net interest margin for fiscal year 2010 was 2.06% compared to 2.20% for fiscal year 2009.  The 14 basis point decrease in the net interest margin was primarily a result of a decrease in the average yield of interest-earning assets compared to fiscal year 2009.  The average yield on the loan portfolio decreased 33 basis points between periods due to loan endorsements and refinances, originations and purchases at market rates which were lower than the existing portfolio and repayments of loans with rates higher than the portfolio.  Additionally, the Bank purchased investment securities with weighted average lives of approximately three years or less and at yields lower than MBS as part of our overall interest rate risk management strategy.  The decrease in the weighted average yield on interest-earning assets was partially offset by a decrease in the weighted average rate paid on interest-bearing liabilities, specifically the certificate of deposit portfolio and FHLB advances.

40

Provision for Credit Losses

During fiscal year 2010, the Company recorded a provision for credit losses of $8.9 million compared to a provision of $6.4 million in the fiscal year 2009.  The $8.9 million provision for credit losses was composed of $5.0 million related to increases in certain loss factors in our general valuation allowance model and $3.9 million related to establishing or increasing SVAs.  The increase in certain loss factors in our general valuation allowance model reflects the risks inherent in our loan portfolio due to decreases in real estate values in certain geographic regions where the Bank has purchased loans, the continued elevated level of unemployment, and the increase in non-performing loans and loan charge-offs.  The increase in SVAs was primarily related to our purchased loan portfolio.

Other Income and Expense

Total other income for fiscal year 2010 was $34.4 million compared to $28.6 million in the fiscal year 2009.  The $5.8 million increase was due primarily to the $6.5 million gain on the sale of trading MBS in conjunction with the loan swap transaction during the first quarter of fiscal year 2010.

Total other expenses for fiscal year 2010 were $89.7 million compared to $93.6 million for the fiscal year 2009.  The $3.9 million decrease was due primarily to an impairment and valuation allowance taken on the mortgage-servicing rights asset in the fiscal year 2009, compared to a net recovery in the fiscal year 2010.

Income Tax Expense

Income tax expense for fiscal year 2010 was $37.5 million compared to $38.9 million for the fiscal year 2009.  The effective tax rate was 35.6% for fiscal year 2010, compared to 37.0% for the fiscal year 2009.  The difference in the effective tax rate between periods was primarily a result of a net decrease in nondeductible amounts associated with the ESOP in fiscal year 2010, a reduction of unrecognized tax benefits due to the lapse of the statute of limitations during the first quarter of fiscal year 2010 and an increase in tax credits related to our low income housing partnerships.

41

Liquidity and Capital Resources

Liquidity refers to our ability to generate sufficient cash to fund ongoing operations, to pay maturing certificates of deposit and other deposit withdrawals, to repay maturing borrowings, and to fund loan commitments.  Liquidity management is both a daily and long-term function of our business management.  The Company’s most available liquid assets are represented by cash and cash equivalents, AFS MBS and investment securities, and short-term investment securities.  The Bank’s primary sources of funds are deposits, FHLB advances, other borrowings, repayments and maturities of outstanding loans and MBS and other short-term investments, and funds provided by operations.  The Bank’s borrowings primarily have been used to invest in U.S. GSE debentures and MBS securities in an effort to manage the Bank’s interest rate risk with the intent to improve the earnings of the Bank while maintaining capital ratios in excess of regulatory standards for well-capitalized financial institutions.  In addition, the Bank’s focus on managing risk has provided additional liquidity capacity by remaining below FHLB borrowing limits and by increasing the balance of MBS and investment securities available as collateral for borrowings.

We generally intend to maintain cash reserves sufficient to meet short-term liquidity needs, which are routinely forecasted for 10, 30, and 365 days.  Additionally, on a monthly basis, we perform a liquidity stress test in accordance with the Interagency Policy Statement on Funding and Liquidity Risk Management.  The liquidity stress test incorporates both short-term and long-term liquidity scenarios in order to quantify liquidity risk. In the event short-term liquidity needs exceed available cash, the Bank has access to lines of credit at the FHLB and the Federal Reserve Bank.  The FHLB line of credit, when combined with FHLB advances, may generally not exceed 40% of total assets.  Our excess capacity at the FHLB as of September 30, 2011 was $1.26 billion. The Federal Reserve Bank line of credit is based upon the fair values of the securities pledged as collateral and certain other characteristics of those securities, and is used only when other sources of short-term liquidity are unavailable.  At September 30, 2011, the Bank had $1.98 billion of securities that were eligible but unused as collateral for borrowing or other liquidity needs.  This collateral amount is comprised of AFS and HTM securities with individual fair values greater than $10.0 million, which is then reduced by a collateralization ratio of 10% to account for potential market value fluctuations. 

Borrowings on the lines of credit are outstanding until replaced by cash flows from long-term sources of liquidity, and are generally outstanding no longer than 30 days.  If management observes a trend in the amount and frequency of lines of credit utilization, the Bank will likely utilize long-term wholesale borrowing sources, such as FHLB advances and/or repurchase agreements, to provide permanent fixed-rate funding.  The maturity of these borrowings is generally structured in such a way as to stagger maturities in order to reduce the risk of a highly negative cash flow position at maturity.  Additionally, the Bank could utilize the repayment and maturity of outstanding loans, MBS and other investments for liquidity needs rather than reinvesting such funds into the related portfolios. 

While scheduled payments from the amortization of loans and MBS and payments on short-term investments are relatively predictable sources of funds, deposit flows, prepayments on loans and MBS, and calls of investment securities are greatly influenced by general interest rates, economic conditions and competition, and are less predictable sources of funds.  To the extent possible, the Bank manages the cash flows of its loan and deposit portfolios by the rates it offers customers. 

At September 30, 2011, cash and cash equivalents totaled $121.1 million, an increase of $55.9 million from September 30, 2010.  The increase was due to cash flows received late in the month that were not reinvested by the end of the month.

During fiscal year 2011, loan originations and purchases were almost completely offset by principal repayments and related loan activity, compared to a cash inflow of $219.6 million in the same period in the prior year, as principal repayments exceeded loan originations and purchases in fiscal year 2010.  See additional discussion regarding loan activity in “Financial Condition – Loans Receivable.”

During fiscal year 2011, the Company received principal payments on MBS of $480.1 million and proceeds from called or matured investment securities of $1.36 billion. These funds were largely reinvested into investment securities and MBS portfolios, along with the majority of the proceeds from the stock offering in conjunction with the corporate reorganization.  During fiscal year 2011, the Company purchased $1.47 billion of investment securities and $1.30 billion of MBS.  

42

The following table presents the contractual maturity of our loan, MBS, and investment securities portfolios at September 30, 2011.  Loans and securities which have adjustable interest rates are shown as maturing in the period during which the contract is due.  The table does not reflect the effects of possible prepayments or enforcement of due on sale clauses.

	Loans (1)					MBS					Investment Securities					Total
			Weighted					Weighted					Weighted					Weighted
			Average					Average					Average					Average
	Amount		Rate			Amount		Rate			Amount		Rate			Amount		Rate
	(Dollars in thousands)
Amounts due:
Within one year	$	34,830		4.71	%	$	--		--	%	$	304,058		1.84	%	$	338,888		2.14	%
After one year:
Over one to two years		35,672		4.74			--		--			91,293		1.33			126,965		2.29
Over two to three years		9,137		5.41			--		--			295,267		1.33			304,404		1.46
Over three to five years		39,813		5.45			2,659		6.00			723,888		1.36			766,360		1.59
Over five to ten years		394,403		5.02			644,929		3.85			19,544		4.17			1,058,876		4.29
Over 10 to 15 years		1,214,895		4.39			727,708		3.53			3,304		5.24			1,945,907		4.07
After 15 years		3,467,126		4.75			1,036,780		3.18			7,126		3.20			4,511,032		4.39
Total due after one year		5,161,046		4.69			2,412,076		3.47			1,140,422		1.42			8,713,544		3.93
	$	5,195,876		4.69	%	$	2,412,076		3.47	%	$	1,444,480		1.51	%	$	9,052,432		3.86	%

(1)   Demand loans, loans having no stated maturity, and overdraft loans are included in the amounts due within one year.  Construction loans are reported based on the term to complete construction.  The maturity date for home equity loans assumes the customer always makes the required minimum payment.

The Bank utilizes FHLB advances to provide funds for lending and investment activities.  The Bank’s policies allow advances up to 40% of total Bank assets.  At September 30, 2011, the Bank’s ratio of the face amount of advances to total assets, as reported to the Bank’s regulators, was 26%.  The advances are secured by a blanket pledge of our loan portfolio, as collateral, supported by quarterly reporting to the FHLB.  Currently, the blanket pledge is sufficient collateral for the FHLB advances.  It is possible that increases in our borrowings or decreases in our loan portfolio could require the Bank to pledge securities as collateral on the FHLB advances.  The Bank relies on FHLB advances as a primary source of borrowings.  The par value of FHLB advances was $2.40 billion at September 30, 2011, of which $350.0 million is scheduled to mature in fiscal year 2012. $100.0 million is due in the first quarter of fiscal year 2012, $150.0 million is due in the second quarter of fiscal year 2012, and $100.0 million is due in the fourth quarter of fiscal year 2012.  Maturing advances during fiscal year 2012 will likely be replaced with borrowings with terms between 36 and 60 months.

In April 2011, the Company redeemed the outstanding Debentures of $53.6 million, using a portion of the offering proceeds from the corporate reorganization.

The Bank has access to and utilizes other sources for liquidity, such as secondary market repurchase agreements, brokered deposits, and public unit deposits.  The Bank’s policy limits total borrowings to 55% of total assets.  At September 30, 2011, the Bank had repurchase agreements of $515.0 million, of which $150.0 million are scheduled to mature in the first quarter of 2012 and will likely be replaced with borrowings with terms between 36 and 60 months.  The Bank may enter into additional repurchase agreements as management deems appropriate, not to exceed 15% of total assets.  The Bank has pledged securities with an estimated fair value of $597.3 million as collateral for repurchase agreements at September 30, 2011.  The securities pledged for the repurchase agreements will be delivered back to the Bank when the repurchase agreements mature.

As of September 30, 2011, the Bank’s policy allows for brokered deposits up to 10% of total deposits and public unit deposits up to 5% of total deposits.  At September 30, 2011, the Bank had brokered deposits of $83.7 million, or approximately 2% of total deposits and public unit deposits of $106.4 million, or approximately 2.5% of total deposits.  Management continuously monitors the wholesale deposit market for opportunities to obtain brokered and public unit deposits at attractive rates.  The Bank has pledged securities with an estimated fair value of $124.8 million as collateral for public unit deposits.  The securities pledged as collateral for public unit deposits are held under joint custody receipt by the FHLB and generally will be released upon deposit maturity. 

43

At September 30, 2011, $1.39 billion of the $2.62 billion in certificates of deposit were scheduled to mature within one year.  Included in the $1.39 billion are $85.9 million in public unit deposits.  Based on our deposit retention experience and our current pricing strategy, we anticipate the majority of the maturing retail certificates of deposit will renew or transfer to other deposit products at the prevailing rate, although no assurance can be given in this regard. 

As of September 30, 2011, the Bank had entered into $8.8 million of agreements, of which $1.7 million are outstanding, in connection with the remodeling of the Bank’s home office.  The existing home office building was constructed in 1961 and has been fully depreciated since 1997.  The project scope includes replacement of all mechanical and electrical systems, interior finishes, and exterior building components.  The completed project will result in a more energy efficient building which is expected to lower our utility and maintenance expenses.  There will be additional agreements and expenses related to the project through fiscal year 2013, which is when the project is expected to be completed.  Costs related to the project will be capitalized and depreciated according to the estimated useful life of the assets as they are placed in service. 

Limitations on Dividends and Other Capital Distributions   

Although savings and loan holding companies are not currently subject to regulatory capital requirements or specific restrictions on the payment of dividends or other capital distributions, the OCC does prescribe such restrictions on subsidiary savings associations. The OCC regulations impose restrictions on savings institutions with respect to their ability to make distributions of capital, which include dividends, stock redemptions or repurchases, cash-out mergers and other transactions charged to the capital account.  In addition, the financial impact of a holding company on its subsidiary institution is a matter that is evaluated by the OCC and the agency has authority to order cessation of activities or divestiture of subsidiaries deemed to pose a threat to the safety and soundness of the institution. 

Generally under OCC and FRB regulations, savings institutions, such as the Bank, may make capital distributions during any calendar year equal to earnings of the previous two calendar years and current year-to-date earnings.  It is generally required under OCC and FRB regulations that the Bank remain well-capitalized before and after the proposed distribution.  However, an institution deemed to be in need of more than normal supervision by the OCC and FRB may have its dividend authority restricted by the OCC and FRB.  Savings institutions proposing to make any capital distribution within these limits need only submit written notice to the OCC and FRB 30 days prior to such distribution.  The OCC and FRB may object to the distribution during that 30-day period based on safety and soundness concerns.  Savings institutions that desire to make a larger capital distribution, or are under special restrictions, or are not, or would not be, well-capitalized following a proposed capital distribution, however, must obtain OCC and FRB approval prior to making such distribution.

The long-term ability of the Company to pay dividends to its stockholders is based primarily upon the ability of the Bank to make capital distributions to the Company.  So long as the Bank continues to remain “well-capitalized” after each capital distribution, operate in a safe and sound manner, provide the OCC and FRB with updated capital levels, non-performing asset balances and ACL information as requested, and comply with the interest rate risk management guidelines of the OCC and FRB, it is management’s belief that the OCC and FRB will continue to allow the Bank to distribute its net income to the Company, although no assurance can be given in this regard.

In connection with the corporate reorganization, a “liquidation account” was established for the benefit of certain depositors of the Bank in an amount equal to MHC’s ownership interest in the retained earnings of Capitol Federal Financial as of June 30, 2010.  Under applicable federal banking regulations, neither the Company nor the Bank is permitted to pay dividends of its capital stock to its stockholders if stockholders’ equity would be reduced below the amount of the liquidation account at that time.

During fiscal year 2011, the Company paid $150.1 million in cash dividends, which consisted of cash dividends of $17.0 million paid prior to the corporate reorganization, and $133.1 million paid since the corporate reorganization. Dividend payments depend upon a number of factors including the Company's financial condition and results of operations, the Bank’s regulatory capital requirements, regulatory limitations on the Bank's ability to make capital distributions to the Company, and the amount of cash at the holding company.

At September 30, 2011, Capitol Federal Financial, Inc., at the holding company level, had $113.1 million on deposit with the Bank and $362.9 million in investment securities.  As of September 30, 2011, $90.3 million of these securities will mature within 90 days.  Under current regulatory restrictions, we may not repurchase our stock during the first year following our corporate reorganization except under very limited circumstances.  The Company intends to begin repurchasing shares at the end of this one-year moratorium, which expires in December 2011, subject to market conditions and other factors.

44

Contingencies

In the normal course of business, the Company and its subsidiary are named defendants in various lawsuits and counter claims.  In the opinion of management, after consultation with legal counsel, none of the currently pending suits are expected to have a materially adverse effect on the Company’s consolidated financial statements for the year ended September 30, 2011 or future periods.

Regulatory Capital

Consistent with management’s goals to operate a sound and profitable financial organization, we actively seek to maintain a “well capitalized” status in accordance with regulatory standards.  Total equity under GAAP for the Bank was $1.40 billion at September 30, 2011, or 15.4% of total Bank assets on that date.  As of September 30, 2011, the Bank exceeded all capital requirements of the OCC.  The Company currently does not have any regulatory capital requirements, but under the Dodd-Frank Act will become subject to regulatory capital requirements beginning July 21, 2015.  The following table presents the Bank’s regulatory capital ratios at September 30, 2011 based upon regulatory guidelines.

				Regulatory
				Requirement
	Bank			For “Well-
	Ratios			Capitalized” Status
Tangible equity		15.1	%		N/A
Tier 1 (core) capital		15.1			5.0	%
Tier 1 (core) risk-based capital		37.9			6.0
Total risk-based capital		38.3			10.0

45

Off-Balance Sheet Arrangements, Commitments and Contractual Obligations

The Company, in the normal course of business, makes commitments to buy or sell assets or to incur or fund liabilities.  Commitments may include, but are not limited to:

·   the origination, purchase, or sale of loans;

·   the purchase or sale of investment securities and MBS;

·   extensions of credit on home equity loans, construction loans, and commercial loans;

·   terms and conditions of operating leases; and

·   funding withdrawals of certificate of deposits at maturity.

The following table summarizes our contractual obligations and other material commitments as of September 30, 2011.

	Maturity Range
							One to			Three to
				Less than			three			five			More than
	Total			one year			years			years			five years
	(Dollars in thousands)
Operating leases	$	11,801		$	1,279		$	2,051		$	1,547		$	6,924
Certificates of Deposit	$	2,624,292		$	1,390,231		$	864,058		$	366,488		$	3,515
Weighted average rate		1.87	%		1.65	%		2.00	%		2.40	%		2.46	%
FHLB Advances	$	2,400,000		$	350,000		$	975,000		$	475,000		$	600,000
Weighted average rate		3.37	%		3.35	%		3.45	%		3.67	%		3.01	%
Repurchase Agreements	$	515,000		$	150,000		$	245,000		$	20,000		$	100,000
Weighted average rate		4.00	%		4.41	%		3.97	%		4.45	%		3.35	%
Commitments to originate and
purchase loans	$	170,312		$	170,312		$	--		$	--		$	--
Weighted average rate		3.76	%		3.76	%		--	%		--	%		--	%
Commitments to fund unused
home equity lines of credit
and commercial commitments	$	265,531		$	265,531		$	--		$	--		$	--
Weighted average rate		4.53	%		4.53	%		--	%		--	%		--	%
Unadvanced portion of
construction loans	$	22,531		$	22,531		$	--		$	--		$	--
Weighted average rate		4.22	%		4.22	%		--	%		--	%		--	%

Excluded from the table above are income tax liabilities of $68 thousand related to uncertain income tax positions.  The amounts are excluded as management is unable to estimate the period of cash settlement as it is contingent on the statute of limitations expiring without examination by the respective taxing authority.

A percentage of commitments to originate mortgage loans are expected to expire unfunded, so the amounts reflected in the table above are not necessarily indicative of future liquidity requirements.  Additionally, the Bank is not obligated to honor commitments to fund unused home equity lines of credit if a customer is delinquent or otherwise in violation of the loan agreement.

We anticipate we will continue to have sufficient funds, through repayments and maturities of loans and securities, deposits and borrowings, to meet our current commitments.

46

Stockholder Return Performance Presentation

The line graph below compares the cumulative total stockholder return on the Company’s common stock to the cumulative total return of a broad index of the Nasdaq Stock Market, the Hemscott Savings and Loan index, and the SNL Midcap Bank and Thrift industry index for the period September 30, 2006 through September 30, 2011.  The information presented below assumes $100 invested on September 30, 2006 in the Company’s common stock and in each of the indices, and assumes the reinvestment of all dividends.  Historical stock price performance is not necessarily indicative of future stock price performance.  The SNL Midcap Bank and Thrift index will replace the Hemscott Savings and Loan index going forward, as the Hemscott Savings and Loan index was discontinued in May 2011.

Index	2006	2007	2008	2009	2010	2011
Capitol Federal Financial, Inc.	100.00	101.79	139.57	109.03	87.77	94.06
NASDAQ Composite	100.00	120.52	94.10	96.49	108.79	112.05
SNL Midcap Bank and Thrift index	100.00	95.54	55.77	36.42	38.32	31.20
Hemscott Savings and Loans	100.00	70.86	33.99	24.94	25.62	--

47

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended, the “Act”).  The Company’s internal control system is a process designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation of published financial statements.

The Company’s internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and provide reasonable assurance regarding prevention or untimely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the Company’s financial statements.

All internal control systems, no matter how well designed, have inherent limitations.  Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial reporting.  Further, because of changes in conditions, the effectiveness of any system of internal control may vary over time.  The design of any internal control system also factors in resource constraints and consideration for the benefit of the control relative to the cost of implementing the control.  Because of these inherent limitations in any system of internal control, management cannot provide absolute assurance that all control issues and instances of fraud within the Company have been detected.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2011.  In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework.  Management has concluded that the Company maintained an effective system of internal control over financial reporting based on these criteria as of September 30, 2011.

The Company’s independent registered public accounting firm, Deloitte & Touche LLP, who audited the consolidated financial statements included in the Company’s annual report, has issued an audit report on the Company’s internal control over financial reporting as of September 30, 2011 and it is included herein.

 

John B. Dicus, Chairman, President

   and Chief Executive Officer

 

Kent G. Townsend, Executive Vice President,

   Chief Financial Officer and Treasurer

48

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Capitol Federal Financial, Inc. and subsidiary

Topeka, Kansas

We have audited the internal control over financial reporting of Capitol Federal Financial, Inc. and subsidiary (the “Company”) as of September 30, 2011, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.  Because management’s assessment and our audit were conducted to meet the reporting requirements of Section 112 of the Federal Deposit Insurance Corporation Improvement Act (FDICIA), management’s assessment and our audit of the Company’s internal control over financial reporting included controls over the preparation of the schedules equivalent to the basic financial statements in accordance with the instructions for the Consolidated Financial Statements for Bank Holding Companies (Form FR Y-9C).  The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.  Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.  Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.  We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's Board of Directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis.  Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

49

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2011, based on the criteria established in Internal Control -  Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended September 30, 2011 of the Company and our report dated November 29, 2011 expressed an unqualified opinion on those financial statements.

Kansas City, Missouri

November 29, 2011

50

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Capitol Federal Financial, Inc. and subsidiary

Topeka, Kansas

We have audited the accompanying consolidated balance sheets of Capitol Federal Financial, Inc. and subsidiary (the “Company”) as of September 30, 2011 and 2010, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended September 30, 2011.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Capitol Federal Financial, Inc. and subsidiary as of September 30, 2011 and 2010, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2011, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of September 30, 2011, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated November 29, 2011 expressed an unqualified opinion on the Company's internal control over financial reporting.

 

Kansas City, Missouri

November 29, 2011

51

CAPITOL FEDERAL FINANCIAL, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2011 and 2010 (Dollars in thousands)
ASSETS	2011		2010
CASH AND CASH EQUIVALENTS (includes interest-earning deposits of
$105,292 and $50,771)	$	121,070	$	65,217
SECURITIES:
Available-for-sale (“AFS”), at fair value (amortized cost of $1,443,529 and $1,009,142)		1,486,439		1,060,366
Held-to-maturity (“HTM”), at cost (fair value of $2,434,392 and $1,913,454)		2,370,117		1,880,154
LOANS RECEIVABLE, net (less allowance for credit losses “ACL” of
$15,465 and $14,892 )		5,149,734		5,168,202
BANK-OWNED LIFE INSURANCE (“BOLI”)		56,534		54,710
CAPITAL STOCK OF FEDERAL HOME LOAN BANK (“FHLB”), at cost		126,877		120,866
ACCRUED INTEREST RECEIVABLE		29,316		30,220
PREMISES AND EQUIPMENT, net		48,423		41,260
REAL ESTATE OWNED (“REO”), net		11,321		9,920
INCOME TAXES RECEIVABLE, net		--		716
OTHER ASSETS		50,968		55,499
TOTAL ASSETS	$	9,450,799	$	8,487,130
			(Continued)

52

CAPITOL FEDERAL FINANCIAL, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2011 and 2010 (Dollars in thousands)
LIABILITIES AND STOCKHOLDERS’ EQUITY	2011			2010
LIABILITIES:
Deposits	$	4,495,173		$	4,386,310
Advances from FHLB		2,379,462			2,348,371
Other borrowings		515,000			668,609
Advance payments by borrowers for taxes and insurance		55,138			55,036
Income taxes payable		2,289			--
Deferred income tax liabilities, net		20,447			33,244
Accounts payable and accrued expenses		43,761			33,610
Total liabilities		7,511,270			7,525,180
COMMITMENTS AND CONTINGENCIES (NOTE 12)
STOCKHOLDERS’ EQUITY:
Preferred stock, $.01 par value; 100,000,000 shares authorized,
no shares issued or outstanding		--			--
Common stock, $.01 par value; 1,400,000,000 shares authorized,
167,498,133 shares issued;  167,498,133 and 73,992,678 shares
outstanding as of September 30, 2011 and 2010, respectively		1,675			915
Additional paid-in capital		1,392,691			457,795
Unearned compensation, Employee Stock Ownership Plan (“ESOP”)		(50,547	)		(6,050	)
Unearned compensation, Recognition and Retention Plan (“RRP”)		(124	)		(255	)
Retained earnings		569,127			801,044
Accumulated other comprehensive income (“AOCI”), net of tax		26,707			31,862
		1,939,529			1,285,311
Treasury stock, at cost, 0 and 17,519,609 shares as of
September 30, 2011 and 2010, respectively, at cost		--			(323,361	)
Total stockholders’ equity		1,939,529			961,950
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	9,450,799		$	8,487,130

See notes to consolidated financial statements                                                                                                     (Concluded)

53

CAPITOL FEDERAL FINANCIAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED SEPTEMBER 30, 2011, 2010, and 2009 (Dollars in thousands, except per share data)
	2011		2010		2009
INTEREST AND DIVIDEND INCOME:
Loans receivable	$	251,909	$	282,307	$	305,782
Mortgage-backed securities (“MBS”)		71,332		71,859		97,926
Investment securities		19,077		15,682		5,533
Capital stock of FHLB		3,791		3,966		3,344
Cash and cash equivalents		756		237		201
Total interest and dividend income		346,865		374,051		412,786
INTEREST EXPENSE:
FHLB advances		90,298		97,212		106,551
Deposits		63,568		79,216		100,471
Other borrowings		24,265		28,058		29,122
Total interest expense		178,131		204,486		236,144
NET INTEREST INCOME		168,734		169,565		176,642
PROVISION FOR CREDIT LOSSES		4,060		8,881		6,391
NET INTEREST INCOME AFTER PROVISION
FOR CREDIT LOSSES		164,674		160,684		170,251
OTHER INCOME:
Retail fees and charges		15,509		17,789		18,023
Insurance commissions		3,071		2,476		2,440
Loan fees		2,449		2,592		2,327
Income from BOLI		1,824		1,202		1,158
Gains on securities, net		--		6,454		--
Other income, net		2,142		3,898		4,646
Total other income		24,995		34,411		28,594
					(Continued)

54

CAPITOL FEDERAL FINANCIAL, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

YEARS ENDED SEPTEMBER 30, 2011, 2010, and 2009 (Dollars in thousands, except per share data)

	2011		2010		2009
OTHER EXPENSES:
Salaries and employee benefits		44,913		42,666		43,318
Communications, information technology, and occupancy		16,051		15,554		15,226
Regulatory and outside services		5,224		4,769		4,318
Federal insurance premium		5,222		7,452		7,558
Deposit and loan transaction costs		5,157		5,300		5,434
Advertising and promotional		3,723		6,027		6,918
Mortgage servicing activity, net		2,434		600		3,148
Contribution to Capitol Federal Foundation (“Foundation”)		40,000		--		--
Other expenses, net		9,593		7,362		7,701
Total other expenses		132,317		89,730		93,621
INCOME BEFORE INCOME TAX EXPENSE		57,352		105,365		105,224
INCOME TAX EXPENSE		18,949		37,525		38,926
NET INCOME	$	38,403	$	67,840	$	66,298
Basic earnings per share (“EPS”)	$	0.24	$	0.41	$	0.40
Diluted EPS	$	0.24	$	0.41	$	0.40
Dividends declared per public share	$	1.63	$	2.29	$	2.11
Basic weighted average common shares		162,625,274		165,862,176		165,576,334
Diluted weighted average common shares		162,632,665		165,899,445		165,721,176

                                                                                                                                            (Concluded)

See notes to consolidated financial statements

55

CAPITOL FEDERAL FINANCIAL, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

YEARS ENDED SEPTEMBER 30, 2011, 2010, and 2009 (Dollars in thousands, except per share data)               

			Additional		Unearned															Total
	Common		Paid-In		Compensation -						Retained			AOCI			Treasury			Stockholders’
	Stock		Capital		ESOP			RRP			Earnings			(Loss)			Stock			Equity
Balance at October 1, 2008	$	915	$	445,391	$	(10,082	)	$	(553	)	$	759,375		$	(5,968	)	$	(317,862	)	$	871,216
Comprehensive Income:
Net income, fiscal year 2009												66,298									66,298
Changes in unrealized gain/losses on
securities AFS, net of deferred
income tax $24,210															39,838						39,838
Total comprehensive income																					106,136
ESOP activity, net				5,913		2,016															7,929
RRP activity, net				131					(100	)								24			55
Stock based compensation
- stock options and RRP				281					323												604
Acquisition of treasury stock																		(2,426	)		(2,426	)
Stock options exercised				1,156														697			1,853
Dividends on common stock to
stockholders ($2.11 per public share)												(44,069	)								(44,069	)
Balance at September 30, 2009		915		452,872		(8,066	)		(330	)		781,604			33,870			(319,567	)		941,298
Comprehensive Income:
Net income, fiscal year 2010												67,840									67,840
Changes in unrealized gain/losses on
securities AFS, net of deferred
income tax $1,221															(2,008	)					(2,008	)
Total comprehensive income																					65,832
ESOP activity, net				4,465		2,016															6,481
RRP activity, net				123					(163	)								47			7
Stock based compensation
- stock options and RRP				214					238												452
Acquisition of treasury stock																		(4,019	)		(4,019	)
Stock options exercised				121														178			299
Dividends on common stock to
stockholders ($2.29 per public share)												(48,400	)								(48,400	)
Balance at September 30, 2010		915		457,795		(6,050	)		(255	)		801,044			31,862			(323,361	)		961,950
																				(Continued)

56

CAPITOL FEDERAL FINANCIAL, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

YEARS ENDED SEPTEMBER 30, 2011, 2010, and 2009 (Dollars in thousands, except per share data)               

				Additional			Unearned														Total
	Common			Paid-In			Compensation -						Retained			AOCI			Treasury		Stockholders’
	Stock			Capital			ESOP			RRP			Earnings			(Loss)			Stock		Equity
Comprehensive Income:
Net income, fiscal year 2011														38,403								38,403
Changes in unrealized gain/losses on
securities AFS, net of deferred
income tax $3,159																	(5,155	)				(5,155	)
Total comprehensive income																						33,248
ESOP activity, net					3,259			2,763														6,022
RRP activity, net					(4	)																(4	)
Stock based compensation
- stock options and RRP					131						131											262
Acquisition of treasury stock																						--
Stock options exercised					42																	42
Dividends on common stock to
stockholders ($1.63 per public share)														(150,110	)							(150,110	)
Corporate reorganization:
Merger of Capitol Federal
Savings Bank MHC		(522	)		1,997									(1,223	)							252
Retirement of treasury stock		(175	)		(204,199	)								(118,987	)					323,361		--
Exchange of common stock		276			(323	)																(47	)
Proceeds from stock offering,
net of offering expenses		1,181			1,133,993																	1,135,174
Purchase of common stock by ESOP								(47,260	)													(47,260	)
Balance at September 30, 2011	$	1,675		$	1,392,691		$	(50,547	)	$	(124	)	$	569,127		$	26,707		$	--	$	1,939,529

See notes to consolidated financial statements           (Concluded)

57

CAPITOL FEDERAL FINANCIAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 2011, 2010, AND 2009 (Dollars in thousands)
	2011			2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	38,403		$	67,840		$	66,298
Adjustments to reconcile net income to net cash provided by
operating activities:
FHLB stock dividends		(3,791	)		(3,966	)		(3,344	)
Provision for credit losses		4,060			8,881			6,391
Originations of loans receivable held-for-sale (“LHFS”)		(11,715	)		(47,488	)		(851	)
Proceeds from sales of LHFS		13,483			46,140			97,838
Amortization and accretion of premiums and discounts on securities		8,100			5,940			2,644
Depreciation and amortization of premises and equipment		4,397			4,584			5,132
Amortization of deferred amounts related to FHLB advances, net		7,091			6,676			3,829
Common stock committed to be released for allocation - ESOP		6,022			6,481			7,929
Stock based compensation - stock options and RRP		262			452			604
Provision for deferred income taxes		(9,647	)		3,466			3,548
Gain on the sale of trading securities received in the loan swap transaction		--			(6,454	)		--
Changes in:
Prepaid federal insurance premium, net		4,718			(20,447	)		--
Accrued interest receivable		904			2,420			1,064
Other assets, net		637			(7,035	)		837
Income taxes payable/receivable		3,004			(6,697	)		8
Accounts payable and accrued expenses		(143	)		(1,631	)		(1,209	)
Net cash provided by operating activities		65,785			59,162			190,718
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of trading securities received in the loan swap transaction		--			199,144			--
Purchase of AFS securities		(790,083	)		--			(424,498	)
Purchase of HTM securities		(1,979,789	)		(1,662,009	)		(215,263	)
Proceeds from calls, maturities and principal reductions of AFS securities		351,636			557,141			396,101
Proceeds from calls, maturities and principal reductions of HTM securities		1,485,786			628,350			208,591
Proceeds from the redemption of capital stock of FHLB		4,942			16,185			3,688
Purchases of capital stock of FHLB		(7,162	)		(21	)		(9,002	)
Loan originations and purchases, net of principal collected
and deferred loan fees		(105	)		219,628			(394,785	)
Purchases of premises and equipment		(12,751	)		(8,183	)		(13,053	)
Proceeds from sales of REO		14,205			11,273			7,669
Net cash used in investing activities		(933,321	)		(38,492	)		(440,552	)
							(Continued)

58

CAPITOL FEDERAL FINANCIAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 2011, 2010, AND 2009 (Dollars in thousands)
	2011			2010			2009
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid		(150,110	)		(48,400	)		(44,069	)
Deposits, net of withdrawals		126,553			157,701			304,726
Proceeds from borrowings		644,162			300,000			1,561,612
Repayments on borrowings		(773,771	)		(395,000	)		(1,581,612	)
Deferred FHLB prepayment penalty		--			(875	)		(38,388	)
Change in advance payments by borrowers for taxes and insurance		102			(331	)		2,154
Net proceeds from common stock offering (deferred offering costs)		1,076,411			(5,982	)		--
Acquisitions of treasury stock		--			(4,019	)		(2,426	)
Stock options exercised		35			210			1,337
Excess tax benefits from stock options		7			89			516
Net cash provided by financing activities		923,389			3,393			203,850
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		55,853			24,063			(45,984	)
CASH AND CASH EQUIVALENTS:
Beginning of Period		65,217			41,154			87,138
End of Period	$	121,070		$	65,217		$	41,154
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Income tax payments	$	25,517		$	40,664		$	35,334
Interest payments	$	172,332		$	199,433		$	236,137
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Note received from ESOP in exchange for common stock	$	47,260		$	--		$	--
Customer deposit holds related to common stock offering	$	17,690		$	--		$	--
Commitment to fund low-income housing partnerships	$	9,618		$	--		$	--
Loans transferred to REO	$	15,048		$	13,717		$	10,730
Transfer of loans receivable to LHFS, net	$	--		$	--		$	94,672
Swap of loans for trading securities	$	--		$	193,889		$	--
See notes to consolidated financial statements.							(Concluded)

59

CAPITOL FEDERAL FINANCIAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 2011, 2010, and 2009                                                                                             

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business - Capitol Federal Financial, Inc. (the “Company”) provides a full range of retail banking services through its wholly-owned subsidiary, Capitol Federal Savings Bank (the “Bank”) which has 35 traditional and 10 in-store banking offices serving primarily the metropolitan areas of Topeka, Wichita, Lawrence, Manhattan, Emporia and Salina, Kansas and portions of the metropolitan area of greater Kansas City. The Bank emphasizes mortgage lending, primarily originating and purchasing one- to four-family mortgage loans and providing personal retail financial services.  The Bank is subject to competition from other financial institutions and other companies that provide financial services.

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) was signed into law.  The Dodd-Frank Act, among other things, required the Office of Thrift Supervision (the “OTS”) to be merged into the Office of the Comptroller of the Currency (the “OCC”).  On July 21, 2011, the OCC assumed all functions and authority from the OTS relating to federally chartered savings banks, and the Board of Governors of the Federal Reserve System (“FRB”) assumed all functions and authority from the OTS relating to savings and loan holding companies.   Effective July 21, 2011, the Bank is regulated by the OCC and the Company is regulated by the FRB.  Prior to that date, the Bank and Company were regulated by the OTS.  The Bank is also regulated by the Federal Deposit Insurance Corporation (the “FDIC”).  The Bank and Company are subject to periodic examinations by the above noted regulatory authorities.

The Bank has an expense sharing agreement with the Company that covers the reimbursement of certain expenses that are allocable to the Company.  These expenses include compensation, rent for leased office space, and general overhead expenses.

The Company and its subsidiary have a tax allocation agreement.  The Bank is the paying agent to the taxing authorities for the group for all periods presented.  Each company is liable for taxes as if separate tax returns were filed and reimburses the Bank for its related tax liability.  If any entity has a tax benefit due to a taxable loss, the Bank reimburses the entity for the related tax benefit.

The Company’s ability to pay dividends is dependent, in part, upon its ability to obtain capital distributions from the Bank. The future dividend policy of the Company is subject to the discretion of the Board of Directors and will depend upon a number of factors, including the Company’s financial condition and results of operations, the Bank’s regulatory capital requirements, regulatory limitations on the Bank’s ability to make capital distributions to the Company, and the amount of cash at the holding company.  Holders of common stock will be entitled to receive dividends as of and when declared by the Board of Directors of the Company out of funds legally available for that purpose.

Basis of Presentation - In December 2010, Capitol Federal Financial completed its conversion from a mutual holding company form of organization to a stock form of organization (“corporate reorganization”).  Capitol Federal Financial, which owned 100% of the Bank, was succeeded by the Company, a new Maryland corporation.  As part of the corporate reorganization, Capitol Federal Savings Bank MHC’s (“MHC”) ownership interest in Capitol Federal Financial was sold in a public offering.  Gross proceeds from the offering were $1.18 billion and related offering expenses were $46.7 million, of which $6.0 million were incurred and deferred in fiscal year 2010.  The publicly held shares of Capitol Federal Financial were exchanged for new shares of common stock of the Company.  The exchange ratio was 2.2637 and ensured that immediately after the corporate reorganization the public stockholders of Capitol Federal Financial owned the same aggregate percentage of the Company’s common stock that they owned of Capitol Federal Financial’s common stock immediately prior to the reorganization.  All share information used to calculate EPS in the consolidated financial statements prior to the corporate reorganization has been revised to reflect the 2.2637 exchange ratio.  In conjunction with the corporate reorganization, the Company contributed $40.0 million of cash to the Bank’s charitable foundation, Capitol Federal Foundation.  Additionally, a “liquidation account” has been established for the benefit of certain depositors of the Bank in an amount equal to MHC’s ownership interest in the retained earnings of Capitol Federal Financial as of June 30, 2010.  As of September 30, 2011, the balance of the liquidation account was $405.4 million.  Under OCC regulations, neither the Company nor the Bank is permitted to pay dividends on its capital stock to its stockholders if stockholders’ equity would be reduced below the current amount of the liquidation account at that time.

The consolidated financial statements after the corporate reorganization in December 2010 include the accounts of the Company and its wholly owned subsidiary, the Bank.  The consolidated financial statements prior to the corporate reorganization include the accounts of Capitol Federal Financial and its wholly owned subsidiary, the Bank.  The Bank has a wholly owned subsidiary, Capitol Funds, Inc.  Capitol Funds, Inc. has a wholly owned subsidiary, Capitol Federal Mortgage Reinsurance Company.  All intercompany accounts and transactions have been eliminated. 

60

These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The ACL is a significant estimate that involves a high degree of complexity and requires management to make difficult and subjective judgments and assumptions about highly uncertain matters.  The use of different judgments and assumptions could cause reported results to differ significantly.  In addition, bank regulators periodically review the Bank’s ACL.  The bank regulators have the ability to require the Bank, as they can require all banks, to increase the ACL or recognize additional charge-offs based upon their judgments, which may differ from management’s judgments.  Any increases in the ACL or recognition of additional charge-offs required by bank regulators could adversely affect the Company’s financial condition and results of operations.

Cash and Cash Equivalents - Cash and cash equivalents include cash on hand and amounts due from banks.  The Bank has acknowledged informal agreements with other banks where it maintains deposits. Under these agreements, service fees charged to the Bank are waived provided certain average compensating balances are maintained throughout each month.  FRB regulations require federally chartered savings banks to maintain cash reserves against their transaction accounts.  Required reserves must be maintained in the form of vault cash, an account at a Federal Reserve Bank, or a pass-through account as defined by the FRB.  The Bank is in compliance with the FRB requirements.  For the years ended September 30, 2011 and 2010, the average daily balance of required reserves at the Federal Reserve Bank was $9.3 million and $9.7 million, respectively.

Securities - Securities include mortgage-backed and agency securities issued primarily by United States Government-Sponsored Enterprises (“GSE”), including Federal National Mortgage Association (“FNMA”), Federal Home Loan Mortgage Corporation (“FHLMC”) and FHLB, United States Government agencies, including Government National Mortgage Association (“GNMA”), and municipal bonds.  Securities are classified as HTM, AFS, or trading based on management’s intention on the date of purchase.  Generally, classifications are made in response to liquidity needs, asset/liability management strategies, and the market interest rate environment at the time of purchase.

Securities that management has the intent and ability to hold to maturity are classified as HTM and reported at amortized cost. Such securities are adjusted for the amortization of premiums and discounts which are recognized as adjustments to interest income over the life of the securities using the level-yield method.

Securities that management may sell if necessary for liquidity or asset management purposes are classified as AFS and reported at fair value, with unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) within stockholders’ equity, net of deferred income taxes.  The amortization of premiums and discounts are recognized as adjustments to interest income over the life of the securities using the level-yield method.  Gains or losses on the disposition of AFS securities are recognized using the specific identification method. Estimated fair values of AFS securities are based on one of three methods:  1) quoted market prices where available, 2) quoted market prices for similar instruments if quoted market prices are not available, and 3) unobservable data that represents the Bank’s assumptions about items that market participants would consider in determining fair value where no market data is available.  See additional discussion of fair value of AFS securities in Note 14.

Securities that are purchased and held principally for resale in the near future are classified as trading securities and are reported at fair value, with unrealized gains and losses included in other income in the consolidated statements of income.  During fiscal year 2010, the Bank held trading securities for a limited time.  The securities were received in conjunction with the swap of originated fixed-rate mortgage loans with FHLMC for MBS.  During the fiscal year ended September 30, 2011, neither the Company nor the Bank maintained a trading securities portfolio.

Management monitors the securities portfolio for impairment on an ongoing basis and performs a formal review quarterly. The process involves monitoring market events and other items that could impact issuers.  The evaluation includes, but is not limited to, such factors as:  the nature of the investment, the length of time the security has had a fair value less than the amortized cost basis, the cause(s) and severity of the loss, expectation of an anticipated recovery period, recent events specific to the issuer or industry including the issuer’s financial condition and current ability to make future payments in a timely manner, external credit ratings and recent downgrades in such ratings, management’s intent to sell and whether it is more likely than not management would be required to sell prior to recovery for debt securities. Management determines whether other-than-temporary losses should be recognized for impaired securities by assessing all known facts and circumstances surrounding the securities.  If management intends to sell an impaired security or if it is more likely than not that management will be required to sell an impaired security before recovery of its amortized cost basis, an other-than-temporary impairment has occurred and the difference between amortized cost and fair value will be recognized as a loss in earnings and the security will be written down to fair value.  Such losses would be included in other income in the consolidated statements of income.

61

Loans Receivable - Loans receivable that management has the intent and ability to hold for the foreseeable future are carried at the amount of unpaid principal, net of ACL, undisbursed loan funds, unamortized premiums and discounts, and deferred loan origination fees and costs.  Net loan origination fees and costs and premiums and discounts are amortized as yield adjustments to interest income using the level-yield method, adjusted for the estimated prepayment speeds of the related loans when applicable.  Interest on loans is credited to income as earned and accrued only if deemed collectible.

A loan is considered delinquent when payment has not been received within 30 days of its contractual due date.  The accrual of income on loans is discontinued when interest or principal payments are 90 days in arrears.  Loans on which the accrual of income has been discontinued are designated as non-accrual loans and outstanding interest previously credited beyond 90 days delinquent is reversed.  A non-accrual loan is returned to accrual status once the contractual payments have been made to bring the loan less than 90 days past due.

Existing loan customers, whose loans have not been sold to third parties and who have not been delinquent on their contractual loan payments during the previous 12 months have the opportunity, for a fee, to endorse their original loan terms to current loan terms being offered.  The fee assessed for endorsing the mortgage loan is deferred and amortized over the remaining life of the endorsed loan using the level-yield method and is reflected as an adjustment to interest income.  Each endorsement is examined on a loan-by-loan basis and if the new loan terms represent more than a minor change to the loan, then the unamortized balance of the pre-endorsement deferred fees and/or costs associated with the mortgage loan are recognized in interest income at the time of the endorsement.  If the endorsement of terms does not represent more than a minor change to the loan, then the unamortized balance of the pre-endorsement deferred fees or costs continue to be deferred.

For borrowers experiencing financial difficulties, the Bank may grant a concession to the borrower.  Generally, the Bank grants a short-term payment accommodation to borrowers that are experiencing a temporary cash flow problem.  The most frequently used accommodation is to reduce the monthly payment amount for a period of six to 12 months, often by requiring payments of only interest and escrow during this period. These restructurings result in an extension of the maturity date of the loan.  For more severe situations requiring long-term solutions, the Bank also offers interest rate reductions to currently-offered rates and more lengthy extensions of the maturity date.  All such concessions are considered a troubled debt restructuring (“TDR”).  The Bank does not forgive principal or interest nor does it commit to lend additional funds to debtors whose terms have been modified in TDRs.

The Company adopted Accounting Standards Update (“ASU”) No. 2011-02, Receivables (Topic 310): A Creditor's Determination of Whether a Restructuring Is a Troubled Debt Restructuring, (ASU 2011-02)on July 1, 2011.  ASU No. 2011-02 provides additional guidance to creditors for evaluating whether a restructuring of a loan is a TDR.  In evaluating whether a loan restructuring constitutes a TDR, a creditor must separately conclude that the restructuring constitutes a concession to the borrower and the borrower is experiencing financial difficulties.

As a result of adopting the ASU, management reassessed all restructurings that occurred on or after October 1, 2010, for identification as TDRs.  Management identified certain endorsed loans that are now required to be reported as TDRs due to decreases in soft credit scores and/or estimated loan-to-value (“LTV”) ratios since the time the loan was originated.  Because of these decreases, the borrower could be experiencing financial difficulties even though they have not been delinquent in the previous 12 months on their existing loan payments.  These loans had been measured under the general valuation allowance methodology, prior to the adoption of ASU 2011-02.  Upon adoption, management classified the loans as impaired and began measuring the loans under the specific valuation allowance (“SVA”) methodology.  Management will continue to apply the SVA methodology to these loans as long as they are classified as impaired.

Additionally, management identified certain loan restructurings that occurred on or after October 1, 2010, where the loan restructurings resulted in an insignificant delay in the timing of the loan principal payments. The deferral period for these restructured loans was six months or less and any reduction in the principal value of cash flows as a result of the restructuring was due to the insignificant delay in the timing of principal payments. The Bank did not forgive any interest or principal in association with these restructurings.  Upon adoption, management began measuring these loans under the general valuation allowance methodology.

A loan is considered impaired when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the loan agreement.  Interest income on impaired loans is recognized in the period collected unless the ultimate collection of principal is considered doubtful.  Management considers the following loans to be impaired loans: all non-accrual loans, loans classified as substandard, loans with SVAs, and TDRs that have not been performing under the new terms for 12 consecutive months or are required by the accounting literature to be classified as a TDR for the life of the loan due to a reduction in the stated interest rate to a rate lower than the current market rate for new debt with similar risk.

62

Allowance for Credit Losses - The ACL represents management’s best estimate of the amount of known and inherent losses in the loan portfolio as of the balance sheet date.  Management’s methodology for assessing the appropriateness of the ACL consists of a formula analysis for general valuation allowances and the establishment of SVAs for identified problem loans.  Management maintains the ACL through provisions for credit losses that are charged to income.

For one- to four-family loans, losses are charged-off when a loan is transferred to REO or if there is a short-sale of the collateral.  For consumer home equity loans where the Bank holds the first mortgage, if the loan balance is in excess of the fair value and the loan is in foreclosure, the difference between the loan balances and the fair value is charged-off.  Estimated selling costs and private mortgage insurance (“PMI”) proceeds are also taken into consideration when calculating the amount to charge-off for home equity loans.  For consumer home equity loans where the Bank does not hold the first mortgage, foreclosure is pursued or the loan balance is charged-off.  Other consumer loans that are unsecured are entirely charged-off once the loan is 120 days past due.  For multi-family and commercial loans, the Bank records an SVA when it is determined that the collection of all or a portion of a loan may not be collected and the amount of that loss is reasonably estimated.

The Bank’s primary lending emphasis is the origination and purchase of one- to four-family first mortgage loans on residential properties and, to a lesser extent, second mortgage loans on one- to four-family residential properties, resulting in a loan concentration in residential mortgage loans.  The Bank has a concentration of loans secured by residential property located in Kansas and Missouri.  Based on the composition of the Bank’s loan portfolio, the primary risks inherent in the one- to four-family and consumer loan portfolios are the continued weakened economic conditions, continued high levels of unemployment or underemployment, and a continuing decline in residential real estate values.  Any one or a combination of these events may adversely affect borrowers’ ability to repay their loans, resulting in increased delinquencies, non-performing assets, loan losses, and future loan loss provisions.  Although the multi-family and commercial loan portfolio also shares the risk of continued weakened economic conditions, the primary risks for this portfolio include the ability of the borrower to sustain sufficient cash flows from leases and to control expenses to satisfy their contractual debt payments, or the ability to utilize personal and/or business resources to pay their contractual debt payments if the cash flows are not sufficient.  Additionally, if the Bank were to repossess the secured collateral of a multi-family or commercial loan, the pool of potential buyers is limited more than that for a residential property; therefore, the Bank could hold the property for an extended period of time and potentially be forced to sell at a discounted price, resulting in additional losses.

Management considers several quantitative and qualitative factors quarterly while monitoring the credit quality of the loan portfolio and evaluating the adequacy of the ACL.  Such factors include: the trend and composition of delinquent and non-performing loans, the results of foreclosed property and short-sale transactions (historical losses and net charge-offs), increase in and establishment of SVAs, the current status and trends of local and national economies, the trends and current conditions in the residential real estate markets, and loan portfolio growth and concentrations.

Since the Bank’s loan portfolio is primarily concentrated in one- to four-family real estate, management monitors residential real estate market value trends in the Bank’s local market areas and geographic sections of the U.S. by reference to various industry and market reports, economic releases and surveys, and management’s general and specific knowledge of the real estate markets in which the Bank lends, in order to determine what impact, if any, such trends may have on the level of ACL.   Reviewing these quantitative and qualitative factors assists management in evaluating the overall credit quality of the loan portfolio and the reasonableness of the ACL on an ongoing basis, and whether changes need to be made to the Bank’s allowance for credit loss methodology.  Management seeks to apply the ACL methodology in a consistent manner; however, the methodology can be modified in response to changing conditions.  There were no significant modifications to the formula analysis methodology during the year ended September 30, 2011.

The formula analysis for general valuation allowances is updated each quarter.  Within the formula analysis, the loan portfolio is segregated into the following categories:  one- to four-family loans, multi-family and commercial loans, consumer home equity loans, and other consumer loans.  Home equity loans with the same underlying collateral as a one- to four-family loan are combined with the one- to four-family loan in the formula analysis to calculate a combined LTV ratio.  Impaired loans are excluded from the formula analysis as they are individually evaluated for SVAs.  The one- to four-family loan portfolio and related home equity loans are segregated into additional categories based on the following risk characteristics:  originated or purchased from a nationwide lender, interest payments (fixed-rate, adjustable-rate, and interest-only), LTV ratios, borrower’s credit scores, and geographic location.  The categories were derived by management based on reviewing the historical performance of the one- to four-family loan portfolio and taking into consideration current economic conditions, such as trends in residential real estate values in certain areas of the U.S. and unemployment rates.  The geographic location category pertains primarily to certain states in which the Bank has experienced measurable losses on REO and short-sales.

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Quantitative loss factors are applied to each loan category in the formula analysis based on the historical loss experience and current SVAs, adjusted for loan delinquency trends, for each respective loan category.  Each quarter, management reviews the historical loss time periods and utilizes the historical loss time periods believed to be the most reflective of the current economic conditions and recent charge-off experience for each respective loan category.

Qualitative loss factors are applied to each loan category in the formula analysis.  The qualitative factors for the one- to four-family and consumer loan portfolios are:  unemployment rate trends, collateral value trends, credit score trends, and delinquent loan trends.  The qualitative factors for the multi-family and commercial loan portfolio are:  unemployment rate trends, collateral value trends, and delinquent loan trends.  As loans are classified as special mention or become 30 to 89 days delinquent, the qualitative loss factors increase based upon delinquent loan trends.  The qualitative factors were derived by management based on a review of the historical performance of the respective loan portfolios and consideration of current economic conditions and their likely impact to the loan portfolio.

SVAs are established in connection with individual loan reviews of impaired loans.  Since the majority of the Bank’s loan portfolio is composed of residential real estate, determining the estimated fair value of the underlying collateral is important in evaluating the amount of SVAs required for impaired one- to four-family loans.  If the estimated fair value of the collateral, less estimated costs to sell and anticipated PMI proceeds, is less than the current loan balance, an SVA is established for the difference.  Once a purchased one- to four-family loan is 90 days delinquent, new collateral values are obtained through automated valuation models (“AVMs”) or broker price opinions (“BPOs”).  An updated AVM or BPO is then requested approximately every six months while the loan is greater than 90 days delinquent.Due to the relatively stable home values in Kansas and Missouri, new appraisals on originated one- to four- family loans are not obtained until a loan enters foreclosure.  For originated one- to four-family loans and home equity loans that are impaired and the most recent appraisal is more than one year old, management estimates the fair value of the collateral using the most recently published Federal Housing Finance Agency (“FHFA”) index.  For those loans where the FHFA fair value estimate results in a value less than the outstanding loan balance, an updated appraisal is obtained and is used to establish the SVA. If the Bank holds the first and second mortgage, both loans are combined when evaluating the need for an SVA.

Loans with an outstanding balance of $1.5 million or more are reviewed annually if secured by property in one of the following categories:  multi-family (five or more units) property, unimproved land, other improved commercial property, acquisition and development of land projects, developed building lots, office building, single-use building, or retail building.  SVAs are established if necessary, or management may charge-off such losses if deemed appropriate.

Assessing the adequacy of the ACL is inherently subjective.  Actual results could differ from estimates as a result of changes in economic or market conditions.  Changes in estimates could result in a material change in the ACL.  In the opinion of management, the ACL, when taken as a whole, is adequate to absorb estimated losses inherent in the loan portfolio.  However, future adjustments may be necessary if loan portfolio performance or economic or market conditions differ substantially from the conditions that existed at the time of the initial determinations.

Bank-Owned Life Insurance - BOLI is an insurance investment designed to help offset costs associated with the Bank’s compensation and benefit programs.  In the event of the death of an insured individual, the Bank would receive a death benefit.  If the insured individual is employed by the Bank at the time of death, a death benefit will be paid to the insured individual’s designated beneficiary equal to the insured individual’s base compensation at the time BOLI was approved by the Bank’s Board of Directors.  If the individual is not employed by the Bank at the time of death, no death benefits will be paid to the insured individual’s designated beneficiary.

The cash surrender value of the policies is reported in BOLI in the consolidated balance sheets.   Changes in the cash surrender value are recorded in Income from BOLI in the consolidated statements of income.  

Capital Stock of Federal Home Loan Bank - As a member of FHLB Topeka, the Bank is required to acquire and hold shares of FHLB stock.  The Bank’s holding requirement varies based on the Bank’s activities, primarily the Bank’s outstanding advances, with FHLB.  FHLB stock is carried at cost.  Management conducts a periodic review and evaluation of the Bank’s investment in FHLB stock to determine if any impairment exists.  Dividends received on FHLB stock are reflected as interest and dividend income in the consolidated statements of income.

Premises and Equipment - Land is carried at cost. Buildings, leasehold improvements and furniture, fixtures and equipment are carried at cost less accumulated depreciation and leasehold amortization.  Buildings, furniture, fixtures and equipment are depreciated over their estimated useful lives using the straight-line method.  Buildings have an estimated useful life of 39 years. Furniture, fixtures and equipment have an estimated useful life of three to seven years. Leasehold improvements are amortized over the shorter of their estimated useful lives or the term of the respective leases, which is generally three to 15 years.  The costs for major improvements and renovations are capitalized, while maintenance, repairs and minor improvements are charged to operating expenses as incurred.  Gains and losses on dispositions are recorded as other income or other expense as incurred.

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Real Estate Owned - REO primarily represents foreclosed assets held for sale.  REO is reported at the lower of cost or estimated fair value less estimated selling costs (“realizable value.”)  At acquisition, write downs to realizable value are charged to the ACL.  After acquisition, any additional write downs are charged to operations in the period they are identified and are recorded in other expenses on the consolidated statements of income. Costs and expenses related to major additions and improvements are capitalized while maintenance and repairs which do not improve or extend the lives of the respective assets are expensed. Gains and losses on the sale of REO are recognized upon disposition of the property and are recorded in other expenses in the consolidated statements of income.

Income Taxes - The Company utilizes the asset and liability method of accounting for income taxes.  Under this method, deferred income tax assets and liabilities are recognized for the tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities.  The provision for deferred income taxes represents the change in deferred income tax assets and liabilities excluding the tax effects of the change in net unrealized gain (loss) on AFS securities and changes in the market value of vested RRP shares.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.  Certain tax benefits attributable to stock options and RRP shares are credited to additional paid-in capital.  The Company will record a valuation allowance to reduce its deferred income tax assets when there is uncertainty regarding the ability to realize their benefit.

Certain accounting literature prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return.  Accruals of interest and penalties related to unrecognized tax benefits are recognized in income tax expense.

Employee Stock Ownership Plan - The funds borrowed by the ESOP from the Company to purchase the Company’s common stock are being repaid from the Bank’s contributions and dividends paid on unallocated ESOP shares.  The shares pledged as collateral are reported as a reduction of stockholders’ equity at cost.  As ESOP shares are committed to be released from collateral each quarter, the Company records compensation expense based on the average market price of the Company’s stock during the quarter.  Additionally, the shares become outstanding for EPS computations once they are committed to be released.

Stock-based Compensation - The Company has a Stock Option and Incentive Plan (the “Option Plan”) and an RRP which are considered share-based payment awards.  Compensation expense is recognized over the service period of each share-based payment award.  The Company applies a fair-value-based measurement method in accounting for share-based payment transactions with employees, except for equity instruments held by the ESOP.  The Company applies the modified prospective method in which compensation cost is recognized over the service period for all awards granted.

Borrowed Funds - The Bank enters into sales of securities under agreements to repurchase with selected brokers (“repurchase agreements”).  These agreements are recorded as financing transactions as the Bank maintains effective control over the transferred securities. The dollar amount of the securities underlying the agreements continues to be carried in the Bank’s securities portfolio. The obligations to repurchase the securities are reported as a liability in the consolidated balance sheet. The securities underlying the agreements are delivered to the party with whom each transaction is executed. They agree to resell to the Bank the same securities at the maturity of the agreement. The Bank retains the right to substitute similar or like securities throughout the terms of the agreements.  The collateral is subject to valuation at current market levels and the Bank may ask for the return of excess collateral or be required to post additional collateral due to market value changes.

The Bank has obtained advances from FHLB.  FHLB advances are secured by certain qualifying mortgage loans pursuant to a blanket collateral agreement with FHLB and all of the capital stock of FHLB owned by the Bank.  Per the FHLB lending guidelines, total FHLB borrowings cannot exceed 40% of total Bank assets, as reported on the Bank’s Thrift Financial Report to the OCC, without pre-approval from the FHLB president.

Capitol Federal Financial Trust I (the “Trust”) is a Delaware statutory trust established by Capitol Federal Financial.  The Trust was formed for the purpose of issuing Company obligated mandatorily redeemable preferred securities (“Trust Preferred Securities”). The Trust issued $53.6 million of Trust Preferred Securities.  When the Trust Preferred Securities were issued, the Trust used the proceeds to purchase a like amount of Junior Subordinated Deferrable Interest Debentures (the “Debentures”) of the Company. The Company guaranteed the obligations of the Trust.  The Debentures were redeemed in April 2011.  The Debentures were the sole assets of the Trust, and were reported in Other Borrowings in the September 30, 2010 consolidated balance sheet.  The Trust was not included in the consolidated financial statements.

The Bank is authorized to borrow from the Federal Reserve Bank’s “discount window.”  The Bank had no outstanding Federal Reserve Bank borrowings at September 30, 2011 or 2010.

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Comprehensive Income - Comprehensive income is comprised of net income and other comprehensive income. Other comprehensive income includes changes in unrealized gains and losses on securities AFS, net of tax.  Comprehensive income is presented in the consolidated statements of changes in stockholders’ equity.

Segment Information - As a community-oriented financial institution, substantially all of the Bank’s operations involve the delivery of loan and deposit products to customers. Management makes operating decisions and assesses performance based on an ongoing review of these community banking operations, which constitute the Company’s only operating segment for financial reporting purposes.

Earnings Per Share - Basic EPS is computed by dividing income available to common stockholders by the weighted average number of shares outstanding for the period.  Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock (such as stock options) were exercised or resulted in the issuance of common stock.  These potentially dilutive shares would then be included in the weighted average number of shares outstanding for the period using the treasury stock method.  Shares issued and shares reacquired during any period are weighted for the portion of the period that they were outstanding.

In computing both basic and diluted EPS, the weighted average number of common shares outstanding includes the ESOP shares previously allocated to participants and shares committed to be released for allocation to participants and the RRP shares which have vested or have been allocated to participants. ESOP and RRP shares that have not been committed to be released or have not vested are excluded from the computation of basic and diluted EPS.  Unvested awards that contain nonforfeitable rights to dividends should be treated as participating securities in the computation of EPS pursuant to the two-class method; however, the Company has determined the impact of doing so is inconsequential.

Recent Accounting Pronouncements - Effective October 1, 2010, the Company adopted new authoritative accounting guidance under Accounting Standards Codification (“ASC”) 860, Transfers of Servicing Assets.  The objective of this standard isto improve the relevance, representational faithfulness, and comparability of the information provided in the financial statements related to the transfer of financial assets; the effects of a transfer on the Company’s financial position, financial performance, and cash flows; and a transferor’s continuing involvement in transferred financial assets.  The adoption of this standard did not have an impact on the Company’s financial condition or results of operations.

Effective October 1, 2010, the Company also adopted new authoritative accounting guidance under ASC 810, Consolidation.  The new guidance did not change many of the key principles for determining whether an entity is a variable interest entity consistent with the ASC on “Consolidation”, but does amend many important provisions of the existing guidance on “Consolidation.”  The adoption of this standard did not have an impact on the Company’s financial condition, results of operations, or financial statement disclosures.

In July 2010, the Financial Accounting Standards Board (“FASB”) issued ASU 2010-20, Disclosures about Credit Quality of Financing Receivables and the Allowance for Credit Losses, which amends ASC 310, Receivables, by requiring more robust and disaggregated disclosures about the credit quality of an entity’s financing receivables and its ACL. The objective of enhancing these disclosures is to improve financial statement users’ understanding of (1) the nature of an entity’s credit risk associated with its financing receivables and (2) the entity’s assessment of that risk in estimating its ACL as well as changes in the allowance and the reasons for those changes.   The new and amended disclosures that relate to information as of the end of a reporting period were effective for the Company at March 31, 2011. The disclosures that include information for activity that occurs during a reporting period were effective beginning January 1, 2011 for the Company.  Since the provisions of ASU 2010-20 are disclosure-related, the Company’s adoption of this guidance did not have an impact to its financial condition or results of operations.

In January 2011, the FASB issued ASU 2011-01, Deferral of the Effective Date of Disclosures About Troubled Debt Restructurings in Update No. 2010-20, which temporarily deferred the effective date in ASU 2010-20 for disclosures about TDRs by creditors until the FASB finalized its project on determining what constitutes a TDR for a creditor. In April 2011, the FASB issued ASU 2011-02, Receivables (Topic 310): A Creditor's Determination of Whether a Restructuring Is a Troubled Debt Restructuring, which amends the content in ASC 310 related to identifying TDRs and effectively nullifies ASU 2011-01.  ASU 2011-02 removes the deferral of the TDR disclosure requirements of ASU 2010-20 for public entities and thus establishes the effective date for those disclosures.  ASU 2011-02 is effective for the first interim or annual period beginning on or after June 15, 2011, which was July 1, 2011 for the Company.  2011-02 is to be applied retrospectively to modifications occurring on or after the beginning of the fiscal year of adoption, which was October 1, 2010 for the Company.  The adoption of ASU 2011-02 did not have a significant impact on the Company’s financial condition or results of operations.

In April 2011, the FASB issued ASU 2011-03, Reconsideration of Effective Control for Repurchase Agreements.  The primary objective of this ASU is to improve the accounting for repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity.  This ASU eliminates the requirement for entities to consider whether a transferor has the ability to repurchase the financial assets in a repurchase agreement, which may result in more repurchase agreements to be accounted for as secured borrowings rather than as a sale.  ASU 2011-03 is effective for the first interim or annual period beginning on or after December 15, 2011, which is January 1, 2012 for the Company, and should be applied prospectively.  The Company accounts for its repurchase agreements as secured borrowings; therefore, the adoption of ASU 2011-03 is not expected to have a material impact on its financial condition or results of operations.

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In May 2011, the FASB issued ASU 2011-04, Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRSs.  This ASU is a result of joint efforts by the FASB and the International Accounting Standards Board (“IASB”) to develop a single, converged fair value framework for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP and International Financial Reporting Standards (“IFRSs”).  This ASU is largely consistent with existing fair value measurement principles in U.S. GAAP; however, some of the components of this ASU could change how fair value measurement guidance in ASC 820, Fair Value Measurements and Disclosures, is applied.  This ASU does not require additional fair value measurements and is not intended to establish valuation standards or affect valuation practices outside of financial reporting.  ASU 2011-04 is effective during interim and annual periods beginning after December 15, 2011, which is January 1, 2012 for the Company, and should be applied retrospectively. The provisions of ASU 2011-04 applicable to the Company are disclosure related.  The Company is currently disclosing its fair value measurements in compliance with the converged guidance; therefore, the adoption of ASU 2011-04 will not have an impact to the Company’s financial statement disclosures.

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income, which revises how entities present comprehensive income in their financial statements.  The ASU requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements.  In a continuous statement of comprehensive income, an entity would be required to present the components of the income statement as presented today, along with the components of other comprehensive income.  In the two-statement approach, an entity would be required to present a statement that is consistent with the income statement format used today, along with a second statement, which would immediately follow the income statement, that would include the components of other comprehensive income.  The ASU does not change the items that an entity must report in other comprehensive income.  ASU 2011-05 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, which is October 1, 2012 for the Company, and should be applied retrospectively for all periods presented in the financial statements.  The Company has not yet decided which statement format it will adopt.

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2.   EARNINGS PER SHARE

The Company accounts for the shares acquired by its ESOP and the shares awarded pursuant to its RRP in accordance with ASC 260, which requires that unvested RRP awards that contain nonforfeitable rights to dividends be treated as participating securities in the computation of EPS pursuant to the two-class method. The two-class method is an earnings allocation that determines EPS for each class of common stock and participating security. Shares acquired by the ESOP are not considered in the basic average shares outstanding until the shares are committed for allocation or vested to an employee’s individual account.  All share information prior to the corporate reorganization has been revised to reflect the 2.2637 exchange ratio.

	2011		2010		2009
	(Dollars in thousands, except per share data)
Net income (1)	$	38,403	$	67,840	$	66,298
Average common shares outstanding		162,432,315		165,689,601		165,403,759
Average committed ESOP shares outstanding		192,959		172,575		172,575
Total basic average common shares outstanding		162,625,274		165,862,176		165,576,334
Effect of dilutive RRP shares		2,747		6,492		12,174
Effect of dilutive stock options		4,644		30,777		132,668
Total diluted average common shares outstanding		162,632,665		165,899,445		165,721,176
Net EPS
Basic	$	0.24	$	0.41	$	0.40
Diluted	$	0.24	$	0.41	$	0.40
Antidilutive stock options and RRP, excluded
from the diluted average common shares
outstanding calculation		898,415		642,777		167,626

(1)   Net income available to participating securities (unvested RRP shares) was inconsequential for fiscal years 2011, 2010, and 2009.

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3.   SECURITIES

The following tables reflect the amortized cost, estimated fair value, and gross unrealized gains and losses of AFS and HTM securities at September 30, 2011 and 2010.  The majority of the MBS and investment securities portfolios are composed of securities issued by GSEs.

	September 30, 2011
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(Dollars in thousands)
AFS:
GSE debentures	$	746,545	$	1,996	$	233	$	748,308
Municipal bonds		2,628		126		--		2,754
Trust preferred securities		3,681		--		740		2,941
MBS		690,675		41,764		3		732,436
		1,443,529		43,886		976		1,486,439
HTM:
GSE debentures		633,483		3,171		--		636,654
Municipal bonds		56,994		2,190		4		59,180
MBS		1,679,640		59,071		153		1,738,558
		2,370,117		64,432		157		2,434,392
	$	3,813,646	$	108,318	$	1,133	$	3,920,831
	September 30, 2010
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(Dollars in thousands)
AFS:
GSE debentures	$	50,151	$	104	$	--	$	50,255
Municipal bonds		2,649		170		--		2,819
Trust preferred securities		3,721		--		925		2,796
MBS		952,621		51,881		6		1,004,496
		1,009,142		52,155		931		1,060,366
HTM:
GSE debentures		1,208,829		4,441		--		1,213,270
Municipal bonds		67,957		2,654		1		70,610
MBS		603,368		26,209		3		629,574
		1,880,154		33,304		4		1,913,454
	$	2,889,296	$	85,459	$	935	$	2,973,820

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The following tables summarize the estimated fair value and gross unrealized losses of those securities on which an unrealized loss at September 30, 2011 and 2010 was reported and the continuous unrealized loss position for at least 12 months or less than 12 months as of September 30, 2011 and 2010.

	September 30, 2011
	Less Than						Equal to or Greater
	12 Months						Than 12 Months
			Estimated						Estimated
			Fair		Unrealized				Fair		Unrealized
	Count		Value		Losses		Count		Value		Losses
	(Dollars in thousands)
AFS:
GSE debentures		7	$	230,848	$	233		--	$	--	$	--
Trust preferred securities		--		--		--		1		2,941		740
MBS		5		1,189		3		--		--		--
		12	$	232,037	$	236		1	$	2,941	$	740
HTM:
GSE debentures		--	$	--	$	--		--	$	--	$	--
Municipal bonds		2		615		4		--		--		--
MBS		1		25,142		153		--		--		--
		3	$	25,757	$	157		--	$	--	$	--
	September 30, 2010
	Less Than						Equal to or Greater
	12 Months						Than 12 Months
			Estimated						Estimated
			Fair		Unrealized				Fair		Unrealized
	Count		Value		Losses		Count		Value		Losses
	(Dollars in thousands)
AFS:
GSE debentures		--	$	--	$	--		--	$	--	$	--
Trust preferred securities		--		--		--		1		2,796		925
MBS		4		1,678		5		3		359		1
		4	$	1,678	$	5		4	$	3,155	$	926
HTM:
GSE debentures		--	$	--	$	--		--	$	--	$	--
Municipal bonds		--		--		--		1		878		1
MBS		1		48,392		3		--		--		--
		1	$	48,392	$	3		1	$	878	$	1

On a quarterly basis, management conducts a formal review of securities for the presence of an other-than-temporary impairment.  Management assesses whether an other-than-temporary impairment is present when the fair value of a security is less than its amortized cost basis at the balance sheet date.  For such securities, other-than-temporary impairment is considered to have occurred if the Company intends to sell the security, if it is more likely than not the Company will be required to sell the security before recovery of its amortized cost basis, or if the present value of expected cash flows is not sufficient to recover the entire amortized cost.

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The unrealized losses at September 30, 2011 and 2010 are primarily a result of increases in market yields from the time of purchase.  In general, as market yields rise, the fair value of securities will decrease; as market yields fall, the fair value of securities will increase. Management generally views changes in fair value caused by changes in interest rates as temporary; therefore, these securities have not been classified as other-than-temporarily impaired.  Additionally, the impairment is also considered temporary because scheduled coupon payments have been made, it is anticipated that the entire principal balance will be collected as scheduled, and management neither intends to sell the securities, nor is it more likely than not that the Company will be required to sell the securities before the recovery of the remaining amortized cost amount, which could be at maturity.

The amortized cost and estimated fair value of securities by remaining contractual maturity without consideration for call features or pre-refunding dates as of September 30, 2011 are shown below.  Actual maturities of MBS may differ from contractual maturities because borrowers have the right to call or prepay obligations, generally without penalties.  As of September 30, 2011, the amortized cost of the securities in our portfolio which are callable or have pre-refunding dates within one year totaled $869.2 million.  Maturities of MBS depend on the repayment characteristics and experience of the underlying financial instruments. Issuers of certain investment securities have the right to call and prepay obligations with or without prepayment penalties.

	AFS				HTM				Total
			Estimated				Estimated				Estimated
	Amortized		Fair		Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value		Cost		Value
	(Dollars in thousands)
One year or less	$	301,992	$	302,329	$	1,729	$	1,745	$	303,721	$	304,074
One year through five years		447,564		449,236		663,871		668,228		1,111,435		1,117,464
Five years through ten years		159,505		172,066		492,407		513,849		651,912		685,915
Ten years and thereafter		534,468		562,808		1,212,110		1,250,570		1,746,578		1,813,378
	$	1,443,529	$	1,486,439	$	2,370,117	$	2,434,392	$	3,813,646	$	3,920,831

The following table presents the carrying value of the MBS in our portfolio by issuer as of the dates indicated.

	At September 30,
	2011		2010
	(Dollars in thousands)
FNMA	$	1,384,396	$	890,216
FHLMC		823,728		712,253
GNMA		202,340		2,452
Private Issuer		1,612		2,943
	$	2,412,076	$	1,607,864

The following table presents the taxable and non-taxable components of interest income on investment securities for the fiscal years ended September 30, 2011, 2010, and 2009.

	For the Year Ended
	September 30,
	2011		2010		2009
	(Dollars in thousands)
Taxable	$	17,180	$	13,547	$	3,526
Non-taxable		1,897		2,135		2,007
	$	19,077	$	15,682	$	5,533

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The following table summarizes the amortized cost and estimated fair value of securities pledged as collateral as of the dates indicated.

	September 30,
	2011				2010
			Estimated				Estimated
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(Dollars in thousands)
Repurchase agreements	$	571,016	$	597,286	$	671,852	$	709,919
Retail deposits		44,429		44,991		--		--
Public unit deposits		116,472		124,785		120,241		128,621
Federal Reserve Bank		26,666		27,939		34,720		36,363
	$	758,583	$	795,001	$	826,813	$	874,903

During fiscal year 2010, the Bank swapped originated fixed-rate mortgage loans with the FHLMC for MBS (“loan swap transaction”).  The $192.7 million of MBS received, at amortized cost, in the loan swap transaction were classified as trading securities prior to their subsequent sale by the Bank.  Proceeds from the sale of these securities were $199.1 million, resulting in a gross realized gain of $6.5 million.  The gain is included in gain on securities, net in the consolidated statements of income for the year ended September 30, 2010.  All other dispositions of securities during 2011, 2010, and 2009 were the result of principal repayments or maturities.

4.   LOANS RECEIVABLE and ALLOWANCE FOR CREDIT LOSSES

Loans receivable, net at September 30, 2011 and 2010 is summarized as follows:

	2011			2010
	(Dollars in thousands)
Real Estate Loans:
One- to four-family	$	4,918,778		$	4,915,651
Multi-family and commercial		57,965			66,476
Construction		47,368			33,168
Total real estate loans		5,024,111			5,015,295
Consumer Loans:
Home equity		164,541			186,347
Other		7,224			7,671
Total consumer loans		171,765			194,018
Total loans receivable		5,195,876			5,209,313
Less:
Undisbursed loan funds		22,531			15,489
ACL		15,465			14,892
Discounts/unearned loan fees		19,093			22,267
Premiums/deferred costs		(10,947	)		(11,537	)
	$	5,149,734		$	5,168,202

Lending Practices and Underwriting Standards - Originating and purchasing loans secured by one- to four-family residential properties is the Bank’s primary business, resulting in a loan concentration in residential first mortgage loans.  The Bank purchases one- to four-family loans from a select group of correspondent lenders located throughout the central United States.  As a result of originating loans in our branches, along with the correspondent lenders in our local markets, the Bank has a concentration of loans secured by real property located in Kansas and Missouri.  Additionally, the Bank purchases whole one- to four-family loans in bulk packages from nationwide lenders.  The Bank also makes consumer loans, construction loans secured by residential or commercial properties, and real estate loans secured by multi-family dwellings.

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One- to four-family loans - One- to four-family loans are underwritten manually or by an automated underwriting system developed by a third party.  The system’s components closely resemble the Bank’s manual underwriting standards which are generally in accordance with FHLMC and FNMA manual underwriting guidelines.  The automated underwriting system analyzes the applicant’s data, with emphasis on credit history, employment and income history, qualifying ratios reflecting the applicant’s ability to repay, asset reserves, and LTV ratio.  Full documentation to support the applicant’s credit, income, and sufficient funds to cover all applicable fees and reserves at closing is required on all loans.  Loans that do not meet the automated underwriting standards are referred to a staff underwriter for manual underwriting.  Properties securing one- to four-family loans are appraised by either staff appraisers or fee appraisers, both of which are independent of the loan origination function.

The underwriting standards for loans purchased from correspondent and nationwide lenders are generally similar to the Bank’s internal underwriting standards.  The underwriting of loans purchased from correspondent lenders is generally performed by the Bank’s underwriters.  Before committing to purchase a pool of loans from a nationwide lender, the Bank’s Chief Lending Officer or Secondary Marketing Manager reviews specific criteria such as loan amount, credit scores, LTV ratios, geographic location, and debt ratios of each loan in the pool.  If the specific criteria do not meet the Bank’s underwriting standards and compensating factors are not sufficient, then a loan will be removed from the pool.  Before the pool is funded, an internal Bank underwriter or a third party reviews at least 25% of the loan files to confirm loan terms, credit scores, debt service ratios, property appraisals, and other underwriting related documentation.  The Bank does not service the loans purchased from nationwide lenders.  For the tables within this footnote, loans purchased from correspondent lenders are included with originated loans, and loans purchased in bulk from nationwide lenders are reported as purchased loans.

The Bank also originates construction-to-permanent loans secured by one- to four-family residential real estate.  The majority of the one- to four-family construction loans are secured by property located within the Bank’s Kansas City market area.  Construction loans are obtained by homeowners who will occupy the property when construction is complete.  Construction loans to builders for speculative purposes are not permitted.  The application process includes submission of complete plans, specifications, and costs of the project to be constructed.  All construction loans are manually underwritten using the Bank’s internal underwriting standards.  Construction draw requests and the supporting documentation are reviewed and approved by management.  The Bank also performs regular documented inspections of the construction project to ensure the funds are being used for the intended purpose and the project is being completed according to the plans and specifications provided.

Multi-family and commercial loans - The Bank’s multi-family and commercial real estate loans are secured primarily by multi-family dwellings and small commercial buildings generally located in the Bank’s market areas.  These loans are granted based on the income producing potential of the property and the financial strength of the borrower.  At the time of origination, LTV ratios on multi-family and commercial real estate loans cannot exceed 80% of the appraised value of the property securing the loans.  The net operating income, which is the income derived from the operation of the property less all operating expenses, must be sufficient to cover the payments related to the outstanding debt at the time of origination.  The Bank generally requires personal guarantees of the borrowers covering a portion of the debt in addition to the security property as collateral for these loans.  Appraisals on properties securing these loans are performed by independent state certified fee appraisers.  Bank policy permits a limited amount of construction-to-permanent loans secured by multi-family dwellings and commercial real estate.  Currently there are no construction-to-permanent loans in the multi-family and commercial portfolio.

Consumer loans - The Bank offers a variety of secured consumer loans, including home equity loans and lines of credit, home improvement loans, auto loans, and loans secured by savings deposits.   The Bank also originates a very limited amount of unsecured loans.  The Bank does not originate any consumer loans on an indirect basis, such as contracts purchased from retailers of goods or services which have extended credit to their customers.  The majority of the consumer loan portfolio is comprised of home equity lines of credit.

The underwriting standards for consumer loans include a determination of the applicant’s payment history on other debts and an assessment of their ability to meet existing obligations and payments on the proposed loan.  Although creditworthiness of the applicant is a primary consideration, the underwriting process also includes a comparison of the value of the security in relation to the proposed loan amount.

Credit Quality Indicators - Based on the Bank’s lending emphasis and underwriting standards, management has divided the loan portfolio into three segments:  one- to four-family loans, consumer loans, and multi-family and commercial loans.  The one- to four-family and consumer loan segments are further grouped into classes for purposes of providing disaggregated information about the credit quality of the loan portfolio.  The classes are:  one- to four-family loans - originated, one- to four-family loans - purchased, consumer loans - home equity, and consumer loans - other.  The Bank’s primary credit quality indicators for the one- to four-family loan and consumer - home equity loan portfolios are delinquency status, asset classifications in accordance with applicable regulations, LTV ratios and borrower credit scores.  The Bank’s primary credit quality indicators for the multi-family and commercial loan and consumer - other loan portfolios are delinquency status and asset classifications in accordance with applicable regulations.

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The following table presents the recorded investment of loans, defined as the unpaid loan principal balance (net of unadvanced funds related to loans in process) inclusive of unearned loan fees and deferred costs, of the Company's 30 to 89 day delinquent loans, 90 or more day delinquent loans, total delinquent loans, total current loans, and the total loans receivable balance at September 30, 2011 by class.  In the general valuation allowance model, loans in the 30 to 89 day delinquent category are assigned a higher loss factor than corresponding performing loans.  Loans 90 or more days delinquent are considered impaired loans and are individually evaluated for impairment.  At September 30, 2011, all loans in the 90 or more days delinquent category were on nonaccrual status and represented the entire balance of nonaccrual loans.  At September 30, 2011, there were no loans 90 or more days delinquent that were still accruing interest.

					Total				Total
	30 to 89 Days		90 or More Days		Delinquent		Current		Recorded
	Delinquent		Delinquent		Loans		Loans		Investment
	(Dollars in thousands)
One- to four-family loans - originated	$	19,682	$	12,363	$	32,045	$	4,362,498	$	4,394,543
One- to four-family loans - purchased		6,243		13,836		20,079		520,876		540,955
Multi-family and commercial loans		--		--		--		57,936		57,936
Consumer - home equity		759		380		1,139		163,402		164,541
Consumer - other		92		3		95		7,129		7,224
	$	26,776	$	26,582	$	53,358	$	5,111,841	$	5,165,199

As of September 30, 2011, 2010, and 2009, loans with unpaid principal amounts totaling approximately $26.5 million, $32.0 million, and $30.9 million, respectively, were on nonaccrual status.  Gross interest income would have increased by $643 thousand, $766 thousand, and $603 thousand for the years ended September 30, 2011, 2010, and 2009, respectively, if these nonaccrual status loans were not classified as such.

In accordance with the Bank’s asset classification policy, management regularly reviews the problem loans in the Bank's portfolio to determine whether any assets require classification in accordance with applicable regulations.  Loan classifications, other than pass loans, are defined as follows:

·   Special mention - These loans are performing loans on which known information about the collateral pledged or the possible credit problems of the borrowers have caused management to have doubts as to the ability of the borrowers to comply with present loan repayment terms and which may result in the future inclusion of such loans in the non-performing loan categories.

·   Substandard - A loan is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any.  Substandard loans include those characterized by the distinct possibility the Bank will sustain some loss if the deficiencies are not corrected.

·   Doubtful - Loans classified as doubtful have all the weaknesses inherent as those classified as substandard, with the added characteristic that the weaknesses present make collection or liquidation in full on the basis of currently existing facts and conditions and values highly questionable and improbable.

·   Loss - Loans classified as loss are considered uncollectible and of such little value that their continuance as loans without the establishment of specific loss allowance is not warranted.

Special mention loans are included with loans 30 to 89 days delinquent in the general valuation allowance model, if the loan is not considered impaired.  Loans classified as substandard, doubtful, or loss are considered impaired loans and are individually evaluated for impairment.

The following table sets forth the recorded investment in loans, less SVAs, classified at September 30, 2011 by class.  At September 30, 2011, there were no loans classified as doubtful or loss that were not fully reserved.  In addition to the classified loans below, at September 30, 2011, the Bank had other assets totaling $10.3 million, comprised of municipal bonds and a trust preferred security, also classified per its asset classification policy and applicable regulations.

	Special Mention		Substandard
	(Dollars in thousands)
One- to four-family - originated	$	32,673	$	18,419
One- to four-family - purchased		447		15,987
Multi-family and commercial		7,683		--
Consumer - home equity		50		592
Consumer - other		--		5
	$	40,853	$	35,003

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The following table shows the weighted average LTV and credit score information for originated and purchased one- to four-family loans and originated consumer home equity loans at September 30, 2011.  Borrower credit scores are intended to provide an indication as to the likelihood that a borrower will repay their debts.  Credit scores were most recently updated in September 2011 and were obtained from a nationally recognized consumer rating agency.  The LTV ratios provide an estimate of the extent to which the Bank may incur a loss on any given loan that may go into foreclosure.  The LTV ratios were based on the current loan balance and either the lesser of the purchase price or original appraisal, or the most recent bank appraisal, BPO or AVM, if available.  In most cases, the most recent appraisal was obtained at the time of origination.    

	Weighted Average		Weighted Average
	Credit Score		LTV
One- to four-family - originated		762		66	%
One- to four-family - purchased		740		60
Consumer - home equity		742		20
		759		64	%

Troubled Debt Restructurings - The total recorded investment of loans classified as TDRs at September 30, 2011 was $50.3 million, of which $30.7 million represent restructurings granted to borrowers experiencing financial difficulties and $19.6 million represent restructurings to market interest rates through the Bank’s loan endorsement program, which are classified as TDRs as a result of the Company adopting ASU No. 2011-02 on July 1, 2011.

Substantially all of the TDRs at September 30, 2011, are secured by residential real estate.  The recorded investment of TDRs classified as impaired totaled $46.1 million at September 30, 2011.  Impaired loans are individually evaluated for SVAs.  TDRs not classified as impaired, which totaled $4.2 million at September 30, 2011, are included in the general valuation allowance model in their appropriate loan category.  At September 30, 2011, $960 thousand was recorded in the ACL related to TDRs.  The TDRs classified as a result of adopting ASU No. 2011-02 were individually evaluated for impairment.  No SVA was recorded on these loans at September 30, 2011, as the estimated current values of the collateral were in excess of the recorded loan balances.

The following table presents the recorded investment of TDRs at September 30, 2011, including restructurings granted to borrowers that were experiencing financial difficulties and restructurings of loans to market interest rates through the Bank’s loan endorsement program.

	Restructurings
	Due to		Loan
	Financial		Endorsement
	Difficulties		Program		Total
	(Dollars in thousands)
One- to four-family loans - originated	$	23,534	$	19,624	$	43,158
One- to four-family loans - purchased		6,155		--		6,155
Multi-family and commercial loans		563		--		563
Consumer - home equity		413		--		413
Consumer - other		2		--		2
	$	30,667	$	19,624	$	50,291

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The following table presents the recorded investment prior to restructuring and immediately after restructuring for all loans restructured during the year ended September 30, 2011.  This table does not reflect the recorded investment at September 30, 2011.

	Number		Pre-		Post-
	of		Restructured		Restructured
	Contracts		Outstanding		Outstanding
			(Dollars in thousands)
One- to four-family loans - originated		158	$	27,250	$	26,936
One- to four-family loans - purchased		4		1,563		1,555
Multi-family and commercial loans		--		--		--
Consumer - home equity		5		224		227
Consumer - other		--		--		--
		167	$	29,037	$	28,718

As of September 30, 2011, the recorded investment of TDRs 30-89 days delinquent and over 90 days delinquent was $2.6 million and $2.9 million, respectively.  The following table provides information on TDRs restructured within the last 12 months that subsequently defaulted during the year ended September 30, 2011.  Of the 13 loans in the table that defaulted during the year, seven loans, with a recorded investment of $812 thousand as of September 30, 2011, had returned to current status as of September 30, 2011.

	Number
	of		Recorded
	Contracts		Investment
			(Dollars in thousands)
One- to four-family loans - originated		13	$	1,353
One- to four-family loans - purchased		--		--
Multi-family and commercial loans		--		--
Consumer - home equity		--		--
Consumer - other		--		--
		13	$	1,353

Impaired loans - Impaired loans are defined as non-accrual loans, loans classified as substandard, loans with SVAs, and TDRs that have not yet performed under the restructured terms for 12 consecutive months or are required by the accounting literature to be classified as a TDR for the life of the loan due to a reduction in the stated interest rate to a rate lower than the current market rate for new debt with similar risk.  Substantially all of the impaired loans at September 30, 2011 were secured by residential real estate.  Impaired loans related to residential real estate are individually evaluated to ensure that the carrying value of the loan is not in excess of the fair value of the collateral, less estimated selling costs.  Fair values of residential real estate are estimated through such methods as current appraisals, AVMs, BPOs, or listing prices.  Fair values may be adjusted by management to reflect current economic and market conditions.  If the outstanding loan balance is in excess of the estimated fair value determined by management, less estimated costs to sell, then a SVA is recorded for the difference.

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The following is a summary of information pertaining to impaired loans by class at September 30, 2011.

								Fiscal		Fiscal
								Year-to-Date		Year-to-Date
				Unpaid				Average		Interest
		Recorded		Principal		Related		Recorded		Income
		Investment		Balance		ACL		Investment		Recognized
		(Dollars in thousands)
With no related allowance recorded
	One- to four-family - originated	$	47,710	$	47,845	$	--	$	41,401	$	1,467
	One- to four-family - purchased		6,075		6,056		--		7,381		58
	Multi-family and commercial		563		565		--		578		36
	Consumer - home equity		468		468		--		672		14
	Consumer - other		5		5		--		46		--
			54,821		54,939		--		50,078		1,575
With an allowance recorded
	One- to four-family - originated		3,297		3,299		335		2,419		102
	One- to four-family - purchased		13,640		13,546		3,280		14,576		156
	Multi-family and commercial		--		--		--		--		--
	Consumer - home equity		264		264		140		80		3
	Consumer - other		--		--		--		--		--
			17,201		17,109		3,755		17,075		261
Total
	One- to four-family - originated		51,007		51,144		335		43,820		1,569
	One- to four-family - purchased		19,715		19,602		3,280		21,957		214
	Multi-family and commercial		563		565		--		578		36
	Consumer - home equity		732		732		140		752		17
	Consumer - other		5		5		--		46		--
		$	72,022	$	72,048	$	3,755	$	67,153	$	1,836

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Allowance for Credit Losses - The following is a summary of the activity in the ACL by segment for the year ended September 30, 2011 and the ending balance of the ACL at September 30, 2011, based on the Company’s impairment methodology.

	One- to Four-			One- to Four-			One- to Four-			Multi-family
	Family			Family			Family			and
	Originated			Purchased			Total			Commercial			Consumer			Total
	(Dollars in thousands)
Beginning balance	$	3,813		$	10,425		$	14,238		$	275		$	379		$	14,892
Charge-offs		(414	)		(2,928	)		(3,342	)		--			(145	)		(3,487	)
Recoveries		--			--			--			--			--			--
Provision for credit losses		1,516			2,404			3,920			(21	)		161			4,060
Ending balance	$	4,915		$	9,901		$	14,816		$	254		$	395		$	15,465
Ratio of net charge-offs to average loans
outstanding year-to-date																	0.07	%
Ratio of net charge-offs year-to-date
to average non-performing assets																	8.75	%
ACL for loans collectively
evaluated for impairment	$	4,580		$	6,621		$	11,201		$	254		$	255		$	11,710
ACL for loans individually
evaluated for impairment	$	335		$	3,280		$	3,615		$	--		$	140		$	3,755

The following is a summary of the loan portfolio at September 30, 2011 by loan portfolio segment disaggregated by the Company’s impairment method.

	One- to Four-		One- to Four-		One- to Four-		Multi-family
	Family		Family		Family		and
	Originated		Purchased		Total		Commercial		Consumer		Total
	(Dollars in thousands)
Recorded investment of loans
collectively evaluated for impairment	$	4,343,536	$	521,240	$	4,864,776	$	57,373	$	171,028	$	5,093,177
Recorded investment of loans
individually evaluated for impairment		51,007		19,715		70,722		563		737		72,022
	$	4,394,543	$	540,955	$	4,935,498	$	57,936	$	171,765	$	5,165,199

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As noted above, the Bank has a loan concentration in residential first mortgage loans.  Continued declines in residential real estate values could adversely impact the property used as collateral for the Bank’s loans.  Adverse changes in the economic conditions and increasing unemployment rates may have a negative effect on the ability of the Bank’s borrowers to make timely loan payments, which would likely increase delinquencies and have an adverse impact on the Bank’s earnings.  Further increases in delinquencies will decrease interest income on loans receivable and will likely adversely impact the Bank’s loan loss experience, resulting in an increase in the Bank’s ACL and provision for credit losses.  Although management believes the ACL was at an adequate level to absorb known and inherent losses in the loan portfolio at September 30, 2011, the level of the ACL remains an estimate that is subject to significant judgment and short-term changes.  Additions to the ACL may be necessary if future economic and other conditions differ substantially from the current environment.

The Bank originated and refinanced $892 thousand, $13.1 million, and $15.3 million of commercial real estate and business loans during the years ended September 30, 2011, 2010, and 2009, respectively.

The Bank is subject to numerous lending-related regulations. Under the Financial Institutions Reform, Recovery, and Enforcement Act, the limit of aggregate loans to one borrower is 15% of the Bank’s unimpaired capital and surplus, but not less than $500 thousand.  As of September 30, 2011, the Bank was in compliance with this limitation.

Aggregate loans to executive officers, directors and their associates did not exceed 5% of stockholders’ equity as of September 30, 2011 and 2010.  Such loans were made under terms and conditions substantially the same as loans made to parties not affiliated with the Bank.

The Bank recognized net gains of $298 thousand, $1.8 million, and $2.2 million during fiscal years 2011, 2010, and 2009, respectively, as a result of selling LHFS.  The net gains are included in other income, net in the consolidated statements of income.

As of September 30, 2011 and 2010, the Bank serviced loans for others aggregating approximately $526.3 million and $681.1 million, respectively.  Such loans are not included in the accompanying consolidated balance sheets. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors and foreclosure processing. Loan servicing income includes servicing fees withheld from investors and certain charges collected from borrowers, such as late payment fees. The Bank held borrowers’ escrow balances on loans serviced for others of $7.5 million and $9.0 million as of September 30, 2011 and 2010, respectively.

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5.   PREMISES AND EQUIPMENT, Net

A summary of the net carrying value of banking premises and equipment at September 30, 2011 and 2010 is as follows:

	2011		2010
	(Dollars in thousands)
Land	$	8,684	$	7,877
Building and improvements		53,822		45,295
Furniture, fixtures and equipment		38,069		37,289
		100,575		90,461
Less accumulated depreciation		52,152		49,201
	$	48,423	$	41,260

Depreciation and amortization expense for the years ended September 30, 2011, 2010, and 2009 was $4.4 million, $4.6 million, and $5.1 million, respectively.

The Bank has entered into non-cancelable operating lease agreements with respect to banking premises and equipment. It is expected that many agreements will be renewed at expiration in the normal course of business. Rental expense was $1.3 million for the year ended September 30, 2011 and $1.2 million for each of the years ended September 30, 2010 and 2009.  Future minimum rental commitments, rounded to the nearest thousand, required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year are as follows (dollars in thousands):

2012	$	1,279
2013		1,112
2014		939
2015		817
2016		730
Thereafter		6,924
	$	11,801

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6.   DEPOSITS

Deposits at September 30, 2011 and 2010 are summarized as follows:

			2011								2010
					Weighted								Weighted
					Average			% of					Average			% of
			Amount		Rate			Total			Amount		Rate			Total
			(Dollars in thousands)
Non-certificates:
Checking			$	551,632		0.08	%		12.3	%	$	482,428		0.13	%		11.0	%
Savings				253,184		0.41			5.6			234,285		0.54			5.3
Money market				1,066,065		0.35			23.7			942,428		0.65			21.5
Total non-certificates				1,870,881		0.28			41.6			1,659,141		0.48			37.8
Certificates of deposit:
	0.00 – 0.99	%		339,803		0.50			7.6			193,959		0.53			4.4
	1.00 – 1.99	%		1,106,957		1.27			24.6			1,013,538		1.44			23.1
	2.00 – 2.99	%		775,235		2.49			17.2			777,687		2.53			17.7
	3.00 – 3.99	%		371,682		3.42			8.3			576,595		3.50			13.2
	4.00 – 4.99	%		30,615		4.40			0.7			164,763		4.32			3.8
	5.00 – 5.99	%		--		--			--			627		5.29			--
Total certificates of deposit				2,624,292		1.87			58.4			2,727,169		2.29			62.2
			$	4,495,173		1.21	%		100.0	%	$	4,386,310		1.61	%		100.0	%

As of September 30, 2011, certificates of deposit mature as follows:

			Weighted
			Average
	Amount		Rate
	(Dollars in thousands)
2012	$	1,390,231		1.65	%
2013		555,043		1.86
2014		309,015		2.27
2015		317,065		2.43
2016		49,423		2.22
Thereafter		3,515		2.46
	$	2,624,292		1.87	%

Interest expense on deposits for the periods presented is as follows:

	Year Ended September 30,
	2011		2010		2009
	(Dollars in thousands)
Checking	$	441	$	622	$	879
Savings		1,225		1,323		1,873
Money market		5,307		6,522		8,512
Certificates		56,595		70,749		89,207
	$	63,568	$	79,216	$	100,471

The amount of noninterest-bearing deposits was $97.6 million and $76.4 million as of September 30, 2011 and 2010, respectively.  Certificates of deposit with a minimum denomination of $100 thousand were $882.8 million and $885.6 million as of September 30, 2011 and 2010, respectively.  Deposits in excess of $250 thousand may not be fully insured by the FDIC.  The aggregate amount of deposits that were reclassified as loans receivable due to customer overdrafts was $124 thousand and $175 thousand as of September 30, 2011 and 2010, respectively.

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7.   BORROWED FUNDS

At September 30, 2011 the Company’s borrowed funds consisted of FHLB advances and repurchase agreements.  At September 30, 2010, the Company’s borrowed funds consisted of FHLB advances, repurchase agreements, and the Debentures.   The Debentures were repaid in April 2011.

FHLB Advances – FHLB advances at September 30, 2011 and 2010 were comprised of the following:

	2011			2010
	(Dollars in thousands)
Fixed-rate FHLB advances	$	2,400,000		$	2,376,000
Deferred prepayment penalty		(20,995	)		(28,261	)
Deferred gain on terminated interest rate swaps		457			632
	$	2,379,462		$	2,348,371
Weighted average contractual interest rate on FHLB advances		3.37	%		3.61	%
Weighted average effective interest rate on FHLB advances (1)		3.71	%		3.96	%

(1)   The effective rate includes the net impact of the amortization of deferred prepayment penalties related to the prepayment of certain FHLB advances and deferred gains related to the termination of interest rate swaps.

During fiscal year 2010, the Bank prepaid $200.0 million of fixed-rate FHLB advances with a weighted average interest rate of 4.63% and a weighted average remaining term to maturity of approximately one month.  The prepaid FHLB advances were replaced with $200.0 million of fixed-rate FHLB advances with a weighted average contractual interest rate of 3.17% and an average term of 84 months.  The Bank paid an $875 thousand prepayment penalty to the FHLB as a result of prepaying the FHLB advances.  The present value of the cash flows under the terms of the new FHLB advance was not more than 10% different from the present value of the cash flows under the terms of the prepaid FHLB advances (including the prepayment penalty) and there were no embedded conversion options in the prepaid advances or in the new FHLB advances.  The prepayment penalty effectively increased the interest rate on the new advances seven basis points at the time of the transaction.  The deferred prepayment penalty is being recognized in interest expense over the life of the new FHLB advances.  The benefit of prepaying the advances in fiscal year 2010 was an immediate decrease in interest expense, and a decrease in interest rate sensitivity, as the maturity of the refinanced advances were extended at a lower rate.

The FHLB advances are secured by certain qualifying mortgage loans pursuant to a blanket collateral agreement with the FHLB and all of the capital stock of FHLB owned by the Bank.  Per the FHLB’s lending guidelines, total FHLB borrowings cannot exceed 40% of total Bank assets without the pre-approval of the FHLB president.  At September 30, 2011, the Bank’s ratio of FHLB advances to total assets, as reported to the Bank’s regulators, was 26%.

At September 30, 2011, the Bank had access to a line of credit with the FHLB set to expire on November 25, 2011, at which time the line of credit is expected to be renewed automatically by the FHLB for a one year period.  At September 30, 2011, there were no borrowings on the FHLB line of credit.  Any borrowings on the line of credit would be included in total FHLB borrowings in calculating the ratio of FHLB borrowings to total Bank assets, which generally could not exceed 40% of total Bank assets at September 30, 2011.

Other Borrowings – The following summarizes the components of other borrowings as of September 30, 2011 and 2010.  The Debentures were redeemed in April 2011.

	2011					2010
			Weighted					Weighted
			Average					Average
			Contractual					Contractual
	Amount		Rate			Amount		Rate
	(Dollars in thousands)
Repurchase agreements	$	515,000		4.00	%	$	615,000		4.03	%
Debentures		--		--			53,609		3.28
	$	515,000		4.00	%	$	668,609		3.97	%

The Bank has pledged MBS with an estimated fair value of $597.3 million at September 30, 2011 as collateral for the repurchase agreements.  

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Maturity of Borrowed Funds – At September 30, 2011, the maturities of FHLB advances and repurchase agreements were as follows:

							Weighted			Weighted
	FHLB		Repurchase		Total		Average			Average
	Advances		Agreements		Borrowings		Contractual			Effective
	Amount		Amount		Amount		Rate			Rate
	(Dollars in thousands)
2012	$	350,000	$	150,000	$	500,000		3.67	%		3.67	%
2013		525,000		145,000		670,000		3.74			4.00
2014		450,000		100,000		550,000		3.33			3.96
2015		200,000		20,000		220,000		3.50			4.16
2016		275,000		--		275,000		3.86			4.39
Thereafter		600,000		100,000		700,000		3.06			3.08
	$	2,400,000	$	515,000	$	2,915,000		3.48	%		3.76	%

Of the $350.0 million FHLB advances maturing in fiscal year 2012, $100.0 million is due in the first quarter of fiscal year 2012, $150.0 million is due in the second quarter of fiscal year 2012, and $100.0 million is due in the fourth quarter of fiscal year 2012. All of the $150.0 million of repurchase agreements maturing in fiscal year 2012 is due in the first quarter.

8.   INCOME TAXES

Income tax expense (benefit) for the years ended September 30, 2011, 2010, and 2009 consisted of the following:

	2011			2010		2009
Current	(Dollars in thousands)
Federal	$	25,889		$	31,252	$	32,590
State		2,707			2,807		2,788
		28,596			34,059		35,378
Deferred
Federal		(8,933	)		3,209		3,285
State		(714	)		257		263
		(9,647	)		3,466		3,548
	$	18,949		$	37,525	$	38,926

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The Company’s effective tax rates were 33.0%, 35.6%, and 37.0% for the years ended September 30, 2011, 2010, and 2009, respectively.  The differences between such effective rates and the statutory Federal income tax rate computed on income before income tax expense result from the following:

	2011						2010						2009
	Amount			%			Amount			%			Amount			%
	(Dollars in thousands)
Federal income tax expense
computed at statutory Federal rate	$	20,073			35.0	%	$	36,878			35.0	%	$	36,828			35.0	%
Increases (Decreases) in taxes resulting from:
State taxes, net of Federal tax effect		1,993			3.4			3,064			2.9			3,051			2.9
Net tax-exempt interest income		(577	)		(1.0	)		(624	)		(0.6	)		(579	)		(0.6	)
Change in cash surrender value of BOLI		(638	)		(1.1	)		(421	)		(0.4	)		(406	)		(0.4	)
Low income housing tax credits		(1,397	)		(2.4	)		(1,209	)		(1.1	)		(1,013	)		(1.0	)
Other		(505	)		(0.9	)		(163	)		(0.2	)		1,045			1.1
	$	18,949			33.0	%	$	37,525			35.6	%	$	38,926			37.0	%

Deferred income tax (benefit) expense results from temporary differences in the recognition of revenue and expenses for tax and financial statement purposes. The sources of these differences and the tax effect of each as of September 30, 2011, 2010, and 2009 were as follows:

	2011			2010			2009
	(Dollars in thousands)
Foundation contribution	$	(12,824	)	$	--		$	--
Mortgage servicing rights		(885	)		774			(874	)
ACL		(197	)		(1,771	)		(1,628	)
FHLB prepayment penalty		--			1,283			4,601
FHLB stock dividends		1,432			2,206			694
Other, net		2,827			974			755
	$	(9,647	)	$	3,466		$	3,548

The components of the net deferred income tax (liabilities) assets as of September 30, 2011 and 2010 are as follows:

	2011			2010
	(Dollars in thousands)
Deferred income tax assets:
Foundation contribution	$	12,824		$	--
ACL		3,863			3,666
Salaries and employee benefits		1,219			1,230
ESOP compensation		836			747
Other		2,630			2,307
Gross deferred income tax assets		21,372			7,950
Valuation allowance		(2,060	)		(280	)
Gross deferred income tax asset, net of valuation allowance		19,312			7,670
Deferred income tax liabilities:
FHLB stock dividends		18,828			17,396
Unrealized gain on AFS securities		16,203			19,362
Other		4,728			4,156
Gross deferred income tax liabilities		39,759			40,914
Net deferred tax liabilities	$	(20,447	)	$	(33,244	)

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The Company assesses the available positive and negative evidence surrounding the recoverability of its deferred tax assets and applies its judgment in estimating the amount of valuation allowance necessary under the circumstances.  As of September 30, 2011, the Company had a valuation allowance of $2.1 million related to the Kansas state tax portion of the Foundation contribution and the net operating losses generated by the Company's consolidated Kansas corporate income tax return.As of September 30, 2010, the Company had a valuation allowance of $280 thousand related to the net operating losses generated by the Company's consolidated Kansas corporate income tax return.The Company's consolidated Kansas corporate income tax return at September 30, 2011 and 2010 does not include the Bank, as the Bank files a Kansas privilege tax return.  Based on the nature of the operations of the companies included in the consolidated Kansas corporate return, management believes there will not be sufficient taxable income to fully utilize the deferred tax assets noted above; therefore a valuation allowance was established for the related amounts at September 30, 2011 and 2010.

ASC 740 Income Taxes prescribes a process by which the likelihood of a tax position is gauged based upon the technical merits of the position, and then a subsequent measurement relates the maximum benefit and the degree of likelihood to determine the amount of benefit to recognize in the financial statements. A reconciliation of the beginning and ending amounts of unrecognized tax benefits for the years ended September 30, 2011, 2010, and 2009 is as follows.  The amounts have not been reduced by the federal deferred tax effects of unrecognized tax benefits.

	2011			2010			2009
	(Dollars in thousands)
Balance at beginning of year	$	114		$	2,848		$	2,409
Additions for tax positions related to the current year		--			--			109
Additions for tax positions of prior years		3			28			888
Reductions for tax positions of prior years		(49	)		(195	)		--
Reductions relating to settlement with taxing authorities		--			--			(97	)
Lapse of statute of limitations		--			(2,567	)		(461	)
Balance at end of year	$	68		$	114		$	2,848

If realized, the unrecognized tax benefits at September 30, 2011 would impact the effective tax rate.  After the related deferred tax effects, realization of those benefits would reduce income tax expense by $20 thousand.  Included in the unrecognized tax benefits in the table above were accrued penalties and interest of $20 thousand, $17 thousand, and $763 thousand for the years ended September 30, 2011, 2010, and 2009, respectively.  Estimated penalties and interest for the years ended September 30, 2011 and 2009 was $2 thousand and $87 thousand.  The net reversal of penalties and interest expense due to the lapse of statute of limitations for the years ended September 30, 2010 was $463 thousand.  Estimated penalties and interest are included in income tax expense in the consolidated statements of income.  It is reasonably possible that decreases in gross unrecognized tax benefits totaling less than $10 thousand may occur in fiscal year 2012 as a result of a lapse in the applicable statute of limitations. 

The Company files income tax returns in the U.S. federal jurisdiction and the state of Kansas, as well as other states where it has nexus.  In many cases, uncertain tax positions are related to tax years that remain subject to examination by the relevant taxing authorities.  With few exceptions, the Company is no longer subject to U.S. federal and state examinations by tax authorities for fiscal years before 2008.

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9.   EMPLOYEE BENEFIT PLANS

The Company has a profit sharing plan (“PIT”) and an ESOP.  The plans cover all employees with a minimum of one year of service, at least age 21, and at least 1,000 hours of employment in each plan year.

Profit Sharing Plan – The PIT provides for two types of discretionary contributions. The first type is an optional Bank contribution and may be 0% or any percentage above that, as determined by the Board of Directors, of an eligible employee’s eligible compensation during the fiscal year.  The second contribution may be 0% or any percentage above that, as determined by the Board of Directors, of an eligible employee’s eligible compensation during the fiscal year if the employee matches 50.0% (on an after-tax basis) of the Bank’s second contribution.  The PIT qualifies as a thrift and profit sharing plan for purposes of Internal Revenue Codes 401(a), 402, 412, and 417.  Total Bank contributions to the PIT amounted to $105 thousand, $101 thousand, and $102 thousand for the years ended September 30, 2011, 2010, and 2009, respectively.

ESOP – The ESOP Trust acquired 3,024,574 shares (6,846,728 shares post corporate reorganization) of common stock in the Company’s initial public offering and 4,726,000 shares of common stock in the Company’s corporate reorganization in December of 2010.  Both acquisitions of common stock were made with proceeds from loans from the Company.  The loans are secured by shares of the Company stock purchased in each offering.  The Bank has agreed to make cash contributions to the ESOP on an annual basis sufficient to enable the ESOP to make the required annual loan payments to the Company on September 30 of each year. Share information presented below relating to the shares in the ESOP trust acquired prior to the corporate reorganization has been revised to reflect the 2.2637 exchange ratio.

The loan for the shares acquired in the initial public offering bears interest at a fixed-rate of 5.80%, with future principal and interest payable annually in two remaining fixed installments of $3.0 million, as of September 30, 2011. Payments of $3.0 million consisting of principal of $2.5 million, $2.4 million, and $2.3 million and interest of $465 thousand, $604 thousand, and $735 thousand were made on September 30, 2011, 2010, and 2009, respectively. The loan matures on September 30, 2013.

The loan for the shares acquired in the corporate reorganization bears interest at a fixed-rate of 3.25% and has a 30 year term.  The loan requires interest-only payments the first three years.  The first interest payment of $1.2 million was paid on September 30, 2011 and the next two interest payments of $1.5 million each are payable on September 30, 2012 and 2013.  Beginning in fiscal year 2014, principal and interest payments of $2.7 million will be payable annually.  The loan matures on September 30, 2040.

As the annual loan payments are made, shares will be released from collateral at September 30 and allocated to qualified employees based on the proportion of their qualifying compensation to total qualifying compensation.  On September 30, 2011, 531,025 shares were released from collateral, and on September 30, 2012 and September 30, 2013, 551,988 shares will be released from collateral.  As ESOP shares are committed to be released from collateral, the Company records compensation expense.  Dividends on unallocated ESOP shares are only applied to the debt service payments of the loan secured by the unallocated shares.  Dividends on unallocated ESOP shares in excess of the debt service payment are recorded as compensation expense and distributed to participants or participants' ESOP accounts.  During the years ended September 30, 2011, 2010, and 2009, the Bank paid $1.4 million, $1.1 million, and $863 thousand, respectively, of the ESOP debt payment because dividends on unallocated shares were insufficient to pay the scheduled debt payment, specifically on the loan for the shares acquired in the initial public offering.  Compensation expense related to the ESOP was $8.7 million for the year ended September 30, 2011, $6.5 million for the year ended September 30, 2010, and $7.9 million for the year ended September 30, 2009.  The amount included in compensation expense for dividends on unallocated ESOP shares in excess of the debt service payments was $2.7 million for the year ended September 30, 2011, which was related to the loan for the shares acquired in the corporate reorganization.  There were no such amounts for the years ended September 30, 2010 and 2009.

Participants have the option to receive the dividends on allocated shares and unallocated shares in excess of debt service payments, in cash or leave the dividend in the ESOP.  Dividends are reinvested in Company stock for those participants who choose to leave their dividends in the ESOP or who do not make an election.  The purchase of Company stock for reinvestment of dividends is made in the open market on or about the date of the cash disbursement to the participants who opt to take dividends in cash.

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Shares may be withdrawn from the ESOP Trust due to retirement, termination or death of the participant.  Additionally, a participant may begin to diversify at least 25% of their ESOP shares at age 50.  Following is a summary of shares held in the ESOP Trust as of September 30, 2011 and 2010:

	2011		2010
	(Dollars in thousands)
Allocated ESOP shares		4,393,908		4,028,784
Unreleased ESOP shares		5,564,328		1,369,353
Total ESOP shares		9,958,236		5,398,137
Fair value of unreleased ESOP shares	$	58,759	$	14,941

10.   STOCK-BASED COMPENSATION

The Company has an Option Plan and an RRP which are considered share-based plans.  Compensation expense is recognized over the service period of the share-based payment award.  The Company utilizes a fair-value-based measurement method in accounting for the share-based payment transactions with employees, except for equity instruments held by the ESOP.  All share information presented below relating to stock options and RRP shares issued prior to the corporate reorganization has been revised to reflect the 2.2637 exchange ratio.

Stock Option Plan – The purpose of the Option Plan is to provide additional incentive to certain officers, directors and key employees by facilitating their purchase of a stock interest in the Company.  Pursuant to the Option Plan, subject to adjustment as described below, 8,558,411 shares of common stock were reserved for issuance by the Company upon exercise of stock options granted to officers, directors and employees of the Company and the Bank from time to time under the Option Plan. The Company may issue both incentive and nonqualified stock options under the Option Plan.  The Company may also award stock appreciation rights under the Option Plan, although to date no stock appreciation rights have been awarded under the Option Plan.  The incentive stock options expire no later than ten years and the nonqualified stock options expire no later than fifteen years from the date of grant.  The date on which the options are first exercisable is determined by the Stock Benefits Committee (“sub-committee”), a sub-committee of the Compensation Committee (“committee”) of the Board of Directors.  The vesting period of the options generally ranges from three to five years.  The option price is equal to the market value at the date of the grant as defined by the Option Plan.

Under the Option Plan, incentive stock options may not be granted after April 2010 and nonqualified stock options may not be granted after April 2015.  At September 30, 2011, the Company had 2,856,549 shares available for future grants under the Option Plan.  This includes 2,380,866 shares added back to the Option Plan through the reload feature of the plan, which provides that the maximum number of shares with respect to which awards may be made under the plan shall be increased by (i) the number of shares of common stock repurchased by the Company with an aggregate price no greater than the cash proceeds received by the Company from the exercise of options under the Option Plan; and (ii) the number of shares surrendered to the Company in payment of the exercise price of options granted under the Option Plan.

The Option Plan is administered by the sub-committee, which selects the employees and non-employee directors to whom options are to be granted and the number of shares to be granted.  The exercise price may be paid in cash, shares of the common stock, or a combination of both.  The option price may not be less than 100% of the fair market value of the shares on the date of the grant. In the case of any employee who is granted an incentive stock option who owns more than 10% of the outstanding common stock at the time the option is granted, the option price may not be less than 110% of the fair market value of the shares on the date of the grant, and the option shall not be exercisable after the expiration of five years from the grant date.  Historically, the Company has issued shares held in treasury upon the exercise of stock options, except for the exercise of stock options after the corporate reorganization.  Shares were issued by the Company for those stock options exercised after the corporate reorganization.

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The fair value of stock option grants are estimated on the date of grant using the Black-Scholes option pricing model.  The weighted average grant-date fair value of stock options granted during the fiscal years ended September 30, 2011, 2010, and 2009 was $0.78, $1.52, and $2.22 per share, respectively.  Compensation expense attributable to stock options awards during the year ended September 30, 2011, 2010, and 2009 totaled $131 thousand ($122 thousand, net of tax), $214 thousand ($189 thousand, net of tax), and $281 thousand ($240 thousand, net of tax), respectively.  The following weighted average assumptions were used for valuing stock option grants for the years noted:

	2011			2010			2009
Risk-free interest rate		1.3	%		2.1	%		2.1	%
Expected life (years)		5			4			4
Expected volatility		25	%		25	%		24	%
Dividend yield		8.1	%		6.2	%		4.8	%
Estimated forfeitures		12.9	%		3.3	%		10.5	%

The risk-free interest rate was determined using the yield available on the option grant date for a zero-coupon U.S. Treasury security with a term equivalent to the expected life of the option.  The expected life for options granted was based upon historical experience.  The expected volatility was determined using historical volatilities based on historical stock prices.  The dividend yield was determined based upon historical quarterly dividends and the Company’s stock price on the option grant date.  Estimated forfeitures were determined based upon voluntary termination behavior and actual option forfeitures.

A summary of option activity for the years ended September 30, 2011, 2010, and 2009 follows:

	2011					2010					2009
				Weighted					Weighted					Weighted
				Average					Average					Average
	Number			Exercise		Number			Exercise		Number			Exercise
	of Options			Price		of Options			Price		of Options			Price
Options outstanding
at beginning of year		919,639		$	15.08		841,991		$	14. 69		912,879		$	13.10
Granted		2,030			10.86		119,945			14.25		94,460			18.57
Forfeited		(10,180	)		16.59		--			--		--			--
Exercised		(4,525	)		8.23		(42,297	)		4.96		(165,348	)		8.08
Options outstanding
at end of year		906,964		$	15.09		919,639		$	15.08		841,991		$	14.69

During the years ended September 30, 2011, 2010, and 2009, the total pretax intrinsic value of stock options exercised was $19 thousand, $361 thousand, and $1.7 million, respectively, and the tax benefits realized from the exercise of stock options were $7 thousand, $89 thousand, and $515 thousand, respectively.  The fair value of stock options vested during the year ended September 30, 2011, 2010, and 2009 was $150 thousand, $264 thousand, and $297 thousand, respectively.

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The following summarizes information about the stock options outstanding and exercisable as of September 30, 2011:

		Options Outstanding
				Weighted		Weighted
				Average		Average
		Number		Remaining		Exercise		Aggregate
Exercise		of Options		Contractual		Price per		Intrinsic
Price		Outstanding		Life (in years)		Share		Value
		(Dollars in thousands, except per share amounts)
$	4.07		8,783		3.55	$	4.07	$	57
	6.19 - 8.69		--		--		--		--
	10.86 - 12.71		6,550		4.95		11.42		--
	13.33 - 17.59		839,601		7.52		14.98		--
	19.19		52,030		7.08		19.19		--
			906,964		7.44	$	15.09	$	57
		Options Exercisable
				Weighted		Weighted
				Average		Average
		Number		Remaining		Exercise		Aggregate
Exercise		of Options		Contractual		Price per		Intrinsic
Price		Exercisable		Life (in years)		Share		Value
		(Dollars in thousands, except per share amounts)
$	4.07		8,783		3.55	$	4.07	$	57
	6.19 - 8.69		--		--		--		--
	10.86 - 12.71		4,926		1.93		11.61		--
	13.33 - 17.59		727,349		7.23		15.03		--
	19.19		31,218		7.08		19.19		--
			772,276		7.14	$	15.05	$	57

The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value, based on the Company’s closing stock price of $10.56 as of September 30, 2011, which would have been received by the option holders had all option holders exercised their options as of that date.  The total number of in-the-money options exercisable as of September 30, 2011 was 8,783.

As of September 30, 2011, the total future compensation cost related to non-vested stock options not yet recognized in the consolidated statements of income was $148 thousand and the weighted average period over which these awards are expected to be recognized was 1.84 years.

Recognition and Retention Plan – The objective of the RRP is to enable the Company and the Bank to retain personnel of experience and ability in key positions of responsibility.  Employees and directors of the Bank are eligible to receive benefits under the RRP at the sole discretion of the sub-committee. The total number of shares originally eligible to be granted under the RRP was 3,423,364.  At September 30, 2011, the Company had 358,767 shares available for future grants under the RRP.  The RRP expires in April 2015.  No additional grants may be made after expiration, but outstanding grants continue until they are individually vested, forfeited, or expire.

Compensation expense in the amount of the fair market value of the common stock at the date of the grant, as defined by the RRP, to the employee is recognized over the period during which the shares vest.  Compensation expense attributable to RRP awards during the years ended September 30, 2011, 2010, and 2009 totaled $131 thousand ($88 thousand, net of tax), $238 thousand ($153 thousand, net of tax), and $323 thousand ($204 thousand, net of tax), respectively.  A recipient of such restricted stock will be entitled to all voting and other stockholder rights (including the right to receive dividends on vested and non-vested shares), except that the shares, while restricted, may not be sold, pledged or otherwise disposed of and are required to be held in escrow by the Company.  If a holder of such restricted stock terminates employment for reasons other than death or disability, the employee forfeits all rights to the non-vested shares under restriction.  If the participant’s service terminates as a result of death, disability, or if a change in control of the Bank occurs, all restrictions expire and all non-vested shares become unrestricted. 

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 A summary of RRP share activity for the years ended September 30, 2011, 2010, and 2009 follows:

	2011					2010					2009
				Weighted					Weighted					Weighted
				Average					Average					Average
	Number			Grant Date		Number			Grant Date		Number			Grant Date
	of Shares			Fair Value		of Shares			Fair Value		of Shares			Fair Value
Unvested RRP shares
at beginning of year:		23,762		$	15.07		34,177		$	15.17		52,509		$	14.87
Granted		--			--		11,317			14.42		5,657			17.64
Vested		(10,180	)		15.30		(21,732	)		14.88		(23,989	)		15.10
Forfeited		--			--		--			--		--			--
Unvested RRP shares
at end of year		13,582		$	14.90		23,762		$	15.07		34,177		$	15.17

The estimated forfeiture rate for the RRP shares granted during the year ended September 30, 2011, 2010, and 2009 was 0% based upon voluntary termination behavior and actual forfeitures.  The fair value of RRP shares that vested during the years ended September 30, 2011, 2010, and 2009 totaled $120 thousand, $324 thousand, and $363 thousand, respectively.  As of September 30, 2011, there was $124 thousand of unrecognized compensation cost related to non-vested RRP shares to be recognized over a weighted average period of 1.9 years.

11. PERFORMANCE BASED COMPENSATION

The Company and the Bank have a short-term performance plan for all officers and a deferred incentive bonus plan for senior and executive officers.  The short-term performance plan has a component tied to Company performance and a component tied to individual participant performance.  Individual performance criteria are established by executive management for eligible non-executive employees of the Bank; individual performance of executive officers is reviewed by the committee.  Company performance criteria are approved by the committee.  Short-term performance plan awards are granted based upon a performance review by the committee.  The committee may exercise its discretion and reduce or not grant awards.  The deferred incentive bonus plan is intended to operate in conjunction with the short-term performance plan.  A participant in the deferred incentive bonus plan can elect to defer into an account between $2 thousand and up to 50% (executive officers can defer up to 50%, while senior officers can elect to defer up to 35%) of the short-term performance plan award up to but not exceeding $100 thousand.  The amount deferred receives an employer match of up to 50% that is accrued over a three year mandatory deferral period.  The amount deferred, plus up to a 50% match, is deemed to have been invested in Company stock on the last business day of the calendar year preceding the receipt of the short-term performance plan award, in the form of phantom stock.  The number of shares deemed purchased in phantom stock receives dividend equivalents as if the stock were owned by the officer.  At the end of the mandatory deferral period, the deferred incentive bonus plan award is paid out in cash and is comprised of the initial amount deferred, the match amount, dividend equivalents on the phantom shares over the deferral period and the increase in the market value of the Company’s stock over the deferral period, if any, on the phantom shares.  There is no provision for the reduction of the deferred incentive bonus plan award if the market value of the Company’s stock at the time is lower than the market value at the time of the deemed investment.  The total amount of short-term performance plan awards provided for the years ended September 30, 2011, 2010, and 2009 amounted to $1.8 million, $1.7 million, and $1.1 million, respectively, of which $345 thousand, $332 thousand, and $137 thousand, respectively, was deferred under the deferred incentive bonus plan.  The deferrals, any earnings on those deferrals and increases in the market value of the phantom shares, if any, will be paid in 2013, 2014, and 2015.  During fiscal years 2011, 2010, and 2009, the amount expensed in conjunction with the deferred amounts was $153 thousand, $86 thousand, and $51 thousand, respectively.

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12.   COMMITMENTS AND CONTINGENCIES

The Bank had commitments outstanding to originate and purchase loans as of September 30, 2011 and 2010 as follows:

	2011		2010
	(Dollars in thousands)
Originate fixed-rate	$	89,059	$	75,001
Originate adjustable-rate		24,047		20,144
Purchase/participate fixed-rate		30,650		3,526
Purchase/participate adjustable-rate		26,556		8,395
	$	170,312	$	107,066

As of September 30, 2011 and 2010, the Bank had approved but unadvanced home equity lines of credit and outstanding commitments on commercial loans of $265.5 million and $266.5 million, respectively.  Approval of lines of credit is based upon underwriting standards that do not allow total borrowings, including existing mortgages and lines of credit, to exceed 90% of the estimated market value of the customer’s home.  Prior to June 2010, the limit was 95% of the estimated market value of the customer’s home.

Commitments to originate mortgage and non-mortgage loans are agreements to lend to a customer as long as there is no violation of any condition established in the contract.  Commitments generally have fixed expiration dates or other termination clauses and may require the payment of a rate lock fee.  Some of the commitments are expected to expire without being fully drawn upon; therefore the amount of total commitments disclosed above does not necessarily represent future cash requirements.  The Bank evaluates each customer’s creditworthiness on a case-by-case basis.  The amount of collateral obtained, if considered necessary by the Bank, upon extension of credit is based on management’s credit evaluation of the customer.  As of September 30, 2011 and 2010, there were no significant loan-related commitments that met the definition of derivatives or commitments to sell mortgage loans.

As of September 30, 2011, the Bank had $1.7 million of agreements outstanding in connection with the remodeling of the Bank’s home office. 

13.   REGULATORY CAPITAL REQUIREMENTS

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a material adverse effect on the Company’s financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices.  The Bank’s capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings, and other factors.

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The Bank’s primary regulatory agency requires that the Bank maintain minimum ratios of tangible equity of 1.5%, Tier 1 (core) capital of 4%, and total risk-based capital of 8%.  As of September 30, 2011 and 2010, the most recent regulatory guidelines categorized the Bank as “well capitalized” under the regulatory framework for prompt corrective action.  To be categorized as “well capitalized,” the Bank must maintain minimum Tier 1 (core) capital, Tier 1 risked based capital and total risk-based capital ratios as set forth in the table below.  Management believes, as of September 30, 2011, that the Bank meets all capital adequacy requirements to which it is subject and there were no conditions or events subsequent to September 30, 2011 that would change the Bank’s category.  There are currently no regulatory capital requirements at the Company, but under the Dodd-Frank Act, the Company will become subject to regulatory capital requirements beginning July 21, 2015.

											To Be Well
											Capitalized
											Under Prompt
						For Capital					Corrective Action
	Actual					Adequacy Purposes					Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
As of September 30, 2011:
Tangible equity	$	1,369,143		15.1	%	$	135,926		1.5	%		N/A		N/A
Tier 1 (core) capital		1,369,143		15.1			362,469		4.0		$	453,086		5.0	%
Tier 1 (core) risk-based capital		1,369,143		37.9			N/A		N/A			216,551		6.0
Total risk-based capital		1,380,853		38.3			288,734		8.0			360,918		10.0
As of September 30, 2010:
Tangible equity	$	824,768		9.8	%	$	126,666		1.5	%		N/A		N/A
Tier 1 (core) capital		824,768		9.8			337,776		4.0		$	422,220		5.0	%
Tier 1 (core) risk-based capital		824,768		23.5			N/A		N/A			210,597		6.0
Total risk-based capital		835,324		23.8			280,796		8.0			350,995		10.0

A reconciliation of the Bank’s equity under GAAP to regulatory capital amounts as of September 30, 2011 and 2010 is as follows:

	2011			2010
	(Dollars in thousands)
Total Bank equity as reported under GAAP	$	1,395,708		$	857,114
Unrealized gains on AFS securities		(26,314	)		(31,862	)
Other		(251	)		(484	)
Total tangible and core capital		1,369,143			824,768
ACL(1)		11,710			10,556
Total risk based capital	$	1,380,853		$	835,324

(1)   This amount represents the general valuation allowances calculated using the formula analysis.  SVA are netted against the related loan balance on the Thrift Financial Report and are therefore not included in this amount.

Under OCC and FRB regulations, there are limitations on the amount of capital the Bank may distribute to the Company.  Generally, this is limited to the earnings of the previous two calendar years and current year-to-date earnings.  Under OCC and FRB safe harbor regulations, the Bank may distribute to the Company capital not exceeding net income for the current calendar year and the prior two calendar years.  At September 30, 2011, the Bank was in compliance with the OCC and FRB safe harbor regulations.  So long as the Bank continues to remain “well capitalized” after each capital distribution, operate in a safe and sound manner, provide the OCC and FRB with updated capital levels, and non-performing asset balances and allowance for credit loss information as requested, and comply with OCC interest rate risk management guidelines, it is management’s belief that the OCC and FRB will continue to allow the Bank to distribute its net income to the Company, although no assurance can be given in this regard.

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14.   FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair Value Measurements - ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.  ASC 820 applies only to fair value measurements already required or permitted by other accounting standards and does not impose requirements for additional fair value measures.  ASC 820 was issued to increase consistency and comparability in reporting fair values.

The Company uses fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures.  The Company did not have any liabilities that were measured at fair value at September 30, 2011 and 2010.  The Company’s AFS securities are recorded at fair value on a recurring basis.  Additionally, from time to time, the Company may be required to record at fair value other assets or liabilities on a non-recurring basis, such as REO, LHFS, and impaired loans.  These non-recurring fair value adjustments involve the application of lower-of-cost-or-fair value accounting or write-downs of individual assets.

In accordance with ASC 820, the Company groups its assets at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value. These levels are:

• Level 1 — Valuation is based upon quoted prices for identical instruments traded in active markets.

• Level 2 — Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

• Level 3 — Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect the Company’s own estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include the use of option pricing models, discounted cash flow models, and similar techniques. The results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability.  

The Company bases its fair values on the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date.  As required by ASC 820, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value.

The following is a description of valuation methodologies used for assets measured at fair value on a recurring basis.

AFS Securities - The Company’s AFS securities portfolio is carried at estimated fair value, with any unrealized gains and losses, net of taxes, reported as AOCI in stockholders' equity.  The Company’s major security types based on the nature and risks of the securities are included in the table below.  The majority of the securities within the AFS portfolio are issued by U.S. GSEs.  The fair values for all AFS securities are based on quoted prices for similar securities.  Various modeling techniques are used to determine pricing for the Company’s securities, including option pricing and discounted cash flow models. The inputs to these models may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data.  There is an AFS security in the AFS portfolio that has significant unobservable inputs requiring the independent pricing services to use some judgment in determining its fair value.  This AFS security is classified as Level 3.  All other AFS securities are classified as Level 2.

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The following tables provide the level of valuation assumption used to determine the carrying value of the Company’s AFS securities measured at fair value on a recurring basis at September 30, 2011 and 2010.

	September 30, 2011
			Quoted Prices		Significant		Significant
			in Active Markets		Other Observable		Unobservable
	Carrying		for Identical Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)(1)
	(Dollars in thousands)
AFS securities
GSE debentures	$	748,308	$	--	$	748,308	$	--
Municipal bonds		2,754		--		2,754		--
Trust preferred securities		2,941		--		--		2,941
MBS		732,436		--		732,436		--
	$	1,486,439	$	--	$	1,483,498	$	2,941
	September 30, 2010
			Quoted Prices		Significant		Significant
			in Active Markets		Other Observable		Unobservable
	Carrying		for Identical Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)(2)
	(Dollars in thousands)
AFS securities
GSE debentures	$	50,255	$	--	$	50,255	$	--
Municipal bonds		2,819		--		2,819		--
Trust preferred securities		2,796		--		--		2,796
MBS		1,004,496		--		1,004,496		--
	$	1,060,366	$	--	$	1,057,570	$	2,796

(1)   The Company’s Level 3 AFS securities have had no activity from September 30, 2010 to September 30, 2011, except for principal repayments of $87 thousand and reductions in net unrealized losses recognized in other comprehensive income.  Reductions of net unrealized losses included in other comprehensive income for the year ended September 30, 2011 were $115 thousand.

(2)   The Company’s Level 3 AFS securities have had no activity from September 30, 2009 to September 30, 2010, except for principal repayments of $93 thousand and reductions in net unrealized losses recognized in other comprehensive income.  Reductions of net unrealized losses included in other comprehensive income for the year ended September 30, 2010 were $460 thousand.

The following is a description of valuation methodologies used for significant assets measured at fair value on a non-recurring basis.

Loans Receivable - Loans which meet certain criteria are evaluated individually for impairment. A loan is considered impaired when, based upon current information and events, it is probable the Bank will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the loan agreement.  The unpaid principal balance of impaired loans at September 30, 2011 and 2010 was $72.0 million and $57.1 million, respectively. Substantially all of the Bank’s impaired loans at September 30, 2011 and 2010 were secured by residential real estate.  These impaired loans are individually assessed to ensure that the carrying value of the loan is not in excess of the fair value of the collateral, less estimated selling costs.  Fair value is estimated through current appraisals, AVMs, BPOs, or listing prices in the event of a possible short sale.  Fair values may be adjusted by management to reflect current economic and market conditions and, as such, are classified as Level 3. Based on this evaluation, the Company maintained an ACL of $3.8 million and $4.3 million at September 30, 2011 and 2010, respectively, for such impaired loans.

REO, net - REO primarily represents residential real estate acquired as a result of foreclosure or by deed in lieu of foreclosure and is carried at lower-of-cost or fair value.  Fair value is estimated through current appraisals, AVMs, BPOs, or listing prices.  As these properties are actively marketed, estimated fair values may be adjusted by management to reflect current economic and market conditions and, as such, are classified as Level 3.  The fair value of REO at September 30, 2011 and 2010 was $11.3 million and $9.9 million, respectively.

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The following tables provide the level of valuation assumption used to determine the carrying value of the Company’s assets measured at fair value on a non-recurring basis at September 30, 2011 and 2010.

	September 30, 2011
			Quoted Prices		Significant		Significant
			in Active Markets		Other Observable		Unobservable
	Carrying		for Identical Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in thousands)
Impaired loans	$	72,048	$	--	$	--	$	72,048
REO, net		11,321		--		--		11,321
	$	83,369	$	--	$	--	$	83,369
	September 30, 2010
			Quoted Prices		Significant		Significant
			in Active Markets		Other Observable		Unobservable
	Carrying		for Identical Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in thousands)
Impaired loans	$	57,118	$	--	$	--	$	57,118
REO, net		9,920		--		--		9,920
	$	67,038	$	--	$	--	$	67,038

Fair Value Disclosures - The Company determined estimated fair value amounts using available market information and a selection from a variety of valuation methodologies. However, considerable judgment is required to interpret market data to develop the estimates of fair value. Accordingly, the estimates presented are not necessarily indicative of the amount the Company could realize in a current market exchange. The use of different market assumptions and estimation methodologies may have a material impact on the estimated fair value amounts.  The fair value estimates presented herein are based on pertinent information available to management as of September 30, 2011 and 2010. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since those dates.  The carrying amounts and estimated fair values of the Company’s financial instruments as of September 30, 2011 and 2010 were as follows:

	2011				2010
			Estimated				Estimated
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
	(Dollars in thousands)
Assets:
Cash and cash equivalents	$	121,070	$	121,070	$	65,217	$	65,217
AFS securities		1,486,439		1,486,439		1,060,366		1,060,366
HTM securities		2,370,117		2,434,392		1,880,154		1,913,454
Loans receivable		5,149,734		5,475,150		5,168,202		5,392,550
BOLI		56,534		56,534		54,710		54,710
Capital stock of FHLB		126,877		126,877		120,866		120,866
Liabilities:
Deposits		4,495,173		4,553,516		4,386,310		4,459,052
FHLB Advances		2,379,462		2,569,958		2,348,371		2,557,064
Other borrowings		515,000		545,096		668,609		701,099

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The following methods and assumptions were used to estimate the fair value of the financial instruments:

Cash and Cash Equivalents - The carrying amounts of cash and cash equivalents are considered to approximate their fair value due to the nature of the financial asset.

AFS and HTM Securities - Estimated fair values of securities are based on one of three methods:  1) quoted market prices where available, 2) quoted market prices for similar instruments if quoted market prices are not available, 3) unobservable data that represents the Bank’s assumptions about items that market participants would consider in determining fair value where no market data is available.  AFS securities are carried at estimated fair value.  HTM securities are carried at amortized cost.

Loans Receivable - Fair values are estimated for portfolios with similar financial characteristics.  Loans are segregated by type, such as one- to four-family residential mortgages, multi-family residential mortgages, nonresidential, and installment loans.  Each loan category is further segmented into fixed- and adjustable interest rate categories.  Market pricing sources are used to approximate the estimated fair value of fixed- and adjustable-rate one- to four-family residential mortgages.  For all other loan categories, future cash flows are discounted using the LIBOR curve plus a margin at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturity.

BOLI- The carrying value of BOLI is considered to approximate its fair value due to the nature of the financial asset.

Capital Stock of FHLB - The carrying value of FHLB stock equals cost.  The fair value is based on redemption at par value.

Deposits - The estimated fair value of demand deposits, savings, and money market accounts is the amount payable on demand at the reporting date.  The estimated fair value of fixed-maturity certificates of deposit is estimated by discounting the future cash flows using a margin to the LIBOR curve.

Advances from FHLB - The estimated fair value of advances from FHLB is determined by discounting the future cash flows of each advance using a margin to the LIBOR curve.

Other Borrowings - The estimated fair value of the repurchase agreements is determined by discounting the future cash flows of each agreement using a margin to the LIBOR curve.  The Debentures had a variable rate structure, with the ability to redeem at par; therefore, the carrying value of the Debentures approximated their estimated fair value at September 30, 2010.  The Debentures were redeemed in April 2011.

15.   SUBSEQUENT EVENTS

In preparing these financial statements, management has evaluated events occurring subsequent to September 30, 2011, for potential recognition and disclosure.  There have been no material events or transactions which would require adjustments to the consolidated financial statements at September 30, 2011.

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16.   SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

The following tables present summarized quarterly data for each of the years indicated for the Company.  In December 2010, Capitol Federal Financial completed its corporate reorganization.  All share information used to calculate EPS in the consolidated financial statements prior to the corporate reorganization has been revised to reflect the 2.2637 exchange ratio and is reflected in the following tables.

	First			Second		Third		Fourth
	Quarter			Quarter		Quarter		Quarter		Total
	(Dollars and counts in thousands, except per share amounts)
2011
Total interest and dividend income	$	87,247		$	84,941	$	88,083	$	86,594	$	346,865
Net interest and dividend income		40,005			40,556		44,308		43,865		168,734
Provision for credit losses		650			520		1,240		1,650		4,060
Net income (loss)		(11,258	)		15,636		17,259		16,766		38,403
Basic earnings (loss) per share		(0.07	)		0.10		0.10		0.10		0.24
Diluted earnings (loss) per share		(0.07	)		0.10		0.10		0.10		0.24
Dividends paid per public share		0.800			0.675		0.075		0.075		1.625
Average number of shares outstanding		165,541			161,500		161,642		161,784		162,625
2010
Total interest and dividend income	$	98,887		$	93,707	$	91,485	$	89,972	$	374,051
Net interest and dividend income		44,854			42,683		40,887		41,141		169,565
Provision for credit losses		3,115			3,200		1,816		750		8,881
Net income		20,980			14,655		16,758		15,447		67,840
Basic EPS		0.13			0.09		0.10		0.09		0.41
Diluted EPS		0.13			0.09		0.10		0.09		0.41
Dividends paid per public share		0.790			0.500		0.500		0.500		2.290
Average number of shares outstanding		165,854			165,734		165,869		165,989		165,862

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17.   PARENT COMPANY FINANCIAL INFORMATION (PARENT COMPANY ONLY)

The Company serves as the holding company for the Bank (see Note 1).  The Company’s (parent company only) balance sheets as of September 30, 2011 and 2010, and the related statements of income and cash flows for each of the three years in the period ended September 30, 2011 are as follows:

BALANCE SHEETS
SEPTEMBER 30, 2011 and 2010
(Dollars in thousands, except share amounts)
	2011			2010
ASSETS
Cash and cash equivalents	$	113,101		$	88,098
Investment in the Bank		1,395,708			857,115
AFS securities, at fair value (amortized cost of $362,271 and $0)		362,875			--
Investment in certificates of deposit at the Bank		--			55,000
Note receivable - ESOP		52,759			8,024
Other assets		75			7,604
Accrued interest receivable		1,812			--
Income taxes receivable		2,855			138
Deferred income tax assets		10,409			--
TOTAL ASSETS	$	1,939,594		$	1,015,979
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Accounts payable and accrued expenses	$	65		$	420
Other borrowings		--			53,609
Total liabilities		65			54,029
STOCKHOLDERS’ EQUITY:
Preferred stock, $.01 par value; 100,000,000 shares authorized,
no shares issued or outstanding		--			--
Common stock, $.01 par value; 1,400,000,000 shares authorized,
167,498,133 shares issued;  167,498,133 and 73,992,678 shares		1,675			915
outstanding as of September 30, 2011 and 2010, respectively
Additional paid-in capital		1,392,691			457,795
Unearned compensation - ESOP		(50,547	)		(6,050	)
Unearned compensation - RRP		(124	)		(255	)
Retained earnings		569,127			801,044
AOCI, net of tax		26,707			31,862
		1,939,529			1,285,311
Treasury stock, at cost, 0 and 17,519,609 shares as of
September 30, 2011 and 2010, respectively		--			(323,361	)
Total stockholders’ equity		1,939,529			961,950
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,939,594		$	1,015,979

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STATEMENTS OF INCOME
YEARS ENDED SEPTEMBER 30, 2011, 2010, and 2009
(Dollars in thousands)
	2011			2010			2009
INTEREST AND DIVIDEND INCOME:
Dividend income from the Bank	$	45,643		$	84,869		$	50,056
Interest income from other investments		3,221			2,927			3,612
Interest income from securities		1,093			--			--
Total interest and dividend income		49,957			87,796			53,668
INTEREST EXPENSE		855			1,680			2,573
NET INTEREST AND DIVIDEND INCOME		49,102			86,116			51,095
OTHER INCOME		26			50			76
OTHER EXPENSES:
Contribution to Foundation		40,000			--			--
Salaries and employee benefits		856			929			1,108
Regulatory and outside services		337			493			228
Other, net		650			270			243
Total other expenses		41,843			1,692			1,579
INCOME BEFORE INCOME TAX BENEFIT AND EQUITY
IN UNDISTRIBUTED EARNINGS OF SUBSIDIARY		7,285			84,474			49,592
INCOME TAX BENEFIT		(13,425	)		(138	)		(162	)
INCOME BEFORE EQUITY IN UNDISTRIBUTED
EARNINGS OF SUBSIDIARY		20,710			84,612			49,754
EQUITY IN UNDISTRIBUTED EARNINGS OF SUBSIDIARY
(EXCESS OF DISTRIBUTION OVER)		17,693			(16,772	)		16,544
NET INCOME	$	38,403		$	67,840		$	66,298

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STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 2011, 2010, and 2009
(Dollars in thousands)
	2011			2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	38,403		$	67,840		$	66,298
Adjustments to reconcile net income to net cash provided by
operating activities:
Equity in excess of distribution over/(undistributed)
earnings of subsidiary		(17,693	)		16,772			(16,544	)
Amortization/accretion of premiums/discounts		3,529			--			--
Amortization of deferred debt issuance costs		--			--			28
Other, net		(1,812	)		1			14
Provision for deferred income taxes		(10,409	)		--			--
Changes in:
Other assets		1,547			--			2,999
Income taxes receivable/payable		(2,927	)		24			(95	)
Accounts payable and accrued expenses		(355	)		3			(292	)
Net cash flows provided by operating activities		10,283			84,640			52,408
CASH FLOWS FROM INVESTING ACTIVITIES:
Offering proceeds downstreamed to Bank		(567,422	)		--			--
Purchase of AFS investment securities		(405,800	)		--			--
Proceeds from maturities of AFS securities		40,000			--			--
Proceeds from maturities of Bank certificates		55,000			5,000			--
Purchase of Capitol Federal Financial, Inc. stock		--			(1	)		--
Principal collected on notes receivable from ESOP		2,525			2,387			2,256
Net cash flows (used in)/provided by investing activities		(875,697	)		7,386			2,256
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from stock offering (Deferred offering costs)		1,094,101			(5,982	)		--
Payment from subsidiary for sale of treasury stock related to
RRP shares		--			162			87
Dividends paid		(150,110	)		(48,400	)		(44,069	)
Repayment of other borrowings		(53,609	)		--			--
Acquisition of treasury stock		--			(4,019	)		(2,426	)
Stock options exercised		35			210			1,337
Net cash flows provided by/(used in) financing activities		890,417			(58,029	)		(45,071	)
NET INCREASE IN CASH AND CASH EQUIVALENTS		25,003			33,997			9,593
CASH AND CASH EQUIVALENTS:
Beginning of year		88,098			54,101			44,508
End of year	$	113,101		$	88,098		$	54,101
SUPPLEMENTAL DISCLOSURES OF CASH FLOW   INFORMATION:
Interest payments	$	1,274		$	1,678		$	2,866
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Note to ESOP in exchange for common stock	$	47,260		$	--		$	--

100

EX-21

EXHIBIT 21

SUBSIDIARIES OF THE REGISTRANT

			State of
		Percentage	Incorporation
		of	or
Parent	Subsidiary	Ownership	Organization
Capitol Federal	Capitol Federal	100%	Maryland
Financial, Inc.	Savings Bank
Capitol Federal	Capitol Funds, Inc.	100%	Kansas
Savings Bank
Capitol Funds,	Capitol Federal	100%	Vermont
Inc.	Mortgage Reinsurance
	Company

EX-23

EXHIBIT 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statements Nos. 333-174890 and 333-174891 on Form S-8 of our reports dated November 29, 2011, relating to the consolidated financial statements of Capitol Federal Financial, Inc. and subsidiary, and the effectiveness of Capitol Federal Financial, Inc.’s internal control over financial reporting appearing in this Annual Report on Form 10-K of Capitol Federal Financial, Inc. for the year ended September 30, 2011.

Kansas City, Missouri

November 29, 2011

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, John B. Dicus, certify that:

1.	I have reviewed this Annual Report on Form 10-K of Capitol Federal Financial, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-l5(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15 d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 29, 2011	By:	/s/ John B. Dicus
		John B. Dicus
		Chairman, President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Kent G. Townsend, certify that:

1.	I have reviewed this Annual Report on Form 10-K of Capitol Federal Financial, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-l5(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15 d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 29, 2011	By:	/s/ Kent G. Townsend
		Kent G. Townsend
		Executive Vice President, Chief Financial Officer and Treasurer

EX-32

EXHIBIT 32

CERTIFICATE PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Capitol Federal Financial, Inc. (the “Company”) on Form 10-K for the fiscal year ended September 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John B. Dicus, Chief Executive Officer of the Company, and I, Kent G. Townsend, Executive Vice President, Chief Financial Officer and Treasurer of the Company, certify, in my capacity as an officer of the Company, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company as of the dates and for the periods presented in the financial statements included in such Report.

Date:   November 29, 2011                                    By:   /s/ John B. Dicus                                         

                                                                                        John B. Dicus, Chairman, President and

                                                                                        Chief Executive Officer

Date:   November 29, 2011                                   By:   /s/ Kent G. Townsend                                 

                                                                                        Kent G. Townsend, Executive Vice President,

                                                                                        Chief Financial Officer and Treasurer

XML

Parent Company Financial Information (Parent Company Only) (Tables)

12 Months Ended

Sep. 30, 2011

Parent Company Financial Information (Parent Company Only) [Abstract]

Schedule Of Balance Sheets

BALANCE SHEETS
SEPTEMBER 30, 2011 and 2010
(Dollars in thousands, except share amounts)
	2011			2010
ASSETS
Cash and cash equivalents	$	113,101		$	88,098
Investment in the Bank		1,395,708			857,115
AFS securities, at fair value (amortized cost of $362,271 and $0)		362,875			--
Investment in certificates of deposit at the Bank		--			55,000
Note receivable - ESOP		52,759			8,024
Other assets		75			7,604
Accrued interest receivable		1,812			--
Income taxes receivable		2,855			138
Deferred income tax assets		10,409			--
TOTAL ASSETS	$	1,939,594		$	1,015,979
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable and accrued expenses	$	65		$	420
Other borrowings		--			53,609
Total liabilities		65			54,029
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value; 100,000,000 shares authorized,
no shares issued or outstanding		--			--
Common stock, $.01 par value; 1,400,000,000 shares authorized,
167,498,133 shares issued;  167,498,133 and 73,992,678 shares		1,675			915
outstanding as of September 30, 2011 and 2010, respectively
Additional paid-in capital		1,392,691			457,795
Unearned compensation - ESOP		(50,547	)		(6,050	)
Unearned compensation - RRP		(124	)		(255	)
Retained earnings		569,127			801,044
AOCI, net of tax		26,707			31,862
		1,939,529			1,285,311
Treasury stock, at cost, 0 and 17,519,609 shares as of
September 30, 2011 and 2010, respectively		--			(323,361	)
Total stockholders' equity		1,939,529			961,950
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,939,594		$	1,015,979

Schedule Of Statements Of Income

STATEMENTS OF INCOME
YEARS ENDED SEPTEMBER 30, 2011, 2010, and 2009
(Dollars in thousands)
	2011			2010			2009
INTEREST AND DIVIDEND INCOME:
Dividend income from the Bank	$	45,643		$	84,869		$	50,056
Interest income from other investments		3,221			2,927			3,612
Interest income from securities		1,093			--			--
Total interest and dividend income		49,957			87,796			53,668
INTEREST EXPENSE		855			1,680			2,573
NET INTEREST AND DIVIDEND INCOME		49,102			86,116			51,095
OTHER INCOME		26			50			76
OTHER EXPENSES:
Contribution to Foundation		40,000			--			--
Salaries and employee benefits		856			929			1,108
Regulatory and outside services		337			493			228
Other, net		650			270			243
Total other expenses		41,843			1,692			1,579
INCOME BEFORE INCOME TAX BENEFIT AND EQUITY
IN UNDISTRIBUTED EARNINGS OF SUBSIDIARY		7,285			84,474			49,592
INCOME TAX BENEFIT		(13,425	)		(138	)		(162	)
INCOME BEFORE EQUITY IN UNDISTRIBUTED
EARNINGS OF SUBSIDIARY		20,710			84,612			49,754
EQUITY IN UNDISTRIBUTED EARNINGS OF SUBSIDIARY
(EXCESS OF DISTRIBUTION OVER)		17,693			(16,772	)		16,544
NET INCOME	$	38,403		$	67,840		$	66,298

Schedule Of Statements Of Cash Flows

STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 2011, 2010, and 2009
(Dollars in thousands)
	2011			2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	38,403		$	67,840		$	66,298
Adjustments to reconcile net income to net cash provided by
operating activities:
Equity in excess of distribution over/(undistributed)
earnings of subsidiary		(17,693	)		16,772			(16,544	)
Amortization/accretion of premiums/discounts		3,529			--			--
Amortization of deferred debt issuance costs		--			--			28
Other, net		(1,812	)		1			14
Provision for deferred income taxes		(10,409	)		--			--
Changes in:
Other assets		1,547			--			2,999
Income taxes receivable/payable		(2,927	)		24			(95	)
Accounts payable and accrued expenses		(355	)		3			(292	)
Net cash flows provided by operating activities		10,283			84,640			52,408
CASH FLOWS FROM INVESTING ACTIVITIES:
Offering proceeds downstreamed to Bank		(567,422	)		--			--
Purchase of AFS investment securities		(405,800	)		--			--
Proceeds from maturities of AFS securities		40,000			--			--
Proceeds from maturities of Bank certificates		55,000			5,000			--
Purchase of Capitol Federal Financial, Inc. stock		--			(1	)		--
Principal collected on notes receivable from ESOP		2,525			2,387			2,256
Net cash flows (used in)/provided by investing activities		(875,697	)		7,386			2,256
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from stock offering (Deferred offering costs)		1,094,101			(5,982	)		--
Payment from subsidiary for sale of treasury stock related to
RRP shares		--			162			87
Dividends paid		(150,110	)		(48,400	)		(44,069	)
Repayment of other borrowings		(53,609	)		--			--
Acquisition of treasury stock		--			(4,019	)		(2,426	)
Stock options exercised		35			210			1,337
Net cash flows provided by/(used in) financing activities		890,417			(58,029	)		(45,071	)
NET INCREASE IN CASH AND CASH EQUIVALENTS		25,003			33,997			9,593
CASH AND CASH EQUIVALENTS:
Beginning of year		88,098			54,101			44,508
End of year	$	113,101		$	88,098		$	54,101
SUPPLEMENTAL DISCLOSURES OF CASH FLOW   INFORMATION:
Interest payments	$	1,274		$	1,678		$	2,866
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Note to ESOP in exchange for common stock	$	47,260		$	--		$	--

XML

Loans Receivable And Allowance For Credit Losses (Troubled Debt Restructurings On Financing Receivable, Recorded Investment) (Details) (USD $) In Thousands	Sep. 30, 2011
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	$ 50,291
Restructurings Due To Financial Difficulties [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	30,667
Restructurings Due To Financial Difficulties [Member] | One-To Four-Family Loans - Originated [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	23,534
Restructurings Due To Financial Difficulties [Member] | One-To Four-Family Loans - Purchased [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	6,155
Restructurings Due To Financial Difficulties [Member] | Multi-Family And Commercial Loans [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	563
Restructurings Due To Financial Difficulties [Member] | Consumer - Home Equity [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	413
Restructurings Due To Financial Difficulties [Member] | Consumer - Other [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	2
Loan Endorsement Program [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	19,624
Loan Endorsement Program [Member] | One-To Four-Family Loans - Originated [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	19,624
One-To Four-Family Loans - Originated [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	43,158
One-To Four-Family Loans - Purchased [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	6,155
Multi-Family And Commercial Loans [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	563
Consumer - Home Equity [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	413
Consumer - Other [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	$ 2

XML

Securities (Schedule Of Amortized Cost And Estimated Fair Value Of Securities Pledged As Collateral) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Repurchase Agreements [Member] | Amortized Cost [Member]
Securities pledged as collateral	$ 571,016	$ 671,852
Repurchase Agreements [Member] | Estimated Fair Value [Member]
Securities pledged as collateral	597,286	709,919
Retail Deposits [Member] | Amortized Cost [Member]
Securities pledged as collateral	44,429
Retail Deposits [Member] | Estimated Fair Value [Member]
Securities pledged as collateral	44,991
Public Unit Deposits [Member] | Amortized Cost [Member]
Securities pledged as collateral	116,472	120,241
Public Unit Deposits [Member] | Estimated Fair Value [Member]
Securities pledged as collateral	124,785	128,621
Federal Reserve Bank [Member] | Amortized Cost [Member]
Securities pledged as collateral	26,666	34,720
Federal Reserve Bank [Member] | Estimated Fair Value [Member]
Securities pledged as collateral	27,939	36,363
Amortized Cost [Member]
Securities pledged as collateral	758,583	826,813
Estimated Fair Value [Member]
Securities pledged as collateral	$ 795,001	$ 874,903

XML

Borrowed Funds (Maturity Of Borrowed Funds) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2011	Sep. 30, 2010
Federal Home Loan Bank, Advances, Maturities Summary	$ 2,400,000	$ 2,376,000
Repurchase Agreements Amount	515,000
Total Borrowings Amount	2,915,000
Weighted Average Contractual Rate	3.48%
Weighted Average Effective Rate	3.76%
2012 [Member]
Federal Home Loan Bank, Advances, Maturities Summary	350,000
Repurchase Agreements Amount	150,000
Total Borrowings Amount	500,000
Weighted Average Contractual Rate	3.67%
Weighted Average Effective Rate	3.67%
2013 [Member]
Federal Home Loan Bank, Advances, Maturities Summary	525,000
Repurchase Agreements Amount	145,000
Total Borrowings Amount	670,000
Weighted Average Contractual Rate	3.74%
Weighted Average Effective Rate	4.00%
2014 [Member]
Federal Home Loan Bank, Advances, Maturities Summary	450,000
Repurchase Agreements Amount	100,000
Total Borrowings Amount	550,000
Weighted Average Contractual Rate	3.33%
Weighted Average Effective Rate	3.96%
2015 [Member]
Federal Home Loan Bank, Advances, Maturities Summary	200,000
Repurchase Agreements Amount	20,000
Total Borrowings Amount	220,000
Weighted Average Contractual Rate	3.50%
Weighted Average Effective Rate	4.16%
2016 [Member]
Federal Home Loan Bank, Advances, Maturities Summary	275,000
Total Borrowings Amount	275,000
Weighted Average Contractual Rate	3.86%
Weighted Average Effective Rate	4.39%
Thereafter [Member]
Federal Home Loan Bank, Advances, Maturities Summary	600,000
Repurchase Agreements Amount	100,000
Total Borrowings Amount	$ 700,000
Weighted Average Contractual Rate	3.06%
Weighted Average Effective Rate	3.08%

XML

Loans Receivable And Allowance For Credit Losses (Troubled Debt Restructurings On Financing Receivables) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Sep. 30, 2011
Financing Receivable, Modifications [Line Items]
Number Of Contracts	167
Pre-Restructured Outstanding	$ 29,037
Post-Restructured Outstanding	28,718
One-To Four-Family Loans - Originated [Member]
Financing Receivable, Modifications [Line Items]
Number Of Contracts	158
Pre-Restructured Outstanding	27,250
Post-Restructured Outstanding	26,936
One-To Four-Family Loans - Purchased [Member]
Financing Receivable, Modifications [Line Items]
Number Of Contracts	4
Pre-Restructured Outstanding	1,563
Post-Restructured Outstanding	1,555
Multi-Family And Commercial Loans [Member]
Financing Receivable, Modifications [Line Items]
Number Of Contracts
Pre-Restructured Outstanding
Post-Restructured Outstanding
Consumer - Home Equity [Member]
Financing Receivable, Modifications [Line Items]
Number Of Contracts	5
Pre-Restructured Outstanding	224
Post-Restructured Outstanding	227
Consumer - Other [Member]
Financing Receivable, Modifications [Line Items]
Number Of Contracts
Pre-Restructured Outstanding
Post-Restructured Outstanding

XML

Employee Benefit Plans (Summary Of Shares Held In The ESOP Trust) (Details) (USD $) In Thousands, except Share data	Sep. 30, 2011	Sep. 30, 2010 ESOP Trust [Member]
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Allocated ESOP shares	4,393,908	4,028,784
Unreleased ESOP shares	5,564,328	1,369,353
Total ESOP shares	9,958,236	5,398,137
Fair value of unreleased ESOP shares	$ 58,759	$ 14,941

XML

Securities (Carrying Value of Mortgage Backed Securities in Portfolio) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
FNMA [Member]
Schedule of Investments [Line Items]
Mortgage Backed Securities	$ 1,384,396	$ 890,216
FHLMC [Member]
Schedule of Investments [Line Items]
Mortgage Backed Securities	823,728	712,253
GNMA [Member]
Schedule of Investments [Line Items]
Mortgage Backed Securities	202,340	2,452
Private Issuer [Member]
Schedule of Investments [Line Items]
Mortgage Backed Securities	1,612	2,943
MBS [Member]
Schedule of Investments [Line Items]
Mortgage Backed Securities	$ 2,412,076	$ 1,607,864

XML

Employee Benefit Plans (Tables)

12 Months Ended

Sep. 30, 2011

Employee Benefit Plans [Abstract]

Summary Of Shares Held In The ESOP Trust

	2011		2010
	(Dollars in thousands)
Allocated ESOP shares		4,393,908		4,028,784
Unreleased ESOP shares		5,564,328		1,369,353
Total ESOP shares		9,958,236		5,398,137
Fair value of unreleased ESOP shares	$	58,759	$	14,941

XML

Stock Based Compensation (Narrative) (Details) (USD $)	12 Months Ended
	Sep. 30, 2011 years	Sep. 30, 2010	Sep. 30, 2009
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock exchange ratio	2.2637
Minimum [Member] | Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period of options, years	three
Maximum [Member] | Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period of options, years	five
Stock Options [Member] | Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Contractual term of stock options, years	10
Nonqualified Stock Options [Member] | Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Contractual term of stock options, years	15
Greater Than 10% Outstanding Common Stock Ownership [Member] | Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Contractual term of stock options, years	5
Option price percentage of fair market value of shares on the date of grant, minimum	110.00%
Outstanding common stock ownership percentage limitation	10.00%
Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock reserved for future issuance	8,558,411
Number of shares available for future grants	2,856,549
Number of shares added back to Option Plan through the reload feature of the plan	2,380,866
Option price percentage of fair market value of shares on the date of grant, minimum	100.00%
Weighted average grant-date fair value of stock options granted	$ 0.78	$ 1.52	$ 2.22
Compensation expense	$ 131,000	$ 214,000	$ 281,000
Compensation expense, net of tax	122,000	189,000	240,000
Total pretax intrinsic value of stock options exercised	19,000	361,000	1,700,000
Tax benefit from stock options exercised	7,000	89,000	515,000
Fair value of stock options vested during the period	150,000	264,000	297,000
Stock market price per share	$ 10.56
Number of in-the-money options exercisable	8,783
Unrecognized total future compensation cost	148,000
Unrecognized total future compensation cost weighted average recognition period, years	1.84
Recognition And Retention Plan (RRP) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock reserved for future issuance	3,423,364
Number of shares available for future grants	358,767
Compensation expense	131,000	238,000	323,000
Compensation expense, net of tax	88,000	153,000	204,000
Fair value of RRP shares vested during the period	120,000	324,000	363,000
Unrecognized total future compensation cost	$ 124,000
Unrecognized total future compensation cost weighted average recognition period, years	1.9
Estimated forfeiture rate for RRP shares granted	0.00%	0.00%	0.00%

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Income Taxes (Differences Between Effective Rates And Statutory Federal Income Tax Rate Computed On Income Before Income Tax Expense) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Income Taxes [Abstract]
Federal income tax expense computed at statutory Federal rate, Amount	$ 20,073	$ 36,878	$ 36,828
Federal income tax expense computed at statutory Federal rate, Percentage	35.00%	35.00%	35.00%
Increases (Decreases) In Taxes Resulting From:
State taxes, net of Federal tax effect, Amount	1,993	3,064	3,051
State taxes, net of Federal tax effect, Percentage	3.40%	2.90%	2.90%
Net tax-exempt interest income, Amount	(577)	(624)	(579)
Net tax-exempt interest income, Percentage	(1.00%)	(0.60%)	(0.60%)
Change in cash surrender value of BOLI, Amount	(638)	(421)	(406)
Change in cash surrender value of BOLI, Percentage	(1.10%)	(0.40%)	(0.40%)
Low income housing tax credits, Amount	(1,397)	(1,209)	(1,013)
Low income housing tax credits, Percentage	(2.40%)	(1.10%)	(1.00%)
Other, Amount	(505)	(163)	1,045
Other, Percentage	(0.90%)	(0.20%)	1.10%
Income tax expense	$ 18,949	$ 37,525	$ 38,926
Income tax expense, Percentage	33.00%	35.60%	37.00%

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Regulatory Capital Requirements (Reconciliation Of The Bank's Equity Under GAAP To Regulatory Capital Amounts) (Details) (USD $) In Thousands	Sep. 30, 2011		Sep. 30, 2010
Regulatory Capital Requirements [Abstract]
Total Bank equity as reported under GAAP	$ 1,395,708		$ 857,114
Unrealized gains on AFS securities	(26,314)		(31,862)
Other	(251)		(484)
Total tangible equity and Tier 1 (core) capital	1,369,143		824,768
ACL	11,710	[1]	10,556	[1]
Total risk based capital	$ 1,380,853		$ 835,324

[1] This amount represents the general valuation allowances calculated using the formula analysis. SVA are netted against the related loan balance on the Thrift Financial Report and are therefore not included in this amount.

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Loans Receivable And Allowance For Credit Losses (Impaired Loans By Class) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
Financing Receivable, Impaired [Line Items]
Recorded Investment	$ 72,022	$ 57,100
Unpaid Principal Balance	72,048	57,118
Related ACL	3,755	4,300
Fiscal Year-to-Date Average Recorded Investment	67,153
Fiscal Year-to-Date Interest Income Recognized	1,836
One-To Four-Family Loans - Originated [Member] | With No Related Allowance Recorded [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	47,710
Unpaid Principal Balance	47,845
Fiscal Year-to-Date Average Recorded Investment	41,401
Fiscal Year-to-Date Interest Income Recognized	1,467
One-To Four-Family Loans - Purchased [Member] | With No Related Allowance Recorded [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	6,075
Unpaid Principal Balance	6,056
Fiscal Year-to-Date Average Recorded Investment	7,381
Fiscal Year-to-Date Interest Income Recognized	58
Multi-Family And Commercial Loans [Member] | With No Related Allowance Recorded [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	563
Unpaid Principal Balance	565
Fiscal Year-to-Date Average Recorded Investment	578
Fiscal Year-to-Date Interest Income Recognized	36
Consumer - Home Equity [Member] | With No Related Allowance Recorded [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	468
Unpaid Principal Balance	468
Fiscal Year-to-Date Average Recorded Investment	672
Fiscal Year-to-Date Interest Income Recognized	14
Consumer - Other [Member] | With No Related Allowance Recorded [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	5
Unpaid Principal Balance	5
Fiscal Year-to-Date Average Recorded Investment	46
With No Related Allowance Recorded [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	54,821
Unpaid Principal Balance	54,939
Fiscal Year-to-Date Average Recorded Investment	50,078
Fiscal Year-to-Date Interest Income Recognized	1,575
One-To Four-Family Loans - Originated [Member] | With An Allowance Recorded [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	3,297
Unpaid Principal Balance	3,299
Related ACL	335
Fiscal Year-to-Date Average Recorded Investment	2,419
Fiscal Year-to-Date Interest Income Recognized	102
One-To Four-Family Loans - Purchased [Member] | With An Allowance Recorded [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	13,640
Unpaid Principal Balance	13,546
Related ACL	3,280
Fiscal Year-to-Date Average Recorded Investment	14,576
Fiscal Year-to-Date Interest Income Recognized	156
Consumer - Home Equity [Member] | With An Allowance Recorded [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	264
Unpaid Principal Balance	264
Related ACL	140
Fiscal Year-to-Date Average Recorded Investment	80
Fiscal Year-to-Date Interest Income Recognized	3
With An Allowance Recorded [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	17,201
Unpaid Principal Balance	17,109
Related ACL	3,755
Fiscal Year-to-Date Average Recorded Investment	17,075
Fiscal Year-to-Date Interest Income Recognized	261
One-To Four-Family Loans - Originated [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	51,007
Unpaid Principal Balance	51,144
Related ACL	335
Fiscal Year-to-Date Average Recorded Investment	43,820
Fiscal Year-to-Date Interest Income Recognized	1,569
One-To Four-Family Loans - Purchased [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	19,715
Unpaid Principal Balance	19,602
Related ACL	3,280
Fiscal Year-to-Date Average Recorded Investment	21,957
Fiscal Year-to-Date Interest Income Recognized	214
Multi-Family And Commercial Loans [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	563
Unpaid Principal Balance	565
Fiscal Year-to-Date Average Recorded Investment	578
Fiscal Year-to-Date Interest Income Recognized	36
Consumer - Home Equity [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	732
Unpaid Principal Balance	732
Related ACL	140
Fiscal Year-to-Date Average Recorded Investment	752
Fiscal Year-to-Date Interest Income Recognized	17
Consumer - Other [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	5
Unpaid Principal Balance	5
Fiscal Year-to-Date Average Recorded Investment	$ 46

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Income Taxes (Reconciliation Of Beginning And Ending Amounts Of Unrecognized Tax Benefits) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Income Taxes [Abstract]
Balance at beginning of year	$ 68	$ 114	$ 2,848	$ 2,409
Additions for tax positions related to the current year				109
Additions for tax positions of prior years		3	28	888
Reductions for tax positions of prior years		(49)	(195)
Reductions relating to settlement with taxing authorities				(97)
Lapse of statute of limitations	10		(2,567)	(461)
Balance at end of year		$ 68	$ 114	$ 2,848

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Commitments And Contingencies (Commitments Outstanding To Originate And Purchase First And Second Mortgage Loans) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Commitments And Contingencies [Abstract]
Originate fixed-rate	$ 89,059	$ 75,001
Originate adjustable-rate	24,047	20,144
Purchase/participate fixed-rate	30,650	3,526
Purchase/participate adjustable-rate	26,556	8,395
Commitments outstanding to originate and purchase loans	$ 170,312	$ 107,066

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Stock Based Compensation (Summary Of Option Activity) (Details) (USD $)	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Stock Based Compensation [Abstract]
Options outstanding at beginning of year, Number of Options	919,639	841,991	912,879
Granted, Number of Options	2,030	119,945	94,460
Forfeited, Number of Options	(10,180)
Exercised, Number of Options	(4,525)	(42,297)	(165,348)
Options outstanding at end of year, Number of Options	906,964	919,639	841,991
Options outstanding at beginning of year, Weighted Average Exercise Price	$ 15.08	$ 14.69	$ 13.10
Granted, Weighted Average Exercise Price	$ 10.86	$ 14.25	$ 18.57
Forfeited, Weighted Average Exercise Price	$ 16.59
Exercised, Weighted Average Exercise Price	$ 8.23	$ 4.96	$ 8.08
Options outstanding at end of year, Weighted Average Exercise Price	$ 15.09	$ 15.08	$ 14.69

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Regulatory Capital Requirements (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Sep. 30, 2010	Sep. 30, 2011
Regulatory Capital Requirements [Abstract]
Tangible equity	1.50%	1.50%
Tier 1 (core) capital	4.00%	4.00%
Total risk-based capital	8.00%	8.00%
Subsequent events	$ 0

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Employee Benefit Plans (Narrative) (Details) (USD $)	12 Months Ended					12 Months Ended					24 Months Ended				12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2011 Initial Public Offering [Member]	Sep. 30, 2010 Initial Public Offering [Member]	Sep. 30, 2009 Initial Public Offering [Member]	Sep. 30, 2014 Corporate Reorganization [Member]	Sep. 30, 2011 Corporate Reorganization [Member]	Sep. 30, 2013 Corporate Reorganization [Member]	Sep. 30, 2011 Minimum [Member] hours years	Sep. 30, 2011 Minimum [Member] Discretionary Contribution Type I [Member]	Sep. 30, 2011 Minimum [Member] Discretionary Contribution Type II [Member]	Sep. 30, 2011 Profit Sharing Plan [Member]	Sep. 30, 2010 Profit Sharing Plan [Member]	Sep. 30, 2009 Profit Sharing Plan [Member]
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Period of service required for plan eligibility, years												1
Employee age required for plan eligibility, years												21
Number of hours required for plan eligibility												1,000
Types of discretionary contributions provided under profit sharing plan	2
Percentage of contribution under profit sharing plan													0.00%	0.00%
Percentage of employee matching contribution under profit sharing plan															50.00%
Total Bank contributions															$ 105,000	$ 101,000	$ 102,000
Number shares acquired by ESOP trust						3,024,574				4,726,000
Number of shares acquired by ESOP post corporate reorganization	6,846,728
Corporate Reorganization, Common Stock Exchange Ratio	2.2637
Percentage of fixed bearing interest rate on loan						5.80%				3.25%
Fixed rate interest loan, installments						3,000,000			2,700,000
Fixed rate interest loan, number of installments	3
Employee Stock Ownership Plan (ESOP), Debt Structure, Employer Loan, Description	two
ESOP principal loan amount						2,500,000	2,400,000	2,300,000
Interest amount on ESOP loan						465,000	604,000	735,000		1,200,000	1,500,000
Shares Held In Employee Stock Ownership Plan, Allocated	531,025
Shares Held In Employee Stock Ownership Plan, Committed-to-be-Released				551,988	551,988
Compensation expense related to the ESOP	6,022,000	6,481,000	7,929,000
Compensation expense related to the ESOP including dividends	8,700,000
Dividends on unallocated ESOP shares in excess of debt service payments	2,700,000
Employee stock ownership plan ESOP debt structure employer cash payments used for debt service	$ 1,400,000	$ 1,100,000	$ 863,000
Percentage of ESOP shares diversified												25.00%
Age period of diversified ESOP shares, years	50

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Income Taxes (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Income Taxes [Abstract]
Income tax expense effective rates		33.00%	35.60%	37.00%
Valuation allowance		$ 2,060	$ 280
Reduction in income tax expense		20
Accrued penalties and interest		20	17	763
Net reversal of penalties and interest expense due to the lapse of statute of limitations			463
Estimated penalties and interest		2		87
Unrecognized Tax Benefits, Reductions Resulting from Lapse of Applicable Statute of Limitations	$ 10		$ (2,567)	$ (461)

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Summary Of Significant Accounting Policies (Policies)

12 Months Ended

Sep. 30, 2011

Summary Of Significant Accounting Policies [Abstract]

Description of Business

Description of Business - Capitol Federal Financial, Inc. (the "Company") provides a full range of retail banking services through its wholly-owned subsidiary, Capitol Federal Savings Bank (the "Bank") which has 35 traditional and 10 in-store banking offices serving primarily the metropolitan areas of Topeka, Wichita, Lawrence, Manhattan, Emporia and Salina, Kansas and portions of the metropolitan area of greater Kansas City. The Bank emphasizes mortgage lending, primarily originating and purchasing one- to four-family mortgage loans and providing personal retail financial services.  The Bank is subject to competition from other financial institutions and other companies that provide financial services.

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") was signed into law.  The Dodd-Frank Act, among other things, required the Office of Thrift Supervision (the "OTS") to be merged into the Office of the Comptroller of the Currency (the "OCC").  On July 21, 2011, the OCC assumed all functions and authority from the OTS relating to federally chartered savings banks, and the Board of Governors of the Federal Reserve System ("FRB") assumed all functions and authority from the OTS relating to savings and loan holding companies.   Effective July 21, 2011, the Bank is regulated by the OCC and the Company is regulated by the FRB.  Prior to that date, the Bank and Company were regulated by the OTS.  The Bank is also regulated by the Federal Deposit Insurance Corporation (the "FDIC").  The Bank and Company are subject to periodic examinations by the above noted regulatory authorities.

The Bank has an expense sharing agreement with the Company that covers the reimbursement of certain expenses that are allocable to the Company.  These expenses include compensation, rent for leased office space, and general overhead expenses.

The Company and its subsidiary have a tax allocation agreement.  The Bank is the paying agent to the taxing authorities for the group for all periods presented.  Each company is liable for taxes as if separate tax returns were filed and reimburses the Bank for its related tax liability.  If any entity has a tax benefit due to a taxable loss, the Bank reimburses the entity for the related tax benefit.

The Company's ability to pay dividends is dependent, in part, upon its ability to obtain capital distributions from the Bank. The future dividend policy of the Company is subject to the discretion of the Board of Directors and will depend upon a number of factors, including the Company's financial condition and results of operations, the Bank's regulatory capital requirements, regulatory limitations on the Bank's ability to make capital distributions to the Company, and the amount of cash at the holding company.  Holders of common stock will be entitled to receive dividends as of and when declared by the Board of Directors of the Company out of funds legally available for that purpose.

Basis of Presentation

Basis of Presentation - In December 2010, Capitol Federal Financial completed its conversion from a mutual holding company form of organization to a stock form of organization ("corporate reorganization").  Capitol Federal Financial, which owned 100% of the Bank, was succeeded by the Company, a new Maryland corporation.  As part of the corporate reorganization, Capitol Federal Savings Bank MHC's ("MHC") ownership interest in Capitol Federal Financial was sold in a public offering.  Gross proceeds from the offering were $1.18 billion and related offering expenses were $46.7 million, of which $6.0 million were incurred and deferred in fiscal year 2010.  The publicly held shares of Capitol Federal Financial were exchanged for new shares of common stock of the Company.  The exchange ratio was 2.2637 and ensured that immediately after the corporate reorganization the public stockholders of Capitol Federal Financial owned the same aggregate percentage of the Company's common stock that they owned of Capitol Federal Financial's common stock immediately prior to the reorganization.  All share information used to calculate EPS in the consolidated financial statements prior to the corporate reorganization has been revised to reflect the 2.2637 exchange ratio.  In conjunction with the corporate reorganization, the Company contributed $40.0 million of cash to the Bank's charitable foundation, Capitol Federal Foundation.  Additionally, a "liquidation account" has been established for the benefit of certain depositors of the Bank in an amount equal to MHC's ownership interest in the retained earnings of Capitol Federal Financial as of June 30, 2010.  As of September 30, 2011, the balance of the liquidation account was $405.4 million.  Under OCC regulations, neither the Company nor the Bank is permitted to pay dividends on its capital stock to its stockholders if stockholders' equity would be reduced below the current amount of the liquidation account at that time.

The consolidated financial statements after the corporate reorganization in December 2010 include the accounts of the Company and its wholly owned subsidiary, the Bank.  The consolidated financial statements prior to the corporate reorganization include the accounts of Capitol Federal Financial and its wholly owned subsidiary, the Bank.  The Bank has a wholly owned subsidiary, Capitol Funds, Inc.  Capitol Funds, Inc. has a wholly owned subsidiary, Capitol Federal Mortgage Reinsurance Company.  All intercompany accounts and transactions have been eliminated. 

These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"), and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The ACL is a significant estimate that involves a high degree of complexity and requires management to make difficult and subjective judgments and assumptions about highly uncertain matters.  The use of different judgments and assumptions could cause reported results to differ significantly.  In addition, bank regulators periodically review the Bank's ACL.  The bank regulators have the ability to require the Bank, as they can require all banks, to increase the ACL or recognize additional charge-offs based upon their judgments, which may differ from management's judgments.  Any increases in the ACL or recognition of additional charge-offs required by bank regulators could adversely affect the Company's financial condition and results of operations.

Cash and Cash Equivalents

Cash and Cash Equivalents - Cash and cash equivalents include cash on hand and amounts due from banks.  The Bank has acknowledged informal agreements with other banks where it maintains deposits. Under these agreements, service fees charged to the Bank are waived provided certain average compensating balances are maintained throughout each month.  FRB regulations require federally chartered savings banks to maintain cash reserves against their transaction accounts.  Required reserves must be maintained in the form of vault cash, an account at a Federal Reserve Bank, or a pass-through account as defined by the FRB.  The Bank is in compliance with the FRB requirements.  For the years ended September 30, 2011 and 2010, the average daily balance of required reserves at the Federal Reserve Bank was $9.3 million and $9.7 million, respectively.

Securities

Securities - Securities include mortgage-backed and agency securities issued primarily by United States Government-Sponsored Enterprises ("GSE"), including Federal National Mortgage Association ("FNMA"), Federal Home Loan Mortgage Corporation ("FHLMC") and FHLB, United States Government agencies, including Government National Mortgage Association ("GNMA"), and municipal bonds.  Securities are classified as HTM, AFS, or trading based on management's intention on the date of purchase.  Generally, classifications are made in response to liquidity needs, asset/liability management strategies, and the market interest rate environment at the time of purchase.

Securities that management has the intent and ability to hold to maturity are classified as HTM and reported at amortized cost. Such securities are adjusted for the amortization of premiums and discounts which are recognized as adjustments to interest income over the life of the securities using the level-yield method.

Securities that management may sell if necessary for liquidity or asset management purposes are classified as AFS and reported at fair value, with unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) within stockholders' equity, net of deferred income taxes.  The amortization of premiums and discounts are recognized as adjustments to interest income over the life of the securities using the level-yield method.  Gains or losses on the disposition of AFS securities are recognized using the specific identification method. Estimated fair values of AFS securities are based on one of three methods:  1) quoted market prices where available, 2) quoted market prices for similar instruments if quoted market prices are not available, and 3) unobservable data that represents the Bank's assumptions about items that market participants would consider in determining fair value where no market data is available.  See additional discussion of fair value of AFS securities in Note 14.

Securities that are purchased and held principally for resale in the near future are classified as trading securities and are reported at fair value, with unrealized gains and losses included in other income in the consolidated statements of income.  During fiscal year 2010, the Bank held trading securities for a limited time.  The securities were received in conjunction with the swap of originated fixed-rate mortgage loans with FHLMC for MBS.  During the fiscal year ended September 30, 2011, neither the Company nor the Bank maintained a trading securities portfolio.

Management monitors the securities portfolio for impairment on an ongoing basis and performs a formal review quarterly. The process involves monitoring market events and other items that could impact issuers.  The evaluation includes, but is not limited to, such factors as:  the nature of the investment, the length of time the security has had a fair value less than the amortized cost basis, the cause(s) and severity of the loss, expectation of an anticipated recovery period, recent events specific to the issuer or industry including the issuer's financial condition and current ability to make future payments in a timely manner, external credit ratings and recent downgrades in such ratings, management's intent to sell and whether it is more likely than not management would be required to sell prior to recovery for debt securities. Management determines whether other-than-temporary losses should be recognized for impaired securities by assessing all known facts and circumstances surrounding the securities.  If management intends to sell an impaired security or if it is more likely than not that management will be required to sell an impaired security before recovery of its amortized cost basis, an other-than-temporary impairment has occurred and the difference between amortized cost and fair value will be recognized as a loss in earnings and the security will be written down to fair value.  Such losses would be included in other income in the consolidated statements of income.

Loans Receivable

Loans Receivable - Loans receivable that management has the intent and ability to hold for the foreseeable future are carried at the amount of unpaid principal, net of ACL, undisbursed loan funds, unamortized premiums and discounts, and deferred loan origination fees and costs.  Net loan origination fees and costs and premiums and discounts are amortized as yield adjustments to interest income using the level-yield method, adjusted for the estimated prepayment speeds of the related loans when applicable.  Interest on loans is credited to income as earned and accrued only if deemed collectible.

A loan is considered delinquent when payment has not been received within 30 days of its contractual due date.  The accrual of income on loans is discontinued when interest or principal payments are 90 days in arrears.  Loans on which the accrual of income has been discontinued are designated as non-accrual loans and outstanding interest previously credited beyond 90 days delinquent is reversed.  A non-accrual loan is returned to accrual status once the contractual payments have been made to bring the loan less than 90 days past due.

Existing loan customers, whose loans have not been sold to third parties and who have not been delinquent on their contractual loan payments during the previous 12 months have the opportunity, for a fee, to endorse their original loan terms to current loan terms being offered.  The fee assessed for endorsing the mortgage loan is deferred and amortized over the remaining life of the endorsed loan using the level-yield method and is reflected as an adjustment to interest income.  Each endorsement is examined on a loan-by-loan basis and if the new loan terms represent more than a minor change to the loan, then the unamortized balance of the pre-endorsement deferred fees and/or costs associated with the mortgage loan are recognized in interest income at the time of the endorsement.  If the endorsement of terms does not represent more than a minor change to the loan, then the unamortized balance of the pre-endorsement deferred fees or costs continue to be deferred.

For borrowers experiencing financial difficulties, the Bank may grant a concession to the borrower.  Generally, the Bank grants a short-term payment accommodation to borrowers that are experiencing a temporary cash flow problem.  The most frequently used accommodation is to reduce the monthly payment amount for a period of six to 12 months, often by requiring payments of only interest and escrow during this period. These restructurings result in an extension of the maturity date of the loan.  For more severe situations requiring long-term solutions, the Bank also offers interest rate reductions to currently-offered rates and more lengthy extensions of the maturity date.  All such concessions are considered a troubled debt restructuring ("TDR").  The Bank does not forgive principal or interest nor does it commit to lend additional funds to debtors whose terms have been modified in TDRs.

The Company adopted Accounting Standards Update ("ASU") No. 2011-02, Receivables (Topic 310): A Creditor's Determination of Whether a Restructuring Is a Troubled Debt Restructuring, (ASU 2011-02)on July 1, 2011.  ASU No. 2011-02 provides additional guidance to creditors for evaluating whether a restructuring of a loan is a TDR.  In evaluating whether a loan restructuring constitutes a TDR, a creditor must separately conclude that the restructuring constitutes a concession to the borrower and the borrower is experiencing financial difficulties.

As a result of adopting the ASU, management reassessed all restructurings that occurred on or after October 1, 2010, for identification as TDRs.  Management identified certain endorsed loans that are now required to be reported as TDRs due to decreases in soft credit scores and/or estimated loan-to-value ("LTV") ratios since the time the loan was originated.  Because of these decreases, the borrower could be experiencing financial difficulties even though they have not been delinquent in the previous 12 months on their existing loan payments.  These loans had been measured under the general valuation allowance methodology, prior to the adoption of ASU 2011-02.  Upon adoption, management classified the loans as impaired and began measuring the loans under the specific valuation allowance ("SVA") methodology.  Management will continue to apply the SVA methodology to these loans as long as they are classified as impaired.

Additionally, management identified certain loan restructurings that occurred on or after October 1, 2010, where the loan restructurings resulted in an insignificant delay in the timing of the loan principal payments. The deferral period for these restructured loans was six months or less and any reduction in the principal value of cash flows as a result of the restructuring was due to the insignificant delay in the timing of principal payments. The Bank did not forgive any interest or principal in association with these restructurings.  Upon adoption, management began measuring these loans under the general valuation allowance methodology.

A loan is considered impaired when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the loan agreement.  Interest income on impaired loans is recognized in the period collected unless the ultimate collection of principal is considered doubtful.  Management considers the following loans to be impaired loans: all non-accrual loans, loans classified as substandard, loans with SVAs, and TDRs that have not been performing under the new terms for 12 consecutive months or are required by the accounting literature to be classified as a TDR for the life of the loan due to a reduction in the stated interest rate to a rate lower than the current market rate for new debt with similar risk.

Allowance for Loan Losses

Allowance for Credit Losses - The ACL represents management's best estimate of the amount of known and inherent losses in the loan portfolio as of the balance sheet date.  Management's methodology for assessing the appropriateness of the ACL consists of a formula analysis for general valuation allowances and the establishment of SVAs for identified problem loans.  Management maintains the ACL through provisions for credit losses that are charged to income.

For one- to four-family loans, losses are charged-off when a loan is transferred to REO or if there is a short-sale of the collateral.  For consumer home equity loans where the Bank holds the first mortgage, if the loan balance is in excess of the fair value and the loan is in foreclosure, the difference between the loan balances and the fair value is charged-off.  Estimated selling costs and private mortgage insurance ("PMI") proceeds are also taken into consideration when calculating the amount to charge-off for home equity loans.  For consumer home equity loans where the Bank does not hold the first mortgage, foreclosure is pursued or the loan balance is charged-off.  Other consumer loans that are unsecured are entirely charged-off once the loan is 120 days past due.  For multi-family and commercial loans, the Bank records an SVA when it is determined that the collection of all or a portion of a loan may not be collected and the amount of that loss is reasonably estimated.

The Bank's primary lending emphasis is the origination and purchase of one- to four-family first mortgage loans on residential properties and, to a lesser extent, second mortgage loans on one- to four-family residential properties, resulting in a loan concentration in residential mortgage loans.  The Bank has a concentration of loans secured by residential property located in Kansas and Missouri.  Based on the composition of the Bank's loan portfolio, the primary risks inherent in the one- to four-family and consumer loan portfolios are the continued weakened economic conditions, continued high levels of unemployment or underemployment, and a continuing decline in residential real estate values.  Any one or a combination of these events may adversely affect borrowers' ability to repay their loans, resulting in increased delinquencies, non-performing assets, loan losses, and future loan loss provisions.  Although the multi-family and commercial loan portfolio also shares the risk of continued weakened economic conditions, the primary risks for this portfolio include the ability of the borrower to sustain sufficient cash flows from leases and to control expenses to satisfy their contractual debt payments, or the ability to utilize personal and/or business resources to pay their contractual debt payments if the cash flows are not sufficient.  Additionally, if the Bank were to repossess the secured collateral of a multi-family or commercial loan, the pool of potential buyers is limited more than that for a residential property; therefore, the Bank could hold the property for an extended period of time and potentially be forced to sell at a discounted price, resulting in additional losses.

Management considers several quantitative and qualitative factors quarterly while monitoring the credit quality of the loan portfolio and evaluating the adequacy of the ACL.  Such factors include: the trend and composition of delinquent and non-performing loans, the results of foreclosed property and short-sale transactions (historical losses and net charge-offs), increase in and establishment of SVAs, the current status and trends of local and national economies, the trends and current conditions in the residential real estate markets, and loan portfolio growth and concentrations.

Since the Bank's loan portfolio is primarily concentrated in one- to four-family real estate, management monitors residential real estate market value trends in the Bank's local market areas and geographic sections of the U.S. by reference to various industry and market reports, economic releases and surveys, and management's general and specific knowledge of the real estate markets in which the Bank lends, in order to determine what impact, if any, such trends may have on the level of ACL.   Reviewing these quantitative and qualitative factors assists management in evaluating the overall credit quality of the loan portfolio and the reasonableness of the ACL on an ongoing basis, and whether changes need to be made to the Bank's allowance for credit loss methodology.  Management seeks to apply the ACL methodology in a consistent manner; however, the methodology can be modified in response to changing conditions.  There were no significant modifications to the formula analysis methodology during the year ended September 30, 2011.

The formula analysis for general valuation allowances is updated each quarter.  Within the formula analysis, the loan portfolio is segregated into the following categories:  one- to four-family loans, multi-family and commercial loans, consumer home equity loans, and other consumer loans.  Home equity loans with the same underlying collateral as a one- to four-family loan are combined with the one- to four-family loan in the formula analysis to calculate a combined LTV ratio.  Impaired loans are excluded from the formula analysis as they are individually evaluated for SVAs.  The one- to four-family loan portfolio and related home equity loans are segregated into additional categories based on the following risk characteristics:  originated or purchased from a nationwide lender, interest payments (fixed-rate, adjustable-rate, and interest-only), LTV ratios, borrower's credit scores, and geographic location.  The categories were derived by management based on reviewing the historical performance of the one- to four-family loan portfolio and taking into consideration current economic conditions, such as trends in residential real estate values in certain areas of the U.S. and unemployment rates.  The geographic location category pertains primarily to certain states in which the Bank has experienced measurable losses on REO and short-sales.

Quantitative loss factors are applied to each loan category in the formula analysis based on the historical loss experience and current SVAs, adjusted for loan delinquency trends, for each respective loan category.  Each quarter, management reviews the historical loss time periods and utilizes the historical loss time periods believed to be the most reflective of the current economic conditions and recent charge-off experience for each respective loan category.

Qualitative loss factors are applied to each loan category in the formula analysis.  The qualitative factors for the one- to four-family and consumer loan portfolios are:  unemployment rate trends, collateral value trends, credit score trends, and delinquent loan trends.  The qualitative factors for the multi-family and commercial loan portfolio are:  unemployment rate trends, collateral value trends, and delinquent loan trends.  As loans are classified as special mention or become 30 to 89 days delinquent, the qualitative loss factors increase based upon delinquent loan trends.  The qualitative factors were derived by management based on a review of the historical performance of the respective loan portfolios and consideration of current economic conditions and their likely impact to the loan portfolio.

SVAs are established in connection with individual loan reviews of impaired loans.  Since the majority of the Bank's loan portfolio is composed of residential real estate, determining the estimated fair value of the underlying collateral is important in evaluating the amount of SVAs required for impaired one- to four-family loans.  If the estimated fair value of the collateral, less estimated costs to sell and anticipated PMI proceeds, is less than the current loan balance, an SVA is established for the difference.  Once a purchased one- to four-family loan is 90 days delinquent, new collateral values are obtained through automated valuation models ("AVMs") or broker price opinions ("BPOs").  An updated AVM or BPO is then requested approximately every six months while the loan is greater than 90 days delinquent.Due to the relatively stable home values in Kansas and Missouri, new appraisals on originated one- to four- family loans are not obtained until a loan enters foreclosure.  For originated one- to four-family loans and home equity loans that are impaired and the most recent appraisal is more than one year old, management estimates the fair value of the collateral using the most recently published Federal Housing Finance Agency ("FHFA") index.  For those loans where the FHFA fair value estimate results in a value less than the outstanding loan balance, an updated appraisal is obtained and is used to establish the SVA. If the Bank holds the first and second mortgage, both loans are combined when evaluating the need for an SVA.

Loans with an outstanding balance of $1.5 million or more are reviewed annually if secured by property in one of the following categories:  multi-family (five or more units) property, unimproved land, other improved commercial property, acquisition and development of land projects, developed building lots, office building, single-use building, or retail building.  SVAs are established if necessary, or management may charge-off such losses if deemed appropriate.

Assessing the adequacy of the ACL is inherently subjective.  Actual results could differ from estimates as a result of changes in economic or market conditions.  Changes in estimates could result in a material change in the ACL.  In the opinion of management, the ACL, when taken as a whole, is adequate to absorb estimated losses inherent in the loan portfolio.  However, future adjustments may be necessary if loan portfolio performance or economic or market conditions differ substantially from the conditions that existed at the time of the initial determinations.

Bank-Owned Life Insurance

Bank-Owned Life Insurance - BOLI is an insurance investment designed to help offset costs associated with the Bank's compensation and benefit programs.  In the event of the death of an insured individual, the Bank would receive a death benefit.  If the insured individual is employed by the Bank at the time of death, a death benefit will be paid to the insured individual's designated beneficiary equal to the insured individual's base compensation at the time BOLI was approved by the Bank's Board of Directors.  If the individual is not employed by the Bank at the time of death, no death benefits will be paid to the insured individual's designated beneficiary.

The cash surrender value of the policies is reported in BOLI in the consolidated balance sheets.   Changes in the cash surrender value are recorded in Income from BOLI in the consolidated statements of income.  

Capital Stock of Federal Home Loan Bank

Capital Stock of Federal Home Loan Bank - As a member of FHLB Topeka, the Bank is required to acquire and hold shares of FHLB stock.  The Bank's holding requirement varies based on the Bank's activities, primarily the Bank's outstanding advances, with FHLB.  FHLB stock is carried at cost.  Management conducts a periodic review and evaluation of the Bank's investment in FHLB stock to determine if any impairment exists.  Dividends received on FHLB stock are reflected as interest and dividend income in the consolidated statements of income.

Premises and Equipment

Premises and Equipment - Land is carried at cost. Buildings, leasehold improvements and furniture, fixtures and equipment are carried at cost less accumulated depreciation and leasehold amortization.  Buildings, furniture, fixtures and equipment are depreciated over their estimated useful lives using the straight-line method.  Buildings have an estimated useful life of 39 years. Furniture, fixtures and equipment have an estimated useful life of three to seven years. Leasehold improvements are amortized over the shorter of their estimated useful lives or the term of the respective leases, which is generally three to 15 years.  The costs for major improvements and renovations are capitalized, while maintenance, repairs and minor improvements are charged to operating expenses as incurred.  Gains and losses on dispositions are recorded as other income or other expense as incurred.

Real Estate Owned

Real Estate Owned - REO primarily represents foreclosed assets held for sale.  REO is reported at the lower of cost or estimated fair value less estimated selling costs ("realizable value.")  At acquisition, write downs to realizable value are charged to the ACL.  After acquisition, any additional write downs are charged to operations in the period they are identified and are recorded in other expenses on the consolidated statements of income. Costs and expenses related to major additions and improvements are capitalized while maintenance and repairs which do not improve or extend the lives of the respective assets are expensed. Gains and losses on the sale of REO are recognized upon disposition of the property and are recorded in other expenses in the consolidated statements of income.

Income Tax

Income Taxes - The Company utilizes the asset and liability method of accounting for income taxes.  Under this method, deferred income tax assets and liabilities are recognized for the tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities.  The provision for deferred income taxes represents the change in deferred income tax assets and liabilities excluding the tax effects of the change in net unrealized gain (loss) on AFS securities and changes in the market value of vested RRP shares.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.  Certain tax benefits attributable to stock options and RRP shares are credited to additional paid-in capital.  The Company will record a valuation allowance to reduce its deferred income tax assets when there is uncertainty regarding the ability to realize their benefit.

Certain accounting literature prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return.  Accruals of interest and penalties related to unrecognized tax benefits are recognized in income tax expense.

Employee Stock Ownership Plan

Employee Stock Ownership Plan - The funds borrowed by the ESOP from the Company to purchase the Company's common stock are being repaid from the Bank's contributions and dividends paid on unallocated ESOP shares.  The shares pledged as collateral are reported as a reduction of stockholders' equity at cost.  As ESOP shares are committed to be released from collateral each quarter, the Company records compensation expense based on the average market price of the Company's stock during the quarter.  Additionally, the shares become outstanding for EPS computations once they are committed to be released.

Stock-based Compensation

Stock-based Compensation - The Company has a Stock Option and Incentive Plan (the "Option Plan") and an RRP which are considered share-based payment awards.  Compensation expense is recognized over the service period of each share-based payment award.  The Company applies a fair-value-based measurement method in accounting for share-based payment transactions with employees, except for equity instruments held by the ESOP.  The Company applies the modified prospective method in which compensation cost is recognized over the service period for all awards granted.

Borrowed Funds

Borrowed Funds - The Bank enters into sales of securities under agreements to repurchase with selected brokers ("repurchase agreements").  These agreements are recorded as financing transactions as the Bank maintains effective control over the transferred securities. The dollar amount of the securities underlying the agreements continues to be carried in the Bank's securities portfolio. The obligations to repurchase the securities are reported as a liability in the consolidated balance sheet. The securities underlying the agreements are delivered to the party with whom each transaction is executed. They agree to resell to the Bank the same securities at the maturity of the agreement. The Bank retains the right to substitute similar or like securities throughout the terms of the agreements.  The collateral is subject to valuation at current market levels and the Bank may ask for the return of excess collateral or be required to post additional collateral due to market value changes.

The Bank has obtained advances from FHLB.  FHLB advances are secured by certain qualifying mortgage loans pursuant to a blanket collateral agreement with FHLB and all of the capital stock of FHLB owned by the Bank.  Per the FHLB lending guidelines, total FHLB borrowings cannot exceed 40% of total Bank assets, as reported on the Bank's Thrift Financial Report to the OCC, without pre-approval from the FHLB president.

Capitol Federal Financial Trust I (the "Trust") is a Delaware statutory trust established by Capitol Federal Financial.  The Trust was formed for the purpose of issuing Company obligated mandatorily redeemable preferred securities ("Trust Preferred Securities"). The Trust issued $53.6 million of Trust Preferred Securities.  When the Trust Preferred Securities were issued, the Trust used the proceeds to purchase a like amount of Junior Subordinated Deferrable Interest Debentures (the "Debentures") of the Company. The Company guaranteed the obligations of the Trust.  The Debentures were redeemed in April 2011.  The Debentures were the sole assets of the Trust, and were reported in Other Borrowings in the September 30, 2010 consolidated balance sheet.  The Trust was not included in the consolidated financial statements.

The Bank is authorized to borrow from the Federal Reserve Bank's "discount window."  The Bank had no outstanding Federal Reserve Bank borrowings at September 30, 2011 or 2010.

Comprehensive Income

Comprehensive Income - Comprehensive income is comprised of net income and other comprehensive income. Other comprehensive income includes changes in unrealized gains and losses on securities AFS, net of tax.  Comprehensive income is presented in the consolidated statements of changes in stockholders' equity.

Segment Information

Segment Information - As a community-oriented financial institution, substantially all of the Bank's operations involve the delivery of loan and deposit products to customers. Management makes operating decisions and assesses performance based on an ongoing review of these community banking operations, which constitute the Company's only operating segment for financial reporting purposes.

Earnings Per Share

Earnings Per Share - Basic EPS is computed by dividing income available to common stockholders by the weighted average number of shares outstanding for the period.  Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock (such as stock options) were exercised or resulted in the issuance of common stock.  These potentially dilutive shares would then be included in the weighted average number of shares outstanding for the period using the treasury stock method.  Shares issued and shares reacquired during any period are weighted for the portion of the period that they were outstanding.

In computing both basic and diluted EPS, the weighted average number of common shares outstanding includes the ESOP shares previously allocated to participants and shares committed to be released for allocation to participants and the RRP shares which have vested or have been allocated to participants. ESOP and RRP shares that have not been committed to be released or have not vested are excluded from the computation of basic and diluted EPS.  Unvested awards that contain nonforfeitable rights to dividends should be treated as participating securities in the computation of EPS pursuant to the two-class method; however, the Company has determined the impact of doing so is inconsequential.

Recent Accounting Pronouncements

Recent Accounting Pronouncements - Effective October 1, 2010, the Company adopted new authoritative accounting guidance under Accounting Standards Codification ("ASC") 860, Transfers of Servicing Assets.  The objective of this standard isto improve the relevance, representational faithfulness, and comparability of the information provided in the financial statements related to the transfer of financial assets; the effects of a transfer on the Company's financial position, financial performance, and cash flows; and a transferor's continuing involvement in transferred financial assets.  The adoption of this standard did not have an impact on the Company's financial condition or results of operations.

Effective October 1, 2010, the Company also adopted new authoritative accounting guidance under ASC 810, Consolidation.  The new guidance did not change many of the key principles for determining whether an entity is a variable interest entity consistent with the ASC on "Consolidation", but does amend many important provisions of the existing guidance on "Consolidation."  The adoption of this standard did not have an impact on the Company's financial condition, results of operations, or financial statement disclosures.

In July 2010, the Financial Accounting Standards Board ("FASB") issued ASU 2010-20, Disclosures about Credit Quality of Financing Receivables and the Allowance for Credit Losses, which amends ASC 310, Receivables, by requiring more robust and disaggregated disclosures about the credit quality of an entity's financing receivables and its ACL. The objective of enhancing these disclosures is to improve financial statement users' understanding of (1) the nature of an entity's credit risk associated with its financing receivables and (2) the entity's assessment of that risk in estimating its ACL as well as changes in the allowance and the reasons for those changes.   The new and amended disclosures that relate to information as of the end of a reporting period were effective for the Company at March 31, 2011. The disclosures that include information for activity that occurs during a reporting period were effective beginning January 1, 2011 for the Company.  Since the provisions of ASU 2010-20 are disclosure-related, the Company's adoption of this guidance did not have an impact to its financial condition or results of operations.

In January 2011, the FASB issued ASU 2011-01, Deferral of the Effective Date of Disclosures About Troubled Debt Restructurings in Update No. 2010-20, which temporarily deferred the effective date in ASU 2010-20 for disclosures about TDRs by creditors until the FASB finalized its project on determining what constitutes a TDR for a creditor. In April 2011, the FASB issued ASU 2011-02, Receivables (Topic 310): A Creditor's Determination of Whether a Restructuring Is a Troubled Debt Restructuring, which amends the content in ASC 310 related to identifying TDRs and effectively nullifies ASU 2011-01.  ASU 2011-02 removes the deferral of the TDR disclosure requirements of ASU 2010-20 for public entities and thus establishes the effective date for those disclosures.  ASU 2011-02 is effective for the first interim or annual period beginning on or after June 15, 2011, which was July 1, 2011 for the Company.  2011-02 is to be applied retrospectively to modifications occurring on or after the beginning of the fiscal year of adoption, which was October 1, 2010 for the Company.  The adoption of ASU 2011-02 did not have a significant impact on the Company's financial condition or results of operations.

In April 2011, the FASB issued ASU 2011-03, Reconsideration of Effective Control for Repurchase Agreements.  The primary objective of this ASU is to improve the accounting for repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity.  This ASU eliminates the requirement for entities to consider whether a transferor has the ability to repurchase the financial assets in a repurchase agreement, which may result in more repurchase agreements to be accounted for as secured borrowings rather than as a sale.  ASU 2011-03 is effective for the first interim or annual period beginning on or after December 15, 2011, which is January 1, 2012 for the Company, and should be applied prospectively.  The Company accounts for its repurchase agreements as secured borrowings; therefore, the adoption of ASU 2011-03 is not expected to have a material impact on its financial condition or results of operations.

In May 2011, the FASB issued ASU 2011-04, Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRSs.  This ASU is a result of joint efforts by the FASB and the International Accounting Standards Board ("IASB") to develop a single, converged fair value framework for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP and International Financial Reporting Standards ("IFRSs").  This ASU is largely consistent with existing fair value measurement principles in U.S. GAAP; however, some of the components of this ASU could change how fair value measurement guidance in ASC 820, Fair Value Measurements and Disclosures, is applied.  This ASU does not require additional fair value measurements and is not intended to establish valuation standards or affect valuation practices outside of financial reporting.  ASU 2011-04 is effective during interim and annual periods beginning after December 15, 2011, which is January 1, 2012 for the Company, and should be applied retrospectively. The provisions of ASU 2011-04 applicable to the Company are disclosure related.  The Company is currently disclosing its fair value measurements in compliance with the converged guidance; therefore, the adoption of ASU 2011-04 will not have an impact to the Company's financial statement disclosures.

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income, which revises how entities present comprehensive income in their financial statements.  The ASU requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements.  In a continuous statement of comprehensive income, an entity would be required to present the components of the income statement as presented today, along with the components of other comprehensive income.  In the two-statement approach, an entity would be required to present a statement that is consistent with the income statement format used today, along with a second statement, which would immediately follow the income statement, that would include the components of other comprehensive income.  The ASU does not change the items that an entity must report in other comprehensive income.  ASU 2011-05 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, which is October 1, 2012 for the Company, and should be applied retrospectively for all periods presented in the financial statements.  The Company has not yet decided which statement format it will adopt.

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Loans Receivable And Allowance For Credit Losses (Summary Of Loans Receivable) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Loans Receivable And Allowance For Credit Losses [Abstract]
One-to four-family	$ 4,918,778	$ 4,915,651
Multi-family and commercial	57,965	66,476
Construction	47,368	33,168
Total real estate loans	5,024,111	5,015,295
Home equity	164,541	186,347
Other	7,224	7,671
Total consumer loans	171,765	194,018
Total loans receivable	5,195,876	5,209,313
Undisbursed loan funds	22,531	15,489
ACL	15,465	14,892
Discounts/unearned loan fees	19,093	22,267
Premiums/deferred costs	(10,947)	(11,537)
Loans and leases receivable, net	$ 5,149,734	$ 5,168,202

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Securities (Narrative) (Details) (USD $) In Millions	12 Months Ended
	Sep. 30, 2010	Sep. 30, 2011
Securities [Abstract]
Securities callable within one year amortized cost		$ 869.2
Mortgage-backed securities received in loan swap transaction at amortized cost	192.7
Proceeds from sale of MBS	199.1
Gain (loss) on sales of MBS	$ 6.5

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Income Taxes (Components Of Net Deferred Income Tax (Liabilities) Assets) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Income Taxes [Abstract]
Deferred Tax Asset Foundation Contribution	$ 12,824
ACL	3,863	3,666
Salaries and employee benefits	1,219	1,230
ESOP compensation	836	747
Other	2,630	2,307
Gross deferred income tax assets	21,372	7,950
Valuation allowance	(2,060)	(280)
Gross deferred income tax asset, net of valuation allowance	19,312	7,670
FHLB stock dividends	18,828	17,396
Unrealized gain on AFS securities	16,203	19,362
Other	4,728	4,156
Gross deferred income tax liabilities	39,759	40,914
Net deferred tax liabilities	$ (20,447)	$ (33,244)

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Parent Company Financial Information (Parent Company Only) (Schedule Of Statements Of Cash Flows) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011		Sep. 30, 2010		Sep. 30, 2009
Net income	$ 38,403	[1]	$ 67,840	[1]	$ 66,298	[1]
Amortization/accretion of premiums/discounts	(8,100)		(5,940)		(2,644)
Other assets	(637)		7,035		(837)
Income taxes receivable/payable	3,004		(6,697)		8
Accounts payable and accrued expenses	(143)		(1,631)		(1,209)
Net cash provided by operating activities	65,785		59,162		190,718
Purchase of AFS securities	(790,083)				(424,498)
Net cash flows (used in)/provided by investing activities	(933,321)		(38,492)		(440,552)
Dividends paid	(150,110)		(48,400)		(44,069)
Repayments on borrowings	(773,771)		(395,000)		(1,581,612)
Acquisition of treasury stock			(4,019)		(2,426)
Stock options exercised	35		210		1,337
Net cash flows provided by/(used in) financing activities	923,389		3,393		203,850
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	55,853		24,063		(45,984)
Beginning of Period	65,217		41,154		87,138
End of Period	121,070		65,217		41,154
Interest payments	172,332		199,433		236,137
Capitol Federal Financial [Member]
Net income	38,403		67,840		66,298
Equity in excess of distribution over/(undistributed) earnings of subsidiary	(17,693)		16,772		(16,544)
Amortization/accretion of premiums/discounts	3,529
Amortization of deferred debt issuance costs					28
Other, net	(1,812)		1		14
Provision for deferred income taxes	(10,409)
Other assets	1,547				2,999
Income taxes receivable/payable	(2,927)		24		(95)
Accounts payable and accrued expenses	(355)		3		(292)
Net cash provided by operating activities	10,283		84,640		52,408
Offering proceeds downstreamed to Bank	(567,422)
Purchase of AFS securities	(405,800)
Proceeds from maturities of AFS securities	40,000
Proceeds from maturities of Bank certificates of deposit	55,000		5,000
Purchase of Capitol Federal Financial, Inc. stock			(1)
Principal collected on notes receivable from ESOP	2,525		2,387		2,256
Net cash flows (used in)/provided by investing activities	(875,697)		7,386		2,256
Net proceeds from common stock offering (Deferred offering costs)	1,094,101		(5,982)
Payment from subsidiary for sale of treasury stock related to RRP shares			162		87
Dividends paid	(150,110)		(48,400)		(44,069)
Repayments on borrowings	(53,609)
Acquisition of treasury stock			(4,019)		(2,426)
Stock options exercised	35		210		1,337
Net cash flows provided by/(used in) financing activities	890,417		(58,029)		(45,071)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	25,003		33,997		9,593
Beginning of Period	88,098		54,101		44,508
End of Period	113,101		88,098		54,101
Interest payments	1,274		1,678		2,866
Note to ESOP in exchange for common stock	$ 47,260

[1] Net income available to participating securities (unvested RRP shares) was inconsequential for fiscal years 2011, 2010, and 2009.

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Fair Value Of Financial Instruments (Tables)

12 Months Ended

Sep. 30, 2011

Fair Value Of Financial Instruments [Abstract]

Schedule Of Fair Value Assets Measured On A Recurring Basis

	September 30, 2011
			Quoted Prices		Significant		Significant
			in Active Markets		Other Observable		Unobservable
	Carrying		for Identical Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)(1)
	(Dollars in thousands)
AFS securities
GSE debentures	$	748,308	$	--	$	748,308	$	--
Municipal bonds		2,754		--		2,754		--
Trust preferred securities		2,941		--		--		2,941
MBS		732,436		--		732,436		--
	$	1,486,439	$	--	$	1,483,498	$	2,941
	September 30, 2010
			Quoted Prices		Significant		Significant
			in Active Markets		Other Observable		Unobservable
	Carrying		for Identical Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)(2)
	(Dollars in thousands)
AFS securities
GSE debentures	$	50,255	$	--	$	50,255	$	--
Municipal bonds		2,819		--		2,819		--
Trust preferred securities		2,796		--		--		2,796
MBS		1,004,496		--		1,004,496		--
	$	1,060,366	$	--	$	1,057,570	$	2,796

(1)   The Company's Level 3 AFS securities have had no activity from September 30, 2010 to September 30, 2011, except for principal repayments of $87 thousand and reductions in net unrealized losses recognized in other comprehensive income.  Reductions of net unrealized losses included in other comprehensive income for the year ended September 30, 2011 were $115 thousand.  

(2)   The Company's Level 3 AFS securities have had no activity from September 30, 2009 to September 30, 2010, except for principal repayments of $93 thousand and reductions in net unrealized losses recognized in other comprehensive income.  Reductions of net unrealized losses included in other comprehensive income for the year ended September 30, 2010 were $460 thousand.

Schedule Of Fair Value Assets Measured On A Nonrecurring Basis

	September 30, 2011
			Quoted Prices		Significant		Significant
			in Active Markets		Other Observable		Unobservable
	Carrying		for Identical Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in thousands)
Impaired loans	$	72,048	$	--	$	--	$	72,048
REO, net		11,321		--		--		11,321
	$	83,369	$	--	$	--	$	83,369
	September 30, 2010
			Quoted Prices		Significant		Significant
			in Active Markets		Other Observable		Unobservable
	Carrying		for Identical Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in thousands)
Impaired loans	$	57,118	$	--	$	--	$	57,118
REO, net		9,920		--		--		9,920
	$	67,038	$	--	$	--	$	67,038

Schedule Of Carrying Amounts And Estimated Fair Values Of Financial Instruments

	2011				2010
			Estimated				Estimated
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
	(Dollars in thousands)
Assets:
Cash and cash equivalents	$	121,070	$	121,070	$	65,217	$	65,217
AFS securities		1,486,439		1,486,439		1,060,366		1,060,366
HTM securities		2,370,117		2,434,392		1,880,154		1,913,454
Loans receivable		5,149,734		5,475,150		5,168,202		5,392,550
BOLI		56,534		56,534		54,710		54,710
Capital stock of FHLB		126,877		126,877		120,866		120,866
Liabilities:
Deposits		4,495,173		4,553,516		4,386,310		4,459,052
FHLB Advances		2,379,462		2,569,958		2,348,371		2,557,064
Other borrowings		515,000		545,096		668,609		701,099

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Loans Receivable And Allowance For Credit Losses (Recorded Investment In Loans, Less SVAs) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Financing Receivable, Recorded Investment [Line Items]
Multi-family and commercial	$ 57,965	$ 66,476
Consumer - home equity	164,541	186,347
Consumer - other	7,224	7,671
Total loans receivable	5,195,876	5,209,313
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
One-to four-family - originated	32,673
One-to four-family - purchased	447
Multi-family and commercial	7,683
Consumer - home equity	50
Total loans receivable	40,853
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
One-to four-family - originated	18,419
One-to four-family - purchased	15,987
Consumer - home equity	592
Consumer - other	5
Total loans receivable	$ 35,003

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Borrowed Funds (Narrative) (Details) (USD $)	12 Months Ended						12 Months Ended
	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2010	Mar. 31, 2012 2012 [Member]	Dec. 31, 2011 2012 [Member]	Sep. 30, 2011 2012 [Member]	Sep. 30, 2010 Repayments Of FHLB Advances [Member]	Sep. 30, 2010 New Borrowings [Member]
Repayments of fixed-rate FHLB advances							$ 200,000,000
New fixed-rate FHLB advances								200,000,000
Weighted average interest rate							4.63%	3.17%
Weighted average remaining term to maturity in months							1	84
Penalty prepaying the FHLB advances	20,995,000		28,261,000				875,000
Percentage change in present value of cash flows due to debt restructuring, maximum			10.00%
FHLB percentage of regulatory assets	26.00%
FHLB borrowings threshold percentage of regulatory assets	40.00%
Expiration date for FHLB line of credit	November 25, 2011
Borrowings FHLB line of credit			0
MBS pledged as collateral, estimated fair value	597,300,000
FHLB advances maturing	2,400,000,000		2,376,000,000			350,000,000
FHLB advances due		100,000,000		150,000,000	100,000,000
Repurchase agreements maturing					$ 150,000,000

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Premises And Equipment, Net (Summary Of The Carrying Value Of Banking Premises And Equipment) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Premises And Equipment, Net [Abstract]
Land	$ 8,684	$ 7,877
Building and improvements	53,822	45,295
Furniture, fixtures and equipment	38,069	37,289
Premises and equipment, gross	100,575	90,461
Less accumulated depreciation	52,152	49,201
Premises and equipment, net	$ 48,423	$ 41,260

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Securities (Schedule Of Taxable And Non-taxable Components Of Interest Income) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Securities [Abstract]
Taxable	$ 17,180	$ 13,547	$ 3,526
Non-taxable	1,897	2,135	2,007
Interest income on investment securities	$ 19,077	$ 15,682	$ 5,533

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Earnings Per Share

12 Months Ended

Sep. 30, 2011

Earnings Per Share [Abstract]

Earnings Per Share

2.   EARNINGS PER SHARE

The Company accounts for the shares acquired by its ESOP and the shares awarded pursuant to its RRP in accordance with ASC 260, which requires that unvested RRP awards that contain nonforfeitable rights to dividends be treated as participating securities in the computation of EPS pursuant to the two-class method. The two-class method is an earnings allocation that determines EPS for each class of common stock and participating security. Shares acquired by the ESOP are not considered in the basic average shares outstanding until the shares are committed for allocation or vested to an employee's individual account.  All share information prior to the corporate reorganization has been revised to reflect the 2.2637 exchange ratio.

	2011		2010		2009
	(Dollars in thousands, except per share data)
Net income (1)	$	38,403	$	67,840	$	66,298
Average common shares outstanding		162,432,315		165,689,601		165,403,759
Average committed ESOP shares outstanding		192,959		172,575		172,575
Total basic average common shares outstanding		162,625,274		165,862,176		165,576,334
Effect of dilutive RRP shares		2,747		6,492		12,174
Effect of dilutive stock options		4,644		30,777		132,668
Total diluted average common shares outstanding		162,632,665		165,899,445		165,721,176
Net EPS
Basic	$	0.24	$	0.41	$	0.40
Diluted	$	0.24	$	0.41	$	0.40
Antidilutive stock options and RRP, excluded
from the diluted average common shares
outstanding calculation		898,415		642,777		167,626

(1)   Net income available to participating securities (unvested RRP shares) was inconsequential for fiscal years 2011, 2010, and 2009.

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Premises And Equipment, Net (Schedule Of Future Minimum Rental Commitments) (Details) (USD $) In Thousands	Sep. 30, 2011
Premises And Equipment, Net [Abstract]
2012	$ 1,279
2013	1,112
2014	939
2015	817
2016	730
Thereafter	6,924
Future minimum rental commitments, total	$ 11,801

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Securities (Amortized Cost, Estimated Fair Value, and Gross Unrealized Gains and Losses of AFS and HTM Securities) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Investment [Line Items]
Available-for-sale Securities, Amortized Cost	$ 1,443,529	$ 1,009,142
Available-for-sale Securities, Gross Unrealized Gains	43,886	52,155
Available-for-sale Securities, Gross Unrealized Losses	976	931
Available-for-sale Securities, Estimated Fair Value	1,486,439	1,060,366
Held-to-maturity Securities, Amortized Cost	2,370,117	1,880,154
Held-to-maturity Securities, Unrecognized Holding Gain	64,432	33,304
Held-to-maturity Securities, Unrecognized Holding Loss	157	4
Held-to-maturity securities, Estimated Fair Value	2,434,392	1,913,454
Marketable Securities Amortized Cost	3,813,646	2,889,296
Marketable Securities Unrealized Gain	108,318	85,459
Marketable Securities Unrealized Loss	1,133	935
Marketable Securities, Estimated fair Value	3,920,831	2,973,820
MBS [Member]
Investment [Line Items]
Available-for-sale Securities, Amortized Cost	690,675	952,621
Available-for-sale Securities, Gross Unrealized Gains	41,764	51,881
Available-for-sale Securities, Gross Unrealized Losses	3	6
Available-for-sale Securities, Estimated Fair Value	732,436	1,004,496
Held-to-maturity Securities, Amortized Cost	1,679,640	603,368
Held-to-maturity Securities, Unrecognized Holding Gain	59,071	26,209
Held-to-maturity Securities, Unrecognized Holding Loss	153	3
Held-to-maturity securities, Estimated Fair Value	1,738,558	629,574
GSE Debentures [Member]
Investment [Line Items]
Available-for-sale Securities, Amortized Cost	746,545	50,151
Available-for-sale Securities, Gross Unrealized Gains	1,996	104
Available-for-sale Securities, Gross Unrealized Losses	233
Available-for-sale Securities, Estimated Fair Value	748,308	50,255
Held-to-maturity Securities, Amortized Cost	633,483	1,208,829
Held-to-maturity Securities, Unrecognized Holding Gain	3,171	4,441
Held-to-maturity securities, Estimated Fair Value	636,654	1,213,270
Municipal Bonds [Member]
Investment [Line Items]
Available-for-sale Securities, Amortized Cost	2,628	2,649
Available-for-sale Securities, Gross Unrealized Gains	126	170
Available-for-sale Securities, Estimated Fair Value	2,754	2,819
Held-to-maturity Securities, Amortized Cost	56,994	67,957
Held-to-maturity Securities, Unrecognized Holding Gain	2,190	2,654
Held-to-maturity Securities, Unrecognized Holding Loss	4	1
Held-to-maturity securities, Estimated Fair Value	59,180	70,610
Trust Preferred Securities [Member]
Investment [Line Items]
Available-for-sale Securities, Amortized Cost	3,681	3,721
Available-for-sale Securities, Gross Unrealized Losses	740	925
Available-for-sale Securities, Estimated Fair Value	$ 2,941	$ 2,796

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Premises And Equipment, Net (Tables)

12 Months Ended

Sep. 30, 2011

Premises And Equipment, Net [Abstract]

Summary Of The Carrying Value Of Banking Premises And Equipment

	2011		2010
	(Dollars in thousands)
Land	$	8,684	$	7,877
Building and improvements		53,822		45,295
Furniture, fixtures and equipment		38,069		37,289
		100,575		90,461
Less accumulated depreciation		52,152		49,201
	$	48,423	$	41,260

Schedule Of Future Minimum Rental Commitments

2012	$	1,279
2013		1,112
2014		939
2015		817
2016		730
Thereafter		6,924
	$	11,801

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Loans Receivable And Allowance For Credit Losses (Tables)

12 Months Ended

Sep. 30, 2011

Loans Receivable And Allowance For Credit Losses [Abstract]

Summary Of Loans Receivable

	2011			2010
	(Dollars in thousands)
Real Estate Loans:
One- to four-family	$	4,918,778		$	4,915,651
Multi-family and commercial		57,965			66,476
Construction		47,368			33,168
Total real estate loans		5,024,111			5,015,295
Consumer Loans:
Home equity		164,541			186,347
Other		7,224			7,671
Total consumer loans		171,765			194,018
Total loans receivable		5,195,876			5,209,313
Less:
Undisbursed loan funds		22,531			15,489
ACL		15,465			14,892
Discounts/unearned loan fees		19,093			22,267
Premiums/deferred costs		(10,947	)		(11,537	)
	$	5,149,734		$	5,168,202

Recorded Investment Of Loans, Past Due

					Total				Total
	30 to 89 Days		90 or More Days		Delinquent		Current		Recorded
	Delinquent		Delinquent		Loans		Loans		Investment
	(Dollars in thousands)
One- to four-family loans - originated	$	19,682	$	12,363	$	32,045	$	4,362,498	$	4,394,543
One- to four-family loans - purchased		6,243		13,836		20,079		520,876		540,955
Multi-family and commercial loans		--		--		--		57,936		57,936
Consumer - home equity		759		380		1,139		163,402		164,541
Consumer - other		92		3		95		7,129		7,224
	$	26,776	$	26,582	$	53,358	$	5,111,841	$	5,165,199

Recorded Investment In Loans, Less SVAs

	Special Mention		Substandard
	(Dollars in thousands)
One- to four-family - originated	$	32,673	$	18,419
One- to four-family - purchased		447		15,987
Multi-family and commercial		7,683		--
Consumer - home equity		50		592
Consumer - other		--		5
	$	40,853	$	35,003

LTV And Credit Score Information For Originated And Purchased One-To Four-Family Loans And Originated Consumer Home Equity Loans

	Weighted Average		Weighted Average
	Credit Score		LTV
One- to four-family - originated		762		66	%
One- to four-family - purchased		740		60
Consumer - home equity		742		20
		759		64	%

Troubled Debt Restructurings On Financing Receivable, Recorded Investment

	Restructurings
	Due to		Loan
	Financial		Endorsement
	Difficulties		Program		Total
	(Dollars in thousands)
One- to four-family loans - originated	$	23,534	$	19,624	$	43,158
One- to four-family loans - purchased		6,155		--		6,155
Multi-family and commercial loans		563		--		563
Consumer - home equity		413		--		413
Consumer - other		2		--		2
	$	30,667	$	19,624	$	50,291

Troubled Debt Restructurings On Financing Receivables

	Number		Pre-		Post-
	of		Restructured		Restructured
	Contracts		Outstanding		Outstanding
			(Dollars in thousands)
One- to four-family loans - originated		158	$	27,250	$	26,936
One- to four-family loans - purchased		4		1,563		1,555
Multi-family and commercial loans		--		--		--
Consumer - home equity		5		224		227
Consumer - other		--		--		--
		167	$	29,037	$	28,718

Troubled Debt Restructurings on Financing Receivables That Subsequently Defaulted

	Number
	of		Recorded
	Contracts		Investment
			(Dollars in thousands)
One- to four-family loans - originated		13	$	1,353
One- to four-family loans - purchased		--		--
Multi-family and commercial loans		--		--
Consumer - home equity		--		--
Consumer - other		--		--
		13	$	1,353

Impaired Loans By Class

								Fiscal		Fiscal
								Year-to-Date		Year-to-Date
				Unpaid				Average		Interest
		Recorded		Principal		Related		Recorded		Income
		Investment		Balance		ACL		Investment		Recognized
		(Dollars in thousands)
With no related allowance recorded
	One- to four-family - originated	$	47,710	$	47,845	$	--	$	41,401	$	1,467
	One- to four-family - purchased		6,075		6,056		--		7,381		58
	Multi-family and commercial		563		565		--		578		36
	Consumer - home equity		468		468		--		672		14
	Consumer - other		5		5		--		46		--
			54,821		54,939		--		50,078		1,575
With an allowance recorded
	One- to four-family - originated		3,297		3,299		335		2,419		102
	One- to four-family - purchased		13,640		13,546		3,280		14,576		156
	Multi-family and commercial		--		--		--		--		--
	Consumer - home equity		264		264		140		80		3
	Consumer - other		--		--		--		--		--
			17,201		17,109		3,755		17,075		261
Total
	One- to four-family - originated		51,007		51,144		335		43,820		1,569
	One- to four-family - purchased		19,715		19,602		3,280		21,957		214
	Multi-family and commercial		563		565		--		578		36
	Consumer - home equity		732		732		140		752		17
	Consumer - other		5		5		--		46		--
		$	72,022	$	72,048	$	3,755	$	67,153	$	1,836

Allowance For Credit Losses

	One- to Four-			One- to Four-			One- to Four-			Multi-family
	Family			Family			Family			and
	Originated			Purchased			Total			Commercial			Consumer			Total
	(Dollars in thousands)
Beginning balance	$	3,813		$	10,425		$	14,238		$	275		$	379		$	14,892
Charge-offs		(414	)		(2,928	)		(3,342	)		--			(145	)		(3,487	)
Recoveries		--			--			--			--			--			--
Provision for credit losses		1,516			2,404			3,920			(21	)		161			4,060
Ending balance	$	4,915		$	9,901		$	14,816		$	254		$	395		$	15,465
Ratio of net charge-offs to average loans
outstanding year-to-date																	0.07	%
Ratio of net charge-offs year-to-date
to average non-performing assets																	8.75	%
ACL for loans collectively
evaluated for impairment	$	4,580		$	6,621		$	11,201		$	254		$	255		$	11,710
ACL for loans individually
evaluated for impairment	$	335		$	3,280		$	3,615		$	--		$	140		$	3,755

Summary Of Loan Portfolio Segment Disaggregated By The Company's Impairment Method

	One- to Four-		One- to Four-		One- to Four-		Multi-family
	Family		Family		Family		and
	Originated		Purchased		Total		Commercial		Consumer		Total
	(Dollars in thousands)
Recorded investment of loans
collectively evaluated for impairment	$	4,343,536	$	521,240	$	4,864,776	$	57,373	$	171,028	$	5,093,177
Recorded investment of loans
individually evaluated for impairment		51,007		19,715		70,722		563		737		72,022
	$	4,394,543	$	540,955	$	4,935,498	$	57,936	$	171,765	$	5,165,199

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Loans Receivable And Allowance For Credit Losses (Troubled Debt Restructurings On Financing Receivables That Subsequently Defaulted) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Sep. 30, 2011
Financing Receivable, Modifications [Line Items]
Number Of Contracts	13
Recorded Investment	$ 1,353
One-To Four-Family Loans - Originated [Member]
Financing Receivable, Modifications [Line Items]
Number Of Contracts	13
Recorded Investment	1,353
One-To Four-Family Loans - Purchased [Member]
Financing Receivable, Modifications [Line Items]
Number Of Contracts
Recorded Investment
Multi-Family And Commercial Loans [Member]
Financing Receivable, Modifications [Line Items]
Number Of Contracts
Recorded Investment
Consumer - Home Equity [Member]
Financing Receivable, Modifications [Line Items]
Number Of Contracts
Recorded Investment
Consumer - Other [Member]
Financing Receivable, Modifications [Line Items]
Number Of Contracts
Recorded Investment

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Securities (Schedule Of Estimated Fair Value And Gross Unrealized Losses Of Securities In Continuous Unrealized Loss Position) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2011	Sep. 30, 2010
Schedule of Investments [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less Than 12 Months, Count	12	4
Available-for-sale Securities, Continuous Unrealized Loss Position, Less Than 12 Months, Estimated Fair Value	$ 232,037	$ 1,678
Available-for-sale Securities, Continuous Unrealized Loss Position, Less Than 12 Months, Unrealized Losses	236	5
Available-for-sale Securities, Continuous Unrealized Loss Position, Equal to or Greater Than 12 Months, Count	1	4
Available-for-sale Securities, Continuous Unrealized Loss Position, Equal to or Greater Than 12 Months, Estimated Fair Value	2,941	3,155
Available-for-sale Securities, Continuous Unrealized Loss Position, Equal to or Greater Than 12 Months, Unrealized Losses	740	926
Held-to-maturity, Securities Continuous Unrealized Loss Position, Less Than 12 Months, Count	3	1
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less Than 12 Months, Estimated Fair Value	25,757	48,392
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less Than 12 Months, Unrealized Losses	157	3
Held-to-maturity, Securities Continuous Unrealized Loss Position, Equal to or Greater Than 12 Months, Count		1
Held-to-maturity, Securities Continuous Unrealized Loss Position, Equal to or Greater Than 12 Months, Estimated Fair Value		878
Held-to-maturity, Securities Continuous Unrealized Loss Position, Equal to or Greater Than 12 Months, Unrealized Losses		1
MBS [Member]
Schedule of Investments [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less Than 12 Months, Count	5	4
Available-for-sale Securities, Continuous Unrealized Loss Position, Less Than 12 Months, Estimated Fair Value	1,189	1,678
Available-for-sale Securities, Continuous Unrealized Loss Position, Less Than 12 Months, Unrealized Losses	3	5
Available-for-sale Securities, Continuous Unrealized Loss Position, Equal to or Greater Than 12 Months, Count		3
Available-for-sale Securities, Continuous Unrealized Loss Position, Equal to or Greater Than 12 Months, Estimated Fair Value		359
Available-for-sale Securities, Continuous Unrealized Loss Position, Equal to or Greater Than 12 Months, Unrealized Losses		1
Held-to-maturity, Securities Continuous Unrealized Loss Position, Less Than 12 Months, Count	1	1
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less Than 12 Months, Estimated Fair Value	25,142	48,392
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less Than 12 Months, Unrealized Losses	153	3
Municipal Bonds [Member]
Schedule of Investments [Line Items]
Held-to-maturity, Securities Continuous Unrealized Loss Position, Less Than 12 Months, Count	2
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less Than 12 Months, Estimated Fair Value	615
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less Than 12 Months, Unrealized Losses	4
Held-to-maturity, Securities Continuous Unrealized Loss Position, Equal to or Greater Than 12 Months, Count		1
Held-to-maturity, Securities Continuous Unrealized Loss Position, Equal to or Greater Than 12 Months, Estimated Fair Value		878
Held-to-maturity, Securities Continuous Unrealized Loss Position, Equal to or Greater Than 12 Months, Unrealized Losses		1
Trust Preferred Securities [Member]
Schedule of Investments [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Equal to or Greater Than 12 Months, Count	1	1
Available-for-sale Securities, Continuous Unrealized Loss Position, Equal to or Greater Than 12 Months, Estimated Fair Value	2,941	2,796
Available-for-sale Securities, Continuous Unrealized Loss Position, Equal to or Greater Than 12 Months, Unrealized Losses	740	925
GSE Debentures [Member]
Schedule of Investments [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less Than 12 Months, Count	7
Available-for-sale Securities, Continuous Unrealized Loss Position, Less Than 12 Months, Estimated Fair Value	230,848
Available-for-sale Securities, Continuous Unrealized Loss Position, Less Than 12 Months, Unrealized Losses	$ 233

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Deposits (Tables)

12 Months Ended

Sep. 30, 2011

Deposits [Abstract]

Summary Of Deposits

			2011								2010
					Weighted								Weighted
					Average			% of					Average			% of
			Amount		Rate			Total			Amount		Rate			Total
			(Dollars in thousands)
Non-certificates:
Checking			$	551,632		0.08	%		12.3	%	$	482,428		0.13	%		11.0	%
Savings				253,184		0.41			5.6			234,285		0.54			5.3
Money market				1,066,065		0.35			23.7			942,428		0.65			21.5
Total non-certificates				1,870,881		0.28			41.6			1,659,141		0.48			37.8
Certificates of deposit:
	0.00 – 0.99	%		339,803		0.50			7.6			193,959		0.53			4.4
	1.00 – 1.99	%		1,106,957		1.27			24.6			1,013,538		1.44			23.1
	2.00 – 2.99	%		775,235		2.49			17.2			777,687		2.53			17.7
	3.00 – 3.99	%		371,682		3.42			8.3			576,595		3.50			13.2
	4.00 – 4.99	%		30,615		4.40			0.7			164,763		4.32			3.8
	5.00 – 5.99	%		--		--			--			627		5.29			--
Total certificates of deposit				2,624,292		1.87			58.4			2,727,169		2.29			62.2
			$	4,495,173		1.21	%		100.0	%	$	4,386,310		1.61	%		100.0	%

Summary Of Certificates Of Deposit Maturity

			Weighted
			Average
	Amount		Rate
	(Dollars in thousands)
2012	$	1,390,231		1.65	%
2013		555,043		1.86
2014		309,015		2.27
2015		317,065		2.43
2016		49,423		2.22
Thereafter		3,515		2.46
	$	2,624,292		1.87	%

Summary Of Interest Expense On Deposits

	Year Ended September 30,
	2011		2010		2009
	(Dollars in thousands)
Checking	$	441	$	622	$	879
Savings		1,225		1,323		1,873
Money market		5,307		6,522		8,512
Certificates		56,595		70,749		89,207
	$	63,568	$	79,216	$	100,471

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Borrowed Funds (Tables)

12 Months Ended

Sep. 30, 2011

Borrowed Funds [Abstract]

FHLB Advances

	2011			2010
	(Dollars in thousands)
Fixed-rate FHLB advances	$	2,400,000		$	2,376,000
Deferred prepayment penalty		(20,995	)		(28,261	)
Deferred gain on terminated interest rate swaps		457			632
	$	2,379,462		$	2,348,371
Weighted average contractual interest rate on FHLB advances		3.37	%		3.61	%
Weighted average effective interest rate on FHLB advances (1)		3.71	%		3.96	%

(1)   The effective rate includes the net impact of the amortization of deferred prepayment penalties related to the prepayment of certain FHLB advances and deferred gains related to the termination of interest rate swaps.

Other Borrowings

	2011					2010
			Weighted					Weighted
			Average					Average
			Contractual					Contractual
	Amount		Rate			Amount		Rate
	(Dollars in thousands)
Repurchase agreements	$	515,000		4.00	%	$	615,000		4.03	%
Debentures		--		--			53,609		3.28
	$	515,000		4.00	%	$	668,609		3.97	%

Maturity Of Borrowed Funds

							Weighted			Weighted
	FHLB		Repurchase		Total		Average			Average
	Advances		Agreements		Borrowings		Contractual			Effective
	Amount		Amount		Amount		Rate			Rate
	(Dollars in thousands)
2012	$	350,000	$	150,000	$	500,000		3.67	%		3.67	%
2013		525,000		145,000		670,000		3.74			4.00
2014		450,000		100,000		550,000		3.33			3.96
2015		200,000		20,000		220,000		3.50			4.16
2016		275,000		--		275,000		3.86			4.39
Thereafter		600,000		100,000		700,000		3.06			3.08
	$	2,400,000	$	515,000	$	2,915,000		3.48	%		3.76	%

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Summary Of Significant Accounting Policies

12 Months Ended

Sep. 30, 2011

Summary Of Significant Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business - Capitol Federal Financial, Inc. (the "Company") provides a full range of retail banking services through its wholly-owned subsidiary, Capitol Federal Savings Bank (the "Bank") which has 35 traditional and 10 in-store banking offices serving primarily the metropolitan areas of Topeka, Wichita, Lawrence, Manhattan, Emporia and Salina, Kansas and portions of the metropolitan area of greater Kansas City. The Bank emphasizes mortgage lending, primarily originating and purchasing one- to four-family mortgage loans and providing personal retail financial services.  The Bank is subject to competition from other financial institutions and other companies that provide financial services.

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") was signed into law.  The Dodd-Frank Act, among other things, required the Office of Thrift Supervision (the "OTS") to be merged into the Office of the Comptroller of the Currency (the "OCC").  On July 21, 2011, the OCC assumed all functions and authority from the OTS relating to federally chartered savings banks, and the Board of Governors of the Federal Reserve System ("FRB") assumed all functions and authority from the OTS relating to savings and loan holding companies.   Effective July 21, 2011, the Bank is regulated by the OCC and the Company is regulated by the FRB.  Prior to that date, the Bank and Company were regulated by the OTS.  The Bank is also regulated by the Federal Deposit Insurance Corporation (the "FDIC").  The Bank and Company are subject to periodic examinations by the above noted regulatory authorities.

The Bank has an expense sharing agreement with the Company that covers the reimbursement of certain expenses that are allocable to the Company.  These expenses include compensation, rent for leased office space, and general overhead expenses.

The Company and its subsidiary have a tax allocation agreement.  The Bank is the paying agent to the taxing authorities for the group for all periods presented.  Each company is liable for taxes as if separate tax returns were filed and reimburses the Bank for its related tax liability.  If any entity has a tax benefit due to a taxable loss, the Bank reimburses the entity for the related tax benefit.

The Company's ability to pay dividends is dependent, in part, upon its ability to obtain capital distributions from the Bank. The future dividend policy of the Company is subject to the discretion of the Board of Directors and will depend upon a number of factors, including the Company's financial condition and results of operations, the Bank's regulatory capital requirements, regulatory limitations on the Bank's ability to make capital distributions to the Company, and the amount of cash at the holding company.  Holders of common stock will be entitled to receive dividends as of and when declared by the Board of Directors of the Company out of funds legally available for that purpose.

Basis of Presentation - In December 2010, Capitol Federal Financial completed its conversion from a mutual holding company form of organization to a stock form of organization ("corporate reorganization").  Capitol Federal Financial, which owned 100% of the Bank, was succeeded by the Company, a new Maryland corporation.  As part of the corporate reorganization, Capitol Federal Savings Bank MHC's ("MHC") ownership interest in Capitol Federal Financial was sold in a public offering.  Gross proceeds from the offering were $1.18 billion and related offering expenses were $46.7 million, of which $6.0 million were incurred and deferred in fiscal year 2010.  The publicly held shares of Capitol Federal Financial were exchanged for new shares of common stock of the Company.  The exchange ratio was 2.2637 and ensured that immediately after the corporate reorganization the public stockholders of Capitol Federal Financial owned the same aggregate percentage of the Company's common stock that they owned of Capitol Federal Financial's common stock immediately prior to the reorganization.  All share information used to calculate EPS in the consolidated financial statements prior to the corporate reorganization has been revised to reflect the 2.2637 exchange ratio.  In conjunction with the corporate reorganization, the Company contributed $40.0 million of cash to the Bank's charitable foundation, Capitol Federal Foundation.  Additionally, a "liquidation account" has been established for the benefit of certain depositors of the Bank in an amount equal to MHC's ownership interest in the retained earnings of Capitol Federal Financial as of June 30, 2010.  As of September 30, 2011, the balance of the liquidation account was $405.4 million.  Under OCC regulations, neither the Company nor the Bank is permitted to pay dividends on its capital stock to its stockholders if stockholders' equity would be reduced below the current amount of the liquidation account at that time.

The consolidated financial statements after the corporate reorganization in December 2010 include the accounts of the Company and its wholly owned subsidiary, the Bank.  The consolidated financial statements prior to the corporate reorganization include the accounts of Capitol Federal Financial and its wholly owned subsidiary, the Bank.  The Bank has a wholly owned subsidiary, Capitol Funds, Inc.  Capitol Funds, Inc. has a wholly owned subsidiary, Capitol Federal Mortgage Reinsurance Company.  All intercompany accounts and transactions have been eliminated. 

These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"), and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The ACL is a significant estimate that involves a high degree of complexity and requires management to make difficult and subjective judgments and assumptions about highly uncertain matters.  The use of different judgments and assumptions could cause reported results to differ significantly.  In addition, bank regulators periodically review the Bank's ACL.  The bank regulators have the ability to require the Bank, as they can require all banks, to increase the ACL or recognize additional charge-offs based upon their judgments, which may differ from management's judgments.  Any increases in the ACL or recognition of additional charge-offs required by bank regulators could adversely affect the Company's financial condition and results of operations.

Cash and Cash Equivalents - Cash and cash equivalents include cash on hand and amounts due from banks.  The Bank has acknowledged informal agreements with other banks where it maintains deposits. Under these agreements, service fees charged to the Bank are waived provided certain average compensating balances are maintained throughout each month.  FRB regulations require federally chartered savings banks to maintain cash reserves against their transaction accounts.  Required reserves must be maintained in the form of vault cash, an account at a Federal Reserve Bank, or a pass-through account as defined by the FRB.  The Bank is in compliance with the FRB requirements.  For the years ended September 30, 2011 and 2010, the average daily balance of required reserves at the Federal Reserve Bank was $9.3 million and $9.7 million, respectively.

Securities - Securities include mortgage-backed and agency securities issued primarily by United States Government-Sponsored Enterprises ("GSE"), including Federal National Mortgage Association ("FNMA"), Federal Home Loan Mortgage Corporation ("FHLMC") and FHLB, United States Government agencies, including Government National Mortgage Association ("GNMA"), and municipal bonds.  Securities are classified as HTM, AFS, or trading based on management's intention on the date of purchase.  Generally, classifications are made in response to liquidity needs, asset/liability management strategies, and the market interest rate environment at the time of purchase.

Securities that management has the intent and ability to hold to maturity are classified as HTM and reported at amortized cost. Such securities are adjusted for the amortization of premiums and discounts which are recognized as adjustments to interest income over the life of the securities using the level-yield method.

Securities that management may sell if necessary for liquidity or asset management purposes are classified as AFS and reported at fair value, with unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) within stockholders' equity, net of deferred income taxes.  The amortization of premiums and discounts are recognized as adjustments to interest income over the life of the securities using the level-yield method.  Gains or losses on the disposition of AFS securities are recognized using the specific identification method. Estimated fair values of AFS securities are based on one of three methods:  1) quoted market prices where available, 2) quoted market prices for similar instruments if quoted market prices are not available, and 3) unobservable data that represents the Bank's assumptions about items that market participants would consider in determining fair value where no market data is available.  See additional discussion of fair value of AFS securities in Note 14.

Securities that are purchased and held principally for resale in the near future are classified as trading securities and are reported at fair value, with unrealized gains and losses included in other income in the consolidated statements of income.  During fiscal year 2010, the Bank held trading securities for a limited time.  The securities were received in conjunction with the swap of originated fixed-rate mortgage loans with FHLMC for MBS.  During the fiscal year ended September 30, 2011, neither the Company nor the Bank maintained a trading securities portfolio.

Management monitors the securities portfolio for impairment on an ongoing basis and performs a formal review quarterly. The process involves monitoring market events and other items that could impact issuers.  The evaluation includes, but is not limited to, such factors as:  the nature of the investment, the length of time the security has had a fair value less than the amortized cost basis, the cause(s) and severity of the loss, expectation of an anticipated recovery period, recent events specific to the issuer or industry including the issuer's financial condition and current ability to make future payments in a timely manner, external credit ratings and recent downgrades in such ratings, management's intent to sell and whether it is more likely than not management would be required to sell prior to recovery for debt securities. Management determines whether other-than-temporary losses should be recognized for impaired securities by assessing all known facts and circumstances surrounding the securities.  If management intends to sell an impaired security or if it is more likely than not that management will be required to sell an impaired security before recovery of its amortized cost basis, an other-than-temporary impairment has occurred and the difference between amortized cost and fair value will be recognized as a loss in earnings and the security will be written down to fair value.  Such losses would be included in other income in the consolidated statements of income.

Loans Receivable - Loans receivable that management has the intent and ability to hold for the foreseeable future are carried at the amount of unpaid principal, net of ACL, undisbursed loan funds, unamortized premiums and discounts, and deferred loan origination fees and costs.  Net loan origination fees and costs and premiums and discounts are amortized as yield adjustments to interest income using the level-yield method, adjusted for the estimated prepayment speeds of the related loans when applicable.  Interest on loans is credited to income as earned and accrued only if deemed collectible.

A loan is considered delinquent when payment has not been received within 30 days of its contractual due date.  The accrual of income on loans is discontinued when interest or principal payments are 90 days in arrears.  Loans on which the accrual of income has been discontinued are designated as non-accrual loans and outstanding interest previously credited beyond 90 days delinquent is reversed.  A non-accrual loan is returned to accrual status once the contractual payments have been made to bring the loan less than 90 days past due.

Existing loan customers, whose loans have not been sold to third parties and who have not been delinquent on their contractual loan payments during the previous 12 months have the opportunity, for a fee, to endorse their original loan terms to current loan terms being offered.  The fee assessed for endorsing the mortgage loan is deferred and amortized over the remaining life of the endorsed loan using the level-yield method and is reflected as an adjustment to interest income.  Each endorsement is examined on a loan-by-loan basis and if the new loan terms represent more than a minor change to the loan, then the unamortized balance of the pre-endorsement deferred fees and/or costs associated with the mortgage loan are recognized in interest income at the time of the endorsement.  If the endorsement of terms does not represent more than a minor change to the loan, then the unamortized balance of the pre-endorsement deferred fees or costs continue to be deferred.

For borrowers experiencing financial difficulties, the Bank may grant a concession to the borrower.  Generally, the Bank grants a short-term payment accommodation to borrowers that are experiencing a temporary cash flow problem.  The most frequently used accommodation is to reduce the monthly payment amount for a period of six to 12 months, often by requiring payments of only interest and escrow during this period. These restructurings result in an extension of the maturity date of the loan.  For more severe situations requiring long-term solutions, the Bank also offers interest rate reductions to currently-offered rates and more lengthy extensions of the maturity date.  All such concessions are considered a troubled debt restructuring ("TDR").  The Bank does not forgive principal or interest nor does it commit to lend additional funds to debtors whose terms have been modified in TDRs.

The Company adopted Accounting Standards Update ("ASU") No. 2011-02, Receivables (Topic 310): A Creditor's Determination of Whether a Restructuring Is a Troubled Debt Restructuring, (ASU 2011-02)on July 1, 2011.  ASU No. 2011-02 provides additional guidance to creditors for evaluating whether a restructuring of a loan is a TDR.  In evaluating whether a loan restructuring constitutes a TDR, a creditor must separately conclude that the restructuring constitutes a concession to the borrower and the borrower is experiencing financial difficulties.

As a result of adopting the ASU, management reassessed all restructurings that occurred on or after October 1, 2010, for identification as TDRs.  Management identified certain endorsed loans that are now required to be reported as TDRs due to decreases in soft credit scores and/or estimated loan-to-value ("LTV") ratios since the time the loan was originated.  Because of these decreases, the borrower could be experiencing financial difficulties even though they have not been delinquent in the previous 12 months on their existing loan payments.  These loans had been measured under the general valuation allowance methodology, prior to the adoption of ASU 2011-02.  Upon adoption, management classified the loans as impaired and began measuring the loans under the specific valuation allowance ("SVA") methodology.  Management will continue to apply the SVA methodology to these loans as long as they are classified as impaired.

Additionally, management identified certain loan restructurings that occurred on or after October 1, 2010, where the loan restructurings resulted in an insignificant delay in the timing of the loan principal payments. The deferral period for these restructured loans was six months or less and any reduction in the principal value of cash flows as a result of the restructuring was due to the insignificant delay in the timing of principal payments. The Bank did not forgive any interest or principal in association with these restructurings.  Upon adoption, management began measuring these loans under the general valuation allowance methodology.

A loan is considered impaired when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the loan agreement.  Interest income on impaired loans is recognized in the period collected unless the ultimate collection of principal is considered doubtful.  Management considers the following loans to be impaired loans: all non-accrual loans, loans classified as substandard, loans with SVAs, and TDRs that have not been performing under the new terms for 12 consecutive months or are required by the accounting literature to be classified as a TDR for the life of the loan due to a reduction in the stated interest rate to a rate lower than the current market rate for new debt with similar risk.

Allowance for Credit Losses - The ACL represents management's best estimate of the amount of known and inherent losses in the loan portfolio as of the balance sheet date.  Management's methodology for assessing the appropriateness of the ACL consists of a formula analysis for general valuation allowances and the establishment of SVAs for identified problem loans.  Management maintains the ACL through provisions for credit losses that are charged to income.

For one- to four-family loans, losses are charged-off when a loan is transferred to REO or if there is a short-sale of the collateral.  For consumer home equity loans where the Bank holds the first mortgage, if the loan balance is in excess of the fair value and the loan is in foreclosure, the difference between the loan balances and the fair value is charged-off.  Estimated selling costs and private mortgage insurance ("PMI") proceeds are also taken into consideration when calculating the amount to charge-off for home equity loans.  For consumer home equity loans where the Bank does not hold the first mortgage, foreclosure is pursued or the loan balance is charged-off.  Other consumer loans that are unsecured are entirely charged-off once the loan is 120 days past due.  For multi-family and commercial loans, the Bank records an SVA when it is determined that the collection of all or a portion of a loan may not be collected and the amount of that loss is reasonably estimated.

The Bank's primary lending emphasis is the origination and purchase of one- to four-family first mortgage loans on residential properties and, to a lesser extent, second mortgage loans on one- to four-family residential properties, resulting in a loan concentration in residential mortgage loans.  The Bank has a concentration of loans secured by residential property located in Kansas and Missouri.  Based on the composition of the Bank's loan portfolio, the primary risks inherent in the one- to four-family and consumer loan portfolios are the continued weakened economic conditions, continued high levels of unemployment or underemployment, and a continuing decline in residential real estate values.  Any one or a combination of these events may adversely affect borrowers' ability to repay their loans, resulting in increased delinquencies, non-performing assets, loan losses, and future loan loss provisions.  Although the multi-family and commercial loan portfolio also shares the risk of continued weakened economic conditions, the primary risks for this portfolio include the ability of the borrower to sustain sufficient cash flows from leases and to control expenses to satisfy their contractual debt payments, or the ability to utilize personal and/or business resources to pay their contractual debt payments if the cash flows are not sufficient.  Additionally, if the Bank were to repossess the secured collateral of a multi-family or commercial loan, the pool of potential buyers is limited more than that for a residential property; therefore, the Bank could hold the property for an extended period of time and potentially be forced to sell at a discounted price, resulting in additional losses.

Management considers several quantitative and qualitative factors quarterly while monitoring the credit quality of the loan portfolio and evaluating the adequacy of the ACL.  Such factors include: the trend and composition of delinquent and non-performing loans, the results of foreclosed property and short-sale transactions (historical losses and net charge-offs), increase in and establishment of SVAs, the current status and trends of local and national economies, the trends and current conditions in the residential real estate markets, and loan portfolio growth and concentrations.

Since the Bank's loan portfolio is primarily concentrated in one- to four-family real estate, management monitors residential real estate market value trends in the Bank's local market areas and geographic sections of the U.S. by reference to various industry and market reports, economic releases and surveys, and management's general and specific knowledge of the real estate markets in which the Bank lends, in order to determine what impact, if any, such trends may have on the level of ACL.   Reviewing these quantitative and qualitative factors assists management in evaluating the overall credit quality of the loan portfolio and the reasonableness of the ACL on an ongoing basis, and whether changes need to be made to the Bank's allowance for credit loss methodology.  Management seeks to apply the ACL methodology in a consistent manner; however, the methodology can be modified in response to changing conditions.  There were no significant modifications to the formula analysis methodology during the year ended September 30, 2011.

The formula analysis for general valuation allowances is updated each quarter.  Within the formula analysis, the loan portfolio is segregated into the following categories:  one- to four-family loans, multi-family and commercial loans, consumer home equity loans, and other consumer loans.  Home equity loans with the same underlying collateral as a one- to four-family loan are combined with the one- to four-family loan in the formula analysis to calculate a combined LTV ratio.  Impaired loans are excluded from the formula analysis as they are individually evaluated for SVAs.  The one- to four-family loan portfolio and related home equity loans are segregated into additional categories based on the following risk characteristics:  originated or purchased from a nationwide lender, interest payments (fixed-rate, adjustable-rate, and interest-only), LTV ratios, borrower's credit scores, and geographic location.  The categories were derived by management based on reviewing the historical performance of the one- to four-family loan portfolio and taking into consideration current economic conditions, such as trends in residential real estate values in certain areas of the U.S. and unemployment rates.  The geographic location category pertains primarily to certain states in which the Bank has experienced measurable losses on REO and short-sales.

Quantitative loss factors are applied to each loan category in the formula analysis based on the historical loss experience and current SVAs, adjusted for loan delinquency trends, for each respective loan category.  Each quarter, management reviews the historical loss time periods and utilizes the historical loss time periods believed to be the most reflective of the current economic conditions and recent charge-off experience for each respective loan category.

Qualitative loss factors are applied to each loan category in the formula analysis.  The qualitative factors for the one- to four-family and consumer loan portfolios are:  unemployment rate trends, collateral value trends, credit score trends, and delinquent loan trends.  The qualitative factors for the multi-family and commercial loan portfolio are:  unemployment rate trends, collateral value trends, and delinquent loan trends.  As loans are classified as special mention or become 30 to 89 days delinquent, the qualitative loss factors increase based upon delinquent loan trends.  The qualitative factors were derived by management based on a review of the historical performance of the respective loan portfolios and consideration of current economic conditions and their likely impact to the loan portfolio.

SVAs are established in connection with individual loan reviews of impaired loans.  Since the majority of the Bank's loan portfolio is composed of residential real estate, determining the estimated fair value of the underlying collateral is important in evaluating the amount of SVAs required for impaired one- to four-family loans.  If the estimated fair value of the collateral, less estimated costs to sell and anticipated PMI proceeds, is less than the current loan balance, an SVA is established for the difference.  Once a purchased one- to four-family loan is 90 days delinquent, new collateral values are obtained through automated valuation models ("AVMs") or broker price opinions ("BPOs").  An updated AVM or BPO is then requested approximately every six months while the loan is greater than 90 days delinquent.Due to the relatively stable home values in Kansas and Missouri, new appraisals on originated one- to four- family loans are not obtained until a loan enters foreclosure.  For originated one- to four-family loans and home equity loans that are impaired and the most recent appraisal is more than one year old, management estimates the fair value of the collateral using the most recently published Federal Housing Finance Agency ("FHFA") index.  For those loans where the FHFA fair value estimate results in a value less than the outstanding loan balance, an updated appraisal is obtained and is used to establish the SVA. If the Bank holds the first and second mortgage, both loans are combined when evaluating the need for an SVA.

Loans with an outstanding balance of $1.5 million or more are reviewed annually if secured by property in one of the following categories:  multi-family (five or more units) property, unimproved land, other improved commercial property, acquisition and development of land projects, developed building lots, office building, single-use building, or retail building.  SVAs are established if necessary, or management may charge-off such losses if deemed appropriate.

Assessing the adequacy of the ACL is inherently subjective.  Actual results could differ from estimates as a result of changes in economic or market conditions.  Changes in estimates could result in a material change in the ACL.  In the opinion of management, the ACL, when taken as a whole, is adequate to absorb estimated losses inherent in the loan portfolio.  However, future adjustments may be necessary if loan portfolio performance or economic or market conditions differ substantially from the conditions that existed at the time of the initial determinations.

Bank-Owned Life Insurance - BOLI is an insurance investment designed to help offset costs associated with the Bank's compensation and benefit programs.  In the event of the death of an insured individual, the Bank would receive a death benefit.  If the insured individual is employed by the Bank at the time of death, a death benefit will be paid to the insured individual's designated beneficiary equal to the insured individual's base compensation at the time BOLI was approved by the Bank's Board of Directors.  If the individual is not employed by the Bank at the time of death, no death benefits will be paid to the insured individual's designated beneficiary.

The cash surrender value of the policies is reported in BOLI in the consolidated balance sheets.   Changes in the cash surrender value are recorded in Income from BOLI in the consolidated statements of income.  

Capital Stock of Federal Home Loan Bank - As a member of FHLB Topeka, the Bank is required to acquire and hold shares of FHLB stock.  The Bank's holding requirement varies based on the Bank's activities, primarily the Bank's outstanding advances, with FHLB.  FHLB stock is carried at cost.  Management conducts a periodic review and evaluation of the Bank's investment in FHLB stock to determine if any impairment exists.  Dividends received on FHLB stock are reflected as interest and dividend income in the consolidated statements of income.

Premises and Equipment - Land is carried at cost. Buildings, leasehold improvements and furniture, fixtures and equipment are carried at cost less accumulated depreciation and leasehold amortization.  Buildings, furniture, fixtures and equipment are depreciated over their estimated useful lives using the straight-line method.  Buildings have an estimated useful life of 39 years. Furniture, fixtures and equipment have an estimated useful life of three to seven years. Leasehold improvements are amortized over the shorter of their estimated useful lives or the term of the respective leases, which is generally three to 15 years.  The costs for major improvements and renovations are capitalized, while maintenance, repairs and minor improvements are charged to operating expenses as incurred.  Gains and losses on dispositions are recorded as other income or other expense as incurred.

Real Estate Owned - REO primarily represents foreclosed assets held for sale.  REO is reported at the lower of cost or estimated fair value less estimated selling costs ("realizable value.")  At acquisition, write downs to realizable value are charged to the ACL.  After acquisition, any additional write downs are charged to operations in the period they are identified and are recorded in other expenses on the consolidated statements of income. Costs and expenses related to major additions and improvements are capitalized while maintenance and repairs which do not improve or extend the lives of the respective assets are expensed. Gains and losses on the sale of REO are recognized upon disposition of the property and are recorded in other expenses in the consolidated statements of income.

Income Taxes - The Company utilizes the asset and liability method of accounting for income taxes.  Under this method, deferred income tax assets and liabilities are recognized for the tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities.  The provision for deferred income taxes represents the change in deferred income tax assets and liabilities excluding the tax effects of the change in net unrealized gain (loss) on AFS securities and changes in the market value of vested RRP shares.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.  Certain tax benefits attributable to stock options and RRP shares are credited to additional paid-in capital.  The Company will record a valuation allowance to reduce its deferred income tax assets when there is uncertainty regarding the ability to realize their benefit.

Certain accounting literature prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return.  Accruals of interest and penalties related to unrecognized tax benefits are recognized in income tax expense.

Employee Stock Ownership Plan - The funds borrowed by the ESOP from the Company to purchase the Company's common stock are being repaid from the Bank's contributions and dividends paid on unallocated ESOP shares.  The shares pledged as collateral are reported as a reduction of stockholders' equity at cost.  As ESOP shares are committed to be released from collateral each quarter, the Company records compensation expense based on the average market price of the Company's stock during the quarter.  Additionally, the shares become outstanding for EPS computations once they are committed to be released.

Stock-based Compensation - The Company has a Stock Option and Incentive Plan (the "Option Plan") and an RRP which are considered share-based payment awards.  Compensation expense is recognized over the service period of each share-based payment award.  The Company applies a fair-value-based measurement method in accounting for share-based payment transactions with employees, except for equity instruments held by the ESOP.  The Company applies the modified prospective method in which compensation cost is recognized over the service period for all awards granted.

Borrowed Funds - The Bank enters into sales of securities under agreements to repurchase with selected brokers ("repurchase agreements").  These agreements are recorded as financing transactions as the Bank maintains effective control over the transferred securities. The dollar amount of the securities underlying the agreements continues to be carried in the Bank's securities portfolio. The obligations to repurchase the securities are reported as a liability in the consolidated balance sheet. The securities underlying the agreements are delivered to the party with whom each transaction is executed. They agree to resell to the Bank the same securities at the maturity of the agreement. The Bank retains the right to substitute similar or like securities throughout the terms of the agreements.  The collateral is subject to valuation at current market levels and the Bank may ask for the return of excess collateral or be required to post additional collateral due to market value changes.

The Bank has obtained advances from FHLB.  FHLB advances are secured by certain qualifying mortgage loans pursuant to a blanket collateral agreement with FHLB and all of the capital stock of FHLB owned by the Bank.  Per the FHLB lending guidelines, total FHLB borrowings cannot exceed 40% of total Bank assets, as reported on the Bank's Thrift Financial Report to the OCC, without pre-approval from the FHLB president.

Capitol Federal Financial Trust I (the "Trust") is a Delaware statutory trust established by Capitol Federal Financial.  The Trust was formed for the purpose of issuing Company obligated mandatorily redeemable preferred securities ("Trust Preferred Securities"). The Trust issued $53.6 million of Trust Preferred Securities.  When the Trust Preferred Securities were issued, the Trust used the proceeds to purchase a like amount of Junior Subordinated Deferrable Interest Debentures (the "Debentures") of the Company. The Company guaranteed the obligations of the Trust.  The Debentures were redeemed in April 2011.  The Debentures were the sole assets of the Trust, and were reported in Other Borrowings in the September 30, 2010 consolidated balance sheet.  The Trust was not included in the consolidated financial statements.

The Bank is authorized to borrow from the Federal Reserve Bank's "discount window."  The Bank had no outstanding Federal Reserve Bank borrowings at September 30, 2011 or 2010.

Comprehensive Income - Comprehensive income is comprised of net income and other comprehensive income. Other comprehensive income includes changes in unrealized gains and losses on securities AFS, net of tax.  Comprehensive income is presented in the consolidated statements of changes in stockholders' equity.

Segment Information - As a community-oriented financial institution, substantially all of the Bank's operations involve the delivery of loan and deposit products to customers. Management makes operating decisions and assesses performance based on an ongoing review of these community banking operations, which constitute the Company's only operating segment for financial reporting purposes.

Earnings Per Share - Basic EPS is computed by dividing income available to common stockholders by the weighted average number of shares outstanding for the period.  Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock (such as stock options) were exercised or resulted in the issuance of common stock.  These potentially dilutive shares would then be included in the weighted average number of shares outstanding for the period using the treasury stock method.  Shares issued and shares reacquired during any period are weighted for the portion of the period that they were outstanding.

In computing both basic and diluted EPS, the weighted average number of common shares outstanding includes the ESOP shares previously allocated to participants and shares committed to be released for allocation to participants and the RRP shares which have vested or have been allocated to participants. ESOP and RRP shares that have not been committed to be released or have not vested are excluded from the computation of basic and diluted EPS.  Unvested awards that contain nonforfeitable rights to dividends should be treated as participating securities in the computation of EPS pursuant to the two-class method; however, the Company has determined the impact of doing so is inconsequential.

Recent Accounting Pronouncements - Effective October 1, 2010, the Company adopted new authoritative accounting guidance under Accounting Standards Codification ("ASC") 860, Transfers of Servicing Assets.  The objective of this standard isto improve the relevance, representational faithfulness, and comparability of the information provided in the financial statements related to the transfer of financial assets; the effects of a transfer on the Company's financial position, financial performance, and cash flows; and a transferor's continuing involvement in transferred financial assets.  The adoption of this standard did not have an impact on the Company's financial condition or results of operations.

Effective October 1, 2010, the Company also adopted new authoritative accounting guidance under ASC 810, Consolidation.  The new guidance did not change many of the key principles for determining whether an entity is a variable interest entity consistent with the ASC on "Consolidation", but does amend many important provisions of the existing guidance on "Consolidation."  The adoption of this standard did not have an impact on the Company's financial condition, results of operations, or financial statement disclosures.

In July 2010, the Financial Accounting Standards Board ("FASB") issued ASU 2010-20, Disclosures about Credit Quality of Financing Receivables and the Allowance for Credit Losses, which amends ASC 310, Receivables, by requiring more robust and disaggregated disclosures about the credit quality of an entity's financing receivables and its ACL. The objective of enhancing these disclosures is to improve financial statement users' understanding of (1) the nature of an entity's credit risk associated with its financing receivables and (2) the entity's assessment of that risk in estimating its ACL as well as changes in the allowance and the reasons for those changes.   The new and amended disclosures that relate to information as of the end of a reporting period were effective for the Company at March 31, 2011. The disclosures that include information for activity that occurs during a reporting period were effective beginning January 1, 2011 for the Company.  Since the provisions of ASU 2010-20 are disclosure-related, the Company's adoption of this guidance did not have an impact to its financial condition or results of operations.

In January 2011, the FASB issued ASU 2011-01, Deferral of the Effective Date of Disclosures About Troubled Debt Restructurings in Update No. 2010-20, which temporarily deferred the effective date in ASU 2010-20 for disclosures about TDRs by creditors until the FASB finalized its project on determining what constitutes a TDR for a creditor. In April 2011, the FASB issued ASU 2011-02, Receivables (Topic 310): A Creditor's Determination of Whether a Restructuring Is a Troubled Debt Restructuring, which amends the content in ASC 310 related to identifying TDRs and effectively nullifies ASU 2011-01.  ASU 2011-02 removes the deferral of the TDR disclosure requirements of ASU 2010-20 for public entities and thus establishes the effective date for those disclosures.  ASU 2011-02 is effective for the first interim or annual period beginning on or after June 15, 2011, which was July 1, 2011 for the Company.  2011-02 is to be applied retrospectively to modifications occurring on or after the beginning of the fiscal year of adoption, which was October 1, 2010 for the Company.  The adoption of ASU 2011-02 did not have a significant impact on the Company's financial condition or results of operations.

In April 2011, the FASB issued ASU 2011-03, Reconsideration of Effective Control for Repurchase Agreements.  The primary objective of this ASU is to improve the accounting for repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity.  This ASU eliminates the requirement for entities to consider whether a transferor has the ability to repurchase the financial assets in a repurchase agreement, which may result in more repurchase agreements to be accounted for as secured borrowings rather than as a sale.  ASU 2011-03 is effective for the first interim or annual period beginning on or after December 15, 2011, which is January 1, 2012 for the Company, and should be applied prospectively.  The Company accounts for its repurchase agreements as secured borrowings; therefore, the adoption of ASU 2011-03 is not expected to have a material impact on its financial condition or results of operations.

In May 2011, the FASB issued ASU 2011-04, Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRSs.  This ASU is a result of joint efforts by the FASB and the International Accounting Standards Board ("IASB") to develop a single, converged fair value framework for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP and International Financial Reporting Standards ("IFRSs").  This ASU is largely consistent with existing fair value measurement principles in U.S. GAAP; however, some of the components of this ASU could change how fair value measurement guidance in ASC 820, Fair Value Measurements and Disclosures, is applied.  This ASU does not require additional fair value measurements and is not intended to establish valuation standards or affect valuation practices outside of financial reporting.  ASU 2011-04 is effective during interim and annual periods beginning after December 15, 2011, which is January 1, 2012 for the Company, and should be applied retrospectively. The provisions of ASU 2011-04 applicable to the Company are disclosure related.  The Company is currently disclosing its fair value measurements in compliance with the converged guidance; therefore, the adoption of ASU 2011-04 will not have an impact to the Company's financial statement disclosures.

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income, which revises how entities present comprehensive income in their financial statements.  The ASU requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements.  In a continuous statement of comprehensive income, an entity would be required to present the components of the income statement as presented today, along with the components of other comprehensive income.  In the two-statement approach, an entity would be required to present a statement that is consistent with the income statement format used today, along with a second statement, which would immediately follow the income statement, that would include the components of other comprehensive income.  The ASU does not change the items that an entity must report in other comprehensive income.  ASU 2011-05 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, which is October 1, 2012 for the Company, and should be applied retrospectively for all periods presented in the financial statements.  The Company has not yet decided which statement format it will adopt.

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Income Taxes (Tables)

12 Months Ended

Sep. 30, 2011

Income Taxes [Abstract]

Schedule Of Income Tax Expense

	2011			2010		2009
Current	(Dollars in thousands)
Federal	$	25,889		$	31,252	$	32,590
State		2,707			2,807		2,788
		28,596			34,059		35,378
Deferred
Federal		(8,933	)		3,209		3,285
State		(714	)		257		263
		(9,647	)		3,466		3,548
	$	18,949		$	37,525	$	38,926

Differences Between Effective Rates And Statutory Federal Income Tax Rate Computed On Income Before Income Tax Expense

	2011						2010						2009
	Amount			%			Amount			%			Amount			%
	(Dollars in thousands)
Federal income tax expense
computed at statutory Federal rate	$	20,073			35.0	%	$	36,878			35.0	%	$	36,828			35.0	%
Increases (Decreases) in taxes resulting from:
State taxes, net of Federal tax effect		1,993			3.4			3,064			2.9			3,051			2.9
Net tax-exempt interest income		(577	)		(1.0	)		(624	)		(0.6	)		(579	)		(0.6	)
Change in cash surrender value of BOLI		(638	)		(1.1	)		(421	)		(0.4	)		(406	)		(0.4	)
Low income housing tax credits		(1,397	)		(2.4	)		(1,209	)		(1.1	)		(1,013	)		(1.0	)
Other		(505	)		(0.9	)		(163	)		(0.2	)		1,045			1.1
	$	18,949			33.0	%	$	37,525			35.6	%	$	38,926			37.0	%

Deferred Income Tax Expense Results From Temporary Differences In Recognition Of Revenue And Expenses For Tax

	2011			2010			2009
	(Dollars in thousands)
Foundation contribution	$	(12,824	)	$	--		$	--
Mortgage servicing rights		(885	)		774			(874	)
ACL		(197	)		(1,771	)		(1,628	)
FHLB prepayment penalty		--			1,283			4,601
FHLB stock dividends		1,432			2,206			694
Other, net		2,827			974			755
	$	(9,647	)	$	3,466		$	3,548

Components Of Net Deferred Income Tax (Liabilities) Assets

	2011			2010
	(Dollars in thousands)
Deferred income tax assets:
Foundation contribution	$	12,824		$	--
ACL		3,863			3,666
Salaries and employee benefits		1,219			1,230
ESOP compensation		836			747
Other		2,630			2,307
Gross deferred income tax assets		21,372			7,950
Valuation allowance		(2,060	)		(280	)
Gross deferred income tax asset, net of valuation allowance		19,312			7,670
Deferred income tax liabilities:
FHLB stock dividends		18,828			17,396
Unrealized gain on AFS securities		16,203			19,362
Other		4,728			4,156
Gross deferred income tax liabilities		39,759			40,914
Net deferred tax liabilities	$	(20,447	)	$	(33,244	)

Reconciliation Of Beginning And Ending Amounts Of Unrecognized Tax Benefits

	2011			2010			2009
	(Dollars in thousands)
Balance at beginning of year	$	114		$	2,848		$	2,409
Additions for tax positions related to the current year		--			--			109
Additions for tax positions of prior years		3			28			888
Reductions for tax positions of prior years		(49	)		(195	)		--
Reductions relating to settlement with taxing authorities		--			--			(97	)
Lapse of statute of limitations		--			(2,567	)		(461	)
Balance at end of year	$	68		$	114		$	2,848

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Stock Based Compensation (Summary Of RRP Share Activity) (Details) (USD $)	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Stock Based Compensation [Abstract]
Unvested RRP shares at beginning of year, Number of Shares	23,762	34,177	52,509
Granted, Number of Shares		11,317	5,657
Vested, Number of Shares	(10,180)	(21,732)	(23,989)
Unvested RRP shares at end of year, Number of Shares	13,582	23,762	34,177
Unvested RRP shares at beginning of year, Weighted Average Grant Date Fair Value	$ 15.07	$ 15.17	$ 14.87
Granted, Weighted Average Grant Date Fair Value		$ 14.42	$ 17.64
Vested, Weighted Average Grant Date Fair Value	$ 15.30	$ 14.88	$ 15.10
Unvested RRP shares at end of year, Weighted Average Grant Date Fair Value	$ 14.90	$ 15.07	$ 15.17

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Summary Of Significant Accounting Policies (Narrative) (Details) (USD $)	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
Summary Of Significant Accounting Policies [Line Items]
Average daily balance of required reserves at the Federal Reserve Bank	$ 9,300,000	$ 9,700,000
FHLB borrowing limit as a percentage of Bank assets	40.00%
Trust preferred securities issued	53,600,000
Gross proceeds from the offering		1,180,000,000
Related offering expenses		46,700,000
Deferred offering costs		6,000,000
Common stock exchange ratio	2.2637
Contribution to Capitol Federal Foundation	40,000,000
Liquidation account balance	405,400,000
Minimum [Member]
Summary Of Significant Accounting Policies [Line Items]
Threshold amount of balance outstanding for secured loans receivable annually reviewed		$ 1,500,000
Traditional Banking Offices [Member]
Summary Of Significant Accounting Policies [Line Items]
Number of Stores		35
In-Store Banking Offices [Member]
Summary Of Significant Accounting Policies [Line Items]
Number of Stores		10
Buildings [Member]
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, estimated useful life, years	39
Furniture, Fixtures And Equipment [Member]
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, estimated useful life minimum, years	3
Property, plant and equipment, estimated useful life maximum, years	7
Leasehold Improvements [Member]
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, estimated useful life minimum, years	3
Property, plant and equipment, estimated useful life maximum, years	15
Capitol Federal Savings Bank [Member]
Summary Of Significant Accounting Policies [Line Items]
Percentage of the Bank's stock owned by the Company	100.00%

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Loans Receivable And Allowance For Credit Losses (LTV And Credit Score Information For Originated And Purchased One-To Four-Family Loans And Originated Consumer Home Equity Loans) (Details)	Sep. 30, 2011
Financing Receivable, Recorded Investment [Line Items]
Weighted average LTV ratio	64.00%
Weighted average credit score	759
One-To Four-Family Loans - Originated [Member]
Financing Receivable, Recorded Investment [Line Items]
Weighted average LTV ratio	66.00%
Weighted average credit score	762
One-To Four-Family Loans - Purchased [Member]
Financing Receivable, Recorded Investment [Line Items]
Weighted average LTV ratio	60.00%
Weighted average credit score	740
Consumer - Home Equity [Member]
Financing Receivable, Recorded Investment [Line Items]
Weighted average LTV ratio	20.00%
Weighted average credit score	742

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Income Taxes (Schedule Of Income Tax Expense) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Income Taxes [Abstract]
Current, Federal	$ 25,889	$ 31,252	$ 32,590
Current, State	2,707	2,807	2,788
Current income tax expense	28,596	34,059	35,378
Deferred, Federal	(8,933)	3,209	3,285
Deferred, State	(714)	257	263
Deferred income tax expense	(9,647)	3,466	3,548
Income tax expense	$ 18,949	$ 37,525	$ 38,926

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Consolidated Balance Sheets (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
ASSETS:
CASH AND CASH EQUIVALENTS (includes interest-earning deposits of $105,292 and $50,771)	$ 121,070	$ 65,217
SECURITIES:
Available-for-sale ("AFS"), at fair value (amortized cost of $1,443,529 and $1,009,142)	1,486,439	1,060,366
Held-to-maturity ("HTM"), at cost (fair value of $2,434,392 and $1,913,454)	2,370,117	1,880,154
LOANS RECEIVABLE, net (less allowance for credit losses "ACL" of $15,465 and $14,892 )	5,149,734	5,168,202
BANK-OWNED LIFE INSURANCE ("BOLI")	56,534	54,710
CAPITAL STOCK OF FEDERAL HOME LOAN BANK ("FHLB"), at cost	126,877	120,866
ACCRUED INTEREST RECEIVABLE	29,316	30,220
PREMISES AND EQUIPMENT, net	48,423	41,260
REAL ESTATE OWNED ("REO"), net	11,321	9,920
INCOME TAXES RECEIVABLE, net		716
OTHER ASSETS	50,968	55,499
TOTAL ASSETS	9,450,799	8,487,130
LIABILITIES:
Deposits	4,495,173	4,386,310
Advances from FHLB	2,379,462	2,348,371
Other borrowings	515,000	668,609
Advance payments by borrowers for taxes and insurance	55,138	55,036
Income taxes payable	2,289
Deferred income tax liabilities, net	20,447	33,244
Accounts payable and accrued expenses	43,761	33,610
Total liabilities	7,511,270	7,525,180
COMMITMENTS AND CONTINGENCIES (NOTE 12)
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value; 100,000,000 shares authorized, no shares issued or outstanding
Common stock, $.01 par value; 1,400,000,000 shares authorized, 167,498,133 shares issued; 167,498,133 and 73,992,678 shares outstanding as of September 30, 2011 and 2010, respectively	1,675	915
Additional paid-in capital	1,392,691	457,795
Unearned compensation, Employee Stock Ownership Plan ("ESOP")	(50,547)	(6,050)
Unearned compensation, Recognition and Retention Plan ("RRP")	(124)	(255)
Retained earnings	569,127	801,044
Accumulated other comprehensive income ("AOCI"), net of tax	26,707	31,862
Stockholders' Equity before Treasury Stock	1,939,529	1,285,311
Treasury stock, at cost, 0 and 17,519,609 shares as of September 30, 2011 and 2010, respectively, at cost		(323,361)
Total stockholders' equity	1,939,529	961,950
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 9,450,799	$ 8,487,130

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Securities (Schedule Of Contractual Maturities) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Securities [Abstract]
Available-for-sale Securities, One year or less, Amortized Cost	$ 301,992
Available-for-sale Securities, One year through five years, Amortized Cost	447,564
Available-for-sale Securities, Five years through ten years, Amortized Cost	159,505
Available-for-sale Securities, Ten years and thereafter, Amortized Cost	534,468
Available-for-sale Securities, Amortized Cost	1,443,529	1,009,142
Available-for-sale Securities, One year or less, Estimated Fair Value	302,329
Available-for-sale Securities, One year through five years, Estimated Fair Value	449,236
Available-for-sale Securities, Five years through ten years, Estimated Fair Value	172,066
Available-for-sale Securities, Ten years and thereafter, Estimated Fair Value	562,808
Available-for-sale Securities, Total	1,486,439	1,060,366
Held-to-maturity Securities, One year or less, Amortized Cost	1,729
Held-to-maturity Securities, One year through five years, Amortized Cost	663,871
Held-to-maturity Securities, Five years through ten years, Amortized Cost	492,407
Held-to-maturity Securities, Ten years and thereafter, Amortized Cost	1,212,110
Held-to-maturity Securities, Amortized Cost	2,370,117	1,880,154
Held-to-maturity Securities, One year or less, Estimated Fair Value	1,745
Held-to-maturity Securities, One year through five years, Estimated Fair Value	668,228
Held-to-maturity Securities, Five years through ten years, Estimated Fair Value	513,849
Held-to-maturity Securities, Ten years and thereafter, Estimated Fair Value	1,250,570
Held-to-maturity Securities, Total	2,434,392	1,913,454
Marketable Securities, One year or less, Amortized Cost	303,721
Marketable Securities, One year through five years, Amortized Cost	1,111,435
Marketable Securities, Five years through ten years, Amortized Cost	651,912
Marketable Securities, Ten years and thereafter, Amortized Cost	1,746,578
Marketable Securities Amortized Cost	3,813,646	2,889,296
Marketable Securities, One year or less, Estimated Fair Value	304,074
Marketable Securities, One year through five years, Estimated Fair Value	1,117,464
Marketable Securities, Five years through ten years, Estimated Fair Value	685,915
Marketable Securities, Ten years and thereafter, Estimated Fair Value	1,813,378
Marketable Securities, Estimated fair Value	$ 3,920,831	$ 2,973,820

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Parent Company Financial Information (Parent Company Only) (Schedule Of Statements Of Income) (Details) (USD $) In Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2009	Sep. 30, 2011		Sep. 30, 2010		Sep. 30, 2009
Interest income from securities									$ 19,077		$ 15,682		$ 5,533
Total interest and dividend income	86,594	88,083	84,941	87,247	89,972	91,485	93,707	98,887	346,865		374,051		412,786
INTEREST EXPENSE									178,131		204,486		236,144
NET INTEREST AND DIVIDEND INCOME	43,865	44,308	40,556	40,005	41,141	40,887	42,683	44,854	168,734		169,565		176,642
OTHER INCOME									2,142		3,898		4,646
Salaries and employee benefits									44,913		42,666		43,318
Other, net									9,593		7,362		7,701
Total other expenses									132,317		89,730		93,621
INCOME TAX BENEFIT									18,949		37,525		38,926
INCOME BEFORE INCOME TAX EXPENSE									57,352		105,365		105,224
NET INCOME	16,766	17,259	15,636	(11,258)	15,447	16,758	14,655	20,980	38,403	[1]	67,840	[1]	66,298	[1]
Capitol Federal Financial [Member]
Dividend income from the Bank									45,643		84,869		50,056
Interest income from other investments									3,221		2,927		3,612
Interest income from securities									1,093
Total interest and dividend income									49,957		87,796		53,668
INTEREST EXPENSE									855		1,680		2,573
NET INTEREST AND DIVIDEND INCOME									49,102		86,116		51,095
OTHER INCOME									26		50		76
Contribution to Foundation									40,000
Salaries and employee benefits									856		929		1,108
Regulatory And Outside Services									337		493		228
Other, net									650		270		243
Total other expenses									41,843		1,692		1,579
INCOME BEFORE INCOME TAX BENEFIT AND EQUITY IN UNDISTRIBUTED EARNINGS OF SUBSIDIARY									7,285		84,474		49,592
INCOME TAX BENEFIT									(13,425)		(138)		(162)
INCOME BEFORE INCOME TAX EXPENSE									20,710		84,612		49,754
EQUITY IN UNDISTRIBUTED EARNINGS OF SUBSIDIARY (EXCESS OF DISTRIBUTION OVER)									17,693		(16,772)		16,544
NET INCOME									$ 38,403		$ 67,840		$ 66,298

[1] Net income available to participating securities (unvested RRP shares) was inconsequential for fiscal years 2011, 2010, and 2009.

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Consolidated Statements Of Stockholders' Equity (Parenthetical) (USD $) In Thousands, except Per Share data	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Consolidated Statements Of Stockholders' Equity [Abstract]
Changes in unrealized gain/losses on securities AFS, deferred income taxes	$ 3,159	$ 1,221	$ 24,210
Dividends on common stock to stockholders per share	$ 1.63	$ 2.29	$ 2.11

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Selected Quarterly Financial Data (Summary Of Quarterly Data) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2009	Sep. 30, 2011		Sep. 30, 2010		Sep. 30, 2009
Selected Quarterly Financial Data [Abstract]
Total interest and dividend income	$ 86,594	$ 88,083	$ 84,941	$ 87,247	$ 89,972	$ 91,485	$ 93,707	$ 98,887	$ 346,865		$ 374,051		$ 412,786
Net interest and dividend income	43,865	44,308	40,556	40,005	41,141	40,887	42,683	44,854	168,734		169,565		176,642
Provision for loan losses	1,650	1,240	520	650	750	1,816	3,200	3,115	4,060		8,881		6,391
Net income (loss)	$ 16,766	$ 17,259	$ 15,636	$ (11,258)	$ 15,447	$ 16,758	$ 14,655	$ 20,980	$ 38,403	[1]	$ 67,840	[1]	$ 66,298	[1]
Basic earnings per share	$ 0.10	$ 0.10	$ 0.10	$ (0.07)	$ 0.09	$ 0.10	$ 0.09	$ 0.13	$ 0.24		$ 0.41		$ 0.40
Diluted earnings per share	$ 0.10	$ 0.10	$ 0.10	$ (0.07)	$ 0.09	$ 0.10	$ 0.09	$ 0.13	$ 0.24		$ 0.41		$ 0.40
Dividends paid per public share	$ 0.075	$ 0.075	$ 0.675	$ 0.800	$ 0.500	$ 0.500	$ 0.500	$ 0.790	$ 1.625		$ 2.290
Average number of shares outstanding	161,784,000	161,642,000	161,500,000	165,541,000	165,989,000	165,869,000	165,734,000	165,854,000	162,625,274		165,862,176		165,576,334
Reorganization exchange ratio									2.2637

[1] Net income available to participating securities (unvested RRP shares) was inconsequential for fiscal years 2011, 2010, and 2009.

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Loans Receivable And Allowance For Credit Losses (Summary Of Loan Portfolio Segment Disaggregated By The Company's Impairment Method) (Details) (USD $) In Thousands	Sep. 30, 2011
Financing Receivable, Impaired [Line Items]
Financing Receivable, Collectively Evaluated for Impairment	$ 5,093,177
Financing Receivable, Individually Evaluated for Impairment	72,022
Recorded Investment Financing Receivable	5,165,199
One-To Four-Family Loans - Originated [Member]
Financing Receivable, Impaired [Line Items]
Financing Receivable, Collectively Evaluated for Impairment	4,343,536
Financing Receivable, Individually Evaluated for Impairment	51,007
Recorded Investment Financing Receivable	4,394,543
One-To Four-Family Loans - Purchased [Member]
Financing Receivable, Impaired [Line Items]
Financing Receivable, Collectively Evaluated for Impairment	521,240
Financing Receivable, Individually Evaluated for Impairment	19,715
Recorded Investment Financing Receivable	540,955
One-To Four-Family Loans [Member]
Financing Receivable, Impaired [Line Items]
Financing Receivable, Collectively Evaluated for Impairment	4,864,776
Financing Receivable, Individually Evaluated for Impairment	70,722
Recorded Investment Financing Receivable	4,935,498
Multi-Family And Commercial [Member]
Financing Receivable, Impaired [Line Items]
Financing Receivable, Collectively Evaluated for Impairment	57,373
Financing Receivable, Individually Evaluated for Impairment	563
Recorded Investment Financing Receivable	57,936
Consumer [Member]
Financing Receivable, Impaired [Line Items]
Financing Receivable, Collectively Evaluated for Impairment	171,028
Financing Receivable, Individually Evaluated for Impairment	737
Recorded Investment Financing Receivable	$ 171,765

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Commitments And Contingencies (Tables)

12 Months Ended

Sep. 30, 2011

Commitments And Contingencies [Abstract]

Commitments Outstanding To Originate And Purchase Loans

	2011		2010
	(Dollars in thousands)
Originate fixed-rate	$	89,059	$	75,001
Originate adjustable-rate		24,047		20,144
Purchase/participate fixed-rate		30,650		3,526
Purchase/participate adjustable-rate		26,556		8,395
	$	170,312	$	107,066

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Deposits (Summary Of Certificate Of Deposit Maturity) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2011	Sep. 30, 2010
Deposits [Abstract]
2012, Amount	$ 1,390,231
2013, Amount	555,043
2014, Amount	309,015
2015, Amount	317,065
2016, Amount	49,423
Thereafter, Amount	3,515
Certificates of deposit, Amount	$ 2,624,292	$ 2,727,169
2012, Weighted Average Rate	1.65%
2013, Weighted Average Rate	1.86%
2014, Weighted Average Rate	2.27%
2015, Weighted Average Rate	2.43%
2016, Weighted Average Rate	2.22%
Thereafter, Weighted Average Rate	2.46%
Certificates of deposit, Weighted Average Rate	1.87%	2.29%

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Subsequent Events

12 Months Ended

Sep. 30, 2011

Subsequent Events [Abstract]

Subsequent Events

15.   SUBSEQUENT EVENTS

In preparing these financial statements, management has evaluated events occurring subsequent to September 30, 2011, for potential recognition and disclosure.  There have been no material events or transactions which would require adjustments to the consolidated financial statements at September 30, 2011.

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Regulatory Capital Requirements (Tables)

12 Months Ended

Sep. 30, 2011

Regulatory Capital Requirements [Abstract]

Summary Of Capital And Total Risk-Based Capital Ratios

											To Be Well
											Capitalized
											Under Prompt
						For Capital					Corrective Action
	Actual					Adequacy Purposes					Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
As of September 30, 2011:
Tangible equity	$	1,369,143		15.1	%	$	135,926		1.5	%		N/A		N/A
Tier 1 (core) capital		1,369,143		15.1			362,469		4.0		$	453,086		5.0	%
Tier 1 (core) risk-based capital		1,369,143		37.9			N/A		N/A			216,551		6.0
Total risk-based capital		1,380,853		38.3			288,734		8.0			360,918		10.0
As of September 30, 2010:
Tangible equity	$	824,768		9.8	%	$	126,666		1.5	%		N/A		N/A
Tier 1 (core) capital		824,768		9.8			337,776		4.0		$	422,220		5.0	%
Tier 1 (core) risk-based capital		824,768		23.5			N/A		N/A			210,597		6.0
Total risk-based capital		835,324		23.8			280,796		8.0			350,995		10.0

Reconciliation Of The Bank's Equity Under GAAP To Regulatory Capital Amounts

	2011			2010
	(Dollars in thousands)
Total Bank equity as reported under GAAP	$	1,395,708		$	857,114
Unrealized gains on AFS securities		(26,314	)		(31,862	)
Other		(251	)		(484	)
Total tangible and core capital		1,369,143			824,768
ACL(1)		11,710			10,556
Total risk based capital	$	1,380,853		$	835,324

(1)   This amount represents the general valuation allowances calculated using the formula analysis.  SVA are netted against the related loan balance on the Thrift Financial Report and are therefore not included in this amount.

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Parent Company Financial Information (Parent Company Only)

12 Months Ended

Sep. 30, 2011

Parent Company Financial Information (Parent Company Only) [Abstract]

Parent Company Financial Information (Parent Company Only)

17.   PARENT COMPANY FINANCIAL INFORMATION (PARENT COMPANY ONLY)

The Company serves as the holding company for the Bank (see Note 1).  The Company's (parent company only) balance sheets as of September 30, 2011 and 2010, and the related statements of income and cash flows for each of the three years in the period ended September 30, 2011 are as follows:

BALANCE SHEETS
SEPTEMBER 30, 2011 and 2010
(Dollars in thousands, except share amounts)
	2011			2010
ASSETS
Cash and cash equivalents	$	113,101		$	88,098
Investment in the Bank		1,395,708			857,115
AFS securities, at fair value (amortized cost of $362,271 and $0)		362,875			--
Investment in certificates of deposit at the Bank		--			55,000
Note receivable - ESOP		52,759			8,024
Other assets		75			7,604
Accrued interest receivable		1,812			--
Income taxes receivable		2,855			138
Deferred income tax assets		10,409			--
TOTAL ASSETS	$	1,939,594		$	1,015,979
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable and accrued expenses	$	65		$	420
Other borrowings		--			53,609
Total liabilities		65			54,029
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value; 100,000,000 shares authorized,
no shares issued or outstanding		--			--
Common stock, $.01 par value; 1,400,000,000 shares authorized,
167,498,133 shares issued;  167,498,133 and 73,992,678 shares		1,675			915
outstanding as of September 30, 2011 and 2010, respectively
Additional paid-in capital		1,392,691			457,795
Unearned compensation - ESOP		(50,547	)		(6,050	)
Unearned compensation - RRP		(124	)		(255	)
Retained earnings		569,127			801,044
AOCI, net of tax		26,707			31,862
		1,939,529			1,285,311
Treasury stock, at cost, 0 and 17,519,609 shares as of
September 30, 2011 and 2010, respectively		--			(323,361	)
Total stockholders' equity		1,939,529			961,950
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,939,594		$	1,015,979

STATEMENTS OF INCOME
YEARS ENDED SEPTEMBER 30, 2011, 2010, and 2009
(Dollars in thousands)
	2011			2010			2009
INTEREST AND DIVIDEND INCOME:
Dividend income from the Bank	$	45,643		$	84,869		$	50,056
Interest income from other investments		3,221			2,927			3,612
Interest income from securities		1,093			--			--
Total interest and dividend income		49,957			87,796			53,668
INTEREST EXPENSE		855			1,680			2,573
NET INTEREST AND DIVIDEND INCOME		49,102			86,116			51,095
OTHER INCOME		26			50			76
OTHER EXPENSES:
Contribution to Foundation		40,000			--			--
Salaries and employee benefits		856			929			1,108
Regulatory and outside services		337			493			228
Other, net		650			270			243
Total other expenses		41,843			1,692			1,579
INCOME BEFORE INCOME TAX BENEFIT AND EQUITY
IN UNDISTRIBUTED EARNINGS OF SUBSIDIARY		7,285			84,474			49,592
INCOME TAX BENEFIT		(13,425	)		(138	)		(162	)
INCOME BEFORE EQUITY IN UNDISTRIBUTED
EARNINGS OF SUBSIDIARY		20,710			84,612			49,754
EQUITY IN UNDISTRIBUTED EARNINGS OF SUBSIDIARY
(EXCESS OF DISTRIBUTION OVER)		17,693			(16,772	)		16,544
NET INCOME	$	38,403		$	67,840		$	66,298

STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 2011, 2010, and 2009
(Dollars in thousands)
	2011			2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	38,403		$	67,840		$	66,298
Adjustments to reconcile net income to net cash provided by
operating activities:
Equity in excess of distribution over/(undistributed)
earnings of subsidiary		(17,693	)		16,772			(16,544	)
Amortization/accretion of premiums/discounts		3,529			--			--
Amortization of deferred debt issuance costs		--			--			28
Other, net		(1,812	)		1			14
Provision for deferred income taxes		(10,409	)		--			--
Changes in:
Other assets		1,547			--			2,999
Income taxes receivable/payable		(2,927	)		24			(95	)
Accounts payable and accrued expenses		(355	)		3			(292	)
Net cash flows provided by operating activities		10,283			84,640			52,408
CASH FLOWS FROM INVESTING ACTIVITIES:
Offering proceeds downstreamed to Bank		(567,422	)		--			--
Purchase of AFS investment securities		(405,800	)		--			--
Proceeds from maturities of AFS securities		40,000			--			--
Proceeds from maturities of Bank certificates		55,000			5,000			--
Purchase of Capitol Federal Financial, Inc. stock		--			(1	)		--
Principal collected on notes receivable from ESOP		2,525			2,387			2,256
Net cash flows (used in)/provided by investing activities		(875,697	)		7,386			2,256
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from stock offering (Deferred offering costs)		1,094,101			(5,982	)		--
Payment from subsidiary for sale of treasury stock related to
RRP shares		--			162			87
Dividends paid		(150,110	)		(48,400	)		(44,069	)
Repayment of other borrowings		(53,609	)		--			--
Acquisition of treasury stock		--			(4,019	)		(2,426	)
Stock options exercised		35			210			1,337
Net cash flows provided by/(used in) financing activities		890,417			(58,029	)		(45,071	)
NET INCREASE IN CASH AND CASH EQUIVALENTS		25,003			33,997			9,593
CASH AND CASH EQUIVALENTS:
Beginning of year		88,098			54,101			44,508
End of year	$	113,101		$	88,098		$	54,101
SUPPLEMENTAL DISCLOSURES OF CASH FLOW   INFORMATION:
Interest payments	$	1,274		$	1,678		$	2,866
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Note to ESOP in exchange for common stock	$	47,260		$	--		$	--

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Borrowed Funds (FHLB Advances) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2011		Sep. 30, 2010
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Fixed-rate FHLB advances	$ 2,400,000		$ 2,376,000
Deferred prepayment penalty	(20,995)		(28,261)
Deferred gain on terminated interest rate swaps	457		632
Advances from Federal Home Loan Banks	$ 2,379,462		$ 2,348,371
Federal Home Loan Bank Advances [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Weighted average contractual interest rate on FHLB advances	3.37%		3.61%
Weighted average effective rate FHLB advances	3.71%	[1]	3.96%	[1]

[1] The effective rate includes the net impact of the amortization of deferred prepayment penalties related to the prepayment of certain FHLB advances and deferred gains related to the termination of interest rate swaps.

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Consolidated Statements Of Cash Flows (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011		Sep. 30, 2010		Sep. 30, 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 38,403	[1]	$ 67,840	[1]	$ 66,298	[1]
Adjustments to reconcile net income to net cash provided by operating activities:
FHLB stock dividends	(3,791)		(3,966)		(3,344)
Provision for credit losses	4,060		8,881		6,391
Originations of loans receivable held-for-sale ("LHFS")	(11,715)		(47,488)		(851)
Proceeds from sales of LHFS	13,483		46,140		97,838
Amortization and accretion of premiums and discounts on securities	8,100		5,940		2,644
Depreciation and amortization of premises and equipment	4,397		4,584		5,132
Amortization of deferred amounts related to FHLB advances, net	7,091		6,676		3,829
Common stock committed to be released for allocation - ESOP	6,022		6,481		7,929
Stock based compensation - stock options and RRP	262		452		604
Provision for deferred income taxes	(9,647)		3,466		3,548
Gain on the sale of trading securities received in the loan swap transaction			(6,454)
Changes in:
Prepaid federal insurance premium, net	4,718		(20,447)
Accrued interest receivable	904		2,420		1,064
Other assets, net	637		(7,035)		837
Income taxes payable/receivable	3,004		(6,697)		8
Accounts payable and accrued expenses	(143)		(1,631)		(1,209)
Net cash provided by operating activities	65,785		59,162		190,718
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of trading securities received in the loan swap transaction			199,144
Purchase of AFS securities	(790,083)				(424,498)
Purchase of HTM securities	(1,979,789)		(1,662,009)		(215,263)
Proceeds from calls, maturities and principal reductions of AFS securities	351,636		557,141		396,101
Proceeds from calls, maturities and principal reductions of HTM securities	1,485,786		628,350		208,591
Proceeds from the redemption of capital stock of FHLB	4,942		16,185		3,688
Purchases of capital stock of FHLB	(7,162)		(21)		(9,002)
Loan originations and purchases, net of principal collected and deferred loan fees	(105)		219,628		(394,785)
Purchases of premises and equipment	(12,751)		(8,183)		(13,053)
Proceeds from sales of REO	14,205		11,273		7,669
Net cash flows (used in)/provided by investing activities	(933,321)		(38,492)		(440,552)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid	(150,110)		(48,400)		(44,069)
Deposits, net of withdrawals	126,553		157,701		304,726
Proceeds from borrowings	644,162		300,000		1,561,612
Repayments on borrowings	(773,771)		(395,000)		(1,581,612)
Deferred FHLB prepayment penalty			(875)		(38,388)
Change in advance payments by borrowers for taxes and insurance	102		(331)		2,154
Net proceeds from common stock offering (deferred offering costs)	1,076,411		(5,982)
Acquisition of treasury stock			(4,019)		(2,426)
Stock options exercised	35		210		1,337
Excess tax benefits from stock options	7		89		516
Net cash flows provided by/(used in) financing activities	923,389		3,393		203,850
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	55,853		24,063		(45,984)
CASH AND CASH EQUIVALENTS:
Beginning of Period	65,217		41,154		87,138
End of Period	121,070		65,217		41,154
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Income tax payments	25,517		40,664		35,334
Interest payments	172,332		199,433		236,137
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Note received from ESOP in exchange for common stock	47,260
Customer deposit holds related to common stock offering	17,690
Commitment to fund low-income housing partnerships	9,618
Loans transferred to REO	15,048		13,717		10,730
Transfer of loans receivable to LHFS, net					94,672
Swap of loans for trading securities			$ 193,889

[1] Net income available to participating securities (unvested RRP shares) was inconsequential for fiscal years 2011, 2010, and 2009.

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data	Sep. 30, 2011	Sep. 30, 2010
Consolidated Balance Sheets [Abstract]
Interest-earning deposits	$ 105,292	$ 50,771
Available-for-sale Securities, Amortized Cost	1,443,529	1,009,142
Held-to-maturity securities, fair value	2,434,392	1,913,454
Loans receivable, allowance for loan losses	$ 15,465	$ 14,892
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	1,400,000,000	1,400,000,000
Common stock, shares outstanding	167,498,133	73,992,678
Common stock, shares issued	167,498,133	167,498,133
Treasury stock, shares	0	17,519,609

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Stock Based Compensation

12 Months Ended

Sep. 30, 2011

Stock Based Compensation [Abstract]

Stock Based Compensation

10.   STOCK-BASED COMPENSATION

The Company has an Option Plan and an RRP which are considered share-based plans.  Compensation expense is recognized over the service period of the share-based payment award.  The Company utilizes a fair-value-based measurement method in accounting for the share-based payment transactions with employees, except for equity instruments held by the ESOP.  All share information presented below relating to stock options and RRP shares issued prior to the corporate reorganization has been revised to reflect the 2.2637 exchange ratio.

Stock Option Plan – The purpose of the Option Plan is to provide additional incentive to certain officers, directors and key employees by facilitating their purchase of a stock interest in the Company.  Pursuant to the Option Plan, subject to adjustment as described below, 8,558,411 shares of common stock were reserved for issuance by the Company upon exercise of stock options granted to officers, directors and employees of the Company and the Bank from time to time under the Option Plan. The Company may issue both incentive and nonqualified stock options under the Option Plan.  The Company may also award stock appreciation rights under the Option Plan, although to date no stock appreciation rights have been awarded under the Option Plan.  The incentive stock options expire no later than ten years and the nonqualified stock options expire no later than fifteen years from the date of grant.  The date on which the options are first exercisable is determined by the Stock Benefits Committee ("sub-committee"), a sub-committee of the Compensation Committee ("committee") of the Board of Directors.  The vesting period of the options generally ranges from three to five years.  The option price is equal to the market value at the date of the grant as defined by the Option Plan.

Under the Option Plan, incentive stock options may not be granted after April 2010 and nonqualified stock options may not be granted after April 2015.  At September 30, 2011, the Company had 2,856,549 shares available for future grants under the Option Plan.  This includes 2,380,866 shares added back to the Option Plan through the reload feature of the plan, which provides that the maximum number of shares with respect to which awards may be made under the plan shall be increased by (i) the number of shares of common stock repurchased by the Company with an aggregate price no greater than the cash proceeds received by the Company from the exercise of options under the Option Plan; and (ii) the number of shares surrendered to the Company in payment of the exercise price of options granted under the Option Plan.

The Option Plan is administered by the sub-committee, which selects the employees and non-employee directors to whom options are to be granted and the number of shares to be granted.  The exercise price may be paid in cash, shares of the common stock, or a combination of both.  The option price may not be less than 100% of the fair market value of the shares on the date of the grant. In the case of any employee who is granted an incentive stock option who owns more than 10% of the outstanding common stock at the time the option is granted, the option price may not be less than 110% of the fair market value of the shares on the date of the grant, and the option shall not be exercisable after the expiration of five years from the grant date.  Historically, the Company has issued shares held in treasury upon the exercise of stock options, except for the exercise of stock options after the corporate reorganization.  Shares were issued by the Company for those stock options exercised after the corporate reorganization.

The fair value of stock option grants are estimated on the date of grant using the Black-Scholes option pricing model.  The weighted average grant-date fair value of stock options granted during the fiscal years ended September 30, 2011, 2010, and 2009 was $0.78, $1.52, and $2.22 per share, respectively.  Compensation expense attributable to stock options awards during the year ended September 30, 2011, 2010, and 2009 totaled $131 thousand ($122 thousand, net of tax), $214 thousand ($189 thousand, net of tax), and $281 thousand ($240 thousand, net of tax), respectively.  The following weighted average assumptions were used for valuing stock option grants for the years noted:

	2011			2010			2009
Risk-free interest rate		1.3	%		2.1	%		2.1	%
Expected life (years)		5			4			4
Expected volatility		25	%		25	%		24	%
Dividend yield		8.1	%		6.2	%		4.8	%
Estimated forfeitures		12.9	%		3.3	%		10.5	%

The risk-free interest rate was determined using the yield available on the option grant date for a zero-coupon U.S. Treasury security with a term equivalent to the expected life of the option.  The expected life for options granted was based upon historical experience.  The expected volatility was determined using historical volatilities based on historical stock prices.  The dividend yield was determined based upon historical quarterly dividends and the Company's stock price on the option grant date.  Estimated forfeitures were determined based upon voluntary termination behavior and actual option forfeitures.

A summary of option activity for the years ended September 30, 2011, 2010, and 2009 follows:

	2011					2010					2009
				Weighted					Weighted					Weighted
				Average					Average					Average
	Number			Exercise		Number			Exercise		Number			Exercise
	of Options			Price		of Options			Price		of Options			Price
Options outstanding
at beginning of year		919,639		$	15.08		841,991		$	14. 69		912,879		$	13.10
Granted		2,030			10.86		119,945			14.25		94,460			18.57
Forfeited		(10,180	)		16.59		--			--		--			--
Exercised		(4,525	)		8.23		(42,297	)		4.96		(165,348	)		8.08
Options outstanding
at end of year		906,964		$	15.09		919,639		$	15.08		841,991		$	14.69

During the years ended September 30, 2011, 2010, and 2009, the total pretax intrinsic value of stock options exercised was $19 thousand, $361 thousand, and $1.7 million, respectively, and the tax benefits realized from the exercise of stock options were $7 thousand, $89 thousand, and $515 thousand, respectively.  The fair value of stock options vested during the year ended September 30, 2011, 2010, and 2009 was $150 thousand, $264 thousand, and $297 thousand, respectively.

The following summarizes information about the stock options outstanding and exercisable as of September 30, 2011:

		Options Outstanding
				Weighted		Weighted
				Average		Average
		Number		Remaining		Exercise		Aggregate
Exercise		of Options		Contractual		Price per		Intrinsic
Price		Outstanding		Life (in years)		Share		Value
		(Dollars in thousands, except per share amounts)
$	4.07		8,783		3.55	$	4.07	$	57
	6.19- 8.69		--		--		--		--
	10.86- 12.71		6,550		4.95		11.42		--
	13.33- 17.59		839,601		7.52		14.98		--
	19.19		52,030		7.08		19.19		--
			906,964		7.44	$	15.09	$	57
		Options Exercisable
				Weighted		Weighted
				Average		Average
		Number		Remaining		Exercise		Aggregate
Exercise		of Options		Contractual		Price per		Intrinsic
Price		Exercisable		Life (in years)		Share		Value
		(Dollars in thousands, except per share amounts)
$	4.07		8,783		3.55	$	4.07	$	57
	6.19- 8.69		--		--		--		--
	10.86- 12.71		4,926		1.93		11.61		--
	13.33- 17.59		727,349		7.23		15.03		--
	19.19		31,218		7.08		19.19		--
			772,276		7.14	$	15.05	$	57

The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value, based on the Company's closing stock price of $10.56 as of September 30, 2011, which would have been received by the option holders had all option holders exercised their options as of that date.  The total number of in-the-money options exercisable as of September 30, 2011 was 8,783.

As of September 30, 2011, the total future compensation cost related to non-vested stock options not yet recognized in the consolidated statements of income was $148 thousand and the weighted average period over which these awards are expected to be recognized was 1.84 years.

Recognition and Retention Plan – The objective of the RRP is to enable the Company and the Bank to retain personnel of experience and ability in key positions of responsibility.  Employees and directors of the Bank are eligible to receive benefits under the RRP at the sole discretion of the sub-committee. The total number of shares originally eligible to be granted under the RRP was 3,423,364.  At September 30, 2011, the Company had 358,767 shares available for future grants under the RRP.  The RRP expires in April 2015.  No additional grants may be made after expiration, but outstanding grants continue until they are individually vested, forfeited, or expire.

Compensation expense in the amount of the fair market value of the common stock at the date of the grant, as defined by the RRP, to the employee is recognized over the period during which the shares vest.  Compensation expense attributable to RRP awards during the years ended September 30, 2011, 2010, and 2009 totaled $131 thousand ($88 thousand, net of tax), $238 thousand ($153 thousand, net of tax), and $323 thousand ($204 thousand, net of tax), respectively.  A recipient of such restricted stock will be entitled to all voting and other stockholder rights (including the right to receive dividends on vested and non-vested shares), except that the shares, while restricted, may not be sold, pledged or otherwise disposed of and are required to be held in escrow by the Company.  If a holder of such restricted stock terminates employment for reasons other than death or disability, the employee forfeits all rights to the non-vested shares under restriction.  If the participant's service terminates as a result of death, disability, or if a change in control of the Bank occurs, all restrictions expire and all non-vested shares become unrestricted.  A summary of RRP share activity for the years ended September 30, 2011, 2010, and 2009 follows:

	2011					2010					2009
				Weighted					Weighted					Weighted
				Average					Average					Average
	Number			Grant Date		Number			Grant Date		Number			Grant Date
	of Shares			Fair Value		of Shares			Fair Value		of Shares			Fair Value
Unvested RRP shares
at beginning of year:		23,762		$	15.07		34,177		$	15.17		52,509		$	14.87
Granted		--			--		11,317			14.42		5,657			17.64
Vested		(10,180	)		15.30		(21,732	)		14.88		(23,989	)		15.10
Forfeited		--			--		--			--		--			--
Unvested RRP shares
at end of year		13,582		$	14.90		23,762		$	15.07		34,177		$	15.17

The estimated forfeiture rate for the RRP shares granted during the year ended September 30, 2011, 2010, and 2009 was 0% based upon voluntary termination behavior and actual forfeitures.  The fair value of RRP shares that vested during the years ended September 30, 2011, 2010, and 2009 totaled $120 thousand, $324 thousand, and $363 thousand, respectively.  As of September 30, 2011, there was $124 thousand of unrecognized compensation cost related to non-vested RRP shares to be recognized over a weighted average period of 1.9 years.

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Fair Value Of Financial Instruments (Schedule Of Carrying Amounts And Estimated Fair Values Of Financial Instruments) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009	Sep. 30, 2008
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	$ 121,070	$ 65,217	$ 41,154	$ 87,138
Available-for-sale ("AFS")	1,486,439	1,060,366
Held-to-maturity ("HTM")	2,370,117	1,880,154
Loans receivable, net	5,149,734	5,168,202
BOLI	56,534	54,710
Capital stock of FHLB	126,877	120,866
Deposits	4,495,173	4,386,310
FHLB Advances Amount	2,379,462	2,348,371
Other borrowings, Amount	515,000	668,609
Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	121,070	65,217
Available-for-sale ("AFS")	1,486,439	1,060,366
Held-to-maturity ("HTM")	2,370,117	1,880,154
Loans receivable, net	5,149,734	5,168,202
BOLI	56,534	54,710
Capital stock of FHLB	126,877	120,866
Deposits	4,495,173	4,386,310
FHLB Advances Amount	2,379,462	2,348,371
Other borrowings, Amount	515,000	668,609
Estimated Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	121,070	65,217
Available-for-sale ("AFS")	1,486,439	1,060,366
Held-to-maturity ("HTM")	2,434,392	1,913,454
Loans receivable, net	5,475,150	5,392,550
BOLI	56,534	54,710
Capital stock of FHLB	126,877	120,866
Deposits	4,553,516	4,459,052
FHLB Advances Amount	2,569,958	2,557,064
Other borrowings, Amount	$ 545,096	$ 701,099

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Fair Value Of Financial Instruments (Schedule Of Fair Value Assets Measured On A Recurring Basis) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011		Sep. 30, 2010		Sep. 30, 2009
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale ("AFS") at Carrying Value	$ 1,486,439		$ 1,060,366
Proceeds from principal repayments	351,636		557,141		396,101
Reductions in net unrealized losses included in OCI	115		460
MBS [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale ("AFS") at Carrying Value	732,436		1,004,496
MBS [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale ("AFS") at Carrying Value	732,436		1,004,496
GSE Debentures [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale ("AFS") at Carrying Value	748,308		50,255
GSE Debentures [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale ("AFS") at Carrying Value	748,308		50,255
Municipal Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale ("AFS") at Carrying Value	2,754		2,819
Municipal Bonds [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale ("AFS") at Carrying Value	2,754		2,819
Trust Preferred Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale ("AFS") at Carrying Value	2,941		2,796
Trust Preferred Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale ("AFS") at Carrying Value	2,941	[1]	2,796	[2]
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale ("AFS") at Carrying Value	1,483,498		1,057,570
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale ("AFS") at Carrying Value	2,941	[1]	2,796	[2]
Proceeds from principal repayments	$ 87		$ 93

[1] The Company's Level 3 AFS securities have had no activity from September 30, 2010 to September 30, 2011, except for principal repayments of $87 thousand and reductions in net unrealized losses recognized in other comprehensive income. Reductions of net unrealized losses included in other comprehensive income for the year ended September 30, 2011 were $115 thousand.

[2] The Company's Level 3 AFS securities have had no activity from September 30, 2009 to September 30, 2010, except for principal repayments of $93 thousand and reductions in net unrealized losses recognized in other comprehensive income. Reductions of net unrealized losses included in other comprehensive income for the year ended September 30, 2010 were $460 thousand.

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Document And Entity Information (USD $)	12 Months Ended
	Sep. 30, 2011	Mar. 31, 2011
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Sep. 30, 2011
Entity Registrant Name	Capitol Federal Financial Inc
Entity Central Index Key	0001490906
Current Fiscal Year End Date	--09-30
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding	167,498,133
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float		$ 1,850,000,000

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Performance Based Compensation

12 Months Ended

Sep. 30, 2011

Performance Based Compensation [Abstract]

Performance Based Compensation

11. PERFORMANCE BASED COMPENSATION

The Company and the Bank have a short-term performance plan for all officers and a deferred incentive bonus plan for senior and executive officers.  The short-term performance plan has a component tied to Company performance and a component tied to individual participant performance.  Individual performance criteria are established by executive management for eligible non-executive employees of the Bank; individual performance of executive officers is reviewed by the committee.  Company performance criteria are approved by the committee.  Short-term performance plan awards are granted based upon a performance review by the committee.  The committee may exercise its discretion and reduce or not grant awards.  The deferred incentive bonus plan is intended to operate in conjunction with the short-term performance plan.  A participant in the deferred incentive bonus plan can elect to defer into an account between $2 thousand and up to 50% (executive officers can defer up to 50%, while senior officers can elect to defer up to 35%) of the short-term performance plan award up to but not exceeding $100 thousand.  The amount deferred receives an employer match of up to 50% that is accrued over a three year mandatory deferral period.  The amount deferred, plus up to a 50% match, is deemed to have been invested in Company stock on the last business day of the calendar year preceding the receipt of the short-term performance plan award, in the form of phantom stock.  The number of shares deemed purchased in phantom stock receives dividend equivalents as if the stock were owned by the officer.  At the end of the mandatory deferral period, the deferred incentive bonus plan award is paid out in cash and is comprised of the initial amount deferred, the match amount, dividend equivalents on the phantom shares over the deferral period and the increase in the market value of the Company's stock over the deferral period, if any, on the phantom shares.  There is no provision for the reduction of the deferred incentive bonus plan award if the market value of the Company's stock at the time is lower than the market value at the time of the deemed investment.

The total amount of short-term performance plan awards provided for the years ended September 30, 2011, 2010, and 2009 amounted to $1.8 million, $1.7 million, and $1.1 million, respectively, of which $345 thousand, $332 thousand, and $137 thousand, respectively, was deferred under the deferred incentive bonus plan.  The deferrals, any earnings on those deferrals and increases in the market value of the phantom shares, if any, will be paid in 2013, 2014, and 2015.  During fiscal years 2011, 2010, and 2009, the amount expensed in conjunction with the deferred amounts was $153 thousand, $86 thousand, and $51 thousand, respectively.

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Stock Based Compensation (Schedule Of Share Based Compensation Weighted Average Assumptions Used To Value Stock Option Grants) (Details)	12 Months Ended
	Sep. 30, 2011 years	Sep. 30, 2010 years	Sep. 30, 2009 years
Stock Based Compensation [Abstract]
Risk-free interest rate	1.30%	2.10%	2.10%
Expected life (years)	5	4	4
Expected volatility	25.00%	25.00%	24.00%
Dividend yield	8.10%	6.20%	4.80%
Estimated forfeitures	12.90%	3.30%	10.50%

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Fair Value Of Financial Instruments (Narrative) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unpaid principal balance of impaired loans	$ 72,022	$ 57,100
ACL maintained for impaired loans	3,755	4,300
Real estate owned (REO), net	11,321	9,920
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Real estate owned (REO), net	$ 11,321	$ 9,920

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Consolidated Statements Of Income (USD $) In Thousands, except Share data	12 Months Ended
	Sep. 30, 2011		Sep. 30, 2010		Sep. 30, 2009
INTEREST AND DIVIDEND INCOME:
Loans receivable	$ 251,909		$ 282,307		$ 305,782
Mortgage-backed securities ("MBS")	71,332		71,859		97,926
Investment securities	19,077		15,682		5,533
Capital stock of FHLB	3,791		3,966		3,344
Cash and cash equivalents	756		237		201
Total interest and dividend income	346,865		374,051		412,786
INTEREST EXPENSE:
FHLB advances	90,298		97,212		106,551
Deposits	63,568		79,216		100,471
Other borrowings	24,265		28,058		29,122
Total interest expense	178,131		204,486		236,144
NET INTEREST INCOME	168,734		169,565		176,642
PROVISION FOR CREDIT LOSSES	4,060		8,881		6,391
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	164,674		160,684		170,251
OTHER INCOME:
Retail fees and charges	15,509		17,789		18,023
Insurance commissions	3,071		2,476		2,440
Loan fees	2,449		2,592		2,327
Income from BOLI	1,824		1,202		1,158
Gains on securities, net			6,454
Other income, net	2,142		3,898		4,646
Total other income	24,995		34,411		28,594
OTHER EXPENSES:
Salaries and employee benefits	44,913		42,666		43,318
Communications, information technology, and occupancy	16,051		15,554		15,226
Regulatory and outside services	5,224		4,769		4,318
Federal insurance premium	5,222		7,452		7,558
Deposit and loan transaction costs	5,157		5,300		5,434
Advertising and promotional	3,723		6,027		6,918
Mortgage servicing activity, net	2,434		600		3,148
Contribution to Capitol Federal Foundation ("Foundation")	40,000
Other expenses, net	9,593		7,362		7,701
Total other expenses	132,317		89,730		93,621
INCOME BEFORE INCOME TAX EXPENSE	57,352		105,365		105,224
INCOME TAX EXPENSE	18,949		37,525		38,926
NET INCOME	$ 38,403	[1]	$ 67,840	[1]	$ 66,298	[1]
Basic earnings per share ("EPS")	$ 0.24		$ 0.41		$ 0.40
Diluted EPS	$ 0.24		$ 0.41		$ 0.40
Dividends declared per public share	$ 1.63		$ 2.29		$ 2.11
Basic weighted average common shares	162,625,274		165,862,176		165,576,334
Diluted weighted average common shares	162,632,665		165,899,445		165,721,176

[1] Net income available to participating securities (unvested RRP shares) was inconsequential for fiscal years 2011, 2010, and 2009.

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Premises And Equipment, Net

12 Months Ended

Sep. 30, 2011

Premises And Equipment, Net [Abstract]

Premises And Equipment, Net

5.   PREMISES AND EQUIPMENT, Net

A summary of the net carrying value of banking premises and equipment at September 30, 2011 and 2010 is as follows:

	2011		2010
	(Dollars in thousands)
Land	$	8,684	$	7,877
Building and improvements		53,822		45,295
Furniture, fixtures and equipment		38,069		37,289
		100,575		90,461
Less accumulated depreciation		52,152		49,201
	$	48,423	$	41,260

Depreciation and amortization expense for the years ended September 30, 2011, 2010, and 2009 was $4.4 million, $4.6 million, and $5.1 million, respectively.

The Bank has entered into non-cancelable operating lease agreements with respect to banking premises and equipment. It is expected that many agreements will be renewed at expiration in the normal course of business. Rental expense was $1.3 million for the year ended September 30, 2011 and $1.2 million for each of the years ended September 30, 2010 and 2009.  Future minimum rental commitments, rounded to the nearest thousand, required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year are as follows (dollars in thousands):

2012	$	1,279
2013		1,112
2014		939
2015		817
2016		730
Thereafter		6,924
	$	11,801

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Loans Receivable And Allowance For Credit Losses

12 Months Ended

Sep. 30, 2011

Loans Receivable And Allowance For Credit Losses [Abstract]

Loans Receivable And Allowance For Credit Losses

4.   LOANS RECEIVABLE and ALLOWANCE FOR CREDIT LOSSES

Loans receivable, net at September 30, 2011 and 2010 is summarized as follows:

	2011			2010
	(Dollars in thousands)
Real Estate Loans:
One- to four-family	$	4,918,778		$	4,915,651
Multi-family and commercial		57,965			66,476
Construction		47,368			33,168
Total real estate loans		5,024,111			5,015,295
Consumer Loans:
Home equity		164,541			186,347
Other		7,224			7,671
Total consumer loans		171,765			194,018
Total loans receivable		5,195,876			5,209,313
Less:
Undisbursed loan funds		22,531			15,489
ACL		15,465			14,892
Discounts/unearned loan fees		19,093			22,267
Premiums/deferred costs		(10,947	)		(11,537	)
	$	5,149,734		$	5,168,202

Lending Practices and Underwriting Standards - Originating and purchasing loans secured by one- to four-family residential properties is the Bank's primary business, resulting in a loan concentration in residential first mortgage loans.  The Bank purchases one- to four-family loans from a select group of correspondent lenders located throughout the central United States.  As a result of originating loans in our branches, along with the correspondent lenders in our local markets, the Bank has a concentration of loans secured by real property located in Kansas and Missouri.  Additionally, the Bank purchases whole one- to four-family loans in bulk packages from nationwide lenders.  The Bank also makes consumer loans, construction loans secured by residential or commercial properties, and real estate loans secured by multi-family dwellings.

One- to four-family loans - One- to four-family loans are underwritten manually or by an automated underwriting system developed by a third party.  The system's components closely resemble the Bank's manual underwriting standards which are generally in accordance with FHLMC and FNMA manual underwriting guidelines.  The automated underwriting system analyzes the applicant's data, with emphasis on credit history, employment and income history, qualifying ratios reflecting the applicant's ability to repay, asset reserves, and LTV ratio.  Full documentation to support the applicant's credit, income, and sufficient funds to cover all applicable fees and reserves at closing is required on all loans.  Loans that do not meet the automated underwriting standards are referred to a staff underwriter for manual underwriting.  Properties securing one- to four-family loans are appraised by either staff appraisers or fee appraisers, both of which are independent of the loan origination function.

The underwriting standards for loans purchased from correspondent and nationwide lenders are generally similar to the Bank's internal underwriting standards.  The underwriting of loans purchased from correspondent lenders is generally performed by the Bank's underwriters.  Before committing to purchase a pool of loans from a nationwide lender, the Bank's Chief Lending Officer or Secondary Marketing Manager reviews specific criteria such as loan amount, credit scores, LTV ratios, geographic location, and debt ratios of each loan in the pool.  If the specific criteria do not meet the Bank's underwriting standards and compensating factors are not sufficient, then a loan will be removed from the pool.  Before the pool is funded, an internal Bank underwriter or a third party reviews at least 25% of the loan files to confirm loan terms, credit scores, debt service ratios, property appraisals, and other underwriting related documentation.  The Bank does not service the loans purchased from nationwide lenders.  For the tables within this footnote, loans purchased from correspondent lenders are included with originated loans, and loans purchased in bulk from nationwide lenders are reported as purchased loans.

The Bank also originates construction-to-permanent loans secured by one- to four-family residential real estate.  The majority of the one- to four-family construction loans are secured by property located within the Bank's Kansas City market area.  Construction loans are obtained by homeowners who will occupy the property when construction is complete.  Construction loans to builders for speculative purposes are not permitted.  The application process includes submission of complete plans, specifications, and costs of the project to be constructed.  All construction loans are manually underwritten using the Bank's internal underwriting standards.  Construction draw requests and the supporting documentation are reviewed and approved by management.  The Bank also performs regular documented inspections of the construction project to ensure the funds are being used for the intended purpose and the project is being completed according to the plans and specifications provided.

Multi-family and commercial loans - The Bank's multi-family and commercial real estate loans are secured primarily by multi-family dwellings and small commercial buildings generally located in the Bank's market areas.  These loans are granted based on the income producing potential of the property and the financial strength of the borrower.  At the time of origination, LTV ratios on multi-family and commercial real estate loans cannot exceed 80% of the appraised value of the property securing the loans.  The net operating income, which is the income derived from the operation of the property less all operating expenses, must be sufficient to cover the payments related to the outstanding debt at the time of origination.  The Bank generally requires personal guarantees of the borrowers covering a portion of the debt in addition to the security property as collateral for these loans.  Appraisals on properties securing these loans are performed by independent state certified fee appraisers.  Bank policy permits a limited amount of construction-to-permanent loans secured by multi-family dwellings and commercial real estate.  Currently there are no construction-to-permanent loans in the multi-family and commercial portfolio.

Consumer loans - The Bank offers a variety of secured consumer loans, including home equity loans and lines of credit, home improvement loans, auto loans, and loans secured by savings deposits.   The Bank also originates a very limited amount of unsecured loans.  The Bank does not originate any consumer loans on an indirect basis, such as contracts purchased from retailers of goods or services which have extended credit to their customers.  The majority of the consumer loan portfolio is comprised of home equity lines of credit.

The underwriting standards for consumer loans include a determination of the applicant's payment history on other debts and an assessment of their ability to meet existing obligations and payments on the proposed loan.  Although creditworthiness of the applicant is a primary consideration, the underwriting process also includes a comparison of the value of the security in relation to the proposed loan amount.

Credit Quality Indicators - Based on the Bank's lending emphasis and underwriting standards, management has divided the loan portfolio into three segments:  one- to four-family loans, consumer loans, and multi-family and commercial loans.  The one- to four-family and consumer loan segments are further grouped into classes for purposes of providing disaggregated information about the credit quality of the loan portfolio.  The classes are:  one- to four-family loans - originated, one- to four-family loans - purchased, consumer loans - home equity, and consumer loans - other.  The Bank's primary credit quality indicators for the one- to four-family loan and consumer - home equity loan portfolios are delinquency status, asset classifications in accordance with applicable regulations, LTV ratios and borrower credit scores.  The Bank's primary credit quality indicators for the multi-family and commercial loan and consumer - other loan portfolios are delinquency status and asset classifications in accordance with applicable regulations.

The following table presents the recorded investment of loans, defined as the unpaid loan principal balance (net of unadvanced funds related to loans in process) inclusive of unearned loan fees and deferred costs, of the Company's 30 to 89 day delinquent loans, 90 or more day delinquent loans, total delinquent loans, total current loans, and the total loans receivable balance at September 30, 2011 by class.  In the general valuation allowance model, loans in the 30 to 89 day delinquent category are assigned a higher loss factor than corresponding performing loans.  Loans 90 or more days delinquent are considered impaired loans and are individually evaluated for impairment.  At September 30, 2011, all loans in the 90 or more days delinquent category were on nonaccrual status and represented the entire balance of nonaccrual loans.  At September 30, 2011, there were no loans 90 or more days delinquent that were still accruing interest.

					Total				Total
	30 to 89 Days		90 or More Days		Delinquent		Current		Recorded
	Delinquent		Delinquent		Loans		Loans		Investment
	(Dollars in thousands)
One- to four-family loans - originated	$	19,682	$	12,363	$	32,045	$	4,362,498	$	4,394,543
One- to four-family loans - purchased		6,243		13,836		20,079		520,876		540,955
Multi-family and commercial loans		--		--		--		57,936		57,936
Consumer - home equity		759		380		1,139		163,402		164,541
Consumer - other		92		3		95		7,129		7,224
	$	26,776	$	26,582	$	53,358	$	5,111,841	$	5,165,199

As of September 30, 2011, 2010, and 2009, loans with unpaid principal amounts totaling approximately $26.5 million, $32.0 million, and $30.9 million, respectively, were on nonaccrual status.  Gross interest income would have increased by $643 thousand, $766 thousand, and $603 thousand for the years ended September 30, 2011, 2010, and 2009, respectively, if these nonaccrual status loans were not classified as such.

In accordance with the Bank's asset classification policy, management regularly reviews the problem loans in the Bank's portfolio to determine whether any assets require classification in accordance with applicable regulations.  Loan classifications, other than pass loans, are defined as follows:

·   Special mention - These loans are performing loans on which known information about the collateral pledged or the possible credit problems of the borrowers have caused management to have doubts as to the ability of the borrowers to comply with present loan repayment terms and which may result in the future inclusion of such loans in the non-performing loan categories.

·   Substandard - A loan is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any.  Substandard loans include those characterized by the distinct possibility the Bank will sustain some loss if the deficiencies are not corrected.

·   Doubtful - Loans classified as doubtful have all the weaknesses inherent as those classified as substandard, with the added characteristic that the weaknesses present make collection or liquidation in full on the basis of currently existing facts and conditions and values highly questionable and improbable.

·   Loss - Loans classified as loss are considered uncollectible and of such little value that their continuance as loans without the establishment of specific loss allowance is not warranted.

Special mention loans are included with loans 30 to 89 days delinquent in the general valuation allowance model, if the loan is not considered impaired.  Loans classified as substandard, doubtful, or loss are considered impaired loans and are individually evaluated for impairment.

The following table sets forth the recorded investment in loans, less SVAs, classified at September 30, 2011 by class.  At September 30, 2011, there were no loans classified as doubtful or loss that were not fully reserved.  In addition to the classified loans below, at September 30, 2011, the Bank had other assets totaling $10.3 million, comprised of municipal bonds and a trust preferred security, also classified per its asset classification policy and applicable regulations.

	Special Mention		Substandard
	(Dollars in thousands)
One- to four-family - originated	$	32,673	$	18,419
One- to four-family - purchased		447		15,987
Multi-family and commercial		7,683		--
Consumer - home equity		50		592
Consumer - other		--		5
	$	40,853	$	35,003

The following table shows the weighted average LTV and credit score information for originated and purchased one- to four-family loans and originated consumer home equity loans at September 30, 2011.  Borrower credit scores are intended to provide an indication as to the likelihood that a borrower will repay their debts.  Credit scores were most recently updated in September 2011 and were obtained from a nationally recognized consumer rating agency.  The LTV ratios provide an estimate of the extent to which the Bank may incur a loss on any given loan that may go into foreclosure.  The LTV ratios were based on the current loan balance and either the lesser of the purchase price or original appraisal, or the most recent bank appraisal, BPO or AVM, if available.  In most cases, the most recent appraisal was obtained at the time of origination.    

	Weighted Average		Weighted Average
	Credit Score		LTV
One- to four-family - originated		762		66	%
One- to four-family - purchased		740		60
Consumer - home equity		742		20
		759		64	%

Troubled Debt Restructurings - The total recorded investment of loans classified as TDRs at September 30, 2011 was $50.3 million, of which $30.7 million represent restructurings granted to borrowers experiencing financial difficulties and $19.6 million represent restructurings to market interest rates through the Bank's loan endorsement program, which are classified as TDRs as a result of the Company adopting ASU No. 2011-02 on July 1, 2011.

Substantially all of the TDRs at September 30, 2011, are secured by residential real estate.  The recorded investment of TDRs classified as impaired totaled $46.1 million at September 30, 2011.  Impaired loans are individually evaluated for SVAs.  TDRs not classified as impaired, which totaled $4.2 million at September 30, 2011, are included in the general valuation allowance model in their appropriate loan category.  At September 30, 2011, $960 thousand was recorded in the ACL related to TDRs.  The TDRs classified as a result of adopting ASU No. 2011-02 were individually evaluated for impairment.  No SVA was recorded on these loans at September 30, 2011, as the estimated current values of the collateral were in excess of the recorded loan balances.

The following table presents the recorded investment of TDRs at September 30, 2011, including restructurings granted to borrowers that were experiencing financial difficulties and restructurings of loans to market interest rates through the Bank's loan endorsement program.

	Restructurings
	Due to		Loan
	Financial		Endorsement
	Difficulties		Program		Total
	(Dollars in thousands)
One- to four-family loans - originated	$	23,534	$	19,624	$	43,158
One- to four-family loans - purchased		6,155		--		6,155
Multi-family and commercial loans		563		--		563
Consumer - home equity		413		--		413
Consumer - other		2		--		2
	$	30,667	$	19,624	$	50,291

The following table presents the recorded investment prior to restructuring and immediately after restructuring for all loans restructured during the year ended September 30, 2011.  This table does not reflect the recorded investment at September 30, 2011.

	Number		Pre-		Post-
	of		Restructured		Restructured
	Contracts		Outstanding		Outstanding
			(Dollars in thousands)
One- to four-family loans - originated		158	$	27,250	$	26,936
One- to four-family loans - purchased		4		1,563		1,555
Multi-family and commercial loans		--		--		--
Consumer - home equity		5		224		227
Consumer - other		--		--		--
		167	$	29,037	$	28,718

As of September 30, 2011, the recorded investment of TDRs 30-89 days delinquent and over 90 days delinquent was $2.6 million and $2.9 million, respectively.  The following table provides information on TDRs restructured within the last 12 months that subsequently defaulted during the year ended September 30, 2011.  Of the 13 loans in the table that defaulted during the year, seven loans, with a recorded investment of $812 thousand as of September 30, 2011, had returned to current status as of September 30, 2011.

	Number
	of		Recorded
	Contracts		Investment
			(Dollars in thousands)
One- to four-family loans - originated		13	$	1,353
One- to four-family loans - purchased		--		--
Multi-family and commercial loans		--		--
Consumer - home equity		--		--
Consumer - other		--		--
		13	$	1,353

Impaired loans - Impaired loans are defined as non-accrual loans, loans classified as substandard, loans with SVAs, and TDRs that have not yet performed under the restructured terms for 12 consecutive months or are required by the accounting literature to be classified as a TDR for the life of the loan due to a reduction in the stated interest rate to a rate lower than the current market rate for new debt with similar risk.  Substantially all of the impaired loans at September 30, 2011 were secured by residential real estate.  Impaired loans related to residential real estate are individually evaluated to ensure that the carrying value of the loan is not in excess of the fair value of the collateral, less estimated selling costs.  Fair values of residential real estate are estimated through such methods as current appraisals, AVMs, BPOs, or listing prices.  Fair values may be adjusted by management to reflect current economic and market conditions.  If the outstanding loan balance is in excess of the estimated fair value determined by management, less estimated costs to sell, then a SVA is recorded for the difference.

The following is a summary of information pertaining to impaired loans by class at September 30, 2011.

								Fiscal		Fiscal
								Year-to-Date		Year-to-Date
				Unpaid				Average		Interest
		Recorded		Principal		Related		Recorded		Income
		Investment		Balance		ACL		Investment		Recognized
		(Dollars in thousands)
With no related allowance recorded
	One- to four-family - originated	$	47,710	$	47,845	$	--	$	41,401	$	1,467
	One- to four-family - purchased		6,075		6,056		--		7,381		58
	Multi-family and commercial		563		565		--		578		36
	Consumer - home equity		468		468		--		672		14
	Consumer - other		5		5		--		46		--
			54,821		54,939		--		50,078		1,575
With an allowance recorded
	One- to four-family - originated		3,297		3,299		335		2,419		102
	One- to four-family - purchased		13,640		13,546		3,280		14,576		156
	Multi-family and commercial		--		--		--		--		--
	Consumer - home equity		264		264		140		80		3
	Consumer - other		--		--		--		--		--
			17,201		17,109		3,755		17,075		261
Total
	One- to four-family - originated		51,007		51,144		335		43,820		1,569
	One- to four-family - purchased		19,715		19,602		3,280		21,957		214
	Multi-family and commercial		563		565		--		578		36
	Consumer - home equity		732		732		140		752		17
	Consumer - other		5		5		--		46		--
		$	72,022	$	72,048	$	3,755	$	67,153	$	1,836

Allowance for Credit Losses - The following is a summary of the activity in the ACL by segment for the year ended September 30, 2011 and the ending balance of the ACL at September 30, 2011, based on the Company's impairment methodology.

	One- to Four-			One- to Four-			One- to Four-			Multi-family
	Family			Family			Family			and
	Originated			Purchased			Total			Commercial			Consumer			Total
	(Dollars in thousands)
Beginning balance	$	3,813		$	10,425		$	14,238		$	275		$	379		$	14,892
Charge-offs		(414	)		(2,928	)		(3,342	)		--			(145	)		(3,487	)
Recoveries		--			--			--			--			--			--
Provision for credit losses		1,516			2,404			3,920			(21	)		161			4,060
Ending balance	$	4,915		$	9,901		$	14,816		$	254		$	395		$	15,465
Ratio of net charge-offs to average loans
outstanding year-to-date																	0.07	%
Ratio of net charge-offs year-to-date
to average non-performing assets																	8.75	%
ACL for loans collectively
evaluated for impairment	$	4,580		$	6,621		$	11,201		$	254		$	255		$	11,710
ACL for loans individually
evaluated for impairment	$	335		$	3,280		$	3,615		$	--		$	140		$	3,755

The following is a summary of the loan portfolio at September 30, 2011 by loan portfolio segment disaggregated by the Company's impairment method.

	One- to Four-		One- to Four-		One- to Four-		Multi-family
	Family		Family		Family		and
	Originated		Purchased		Total		Commercial		Consumer		Total
	(Dollars in thousands)
Recorded investment of loans
collectively evaluated for impairment	$	4,343,536	$	521,240	$	4,864,776	$	57,373	$	171,028	$	5,093,177
Recorded investment of loans
individually evaluated for impairment		51,007		19,715		70,722		563		737		72,022
	$	4,394,543	$	540,955	$	4,935,498	$	57,936	$	171,765	$	5,165,199

As noted above, the Bank has a loan concentration in residential first mortgage loans.  Continued declines in residential real estate values could adversely impact the property used as collateral for the Bank's loans.  Adverse changes in the economic conditions and increasing unemployment rates may have a negative effect on the ability of the Bank's borrowers to make timely loan payments, which would likely increase delinquencies and have an adverse impact on the Bank's earnings.  Further increases in delinquencies will decrease interest income on loans receivable and will likely adversely impact the Bank's loan loss experience, resulting in an increase in the Bank's ACL and provision for credit losses.  Although management believes the ACL was at an adequate level to absorb known and inherent losses in the loan portfolio at September 30, 2011, the level of the ACL remains an estimate that is subject to significant judgment and short-term changes.  Additions to the ACL may be necessary if future economic and other conditions differ substantially from the current environment.

The Bank originated and refinanced $892 thousand, $13.1 million, and $15.3 million of commercial real estate and business loans during the years ended September 30, 2011, 2010, and 2009, respectively.

The Bank is subject to numerous lending-related regulations. Under the Financial Institutions Reform, Recovery, and Enforcement Act, the limit of aggregate loans to one borrower is 15% of the Bank's unimpaired capital and surplus, but not less than $500 thousand.  As of September 30, 2011, the Bank was in compliance with this limitation.

Aggregate loans to executive officers, directors and their associates did not exceed 5% of stockholders' equity as of September 30, 2011 and 2010.  Such loans were made under terms and conditions substantially the same as loans made to parties not affiliated with the Bank.

The Bank recognized net gains of $298 thousand, $1.8 million, and $2.2 million during fiscal years 2011, 2010, and 2009, respectively, as a result of selling LHFS.  The net gains are included in other income, net in the consolidated statements of income.

As of September 30, 2011 and 2010, the Bank serviced loans for others aggregating approximately $526.3 million and $681.1 million, respectively.  Such loans are not included in the accompanying consolidated balance sheets. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors and foreclosure processing. Loan servicing income includes servicing fees withheld from investors and certain charges collected from borrowers, such as late payment fees. The Bank held borrowers' escrow balances on loans serviced for others of $7.5 million and $9.0 million as of September 30, 2011 and 2010, respectively.

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Selected Quarterly Financial Data

12 Months Ended

Sep. 30, 2011

Selected Quarterly Financial Data [Abstract]

Selected Quarterly Financial Data

16.   SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

The following tables present summarized quarterly data for each of the years indicated for the Company.  In December 2010, Capitol Federal Financial completed its corporate reorganization.  All share information used to calculate EPS in the consolidated financial statements prior to the corporate reorganization has been revised to reflect the 2.2637 exchange ratio and is reflected in the following tables.

	First			Second		Third		Fourth
	Quarter			Quarter		Quarter		Quarter		Total
	(Dollars and counts in thousands, except per share amounts)
2011
Total interest and dividend income	$	87,247		$	84,941	$	88,083	$	86,594	$	346,865
Net interest and dividend income		40,005			40,556		44,308		43,865		168,734
Provision for credit losses		650			520		1,240		1,650		4,060
Net income (loss)		(11,258	)		15,636		17,259		16,766		38,403
Basic earnings (loss) per share		(0.07	)		0.10		0.10		0.10		0.24
Diluted earnings (loss) per share		(0.07	)		0.10		0.10		0.10		0.24
Dividends paid per public share		0.800			0.675		0.075		0.075		1.625
Average number of shares outstanding		165,541			161,500		161,642		161,784		162,625
2010
Total interest and dividend income	$	98,887		$	93,707	$	91,485	$	89,972	$	374,051
Net interest and dividend income		44,854			42,683		40,887		41,141		169,565
Provision for credit losses		3,115			3,200		1,816		750		8,881
Net income		20,980			14,655		16,758		15,447		67,840
Basic EPS		0.13			0.09		0.10		0.09		0.41
Diluted EPS		0.13			0.09		0.10		0.09		0.41
Dividends paid per public share		0.790			0.500		0.500		0.500		2.290
Average number of shares outstanding		165,854			165,734		165,869		165,989		165,862

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Commitments And Contingencies

12 Months Ended

Sep. 30, 2011

Commitments And Contingencies [Abstract]

Commitments And Contingencies

12.   COMMITMENTS AND CONTINGENCIES

The Bank had commitments outstanding to originate and purchase loans as of September 30, 2011 and 2010 as follows:

	2011		2010
	(Dollars in thousands)
Originate fixed-rate	$	89,059	$	75,001
Originate adjustable-rate		24,047		20,144
Purchase/participate fixed-rate		30,650		3,526
Purchase/participate adjustable-rate		26,556		8,395
	$	170,312	$	107,066

As of September 30, 2011 and 2010, the Bank had approved but unadvanced home equity lines of credit and outstanding commitments on commercial loans of $265.5 million and $266.5 million, respectively.  Approval of lines of credit is based upon underwriting standards that do not allow total borrowings, including existing mortgages and lines of credit, to exceed 90% of the estimated market value of the customer's home.  Prior to June 2010, the limit was 95% of the estimated market value of the customer's home.

Commitments to originate mortgage and non-mortgage loans are agreements to lend to a customer as long as there is no violation of any condition established in the contract.  Commitments generally have fixed expiration dates or other termination clauses and may require the payment of a rate lock fee.  Some of the commitments are expected to expire without being fully drawn upon; therefore the amount of total commitments disclosed above does not necessarily represent future cash requirements.  The Bank evaluates each customer's creditworthiness on a case-by-case basis.  The amount of collateral obtained, if considered necessary by the Bank, upon extension of credit is based on management's credit evaluation of the customer.  As of September 30, 2011 and 2010, there were no significant loan-related commitments that met the definition of derivatives or commitments to sell mortgage loans.

As of September 30, 2011, the Bank had $1.7 million of agreements outstanding in connection with the remodeling of the Bank's home office. 

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Performance Based Compensation (Details) (USD $)	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Deferred Compensation Arrangement with Individual, Recorded Liability	$ 345,000	$ 332,000	$ 137,000
Deferred Compensation Arrangement With Individual Employer Contribution Percentage	50.00%
Deferred Compensation Arrangement with Individual, Maximum Contractual Term, years	three
Performance Based Compensation Amount	1,800,000	1,700,000	1,100,000
Deferred Compensation Arrangement with Individual, Compensation Expense	153,000	86,000	51,000
Maximum [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Deferred Compensation Arrangement with Individual, Recorded Liability	100,000
Deferred Compensation Arrangement with Individual Recorded Liability Percentage	50.00%
Minimum [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Deferred Compensation Arrangement with Individual, Recorded Liability	$ 2,000
Executive Officers [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Deferred Compensation Arrangement with Individual Recorded Liability Percentage	50.00%
Senior Officers [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Deferred Compensation Arrangement with Individual Recorded Liability Percentage	35.00%

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Income Taxes

12 Months Ended

Sep. 30, 2011

Income Taxes [Abstract]

Income Taxes

8.   INCOME TAXES

Income tax expense (benefit) for the years ended September 30, 2011, 2010, and 2009 consisted of the following:

	2011			2010		2009
Current	(Dollars in thousands)
Federal	$	25,889		$	31,252	$	32,590
State		2,707			2,807		2,788
		28,596			34,059		35,378
Deferred
Federal		(8,933	)		3,209		3,285
State		(714	)		257		263
		(9,647	)		3,466		3,548
	$	18,949		$	37,525	$	38,926

The Company's effective tax rates were 33.0%, 35.6%, and 37.0% for the years ended September 30, 2011, 2010, and 2009, respectively.  The differences between such effective rates and the statutory Federal income tax rate computed on income before income tax expense result from the following:

	2011						2010						2009
	Amount			%			Amount			%			Amount			%
	(Dollars in thousands)
Federal income tax expense
computed at statutory Federal rate	$	20,073			35.0	%	$	36,878			35.0	%	$	36,828			35.0	%
Increases (Decreases) in taxes resulting from:
State taxes, net of Federal tax effect		1,993			3.4			3,064			2.9			3,051			2.9
Net tax-exempt interest income		(577	)		(1.0	)		(624	)		(0.6	)		(579	)		(0.6	)
Change in cash surrender value of BOLI		(638	)		(1.1	)		(421	)		(0.4	)		(406	)		(0.4	)
Low income housing tax credits		(1,397	)		(2.4	)		(1,209	)		(1.1	)		(1,013	)		(1.0	)
Other		(505	)		(0.9	)		(163	)		(0.2	)		1,045			1.1
	$	18,949			33.0	%	$	37,525			35.6	%	$	38,926			37.0	%

Deferred income tax (benefit) expense results from temporary differences in the recognition of revenue and expenses for tax and financial statement purposes. The sources of these differences and the tax effect of each as of September 30, 2011, 2010, and 2009 were as follows:

	2011			2010			2009
	(Dollars in thousands)
Foundation contribution	$	(12,824	)	$	--		$	--
Mortgage servicing rights		(885	)		774			(874	)
ACL		(197	)		(1,771	)		(1,628	)
FHLB prepayment penalty		--			1,283			4,601
FHLB stock dividends		1,432			2,206			694
Other, net		2,827			974			755
	$	(9,647	)	$	3,466		$	3,548

The components of the net deferred income tax (liabilities) assets as of September 30, 2011 and 2010 are as follows:

	2011			2010
	(Dollars in thousands)
Deferred income tax assets:
Foundation contribution	$	12,824		$	--
ACL		3,863			3,666
Salaries and employee benefits		1,219			1,230
ESOP compensation		836			747
Other		2,630			2,307
Gross deferred income tax assets		21,372			7,950
Valuation allowance		(2,060	)		(280	)
Gross deferred income tax asset, net of valuation allowance		19,312			7,670
Deferred income tax liabilities:
FHLB stock dividends		18,828			17,396
Unrealized gain on AFS securities		16,203			19,362
Other		4,728			4,156
Gross deferred income tax liabilities		39,759			40,914
Net deferred tax liabilities	$	(20,447	)	$	(33,244	)

The Company assesses the available positive and negative evidence surrounding the recoverability of its deferred tax assets and applies its judgment in estimating the amount of valuation allowance necessary under the circumstances.  As of September 30, 2011, the Company had a valuation allowance of $2.1 million related to the Kansas state tax portion of the Foundation contribution and the net operating losses generated by the Company's consolidated Kansas corporate income tax return.As of September 30, 2010, the Company had a valuation allowance of $280 thousand related to the net operating losses generated by the Company's consolidated Kansas corporate income tax return.The Company's consolidated Kansas corporate income tax return at September 30, 2011 and 2010 does not include the Bank, as the Bank files a Kansas privilege tax return.  Based on the nature of the operations of the companies included in the consolidated Kansas corporate return, management believes there will not be sufficient taxable income to fully utilize the deferred tax assets noted above; therefore a valuation allowance was established for the related amounts at September 30, 2011 and 2010.

ASC 740 Income Taxes prescribes a process by which the likelihood of a tax position is gauged based upon the technical merits of the position, and then a subsequent measurement relates the maximum benefit and the degree of likelihood to determine the amount of benefit to recognize in the financial statements. A reconciliation of the beginning and ending amounts of unrecognized tax benefits for the years ended September 30, 2011, 2010, and 2009 is as follows.  The amounts have not been reduced by the federal deferred tax effects of unrecognized tax benefits.

	2011			2010			2009
	(Dollars in thousands)
Balance at beginning of year	$	114		$	2,848		$	2,409
Additions for tax positions related to the current year		--			--			109
Additions for tax positions of prior years		3			28			888
Reductions for tax positions of prior years		(49	)		(195	)		--
Reductions relating to settlement with taxing authorities		--			--			(97	)
Lapse of statute of limitations		--			(2,567	)		(461	)
Balance at end of year	$	68		$	114		$	2,848

If realized, the unrecognized tax benefits at September 30, 2011 would impact the effective tax rate.  After the related deferred tax effects, realization of those benefits would reduce income tax expense by $20 thousand.  Included in the unrecognized tax benefits in the table above were accrued penalties and interest of $20 thousand, $17 thousand, and $763 thousand for the years ended September 30, 2011, 2010, and 2009, respectively.  Estimated penalties and interest for the years ended September 30, 2011 and 2009 was $2 thousand and $87 thousand.  The net reversal of penalties and interest expense due to the lapse of statute of limitations for the years ended September 30, 2010 was $463 thousand.  Estimated penalties and interest are included in income tax expense in the consolidated statements of income.  It is reasonably possible that decreases in gross unrecognized tax benefits totaling less than $10 thousand may occur in fiscal year 2012 as a result of a lapse in the applicable statute of limitations. 

The Company files income tax returns in the U.S. federal jurisdiction and the state of Kansas, as well as other states where it has nexus.  In many cases, uncertain tax positions are related to tax years that remain subject to examination by the relevant taxing authorities.  With few exceptions, the Company is no longer subject to U.S. federal and state examinations by tax authorities for fiscal years before 2008.

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Premises And Equipment, Net (Narrative) (Details) (USD $) In Millions	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Premises And Equipment, Net [Abstract]
Depreciation and amortization expense	$ 4.4	$ 4.6	$ 5.1
Rental expense	$ 1.3	$ 1.2	$ 1.2

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Deposits

12 Months Ended

Sep. 30, 2011

Deposits [Abstract]

Deposits

6.   DEPOSITS

Deposits at September 30, 2011 and 2010 are summarized as follows:

			2011								2010
					Weighted								Weighted
					Average			% of					Average			% of
			Amount		Rate			Total			Amount		Rate			Total
			(Dollars in thousands)
Non-certificates:
Checking			$	551,632		0.08	%		12.3	%	$	482,428		0.13	%		11.0	%
Savings				253,184		0.41			5.6			234,285		0.54			5.3
Money market				1,066,065		0.35			23.7			942,428		0.65			21.5
Total non-certificates				1,870,881		0.28			41.6			1,659,141		0.48			37.8
Certificates of deposit:
	0.00 – 0.99	%		339,803		0.50			7.6			193,959		0.53			4.4
	1.00 – 1.99	%		1,106,957		1.27			24.6			1,013,538		1.44			23.1
	2.00 – 2.99	%		775,235		2.49			17.2			777,687		2.53			17.7
	3.00 – 3.99	%		371,682		3.42			8.3			576,595		3.50			13.2
	4.00 – 4.99	%		30,615		4.40			0.7			164,763		4.32			3.8
	5.00 – 5.99	%		--		--			--			627		5.29			--
Total certificates of deposit				2,624,292		1.87			58.4			2,727,169		2.29			62.2
			$	4,495,173		1.21	%		100.0	%	$	4,386,310		1.61	%		100.0	%

As of September 30, 2011, certificates of deposit mature as follows:

			Weighted
			Average
	Amount		Rate
	(Dollars in thousands)
2012	$	1,390,231		1.65	%
2013		555,043		1.86
2014		309,015		2.27
2015		317,065		2.43
2016		49,423		2.22
Thereafter		3,515		2.46
	$	2,624,292		1.87	%

Interest expense on deposits for the periods presented is as follows:

	Year Ended September 30,
	2011		2010		2009
	(Dollars in thousands)
Checking	$	441	$	622	$	879
Savings		1,225		1,323		1,873
Money market		5,307		6,522		8,512
Certificates		56,595		70,749		89,207
	$	63,568	$	79,216	$	100,471

The amount of noninterest-bearing deposits was $97.6 million and $76.4 million as of September 30, 2011 and 2010, respectively.  Certificates of deposit with a minimum denomination of $100 thousand were $882.8 million and $885.6 million as of September 30, 2011 and 2010, respectively.  Deposits in excess of $250 thousand may not be fully insured by the FDIC.  The aggregate amount of deposits that were reclassified as loans receivable due to customer overdrafts was $124 thousand and $175 thousand as of September 30, 2011 and 2010, respectively.

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Borrowed Funds

12 Months Ended

Sep. 30, 2011

Borrowed Funds [Abstract]

Borrowed Funds

7.   BORROWED FUNDS

At September 30, 2011 the Company's borrowed funds consisted of FHLB advances and repurchase agreements.  At September 30, 2010, the Company's borrowed funds consisted of FHLB advances, repurchase agreements, and the Debentures.   The Debentures were repaid in April 2011.

FHLB Advances – FHLB advances at September 30, 2011 and 2010 were comprised of the following:

	2011			2010
	(Dollars in thousands)
Fixed-rate FHLB advances	$	2,400,000		$	2,376,000
Deferred prepayment penalty		(20,995	)		(28,261	)
Deferred gain on terminated interest rate swaps		457			632
	$	2,379,462		$	2,348,371
Weighted average contractual interest rate on FHLB advances		3.37	%		3.61	%
Weighted average effective interest rate on FHLB advances (1)		3.71	%		3.96	%

(1)   The effective rate includes the net impact of the amortization of deferred prepayment penalties related to the prepayment of certain FHLB advances and deferred gains related to the termination of interest rate swaps.

During fiscal year 2010, the Bank prepaid $200.0 million of fixed-rate FHLB advances with a weighted average interest rate of 4.63% and a weighted average remaining term to maturity of approximately one month.  The prepaid FHLB advances were replaced with $200.0 million of fixed-rate FHLB advances with a weighted average contractual interest rate of 3.17% and an average term of 84 months.  The Bank paid an $875 thousand prepayment penalty to the FHLB as a result of prepaying the FHLB advances.  The present value of the cash flows under the terms of the new FHLB advance was not more than 10% different from the present value of the cash flows under the terms of the prepaid FHLB advances (including the prepayment penalty) and there were no embedded conversion options in the prepaid advances or in the new FHLB advances.  The prepayment penalty effectively increased the interest rate on the new advances seven basis points at the time of the transaction.  The deferred prepayment penalty is being recognized in interest expense over the life of the new FHLB advances.  The benefit of prepaying the advances in fiscal year 2010 was an immediate decrease in interest expense, and a decrease in interest rate sensitivity, as the maturity of the refinanced advances were extended at a lower rate.

The FHLB advances are secured by certain qualifying mortgage loans pursuant to a blanket collateral agreement with the FHLB and all of the capital stock of FHLB owned by the Bank.  Per the FHLB's lending guidelines, total FHLB borrowings cannot exceed 40% of total Bank assets without the pre-approval of the FHLB president.  At September 30, 2011, the Bank's ratio of FHLB advances to total assets, as reported to the Bank's regulators, was 26%.

At September 30, 2011, the Bank had access to a line of credit with the FHLB set to expire on November 25, 2011, at which time the line of credit is expected to be renewed automatically by the FHLB for a one year period.  At September 30, 2011, there were no borrowings on the FHLB line of credit.  Any borrowings on the line of credit would be included in total FHLB borrowings in calculating the ratio of FHLB borrowings to total Bank assets, which generally could not exceed 40% of total Bank assets at September 30, 2011.

Other Borrowings – The following summarizes the components of other borrowings as of September 30, 2011 and 2010.  The Debentures were redeemed in April 2011.

	2011					2010
			Weighted					Weighted
			Average					Average
			Contractual					Contractual
	Amount		Rate			Amount		Rate
	(Dollars in thousands)
Repurchase agreements	$	515,000		4.00	%	$	615,000		4.03	%
Debentures		--		--			53,609		3.28
	$	515,000		4.00	%	$	668,609		3.97	%

The Bank has pledged MBS with an estimated fair value of $597.3 million at September 30, 2011 as collateral for the repurchase agreements.  

Maturity of Borrowed Funds – At September 30, 2011, the maturities of FHLB advances and repurchase agreements were as follows:

							Weighted			Weighted
	FHLB		Repurchase		Total		Average			Average
	Advances		Agreements		Borrowings		Contractual			Effective
	Amount		Amount		Amount		Rate			Rate
	(Dollars in thousands)
2012	$	350,000	$	150,000	$	500,000		3.67	%		3.67	%
2013		525,000		145,000		670,000		3.74			4.00
2014		450,000		100,000		550,000		3.33			3.96
2015		200,000		20,000		220,000		3.50			4.16
2016		275,000		--		275,000		3.86			4.39
Thereafter		600,000		100,000		700,000		3.06			3.08
	$	2,400,000	$	515,000	$	2,915,000		3.48	%		3.76	%

Of the $350.0 million FHLB advances maturing in fiscal year 2012, $100.0 million is due in the first quarter of fiscal year 2012, $150.0 million is due in the second quarter of fiscal year 2012, and $100.0 million is due in the fourth quarter of fiscal year 2012. All of the $150.0 million of repurchase agreements maturing in fiscal year 2012 is due in the first quarter.

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Employee Benefit Plans

12 Months Ended

Sep. 30, 2011

Employee Benefit Plans [Abstract]

Employee Benefit Plans

9.   EMPLOYEE BENEFIT PLANS

The Company has a profit sharing plan ("PIT") and an ESOP.  The plans cover all employees with a minimum of one year of service, at least age 21, and at least 1,000 hours of employment in each plan year.

Profit Sharing Plan – The PIT provides for two types of discretionary contributions. The first type is an optional Bank contribution and may be 0% or any percentage above that, as determined by the Board of Directors, of an eligible employee's eligible compensation during the fiscal year.  The second contribution may be 0% or any percentage above that, as determined by the Board of Directors, of an eligible employee's eligible compensation during the fiscal year if the employee matches 50.0% (on an after-tax basis) of the Bank's second contribution.  The PIT qualifies as a thrift and profit sharing plan for purposes of Internal Revenue Codes 401(a), 402, 412, and 417.  Total Bank contributions to the PIT amounted to $105 thousand, $101 thousand, and $102 thousand for the years ended September 30, 2011, 2010, and 2009, respectively.

ESOP – The ESOP Trust acquired 3,024,574 shares (6,846,728 shares post corporate reorganization) of common stock in the Company's initial public offering and 4,726,000 shares of common stock in the Company's corporate reorganization in December of 2010.  Both acquisitions of common stock were made with proceeds from loans from the Company.  The loans are secured by shares of the Company stock purchased in each offering.  The Bank has agreed to make cash contributions to the ESOP on an annual basis sufficient to enable the ESOP to make the required annual loan payments to the Company on September 30 of each year. Share information presented below relating to the shares in the ESOP trust acquired prior to the corporate reorganization has been revised to reflect the 2.2637 exchange ratio.

The loan for the shares acquired in the initial public offering bears interest at a fixed-rate of 5.80%, with future principal and interest payable annually in two remaining fixed installments of $3.0 million, as of September 30, 2011. Payments of $3.0 million consisting of principal of $2.5 million, $2.4 million, and $2.3 million and interest of $465 thousand, $604 thousand, and $735 thousand were made on September 30, 2011, 2010, and 2009, respectively. The loan matures on September 30, 2013.

The loan for the shares acquired in the corporate reorganization bears interest at a fixed-rate of 3.25% and has a 30 year term.  The loan requires interest-only payments the first three years.  The first interest payment of $1.2 million was paid on September 30, 2011 and the next two interest payments of $1.5 million each are payable on September 30, 2012 and 2013.  Beginning in fiscal year 2014, principal and interest payments of $2.7 million will be payable annually.  The loan matures on September 30, 2040.

As the annual loan payments are made, shares will be released from collateral at September 30 and allocated to qualified employees based on the proportion of their qualifying compensation to total qualifying compensation.  On September 30, 2011, 531,025 shares were released from collateral, and on September 30, 2012 and September 30, 2013, 551,988 shares will be released from collateral.  As ESOP shares are committed to be released from collateral, the Company records compensation expense.  Dividends on unallocated ESOP shares are only applied to the debt service payments of the loan secured by the unallocated shares.  Dividends on unallocated ESOP shares in excess of the debt service payment are recorded as compensation expense and distributed to participants or participants' ESOP accounts.  During the years ended September 30, 2011, 2010, and 2009, the Bank paid $1.4 million, $1.1 million, and $863 thousand, respectively, of the ESOP debt payment because dividends on unallocated shares were insufficient to pay the scheduled debt payment, specifically on the loan for the shares acquired in the initial public offering.  Compensation expense related to the ESOP was $8.7 million for the year ended September 30, 2011, $6.5 million for the year ended September 30, 2010, and $7.9 million for the year ended September 30, 2009.  The amount included in compensation expense for dividends on unallocated ESOP shares in excess of the debt service payments was $2.7 million for the year ended September 30, 2011, which was related to the loan for the shares acquired in the corporate reorganization.  There were no such amounts for the years ended September 30, 2010 and 2009.

Participants have the option to receive the dividends on allocated shares and unallocated shares in excess of debt service payments, in cash or leave the dividend in the ESOP.  Dividends are reinvested in Company stock for those participants who choose to leave their dividends in the ESOP or who do not make an election.  The purchase of Company stock for reinvestment of dividends is made in the open market on or about the date of the cash disbursement to the participants who opt to take dividends in cash.

Shares may be withdrawn from the ESOP Trust due to retirement, termination or death of the participant.  Additionally, a participant may begin to diversify at least 25% of their ESOP shares at age 50.  Following is a summary of shares held in the ESOP Trust as of September 30, 2011 and 2010:

	2011		2010
	(Dollars in thousands)
Allocated ESOP shares		4,393,908		4,028,784
Unreleased ESOP shares		5,564,328		1,369,353
Total ESOP shares		9,958,236		5,398,137
Fair value of unreleased ESOP shares	$	58,759	$	14,941

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Deposits (Summary Of Deposits) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2011	Sep. 30, 2010
Deposits [Line Items]
Checking, Amount	$ 551,632	$ 482,428
Savings, Amount	253,184	234,285
Money market, Amount	1,066,065	942,428
Total non-certificates, Amount	1,870,881	1,659,141
Checking, Weighted Average Rate	0.08%	0.13%
Savings, Weighted Average Rate	0.41%	0.54%
Money market, Weighted Average Rate	0.35%	0.65%
Total non-certificates, Weighted Average Rate	0.28%	0.48%
Checking, % of Total	12.30%	11.00%
Savings, % of Total	5.60%	5.30%
Money market, % of Total	23.70%	21.50%
Total non-certificates, % of Total	41.60%	37.80%
Certificates of deposit, Amount	2,624,292	2,727,169
Certificates of deposit, Weighted Average Rate	1.87%	2.29%
Certificates of deposit, % of Total	58.40%	62.20%
Deposits, Total	4,495,173	4,386,310
Deposits, Weighted Average Rate	1.21%	1.61%
Deposits, % of Total	100.00%	100.00%
Certificates Of Deposit: 0.00 - 0.99% [Member]
Deposits [Line Items]
Certificates of deposit, Amount	339,803	193,959
Certificates of deposit, Weighted Average Rate	0.50%	0.53%
Certificates of deposit, % of Total	7.60%	4.40%
Certificates Of Deposit: 1.00 - 1.99% [Member]
Deposits [Line Items]
Certificates of deposit, Amount	1,106,957	1,013,538
Certificates of deposit, Weighted Average Rate	1.27%	1.44%
Certificates of deposit, % of Total	24.60%	23.10%
Certificates Of Deposit: 2.00 - 2.99% [Member]
Deposits [Line Items]
Certificates of deposit, Amount	775,235	777,687
Certificates of deposit, Weighted Average Rate	2.49%	2.53%
Certificates of deposit, % of Total	17.20%	17.70%
Certificates Of Deposit: 3.00 - 3.99% [Member]
Deposits [Line Items]
Certificates of deposit, Amount	371,682	576,595
Certificates of deposit, Weighted Average Rate	3.42%	3.50%
Certificates of deposit, % of Total	8.30%	13.20%
Certificates Of Deposit: 4.00 - 4.99% [Member]
Deposits [Line Items]
Certificates of deposit, Amount	30,615	164,763
Certificates of deposit, Weighted Average Rate	4.40%	4.32%
Certificates of deposit, % of Total	0.70%	3.80%
Certificates Of Deposit: 5.00 - 5.99% [Member]
Deposits [Line Items]
Certificates of deposit, Amount		$ 627
Certificates of deposit, Weighted Average Rate		5.29%
Certificates of deposit, % of Total

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Commitments And Contingencies (Narrative) (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended	12 Months Ended
	Jun. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Commitments And Contingencies [Abstract]
Unadvanced home equity lines of credit and outstanding commitments		$ 265.5	$ 266.5
Percentage of estimated market value	95.00%	90.00%
Agreements outstanding in connection with the remodeling of the bank's home office		$ 1.7

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Deposits (Summary Of Interest Expense On Deposits) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Deposits [Abstract]
Interest Expense, Checking	$ 441	$ 622	$ 879
Interest Expense, Savings	1,225	1,323	1,873
Interest Expense, Money Market	5,307	6,522	8,512
Interest Expense, Certificates	56,595	70,749	89,207
Interest Expense, Deposits, Total	$ 63,568	$ 79,216	$ 100,471

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Deposits (Narrative) (Details) (USD $)	Sep. 30, 2011	Sep. 30, 2010
Deposits [Abstract]
Noninterest-bearing deposits	$ 97,600,000	$ 76,400,000
Time deposits, $100,000 or more	882,800,000	885,600,000
Deposits reclassified as loans receivable	$ 124,000	$ 175,000

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Fair Value Of Financial Instruments (Schedule Of Fair Value Assets Measured On A Nonrecurring Basis) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	$ 72,048	$ 57,118
REO, net	11,321	9,920
Assets, fair value disclosure, nonrecurring, total	83,369	67,038
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	72,048	57,118
REO, net	11,321	9,920
Assets, fair value disclosure, nonrecurring, total	$ 83,369	$ 67,038

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Stock Based Compensation (Tables)

12 Months Ended

Sep. 30, 2011

Stock Based Compensation [Abstract]

Schedule Of Share Based Compensation Weighted Average Assumptions Used To Value Stock Option Grants

	2011			2010			2009
Risk-free interest rate		1.3	%		2.1	%		2.1	%
Expected life (years)		5			4			4
Expected volatility		25	%		25	%		24	%
Dividend yield		8.1	%		6.2	%		4.8	%
Estimated forfeitures		12.9	%		3.3	%		10.5	%

Summary Of Option Activity

	2011					2010					2009
				Weighted					Weighted					Weighted
				Average					Average					Average
	Number			Exercise		Number			Exercise		Number			Exercise
	of Options			Price		of Options			Price		of Options			Price
Options outstanding
at beginning of year		919,639		$	15.08		841,991		$	14. 69		912,879		$	13.10
Granted		2,030			10.86		119,945			14.25		94,460			18.57
Forfeited		(10,180	)		16.59		--			--		--			--
Exercised		(4,525	)		8.23		(42,297	)		4.96		(165,348	)		8.08
Options outstanding
at end of year		906,964		$	15.09		919,639		$	15.08		841,991		$	14.69

Summary Of Stock Options Outstanding And Exercisable

		Options Outstanding
				Weighted		Weighted
				Average		Average
		Number		Remaining		Exercise		Aggregate
Exercise		of Options		Contractual		Price per		Intrinsic
Price		Outstanding		Life (in years)		Share		Value
		(Dollars in thousands, except per share amounts)
$	4.07		8,783		3.55	$	4.07	$	57
	6.19- 8.69		--		--		--		--
	10.86- 12.71		6,550		4.95		11.42		--
	13.33- 17.59		839,601		7.52		14.98		--
	19.19		52,030		7.08		19.19		--
			906,964		7.44	$	15.09	$	57
		Options Exercisable
				Weighted		Weighted
				Average		Average
		Number		Remaining		Exercise		Aggregate
Exercise		of Options		Contractual		Price per		Intrinsic
Price		Exercisable		Life (in years)		Share		Value
		(Dollars in thousands, except per share amounts)
$	4.07		8,783		3.55	$	4.07	$	57
	6.19- 8.69		--		--		--		--
	10.86- 12.71		4,926		1.93		11.61		--
	13.33- 17.59		727,349		7.23		15.03		--
	19.19		31,218		7.08		19.19		--
			772,276		7.14	$	15.05	$	57

Summary Of RRP Share Activity

	2011					2010					2009
				Weighted					Weighted					Weighted
				Average					Average					Average
	Number			Grant Date		Number			Grant Date		Number			Grant Date
	of Shares			Fair Value		of Shares			Fair Value		of Shares			Fair Value
Unvested RRP shares
at beginning of year:		23,762		$	15.07		34,177		$	15.17		52,509		$	14.87
Granted		--			--		11,317			14.42		5,657			17.64
Vested		(10,180	)		15.30		(21,732	)		14.88		(23,989	)		15.10
Forfeited		--			--		--			--		--			--
Unvested RRP shares
at end of year		13,582		$	14.90		23,762		$	15.07		34,177		$	15.17

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Loans Receivable And Allowance For Credit Losses (Recorded Investment Of Loans, Past Due) (Details) (USD $) In Thousands	Sep. 30, 2011
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivable, 30 to 89 Days Delinquent	$ 26,776
Financing receivable, 90 or More Days Delinquent	26,582
Financing receivable, Total Delinquent Loans	53,358
Financing receivable, Current Loans	5,111,841
Financing receivable, Total Recorded Investment	5,165,199
One-To Four-Family Loans - Originated [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivable, 30 to 89 Days Delinquent	19,682
Financing receivable, 90 or More Days Delinquent	12,363
Financing receivable, Total Delinquent Loans	32,045
Financing receivable, Current Loans	4,362,498
Financing receivable, Total Recorded Investment	4,394,543
One-To Four-Family Loans - Purchased [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivable, 30 to 89 Days Delinquent	6,243
Financing receivable, 90 or More Days Delinquent	13,836
Financing receivable, Total Delinquent Loans	20,079
Financing receivable, Current Loans	520,876
Financing receivable, Total Recorded Investment	540,955
Multi-Family And Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivable, Current Loans	57,936
Financing receivable, Total Recorded Investment	57,936
Consumer - Home Equity [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivable, 30 to 89 Days Delinquent	759
Financing receivable, 90 or More Days Delinquent	380
Financing receivable, Total Delinquent Loans	1,139
Financing receivable, Current Loans	163,402
Financing receivable, Total Recorded Investment	164,541
Consumer - Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivable, 30 to 89 Days Delinquent	92
Financing receivable, 90 or More Days Delinquent	3
Financing receivable, Total Delinquent Loans	95
Financing receivable, Current Loans	7,129
Financing receivable, Total Recorded Investment	$ 7,224

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Fair Value Of Financial Instruments

12 Months Ended

Sep. 30, 2011

Fair Value Of Financial Instruments [Abstract]

Fair Value Of Financial Instruments

14.   FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair Value Measurements - ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.  ASC 820 applies only to fair value measurements already required or permitted by other accounting standards and does not impose requirements for additional fair value measures.  ASC 820 was issued to increase consistency and comparability in reporting fair values.

The Company uses fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures.  The Company did not have any liabilities that were measured at fair value at September 30, 2011 and 2010.  The Company's AFS securities are recorded at fair value on a recurring basis.  Additionally, from time to time, the Company may be required to record at fair value other assets or liabilities on a non-recurring basis, such as REO, LHFS, and impaired loans.  These non-recurring fair value adjustments involve the application of lower-of-cost-or-fair value accounting or write-downs of individual assets.

In accordance with ASC 820, the Company groups its assets at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value. These levels are:

• Level 1 — Valuation is based upon quoted prices for identical instruments traded in active markets.

• Level 2 — Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

• Level 3 — Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect the Company's own estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include the use of option pricing models, discounted cash flow models, and similar techniques. The results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability.  

The Company bases its fair values on the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date.  As required by ASC 820, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value.

The following is a description of valuation methodologies used for assets measured at fair value on a recurring basis.

AFS Securities - The Company's AFS securities portfolio is carried at estimated fair value, with any unrealized gains and losses, net of taxes, reported as AOCI in stockholders' equity.  The Company's major security types based on the nature and risks of the securities are included in the table below.  The majority of the securities within the AFS portfolio are issued by U.S. GSEs.  The fair values for all AFS securities are based on quoted prices for similar securities.  Various modeling techniques are used to determine pricing for the Company's securities, including option pricing and discounted cash flow models. The inputs to these models may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data.  There is an AFS security in the AFS portfolio that has significant unobservable inputs requiring the independent pricing services to use some judgment in determining its fair value.  This AFS security is classified as Level 3.  All other AFS securities are classified as Level 2.

The following tables provide the level of valuation assumption used to determine the carrying value of the Company's AFS securities measured at fair value on a recurring basis at September 30, 2011 and 2010.

	September 30, 2011
			Quoted Prices		Significant		Significant
			in Active Markets		Other Observable		Unobservable
	Carrying		for Identical Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)(1)
	(Dollars in thousands)
AFS securities
GSE debentures	$	748,308	$	--	$	748,308	$	--
Municipal bonds		2,754		--		2,754		--
Trust preferred securities		2,941		--		--		2,941
MBS		732,436		--		732,436		--
	$	1,486,439	$	--	$	1,483,498	$	2,941
	September 30, 2010
			Quoted Prices		Significant		Significant
			in Active Markets		Other Observable		Unobservable
	Carrying		for Identical Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)(2)
	(Dollars in thousands)
AFS securities
GSE debentures	$	50,255	$	--	$	50,255	$	--
Municipal bonds		2,819		--		2,819		--
Trust preferred securities		2,796		--		--		2,796
MBS		1,004,496		--		1,004,496		--
	$	1,060,366	$	--	$	1,057,570	$	2,796

(1)   The Company's Level 3 AFS securities have had no activity from September 30, 2010 to September 30, 2011, except for principal repayments of $87 thousand and reductions in net unrealized losses recognized in other comprehensive income.  Reductions of net unrealized losses included in other comprehensive income for the year ended September 30, 2011 were $115 thousand.  

(2)   The Company's Level 3 AFS securities have had no activity from September 30, 2009 to September 30, 2010, except for principal repayments of $93 thousand and reductions in net unrealized losses recognized in other comprehensive income.  Reductions of net unrealized losses included in other comprehensive income for the year ended September 30, 2010 were $460 thousand.

The following is a description of valuation methodologies used for significant assets measured at fair value on a non-recurring basis.

Loans Receivable - Loans which meet certain criteria are evaluated individually for impairment. A loan is considered impaired when, based upon current information and events, it is probable the Bank will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the loan agreement.  The unpaid principal balance of impaired loans at September 30, 2011 and 2010 was $72.0 million and $57.1 million, respectively. Substantially all of the Bank's impaired loans at September 30, 2011 and 2010 were secured by residential real estate.  These impaired loans are individually assessed to ensure that the carrying value of the loan is not in excess of the fair value of the collateral, less estimated selling costs.  Fair value is estimated through current appraisals, AVMs, BPOs, or listing prices in the event of a possible short sale.  Fair values may be adjusted by management to reflect current economic and market conditions and, as such, are classified as Level 3. Based on this evaluation, the Company maintained an ACL of $3.8 million and $4.3 million at September 30, 2011 and 2010, respectively, for such impaired loans.

REO, net - REO primarily represents residential real estate acquired as a result of foreclosure or by deed in lieu of foreclosure and is carried at lower-of-cost or fair value.  Fair value is estimated through current appraisals, AVMs, BPOs, or listing prices.  As these properties are actively marketed, estimated fair values may be adjusted by management to reflect current economic and market conditions and, as such, are classified as Level 3.  The fair value of REO at September 30, 2011 and 2010 was $11.3 million and $9.9 million, respectively.

The following tables provide the level of valuation assumption used to determine the carrying value of the Company's assets measured at fair value on a non-recurring basis at September 30, 2011 and 2010.

	September 30, 2011
			Quoted Prices		Significant		Significant
			in Active Markets		Other Observable		Unobservable
	Carrying		for Identical Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in thousands)
Impaired loans	$	72,048	$	--	$	--	$	72,048
REO, net		11,321		--		--		11,321
	$	83,369	$	--	$	--	$	83,369
	September 30, 2010
			Quoted Prices		Significant		Significant
			in Active Markets		Other Observable		Unobservable
	Carrying		for Identical Assets		Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in thousands)
Impaired loans	$	57,118	$	--	$	--	$	57,118
REO, net		9,920		--		--		9,920
	$	67,038	$	--	$	--	$	67,038

Fair Value Disclosures - The Company determined estimated fair value amounts using available market information and a selection from a variety of valuation methodologies. However, considerable judgment is required to interpret market data to develop the estimates of fair value. Accordingly, the estimates presented are not necessarily indicative of the amount the Company could realize in a current market exchange. The use of different market assumptions and estimation methodologies may have a material impact on the estimated fair value amounts.  The fair value estimates presented herein are based on pertinent information available to management as of September 30, 2011 and 2010. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since those dates.  The carrying amounts and estimated fair values of the Company's financial instruments as of September 30, 2011 and 2010 were as follows:

	2011				2010
			Estimated				Estimated
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
	(Dollars in thousands)
Assets:
Cash and cash equivalents	$	121,070	$	121,070	$	65,217	$	65,217
AFS securities		1,486,439		1,486,439		1,060,366		1,060,366
HTM securities		2,370,117		2,434,392		1,880,154		1,913,454
Loans receivable		5,149,734		5,475,150		5,168,202		5,392,550
BOLI		56,534		56,534		54,710		54,710
Capital stock of FHLB		126,877		126,877		120,866		120,866
Liabilities:
Deposits		4,495,173		4,553,516		4,386,310		4,459,052
FHLB Advances		2,379,462		2,569,958		2,348,371		2,557,064
Other borrowings		515,000		545,096		668,609		701,099

The following methods and assumptions were used to estimate the fair value of the financial instruments:

Cash and Cash Equivalents - The carrying amounts of cash and cash equivalents are considered to approximate their fair value due to the nature of the financial asset.

AFS and HTM Securities - Estimated fair values of securities are based on one of three methods:  1) quoted market prices where available, 2) quoted market prices for similar instruments if quoted market prices are not available, 3) unobservable data that represents the Bank's assumptions about items that market participants would consider in determining fair value where no market data is available.  AFS securities are carried at estimated fair value.  HTM securities are carried at amortized cost.

Loans Receivable - Fair values are estimated for portfolios with similar financial characteristics.  Loans are segregated by type, such as one- to four-family residential mortgages, multi-family residential mortgages, nonresidential, and installment loans.  Each loan category is further segmented into fixed- and adjustable interest rate categories.  Market pricing sources are used to approximate the estimated fair value of fixed- and adjustable-rate one- to four-family residential mortgages.  For all other loan categories, future cash flows are discounted using the LIBOR curve plus a margin at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturity.

BOLI- The carrying value of BOLI is considered to approximate its fair value due to the nature of the financial asset.

Capital Stock of FHLB - The carrying value of FHLB stock equals cost.  The fair value is based on redemption at par value.

Deposits - The estimated fair value of demand deposits, savings, and money market accounts is the amount payable on demand at the reporting date.  The estimated fair value of fixed-maturity certificates of deposit is estimated by discounting the future cash flows using a margin to the LIBOR curve.

Advances from FHLB - The estimated fair value of advances from FHLB is determined by discounting the future cash flows of each advance using a margin to the LIBOR curve.

Other Borrowings - The estimated fair value of the repurchase agreements is determined by discounting the future cash flows of each agreement using a margin to the LIBOR curve.  The Debentures had a variable rate structure, with the ability to redeem at par; therefore, the carrying value of the Debentures approximated their estimated fair value at September 30, 2010.  The Debentures were redeemed in April 2011.

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Earnings Per Share (Tables)

12 Months Ended

Sep. 30, 2011

Earnings Per Share [Abstract]

Schedule Of Earnings Per Share, Basic And Diluted

	2011		2010		2009
	(Dollars in thousands, except per share data)
Net income (1)	$	38,403	$	67,840	$	66,298
Average common shares outstanding		162,432,315		165,689,601		165,403,759
Average committed ESOP shares outstanding		192,959		172,575		172,575
Total basic average common shares outstanding		162,625,274		165,862,176		165,576,334
Effect of dilutive RRP shares		2,747		6,492		12,174
Effect of dilutive stock options		4,644		30,777		132,668
Total diluted average common shares outstanding		162,632,665		165,899,445		165,721,176
Net EPS
Basic	$	0.24	$	0.41	$	0.40
Diluted	$	0.24	$	0.41	$	0.40
Antidilutive stock options and RRP, excluded
from the diluted average common shares
outstanding calculation		898,415		642,777		167,626

(1)   Net income available to participating securities (unvested RRP shares) was inconsequential for fiscal years 2011, 2010, and 2009.

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Parent Company Financial Information (Parent Company Only) (Schedule Of Balance Sheets) (Details) (USD $) In Thousands, except Share data	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009	Sep. 30, 2008
Cash and cash equivalents	$ 121,070	$ 65,217	$ 41,154	$ 87,138
Available-for-sale ("AFS")	1,486,439	1,060,366
Other assets	50,968	55,499
Accrued interest receivable	29,316	30,220
Income tax receivable		716
Deferred income tax assets	(20,447)	(33,244)
TOTAL ASSETS	9,450,799	8,487,130
Accounts payable and accrued expenses	43,761	33,610
Other borrowings	515,000	668,609
Total liabilities	7,511,270	7,525,180
Preferred stock, $.01 par value; 100,000,000 shares authorized, no shares issued or outstanding
Common stock, $.01 par value; 1,400,000,000 shares authorized, 167,498,133 shares issued; 167,498,133 and 73,992,678 shares outstanding as of September 30, 2011 and 2010, respectively	1,675	915
Additional paid-in capital	1,392,691	457,795
Unearned compensation, Employee Stock Ownership Plan ("ESOP")	(50,547)	(6,050)
Unearned compensation - RRP	(124)	(255)
Retained earnings	569,127	801,044
Accumulated other comprehensive gain (loss)	26,707	31,862
Stockholders' equity before treasury stock	1,939,529	1,285,311
Treasury stock, at cost, 0 and 17,519,609 shares as of September 30, 2011 and 2010, respectively, at cost		(323,361)
Total stockholders' equity	1,939,529	961,950	941,298	871,216
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	9,450,799	8,487,130
Available-for-sale securities, amortized cost	1,443,529	1,009,142
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	1,400,000,000	1,400,000,000
Common stock, shares issued	167,498,133	167,498,133
Common stock, shares outstanding	167,498,133	73,992,678
Treasury stock, shares	0	17,519,609
Capitol Federal Financial [Member]
Cash and cash equivalents	113,101	88,098	54,101	44,508
Investment in the Bank	1,395,708	857,115
Available-for-sale ("AFS")	362,875
Investment in certificates of deposit at the Bank		55,000
Note receivable - ESOP	52,759	8,024
Other assets	75	7,604
Accrued interest receivable	1,812
Income tax receivable	2,855	138
Deferred income tax assets	10,409
TOTAL ASSETS	1,939,594	1,015,979
Accounts payable and accrued expenses	65	420
Other borrowings		53,609
Total liabilities	65	54,029
Preferred stock, $.01 par value; 100,000,000 shares authorized, no shares issued or outstanding
Common stock, $.01 par value; 1,400,000,000 shares authorized, 167,498,133 shares issued; 167,498,133 and 73,992,678 shares outstanding as of September 30, 2011 and 2010, respectively	1,675	915
Additional paid-in capital	1,392,691	457,795
Unearned compensation, Employee Stock Ownership Plan ("ESOP")	(50,547)	(6,050)
Unearned compensation - RRP	(124)	(255)
Retained earnings	569,127	801,044
Accumulated other comprehensive gain (loss)	26,707	31,862
Stockholders' equity before treasury stock	1,939,529	1,285,311
Treasury stock, at cost, 0 and 17,519,609 shares as of September 30, 2011 and 2010, respectively, at cost		(323,361)
Total stockholders' equity	1,939,529	961,950
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	1,939,594	1,015,979
Available-for-sale securities, amortized cost	$ 362,271	$ 0
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	1,400,000,000	1,400,000,000
Common stock, shares issued	167,498,133	167,498,133
Common stock, shares outstanding	167,498,133	73,992,678
Treasury stock, shares	0	17,519,609

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Loans Receivable And Allowance For Credit Losses (Narrative) (Details) (USD $)	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of potential loan purchases reviewed for compliance with internal underwriting standards, minimum	25.00%
Loans with unpaid principal amounts on nonaccrual status	$ 26,500,000	$ 32,000,000	$ 30,900,000
Gross interest income lost on nonaccrual status loans	643,000	766,000	603,000
Loan-to-value ratio for securing multi-family and commercial real estate loans, maximum	80.00%
Other Classified Assets	10,300,000
Financing Receivable, Modifications, Recorded Investment	50,291,000
Recorded Investment	1,353,000
TDR classified as impaired	46,100,000
TDR not classified as impaired	4,200,000
Financing Receivable Allowance For Credit Losses Related To TDR	960,000
Commercial real estate and business loans originated and refinanced	892,000	13,100,000	15,300,000
Net gain on sale of LHFS	298,000	1,800,000	2,200,000
Serviced loans for others, aggregated amount	526,300,000	681,100,000
Escrow balances on loans serviced for others	7,500,000	9,000,000
Maximum disbursement of real estate loans to one borrower, as percentage of unimpaired capital of borrower	15.00%
Lower range for maximum disbursement of real estate loans to one borrower, amount	500,000
Maximum loan disbursement to executive officers as percentage of stockholder's equity	5.00%	5.00%
Restructurings Due To Financial Difficulties [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Modifications, Recorded Investment	30,667,000
Loan Endorsement Program [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Modifications, Recorded Investment	19,624,000
30-89 Days [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	2,600,000
Over 90 Days [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	2,900,000
Seven Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	$ 812,000

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Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2009	Sep. 30, 2011		Sep. 30, 2010		Sep. 30, 2009
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net income	$ 16,766	$ 17,259	$ 15,636	$ (11,258)	$ 15,447	$ 16,758	$ 14,655	$ 20,980	$ 38,403	[1]	$ 67,840	[1]	$ 66,298	[1]
Total basic average common shares outstanding	161,784,000	161,642,000	161,500,000	165,541,000	165,989,000	165,869,000	165,734,000	165,854,000	162,625,274		165,862,176		165,576,334
Total diluted average common shares outstanding									162,632,665		165,899,445		165,721,176
Basic	$ 0.10	$ 0.10	$ 0.10	$ (0.07)	$ 0.09	$ 0.10	$ 0.09	$ 0.13	$ 0.24		$ 0.41		$ 0.40
Diluted	$ 0.10	$ 0.10	$ 0.10	$ (0.07)	$ 0.09	$ 0.10	$ 0.09	$ 0.13	$ 0.24		$ 0.41		$ 0.40
Antidilutive stock options and RRP, excluded from the diluted average common shares outstanding calculation									898,415		642,777		167,626
Corporate Reorganization, Common Stock Exchange Ratio									2.2637
Average Common Shares Outstanding [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total basic average common shares outstanding									162,432,315		165,689,601		165,403,759
Average Committed ESOP Shares Outstanding [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total basic average common shares outstanding									192,959		172,575		172,575
Effect Of Dilutive RRP Shares [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total diluted average common shares outstanding									2,747		6,492		12,174
Effect Of Dilutive Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total diluted average common shares outstanding									4,644		30,777		132,668

[1] Net income available to participating securities (unvested RRP shares) was inconsequential for fiscal years 2011, 2010, and 2009.

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Consolidated Statements Of Stockholders' Equity (USD $) In Thousands	Common Stock [Member]	Additional Paid-In Capital [Member]	Unearned Compensation-ESOP [Member]	Unearned Compensation-RRP [Member]	Retained Earnings [Member]	AOCI (Loss) [Member]	Treasury Stock [Member]	Total
Balance at Sep. 30, 2008	$ 915	$ 445,391	$ (10,082)	$ (553)	$ 759,375	$ (5,968)	$ (317,862)	$ 871,216
Comprehensive income:
Net income					66,298			66,298	[1]
Changes in unrealized gain/losses on securities AFS, net of deferred income taxes of $24,210, $1,221 and $3,159 respectively						39,838		39,838
Total comprehensive income								106,136
ESOP activity, net		5,913	2,016					7,929
RRP activity, net		131		(100)			24	55
Stock based compensation - stock options and RRP		281		323				604
Acquisition of treasury stock							(2,426)	(2,426)
Stock options exercised		1,156					697	1,853
Dividends on common stock to stockholders					(44,069)			(44,069)
Balance at Sep. 30, 2009	915	452,872	(8,066)	(330)	781,604	33,870	(319,567)	941,298
Comprehensive income:
Net income					67,840			67,840	[1]
Changes in unrealized gain/losses on securities AFS, net of deferred income taxes of $24,210, $1,221 and $3,159 respectively						(2,008)		(2,008)
Total comprehensive income								65,832
ESOP activity, net		4,465	2,016					6,481
RRP activity, net		123		(163)			47	7
Stock based compensation - stock options and RRP		214		238				452
Acquisition of treasury stock							(4,019)	(4,019)
Stock options exercised		121					178	299
Dividends on common stock to stockholders					(48,400)			(48,400)
Balance at Sep. 30, 2010	915	457,795	(6,050)	(255)	801,044	31,862	(323,361)	961,950
Comprehensive income:
Net income					38,403			38,403	[1]
Changes in unrealized gain/losses on securities AFS, net of deferred income taxes of $24,210, $1,221 and $3,159 respectively						(5,155)		(5,155)
Total comprehensive income								33,248
ESOP activity, net		3,259	2,763					6,022
RRP activity, net		(4)						(4)
Stock based compensation - stock options and RRP		131		131				262
Stock options exercised		42						42
Dividends on common stock to stockholders					(150,110)			(150,110)
Merger of Capitol Federal Savings Bank MHC	(522)	1,997			(1,223)			252
Retirement of treasury stock	(175)	(204,199)			(118,987)		323,361
Exchange of common stock	276	(323)						(47)
Proceeds from stock offering, net of offering expenses	1,181	1,133,993						1,135,174
Purchase of common stock by ESOP			(47,260)					(47,260)
Balance at Sep. 30, 2011	$ 1,675	$ 1,392,691	$ (50,547)	$ (124)	$ 569,127	$ 26,707		$ 1,939,529

[1] Net income available to participating securities (unvested RRP shares) was inconsequential for fiscal years 2011, 2010, and 2009.

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Regulatory Capital Requirements (Summary Of Capital And Total Risk-Based Capital Ratios) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2011	Sep. 30, 2010
Regulatory Capital Requirements [Abstract]
Tangible equity, Actual Amount	$ 1,369,143	$ 824,768
Tangible equity, Actual Ratio	15.10%	9.80%
Tangible equity, For Capital Adequacy Purposes Amount	135,926	126,666
Tangible equity, For Capital Adequacy Purposes Ratio	1.50%	1.50%
Tier 1 (core) capital, Actual Amount	1,369,143	824,768
Tier 1 (core) capital, Actual Ratio	15.10%	9.80%
Tier 1 (core) capital, For Capital Adequacy Purposes Amount	362,469	337,776
Tier 1 (core) capital, For Capital Adequacy Purposes Ratio	4.00%	4.00%
Tier 1 (core) capital, To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	453,086	422,220
Tier 1 (core) capital, To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	5.00%	5.00%
Tier 1 risk-based capital, Actual Amount	1,369,143	824,768
Tier 1 risk-based capital, Actual Ratio	37.90%	23.50%
Tier 1 risk-based capital, To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	216,551	210,597
Tier 1 risk-based capital, To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	6.00%	6.00%
Total risk-based capital, Actual Amount	1,380,853	835,324
Total risk-based capital, Actual Ratio	38.30%	23.80%
Total risk-based capital, For Capital Adequacy Purposes Amount	288,734	280,796
Total risk-based capital, For Capital Adequacy Purposes Ratio	8.00%	8.00%
Total risk-based capital, To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	$ 360,918	$ 350,995
Total risk-based capital, To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	10.00%	10.00%

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Securities

12 Months Ended

Sep. 30, 2011

Securities [Abstract]

Securities

3.   SECURITIES

The following tables reflect the amortized cost, estimated fair value, and gross unrealized gains and losses of AFS and HTM securities at September 30, 2011 and 2010.  The majority of the MBS and investment securities portfolios are composed of securities issued by GSEs.

	September 30, 2011
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(Dollars in thousands)
AFS:
GSE debentures	$	746,545	$	1,996	$	233	$	748,308
Municipal bonds		2,628		126		--		2,754
Trust preferred securities		3,681		--		740		2,941
MBS		690,675		41,764		3		732,436
		1,443,529		43,886		976		1,486,439
HTM:
GSE debentures		633,483		3,171		--		636,654
Municipal bonds		56,994		2,190		4		59,180
MBS		1,679,640		59,071		153		1,738,558
		2,370,117		64,432		157		2,434,392
	$	3,813,646	$	108,318	$	1,133	$	3,920,831
	September 30, 2010
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(Dollars in thousands)
AFS:
GSE debentures	$	50,151	$	104	$	--	$	50,255
Municipal bonds		2,649		170		--		2,819
Trust preferred securities		3,721		--		925		2,796
MBS		952,621		51,881		6		1,004,496
		1,009,142		52,155		931		1,060,366
HTM:
GSE debentures		1,208,829		4,441		--		1,213,270
Municipal bonds		67,957		2,654		1		70,610
MBS		603,368		26,209		3		629,574
		1,880,154		33,304		4		1,913,454
	$	2,889,296	$	85,459	$	935	$	2,973,820

The following tables summarize the estimated fair value and gross unrealized losses of those securities on which an unrealized loss at September 30, 2011 and 2010 was reported and the continuous unrealized loss position for at least 12 months or less than 12 months as of September 30, 2011 and 2010.

	September 30, 2011
	Less Than						Equal to or Greater
	12 Months						Than 12 Months
			Estimated						Estimated
			Fair		Unrealized				Fair		Unrealized
	Count		Value		Losses		Count		Value		Losses
	(Dollars in thousands)
AFS:
GSE debentures		7	$	230,848	$	233		--	$	--	$	--
Trust preferred securities		--		--		--		1		2,941		740
MBS		5		1,189		3		--		--		--
		12	$	232,037	$	236		1	$	2,941	$	740
HTM:
GSE debentures		--	$	--	$	--		--	$	--	$	--
Municipal bonds		2		615		4		--		--		--
MBS		1		25,142		153		--		--		--
		3	$	25,757	$	157		--	$	--	$	--
	September 30, 2010
	Less Than						Equal to or Greater
	12 Months						Than 12 Months
			Estimated						Estimated
			Fair		Unrealized				Fair		Unrealized
	Count		Value		Losses		Count		Value		Losses
	(Dollars in thousands)
AFS:
GSE debentures		--	$	--	$	--		--	$	--	$	--
Trust preferred securities		--		--		--		1		2,796		925
MBS		4		1,678		5		3		359		1
		4	$	1,678	$	5		4	$	3,155	$	926
HTM:
GSE debentures		--	$	--	$	--		--	$	--	$	--
Municipal bonds		--		--		--		1		878		1
MBS		1		48,392		3		--		--		--
		1	$	48,392	$	3		1	$	878	$	1

On a quarterly basis, management conducts a formal review of securities for the presence of an other-than-temporary impairment.  Management assesses whether an other-than-temporary impairment is present when the fair value of a security is less than its amortized cost basis at the balance sheet date.  For such securities, other-than-temporary impairment is considered to have occurred if the Company intends to sell the security, if it is more likely than not the Company will be required to sell the security before recovery of its amortized cost basis, or if the present value of expected cash flows is not sufficient to recover the entire amortized cost.

The unrealized losses at September 30, 2011 and 2010 are primarily a result of increases in market yields from the time of purchase.  In general, as market yields rise, the fair value of securities will decrease; as market yields fall, the fair value of securities will increase. Management generally views changes in fair value caused by changes in interest rates as temporary; therefore, these securities have not been classified as other-than-temporarily impaired.  Additionally, the impairment is also considered temporary because scheduled coupon payments have been made, it is anticipated that the entire principal balance will be collected as scheduled, and management neither intends to sell the securities, nor is it more likely than not that the Company will be required to sell the securities before the recovery of the remaining amortized cost amount, which could be at maturity.

The amortized cost and estimated fair value of securities by remaining contractual maturity without consideration for call features or pre-refunding dates as of September 30, 2011 are shown below.  Actual maturities of MBS may differ from contractual maturities because borrowers have the right to call or prepay obligations, generally without penalties.  As of September 30, 2011, the amortized cost of the securities in our portfolio which are callable or have pre-refunding dates within one year totaled $869.2 million.  Maturities of MBS depend on the repayment characteristics and experience of the underlying financial instruments. Issuers of certain investment securities have the right to call and prepay obligations with or without prepayment penalties.

	AFS				HTM				Total
			Estimated				Estimated				Estimated
	Amortized		Fair		Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value		Cost		Value
	(Dollars in thousands)
One year or less	$	301,992	$	302,329	$	1,729	$	1,745	$	303,721	$	304,074
One year through five years		447,564		449,236		663,871		668,228		1,111,435		1,117,464
Five years through ten years		159,505		172,066		492,407		513,849		651,912		685,915
Ten years and thereafter		534,468		562,808		1,212,110		1,250,570		1,746,578		1,813,378
	$	1,443,529	$	1,486,439	$	2,370,117	$	2,434,392	$	3,813,646	$	3,920,831

The following table presents the carrying value of the MBS in our portfolio by issuer as of the dates indicated.

	At September 30,
	2011		2010
	(Dollars in thousands)
FNMA	$	1,384,396	$	890,216
FHLMC		823,728		712,253
GNMA		202,340		2,452
Private Issuer		1,612		2,943
	$	2,412,076	$	1,607,864

The following table presents the taxable and non-taxable components of interest income on investment securities for the fiscal years ended September 30, 2011, 2010, and 2009.

	For the Year Ended
	September 30,
	2011		2010		2009
	(Dollars in thousands)
Taxable	$	17,180	$	13,547	$	3,526
Non-taxable		1,897		2,135		2,007
	$	19,077	$	15,682	$	5,533

The following table summarizes the amortized cost and estimated fair value of securities pledged as collateral as of the dates indicated.

	September 30,
	2011				2010
			Estimated				Estimated
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(Dollars in thousands)
Repurchase agreements	$	571,016	$	597,286	$	671,852	$	709,919
Retail deposits		44,429		44,991		--		--
Public unit deposits		116,472		124,785		120,241		128,621
Federal Reserve Bank		26,666		27,939		34,720		36,363
	$	758,583	$	795,001	$	826,813	$	874,903

During fiscal year 2010, the Bank swapped originated fixed-rate mortgage loans with the FHLMC for MBS ("loan swap transaction").  The $192.7 million of MBS received, at amortized cost, in the loan swap transaction were classified as trading securities prior to their subsequent sale by the Bank.  Proceeds from the sale of these securities were $199.1 million, resulting in a gross realized gain of $6.5 million.  The gain is included in gain on securities, net in the consolidated statements of income for the year ended September 30, 2010.  All other dispositions of securities during 2011, 2010, and 2009 were the result of principal repayments or maturities.

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Loans Receivable And Allowance For Credit Losses (Allowance For Credit Losses) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Sep. 30, 2011
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	$ 14,892
Charge-offs	(3,487)
Recoveries
Provisions (recovery) for credit losses	4,060
Ending Balance	15,465
Ratio of net charge-offs to average loans outstanding year-to-date	0.07%
Ratio of net charge offs year-to-date to average non-performing assets	8.75%
ACL for loans collectively evaluated for impairment	11,710
ACL for loans individually evaluated for impairment	3,755
One-To Four-Family Loans - Originated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	3,813
Charge-offs	(414)
Recoveries
Provisions (recovery) for credit losses	1,516
Ending Balance	4,915
ACL for loans collectively evaluated for impairment	4,580
ACL for loans individually evaluated for impairment	335
One-To Four-Family Loans - Purchased [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	10,425
Charge-offs	(2,928)
Recoveries
Provisions (recovery) for credit losses	2,404
Ending Balance	9,901
ACL for loans collectively evaluated for impairment	6,621
ACL for loans individually evaluated for impairment	3,280
One-To Four-Family Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	14,238
Charge-offs	(3,342)
Recoveries
Provisions (recovery) for credit losses	3,920
Ending Balance	14,816
ACL for loans collectively evaluated for impairment	11,201
ACL for loans individually evaluated for impairment	3,615
Multi-Family And Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	275
Recoveries
Provisions (recovery) for credit losses	(21)
Ending Balance	254
ACL for loans collectively evaluated for impairment	254
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning Balance	379
Charge-offs	(145)
Recoveries
Provisions (recovery) for credit losses	161
Ending Balance	395
ACL for loans collectively evaluated for impairment	255
ACL for loans individually evaluated for impairment	$ 140

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Stock Based Compensation (Summary Of Stock Options Outstanding And Exercisable) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Sep. 30, 2011 years	Sep. 30, 2010	Sep. 30, 2009	Sep. 30, 2008
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of Options Outstanding	906,964	919,639	841,991	912,879
Weighted Average Remaining Contractual Life (in years), Outstanding	7.44
Weighted Average Exercise Price per Share, Outstanding	$ 15.09	$ 15.08	$ 14.69	$ 13.10
Aggregate Intrinsic Value, Outstanding	$ 57
Number of Options Exercisable	772,276
Weighted Average Remaining Contractual Life (in years), Exercisable	7.14
Weighted Average Exercise Price per Share, Exercisable	$ 15.05
Aggregate Intrinsic Value, Exercisable	57
Exercise Price - $4.07 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price Range, Lower Range Limit	$ 4.07
Number of Options Outstanding	8,783
Weighted Average Remaining Contractual Life (in years), Outstanding	3.55
Weighted Average Exercise Price per Share, Outstanding	$ 4.07
Aggregate Intrinsic Value, Outstanding	57
Number of Options Exercisable	8,783
Weighted Average Remaining Contractual Life (in years), Exercisable	3.55
Weighted Average Exercise Price per Share, Exercisable	$ 4.07
Aggregate Intrinsic Value, Exercisable	$ 57
Exercise Price - $6.19 - $8.69 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price Range, Lower Range Limit	$ 6.19
Exercise Price Range, Upper Range Limit	$ 8.69
Exercise Price - $10.86 - $12.71 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price Range, Lower Range Limit	$ 10.86
Exercise Price Range, Upper Range Limit	$ 12.71
Number of Options Outstanding	6,550
Weighted Average Remaining Contractual Life (in years), Outstanding	4.95
Weighted Average Exercise Price per Share, Outstanding	$ 11.42
Number of Options Exercisable	4,926
Weighted Average Remaining Contractual Life (in years), Exercisable	1.93
Weighted Average Exercise Price per Share, Exercisable	$ 11.61
Exercise Price - $13.33 - $17.59 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price Range, Lower Range Limit	$ 13.33
Exercise Price Range, Upper Range Limit	$ 17.59
Number of Options Outstanding	839,601
Weighted Average Remaining Contractual Life (in years), Outstanding	7.52
Weighted Average Exercise Price per Share, Outstanding	$ 14.98
Number of Options Exercisable	727,349
Weighted Average Remaining Contractual Life (in years), Exercisable	7.23
Weighted Average Exercise Price per Share, Exercisable	$ 15.03
Exercise Price $19.19 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price Range, Upper Range Limit	$ 19.19
Number of Options Outstanding	52,030
Weighted Average Remaining Contractual Life (in years), Outstanding	7.08
Weighted Average Exercise Price per Share, Outstanding	$ 19.19
Number of Options Exercisable	31,218
Weighted Average Remaining Contractual Life (in years), Exercisable	7.08
Weighted Average Exercise Price per Share, Exercisable	$ 19.19

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Borrowed Funds (Other Borrowings) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2011	Sep. 30, 2010
Other borrowings, Amount	$ 515,000	$ 668,609
Weighted Average Contractual Rate	4.00%	3.97%
Repurchase Agreements [Member]
Other borrowings, Amount	515,000	615,000
Weighted Average Contractual Rate	4.00%	4.03%
Debentures [Member]
Other borrowings, Amount		$ 53,609
Weighted Average Contractual Rate		3.28%

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Securities (Tables)

12 Months Ended

Sep. 30, 2011

Securities [Abstract]

Amortized Cost, Estimated Fair Value, And Gross Unrealized Gains And Losses Of AFS And HTM Securities

	September 30, 2011
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(Dollars in thousands)
AFS:
GSE debentures	$	746,545	$	1,996	$	233	$	748,308
Municipal bonds		2,628		126		--		2,754
Trust preferred securities		3,681		--		740		2,941
MBS		690,675		41,764		3		732,436
		1,443,529		43,886		976		1,486,439
HTM:
GSE debentures		633,483		3,171		--		636,654
Municipal bonds		56,994		2,190		4		59,180
MBS		1,679,640		59,071		153		1,738,558
		2,370,117		64,432		157		2,434,392
	$	3,813,646	$	108,318	$	1,133	$	3,920,831
	September 30, 2010
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(Dollars in thousands)
AFS:
GSE debentures	$	50,151	$	104	$	--	$	50,255
Municipal bonds		2,649		170		--		2,819
Trust preferred securities		3,721		--		925		2,796
MBS		952,621		51,881		6		1,004,496
		1,009,142		52,155		931		1,060,366
HTM:
GSE debentures		1,208,829		4,441		--		1,213,270
Municipal bonds		67,957		2,654		1		70,610
MBS		603,368		26,209		3		629,574
		1,880,154		33,304		4		1,913,454
	$	2,889,296	$	85,459	$	935	$	2,973,820

Schedule Of Estimated Fair Value And Gross Unrealized Losses Of Securities In Continuous Unrealized Loss Position

	September 30, 2011
	Less Than						Equal to or Greater
	12 Months						Than 12 Months
			Estimated						Estimated
			Fair		Unrealized				Fair		Unrealized
	Count		Value		Losses		Count		Value		Losses
	(Dollars in thousands)
AFS:
GSE debentures		7	$	230,848	$	233		--	$	--	$	--
Trust preferred securities		--		--		--		1		2,941		740
MBS		5		1,189		3		--		--		--
		12	$	232,037	$	236		1	$	2,941	$	740
HTM:
GSE debentures		--	$	--	$	--		--	$	--	$	--
Municipal bonds		2		615		4		--		--		--
MBS		1		25,142		153		--		--		--
		3	$	25,757	$	157		--	$	--	$	--
	September 30, 2010
	Less Than						Equal to or Greater
	12 Months						Than 12 Months
			Estimated						Estimated
			Fair		Unrealized				Fair		Unrealized
	Count		Value		Losses		Count		Value		Losses
	(Dollars in thousands)
AFS:
GSE debentures		--	$	--	$	--		--	$	--	$	--
Trust preferred securities		--		--		--		1		2,796		925
MBS		4		1,678		5		3		359		1
		4	$	1,678	$	5		4	$	3,155	$	926
HTM:
GSE debentures		--	$	--	$	--		--	$	--	$	--
Municipal bonds		--		--		--		1		878		1
MBS		1		48,392		3		--		--		--
		1	$	48,392	$	3		1	$	878	$	1

Schedule Of Contractual Maturities

	AFS				HTM				Total
			Estimated				Estimated				Estimated
	Amortized		Fair		Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value		Cost		Value
	(Dollars in thousands)
One year or less	$	301,992	$	302,329	$	1,729	$	1,745	$	303,721	$	304,074
One year through five years		447,564		449,236		663,871		668,228		1,111,435		1,117,464
Five years through ten years		159,505		172,066		492,407		513,849		651,912		685,915
Ten years and thereafter		534,468		562,808		1,212,110		1,250,570		1,746,578		1,813,378
	$	1,443,529	$	1,486,439	$	2,370,117	$	2,434,392	$	3,813,646	$	3,920,831

Carrying Value Of Mortgage Backed Securities In Portfolio

	At September 30,
	2011		2010
	(Dollars in thousands)
FNMA	$	1,384,396	$	890,216
FHLMC		823,728		712,253
GNMA		202,340		2,452
Private Issuer		1,612		2,943
	$	2,412,076	$	1,607,864

Schedule Of Taxable And Non-taxable Components Of Interest Income

	For the Year Ended
	September 30,
	2011		2010		2009
	(Dollars in thousands)
Taxable	$	17,180	$	13,547	$	3,526
Non-taxable		1,897		2,135		2,007
	$	19,077	$	15,682	$	5,533

Schedule Of Amortized Cost And Estimated Fair Value Of Securities Pledged As Collateral Table Text Block

	September 30,
	2011				2010
			Estimated				Estimated
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(Dollars in thousands)
Repurchase agreements	$	571,016	$	597,286	$	671,852	$	709,919
Retail deposits		44,429		44,991		--		--
Public unit deposits		116,472		124,785		120,241		128,621
Federal Reserve Bank		26,666		27,939		34,720		36,363
	$	758,583	$	795,001	$	826,813	$	874,903

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Income Taxes (Deferred Income Tax Expense Results From Temporary Differences In Recognition Of Revenue And Expenses For Tax) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Income Taxes [Abstract]
Foundation contribution	$ (12,824)
Mortgage servicing rights	(885)	774	(874)
ACL	(197)	(1,771)	(1,628)
FHLB prepayment penalty		1,283	4,601
FHLB stock dividends	1,432	2,206	694
Other, net	2,827	974	755
Deferred income tax expense	$ (9,647)	$ 3,466	$ 3,548

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Selected Quarterly Financial Data (Tables)

12 Months Ended

Sep. 30, 2011

Selected Quarterly Financial Data [Abstract]

Summary Of Quarterly Data

	First			Second		Third		Fourth
	Quarter			Quarter		Quarter		Quarter		Total
	(Dollars and counts in thousands, except per share amounts)
2011
Total interest and dividend income	$	87,247		$	84,941	$	88,083	$	86,594	$	346,865
Net interest and dividend income		40,005			40,556		44,308		43,865		168,734
Provision for credit losses		650			520		1,240		1,650		4,060
Net income (loss)		(11,258	)		15,636		17,259		16,766		38,403
Basic earnings (loss) per share		(0.07	)		0.10		0.10		0.10		0.24
Diluted earnings (loss) per share		(0.07	)		0.10		0.10		0.10		0.24
Dividends paid per public share		0.800			0.675		0.075		0.075		1.625
Average number of shares outstanding		165,541			161,500		161,642		161,784		162,625
2010
Total interest and dividend income	$	98,887		$	93,707	$	91,485	$	89,972	$	374,051
Net interest and dividend income		44,854			42,683		40,887		41,141		169,565
Provision for credit losses		3,115			3,200		1,816		750		8,881
Net income		20,980			14,655		16,758		15,447		67,840
Basic EPS		0.13			0.09		0.10		0.09		0.41
Diluted EPS		0.13			0.09		0.10		0.09		0.41
Dividends paid per public share		0.790			0.500		0.500		0.500		2.290
Average number of shares outstanding		165,854			165,734		165,869		165,989		165,862

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Regulatory Capital Requirements

12 Months Ended

Sep. 30, 2011

Regulatory Capital Requirements [Abstract]

Regulatory Capital Requirements

13.   REGULATORY CAPITAL REQUIREMENTS

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a material adverse effect on the Company's financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank's assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices.  The Bank's capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings, and other factors.

The Bank's primary regulatory agency requires that the Bank maintain minimum ratios of tangible equity of 1.5%, Tier 1 (core) capital of 4%, and total risk-based capital of 8%.  As of September 30, 2011 and 2010, the most recent regulatory guidelines categorized the Bank as "well capitalized" under the regulatory framework for prompt corrective action.  To be categorized as "well capitalized," the Bank must maintain minimum Tier 1 (core) capital, Tier 1 risked based capital and total risk-based capital ratios as set forth in the table below.  Management believes, as of September 30, 2011, that the Bank meets all capital adequacy requirements to which it is subject and there were no conditions or events subsequent to September 30, 2011 that would change the Bank's category.  There are currently no regulatory capital requirements at the Company, but under the Dodd-Frank Act, the Company will become subject to regulatory capital requirements beginning July 21, 2015.

											To Be Well
											Capitalized
											Under Prompt
						For Capital					Corrective Action
	Actual					Adequacy Purposes					Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
As of September 30, 2011:
Tangible equity	$	1,369,143		15.1	%	$	135,926		1.5	%		N/A		N/A
Tier 1 (core) capital		1,369,143		15.1			362,469		4.0		$	453,086		5.0	%
Tier 1 (core) risk-based capital		1,369,143		37.9			N/A		N/A			216,551		6.0
Total risk-based capital		1,380,853		38.3			288,734		8.0			360,918		10.0
As of September 30, 2010:
Tangible equity	$	824,768		9.8	%	$	126,666		1.5	%		N/A		N/A
Tier 1 (core) capital		824,768		9.8			337,776		4.0		$	422,220		5.0	%
Tier 1 (core) risk-based capital		824,768		23.5			N/A		N/A			210,597		6.0
Total risk-based capital		835,324		23.8			280,796		8.0			350,995		10.0

A reconciliation of the Bank's equity under GAAP to regulatory capital amounts as of September 30, 2011 and 2010 is as follows:

	2011			2010
	(Dollars in thousands)
Total Bank equity as reported under GAAP	$	1,395,708		$	857,114
Unrealized gains on AFS securities		(26,314	)		(31,862	)
Other		(251	)		(484	)
Total tangible and core capital		1,369,143			824,768
ACL(1)		11,710			10,556
Total risk based capital	$	1,380,853		$	835,324

(1)   This amount represents the general valuation allowances calculated using the formula analysis.  SVA are netted against the related loan balance on the Thrift Financial Report and are therefore not included in this amount.

Under OCC and FRB regulations, there are limitations on the amount of capital the Bank may distribute to the Company.  Generally, this is limited to the earnings of the previous two calendar years and current year-to-date earnings.  Under OCC and FRB safe harbor regulations, the Bank may distribute to the Company capital not exceeding net income for the current calendar year and the prior two calendar years.  At September 30, 2011, the Bank was in compliance with the OCC and FRB safe harbor regulations.  So long as the Bank continues to remain "well capitalized" after each capital distribution, operate in a safe and sound manner, provide the OCC and FRB with updated capital levels, and non-performing asset balances and allowance for credit loss information as requested, and comply with OCC interest rate risk management guidelines, it is management's belief that the OCC and FRB will continue to allow the Bank to distribute its net income to the Company, although no assurance can be given in this regard.