- EPS Climbs to $2.65 From $0.69 in Prior Year WEST POINT, Ga.,
Nov. 20 /PRNewswire-FirstCall/ -- Charter Financial Corporation
(OTC:CHFN) (BULLETIN BOARD: CHFN) today reported fiscal 2007 net
income increased 262 percent to $50.9 million, or $2.67 per share,
from $13.3 million, or $0.69 per share, for fiscal 2006. Net income
for the fourth quarter ended September 30, 2007 totaled $1.1
million, or $0.06 per share, compared with $2.9 million, or $0.15
per share, for the prior year. The increase in fiscal 2007 net
income was primarily attributed to a pre-tax gain on the partial
sale of the company's Freddie Mac stock of $69.5 million. For the
year ended September 30, 2006, the company had a gain of $4.8
million from sales of Freddie Mac stock. There were 19,210,548
fully diluted shares outstanding at September 30, 2007 and
19,591,492 at September 30, 2006. The company's total assets were
$1.022 billion at September 30, 2007 versus almost $1.097 billion
at the September 30, 2006. Charter Financial's borrowings were down
for the year to $272 million from $338 million at the end of fiscal
2006. This decrease resulted from maturing borrowings being paid
off using cash flow from mortgage securities holdings. Total
interest income rose slightly to $54.6 million from $53.8 million
last year. Interest expense was $29.8 million for fiscal 2007, up
from $27.8 million so that our net interest income was down
slightly to $24.8 million from $26.0 million a year ago. The net
interest margin was almost steady at 2.46 versus 2.48 last year.
Noninterest expense for fiscal 2007 was $21.9 million, up $796,000
over the prior year. Noninterest expense for the quarter was $6.9
million, up over the June 2007 third quarter by $1.9 million due to
a $1.9 million noncash expense for fully vested stock options
granted during the fourth quarter. Noninterest expense was up a
little over $950,000 from the fourth quarter a year ago. Building
Retail Bank Franchise "We made significant progress in building our
retail franchise and improving its earnings," said Robert L.
Johnson, president and chief executive officer. "We increased our
retail deposits by a strong $57.2 million to $378.5 million and net
loans receivable by $30.8 million to $405.6 million. The increases
were due to effective marketing efforts and continued growth in
some segments of our local economy." Deposit fees increased 21.6
percent to $4.5 million for the year from $3.7 million for the
prior year. "The increase in deposit fees was a combination of
growth in core deposits and improved pricing of fees", Mr. Johnson
said. Mr. Johnson noted that the company added a "grocery store
branch" in LaGrange, Ga., which is operating in space set aside
inside a well known local outlet as a full branch with an ATM. That
brought the total number of branches to ten. "Like most banks, our
credit quality has been impacted by the housing slowdown as
nonperforming assets increased to .72 percent of total assets as of
September 30, 2007 from .30 percent last year. While net
charge-offs for fiscal 2007 of $73,000 were similar to 2006 levels,
we expect net charge-offs in fiscal 2008 to be somewhat higher."
Johnson said. "However, we remain comfortable that our loan loss
reserves are adequate." Our local economy is mixed with slow downs
in housing sales and the continued shrinkage of textile related
employment. The economy is being stimulated by the activity related
to the large new Kia Motors assembly plant in West Point, Georgia.
As the plant nears its opening, expected in late 2009, we expect to
see a more positive effect on the growth of our retail business. We
are continuing to prepare and position ourselves for the expected
boost to our area. Capital Management Mr. Johnson stated that
Charter Financial took significant steps in capital management with
the repurchase of over half a million shares of its stock through a
dutch auction tender offer completed in January 2007 and the
declaration of a special cash dividend of $2.50 per share in the
fourth quarter of 2007. Charter Financial increased its regular
quarterly cash dividend to $0.50 per share in the second quarter
from $0.45 per share, a current indicated annual rate of $2.00 with
an estimated four percent return should the stock be at $50. Since
converting to the mutual holding company structure in 2001 the
company has declared dividends of $13.35 per share. During fiscal
2007, the company provided distributions to stockholders through a
combination of stock buybacks of 515,329 shares for $26.0 million
and dividends of $14.2 million. CharterBank's regulatory core
capital ratio is a healthy 9.53 percent. Last year it totaled 9.71
percent. The Company's total capital to total assets is 22.03
percent. Managing Freddie Mac Common Stock During the year, the
company recognized a pre-tax gain on the sale of 1.035 million
shares of Freddie Mac stock of $69.5 million. Charter also
recognized $369,000 in income from covered calls on Freddie Mac
common stock compared with $278,000 in the prior year. At September
30, 2007, the company owned Freddie Mac common stock with a market
value of $200.8 million compared to $294.3 million at September 30,
2006. The Company holds 3,402,500 shares which had a market value
of $59.01 per share on September 30, 2007 and as of release date
were trading about $25.50 per share. About Charter Financial
Corporation Charter Financial Corporation is a savings and loan
holding company and the parent company of CharterBank, a
full-service community bank and a federal savings institution.
Charter Financial Corporation and subsidiary CharterBank are in a
mutual holding company structure. CharterBank is headquartered in
West Point, Georgia, and operates ten branches on the I-85 corridor
from LaGrange, Georgia to Auburn, Alabama. CharterBank's deposits
are insured by the Federal Deposit Insurance Corporation.
Forward-Looking Statements This release may contain
"forward-looking statements" that may be identified by use of such
words as "believe," "expect," "anticipate," "should," "planned,"
"estimated," and "potential." Examples of forward-looking
statements include, but are not limited to, estimates with respect
to our financial condition and results of operation and business
that are subject to various factors that could cause actual results
to differ materially from these estimates. These factors include
but are not limited to general and local economic conditions;
changes in interest rates, deposit flows, demand for mortgages and
other loans, real estate values, and competition; changes in
accounting principles, policies, or guidelines; changes in
legislation or regulation; and other economic, competitive,
governmental, regulatory, and technological factors affecting our
operations, pricing, products, and services. Any or all
forward-looking statements in this release and in any other public
statements we make may turn out to be wrong. They can be affected
by inaccurate assumptions we might make or known or unknown risks
and uncertainties. Consequently, no forward-looking statements can
be guaranteed. The Company disclaims any obligation to subsequently
revise or update any forward-looking statements to reflect events
or circumstances after the date of such statements or to reflect
the occurrence of anticipated or unanticipated events. Financial
Tables Follow Selected Financial Data (in thousands except share
data): September 30, September 30, June 30, 2007 2006 2007
Unaudited Unaudited Total Assets $1,021,856 $1,097,321 $1,028,646
Loans Receivable, Net 405,553 374,726 401,910 Mortgage Securities
Available for Sale 263,351 308,150 268,073 Freddie Mac Common Stock
200,782 294,339 206,532 Other Investment Securities 31,792 37,582
31,994 Retail Deposits 378,498 321,288 372,662 Core Deposits
203,348 169,129 206,001 Total Deposits 430,683 372,057 401,060
Deferred Income Taxes 72,504 108,186 74,213 Borrowings 272,058
337,928 303,759 Realized Stockholders' Equity* 108,186 95,220
114,700 Accumulated Other Comprehensive Income** 116,886 172,489
118,939 Total Equity 225,072 267,709 233,639 Book Value per Share
$11.73 $13.61 $12.19 Tangible Book Value per Share 11.44 13.33
11.90 Minority Shares Outstanding 3,136,085 3,592,863 3,116,197
Total Shares Outstanding - at Quarter End 18,994,009 19,662,981
19,170,765 Weighted Average Total Shares Outstanding - Basic
19,097,807 19,438,844 18,972,247 Weighted Average Total Shares
Outstanding - Fully Diluted 19,210,548 19,591,492 19,158,884 *
Includes Total Stockholders Equity less Accumulated Other
Comprehensive Income. ** Includes unrealized gains and losses on
Freddie Mac common stock and other investment securities adjusted
for income taxes at a tax rate of 38.6% Selected Operating Data (in
thousands except share data): Year Ended Three months ended
September 30, September 30, June 30, 2007 2006 2007 2006 2007
Unaudited Total Interest Income $54,646 $53,802 $13,415 $14,003
$13,664 Total Interest Expense 29,827 27,801 7,413 7,605 7,576 Net
Interest Income 24,819 26,001 6,002 6,398 6,088 Provision for Loan
Losses - - - - - Net Interest Income after Provision for Loan
Losses 24,819 26,001 6,002 6,398 6,088 Noninterest Income 76,924
10,826 1,987 1,383 1,897 Noninterest Expense 21,926 21,130 6,876
5,917 5,025 Income before Income Taxes 79,817 15,697 1,113 1,864
2,960 Income Tax Expense (Benefit) 28,877 2,353 57 (1,045) 846 Net
Income $50,940 $13,344 $1,056 $ 2,909 $2,114 Earnings per Share
$2.67 $0.69 $0.06 $0.15 $0.11 Earnings per Share - Fully Diluted
2.65 0.68 0.06 0.15 0.11 Cash Dividends per Share*** 4.45 3.80 3.00
2.20 0.50 Net Charge-offs (Recoveries) 73 74 27 (10) (12) Deposit
Fees 4,532 3,728 1,235 1,031 1,192 Gain on Sale of Loans 1,152 741
296 232 372 Gain on Sale of Freddie Mac Common Stock 69,453 4,769 -
- - Gain (Loss) on Covered Calls Related to Freddie Mac Common
Stock 369 278 68 (260) - *** First Charter, MHC has waived its
portion of these dividends, resulting in payment only to the
minority stockholders. Year Ended Three months ended Performance
Ratios: September 30, September 30, June 30, 2007 2006 2007 2006
2007 Unaudited Return on Equity 20.30% 5.10% 1.80% 4.64% 3.48%
Return on Assets 4.81 1.22 0.42 1.06 0.81 Net Interest Margin 2.46
2.48 2.55 2.45 2.45 Loan Loss Reserve as a % of Total Loans 1.46
1.59 1.46 1.59 1.48 Loan Loss Reserve as a % of Nonperforming
Assets 81.54 184.60 81.54 184.60 106.57 Nonperforming Assets as a %
of Total Loans and REO 1.79 0.86 1.79 0.86 1.38 Net Chargeoffs
(Recoveries) as a % of Average Loans 0.02 0.02 0.01 - -
Nonperforming Assets to Total Assets 0.72 0.30 0.72 0.30 0.55 Bank
Core Capital Ratio 9.53 9.71 9.53 9.71 9.38 Dividend Payout Ratio
27.83 101.81 891.28 271.67 73.70 Effective Tax Rate Expense
(Benefit) 36.18 14.99 5.11 (56.04) 28.57 DATASOURCE: Charter
Financial Corporation CONTACT: Robert L. Johnson, CEO, , or Curt
Kollar, CFO, , both of Charter Financial Corporation,
+1-706-645-1391; or Woody Wallace of The Investor Relations
Company, +1-312-245-2700, , for Charter Financial Corporation
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