- Net income increased to $3.9 Million WEST POINT, Ga., April 24
/PRNewswire-FirstCall/ -- Charter Financial Corporation (OTC:CHFN)
(BULLETIN BOARD: CHFN) today reported second quarter fiscal 2008
net income of $3.9 million, or $0.20 per share, compared with $2.0
million, or $0.10 per share, for same quarter of the prior year.
Net income for the six months ended March 31, 2008 was $5.9 million
or $0.31 per share compared with $47.8 million or $2.49 per share
for the comparable period in the prior year. The rise in net income
for the second quarter was attributed to a pretax $3.4 million
increase in noninterest income due to larger gains on the sale of
Freddie Mac stock and on covered calls related to Freddie Mac
stock. The increase in net income for the second quarter also
reflects a $256,000 decrease in noninterest expense that was
partially offset by a $1.2 million decline in net interest income,
a $150,000 loan loss provision, and a $399,000 increase in tax
expense. The company noted that the higher net income for the six
months ended March 31, 2007 was due to the sale of one million
shares of Freddie Mac stock during the first quarter of fiscal
2007, which resulted in a pre-tax gain of $69.5 million ($42.6
million after tax), compared with a pre-tax gain of $2.6 million in
the first two quarters of the current year. For the second fiscal
quarter 2008, the pretax gain on sale of Freddie Mac stock was $1.3
million compared with $1.3 million in fiscal first quarter 2008 and
no gain in fiscal second quarter 2007. Income from covered calls
for the quarter ended March 31, 2008 was $2.0 million compared with
a $515,000 loss for the December 2007 quarter. Of the $2.0 million
covered call income for the quarter, $1.1 million was realized and
the remaining $930,000 was from mark to market. Contributing to the
increase in noninterest income was $100,000 in earnings from an
additional investment of $15 million in bank-owned life insurance.
"We continue to monitor our asset quality closely and believe that
our loan loss reserves are adequate," said Robert L. Johnson,
President and CEO. "Less than ten percent of our assets are
acquisition, development or construction loans. More than two
thirds of our nonaccrual loans are less than thirty days
delinquent. Capital is strong, standing at 17.4% of total assets.
CharterBank's regulatory core capital is 9.67%, which is almost
twice the well capitalized requirement of 5%." Net interest income
was $5.1 million for the quarter ended March 31, 2008, which was
$1.2 million lower than the prior year quarter, with the largest
contributor to the decline being the reduced dividend on Freddie
Mac stock. Discussing the company's outlook, Johnson said: "We
continue to anticipate a significant boost to the economy in our
market area over the next several years from the new KIA Motors
Corporation assembly plant to be located between West Point and
LaGrange. "The plant is tentatively scheduled to begin operations
in 2009. KIA and its suppliers have announced intentions to employ
approximately 4,300 in West Point, Georgia and several thousand
more in surrounding communities. As a leading community bank in the
area, we expect to see accelerated growth in our retail banking
business. "We continue to make progress in building our retail
franchise. Net loans receivable climbed to a record $414.1 million,
which is up $5.9 million from December 31, 2007 and up $14.1
million from March 31, 2007. We grew retail deposits $5.0 million
for the quarter to $390.3 million compared with $385.3 million at
December 31, 2007," concluded Johnson. Additional financial
information is available at http://www.charterbank.net/. 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
CharterBank are in a mutual holding company structure. Charter
Financial owns 3.4 million shares of Freddie Mac common stock with
a market value of $84.0 million. 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 Charter Financial Corporation Selected Financial Data
(in thousands except share and per share data): March 31, December
31, September 30, March 31, 2008 2007 2007 2007 Unaudited Total
Assets $905,426 $912,263 $1,021,856 $1,064,835 Loans Receivable,
Net 414,076 408,124 405,553 399,969 Mortgage Securities Available
for Sale 270,952 257,221 263,351 285,083 Freddie Mac Common Stock
83,999 114,475 200,782 202,415 Other Investment Securities 36,548
30,654 31,792 32,249 Core Deposits* 188,397 199,986 203,348 202,715
Retail Deposits** 390,284 385,295 378,498 362,909 Total Deposits
453,102 438,708 430,683 413,682 Deferred Income Taxes 29,009 40,355
72,504 74,174 Borrowings 257,000 246,797 272,058 329,731 Realized
Stockholders' Equity*** 110,474 108,197 108,186 114,088 Accumulated
Other Comprehensive Income**** 47,413 65,637 116,886 118,799 Total
Stockholders' Equity 157,887 173,734 225,072 232,887 Book Value per
Share $8.21 $9.05 $11.73 $12.15 Tangible Book Value per Share 7.93
8.77 11.44 11.86 Minority Shares Outstanding 3,564,622 3,533,648
3,136,085 3,112,697 Total Shares Outstanding 19,225,402 18,997,284
18,994,009 19,167,765 Weighted Average Total Shares
Outstanding-Basic 19,018,570 18,997,097 19,097,807 18,967,899
Weighted Average Total Shares Outstanding - Diluted 19,064,622
19,111,743 19,210,548 19,144,179 * Core Deposits includes
transaction accounts, money market accounts, and savings accounts.
** Retail Deposits includes Core Deposits, and certificates of
deposits excluding brokered and wholesale. *** 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%. Charter Financial Corporation Selected
Operating Data (in thousands except share and per share data):
Three months ended Six months ended March 31, December 31, March
31, 2008 2007 2007 2008 2007 Unaudited Total Interest Income
$11,942 $13,722 $12,689 $24,631 $27,567 Total Interest Expense
6,812 7,366 7,297 14,109 14,838 Net Interest Income 5,130 6,356
5,392 10,522 12,729 Provision for Loan Losses 150 - - 150 - Net
Interest Income after Provision for Loan Losses 4,980 6,356 5,392
10,372 12,729 Noninterest Income 5,173 1,752 2,764 7,938 73,040
Noninterest Expense 4,828 5,084 5,367 10,197 10,024 Income before
Income Taxes 5,325 3,024 2,789 8,113 75,745 Income Tax Expense
1,451 1,052 769 2,219 27,975 Net Income $3,874 $1,972 $2,020 $5,894
$47,770 Earnings per Share - Basic $0.20 $0.10 $0.11 $0.31 $2.49
Earnings per Share - Diluted 0.20 0.10 0.11 0.31 2.46 Cash
Dividends per Share 0.50 0.50 0.50 1.00 0.95 Net Charge-offs
(Recoveries) 285 10 518 803 57 Deposit Fees 1,248 1,064 1,311 2,559
2,106 Gain on Sale of Loans 170 260 260 430 483 Gain on Sale of
Freddie Mac Common Stock 1,302 - 1,348 2,649 69,453 Gain on Covered
Calls Related to Freddie Mac Common Stock 1,993 112 (515) 1,478 300
Three months ended Six months ended March 31, December 31, March
31, 2008 2007 2007 2008 2007 Unaudited Return on Equity 9.24% 3.22%
3.92% 6.30% 36.26% Return on Assets 1.70 0.74 0.83 1.25 8.76 Net
Interest Margin 2.40 2.50 2.34 2.37 2.44 Loan Loss Reserve as a %
of Total Loans 1.28 1.48 1.33 1.28 1.48 Loan Loss Reserve as a % of
Nonperforming Assets 58.04 99.49 70.45 58.04 99.49 Nonperforming
Assets as a % of Total Loans and REO 2.19 1.49 1.87 2.19 1.49 Net
Chargeoffs as a % of Average Loans 0.27 0.01 0.51 0.39 0.03
Nonperforming Assets to Total Assets 1.02 0.57 0.86 1.02 0.57 Bank
Core Capital Ratio 9.67 8.76 9.94 9.67 8.76 Dividend Payout Ratio
41.11 78.92 151.98 79.10 6.66 Effective Tax Rate 27.25 34.78 27.57
27.36 36.93 DATASOURCE: Charter Financial Corporation CONTACT:
Robert L. Johnson, President & 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 Web site: http://www.charterbank.net/
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