- $0.55 earnings per share WEST POINT, Ga., Nov. 7 /PRNewswire-FirstCall/ -- Charter Financial Corporation (OTC:CHFN) (BULLETIN BOARD: CHFN) today reported fiscal 2008 net income totaled $10.5 million or $0.55 per share compared to $50.9 million, or $2.67 per share, for the prior year. Net income for the fourth quarter ended September 30, 2008 totaled $2.9 million, or $0.16 per share, compared with $1.1 million, or $0.06 per share, for the prior year quarter. The decrease in fiscal 2008 net income was primarily attributed to a lower level of gains on the sale of Freddie Mac stock with pre-tax gains of $9.6 million in the current year compared to $69.5 million in the prior year. The company's total assets amounted to $795 million at September 30, 2008 versus $1.02 billion at the September 30, 2007. Charter Financial liquidated its Freddie Mac common stock during fiscal 2008 for a reduction of $200.8 million in assets from the end of the prior year. Total interest income declined to $46.4 million compared to $54.6 million last year. Interest expense was $26.8 million for fiscal 2008, decreasing from $29.8 million so that net interest income declined to $19.6 million from $24.8 million a year ago. The main reason for the shortfall was the reduction in Freddie Mac dividends, to $2.5 million in fiscal 2008 from $7.3 million in fiscal 2007. The net interest margin was lower at 2.32% for the year compared to 2.46% the year before. Noninterest expense for fiscal 2008 was $20.3 million, improving from $21.9 million the prior year. Noninterest expense for the quarter was $5.0 million which was a $1.8 million improvement form the prior year quarter. "We are starting to see KIA Motors hiring for its new plant in our area and KIA Motors related suppliers are also hiring," said Robert L. Johnson, Chairman and CEO. "The KIA plant is scheduled to start production in December 2009 and KIA and its tier one suppliers have stated they will be creating in excess of 10,000 jobs. That is big for our marketing area." Johnson also stated, "We continue to see opportunities to make good loans. We originated $48.6 million during the last quarter compared to $54.2 million during the fourth quarter of 2007. Our franchise continues to grow as we increased the number of transaction accounts by ten percent." In spite of net charge-offs of only $102,000 for the quarter the Company made a good size provision for loan losses of $2.5 million. The provision was based on overall economic weakness and the weakness of some loans, primarily 1-4 family development loans. Our portfolio of 1-4 family development loans has $21.3 million outstanding at September 30, 2008. Capital Mr. Johnson stated, "During the quarter Charter Financial spent $4.4 million purchasing 442,095 of its own shares, paid $871,367 in cash dividends and had $18.6 million in cash at September 30, 2008. CharterBank is well capitalized with a core capital ratio of 10.51% which is more than twice the capital needed to meet the regulatory definition of well capitalized. Stock repurchases during the quarter completed Charter Financial's then authorized stock repurchase program. Therefore, on September 30, 2008, we announced that our board of directors authorized a stock repurchase program of 200,000 shares of common stock. We believe this buyback will prove to be a long term value for our shareholders." 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, 2008 2007 2008 Unaudited Unaudited Total Assets $794,629 $1,021,856 $877,871 Loans Receivable, Net 428,472 405,553 433,700 Mortgage Securities Available for Sale 242,848 263,351 250,881 Freddie Mac Common Stock - 200,782 53,710 Other Investment Securities 34,291 31,792 30,327 Retail Deposits 356,237 378,498 382,315 Core Deposits 169,499 203,348 184,528 Total Deposits 420,175 430,683 460,048 Deferred Income Taxes (4,951) 72,504 14,868 Borrowings 267,000 272,058 257,000 Realized Stockholders' Equity* 109,152 108,186 111,270 Accumulated Other Comprehensive Income** (6,850) 116,886 24,815 Total Equity 102,302 225,072 136,085 Book Value per Share $5.50 $11.85 $7.15 Tangible Book Value per Share 5.21 11.56 6.87 Minority Shares Outstanding 2,754,536 3,136,085 3,185,439 Total Shares Outstanding - at Quarter End 18,612,460 18,994,009 19,042,863 Weighted Average Total Shares Outstanding - Basic 19,022,870 19,097,807 19,029,060 Weighted Average Total Shares Outstanding - Fully Diluted 19,072,917 19,210,548 19,022,054 * 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, 2008 2007 2008 2007 2008 Unaudited Total Interest Income $46,378 $54,646 $10,373 $13,415 $11,373 Total Interest Expense 26,771 29,827 6,219 7,413 6,442 Net Interest Income 19,607 24,819 4,154 6,002 4,931 Provision for Loan Losses 3,250 - 2,500 - 600 Net Interest Income after Provision for Loan Losses 16,357 24,819 1,654 6,002 4,331 Noninterest Income 18,950 76,924 7,846 1,987 3,168 Noninterest Expense 20,284 21,926 5,040 6,876 5,049 Income before Income Taxes 15,023 79,817 4,460 1,113 2,450 Income Tax Expense (Benefit) 4,491 28,877 1,521 57 751 Net Income $10,532 $50,940 $2,939 $1,056 $1,699 Earnings per Share $0.55 $2.67 $0.16 $0.06 $0.09 Earnings per Share - Fully Diluted 0.55 2.65 0.15 0.06 0.09 Cash Dividends per Share*** 1.75 4.45 0.25 3.00 0.50 Net Charge-offs 1,019 73 102 27 114 Deposit Fees 5,027 4,532 1,262 1,235 1,207 Gain on Sale of Loans 762 1,152 153 296 179 Gain on Sale of Freddie Mac Common Stock 9,557 69,453 5,885 - 1,022 Gain (Loss) on Covered Calls Related to Freddie Mac Common Stock 1,723 369 4 68 241 *** 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, 2008 2007 2008 2007 2008 Unaudited Return on Equity 6.23% 20.30% 9.51% 1.80% 4.32% Return on Assets 1.16 4.81 1.41 0.42 0.75 Net Interest Margin 2.32 2.46 2.16 2.55 2.35 Loan Loss Reserve as a % of Total Loans 1.88 1.46 1.88 1.46 1.33 Loan Loss Reserve as a % of Nonperforming Assets 61.29 81.54 61.29 81.54 53.69 Nonperforming Assets as a % of Total Loans and REO 3.06 1.79 3.06 1.79 2.46 Net Chargeoffs (Recoveries) as a % of Average Loans 0.24 0.02 0.09 0.03 0.11 Nonperforming Assets to Total Assets 1.69 0.72 1.69 0.72 1.24 Bank Core Capital Ratio 10.51 9.53 10.51 9.53 9.79 Dividend Payout Ratio 66.97 27.83 27.19 891.28 93.72 Effective Tax Rate Expense (Benefit) 29.89 36.18 34.10 5.11 30.65 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, +1-312-245-2700, , for Charter Financial Corporation

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