- $0.05 earnings per share WEST POINT, Ga., Jan. 29
/PRNewswire-FirstCall/ -- Charter Financial Corporation (OTC:CHFN)
(BULLETIN BOARD: CHFN) today reported first quarter fiscal 2009 net
income of $957,000, or $0.05 per share, compared to $2.0 million,
or $0.11 per share, for the same quarter of the prior year. The
lower net income for the first quarter ended December 31, 2008 from
the same quarter of the prior year was primarily attributable to
the receipt of $850,625 in cash dividends on Freddie Mac stock in
the first quarter last year compared with none in the current
quarter. As previously disclosed, the company sold all its
remaining Freddie Mac stock during the quarter ended September 30,
2008. The company's total assets amounted to $814 million at
December 31, 2008 versus $795 million at September 30, 2008 and
$912 million at December 31, 2007 (which included $114.5 million
investment in Freddie Mac common stock that has since been fully
liquidated). Loans outstanding increased by $12 million during this
quarter to $440.5 million at December 31, 2008 compared to $428.5
million at September 30, 2008. Total interest income declined to
$10.0 million for the current quarter compared to $12.7 million for
the same quarter last year. Interest expense was lower at $5.9
million for current quarter measured against $7.3 million for the
prior year's corresponding quarter. The combination of lower
interest income and interest expense resulted in a decrease in net
interest income to $4.0 million for the current quarter from $5.4
million for the prior year quarter. The primary reason for the
decline was the elimination of dividends on Freddie Mac stock.
Overall interest rates declined resulting in lower interest income
and interest expense. The net impact was a modest reduction in net
interest income. The net interest margin fell to 2.21% for the
quarter versus 2.34% for the comparable quarter the prior year. Non
interest income was $2.3 million for the quarter which included a
$358,000 gain recorded on the sale of a surplus branch building.
"Despite problems in the economy and the automobile sector, KIA
Motors continues to point to a December 2009 production start date.
Hiring for its new plant in our area and related automotive
suppliers is ramping up," said Robert L. Johnson, Chairman and CEO.
"The impact of these new jobs will come in stages because many of
these people need to sell a home before moving to the area
permanently. Also, current hiring is limited to management,
supervisory and first shift workers. KIA and its tier one suppliers
have stated they will ultimately create in excess of 10,000 jobs
when both shifts are up and running at normal capacity. We have
heard that the second shift may come aboard a year later.
Eventually, we expect this to result in a relatively long economic
expansion for our market area." Johnson also said, "We continue to
find opportunities to make good loans. Our loans outstanding grew
at an annualized rate of 11% during the quarter because of a
combination of fewer loans paying off, due to slow economic
conditions, and loan originations." The company had net charge-offs
of $225,000 for the quarter compared to $518,000 in the same
quarter a year ago. Cumulative charge-offs since October 2007 are
$1.2 million while cumulative provisions for loan losses for the
same five quarters are $3.6 million. A loan loss provision of
$350,000 was recorded for quarter ended December 31, 2008. No
provision was made for the comparable quarter in 2007. This
provision brings the reserve for loan losses to 1.86% of total
loans compared to 1.33% of total loans at December 31, 2007 and
1.88% of total loans at September 30, 2008. Total deposits amounted
to $433 million compared with $439 million at December 31, 2007 and
$420 million at September 30, 2008. Borrowings increased to $273
million from $247 million for the year ago quarter. The company had
total equity of $104 million at the end of the first quarter
compared with $174 million at December 31, 2007 (which included
Freddie Mac stock) up slightly from $102 million at September 30,
2008. Capital and TARP Mr. Johnson stated, "CharterBank is well
capitalized with core regulatory capital of 10.45% and we are
profitable. In addition, the holding company, Charter Financial,
has $17.3 million in cash. With these resources in place and a
cautious view of this economic cycle, our Board of Directors has
decided to pass on applying for a government investment under the
Troubled Asset Relief Program ("TARP"). While the Treasury
Department has not yet issued terms for mutual holding companies we
have read the terms for other financial institutions and believe
our company will be better off to grow our bank and reward our
shareholders by using our current capital base and the future
profits we will be generating." 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
and per share data): December 31, September 30, 2008 2007 2008
Unaudited Total Assets $813,933 $912,263 $801,501 Loans Receivable,
Net 440,476 408,124 428,472 Mortgage Securities Available for Sale
234,982 257,221 242,848 Freddie Mac Common Stock - 114,475 - Other
Investment Securities 34,253 30,654 34,291 Retail Deposits 329,585
385,295 356,237 Core Deposits 166,452 199,986 169,499 Total
Deposits 432,909 438,708 420,175 Deferred Income Taxes (3,903)
40,355 (4,951) Borrowings 273,000 246,797 267,000 Realized
Stockholders' Equity* 108,909 108,197 109,152 Accumulated Other
Comprehensive Income** (5,171) 65,537 (6,850) Total Equity 103,738
173,734 102,302 Book Value per Share $5.60 $9.13 $5.50 Tangible
Book Value per Share 5.31 8.85 5.21 Minority Shares Outstanding
2,669,836 3,533,648 2,754,536 Total Shares Outstanding - at Quarter
End 18,527,760 19,028,458 18,612,460 Weighted Average Total Shares
Outstanding - Basic 18,569,009 19,008,966 19,022,259 Weighted
Average Total Shares Outstanding - Fully Diluted 18,569,009
19,086,059 19,082,960 * 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 approximately
38.6% Selected Operating Data (in thousands except share and per
share data): Three months ended December 31, September 30, 2008
2007 2008 Unaudited Total Interest Income $9,989 $12,689 $10,373
Total Interest Expense 5,942 7,297 6,219 Net Interest Income 4,047
5,392 4,154 Provision for Loan Losses 350 - 2,500 Net Interest
Income after Provision for Loan Losses 3,697 5,392 1,654
Noninterest Income 2,295 2,764 7,846 Noninterest Expense 4,684
5,367 5,040 Income before Income Taxes 1,308 2,789 4,460 Income Tax
Expense 351 769 1,521 Net Income $957 $2,020 $2,939 Earnings per
Share $0.05 $0.11 $0.16 Earnings per Share - Fully Diluted 0.05
0.11 0.15 Cash Dividends per Share*** 0.25 0.50 0.25 Net
Charge-offs 225 518 102 Deposit Fees 1,206 1,311 1,262 Gain on Sale
of Loans 129 260 153 Gain on Sale of Freddie Mac Common Stock -
1,348 5,885 (Loss) Gain on Covered Calls Related to Freddie Mac
Common Stock - (515) 4 *** First Charter, MHC has waived most of
its portion of these dividends, resulting in payment primarily to
the minority stockholders. Three months ended December 31,
September 30, 2008 2007 2008 Unaudited Return on Equity 3.71% 3.92%
9.51% Return on Assets 0.48 0.83 1.41 Net Interest Margin 2.21 2.34
2.16 Loan Loss Reserve as a % of Total Loans 1.86 1.33 1.88 Loan
Loss Reserve as a % of Nonperforming Assets 61.70 70.45 61.29
Nonperforming Assets as a % of Total Loans and REO 3.00 1.87 3.06
Net Charge offs as a % of Average Loans 0.05 0.13 0.02
Nonperforming Assets to Total Assets 1.67 0.86 1.69 Bank Core
Capital Ratio 10.45 9.94 10.51 Dividend Payout Ratio 69.76 151.98
27.19 Effective Tax Rate 26.82 27.57 34.10 DATASOURCE: Charter
Financial Corporation CONTACT: Robert L. Johnson, President &
CEO, , or Curtis R. Kollar, Chief Financial Officer, , 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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