Exhibit 99.1
CHARTER FINANCIAL REPORTS Q3 EARNINGS
-- EPS of 16 Cents
-- Loans Up $11 million
-- Move to Charter Corporate Center Complete
-- Book Value Per Share up 3.9 Percent
WEST POINT, Ga., July 27 /PRNewswire-FirstCall/ -- Charter Financial
Corporation (Nasdaq: CHFN) today reported net income for the third quarter ended
June 30, 2005 of $3.2 million, or $0.16 per share, compared with $1.9 million,
or $0.10 per share, a year earlier and $2.5 million, or $0.13 per share, for the
quarter ended March 31, 2005. Results for the current quarter include a pre-tax
gain on the sale of Freddie Mac stock of $1.9 million. There were no sales of
Freddie Mac stock in the prior quarter or the prior year quarter.
Net income for the nine months ended June 30, 2005 was $8.6 million, or
$0.44 per share, compared with $5.8 million, or $0.30 per share in the
comparable period a year earlier. Results for the nine months ended June 30,
2005 included $4.5 million in pre-tax gains on the sale of Freddie Mac stock.
The comparable period the prior year included a pre-tax gain of $1.1 million
from the sale of Freddie Mac stock.
"Our loan growth approximated $10 million for each of the last two
quarters," said Robert L. Johnson, President and CEO. "The continuing loan
growth is the result of our focus on our customers' needs and the high level of
personal service they have experienced when dealing with our staff."
On June 30, 2005, Charter Financial had assets of $1.1 billion, up $13.3
million from September 30, 2004. Net loans outstanding rose to $338.2 million,
up $22.1 million from September 30, 2004. Credit quality remained strong which
enabled Charter Financial to maintain its allowance for loan losses at 1.84
percent of loans with no additional provision. Retail deposits were $237.8
million compared with $245.5 million at September 30, 2004.
"Customer service levels are being further enhanced by consolidation of our
support and management staff in the Charter Corporate Center. That move is also
improving the efficiency of our operations and should also be reflected in an
improving cost structure," Johnson added.
The third quarter was the first period during which the company's new
LaGrange location was open for the entire period. "The new facility adds to
convenience for our customers. It makes Charter Financial more competitive and
will help attract new customers from the surrounding area," Johnson said.
"Our continued strong financial performance allowed us to increase the
quarterly dividend by 40 percent to $0.35 per share beginning with the dividend
we paid in June. This equates to an annualized dividend rate of $1.40 per share.
Based on the current price of our shares, the dividend yield is approximately
four percent," said Johnson.
On a consolidated basis, Charter Financial owns 4.5 million shares of
Freddie Mac common stock with a pre-tax unrealized gain of approximately $289.9
million at June 30, 2005. Total equity was $268.8 million at June 30, 2005
compared with $258.5 million at March 31, 2005 and $272.5 million at September
30, 2004. Book value per share at June 30, 2005 increased to $13.60 from $13.09
at March 31, 2005 due to the increase in accumulated other comprehensive income.
This resulted from the increase in the market value of Freddie Mac common stock
from $63.20 per share at March 31, 2005 to $65.23 at June 30, 2005.
CharterBank's core capital was 9.86 percent of assets at June 30, 2005 and total
capital as a percent of assets was 24.85.
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 is in the mutual holding company
structure with First Charter, MHC owning approximately 80% of Charter Financial.
CharterBank is headquartered in West Point, Georgia, and operates nine
full-service 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.
Selected Financial Data (in thousands except share data):
At June 30, At March 31, At September 30, At June 30,
2005 2005 2004 2004
------------- ------------- ----------------- -------------
Unaudited
Total Assets $ 1,081,518 $ 1,070,653 $ 1,068,201 $ 1,067,732
Loans Receivable,
Net 338,201 327,184 316,151 311,590
Mortgage Securities
Available for Sale 379,886 385,406 378,357 383,636
Freddie Mac Common
Stock 295,981 288,666 300,430 292,478
Other Investment
Securities 9,951 13,823 22,157 21,877
Retail Deposits 237,799 238,275 245,463 243,068
Core Deposits 126,647 126,566 129,349 130,250
Total Deposits 291,773 287,232 279,575 293,003
Deferred Income Taxes 109,641 104,458 111,603 105,290
Borrowings 395,817 407,714 392,789 392,969
Realized Stockholders'
Equity* 91,530 89,552 92,141 89,881
Accumulated Other
Comprehensive
Income** 177,238 168,994 180,359 171,131
Total Equity 268,768 258,546 272,500 261,012
Book Value per Share $ 13.60 $ 13.09 $ 13.80 $ 13.27
Tangible Book Value
per Share 13.31 12.79 13.49 12.96
Minority Shares
Outstanding 3,900,442 3,900,442 3,893,642 3,570,550
Total Shares
Outstanding -
at Quarter End 19,758,366 19,758,366 19,751,566 19,673,968
Weighted Average
Total Shares
Outstanding -
Basic 19,521,791 19,517,703 19,437,613 19,421,990
Weighted Average
Total Shares
Outstanding -
Fully Diluted 19,570,263 19,581,137 19,478,037 19,456,345
* 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):
Three Months Ended
------------------------------------------ Nine Months Ended
June 30, March 31, June 30,
--------------------------- ------------ ---------------------------
2005 2004 2005 2005 2004
------------ ------------ ------------ ------------ ------------
Unaudited
Total Interest
Income $ 11,422 $ 9,662 $ 11,059 $ 33,159 $ 28,574
Total Interest
Expense 5,610 4,202 5,302 15,950 12,518
Net Interest
Income 5,812 5,460 5,757 17,209 16,056
Provision for
Loan Losses - - - - 30
Net Interest
Income after
Provision for
Loan Losses 5,812 5,460 5,757 17,209 16,026
Noninterest
Income 3,108 1,129 1,695 8,095 4,520
Noninterest
Expense 4,535 4,112 4,530 13,666 12,795
Income before
Income Taxes 4,385 2,477 2,922 11,638 7,751
Income Tax
Expense 1,176 605 459 3,042 1,958
Net Income $ 3,209 $ 1,872 $ 2,463 $ 8,596 $ 5,793
Earnings per
Share $ 0.16 $ 0.10 $ 0.13 $ 0.44 $ 0.30
Earnings per
Share - Fully
Diluted 0.16 0.10 0.13 0.44 0.30
Cash Dividends
per Share*** 0.35 0.25 0.25 2.85 0.85
Net Charge-offs
(Recoveries) 28 (118) 27 269 172
Deposit Fees 679 625 632 1,981 1,860
Gain on Sale
of Loans 196 345 201 630 897
Gain on Sale
of Freddie Mac
Common Stock 1,906 - - 4,483 1,125
Gain (loss) on
Covered Calls
Related to
Freddie Mac
Common Stock 141 (2) 674 449 138
*** First Charter, MHC has waived its portion of these dividends, resulting in
payment only to the minority stockholders.
Three Months Ended
------------------------------------------ Nine Months Ended
June 30, March 31, June 30,
--------------------------- ------------ ---------------------------
2005 2004 2005 2005 2004
------------ ------------ ------------ ------------ ------------
Unaudited
Performance
Ratios:
Return on
Equity 4.89% 2.98% 3.60% 4.21% 3.10%
Return on
Assets 1.19 0.72 0.90 1.06 0.75
Net Interest
Margin 2.22 2.16 2.16 2.17 2.12
Loan Loss
Reserve as a
% of Total
Loans 1.84 2.08 1.91 1.84 2.08
Loan Loss
Reserve as a
% of
Nonperforming
Assets 104.50 114.29 101.37 104.50 114.29
Nonperforming
Assets as a
% of Total
Loans and REO 1.75 1.82 1.88 1.75 1.82
Net Chargeoffs
(Recoveries) as a % of
Average Loans 0.01 (0.04) 0.01 0.08 0.06
Nonperforming
Assets to
Total Assets 0.56 0.54 0.59 0.56 0.54
Bank Core
Capital Ratio 9.86 9.08 9.64 9.86 9.08
Dividend Payout
Ratio 38.36 46.31 35.70 116.54 50.20
Effective Tax
Rate 26.81 24.41 15.72 26.14 25.26
/CONTACT: Robert L. Johnson, President & CEO of Charter Financial
Corporation, +1-706-645-1391, bjohnson@charterbank.net , or Michael Arneth,
marneth@tirc.com , or Woody Wallace, wwallace@tirc.com , both of The Investor
Relations Company, +1-847-296-4200/