Exhibit 99.1
CHARTER FINANCIAL REPORTS 1ST QUARTER EARNINGS
-- Net Interest Income increases 14% over September
-- Loan Balances Increase by $19.8 Million To $376.6 Million
-- Net income increases to $5.3 million
WEST POINT, Ga., Feb. 1 /PRNewswire-FirstCall/ -- Charter Financial
Corporation (Nasdaq: CHFN) today reported 1st quarter fiscal 2006 net
income of $5.3 million, or $0.27 per share, compared to $2.9 million, or
$0.15 per share, for same quarter of the prior year for an increase of
eighty-three percent.
The increase in net income for the quarter was attributed to a $3.1 million
improvement in noninterest income and a $840,000 increase in net interest
income. The increase in noninterest income resulted from a gain on the sale of
Freddie Mac stock. The improvement in net interest income was from growth in the
loan portfolio and increases in dividends received from Freddie Mac. These
increases to net income were partially offset by increases of $439,000 in
noninterest expense and $660,000 in tax expense.
"We made significant progress in building our retail franchise and improving the
resulting earnings," said Robert L. Johnson, president and chief executive
officer. "We increased our net loans receivable to $376.6 million, which is up
$19.8 million from the balance at September 30, 2005. The loan growth rewarded
the bank for having strengthened its commercial real estate loan officer staff.
Deposit fees also increased by approximately 12 percent to $833,000 for the
quarter from $745,000 for the prior quarter indicating continued marketing
success of our suite of checking products."
Johnson pointed out that Charter Financial continued to manage its capital by
declaring a special dividend of $0.35 in addition to its regular quarterly
dividend of $0.35.
During the quarter, the company recognized $4.8 million in income from sales of
Freddie Mac common stock compared with $1.6 million in the prior quarter. The
sales resulted from exercises of covered calls written by the Company. These
sales are a positive development because they not only allow the company to
realize the value of the asset at a measured pace but are also an indication
that the value of our Freddie Mac holdings are appreciating.
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 its subsidiary,
CharterBank, are in a mutual holding company structure. Charter Financial owns
4.4 million shares of Freddie Mac common stock with a market value of $290.0
million. 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 and per share data):
December 31,
----------------------------- September 30,
2005 2004 2005
------------- ------------- -------------
Unaudited
Total Assets $ 1,094,812 $ 1,127,228 $ 1,050,570
Loans Receivable, Net 376,647 317,250 356,808
Mortgage Securities
Available for Sale 348,000 405,835 358,461
Freddie Mac Common Stock 289,991 336,625 254,776
Other Investment Securities 17,227 13,903 17,712
Retail Deposits 254,239 238,206 250,391
Core Deposits 128,859 122,500 131,361
Total Deposits 354,977 270,241 320,129
Deferred Income Taxes 106,360 125,844 93,271
Borrowings 351,036 422,598 382,336
Realized Stockholders' Equity* 96,735 87,213 93,825
Accumulated Other
Comprehensive Income** 170,225 203,013 149,405
Total Equity 266,960 290,226 243,230
Book Value per Share $ 13.51 $ 14.69 $ 12.31
Tangible Book Value per Share 13.22 14.39 12.02
Minority Shares Outstanding 3,904,492 3,895,542 3,904,492
Total Shares Outstanding
- at Quarter End 19,762,416 19,753,466 19,762,416
Weighted Average Total Shares
Outstanding - Basic 19,533,722 19,506,259 19,529,848
Weighted Average Total Shares
Outstanding - Fully Diluted 19,575,347 19,578,844 19,566,135
* 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 and per share data):
Three months ended
---------------------------------------------
December 31,
----------------------------- September 30,
2005 2004 2005
------------- ------------- -------------
Unaudited
Total Interest Income $ 12,787 $ 10,679 $ 11,530
Total Interest Expense 6,307 5,039 5,831
Net Interest Income 6,480 5,640 5,699
Provision for Loan Losses - - 75
Net Interest Income after
Provision for Loan Losses 6,480 5,640 5,624
Noninterest Income 5,961 3,292 2,871
Noninterest Expense 5,040 4,601 4,603
Income before Income Taxes 7,401 4,331 3,892
Income Tax Expense 2,067 1,407 1,075
Net Income $ 5,334 $ 2,924 $ 2,817
Earnings per Share $ 0.27 $ 0.15 $ 0.14
Earnings per Share - Fully Diluted 0.27 0.15 0.14
Cash Dividends per Share*** 0.70 2.25 0.35
Net Charge-offs 19 213 269
Deposit Fees 833 670 745
Gain on Sale of Loans 163 233 254
Gain on Sale of Freddie Mac
Common Stock 4,769 2,577 1,603
Gain (Loss) on Covered Calls
Related to Freddie Mac
Common Stock 13 (366) 76
*** First Charter, MHC has waived its portion of these dividends, resulting in
payment only to the minority stockholders.
Three months ended
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December 31,
----------------------------- September 30,
2005 2004 2005
------------- ------------- -------------
Unaudited
Return on Equity 8.43% 4.18% 4.28%
Return on Assets 2.00 1.07 1.06
Net Interest Margin 2.50 2.12 2.21
Loan Loss Reserve as
a % of Total Loans 1.60 1.98 1.69
Loan Loss Reserve as
a % of Nonperforming Assets 128.27 106.08 118.56
Nonperforming Assets as a % of
Total Loans and REO 1.24 1.86 1.42
Net Chargeoffs as a % of
Average Loans 0.01 0.07 0.08
Nonperforming Assets to Total Assets 0.44 0.54 0.49
Bank Core Capital Ratio 8.84 9.38 9.86
Dividend Payout Ratio 46.49 270.43 43.70
Effective Tax Rate Expense 27.93 32.48 27.61