Charter Financial Announces First Quarter Fiscal 2014 Earnings of $1.6 Million

Charter Financial Announces First Quarter Fiscal 2014 Earnings of $1.6 Million

  *Total equity to assets of 25.3%
  *Net loan recoveries for quarter
  *Nonperforming non-covered assets at 0.64% of total non-covered assets
  *Basic and diluted EPS of $0.07 for quarter

WEST POINT, Ga., Jan. 30, 2014 (GLOBE NEWSWIRE) -- Charter Financial
Corporation (the "Company") (Nasdaq:CHFN) today reported net income of $1.6
million, or $0.07 per basic and diluted share, for the quarter ended December
31, 2013, compared with $2.3 million, or $0.12 per basic and diluted share,
for the quarter ended December 31, 2012. The decrease in net income and
earnings per share for the quarter was the result of lower net interest income
and higher noninterest expense, partially offset by higher noninterest income.

The Company's total assets were $1.1 billion at December 31, 2013, a decrease
of $9.5 million from September 30, 2013. Total stockholders' equity of $273.2
million remained relatively unchanged at December 31, 2013, compared to $273.8
million at September 30, 2013. Net non-covered loans grew $5.6 million, or
1.19%, to $476.5 million at December 31, 2013 from $470.9 million at September
30, 2013. At December 31, 2013, $100.1 million of net loans receivable were
covered by FDIC loss sharing, down from $109.0 million at September 30, 2013.

Chairman and CEO Robert L. Johnson said, "In December our stockholders
approved a stock repurchase program, which allowed the Company to commence the
purchase of our stock near the end of the month. In just the final days of
December we repurchased 114,500 shares for approximately $1.2 million, or
$10.86 per share. We are pleased with our solid financial position, which
affords us the ability to be able to repurchase shares at a discount to
tangible book value, and believe that this use of capital, along with our
quarterly dividend, provides excellent stockholder value."

Mr. Johnson continued, "Overall loan growth remains a challenge. Although we
increased net loans not covered by loss sharing $5.6 million since September
30, 2013 and $50.1 million from December 31, 2012, we ended the quarter with a
net reduction of overall loan balance from September 30, 2013. With the
purchase discount accretion reductions and limited opportunity for loan
growth, we will continue to face significant near-term earnings challenges.
However, longer term, we remain optimistic in our ability to improve earnings
upon the movement of our cash, which is currently invested in Fed Funds, into
loans."

Total deposits were $737.7 million at December31, 2013 compared with $751.3
million at September30, 2013. Core deposits remained relatively unchanged
from $475.4 million at September30, 2013 to $474.4 million at December31,
2013.

Net interest income decreased to $7.7 million for the quarter ended
December31, 2013, from $9.0 million for the quarter ended December31, 2012.
Total interest income decreased to $9.3 million for the quarter ended
December31, 2013, compared to $11.1 million for the same quarter last year
primarily as a result of lower average yields on loans and a $1.1 million
decrease in accretion income. Interest expense was lower at $1.5 million for
the quarter ended December31, 2013, compared with $2.1 million for the same
quarter of 2012 primarily as a result of lower expenses on certificates of
deposit and borrowings.

The net interest margin decreased to 3.29% for the quarter ended December31,
2013, compared with 4.13% for the same quarter of 2012. Also included in the
net interest margin was approximately 52 basis points of purchase discount
accretion for the quarter ended December31, 2013. The Company still has cash
from its recent second step conversion completed in April 2013 that is
invested in Fed Funds and thus provides an opportunity for earnings
improvement as these funds can be deployed into loans.

The Company recorded a provision for loan losses of $300,000 on non-covered
loans and $2,000 on covered loans for the quarter ended December31, 2013,
compared to provisions of $300,000 on non-covered loans and $95,000 on covered
loans for the same quarter in 2012. Asset quality remained strong with
nonperforming assets not covered by loss sharing agreements at 0.64% of total
non-covered assets and the allowance for loan losses at 170.74% of
nonperforming non-covered loans at December31, 2013. The Company had net loan
recoveries of $6,000 on non-covered loans for the three months ended
December31, 2013, compared to net loan charge-offs of $108,000 on non-covered
loans for the same period in 2012.

The Company reevaluates estimated losses quarterly on covered loans and
foreclosed properties and the related FDIC indemnification asset. The Company
has two, five and eleven quarters, respectively, of loss sharing remaining on
its three commercial loss share agreements resulting from its FDIC
acquisitions. The Company is aggressively working to complete the resolution
of the problem assets during the remaining loss share period. Due to
uncertainty about the resolution of certain assets covered under the first
agreement to expire, the Company recorded a $225,000 impairment of its
indemnification asset this quarter bringing the impairment to a cumulative
total of $867,000 at December31, 2013. The discount accretion included in
interest income relating to these assets acquired in the FDIC acquisitions was
$1.2 million for the current quarter and $2.3 million in the same quarter in
the prior year. There is $3.7 million of discount remaining to accrete into
interest income over the remaining life of the loans with the accretion
heavily weighted towards the early quarters.

Noninterest income increased to $4.1 million for the quarter ended
December31, 2013, compared with $3.2 million for the same quarter in 2012.
Included in noninterest income was a true-up receipt from the completion and
renegotiation of a processing contract of approximately $1.1 million. This
increase in noninterest income was partially offset by the $225,000 impairment
of the FDIC indemnification asset.

Noninterest expense increased to $9.2 million for the quarter ended
December31, 2013, compared to $8.3 million for the same quarter of 2012. The
increase was primarily attributable to a $481,000 increase in the net cost of
real estate owned and a $231,000 increase in legal and professional fees.

Mr. Johnson added, "We are very sensitive to the risk of reductions in our
book value from rising interest rates. We are working diligently to maintain a
neutral interest rate risk profile. We are managing our loans and securities
portfolios to provide cash flow for reinvestment and limiting the duration of
these portfolios. In addition, we are also limiting the size of our securities
portfolio."

Mr. Johnson concluded, "Our network of 16 branches serves an attractive
geographic region in West Central Georgia, East Central Alabama, and the
Florida Gulf Coast and our solid capital position places CharterBank in a
unique position of strength versus many of its peers. With our strong capital
and a solid operating base, we are well positioned to build a valuable
community bank footprint."

Stock Repurchase Program Update

As announced on December 19, 2013, the Company's stockholders approved a stock
repurchase program which is being used to fund grants of restricted stock
under the Company's 2013 Equity Incentive Plan. During the first quarter of
fiscal 2014, the Company repurchased 114,500 shares for approximately $1.2
million, or $10.86 per share. Under the repurchase program, the Company may
repurchase up to 571,577 shares of its common stock.

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. On April 8,
2013, Charter Financial completed its conversion and reorganization from the
mutual holding company form of organization to the stock holding company form
of organization. CharterBank is headquartered in West Point, Georgia, and
operates branches in West Central Georgia, East Central Alabama, and the
Florida Gulf Coast. CharterBank's deposits are insured by the Federal Deposit
Insurance Corporation.

Forward-Looking Statements

This release contains "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. Except as
required by law, 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.

                                                              
Charter Financial Corporation
Selected Financial Data (unaudited)
in thousands except share and per share data
                                                              
                         December 31, September 30, June 30,     December 31,
                         2013         2013 [(1)]   2013         2012
                                                              
Total Assets              $1,079,911 $1,089,406  $1,125,362 $1,034,074
Cash and Cash Equivalents 157,268      161,452       190,657      130,248
Loans Receivable, Net     576,567      579,854       564,293      575,638
Non-covered Loans         476,467      470,863       443,581      426,370
Receivable, Net
Covered Loans Receivable, 100,100      108,991       120,712      149,268
Net
Other Real Estate Owned   11,996       15,684        14,546       22,444
Non-covered Other Real    1,054        1,615         1,386        1,414
Estate Owned
Covered Other Real Estate 10,942       14,069        13,160       21,030
Owned
Securities Available for  208,064      215,118       226,551      179,246
Sale
Core Deposits [(2)]       474,389      475,426       481,230      463,345
Retail Deposits [(3)]     732,654      745,900       761,602      775,371
Total Deposits            737,654      751,297       769,781      806,118
Borrowings                60,000       60,000        70,000       80,000
Total Stockholders'       273,164      273,778       279,131      143,989
Equity
                                                              
                                                              
Book Value per Share      $11.88     $12.03      $12.27     $7.43
[(4)]
Tangible Book Value per   $11.66     $11.81      $12.04     $7.16
Share [(4)]
                                                              
                                                              
Minority Shares           —            —             —            7,911,531
Outstanding
Total Shares Outstanding  22,997,806   22,752,214    22,752,214   19,369,455
– at Period End [(4)]
Weighted Average Total
Shares Outstanding –      22,006,657   22,004,910    21,747,891   19,375,531
Basic [(4)]
Weighted Average Total
Shares Outstanding –      22,527,837   22,167,468    21,878,502   19,425,275
Fully Diluted [(4)]
                                                              

(1) Financial information as of September30, 2013 has been derived from
audited financial statements.
(2) Core deposits include transaction accounts, money market accounts and
savings accounts.
(3) Retail deposits include Core Deposits and certificates of deposit
excluding brokered and wholesale certificates of deposit.
(4) Share and per share amounts have been restated to reflect the completion
of the second-step conversion using a conversion ratio of 1.2471 on shares
held by the public prior to April 8, 2013.

                                                                 

Charter Financial Corporation
Selected Operating Data (unaudited)
in thousands except share and per share data
                                                                 
                                   Three Months Ended
                                   December 31,       September 30, June 30,
                                   2013     2012      2013          2013
                                                                 
Total Interest Income               $9,257 $11,052 $9,925      $10,654
Total Interest Expense              1,536    2,055     1,661         1,743
Net Interest Income                 7,721    8,997     8,264         8,911
Provision for Loan Losses on        300      300       300           500
Non-covered Loans
Provision (Credit) for Loan Losses  2        95        (5)           42
on Covered Loans
Net Interest Income after Provision 7,419    8,602     7,969         8,369
for Loan Losses
Noninterest Income                  4,116    3,210     2,802         2,662
Noninterest Expense                 9,200    8,325     9,469         8,763
Income before Income Taxes          2,335    3,487     1,302         2,268
Income Tax Expense                  698      1,154     382           650
Net Income                          $1,637 $2,333  $920        $1,618
                                                                 
Earnings per Share – Basic [(1)]    $0.07  $0.12   $0.04       $0.07
Earnings per Share – Fully Diluted  0.07     0.12      0.04          0.07
[(1)]
Cash Dividends per Share            0.05     —         0.30          0.05
                                                                 
                                                                 
Net (Recoveries) Charge-offs –      $(6)     $108    $492        $665
Legacy Loans
Deposit Fees                        1,428    1,390     1,364         1,277
Bankcard fees                       827      561       647           638
Gain on Sale of Loans               172      350       192           407
                                                                 

(1) Shares held by the public prior to April 8, 2013, have been restated to
reflect the completion of the second-step conversion using a conversion ratio
of 1.2471.

                                                                  

Charter Financial Corporation
Financial Ratios (unaudited)
                                                                  
                                       Three Months Ended
                                       December 31,    September 30, June 30,
                                       2013    2012    2013          2013
                                                                  
Return on Equity (annualized)           2.39%   6.51%   1.32%         2.38%
Return on Assets (annualized)           0.60%   0.92%   0.33%         0.56%
Net Interest Margin (annualized)        3.29%   4.13%   3.44%         3.63%
Bank Core Capital Ratio                 19.05%  12.30%  18.56%        17.94%
Bank Total Risk Based Capital           33.83%  20.06%  33.83%        34.62%
Effective Tax Rate                      29.90%  33.10%  29.37%        28.64%
                                                                  
Ratios of Non-covered Assets:                                      
Allowance for Loan Losses as a % of     1.74%   1.92%   1.70%         1.85%
Total Loans
Allowance for Loan Losses as a % of     170.74% 262.64% 280.32%       237.93%
Nonperforming Loans
Nonperforming Assets as a % of Total    1.24%   1.06%   0.94%         1.08%
Loans and REO
Nonperforming Assets as a % of Total    0.64%   0.53%   0.49%         0.52%
Assets
Net Charge-offs as a % of Average Loans —%      0.10%   0.43%         0.61%
(annualized)
                                                                  

CONTACT: Robert L. Johnson, Chairman & CEO
         Curt Kollar, CFO
         706-645-1391
         bjohnson@charterbank.net or
         ckollar@charterbank.net
        
         At Dresner Corporate Services
         Steve Carr
         312-780-7211
         scarr@dresnerco.com
 
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