Charter Financial Announces Second Quarter Fiscal 2014 Earnings of $1.5 Million

Charter Financial Announces Second Quarter Fiscal 2014 Earnings of $1.5
Million

  *Total average equity to average assets of 25.3%
  *Nonperforming non-covered assets at 0.59% of total non-covered assets
  *Basic and diluted EPS of $0.07 for quarter

WEST POINT, Ga., May 1, 2014 (GLOBE NEWSWIRE) -- Charter Financial Corporation
(the "Company") (Nasdaq:CHFN) today reported net income of $1.5 million, or
$0.07 per basic and diluted share, for the quarter ended March 31, 2014,
compared with $1.4 million, or $0.07 per basic and diluted share, for the
quarter ended March 31, 2013. The slight increase in net income for the
quarter was primarily the result of a decrease in noninterest expense and
lower loan loss provision on non-covered loans, partially offset by a decrease
in net interest income. Net income for the six months ended March 31, 2014,
was $3.1 million, or $0.14 per basic and diluted share, compared with $3.7
million, or $0.19 per basic and diluted share, for the six months ended March
31, 2013. The decrease in net income and earnings per share for the six months
ended March 31, 2014, was the result of lower net interest income, partially
offset by higher noninterest income.

The Company's total assets were $1.1 billion at March 31, 2014, a decrease of
$11.5 million from September 30, 2013. Total stockholders' equity decreased to
$270.3 million at March 31, 2014, compared to $273.8 million at September 30,
2013, due predominantly to the repurchase of shares during the current
quarter. Net non-covered loans grew $11.0 million, or 2.35%, to $481.9 million
at March 31, 2014, from $470.9 million at September30, 2013. At March31,
2014, $90.1 million of net loans receivable were covered by FDIC loss sharing,
down from $109.0 million at September30, 2013.

Chairman and CEO Robert L. Johnson said, "We recently completed our first
stock buyback program, whereby the company repurchased 571,577 shares, or
approximately 2.5% of its common stock, at a discount to tangible book value.
We also announced the approval of a new stock buyback program for up to
2,250,000 shares, or approximately 10% of our outstanding shares. Our solid
financial position affords us the ability to repurchase these shares which
currently trade at a discount to tangible book value per share. We believe
that this use of capital, along with our quarterly cash dividend, provides
excellent stockholder value. We will also continue to consider acquisitions
where the additional franchise value and earnings more than offset the book
value dilution."

Mr. Johnson continued, "Overall loan growth remains a challenge. Although we
increased net loans not covered by loss sharing $11.0 million since September
30, 2013, and $60.7 million from March31, 2013, we ended the quarter with a
net reduction of overall loan balance from September30, 2013, due to the
continued rapid run-off of the covered loan portfolio. With the purchase
discount accretion reductions in our covered loan portfolio 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 resumption of loan growth."

Total deposits were $742.1 million at March31, 2014, compared with $751.3
million at September30, 2013. Core deposits increased from $475.4 million at
September30, 2013, to $491.6 million at March31, 2014, due primarily to an
increase in transaction accounts.

Net interest income decreased to $7.5 million for the quarter ended March31,
2014, from $9.1 million for the quarter ended March31, 2013. Total interest
income decreased to $8.9 million for the quarter ended March31, 2014,
compared to $11.0 million for the same quarter last year primarily as a result
of lower average yields on loans and a $1.3 million decrease in accretion
income. Interest expense was lower at $1.4 million for the quarter ended
March31, 2014, compared with $1.9 million for the same quarter of 2013,
primarily as a result of lower expenses on certificates of deposit and
borrowings.

The net interest margin decreased to 3.18% for the quarter ended March31,
2014, compared with 4.14% for the same quarter of 2013. Also included in the
net interest margin was approximately 32 basis points of purchase discount
accretion, net of amortization, for the quarter ended March31, 2014, compared
to 128 basis points for the same quarter of 2013. The Company has excess cash
that is invested in Fed Funds and thus provides an opportunity for earnings
improvement as these funds can be deployed into loans and the repurchase of
shares.

The Company recorded no provision for loan losses on non-covered loans and a
negative provision of $54,000 on covered loans for the quarter ended March31,
2014, compared to a provision of $300,000 on non-covered loans and negative
provision of $42,000 on covered loans for the same quarter in 2013. Asset
quality remained strong with nonperforming assets not covered by loss sharing
agreements at 0.59% of total non-covered assets and the allowance for loan
losses at 177.76% of nonperforming non-covered loans at March31, 2014. The
Company had net loan charge-offs of $64,000 on non-covered loans for the three
months ended March31, 2014, compared to net loan charge-offs of $137,000 on
non-covered loans for the same period in 2013.

The Company reevaluates estimated losses quarterly on covered loans and
foreclosed properties and the related FDIC indemnification asset. The Company
has one, four and ten quarters, respectively, of loss sharing remaining on its
three commercial loss share agreements resulting from its FDIC acquisitions.
At March 31, 2014, the Company had $90.1 million of total loans, net and $9.9
million of other real estate owned covered by loss share agreements and is
aggressively working to complete the resolution of the problem assets during
the remaining loss share period. Previously, due to uncertainty about the
resolution of certain assets covered under the first agreement to expire, the
Company recorded a cumulative total impairment of its indemnification asset of
$867,000. The discount accretion included in interest income relating to these
assets acquired in the FDIC acquisitions was $1.5 million for the current
quarter and $2.7 million in the same quarter in the prior year. There is $5.9
million of discount remaining to accrete into interest income over the
remaining life of all acquired loans with the accretion heavily weighted
towards the early quarters.

During our quarterly reevaluation of cash flows on acquired loans, the Company
improved its estimate of cash flows related to covered loans resulting in a
transfer of $3.6 million from nonaccretable discount to accretable yield. In
accordance with accounting guidance, the transferred amount will be accreted
into income prospectively over the estimated remaining life of the loan pools.
Concurrently, approximately $3.0 million which previously represented cash
flows receivable from the FDIC and included in the FDIC receivable for loss
sharing agreements on the balance sheet will be amortized into interest income
over the remaining life of the loan pools or the agreement with the FDIC,
whichever is shorter. During the quarter, increased interest income on loans
related to this transfer was approximately $647,000 with off-setting
amortization of the indemnification asset of $746,000.

Noninterest income increased $240,000 to $3.2 million for the quarter ended
March31, 2014, compared with $3.0 million for the same quarter in 2013, due
primarily to an increase in bankcard fees.

Noninterest expense decreased to $8.6 million for the quarter ended March31,
2014, compared to $9.8 million for the same quarter of 2013. The decrease was
primarily attributable to a $1.2 million decrease in the net cost of real
estate owned during the quarter ended March31, 2014.

Mr. Johnson added, "We are working diligently to maintain a neutral interest
rate risk profile, given the risk of rising interest rates. As such, we are
managing our loans and securities portfolios to provide cash flow for
reinvestment and limiting the duration of these portfolios, while also
limiting the size of our securities portfolio."

Mr. Johnson concluded, "Given our strong capital position and solid operating
base, including 16 branches serving an attractive geographic region in West
Central Georgia, East Central Alabama, and the Florida Gulf Coast, we are well
positioned for long-term growth opportunities."

Stock Repurchase Program Update

During the quarter ended March 31, 2014, the Company repurchased 395,246
shares for approximately $4.2 million, or $10.75 per share. Following the end
of the second quarter of Fiscal 2014, the Company completed the 571,577 share
repurchase plan. As announced on April 22, 2014, the Company adopted a new
stock repurchase plan for 2,250,000 shares, or approximately 10% of the
current outstanding shares.

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

                           March 31,   December 31, September 30, March 31,
                           2014        2013         2013 [(1)]    2013
Total Assets                $1,077,870 $1,079,911  $1,089,406   $1,135,425
Cash and Cash Equivalents   175,114     157,268      161,452       241,997
Loans Receivable, Net       572,040     576,567      579,854       552,534
Non-covered Loans           481,907     476,467      470,863       421,175
Receivable, Net
Covered Loans Receivable,   90,133      100,100      108,991       131,359
Net
Other Real Estate Owned     10,744      11,996       15,684        18,253
Non-covered Other Real      849         1,054        1,615         1,241
Estate Owned
Covered Other Real Estate   9,895       10,942       14,069        17,012
Owned
Securities Available for    201,578     208,064      215,118       197,370
Sale
Core Deposits [(2)]         491,585     474,389      475,426       474,556
Retail Deposits [(3)]       742,064     732,654      745,900       767,206
Total Deposits              742,064     737,654      751,297       918,989
Borrowings                  55,000      60,000       60,000        70,000
Total Stockholders' Equity  270,265     273,164      273,778       144,682
                                                               
Book Value per Share [(4)]  $11.96    $11.88     $12.03      $7.46
Tangible Book Value per     $11.74    $11.66     $11.81      $7.18
Share [(4)]
                                                               
Total Shares Outstanding –  22,603,219  22,997,806   22,752,214    19,395,652
at Period End [(4)]
Weighted Average Total
Shares Outstanding – Basic  21,701,476  22,006,657   22,004,910    19,374,112
[(4)]
Weighted Average Total
Shares Outstanding – Fully  22,223,877  22,527,837   22,167,468    19,415,179
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                    Six Months Ended
                    March 31,          December September March 31,
                                        31,      30,
                    2014     2013      2013     2013      2014      2013
Total Interest       $8,923 $11,006 $9,257 $9,925  $18,181 $22,057
Income
Total Interest       1,430    1,902     1,536    1,661     2,966     3,956
Expense
Net Interest Income  7,493    9,104     7,721    8,264     15,215    18,101
Provision for Loan
Losses on            —        300       300      300       300       600
Non-covered Loans
(Credit) Provision
for Loan Losses on   (54)     (42)      2        (5)       (51)      52
Covered Loans
Net Interest Income
after Provision for  7,547    8,846     7,419    7,969     14,966    17,449
Loan Losses
Noninterest Income   3,217    2,977     4,116    2,802     7,333     6,188
Noninterest Expense  8,580    9,757     9,200    9,469     17,780    18,082
Income before Income 2,184    2,066     2,335    1,302     4,519     5,555
Taxes
Income Tax Expense   693      682       698      382       1,391     1,836
Net Income           $1,491 $1,384  $1,637 $920    $3,128  $3,719
                                                               
Earnings per Share – $0.07  $0.07   $0.07  $0.04   $0.14   $0.19
Basic [(1)]
Earnings per Share – 0.07     0.07      0.07     0.04      0.14      0.19
Fully Diluted [(1)]
Cash Dividends per   0.05     —         0.05     0.3       0.1       —
Share
                                                               
                                                               
Net Charge-offs
(Recoveries) –       $64    $137    $(6)   $492    $58     $244
Legacy Loans
Service Charges on   1,372    1,286     1,428    1,364     2,800     2,676
Deposit Accounts
Bankcard Fees        864      592       827      647       1,691     1,153
Gain on Sale of      266      385       172      192       439       735
Loans

(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
Supplemental Information (unaudited)
dollars in thousands

                          Three Months Ended                 Six Months Ended
                          March 31,       December September March 31,
                                           31,      30,
                          2014    2013    2013     2013      2014     2013
Return on Equity           2.19%   3.83%   2.39%    1.32%     2.29%    5.16%
(annualized)
Return on Assets           0.55%   0.54%   0.60%    0.33%     0.58%    0.73%
(annualized)
Net Interest Margin        3.18%   4.14%   3.29%    3.44%     3.23%    4.14%
(annualized)
Bank Core Capital Ratio    19.25%  11.33%  19.05%   18.56%    19.25%   11.33%
Bank Total Risk Based      34.18%  23.01%  33.83%   33.83%    34.18%   23.01%
Capital
Effective Tax Rate         31.73%  33.02%  29.90%   29.37%    30.78%   33.06%
Yield on Loans             5.41%   7.08%   5.55%    6.14%     5.48%    6.97%
Cost of Deposits           0.49%   0.62%   0.53%    0.55%     0.51%    0.65%
                                                                 
Ratios of Non-covered                                             
Assets:
Allowance for Loan Losses  1.71%   1.98%   1.74%    1.70%     1.71%    1.98%
as a % of Total Loans
Allowance for Loan Losses
as a % of Nonperforming    177.76% 276.92% 170.74%  280.32%   177.76%  276.92%
Loans
Nonperforming Assets as a  1.14%   1.00%   1.24%    0.94%     1.14%    1.00%
% of Total Loans and REO
Nonperforming Assets as a  0.59%   0.46%   0.64%    0.49%     0.59%    0.46%
% of Total Assets
Net Charge-offs as a % of  0.05%   0.13%   —%       0.43%     0.02%    0.11%
Average Loans (annualized)
                                                                 
                                                                 
Nonperforming Non-covered  4,743   3,086   4,975    2,921     4,743    3,086
Loans
Covered Loans 90+ days     8,825   10,907  8,661    8,574     8,825    10,907
Delinquent [(1)]
Non-covered Allowance for  8,431   8,546   8,494    8,189     8,431    8,546
Loan Losses

(1)Covered loans contractually past due greater than ninety days are reported
as accruing loans because of accretable discounts established at the time of
acquisition.

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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