Charter Financial Announces Third Quarter Fiscal 2014 Earnings of $1.8 Million

Charter Financial Announces Third Quarter Fiscal 2014 Earnings of $1.8 Million    *Total year to date average equity to average assets of 25.2%   *Nonperforming non-covered assets at 0.62% of total non-covered assets as     of June 30, 2014   *Net non-covered organic loan growth of 13.3% over prior year quarter   *Basic and diluted EPS of $0.09 for quarter, up $0.02, respectively, on a     year-over-year basis   *Tangible book value per share of $11.95 at June 30, 2014  WEST POINT, Ga., July 28, 2014 (GLOBE NEWSWIRE) -- Charter Financial Corporation (the "Company") (Nasdaq:CHFN) today reported net income of $1.8 million, or $0.09 per basic and diluted share, for the quarter ended June 30, 2014, compared with $1.6 million, or $0.07 per basic and diluted share, for the quarter ended June 30, 2013. The increase in net income was primarily attributable to an $834,000 negative loan loss provision on covered loans related to improved credit quality and workout experience, along with the absence of a non-covered loan loss provision in the 2014 third quarter versus $500,000 in the prior year quarter and a $573,000 increase in noninterest income. The increase was partially offset by a decline in net interest income of $1.3 million for the quarter ended June 30, 2014. Net income for the nine months ended June 30, 2014, was $4.9 million, or $0.23 and $0.22 per basic and diluted share, respectively, compared with $5.3 million, or $0.26 per basic and diluted share, for the nine months ended June 30, 2013. The decrease in net income and earnings per share for the nine months ended June 30, 2014, was primarily the result of lower net purchase discount accretion, partially offset by reduced provision for loan losses due to improved credit quality and higher noninterest income.  Quarterly Operating Results  The improvement in reported quarterly earnings for the third quarter of fiscal 2014 compared with the third quarter of fiscal 2013 resulted primarily from the following items:    *Recorded an $834,000 negative loan loss provision on covered loans.   *Borrowing expense decreased $146,000, or 19.7%.   *Deposit expense decreased by $211,000, or 21.1%.   *The cost of deposits remained stable at 49 basis points for the quarter     ended June 30, 2014 compared to 57 basis points for the quarter ended June     30, 2013.   *Net interest margin excluding accretion and amortization of loss share     receivable was 2.90% for the quarter ended June 30, 2014 compared with     2.75% the same quarter of 2013.   *Noninterest income increased by $573,000, or 21.5%.   *Deposit and bankcard fee income increased by a combined $455,000.   *Recognized a net gain of $201,000 on the sale of securities available for     sale.  The improvement was partially mitigated by the following items:    *Loan interest income decreased $809,000 primarily due to a decrease in net     accretion income.   *The average yield on loans was 5.44% for the quarter ended June 30, 2014     compared to 6.83% for the quarter ended June 30, 2013.   *Salaries and employee benefits increased by $509,000, primarily related to     stock awards made during the 2014 fiscal year.   *Noninterest expense and income tax expense increased by a combined     $493,000.   *Recorded a $248,000 loss on the write down of fixed assets associated with     a branch to be closed in the fourth quarter of fiscal 2014.   *The net cost of operations of real estate owned increased $110,000.  Chairman and CEO Robert L. Johnson said, "While economic activity remains slow in our markets we achieved modest loan growth. We increased net organic loans not covered by loss sharing by $31.7 million since September 30, 2013, and by $58.9 million from June30, 2013. 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."  Financial Condition  The Company's total assets were $1.0 billion at June30, 2014, a decrease of $49.2 million from September30, 2013. Net non-covered loans grew $40.3 million, or 8.6%, to $511.2 million at June30, 2014, from $470.9 million at September30, 2013. Of the $40.3 million in net non-covered loan growth, $8.6 million was a transfer of non-single family loans that are no longer covered by the FDIC due to the expiration of a non-single family loss sharing agreement. At June30, 2014, $71.2 million of net loans receivable were covered by FDIC loss sharing, down from $109.0 million at September30, 2013.  Total deposits were $729.6 million at June30, 2014, compared with $751.3 million at September30, 2013. Core deposits increased from $475.4 million at September30, 2013, to $486.4 million at June30, 2014, due primarily to an increase in transaction accounts.  Total stockholders' equity decreased to $243.4 million at June30, 2014, compared to $273.8 million at September30, 2013, due predominantly to the repurchase of shares during the two previous quarters.  Net Interest Income and Net Interest Margin  Net interest income decreased to $7.6 million for the quarter ended June30, 2014, from $8.9 million for the quarter ended June30, 2013. Total interest income decreased to $9.0 million for the quarter ended June30, 2014, compared to $10.7 million for the same quarter last year primarily as a result of a $1.3 million decrease in net accretion income. Interest expense was lower at $1.4 million for the quarter ended June30, 2014, compared with $1.7 million for the same quarter of 2013, primarily as a result of lower expenses on certificates of deposit and borrowings.  The Company's net interest margin, excluding accretion and amortization of loss share receivable, was 2.90% for the quarter ended June30, 2014, compared with 2.75% for the quarter ended June 30, 2013. Net interest margin, including the impact of loss share accounting, decreased to 3.26% for the quarter ended June30, 2014, compared with 3.63% 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.  Provision for Loan Losses  The Company recorded no provision for loan losses on non-covered loans and a negative provision of $834,000 on covered loans for the quarter ended June30, 2014, compared to a provision of $500,000 on non-covered loans and provision of $42,000 on covered loans for the same quarter in 2013. In the quarter ended June 30, 2014, the last quarter of the non-single family loss sharing agreement related to the Company's first FDIC-assisted acquisition, the Company successfully resolved several loss share assets resulting in the negative provision on covered loans.  Accounting for FDIC-Assisted Acquisitions  The Company reevaluates estimated losses quarterly on covered loans and foreclosed properties and the related FDIC indemnification asset. The Company has three and nine quarters, respectively, of loss sharing remaining on its second and third non-single family loss share agreements resulting from its FDIC-assisted acquisitions. At June30, 2014, the Company had $71.2 million of total loans, net and $8.0 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 periods. The discount accretion included in interest income, net of amortization of FDIC indemnification asset overstatement relating to these assets acquired in the FDIC acquisitions, was $795,000 for the current quarter and $2.1 million in the same quarter last year. There is $6.0 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. Additionally, there is an estimated $2.5 million overstatement of FDIC indemnification asset that will be amortized over the remaining life of the acquired loan pools or the agreement with the FDIC, whichever is shorter.  During the Company's 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 $1.8 million from nonaccretable discount to accretable yield related to the McIntosh Commercial Bank and First National Bank of Florida agreements. In accordance with accounting guidance, the transferred amount will be accreted into income prospectively over the estimated remaining life of the loan pools. There was also a transfer of $1.2 million from Neighborhood Community Bank's allowance discount with $400,000 being transferred into the non-covered allowance and approximately $834,000 posted as a negative provision. Concurrently, an estimate of approximately $2.5 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.  Noninterest Income and Expense  Noninterest income increased $573,000 to $3.2 million for the quarter ended June30, 2014, compared with $2.7 million for the same quarter in 2013, due primarily to an increase in bankcard and deposit fees as well as gains recognized on securities available for sale. The increase in noninterest income was partially offset by the write down of assets related to the planned closure of an underperforming bank branch in the fourth quarter of fiscal 2014 which will provide anticipated cost savings in future periods.  Noninterest expense increased to $9.0 million for the quarter ended June30, 2014, compared to $8.8 million for the same quarter of 2013. The increase was primarily attributable to an increase in stock benefits due to stock awards made in fiscal 2014.  Asset Quality  Asset quality remained strong with nonperforming assets not covered by loss sharing agreements at 0.62% of total non-covered assets and the allowance for loan losses at 1.65% of total non-covered loans and 192.06% of nonperforming non-covered loans at June30, 2014. The Company's first commercial loss share agreement expired and resulted in a transfer to the non-covered allowance for loan losses of $400,000 and a negative provision of approximately $800,000 during the third quarter of fiscal 2014 due to improved workout experience and credit quality. The Company had net loan charge-offs of $225,000 on non-covered loans for the three months ended June30, 2014, compared to net loan charge-offs of $665,000 on non-covered loans for the same period in 2013.  Capital Management  During the quarter ended June30, 2014, the Company repurchased 2.6 million shares for approximately $29.0 million, or $10.96 per share.  Mr. Johnson said, "Since December 2013, we have completed two stock buyback programs, whereby the company repurchased a combined 2.8 million shares, or approximately 12% of our common stock, at a discount to tangible book value. Meanwhile, in June we announced the approval of a new stock buyback program for up to 2,030,000 shares, or approximately 10% of our outstanding shares, which allows us to continue our share repurchase. The Company's 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."  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 Condensed Consolidated Statements of Financial Condition                                                                                                                                                                       (unaudited)      (audited)                                             June 30,         September 30,                                             2014             2013                                                              Assets                                                        Cash and amounts due from depository         $6,961,232     $10,069,875 institutions Interest-earning deposits in other financial 142,307,370      151,382,606 institutions Cash and cash equivalents                    149,268,602      161,452,481 Loans held for sale, fair value of           2,332,156        1,857,393 $2,380,651 and $1,883,244 Securities available for sale                185,040,274      215,118,407 Federal Home Loan Bank stock                 3,442,900        3,940,300 Loans receivable:                                             Not covered under FDIC loss sharing          521,035,113      480,152,265 agreements Covered under FDIC loss sharing agreements   71,883,355       112,915,868 Allowance for loan losses (covered loans)    (657,133)        (3,924,278) Unamortized loan origination fees, net       (1,252,972)      (1,100,666) (non-covered loans) Allowance for loan losses (non-covered       (8,605,698)      (8,188,896) loans) Loans receivable, net                        582,402,665      579,854,293 Other real estate owned:                                      Not covered under FDIC loss sharing          1,331,356        1,615,036 agreements Covered under FDIC loss sharing agreements   8,014,010        14,068,846 Accrued interest and dividends receivable    2,424,460        2,728,902 Premises and equipment, net                  20,739,910       21,750,756 Goodwill                                     4,325,282        4,325,282 Other intangible assets, net of amortization 503,372          803,886 Cash surrender value of life insurance       46,851,349       39,825,881 FDIC receivable for loss sharing agreements  14,921,803       29,941,862 Deferred income taxes                        10,750,880       11,350,745 Other assets                                 7,888,340        771,779 Total assets                                 $1,040,237,359 $1,089,405,849                                                              Liabilities and Stockholders' Equity                          Liabilities:                                                  Deposits                                     $729,608,889   $751,296,668 FHLB advances                                55,000,000       60,000,000 Advance payments by borrowers for taxes and  931,770          1,054,251 insurance Other liabilities                            11,282,376       3,277,094 Total liabilities                            796,823,035      815,628,013 Stockholders' equity:                                         Common stock, $0.01 par value; 19,959,971 shares issued and outstanding at June 30,    199,600          227,522 2014 and 22,752,214 shares issued and outstanding at September 30, 2013 Preferred stock, $0.01 par value; 50,000,000 shares authorized at June 30, 2014 and       —                — September 30, 2013 Additional paid-in capital                   138,090,060      171,729,570 Unearned compensation – ESOP                 (5,984,317)      (6,480,949) Retained earnings                            111,784,129      110,141,286 Accumulated other comprehensive loss         (675,148)        (1,839,593) Total stockholders' equity                   243,414,324      273,777,836                                                              Total liabilities and stockholders' equity   $1,040,237,359 $1,089,405,849   Charter Financial Corporation Condensed Consolidated Statements of Income (unaudited)                                                                                                                                                   Three Months Ended June 30, Nine Months Ended June 30,                       2014          2013          2014          2013 Interest income:                                               Loans receivable       $8,833,596  $9,642,115  $25,564,268 $29,969,312 Mortgage-backed securities and         871,899       816,602       2,794,019     2,285,175 collateralized mortgage obligations Federal Home Loan Bank 35,601        29,307        102,778       95,097 stock Other investment securities available   18,286        41,817        56,314        136,289 for sale Interest-earning deposits in other      97,321        123,869       266,816       225,263 financial institutions Amortization of FDIC   (849,919)     —             (1,596,310)   — loss share receivable Total interest income  9,006,784     10,653,710    27,187,885    32,711,136 Interest expense:                                              Deposits               790,011       1,001,276     2,479,856     3,307,644 Borrowings             595,829       741,881       1,872,357     2,391,919 Total interest expense 1,385,840     1,743,157     4,352,213     5,699,563 Net interest income    7,620,944     8,910,553     22,835,672    27,011,573 Provision for loan losses, not covered    —             500,000       300,000       1,100,000 under FDIC loss sharing agreements Provision for covered  (834,086)     41,838        (885,664)     94,321 loan losses Net interest income after provision for    8,455,030     8,368,715     23,421,336    25,817,252 loan losses Noninterest income:                                            Service charges on     1,463,698     1,277,072     4,263,639     3,952,695 deposit accounts Bankcard fees          906,013       637,943       2,596,743     1,790,922 Gain on securities     200,704       —             200,704       219,913 available for sale Bank owned life        278,487       211,491       925,467       694,431 insurance Gain on sale of loans and loan servicing     298,405       407,176       737,236       1,142,387 release fees Brokerage commissions  124,128       153,205       452,479       468,543 FDIC receivable for loss sharing           68,400        (114,993)     61,533        218,918 agreements accretion (impairment) Other                  (104,205)     90,602        1,330,929     362,959 Total noninterest      3,235,630     2,662,496     10,568,730    8,850,768 income Noninterest expenses:                                          Salaries and employee  4,969,325     4,460,128     14,522,114    13,502,879 benefits Occupancy              1,863,131     1,845,412     5,629,280     5,324,176 Legal and professional 369,360       458,735       1,309,946     1,275,322 Marketing              339,774       335,708       976,048       927,110 Federal insurance premiums and other     199,167       254,002       701,428       356,718 regulatory fees Net cost (benefit) of operations of real     87,846        (22,205)      374,538       977,302 estate owned Furniture and          225,753       203,276       550,200       615,235 equipment Postage, office        239,874       282,903       646,500       807,034 supplies and printing Core deposit intangible             94,454        116,317       300,514       364,716 amortization expense Other                  646,682       829,473       1,805,148     2,694,791 Total noninterest      9,035,366     8,763,749     26,815,716    26,845,283 expenses Income before income   2,655,294     2,267,462     7,174,350     7,822,737 taxes Income tax expense     870,116       649,513       2,261,294     2,486,092 Net income             $1,785,178  $1,617,949  $4,913,056  $5,336,645 Basic net income per   $0.09       $0.07       $0.23       $0.26 share Diluted net income per $0.09       $0.07       $0.22       $0.26 share Weighted average number of common       20,746,759    21,747,891    21,486,082    20,165,850 shares outstanding Weighted average number of common and   21,300,951    21,878,502    22,040,274    20,296,461 potential common shares outstanding   Charter Financial Corporation Supplemental Financial Data (unaudited) in thousands except per share data                                                                                                                                                                                                                 Quarter to Date                                                   Year to Date                     6/30/2014     3/31/2014    12/31/2013   9/30/2013    6/30/2013    6/30/2014    6/30/2013                                                                                               Consolidated balance                                                                           sheet data: Total assets         $1,040,237  $1,077,870 $1,079,911 $1,089,406 $1,125,362 $1,040,237 $1,125,362 Cash and cash        149,269       175,114      157,268      161,452      190,657      149,269      190,657 equivalents Loans receivable,    582,403       572,040      576,567      579,854      564,293      582,403      564,293 net Non-covered loans    511,176       481,907      476,467      470,863      443,581      511,176      443,581 receivable, net Covered loans        71,227        90,133       100,100      108,991      120,712      71,227       120,712 receivable, net Other real estate    9,345         10,744       11,996       15,684       14,546       9,345        14,546 owned Non-covered other    1,331         849          1,054        1,615        1,386        1,331        1,386 real estate owned Covered other real   8,014         9,895        10,942       14,069       13,160       8,014        13,160 estate owned Securities available 185,040       201,578      208,064      215,118      226,551      185,040      226,551 for sale Core deposits [(2)]  486,392       491,585      474,389      475,426      481,230      486,392      481,230 Total deposits       729,609       742,064      737,654      751,297      769,781      729,609      769,781 Borrowings           55,000        55,000       60,000       60,000       70,000       55,000       70,000 Total stockholders'  243,414       270,265      273,164      273,778      279,131      243,414      279,131 equity                                                                                               Consolidated                                                                                   earnings summary: Interest income      $9,007      $8,923     $9,257     $9,925     $10,654    $27,188    $32,711 Interest expense     1,386         1,430        1,536        1,661        1,743        4,352        5,700 Net interest income  7,621         7,493        7,721        8,264        8,911        22,836       27,011 Provision for loan losses on            —             —            300          300          500          300          1,100 non-covered loans Provision for loan losses on covered    (834)         (54)         2            (5)          42           (885)        94 loans Net interest income after provision for  8,455         7,547        7,419        7,969        8,369        23,421       25,817 loan losses Noninterest income   3,236         3,217        4,116        2,802        2,662        10,569       8,852 Noninterest expense  9,036         8,580        9,200        9,469        8,763        26,816       26,846 Income tax expense   870           693          698          382          650          2,261        2,486 Net income           $1,785      $1,491     $1,637     $920       $1,618     $4,913     $5,337                                                                                               Per share data:                                                                                Earnings per share – $0.09       $0.07      $0.07      $0.04      $0.07      $0.23      $0.26 basic Earnings per share – $0.09       $0.07      $0.07      $0.04      $0.07      $0.22      $0.26 fully diluted Cash dividends per   $0.05       $0.05      $0.05      $0.30      $0.05      $0.15      $0.05 share                                                                                               Weighted average     20,747        21,701       22,007       22,005       21,748       21,486       20,166 basic shares Weighted average     21,301        22,224       22,528       22,167       21,879       22,040       20,296 diluted shares Total shares         19,960        22,603       22,998       22,752       22,752       19,960       22,752 outstanding                                                                                               Book value per share $12.20      $11.96     $11.88     $12.03     $12.27     $12.20     $12.27 Tangible book value  $11.95      $11.74     $11.66     $11.81     $12.04     $11.95     $12.04 per share __________________________________                                                              (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.   Charter Financial Corporation Supplemental Information (unaudited) dollars in thousands                                                                                                                                                                                               Quarter to Date                                         Year to Date                       6/30/2014   3/31/2014  12/31/2013 9/30/2013  6/30/2013  6/30/2014  6/30/2013                                                                                     Not covered by loss                                                                  share agreements Loans receivable:                                                                    [(1)] 1-4 family residential $139,803  $135,181 $133,331 $124,571 $113,255 $139,803 $113,255 real estate Commercial real estate 284,591     271,156    267,818    269,609    254,743    284,591    254,743 Commercial             21,172      21,501     22,793     23,774     19,215     21,172     19,215 Real estate            58,459      47,112     45,200     44,653     47,904     58,459     47,904 construction Consumer and other     17,010      16,531     16,908     17,545     17,876     17,010     17,876 Total non-covered      $521,035  $491,481 $486,050 $480,152 $452,993 $521,035 $452,993 loans receivable                                                                                     Allowance for loan                                                                   losses: Balance at beginning   $8,431    $8,494   $8,189   $8,380   $8,546   $8,189   $8,190 of period Charge-offs            (238)       (93)       (68)       (501)      (705)      (399)      (1,100) Recoveries             13          30         73         10         39         116        190 Provision              —           —          300        300        500        300        1,100 Transfer [(2)]         400         —          —          —          —          400        — Balance at end of      $8,606    $8,431   $8,494   $8,189   $8,380   $8,606   $8,380 period                                                                                     Nonperforming assets:                                                                [(3)] Nonaccrual loans       $4,243    $4,743   $4,975   $2,874   $3,480   $4,243   $3,480 Loans delinquent 90 days or greater and    238         —          —          47         42         238        42 still accruing Total nonperforming    4,481       4,743      4,975      2,921      3,522      4,481      3,522 non-covered loans Other real estate      1,331       849        1,053      1,615      1,386      1,331      1,386 owned Total nonperforming    $5,812    $5,592   $6,028   $4,536   $4,908   $5,812   $4,908 non-covered assets                                                                                     Trouble debt                                                                         restructuring: Trouble debt restructurings -       $7,352    $7,603   $8,589   $12,302  $12,129  $7,352   $12,129 accruing Trouble debt restructurings -       2,094       2,094      2,261      439        500        2,094      500 nonaccrual Total trouble debt     $9,446    $9,697   $10,850  $12,741  $12,629  $9,446   $12,629 restructurings                                                                                     Covered by loss                                                                      sharing agreements Nonperforming assets:                                                                Other real estate      $8,014    $9,895   $10,942  $14,069  $13,160  $8,014   $13,160 owned Covered loans 90+ days 3,156       8,825      8,661      8,574      13,223     3,156      13,223 delinquent [ (4)] Total nonperforming    $11,170   $18,720  $19,603  $22,643  $26,383  $11,170  $26,383 covered assets __________________________________                                                    (1) Includes previously acquired loans in the amount of $9.1 million related to the Neighborhood Community Bank non single-family loss sharing agreement with the FDIC that expired in June 2014. (2) Transfer of allowance related to acquired Neighborhood Community Bank non-single family loans upon expiration of the non-single family loss sharing agreement with the FDIC in June 2014. (3) Previously acquired loans that are no longer covered under the commercial loss sharing agreement with the FDIC are excluded from this table. Due to the recognition of accretion income established at the time of acquisition, acquired loans that are greater than 90 days delinquent are regarded as accruing loans. (4) Covered loans contractually past due greater than ninety days are reported as accruing loans because of accretable discounts established at the time of acquisition.   Charter Financial Corporation Supplemental Information (unaudited)                                                                                                                                                        Quarter to Date                                    Year to Date              6/30/2014 3/31/2014 12/31/2013 9/30/2013 6/30/2013 6/30/2014 6/30/2013                                                                      Return on equity        2.71%     2.19%     2.39%      1.32%     2.38%     2.42%     3.81% (annualized) Return on assets        0.67%     0.55%     0.60%      0.33%     0.56%     0.61%     0.67% (annualized) Net interest margin        3.26%     3.18%     3.29%      3.44%     3.63%     3.24%     3.95% (annualized) Bank core     19.51%    19.25%    19.05%     18.56%    17.94%    19.51%    17.94% capital ratio Bank total risk based    32.69%    34.18%    33.83%     33.83%    34.62%    32.69%    34.62% capital Effective tax 32.77%    31.73%    29.90%     29.37%    28.64%    31.52%    31.78% rate Yield on      5.44%     5.41%     5.55%      6.14%     6.83%     5.47%     6.92% loans Cost of       0.49%     0.49%     0.53%      0.55%     0.57%     0.50%     0.62% deposits                                                                      Ratios of non-covered                                                           assets: Allowance for loan losses   1.65%     1.71%     1.74%      1.70%     1.85%     1.65%     1.85% as a % of total loans Allowance for loan losses as a % of     192.06%   177.76%   170.74%    280.32%   237.93%   192.06%   237.93% nonperforming loans Nonperforming assets as a % 1.11%     1.14%     1.24%      0.94%     1.08%     1.11%     1.08% of total loans and REO Nonperforming assets as a % 0.62%     0.59%     0.64%      0.49%     0.52%     0.62%     0.52% of total assets Net charge-offs as a % of     0.18%     0.05%     —%         0.43%     0.61%     0.08%     0.28% average loans (annualized)   Charter Financial Corporation Average Balances, Interest Rates and Yields (unaudited) dollars in thousands                                                                                                                                                                        Quarter to Date                      6/30/2014                       6/30/2013                                            Average                       Average                      Average                Yield/  Average                Yield/                      Balance      Interest   Cost    Balance      Interest   Cost                                               [(3)]                           [(3)] Assets:                                                                   Interest-earning                                                          assets: Interest-earning deposits in other     $151,348   $97      0.26%   $203,091   $124     0.24% financial institutions FHLB common stock and other equity          3,443        36         4.14    4,407        29         2.66 securities Mortgage-backed securities and collateralized        176,194      872        1.98    184,833      817        1.77 mortgage obligations available for sale Other investment securities available  18,290       18         0.40    25,986       42         0.64 for sale Loans receivable      586,797      7,189      4.90    564,863      7,543      5.34 Accretion and amortization of loss  —            795        0.54    —            2,099      1.49 share loans receivable [(1)] Total interest-earning      936,072      9,007      3.85    983,180      10,654     4.33 assets Total noninterest-earning   123,453                       170,008                 assets Total assets          $1,059,525                  $1,153,188            Liabilities and                                                           Equity: Interest-bearing                                                          liabilities: NOW accounts          $178,771   $51      0.11%   $162,665   $54      0.13% Reward accounts       48,429       29         0.24    51,863       44         0.34 Savings accounts      48,482       2          0.02    49,702       6          0.05 Money market deposit  120,903      65         0.21    141,723      68         0.19 accounts Certificate of        247,197      643        1.04    296,014      829        1.12 deposit accounts Total interest-bearing      643,782      790        0.49    701,967      1,001      0.57 deposits Borrowed funds        55,000       596        4.33    69,978       742        4.24 Total interest-bearing      698,782      1,386      0.79    771,945      1,743      0.90 liabilities Noninterest-bearing   85,061                        101,677                 deposits Other noninterest-bearing   11,979                        7,498                   liabilities Total noninterest-bearing   97,040                        109,175                 liabilities Total liabilities     795,822                       881,120                 Total stockholders'   263,703                       272,068                 equity Total liabilities and $1,059,525                  $1,153,188            stockholders' equity Net interest income               $7,621                      $8,911                                                                             Net interest-earning              $237,290                    $211,235  assets Net interest rate                           3.06%                         3.43% spread Net interest margin                         3.26%                         3.63% Net interest margin, excluding the effects                       2.90%                         2.75% of purchase accounting [(2)] Ratio of average interest-earning assets to average                           133.96%                       127.36% interest-bearing liabilities __________________________________                                         (1) Accretion of accretable purchase discount on loans acquired in FDIC-assisted acquisitions and amortization of impairment of FDIC indemnification asset. (2) Net interest income excluding accretion and amortization of loss share loans receivable divided by net interest earning assets excluding loan accretable discounts in the amount of $5.5 million and $7.9 million for the quarter ended June 30, 2014 and June 30, 2013, respectively. (3) Annualized.   Charter Financial Corporation Average Balances, Interest Rates and Yields (unaudited) dollars in thousands                                                                                                                                                                        Year to Date                      6/30/2014                       6/30/2013                                                                   Average                       Average                      Average                Yield/  Average                Yield/                      Balance      Interest   Cost    Balance      Interest   Cost                                               [(3)]                           [(3)] Assets:                                                                   Interest-earning                                                          assets: Interest-earning deposits in other     $146,869   $267     0.24%   $134,628   $225     0.22% financial institutions FHLB common stock and other equity          3,748        103        3.66    4,965        95         2.55 securities Mortgage-backed securities and collateralized        184,775      2,794      2.02    169,320      2,285      1.80 mortgage obligations available for sale Other investment securities available  19,126       56         0.39    25,141       137        0.73 for sale Loans receivable      584,630      21,249     4.85    577,277      22,840     5.28 Accretion and amortization of loss              2,719      0.62                7,129      1.64 share loans receivable [(1)] Total interest-earning      939,148      27,188     3.86    911,331      32,711     4.79 assets Total noninterest-earning   134,998                       153,793                 assets Total assets          $1,074,146                  $1,065,124            Liabilities and                                                           Equity: Interest-bearing                                                          liabilities: NOW accounts          $175,754   $149     0.11%   $154,547   $155     0.13% Rewards checking      48,342       87         0.24    52,035       146        0.37 Savings accounts      48,243       8          0.02    49,596       18         0.05 Money market deposit  127,567      211        0.22    133,077      245        0.25 accounts Certificate of        256,980      2,025      1.05    317,961      2,743      1.15 deposit accounts Total interest-bearing      656,886      2,480      0.50    707,216      3,307      0.62 deposits Borrowed funds        57,956       1,872      4.31    76,418       2,392      4.17 Total interest-bearing      714,842      4,352      0.81    783,634      5,699      0.97 liabilities Noninterest-bearing   77,572                        88,018                  deposits Other noninterest-bearing   11,459                        6,781                   liabilities Total noninterest-bearing   89,031                        94,799                  liabilities Total liabilities     803,873                       878,433                 Total stockholders'   270,273                       186,691                 equity Total liabilities and $1,074,146                  $1,065,124            stockholders' equity Net interest income               $22,836                     $27,012                                                                            Net interest earning              $224,306                    $127,697  assets Net interest rate                           3.05%                         3.82% spread Net interest margin                         3.24%                         3.95% Net interest margin, excluding the effects                       2.84%                         2.88% of purchase accounting [(2)] Ratio of average interest-earning assets to average                           131.38%                       116.3% interest-bearing liabilities __________________________________                                         (1) Accretion of accretable purchase discount on loans acquired in FDIC-assisted acquisitions and amortization of impairment of FDIC indemnification asset. (2) Net interest income excluding accretion and amortization of loss share loans receivable divided by net interest earning assets excluding loan accretable discounts in the amount of $4.5 million and $10.3 million for the nine months ended June 30, 2014 and 2013, respectively. (3) 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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