8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): July 28, 2003

CHARTER FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

United States (State or other jurisdiction of incorporation) 000-33071 (Commission File Number) 58-2659667 (IRS Employer Identification No.)

600 Third Avenue, West Point, Georgia 31833

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (706) 645-1391

Not Applicable

(Former name or former address, if changed since last report)

Item 1-6.	Not applicable.
Item 7.	Financial Statements, Pro Forma Financial Information and Exhibits
(c)	The following exhibits are filed with this Report:
Exhibit No.	Description
99.1	Press release issued by Charter Financial Corporation (the “Company”) on July 28, 2003, furnished in accordance with Item 12 of this Current Report on Form 8-K.
Item 8.	Not applicable.
Item 9.	Regulation FD
	The following information is furnished under this Item 9 in satisfaction of Item 12, “Disclosure of Results of Operations and Financial Condition.”
	On July 28, 2003, the Company announced its earnings for the second quarter of the 2003 fiscal year. A copy of the press release dated July 28, 2003, describing third quarter earnings is attached as Exhibit 99.1.
Item 10-11.	Not applicable.
Item 12.	Results of Operations and Financial Condition
	See Item 9 per SEC Release 33-8216, March 27, 2003.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CHARTER FINANCIAL CORPORATION
By:	/s/  Robert L. Johnson
Name:	Robert L. Johnson
Title:	President and Chief Executive Officer

Date: July 28, 2003

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated July 28, 2003.

EX-99.1

FOR IMMEDIATE RELEASE

Contact:	At The Investor Relations Company:
Robert L. Johnson, President & CEO	Karl Plath or Woody Wallace
706-645-1391	847-296-4200
bjohnson@charterbank.net	kplath@tirc.com or wwallace@tirc.com

CHARTER FINANCIAL CORPORATION

ANNOUNCES THIRD-QUARTER EARNINGS

WEST POINT, Georgia, July 28, 2003—Charter Financial Corporation (Nasdaq: CHFN) today announced net income for the third quarter ended June 30, 2003 rose to $543,780, or three cents per share, from $193,401, or one cent per share, in the third quarter a year earlier. Net income for the first nine months totaled $1.2 million, or six cents per share, compared with $1.7 million, or nine cents per share, for the first nine months of the prior year. This is the first full quarter of operating results that includes Eagle Bank which was acquired as of February 21, 2003.

At June 30, 2003, the Company had assets of $1.013 billion and loans outstanding of $275.7 million, up from $974.1 million and $259.4 million, respectively, at March 31, 2003. At June 30, 2003, retail deposits totaled $230.4 million, while core deposits increased to $98.6 million at June 30, 2003 from $69.5 million at September 30, 2002. At March 31, 2003, core deposits were $95.6 million. The substantial increase in core deposits resulted from the acquisition of Eagle Bank.

Equity at June 30, 2003 was $227.0 million. Realized stockholders’ equity (stockholders’ equity excluding cumulative comprehensive income, or unrealized gains on securities including Freddie Mac common stock) totaled $84.4 million at June 30, 2003 versus $93.2 million at September 30, 2002 with the difference attributable to the purchase of treasury stock for the Company’s restricted stock program.

During the third quarter of both years, Charter Financial’s net interest income remained at $4.0 million due to margin compression caused by low interest rates. Noninterest income rose to $1.4 million for the quarter from a loss of $707,000 for the comparable quarter in 2002, a $2.1 million increase. The quarter ended June 30, 2002 included a $1.5 million loss on the sale of a WorldCom bond. Deposit fees were up to $383,000 in the quarter from $241,000 and gain on the sale of loans was up to $886,000 from $354,000. Noninterest expense was $4.8 million for the quarter compared with $3.2 million in the year-earlier quarter. Compensation and benefits expense increased to $2.8 million from $1.5 million with stock-based benefits accounting for 42.3 percent of the increase.

In making the announcement Robert L. Johnson, president and chief executive officer, stated, “It is noteworthy to report higher net income for the quarter despite low interest rates, which are compressing our net interest margin. The nationwide high mortgage

refinance boom is pushing loan and investment yields down versus the long-term fixed-rate components of our funding that we locked in during the first half of 2001.” Term funding rates were locked in on $127 million of borrowings that average 5.75 percent on rate and have seven-and-a half years left to maturity. While significantly reduced from the March quarter, another factor negatively affecting interest margins is faster amortization of premiums on securities. During the nine months, Charter Financial’s net interest income rose slightly to $11.2 million from $11.1 million in the year-earlier period. Noninterest income in the first nine months rose to $3.7 million from $1.6 million, net of the prior period loss on the corporate bond, due to increased deposit fees and gains on the sale of loans. Noninterest expense was $13.5 million for the first nine months compared with $10.7 million in the similar year-earlier period.

During the quarter, Charter Financial implemented a pilot program of writing covered calls on 250,000 shares of Freddie Mac stock to enhance the yield on Freddie Mac common stock. On a consolidated basis Charter Financial owns 4.66 million shares with a pre-tax unrealized gain of approximately $230.0 million at June 30, 2003. Charter Financial also increased its quarterly cash dividend from 10 cents per share to 20 cents per share.

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. In October 2001, Charter Financial Corporation and subsidiary CharterBank completed reorganization into a mutual holding company structure and related initial public offering of the company’s common stock. CharterBank is headquartered in West Point, Georgia, and operates eight 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 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 per share data)

	At June 30, 2003		At September 30, 2002
	Unaudited
Total Assets	$	1,013,548	$	982,561
Loans Receivable, net		275,716		208,654
Mortgage Securities Available for Sale		418,245		455,940
Freddie Mac Common Stock		236,334		260,214
Other Investment Securities		13,182		12,059
Retail Deposits		230,376		173,078
Core Deposits		98,605		69,480
Total Deposits		276,612		210,746
Deferred Income Taxes		87,296		96,040
Borrowings		391,516		410,963
Realized Stockholders Equity*		84,408		93,205
Accumulated Other Comprehensive Income**		142,589		155,961
Total Equity		226,997		249,166
Minority Shares Outstanding		3,681,304		3,963,481
Total Shares Outstanding		19,539,228		19,821,405

  *Includes Common Stock, Treasury Stock, Additional Paid-In Capital, Retained Earnings and Unearned Compensation.

**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 per share data)

	Three Months Ended June 30,					Nine Months Ended June 30,
	2003		2002			2003		2002
	Unaudited					Unaudited
Total Interest Income	$	8,545	$	9,381		$	25,511	$	27,768
Total Interest Expense		4,594		5,352			14,326		16,386
Net Interest Income		3,951		4,029			11,185		11,382
Provision for Loan Losses		0		75			0		250
Net Interest Income after Provision for Loan Losses		3,951		3,954			11,185		11,132
Noninterest Income (Loss)		1,426		(707	)		3,655		1,564
Noninterest Expense		4,753		3,168			13,452		10,697
Income before Income Taxes		624		79			1,388		1,999
Income Tax Expense (Benefit)		80		(114	)		181		275
Net Income		544		193			1,207		1,724
Earnings per Share	$	0.03	$	0.01		$	0.06	$	0.09

	Quarter Ended June 30,				Year-to-Date
Performance Ratios:	2003		2002		2003		2002
	Unaudited				Unaudited
Return on Realized Equity	2.56	%	0.85	%	1.81	%	2.44	%
Return on Realized Assets	0.30	%	0.11	%	0.23	%	0.35	%
Return on Equity	0.89	%	0.29	%	0.64	%	0.71	%
Return on Assets	0.22	%	0.08	%	0.17	%	0.23	%
Loan Loss reserve as a % of Nonperforming assets	—		—		137.22	%	121.54	%
Nonperforming assets to total assets	—		—		0.51	%	0.42	%
Bank Core Capital Ratio	—		—		8.81	%	9.84	%