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): April 27, 2005

CHARTER FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

United States	000-33071	58-2659667
(State or other jurisdiction of incorporation)	(Commission File Number)	(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.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On April 27, 2005, Charter Financial Corporation (the “Company”) announced its second quarter earnings for the 2005 fiscal year. A copy of the press release dated April 27, 2005, describing second quarter earnings is attached as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits

(c) The following exhibit is furnished with this Report:

Exhibit No.	Description
99.1	Press release issued by Charter Financial Corporation (the “Company”) on April 27, 2005 furnished in accordance with Item 12 of this Current Report on Form 8-K.

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.

Dated: April 27, 2005	CHARTER FINANCIAL CORPORATION
	By:	\s\ Robert L. Johnson
	Name:	Robert L. Johnson
	Title:	President and Chief Executive Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release issued by the Company on April 27, 2005.

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

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

CHARTER FINANCIAL REPORTS Q2 EARNINGS

•    Computer Conversion Completed

•    New LaGrange Branch Opened    

•    Total Loans Increase $10 Million 

WEST POINT, Georgia, April 27, 2005—Charter Financial Corporation (NASDAQ: CHFN) today reported second-quarter (ended March 31, 2005) net income of $2.5 million, or $0.13 per share, compared with $2.2 million, or $0.11 per share, for the year earlier quarter and $2.9 million, or $0.15 per share, for the prior quarter (ended December 31, 2004). There were no sales of Freddie Mac stock during the current quarter while the prior year quarter included a $592,000 pre-tax gain on sale of Freddie Mac stock and the prior quarter included $2.6 million in pre-tax gain on the sale of Freddie Mac stock.

Net income for the six months ended March 31, 2005 was $5.4 million, or $0.28 per share, compared with $3.9 million, or $0.20 per share, for the same period in the prior year. Results for the first six months of fiscal 2005 included $2.6 million in pre-tax gains on the sale of Freddie Mac stock while the comparable period of the prior year included gains of $1.1 million before taxes.

“We continue to focus on our retail franchise and operations,” said Robert L. Johnson, president and chief executive officer. “We successfully completed the computer conversion of our deposit and loan systems. The new systems will benefit our customers through a better experience in executing transactions and our shareholders through enabling us to be more efficient as we expand our retail customer base. It will also allow us to introduce new products and services more easily. Also, in early March we opened our second LaGrange branch, which significantly improves convenience for our LaGrange customers.”

Net interest income in the second quarter of fiscal 2005 was $5.8 million, an increase of $117,000 over the first quarter and $337,000 over the prior year’s quarter. The increases are the result of increased dividends on Freddie Mac stock, partially offset by the impact of higher short term interest rates.

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On a consolidated basis, Charter Financial owns 4.6 million shares of Freddie Mac common stock with a pre-tax unrealized gain of approximately $282.5 million at March 31, 2005. Total equity was $258.5 million at March 31, 2005 compared with $272.5 million at September 30, 2004.

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 is in a mutual holding structure with First Charter, MHC owning approximately 80% of Charter Financial. 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.

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Selected Financial Data (in thousands except share data):

	At March 31, 2005		At December 31, 2004		At September 30, 2004		At March 31, 2004
	Unaudited
Total Assets	$	1,070,653	$	1,127,228	$	1,068,201	$	1,015,957
Loans Receivable, Net		327,184		317,250		316,151		303,446
Mortgage Securities Available for Sale		385,406		405,835		378,357		374,084
Freddie Mac Common Stock		288,666		336,625		300,430		272,887
Other Investment Securities		13,823		13,903		22,157		20,375
Retail Deposits		238,259		238,206		245,463		245,306
Core Deposits		126,566		122,500		129,349		130,002
Total Deposits		287,232		270,241		279,575		291,001
Deferred Income Taxes		104,458		125,844		111,603		100,859
Borrowings		407,714		422,598		392,789		358,167
Realized Stockholders’ Equity*		89,552		87,213		92,141		88,856
Accumulated Other Comprehensive Income**		168,994		203,013		180,359		164,082
Total Equity		258,546		290,226		272,500		252,938
Book Value per Share	$	13.09	$	14.69	$	13.80	$	12.86
Tangible Book Value per Share		12.79		14.39		13.49		12.55
Minority Shares Outstanding		3,900,442		3,895,542		3,893,642		3,815,344
Total Shares Outstanding – at Quarter End		19,758,366		19,753,466		19,751,566		19,673,268
Weighted Average Shares Outstanding – Basic***		19,517,703		19,506,259		19,437,613		19,418,770
Weighted Average Shares Outstanding – Fully Diluted***		19,581,137		19,578,844		19,478,037		19,457,071

* Total Stockholders Equity less Accumulated Other Comprehensive Income.

** Unrealized gains and losses on Freddie Mac common stock and other investment securities, adjusted for income taxes at a tax rate of 38.6%

*** Year to date amounts presented.

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Selected Operating Data (in thousands except share data):

	Three Months Ended							Six Months Ended
	March 31,				December 31, 2004
	2005		2004					March 31, 2005		March 31, 2004
	Unaudited
Total Interest Income	$	11,059	$	9,443	$	10,679		$	21,738	$	18,912
Total Interest Expense		5,302		4,023		5,039			10,341		8,317
Net Interest Income		5,757		5,420		5,640			11,397		10,595
Provision for Loan Losses		—		—		—			—		30
Net Interest Income after Provision for Loan Losses		5,757		5,420		5,640			11,397		10,565
Noninterest Income		1,695		1,844		3,292			4,987		3,391
Noninterest Expense		4,530		4,283		4,601			9,131		8,682
Income before Income Taxes		2,922		2,981		4,331			7,253		5,274
Income Tax Expense		459		775		1,407			1,866		1,353
Net Income	$	2,463	$	2,206	$	2,924		$	5,387	$	3,921
Earnings per Share	$	0.13	$	0.11	$	0.15		$	0.28	$	0.20
Earnings per Share – Fully Diluted		0.13		0.11		0.15			0.28		0.20
Cash Dividends per Share***		0.25		0.40		2.25			2.50		0.60
Net Charge-offs (Recoveries)		33		222		213			246		290
Deposit Fees		632		673		670			1,302		1,235
Gain on Sale of Loans		201		310		233			434		552
Gain on Sale of Freddie Mac Common Stock		—		592		2,577			2,577		1,125
Gain (loss) on Covered Calls Related to Freddie Mac Common Stock		674		81		(366	)		308		140

*** First Charter, MHC has waived its portion of these dividends, resulting in payment only to the minority stockholders.

	Three Months Ended						Six Months Ended March 31,
	March 31,				December 31, 2004
Performance Ratios:	2005		2004				2005		2004
	Unaudited
Return on Equity	3.60	%	3.42	%	4.18	%	3.90	%	3.17	%
Return on Assets	0.90		0.85		1.07		0.99		0.76
Net Interest Margin	2.16		2.13		2.12		2.14		2.10
Loan Loss Reserve as a % of Total Loans	1.91		2.10		1.98		1.91		2.10
Loan Loss Reserve as a % of Nonperforming Assets	101.37		103.46		106.08		101.37		103.46
Nonperforming Assets as a % of Total Loans and REO	1.88		2.02		1.86		1.88		2.02
Net Chargeoffs (Recoveries) as a % of Average Loans	0.01		0.07		0.07		0.08		0.09
Nonperforming Assets to Total Assets	0.59		0.62		0.54		0.59		0.62
Bank Core Capital Ratio	9.64		9.38		9.38		9.64		9.38
Dividend Payout Ratio	35.70		61.27		270.46		163.11		52.06
Effective Tax Rate	15.72		26.00		32.48		25.73		25.65

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