-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VoF/Zv4JXO6TDaOsHrwf9K0ighJXdsZdbq742lTwy0Z8a26wEz70DCae/K0XNGiB 1GD8cMWf3+9kMZUujFKDJw== 0001275287-06-004632.txt : 20060830 0001275287-06-004632.hdr.sgml : 20060830 20060830171215 ACCESSION NUMBER: 0001275287-06-004632 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20060426 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060830 DATE AS OF CHANGE: 20060830 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHARTER FINANCIAL CORP/GA CENTRAL INDEX KEY: 0001136796 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 000000000 FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-33071 FILM NUMBER: 061066061 BUSINESS ADDRESS: STREET 1: 600 THIRD AVENUE CITY: WEST POINT STATE: GA ZIP: 31833 BUSINESS PHONE: 7066451391 MAIL ADDRESS: STREET 1: 600 THIRD AVENUE CITY: WEST POINT STATE: GA ZIP: 31833 8-K 1 cf7038.txt FORM 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 26, 2006 CHARTER FINANCIAL CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) United States 000-33071 58-2659667 ---------------------------- ----------- ------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 1233 O. G. Skinner Drive, 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 26, 2006, Charter Financial Corporation (the "Company") announced its second quarter earnings for the 2006 fiscal year. A copy of the press release dated April 26, 2006, describing its second quarter earnings is attached as Exhibit 99.1. On July 25, 2006, the Company announced its third quarter earnings for the 2006 fiscal year. A copy of the press release dated July 25, 2006, describing its third quarter earnings is attached as Exhibit 99.2. ITEM 8.01 OTHER EVENTS On August 29, 2006, the Company announced its board of directors has declared a special dividend of $1.75 per share of common stock, payable September 26, 2006 to stockholders of record on September 12, 2006. A copy of the press release dated August 29, 2006, is attached as Exhibit 99.3. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (d) The following exhibits are furnished with this Report: Exhibit No. Description ----------- ------------------------------------------------------- 99.1 Press release issued by Charter Financial Corporation on April 26, 2006. 99.2 Press release issued by Charter Financial Corporation on July 25, 2006. 99.3 Press release issued by Charter Financial Corporation on August 29, 2006. 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: August 30, 2006 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 26, 2006. 99.2 Press release issued by the Company on July 25, 2006. 99.3 Press release issued by the Company on August 29, 2006. EX-99.1 2 cf7038ex991.txt EXHIBIT 99.1 Exhibit 99.1 CHARTER FINANCIAL REPORTS SECOND QUARTER EARNINGS - -- Core Deposit Balances Grow $14.5 million to $143.4 million - -- Loan Balances Increase by $6.8 Million to $383.5 Million WEST POINT, Ga., April 26 /PRNewswire-FirstCall/ -- Charter Financial Corporation (Nasdaq: CHFN) today reported second quarter fiscal 2006 net income of $2.6 million, or $0.13 per share, compared with $2.5 million, or $0.13 per share, for same quarter of the prior year. Net income for the six months ending March 31, 2006 was $7.9 million or $0.40 per share compared with $5.4 million or $0.28 per share for the comparable period in the prior year. The increase in net income for the quarter was attributed to a $910,000 improvement in net interest income, which was partially offset by increases in noninterest expense and tax expense. The improvement in net interest income was from growth in the loan portfolio and increases in dividends received from Freddie Mac. Our net interest income increased as we increased balances in the higher margin loans and decreased balances in the lower margin securities and borrowings. "We continue to progress in building our retail franchise and improving the resulting earnings," said Robert L. Johnson, president and chief executive officer. "We increased our net loans receivable to $383.5 million, which is up $6.8 million from the balance at December 31, 2005 and up $56.3 million from March 31, 2005. We attribute our loan growth to having strengthened our commercial real estate loan staff. We grew core deposits $14.5 million for the quarter to $143.4 million. Deposit fees also increased by approximately six percent to $883,000 for the quarter from $833,000 for the prior quarter indicating continued marketing success of our suite of checking products." During the six months ended March 31, 2006, the company recognized $4.8 million in income from sales of Freddie Mac common stock compared with $2.6 million in the prior year period. The sales resulted from exercises of covered calls written by the Company. These sales are a positive development because they allow the company to realize the value of the asset at a measured pace. "We anticipate a significant boost to the economy in our market area over the next several years from a new manufacturing facility," Johnson states. "Kia Motors Corporation announced that it will build a $1.2 billion automotive assembly and manufacturing plant in West Point. It is anticipated that this facility will directly provide more than 2,000 jobs. The plant is scheduled to begin construction later this year and is tentatively scheduled to begin operations in 2008. Charter Financial is well-positioned to provide the entire spectrum of banking services required, from checking accounts and mortgages for workers, to cash management and commercial loans for the variety of supporting business enterprises. "As a leading community bank in the area, we should see accelerated growth in both our retail banking and commercial businesses. It is, however, too early to project the extent of that growth," Johnson concluded. 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 Corporation and its subsidiary, CharterBank, are in a mutual holding company structure. Charter Financial owns 4.4 million shares of Freddie Mac common stock with a market value of $270.7 million. 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. Selected Financial Data (in thousands except share and per share data):
March 31, December 31, September 30, March 31, 2006 2005 2005 2005 ------------- ------------- ------------- ------------- Unaudited Total Assets $ 1,100,952 $ 1,094,812 $ 1,050,570 $ 1,070,653 Loans Receivable, Net 383,480 376,647 356,808 327,184 Mortgage Securities Available for Sale 331,094 348,000 358,461 385,406 Freddie Mac Common Stock 270,688 289,991 254,776 288,666 Other Investment Securities 37,589 17,227 17,712 13,823 Retail Deposits 272,935 254,239 250,391 238,259 Core Deposits 143,386 128,859 131,361 126,566 Total Deposits 365,501 354,977 320,129 287,232 Deferred Income Taxes 98,553 106,360 93,271 104,458 Borrowings 366,935 351,036 382,336 407,714 Realized Stockholders' Equity* 97,781 96,735 93,825 89,552 Accumulated Other Comprehensive Income** 157,807 170,225 149,405 168,994 Total Equity 255,588 266,960 243,230 258,545 Book Value per Share $ 13.02 $ 13.51 $ 12.31 $ 13.09 Tangible Book Value per Share 12.73 13.22 12.02 12.79 Minority Shares Outstanding 3,559,854 3,542,754 3,542,754 3,517,056 Total Shares Outstanding - at Quarter End 19,630,772 19,629,372 19,629,372 19,603,674 Weighted Average Total Shares Outstanding - Basic 19,401,055 19,533,722 19,523,748 19,517,703 Weighted Average Total Shares Outstanding - Fully Diluted 19,584,927 19,575,347 19,569,097 19,581,137
* Includes Total Stockholders' Equity less Accumulated Other Comprehensive Income. ** 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 share and per share data):
Three months ended Six months ended -------------------------------------- ----------------------- March 31, December 31, March 31, ------------------------ ------------ ----------------------- 2006 2005 2005 2006 2005 ---------- ---------- ------------ ---------- ---------- Unaudited Total Interest Income $ 13,273 $ 11,059 $ 12,787 $ 26,060 $ 21,738 Total Interest Expense 6,606 5,302 6,307 12,913 10,341 Net Interest Income 6,667 5,757 6,480 13,147 11,397 Provision for Loan Losses - - - - - Net Interest Income after Provision for Loan Losses 6,667 5,757 6,480 13,147 11,397 Noninterest Income 1,694 1,695 5,961 7,655 4,987 Noninterest Expense 4,873 4,530 5,040 9,913 9,131 Income before Income Taxes 3,488 2,922 7,401 10,889 7,253 Income Tax Expense 936 459 2,067 3,003 1,866 Net Income $ 2,552 $ 2,463 $ 5,334 $ 7,886 $ 5,387 Earnings per Share $ 0.13 $ 0.13 $ 0.27 $ 0.40 $ 0.28 Earnings per Share - Fully Diluted 0.13 0.13 0.27 0.40 0.28 Cash Dividends per Share*** 0.45 0.25 0.70 1.15 2.50 Net (Recoveries) Charge-offs (2) 27 19 17 240 Deposit Fees 883 632 833 1,716 1,302 Gain on Sale of Loans 153 201 163 316 434 Gain on Sale of Freddie Mac Common Stock - - 4,769 4,769 2,577 Gain on Covered Calls Related to Freddie Mac Common Stock 310 674 13 323 308
*** 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, December 31, March 31, -------------------- ------------ -------------------- 2006 2005 2005 2006 2005 -------- -------- ------------ -------- -------- Unaudited Return on Equity 3.74% 3.60% 8.43% 6.00% 3.90% Return on Assets 0.92 0.90 2.00 1.45 0.99 Net Interest Margin 2.49 2.16 2.50 2.49 2.14 Loan Loss Reserve as a % of Total Loans 1.57 1.91 1.60 1.57 1.91 Loan Loss Reserve as a % of Nonperforming Assets 139.27 101.37 128.27 139.27 101.37 Nonperforming Assets as a % of Total Loans and REO 1.13 1.88 1.24 1.13 1.88 Net Chargeoffs as a % of Average Loans - 0.01 0.01 - 0.08 Nonperforming Assets to Total Assets 0.40 0.59 0.44 0.40 0.59 Bank Core Capital Ratio 8.79 9.64 8.84 8.79 9.64 Dividend Payout Ratio 62.77 35.70 46.49 51.76 163.11 Effective Tax Rate Expense 26.84 15.72 27.93 27.58 25.73
SOURCE Charter Financial Corporation -0- 04/26/2006 /CONTACT: Robert L. Johnson, President & CEO of Charter Financial, +1-706-645-1391, bjohnson@charterbank.net , or Mike Arneth, marneth@tirc.com , or Woody Wallace, wwallace@tirc.com , both of The Investor Relations Company, +1-312-245-2700/ EX-99.2 3 cf7038ex992.txt EXHIBIT 99.2 Exhibit 99.2 CHARTER FINANCIAL REPORTS THIRD QUARTER EARNINGS -- Two Branches Opened in Auburn-Opelika Area -- Retail Deposit Balances Grow $42.2 Million to $322.1 Million -- Net Interest Income Squeezed by Rising Interest Rates WEST POINT, Ga., July 25 /PRNewswire-FirstCall/ -- Charter Financial Corporation (Nasdaq: CHFN) today reported third quarter fiscal 2006 net income of $2.6 million, or $0.13 per share, compared with net income of $3.2 million, or $0.16 per share, in same quarter of the prior year. The June 2005 quarter included $1.9 million in gain on sale of Freddie Mac stock while there were no gains in the June 2006 quarter. Net income for the nine months ending June 30, 2006 was $10.4 million or $0.54 per share compared with $8.6 million or $0.44 per share for the comparable period in the prior year. Net income for the third quarter was approximately the same as the second quarter of 2006. Lower net interest income and higher operating expenses were offset by higher deposit fees and lower income taxes. Net interest income was affected as short-term interest rates, which are the basis for what the Company pays on deposits, rose significantly. Rates on deposits have, until recently, lagged behind overall market rates. As a result of increased rates, the cost of deposits was higher and net interest income declined from the prior quarter. "We continue to progress in building our retail franchise with the opening of two branches in the Auburn-Opelika, Alabama market," said Robert L. Johnson, president and chief executive officer. "We replaced our downtown Opelika branch with a larger, more efficient facility that offers customers an improved banking experience. We also opened a new facility on College Street in Auburn. Together, these upgraded facilities significantly improve our ability to serve this market." "We increased our retail deposits by $43.2 million during the quarter. Deposit fees also increased by approximately 11 percent to $981,000 for the quarter from $883,000 for the prior quarter and $679,000 in the comparable quarter a year ago, reflecting the continued success of our program to market our suite of checking products," Johnson added. Noninterest expense rose to $5.3 million in the third quarter from $4.9 million in the prior quarter and $4.5 million in the comparable quarter a year ago. The increase was due to a number of factors, including increased staffing and the cost of additional employees in the newly opened, larger branch offices. Also, the Company made changes to its incentive compensation plan that resulted in faster accrual of the costs associated with that plan. The Company's continuing strong performance also required that accruals for employee bonuses at a faster rate based on the possibility that the Company may achieve better results in fiscal 2006 than previously assumed. During the nine months ended June 30, 2006, the Company recognized $4.8 million in income from sales of Freddie Mac common stock compared with $4.5 million in the prior year period. The sales resulted from exercises of covered calls written by the Company. These sales allow the Company to realize the value of this asset at a measured pace. However, further sales this year are less likely with the decline in the price of Freddie Mac stock. Income tax expense was $395,000 for the quarter compared with $936,000 for the prior quarter and $1.2 million in the comparable quarter a year ago. This resulted in an effective tax rate of 13.41% for the quarter ended June 30, 2006 versus 26.84% for the prior quarter. The lower taxes are the result of revised projections, which indicate our overall effective rate for the fiscal year will be lower than previously projected. 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 Corporation and its subsidiary, CharterBank, are in a mutual holding Company structure. Charter Financial owns 4.4 million shares of Freddie Mac common stock with a market value of $253.0 million. 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. Selected Financial Data (in thousands except share and per share data):
June 30, March 31, September 30, June 30, 2006 2006 2005 2005 ------------- ------------- ------------- ------------- Unaudited Total Assets $ 1,105,187 $ 1,100,952 $ 1,050,570 $ 1,081,518 Loans Receivable, Net 384,974 383,480 356,808 338,201 Mortgage Securities Available for Sale 320,102 331,094 358,461 379,886 Freddie Mac Common Stock 252,982 270,688 254,776 295,981 Other Investment Securities 37,710 37,589 17,712 9,951 Retail Deposits 322,093 278,862 250,391 237,799 Core Deposits 175,643 143,386 131,361 126,647 Total Deposits 396,406 365,501 320,129 291,773 Deferred Income Taxes 90,026 98,553 93,271 109,641 Borrowings 361,660 366,935 382,336 395,817 Realized Stockholders' Equity* 99,411 97,781 93,825 91,530 Accumulated Other Comprehensive Income** 144,244 157,807 149,405 177,238 Total Equity 243,655 255,588 243,230 268,768 Book Value per Share $ 12.41 $ 13.02 $ 12.31 $ 13.71 Tangible Book Value per Share 12.12 12.73 12.02 13.41 Minority Shares Outstanding 3,562,254 3,560,654 3,542,754 3,517,056 Total Shares Outstanding - at Quarter End 19,632,372 19,630,772 19,629,372 19,603,674 Weighted Average Total Shares Outstanding - Basic 19,418,930 19,401,055 19,523,748 19,374,980 Weighted Average Total Shares Outstanding - Fully Diluted 19,552,867 19,526,064 19,569,097 19,550,470
* Includes Total Stockholders' Equity less Accumulated Other Comprehensive Income. ** 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 share and per share data):
Three months ended Nine months ended --------------------------------- --------------------- June 30, March 31, June 30, --------------------- --------- --------------------- 2006 2005 2006 2006 2005 --------- --------- --------- --------- --------- Unaudited Total Interest Income $ 13,739 $ 11,422 $ 13,273 $ 39,799 $ 33,159 Total Interest Expense 7,282 5,610 6,606 20,196 15,950 Net Interest Income 6,457 5,812 6,667 19,603 17,209 Provision for Loan Losses - - - - - Net Interest Income after Provision for Loan Losses 6,457 5,812 6,667 19,603 17,209 Noninterest Income 1,788 3,108 1,694 9,443 8,095 Noninterest Expense 5,300 4,535 4,873 15,212 13,666 Income before Income Taxes 2,945 4,385 3,488 13,834 11,638 Income Tax Expense 395 1,176 936 3,398 3,042 Net Income $ 2,550 $ 3,209 $ 2,552 $ 10,436 $ 8,596 Earnings per Share $ 0.13 $ 0.16 $ 0.13 $ 0.54 $ 0.44 Earnings per Share - Fully Diluted 0.13 0.16 0.13 0.54 0.44 Cash Dividends per Share*** 0.45 0.35 0.45 1.60 2.85 Net (Recoveries) Charge-offs 67 28 (2) 84 269 Deposit Fees 981 679 883 2,698 1,981 Gain on Sale of Loans 193 196 153 509 630 Gain on Sale of Freddie Mac Common Stock - 1,906 - 4,769 4,483 Gain on Covered Calls Related to Freddie Mac Common Stock 215 141 310 538 449
*** First Charter, MHC has waived its portion of these dividends, resulting in payment only to the minority stockholders.
Three months ended Nine months ended ----------------------------------- ---------------------- June 30, March 31, June 30, ---------------------- --------- ---------------------- 2006 2005 2006 2006 2005 --------- --------- --------- --------- --------- Unaudited Return on Equity 4.00% 4.89% 3.74% 5.35% 4.21% Return on Assets 0.93 1.19 0.92 1.27 1.06 Net Interest Margin 2.46 2.22 2.49 2.48 2.17 Loan Loss Reserve as a % of Total Loans 1.55 1.84 1.57 1.55 1.84 Loan Loss Reserve as a % of Nonperforming Assets 151.14 104.50 139.27 151.14 104.50 Nonperforming Assets as a % of Total Loans and REO 1.02 1.75 1.13 1.02 1.75 Net Chargeoffs as a % of Average Loans 0.02 0.01 - 0.02 0.08 Nonperforming Assets to Total Assets 0.36 0.56 0.40 0.36 0.56 Bank Core Capital Ratio 8.77 9.86 8.79 8.77 9.86 Dividend Payout Ratio 62.85 38.36 62.77 54.47 116.54 Effective Tax Rate Expense 13.41 26.81 26.84 24.56 26.14
SOURCE Charter Financial Corporation -0- 07/25/2006 /CONTACT: Robert L. Johnson, President & CEO of Charter Financial Corporation, +1-706-645-1391, bjohnson@charterbank.net , or Mike Arneth, marneth@tirc.com , or Woody Wallace, wwallace@tirc.com , both of The Investor Relations Company, +1-312-245-2700/ CO: Charter Financial Corporation EX-99.3 4 cf7038ex993.txt EXHIBIT 99.3 Exhibit 99.3 CHARTER FINANCIAL DECLARES SPECIAL CASH DIVIDEND WEST POINT, Ga., Aug. 29 /PRNewswire-FirstCall/ -- Charter Financial Corporation (Nasdaq: CHFN) today announced that its board of directors has declared a special cash dividend of $1.75 per share. The dividend is payable on September 26, 2006, to stockholders of record at the close of business on September 12, 2006. "Our multi-faceted strategy of expanding our retail banking franchise, making efficient use of our capital and our equity investment in Freddie Mac stock continues to generate value for our public shareholders," said Robert L. Johnson, President and CEO. "The board of directors determined our financial condition is strong and our capital exceeds the level required to fund further growth. Accordingly, the board felt it is appropriate to make an additional distribution to shareholders in the form of a special dividend." Johnson added that he is optimistic about the future of Charter Financial. "The combination of our superior customer service and the rebounding economy in the markets we serve provide opportunities for further growth, due in part to a new Kia Motors assembly plant presently being built in our area. We believe we are well-positioned to take advantage of these opportunities by increasing our market share, expanding our operations and managing our assets, while continuing to deliver value to our shareholders." Charter Financial is the majority-owned subsidiary of First Charter, MHC, a federal mutual holding company, which owns approximately 80 percent of its outstanding shares. First Charter, MHC, has filed a regulatory notice of its intent to waive dividends paid on the shares it owns. Charter Financial Corporation is a savings and loan holding company and the parent of CharterBank, a full-service community bank and a federal savings institution. Charter Financial Corporation owns 4.4 million shares of Freddie Mac common stock with a market value of $253.0 million at June 30, 2006. 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. SOURCE Charter Financial Corporation -0- 08/29/2006 /CONTACT: Robert L. Johnson, President & CEO, Charter Financial Corporation, +1-706-645-1391, or bjohnson@charterbank.net ; or at the Investor Relations Company, Mike Arneth, marneth@tirc.com , or Woody Wallace, wwallace@tirc.com , or +1-312-245-2700 / CO: Charter Financial Corporation ST: Georgia IN: FIN SU: DIV CT-CM - -- CGTU046 -- 4293 08/29/2006 12:30 EDT http://www.prnewswire.com -----END PRIVACY-ENHANCED MESSAGE-----