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/