Charter Financial Corporation Adopts Stock Issuance Plan to Conduct an 'Incremental' Stock Offering

WEST POINT, Ga., April 20 /PRNewswire-FirstCall/ -- Charter Financial Corporation (the "Company") (OTC Bulletin Board: CHFN.OB), the holding company for CharterBank, announced today that its Board of Directors has adopted a Stock Issuance Plan whereby the Company will offer shares of its common stock in an "incremental" stock offering. The incremental offering will allow the Company to raise capital while remaining a majority owned subsidiary of its mutual holding company parent, First Charter, MHC.

The Company intends to use proceeds from the offering to support organic growth and acquisitions of financial institutions as opportunities arise, especially acquisitions of troubled financial institutions with FDIC assistance.  In March 2010, CharterBank purchased certain assets and assumed the deposits and certain other liabilities of McIntosh Commercial Bank, a commercial bank headquartered in Carrollton, Georgia, and in June 2009, CharterBank purchased certain assets and assumed certain liabilities of Neighborhood Community Bank, a commercial bank headquartered in Newnan, Georgia.  The acquisition of each of these failed institutions included FDIC loss-sharing agreements.  

In the incremental offering, the Company will offer shares on a priority basis to CharterBank depositors and certain others in a subscription offering.  To the extent shares remain available, common stock will be offered to community residents in a community offering and, if necessary, in a syndicated community offering. The incremental offering will not increase the number of outstanding shares of common stock because the number of shares owned by First Charter, MHC will be reduced by the number of shares sold by the Company in the offering. At March 31, 2010, First Charter, MHC owned 15,857,924, or 84.9%, of the Company's 18,672,361 outstanding shares of common stock.  First Charter, MHC's ownership percentage will be reduced by the incremental stock offering, but not below 50.1%. An offering price range will be determined at the commencement of the offering based upon an appraisal performed by an independent appraiser. The final offering price per share will be determined at the close of the transaction.

The Company will file a registration statement with the Securities and Exchange Commission with respect to the stock offering. Information, including the details of the offering and business and financial information about the Company and CharterBank, will be provided in a prospectus when the offering commences, which is expected to be during the third quarter of 2010. The offering also is subject to approval of the Office of Thrift Supervision.

In adopting the Stock Issuance Plan, the Board terminated First Charter, MHC's plan to reorganize into the stock holding company structure and undertake a "second-step" stock offering, which was announced in December 2009.  The decision by the Board to proceed with an incremental stock offering rather than a second-step offering was made partly in response to shareholder concerns expressed with respect to the second-step offering, and to ensure successful completion of the stock offering.

The Company also announced that the Board of Directors reduced the Company's current quarterly cash dividend from $0.25 per share to $0.05 per share, and declared  a dividend payable on May 18, 2010 to stockholders of record on May 5, 2010. The decision to reduce the dividend reflects the attractive opportunities for deployment of capital in FDIC-assisted transactions referred to above.  

Charter Financial Corporation is a savings and loan holding company and the parent company of CharterBank, a full-service community bank. Charter Financial Corporation is headquartered in West Point, Georgia, and operates 17 branches on Interstate highways in West Georgia and East Alabama. Charter Financial Corporation's common stock is listed on the Over-The-Counter Bulletin Board.  Additional information regarding Charter Financial Corporation can be accessed on-line at www.charterbank.net.

This release is neither an offer to sell nor a solicitation of an offer to buy common stock.  The offer is made only by the prospectus when accompanied by a stock order form.  The shares of common stock of the Company are not savings accounts or savings deposits, may lose value and are not insured by the Federal Deposit Insurance Corporation or any other government agency.

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 economic conditions, either nationally or in our market areas, that are worse than expected; competition among depository and other financial institutions; changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments; adverse changes in the securities markets; changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; our ability to enter new markets successfully and capitalize in growth opportunities; our ability to successfully integrate acquired entities; our incurring higher than expected loan charge-offs with respect to assets acquired in FDIC-assisted acquisitions; changes in consumer spending, borrowing and savings habits; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies and the Financial Accounting Standards Board; and changes in our organization, compensation and benefit plans. 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.

SOURCE Charter Financial Corporation