Charter Financial Reports 1st Quarter Fiscal 2010 Net Income of $1.2 Million

-- $0.07 earnings per share

-- Provision for loan losses for quarter $800,000

-- Loan charge-offs of $166,000

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Jan 26, 2010, 05:20 ET

WEST POINT, Ga., Jan. 26 /PRNewswire-FirstCall/ -- Charter Financial Corporation (OTC Bulletin Board: CHFN) today reported net income of $1.2 million, or $0.07 per share for the quarter ended December 31, 2009, compared to $957,000, or $0.05 per share, for the same quarter of the prior year. The higher net income was primarily attributable to the earnings on the assets acquired in the acquisition of Neighborhood Community Bank.

The Company's total assets amounted to $944.7 million at December 31, 2009 versus $936.9 million at September 30, 2009 and $813.9 million at December 31, 2008. Loans outstanding increased by $11.6 million during the quarter ended December 31, 2009 to $564.1 million compared to $552.6 million at September 30, 2009.

Total interest income increased to $11.2 million for the quarter just ended compared to $10.0 million for the same quarter last year. Interest expense was lower at $5.0 million for the first quarter measured against $5.9 million for the prior year's corresponding quarter. The combination of higher interest income and lower interest expense resulted in an increase in net interest income to $6.2 million for the current quarter from $4.0 million for the prior year quarter. The net interest margin rose to 2.93% for the quarter versus 2.21% for the comparable quarter the prior year.

The Company had net charge-offs of $166,000 for the quarter compared to $408,000 in the same quarter a year ago. Cumulative net charge-offs since October 2007 were $4.6 million while cumulative provisions for loan losses for the same nine quarters were $8.6 million. A loan loss provision of $800,000 was recorded for the quarter ended December 31, 2009. This provision brings the allowance for loan losses to 2.03% of non covered loans at December 31, 2009 compared to 1.86% of non-covered loans at December 31, 2008 and 1.98% of non covered loans at September 30, 2009.

Total deposits rose to $614.8 million compared with $432.9 million at December 31, 2008 and $597.7 million at September 30, 2009. Borrowings decreased to $217.0 million from $273.0 million for the same quarter of the prior year. The Company had total equity of $101.0 million at the end of the first quarter compared with $103.8 million at December 31, 2008.

About Charter Financial Corporation

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 subsidiary CharterBank are in a mutual holding company structure. CharterBank is headquartered in West Point, Georgia, and operates thirteen branches on the I-85 corridor from Newnan, 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.

Financial Tables Follow

Selected Financial Data (in thousands except share and per share data):
	December 31,		September 30,
	2009	2008	2009
	Unaudited
Total Assets	$944,723	$813,933	$936,880
Loans Receivable, Net	564,136	440,476	552,550
Non-covered Loans Receivable, Net	477,882	440,476	462,786
Covered Loans Receivable, Net	86,254	-	89,764
Mortgage Securities Available for Sale	190,980	234,982	201,626
Other Investment Securities	4,210	34,253	4,435
Retail Deposits**	497,926	329,585	463,566
Core Deposits*	241,506	166,452	216,902
Total Deposits	614,755	432,909	597,634
Borrowings	217,000	273,000	227,000
Total Equity	100,982	103,738
Total Equity	100,982	103,738	98,257
	$5.48	$5.60	$5.34
Book Value per Share	$5.48	$5.60	$5.34
Tangible Book Value per Share	5.20	5.31	5.06
	2,564,733
Minority Shares Outstanding	2,564,733	2,669,836	2,551,033
Total Shares Outstanding – at Quarter End	18,422,657	18,527,760	18,408,957
Weighted Average Total Shares Outstanding – Basic	18,409,106	18,569,009	18,417,123
Weighted Average Total Shares Outstanding – Fully Diluted	18,412,477	18,569,009	18,472,222

*Core deposits include transaction accounts, money market accounts, and savings accounts.
**Retail deposits include Core Deposits, and certificates of deposits excluding brokered and wholesale.

Selected Operating Data (in thousands except share and per share data):
	Three months ended
	December 31,		September 30,
	2009	2008	2009
	Unaudited
Total Interest Income	$ 11,249	$ 9,989	$ 12,189
Total Interest Expense	5,071	5,942	5,917
Net Interest Income	6,178	4,047	6,272
Provision for Loan Losses	800	350	1,400
Net Interest Income after Provision for Loan Losses	5,378	3,697	4,872
Noninterest Income	2,409	2,295	3,480
Noninterest Expense	6,084	4,684	7,805
Income before Income Taxes	1,703	1,308	547
Income Tax Expense	501	351	37
Net Income	$ 1,202	$ 957	$ 510

Earnings per Share	$ 0.07	$ 0.05	$ 0.03
Earnings per Share – Fully Diluted	0.07	0.05	0.03
Cash Dividends per Share***	0.25	0.25	0.25

Net Charge-offs	166	225	408
Deposit Fees	1,276	1,206	1,284
Gain on Sale of Loans	89	129	135

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


	Three months ended
	December 31,		September 30,
	2009	2008	2009
	Unaudited
Return on Equity	4.82%	3.71%	2.06%
Return on Assets	0.52	0.48	0.21
Net Interest Margin	2.93	2.21	3.00
Bank Core Capital Ratio	9.38	10.45	9.30
Effective Tax Rate	29.42	26.82	6.83
Dividend Payout Ratio	65.24	69.76	153.79

Ratios of Assets Not Covered:
Loan Loss Reserve as a % of Total Loans	2.03	1.86	1.98
Loan Loss Reserve as a % of Nonperforming Assets	47.77	61.70	52.18
Nonperforming Assets as a % of Total Loans and REO	4.23	3.00	3.74
Net Charge offs as a % of Average Loans	0.14	0.20	0.35