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Form 8-K CHARTER FINANCIAL CORP For: Jul 23

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July 24, 2015 10:08 AM EDT



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): July 23, 2015

_____________________________________

CHARTER FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)

_____________________________________

 
Maryland
001-35870
90-0947148
 
 
(State or other jurisdiction of
(Commission
(IRS Employer
 
 
incorporation or organization)
File Number)
Identification No.)
 

1233 O. G. Skinner Drive, West Point, Georgia 31833
(Address of principal executive offices) (Zip Code)

(706) 645-1391
(Registrant's telephone number, including area code)

N/A
(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:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
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 July 23, 2015, Charter Financial Corporation issued an earnings release announcing its financial results for the third quarter ended June 30, 2015. The text of the press release is included as Exhibit 99.1 to this report. The information included in the press release text is considered to be “furnished” under the Securities Exchange Act of 1934.

Item 7.01.    Regulation FD Disclosure.

On July 28-29, 2015, Charter Financial Corporation (the “Company”), the holding company of CharterBank, will participate in the KBW Community Bank Investor Conference (the “Conference”). The Company’s Investor Presentation attached hereto as Exhibit 99.3 will be made available to investors at the Conference. A copy of the Company’s Investor Presentation will also be posted in the Investor Relations section of the Company’s website at www.charterbk.com.

Item 8.01.     Other Events

On July 23, 2015, the Board of Directors of Charter Financial Corporation declared a regular quarterly cash dividend of $0.05 per share. The dividend is payable on August 24, 2015, to stockholders of record as of August 10, 2015. A press release announcing the details of the declaration is filed herewith as Exhibit 99.2.

Item 9.01.     Financial Statements and Exhibits
(d)
Exhibits.
 
 
 
 
 
Exhibit No.
Description
 
 
 
 
99.1
Earnings press release dated July 23, 2015.
 
99.2
Dividend press release dated July 23, 2015.
 
99.3
Charter Financial Corporation Investor Presentation

 





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.

 
 
CHARTER FINANCIAL CORPORATION
 
 
 
(Registrant)
 
 
 
 
 
 
Date:
July 24, 2015
By:
/s/ Curtis R. Kollar
 
 
 
 
Curtis R. Kollar
 
 
 
 
Senior Vice President and Chief Financial Officer
 





Exhibit 99.1

 
 
NEWS RELEASE
Contact:
 
 
Robert L. Johnson, Chairman & CEO
 
At Dresner Corporate Services
Curt Kollar, CFO
 
Steve Carr
706-645-1391
 
312-780-7211
 
 
 

CHARTER FINANCIAL ANNOUNCES THIRD QUARTER FISCAL
2015 EARNINGS OF $1.9 MILLION

•
Basic and diluted EPS of $0.12 for the quarter
•
Net loan growth of 15.5% over prior year quarter, which marks the seventh consecutive year-over-year quarterly increase
•
Flat noninterest expense
•
Tangible book value per share of $12.44 at June 30, 2015, up $0.49 year over year
•
Nonperforming non-covered assets at 0.55% of total non-covered assets at June 30, 2015
•
Repurchased 259,836 shares for an average of $12.13 per share during the quarter

West Point, Georgia, July 23, 2015 — Charter Financial Corporation (the “Company”) (NASDAQ: CHFN) today reported net income of $1.9 million, or $0.12 per basic and diluted share, for the quarter ended June 30, 2015, compared with $1.8 million, or $0.09 per basic and diluted share, for the quarter ended June 30, 2014. Net income for the quarter increased primarily due to increases in noninterest income and net interest income, partially offset by a large negative provision for covered loans, which benefited last year's results.

Net income for the nine months ended June 30, 2015, was $5.0 million, or $0.32 and $0.30 per basic and diluted share, respectively, up from $4.9 million, or $0.23 and $0.22 per basic and diluted share, respectively, for the nine months ended June 30, 2014.

Quarterly Operating Results

Quarterly earnings for the third quarter of fiscal 2015 compared with the third quarter of fiscal 2014 were positively impacted by the following items:
•
Loan interest income, excluding accretion and amortization of loss share receivable, increased $319,000.
•
Net interest margin, excluding accretion and amortization of loss share receivable, was 3.21% for the quarter ended June 30, 2015 compared with 2.90% for the same quarter of fiscal 2014.
•
The cost of deposits decreased to 43 basis points for the quarter ended June 30, 2015, compared to 49 basis points for the quarter ended June 30, 2014.

1
Exhibit 99.1

•
Deposit and bankcard fee income increased by a combined $309,000.
•
Gain on sale of loans and loan servicing release fees increased by $137,000.
•
Net cost of operations of real estate owned decreased by $118,000.

The above increases to net income were partially offset by the following items:
•
Net purchase discount accretion and amortization decreased by $90,000.
•
The average yield on loans was 5.02% for the quarter ended June 30, 2015 compared to 5.44% for the quarter ended June 30, 2014.
•
The Company recorded a negative provision of $834,000 for the quarter ended June 30, 2014 compared to no provision in the current year quarter.

Chairman and CEO Robert L. Johnson said, “Our net income and earnings per share for the quarter increased by 7% and 33%, respectively, compared to the prior year quarter. We are pleased with this growth and with the continued improvements in our core earnings. Our net interest margin, excluding purchase accounting, was 3.21% for the quarter ending June 30, 2015, which was significantly improved from 2.90% for the quarter ending June 30, 2014.”

Financial Condition

The Company's total assets remained relatively unchanged at $1.0 billion at June 30, 2015. Net loan growth and shares repurchased during the first three quarters of fiscal 2015 were funded by deposit growth, including brokered CDs, and utilization of the Company's cash and cash equivalents. Net loans grew $66.5 million, or 11.0%, to $672.8 million at June 30, 2015, from $606.4 million at September 30, 2014.

Mr. Johnson continued, “Our loan portfolio increased on a year-over-year basis for the seventh consecutive quarter. Continued loan portfolio growth is important to realizing increased profitability through higher operating and capital leverage.”

Total deposits were $734.2 million at June 30, 2015, compared with $717.2 million at September 30, 2014, due primarily to increases of $19.5 million and $30.8 million in core deposits and brokered deposits, respectively. Core deposits increased from $486.2 million at September 30, 2014, to $505.7 million at June 30, 2015, due primarily to an increase in transaction accounts.

Mr. Johnson added, “The rebranding of our checking products that we started last fall is having a positive impact. We reduced the number of checking products from 13 to four, enabling consumers to have free checking accounts in methods more beneficial for the bank. This is accomplished through increased interchange revenue, increased balances or reduced costs through the reduction of mailing paper statements.”

Total stockholders' equity decreased to $208.9 million at June 30, 2015, compared to $225.0 million at September 30, 2014, due predominantly to $20.8 million of share repurchases during the first three quarters of fiscal 2015.

Net Interest Income and Net Interest Margin

Net interest income increased to $8.1 million for the quarter ended June 30, 2015, compared with $7.6 million for the quarter ended June 30, 2014. Interest income increased by $358,000 due to a slight increase in loan receivable income and a $253,000 decrease in amortization of FDIC loss share receivable, aided by a $168,000, or 12.1%, decrease in total interest expense quarter over quarter. The Company's net interest margin, excluding the effects of purchase accounting, was 3.21% for the quarter ended June 30, 2015, compared with 2.90% for the quarter ended June 30, 2014. Net interest margin, including the impact of purchase accounting, increased to 3.62% for the quarter ended June 30, 2015, compared with 3.26% for the quarter ended June 30, 2014.

Net interest income for the nine months ended June 30, 2015, increased $748,000 to $23.6 million compared to the same prior year period despite a $695,000 decline in net discount accretion and amortization on acquired covered loans. Additionally, interest expense decreased by $563,000. Net interest margin, excluding the effects of purchase

2
Exhibit 99.1

accounting, improved 38 basis points to 3.22%, while net interest margin, including the impact of purchase accounting, improved 30 basis points to 3.54% for the nine months ended June 30, 2015.

Provision for Loan Losses

The Company recorded no provision for loan losses on non-covered loans for the quarters ended June 30, 2015 and 2014, due to an overall improvement in the credit quality of the non-covered loan portfolio. No provision was recorded on covered loans for the quarter ended June 30, 2015, compared to a negative provision of $834,000 for the same quarter in 2014.

There was no net provision recorded on non-covered and covered loans during the nine months ended June 30, 2015 due to our continued strong asset credit quality compared to a $300,000 provision on non-covered loans and an $886,000 negative provision on covered loans for the same prior year period.

Accounting for FDIC-Assisted Acquisitions

Mr. Johnson continued, “Earlier this year, we completed the non-single family portion of two of our FDIC assisted acquisitions. The last agreement has 14 months remaining in the loss share period. The FDIC indemnification asset is down to $4.5 million, indicating that we are approaching the completion of the resolution of the acquired troubled assets.”

Under purchase accounting rules, the Company currently expects to realize remaining discount accretion of $4.0 million and $1.7 million in amortization, netting to approximately $2.3 million of future pre-tax income impact.

Noninterest Income and Expense

Noninterest income for the quarter ended June 30, 2015 increased $581,000, or 17.9%, which was primarily due to the continued increases in gain on sale of loans, bankcard fee income and other deposit fee income. Noninterest expense for the quarter ended June 30, 2015 of $9.1 million increased slightly compared with the same period in fiscal 2014. This increase was primarily attributable to increases in salaries and employee benefits, occupancy and losses on debit card fraud, and partially offset by a $118,000 decrease in net cost of real estate owned.

Noninterest income for the nine months ended June 30, 2015 increased $264,000, or 2.5%, despite a $1.1 million true-up receipt from the completion and renegotiation of a processing contract in the prior year period. Bankcard fee income and other deposit fee income increased $855,000 and gain on sale of loans increased $416,000 for the nine months ended June 30, 2015 compared to the same prior year period. Noninterest expense remained practically unchanged at $26.8 million for the nine months ended June 30, 2015 and 2014. Decreases in legal and professional fees and the net cost of real estate owned were offset by increases in salaries and employee benefits and other noninterest expense.

Asset Quality

Asset quality remained strong with nonperforming assets not covered by loss sharing agreements at 0.55% of total non-covered assets and the allowance for loan losses at 1.33% of total non-covered loans and 196.86% of nonperforming non-covered loans at June 30, 2015. The Company had net loan recoveries of $12,000 on non-covered loans for the nine months ended June 30, 2014, compared to net loan charge-offs of $283,000 on non-covered loans for the same period in fiscal 2014.

Capital Management

During the quarter ended June 30, 2015, the Company repurchased 259,836 shares for approximately $3.2 million, or $12.13 per share.

Mr. Johnson said, “Since December 2013, we have completed three stock buyback programs, whereby the Company

3
Exhibit 99.1

repurchased a combined 4.9 million shares at a discount to tangible book value. Additionally, through our current repurchase program announced in September 2014 and revised in March 2015, we can repurchase up to 2.6 million shares, of which 1.9 million shares have been repurchased to date. Collectively, the 6.7 million shares repurchased, or approximately 29% of our common stock, were purchased at a combined discount to tangible book value of $9.4 million.”

Mr. Johnson concluded, “Over the past two years, we have utilized our excess capital in several ways, including the repurchase of shares at a discount to tangible book value, dividends, and growing our loan portfolio. Meanwhile, we continue to explore the possibility of additional acquisitions and opportunities that would be accretive to our earnings. We are also seeking to enhance stockholder value through leverage of our expense structure and improving noninterest income.”

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. CharterBank is headquartered in West Point, Georgia, and operates branches in west-central Georgia, east-central Alabama, and the Florida Gulf Coast. CharterBank's deposits are insured by the Federal Deposit Insurance Corporation. Investors may obtain additional information about Charter Financial Corporation and CharterBank on the internet at www.charterbk.com under About Us.

Forward-Looking Statements
This release may contain “forward-looking statements” within the meaning of the federal securities laws. These statements may be identified by use of such words as “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “seek,” and “potential.” Examples of forward-looking statements include, but are not limited to, statements regarding future growth, profitability, expense reduction, improvements in income and margins, increasing stockholder value, and 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; the changing exposure to credit risk; the effect of any acquisition or other strategic initiatives that we determine to pursue; changes in legislation or regulation; other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products, and services; the effect of cyberterrorism and system failures; and the effects of geopolitical instability and risks such as terrorist attacks, the effects of weather and natural disasters such as floods, droughts, wind, tornadoes and hurricanes, and the effect of any damage to our reputation resulting from developments relating to any of the factors listed herein. 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. Except as required by law, 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. Additional information concerning factors that could cause actual results to differ materially from those forward-looking statements is contained from time to time in the Company's filings with the Securities and Exchange Commission. The company refers you to the section entitled “Risk Factors” contained in the company's Annual Report on Form 10-K for the fiscal year ended September 30, 2014. Copies of each filing may be obtained from the Company or the Securities and Exchange Commission.

The risks included here are not exhaustive and undue reliance should not be placed on any forward-looking statements, which are based on current expectations. All written and oral forward-looking statements attributable to the company, its management, or persons acting on their behalf are qualified in their entirety by these cautionary statements. Further, forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time unless otherwise required by law.

4
Exhibit 99.1


Charter Financial Corporation
Condensed Consolidated Statements of Financial Condition (unaudited)

 
June 30, 2015
 
September 30, 2014
Assets
Cash and amounts due from depository institutions
$
11,386,552

 
$
10,996,959

Interest-earning deposits in other financial institutions
28,564,277

 
88,465,994

Cash and cash equivalents
39,950,829

 
99,462,953

Loans held for sale, fair value of $2,136,035 and $2,090,469
2,092,222

 
2,054,722

Investment securities available for sale
189,790,982

 
188,743,273

Federal Home Loan Bank stock
3,005,600

 
3,442,900

Loans receivable:
 

 
 

Not covered under FDIC loss sharing agreements
636,894,866

 
546,570,720

Covered under FDIC loss sharing agreements
46,772,694

 
70,631,743

Allowance for loan losses (covered loans)
(948,200
)
 
(997,524
)
Unamortized loan origination fees, net (non-covered loans)
(1,404,319
)
 
(1,364,853
)
Allowance for loan losses (non-covered loans)
(8,484,986
)
 
(8,473,373
)
Loans receivable, net
672,830,055

 
606,366,713

Other real estate owned:
 

 
 

Not covered under FDIC loss sharing agreements
938,705

 
1,757,864

Covered under FDIC loss sharing agreements
2,350,797

 
5,557,927

Accrued interest and dividends receivable
2,579,929

 
2,459,347

Premises and equipment, net
19,905,672

 
20,571,541

Goodwill
4,325,282

 
4,325,282

Other intangible assets, net of amortization
492,751

 
423,676

Cash surrender value of life insurance
48,102,945

 
47,178,128

FDIC receivable for loss sharing agreements
4,473,374

 
10,531,809

Deferred income taxes
7,753,812

 
8,231,002

Other assets
6,343,250

 
9,254,001

Total assets
$
1,004,936,205

 
$
1,010,361,138

 
 
 
 
Liabilities and Stockholders’ Equity
Liabilities:
 

 
 

Deposits
$
734,237,570

 
$
717,192,200

FHLB advances
50,000,000

 
55,000,000

Advance payments by borrowers for taxes and insurance
1,503,405

 
1,312,283

Other liabilities
10,275,898

 
11,901,786

Total liabilities
796,016,873

 
785,406,269

Stockholders’ equity:
 

 
 

Common stock, $0.01 par value; 16,403,912 shares issued and outstanding at June 30, 2015 and 18,261,388 shares issued and outstanding at September 30, 2014
164,039

 
182,614

Preferred stock, $0.01 par value; 50,000,000 shares authorized at June 30, 2015 and September 30, 2014
—

 
—

Additional paid-in capital
99,755,617

 
119,586,164

Unearned compensation – ESOP
(5,551,193
)
 
(5,984,317
)
Retained earnings
114,576,694

 
111,924,543

Accumulated other comprehensive loss
(25,825
)
 
(754,135
)
Total stockholders’ equity
208,919,332

 
224,954,869

 
 
 
 
Total liabilities and stockholders’ equity
$
1,004,936,205

 
$
1,010,361,138

__________________________________
(1)
Financial information as of September 30, 2014 has been derived from audited financial statements.

5
Exhibit 99.1

Charter Financial Corporation
Condensed Consolidated Statements of Income (unaudited)

 
Three Months Ended 
 June 30,
 
Nine Months Ended 
 June 30,
 
2015
 
2014
 
2015
 
2014
Interest income:
 
 
 
 
 
 
 
Loans receivable
$
8,988,725

 
$
8,833,596

 
$
26,832,782

 
$
25,564,268

Mortgage-backed securities and collateralized mortgage obligations
735,230

 
871,899

 
2,359,001

 
2,794,019

Federal Home Loan Bank stock
35,316

 
35,601

 
109,001

 
102,778

Other investment securities available for sale
176,342

 
18,286

 
374,216

 
56,314

Interest-earning deposits in other financial institutions
25,611

 
97,321

 
85,459

 
266,816

Amortization of FDIC loss share receivable
(596,691
)
 
(849,919
)
 
(2,387,205
)
 
(1,596,310
)
Total interest income
9,364,533

 
9,006,784

 
27,373,254

 
27,187,885

Interest expense:
 

 
 

 
 

 
 

Deposits
672,525

 
790,011

 
2,063,898

 
2,479,856

Borrowings
545,368

 
595,829

 
1,725,750

 
1,872,357

Total interest expense
1,217,893

 
1,385,840

 
3,789,648

 
4,352,213

Net interest income
8,146,640

 
7,620,944

 
23,583,606

 
22,835,672

Provision for loan losses, not covered under FDIC loss sharing agreements
—

 
—

 
—

 
300,000

Provision for covered loan losses
—

 
(834,086
)
 
—

 
(885,664
)
Net interest income after provision for loan losses
8,146,640

 
8,455,030

 
23,583,606

 
23,421,336

Noninterest income:
 

 
 

 
 

 
 

Service charges on deposit accounts
1,663,324

 
1,463,698

 
4,758,276

 
4,263,639

Bankcard fees
1,015,719

 
906,013

 
2,956,880

 
2,596,743

Gain (loss) on investment securities available for sale
—

 
200,704

 
(27,209
)
 
200,704

Bank owned life insurance
321,102

 
278,487

 
924,817

 
925,467

Gain on sale of loans and loan servicing release fees
435,055

 
298,405

 
1,153,636

 
737,236

Brokerage commissions
210,563

 
124,128

 
567,349

 
452,479

FDIC receivable for loss sharing agreements accretion
19,711

 
68,400

 
94,230

 
61,533

Other
150,933

 
(104,205
)
 
405,086

 
1,330,929

Total noninterest income
3,816,407

 
3,235,630

 
10,833,065

 
10,568,730

Noninterest expenses:
 

 
 

 
 

 
 

Salaries and employee benefits
5,034,540

 
4,969,325

 
15,126,581

 
14,522,114

Occupancy
1,926,645

 
1,863,131

 
5,640,356

 
5,629,280

Legal and professional
352,116

 
369,360

 
978,025

 
1,309,946

Marketing
305,991

 
339,774

 
938,461

 
976,048

Federal insurance premiums and other regulatory fees
189,089

 
199,167

 
564,535

 
701,428

Net (benefit) cost of operations of real estate owned
(29,675
)
 
87,846

 
54,573

 
374,538

Furniture and equipment
229,105

 
225,753

 
603,306

 
550,200

Postage, office supplies and printing
222,151

 
239,874

 
686,783

 
646,500

Core deposit intangible amortization expense
64,009

 
94,454

 
206,405

 
300,514

Other
756,546

 
646,682

 
2,050,328

 
1,805,148

Total noninterest expenses
9,050,517

 
9,035,366

 
26,849,353

 
26,815,716

Income before income taxes
2,912,530

 
2,655,294

 
7,567,318

 
7,174,350

Income tax expense
1,000,796

 
870,116

 
2,547,849

 
2,261,294

Net income
$
1,911,734

 
$
1,785,178

 
$
5,019,469

 
$
4,913,056

Basic net income per share
$
0.12

 
$
0.09

 
$
0.32

 
$
0.23

Diluted net income per share
$
0.12

 
$
0.09

 
$
0.30

 
$
0.22

Weighted average number of common shares outstanding
15,559,917

 
20,746,759

 
15,858,186

 
21,486,082

Weighted average number of common and potential common shares outstanding
16,210,424

 
21,300,951

 
16,508,693

 
22,040,274


6
Exhibit 99.1

Charter Financial Corporation
Supplemental Financial Data (unaudited)
in thousands except per share data
 
Quarter to Date
 
 
Year to Date
 
6/30/2015
 
3/31/2015
 
12/31/2014
 
9/30/2014
 
6/30/2014
 
 
6/30/2015
 
6/30/2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated balance sheet data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
1,004,936

 
$
1,010,645

 
$
979,777

 
$
1,010,361

 
$
1,040,237

 
 
$
1,004,936

 
$
1,040,237

Cash and cash equivalents
39,951

 
64,564

 
48,732

 
99,463

 
149,269

 
 
39,951

 
149,269

Loans receivable, net
672,830

 
656,212

 
627,740

 
606,367

 
582,403

 
 
672,830

 
582,403

Non-covered loans receivable, net
627,006

 
607,118

 
560,724

 
536,732

 
511,176

 
 
627,006

 
511,176

Covered loans receivable, net
45,824

 
49,094

 
67,016

 
69,635

 
71,227

 
 
45,824

 
71,227

Other real estate owned
3,290

 
4,487

 
5,508

 
7,316

 
9,345

 
 
3,290

 
9,345

Non-covered other real estate owned
939

 
1,144

 
954

 
1,758

 
1,331

 
 
939

 
1,331

Covered other real estate owned
2,351

 
3,343

 
4,554

 
5,558

 
8,014

 
 
2,351

 
8,014

Securities available for sale
189,791

 
182,982

 
191,995

 
188,743

 
185,040

 
 
189,791

 
185,040

Transaction accounts
328,961

 
328,012

 
310,891

 
314,201

 
312,962

 
 
328,961

 
312,962

Total deposits
734,238

 
736,803

 
701,475

 
717,192

 
729,609

 
 
734,238

 
729,609

Borrowings
50,000

 
50,000

 
55,000

 
55,000

 
55,000

 
 
50,000

 
55,000

Total stockholders’ equity
208,919

 
211,246

 
213,186

 
224,955

 
243,414

 
 
208,919

 
243,414

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated earnings summary:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
$
9,365

 
$
9,040

 
$
8,969

 
$
8,460

 
$
9,007

 
 
$
27,373

 
$
27,188

Interest expense
1,218

 
1,236

 
1,336

 
1,378

 
1,386

 
 
3,789

 
4,352

Net interest income
8,147

 
7,804

 
7,633

 
7,082

 
7,621

 
 
23,584

 
22,836

Provision for loan losses on non-covered loans
—

 
—

 
—

 
—

 
—

 
 
—

 
300

Provision for loan losses on covered loans
—

 
(4
)
 
4

 
(127
)
 
(834
)
 
 
—

 
(885
)
Net interest income after provision for loan losses
8,147

 
7,808

 
7,629

 
7,209

 
8,455

 
 
23,584

 
23,421

Noninterest income
3,816

 
3,451

 
3,566

 
3,708

 
3,236

 
 
10,833

 
10,569

Noninterest expense
9,050

 
9,064

 
8,735

 
9,394

 
9,036

 
 
26,850

 
26,816

Income tax expense
1,001

 
761

 
786

 
481

 
870

 
 
2,548

 
2,261

Net income
$
1,912

 
$
1,434

 
$
1,674

 
$
1,042

 
$
1,785

 
 
$
5,019

 
$
4,913

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Per share data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share – basic
$
0.12

 
$
0.09

 
$
0.10

 
$
0.06

 
$
0.09

 
 
$
0.32

 
$
0.23

Earnings per share – fully diluted
$
0.12

 
$
0.09

 
$
0.10

 
$
0.06

 
$
0.09

 
 
$
0.30

 
$
0.22

Cash dividends per share
$
0.05

 
$
0.05

 
$
0.05

 
$
0.05

 
$
0.05

 
 
$
0.15

 
$
0.15

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average basic shares
15,560

 
15,835

 
16,175

 
17,936

 
20,747

 
 
15,858

 
21,486

Weighted average diluted shares
16,210

 
16,376

 
16,710

 
18,446

 
21,301

 
 
16,509

 
22,040

Total shares outstanding
16,404

 
16,664

 
16,963

 
18,261

 
19,960

 
 
16,404

 
19,960

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Book value per share
$
12.74

 
$
12.68

 
$
12.57

 
$
12.32

 
$
12.20

 
 
$
12.74

 
$
12.20

Tangible book value per share
$
12.44

 
$
12.39

 
$
12.29

 
$
12.06

 
$
11.95

 
 
$
12.44

 
$
11.95

__________________________________
(1)
Financial information as of September 30, 2014 has been derived from audited financial statements.

7
Exhibit 99.1

Charter Financial Corporation
Supplemental Information (unaudited)
dollars in thousands
 
Quarter to Date
 
 
Year to Date
 
6/30/2015
 
3/31/2015
 
12/31/2014
 
9/30/2014
 
6/30/2014
 
 
6/30/2015
 
6/30/2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Not covered by loss share agreements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans receivable: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1-4 family residential real estate
$
174,824

 
$
172,131

 
$
157,340

 
$
152,811

 
$
139,803

 
 
$
174,824

 
$
139,803

Commercial real estate
356,950

 
340,172

 
313,658

 
300,556

 
284,591

 
 
356,950

 
284,591

Commercial
30,078

 
29,432

 
27,844

 
24,760

 
21,172

 
 
30,078

 
21,172

Real estate construction
70,189

 
70,758

 
67,196

 
63,485

 
58,459

 
 
70,189

 
58,459

Consumer and other
4,854

 
4,560

 
4,625

 
4,959

 
17,010

 
 
4,854

 
17,010

Total non-covered loans receivable
$
636,895

 
$
617,053

 
$
570,663

 
$
546,571

 
$
521,035

 
 
$
636,895

 
$
521,035

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at beginning of period
$
8,463

 
$
8,494

 
$
8,473

 
$
8,606

 
$
8,431

 
 
$
8,473

 
$
8,189

Charge-offs
(54
)
 
(59
)
 
(88
)
 
(342
)
 
(238
)
 
 
(202
)
 
(399
)
Recoveries
76

 
28

 
109

 
209

 
13

 
 
214

 
116

Provision
—

 
—

 
—

 
—

 
—

 
 
—

 
300

Transfer (2)
—

 
—

 
—

 
—

 
400

 
 
—

 
400

Balance at end of period
$
8,485

 
$
8,463

 
$
8,494

 
$
8,473

 
$
8,606

 
 
$
8,485

 
$
8,606

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonperforming assets: (3)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonaccrual loans
$
4,310

 
$
3,410

 
$
3,274

 
$
3,508

 
$
4,243

 
 
$
4,310

 
$
4,243

Loans delinquent 90 days or greater and still accruing
—

 
—

 
64

 
736

 
238

 
 
—

 
238

Total nonperforming non-covered loans
4,310

 
3,410

 
3,338

 
4,244

 
4,481

 
 
4,310

 
4,481

Other real estate owned
939

 
1,144

 
954

 
1,758

 
1,331

 
 
939

 
1,331

Total nonperforming non-covered assets
$
5,249

 
$
4,554

 
$
4,292

 
$
6,002

 
$
5,812

 
 
$
5,249

 
$
5,812

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Troubled debt restructuring:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Troubled debt restructurings - accruing
$
6,105

 
$
6,064

 
$
6,094

 
$
6,154

 
$
7,352

 
 
$
6,105

 
$
7,352

Troubled debt restructurings - nonaccrual
1,790

 
1,673

 
1,673

 
1,674

 
2,094

 
 
1,790

 
2,094

Total troubled debt restructurings
$
7,895

 
$
7,737

 
$
7,767

 
$
7,828

 
$
9,446

 
 
$
7,895

 
$
9,446

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Covered by loss sharing agreements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonperforming assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other real estate owned
$
2,351

 
$
3,343

 
$
4,554

 
$
5,558

 
$
8,014

 
 
$
2,351

 
$
8,014

Covered loans 90+ days delinquent (4)
1,248

 
2,638

 
5,434

 
5,315

 
3,156

 
 
1,248

 
3,156

Total nonperforming covered assets
$
3,599

 
$
5,981

 
$
9,988

 
$
10,873

 
$
11,170

 
 
$
3,599

 
$
11,170

__________________________________
(1)
Includes previously acquired loans in the amount of $20.2 million and $20.8 million at June 30, 2015 and March 31, 2015, respectively, related to the Neighborhood Community Bank and McIntosh Commercial Bank non single-family loss sharing agreements with the FDIC that expired in June 2014 and March 2015, respectively. Additionally, $8.2 million, $8.6 million and $9.1 million of previously acquired loans related to Neighborhood Community Bank are included at December 31, 2014, September 30, 2014 and June 30, 2014, respectively.
(2)
Transfer of allowance related to acquired Neighborhood Community Bank non-single family loans upon expiration of the non-single family loss sharing agreement with the FDIC in June 2014.
(3)
Previously acquired loans that are no longer covered under the commercial loss sharing agreement with the FDIC are excluded from this table. Due to the recognition of accretion income established at the time of acquisition, acquired loans that are greater than 90 days delinquent or designated nonaccrual status are regarded as accruing loans for reporting purposes.
(4)
Covered loans contractually past due greater than ninety days are reported as accruing loans because of accretable discounts established at the time of acquisition.

8
Exhibit 99.1

Charter Financial Corporation
Supplemental Information (unaudited)

 
Quarter to Date
 
 
Year to Date
 
6/30/2015
 
3/31/2015
 
12/31/2014
 
9/30/2014
 
6/30/2014
 
 
6/30/2015
 
6/30/2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on equity (annualized)
3.62
 %
 
2.69
%
 
3.09
 %
 
1.78
%
 
2.71
%
 
 
3.13
%
 
2.42
%
Return on assets (annualized)
0.76
 %
 
0.58
%
 
0.68
 %
 
0.41
%
 
0.67
%
 
 
0.67
%
 
0.61
%
Net interest margin (annualized)
3.62
 %
 
3.54
%
 
3.47
 %
 
3.14
%
 
3.26
%
 
 
3.54
%
 
3.24
%
Net interest margin, excluding the effects of purchase accounting (1)
3.21
 %
 
3.31
%
 
3.14
 %
 
2.95
%
 
2.90
%
 
 
3.22
%
 
2.84
%
Bank tier 1 leverage ratio (2)
16.70
 %
 
16.73
%
 
18.31
 %
 
17.67
%
 
19.51
%
 
 
16.70
%
 
19.51
%
Bank total risk-based capital ratio
22.88
 %
 
23.42
%
 
26.46
 %
 
27.90
%
 
32.93
%
 
 
22.88
%
 
32.93
%
Effective tax rate
34.36
 %
 
34.67
%
 
31.96
 %
 
31.58
%
 
32.77
%
 
 
33.67
%
 
31.52
%
Yield on loans
5.02
 %
 
4.95
%
 
5.14
 %
 
5.05
%
 
5.44
%
 
 
5.04
%
 
5.47
%
Cost of deposits
0.43
 %
 
0.43
%
 
0.48
 %
 
0.49
%
 
0.49
%
 
 
0.45
%
 
0.50
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratios of non-covered assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses as a % of total loans
1.33
 %
 
1.37
%
 
1.49
 %
 
1.55
%
 
1.65
%
 
 
1.33
%
 
1.65
%
Allowance for loan losses as a % of nonperforming loans
196.86
 %
 
248.17
%
 
254.47
 %
 
199.64
%
 
192.06
%
 
 
196.86
%
 
192.06
%
Nonperforming assets as a % of total loans and REO
0.82
 %
 
0.74
%
 
0.75
 %
 
1.09
%
 
1.11
%
 
 
0.82
%
 
1.11
%
Nonperforming assets as a % of total assets
0.55
 %
 
0.48
%
 
0.48
 %
 
0.65
%
 
0.62
%
 
 
0.55
%
 
0.62
%
Net charge-offs as a % of average loans (annualized)
(0.01
)%
 
0.02
%
 
(0.01
)%
 
0.10
%
 
0.18
%
 
 
—
%
 
0.08
%
__________________________________
(1)
Net interest income excluding accretion and amortization of loss share loans receivable divided by average net interest earning assets excluding average loan accretable discounts in the amount of $3.9 million, $5.1 million, $5.5 million, $6.1 million, and $5.5 million, for the quarters ended June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014, and June 30, 2014, respectively.
(2)
During the quarter ended March 31, 2015, an upstream of capital was made between the bank and the holding company in the amount of $17.5 million to be used primarily for the repurchase of the Company's outstanding shares.

9
Exhibit 99.1

Charter Financial Corporation
Average Balances, Interest Rates and Yields (unaudited)
dollars in thousands
 
Quarter to Date
 
6/30/2015
 
6/30/2014
 
Average Balance
 
Interest
 
Average Yield/Cost (10)
 
Average Balance
 
Interest
 
Average Yield/Cost (10)
Assets:
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
Interest-earning deposits in other financial institutions
$
44,748

 
$
26

 
0.23
%
 
$
151,348

 
$
97

 
0.26
%
FHLB common stock and other equity securities
3,006

 
35

 
4.70

 
3,443

 
36

 
4.14

Mortgage-backed securities and collateralized mortgage obligations available for sale
155,280

 
735

 
1.89

 
176,194

 
872

 
1.98

Other investment securities available for sale (1)
28,218

 
176

 
2.50

 
18,290

 
18

 
0.40

Loans receivable (1)(2)(3)(4)
668,329

 
7,508

 
4.49

 
586,797

 
7,189

 
4.90

Accretion and amortization of loss share loans receivable (5)
 
 
885

 
0.53

 
 
 
795

 
0.54

Total interest-earning assets
899,581

 
9,365

 
4.16

 
936,072

 
9,007

 
3.85

Total noninterest-earning assets
103,728

 
 
 
 

 
123,453

 
 
 
 

Total assets
$
1,003,309

 
 
 
 

 
$
1,059,525

 
 
 
 

Liabilities and Equity:
 

 
 

 
 

 
 

 
 

 
 

Interest-bearing liabilities:
 

 
 

 
 

 
 

 
 

 
 

Interest bearing checking
$
175,641

 
$
53

 
0.12
%
 
$
178,771

 
$
51

 
0.11
%
Bank rewarded checking
49,743

 
25

 
0.20

 
48,429

 
29

 
0.24

Savings accounts
50,409

 
2

 
0.02

 
48,482

 
2

 
0.02

Money market deposit accounts
123,392

 
62

 
0.20

 
120,903

 
65

 
0.21

Certificate of deposit accounts
231,077

 
531

 
0.92

 
247,197

 
643

 
1.04

Total interest-bearing deposits
630,262

 
673

 
0.43

 
643,782

 
790

 
0.49

Borrowed funds
50,000

 
545

 
4.36

 
55,000

 
596

 
4.33

Total interest-bearing liabilities
680,262

 
1,218

 
0.72

 
698,782

 
1,386

 
0.79

Noninterest-bearing deposits
99,138

 
 
 
 

 
85,061

 
 
 
 

Other noninterest-bearing liabilities
12,417

 
 
 
 

 
11,979

 
 
 
 

Total noninterest-bearing liabilities
111,555

 
 
 
 

 
97,040

 
 
 
 

Total liabilities
791,817

 
 
 
 

 
795,822

 
 
 
 

Total stockholders' equity
211,492

 
 
 
 

 
263,703

 
 
 
 

Total liabilities and stockholders' equity
$
1,003,309

 
 
 
 

 
$
1,059,525

 
 
 
 

Net interest income
 

 
$
8,147

 
 

 
 

 
$
7,621

 
 

Net interest earning assets (6)
 

 
$
219,319

 
 

 
 

 
$
237,290

 
 

Net interest rate spread (7)
 

 
 

 
3.44
%
 
 

 
 

 
3.06
%
Net interest margin (8)
 

 
 

 
3.62
%
 
 

 
 

 
3.26
%
Net interest margin, excluding the effects of purchase accounting (9)
 
 
 
 
3.21
%
 
 
 
 
 
2.90
%
Ratio of average interest-earning assets to average interest-bearing liabilities
 
 
 
 
132.24
%
 
 
 
 
 
133.96
%
__________________________________
(1)
Tax exempt or tax-advantaged securities and loans are shown at their contractual yields and are not shown at a tax equivalent yield.
(2)
Includes net loan fees deferred and accreted pursuant to applicable accounting requirements.
(3)
Interest income on loans is interest income as recorded in the income statement and, therefore, does not include interest income on nonaccrual loans.
(4)
Interest income on loans excludes discount accretion and amortization of the indemnification asset.
(5)
Accretion of accretable purchase discount on loans acquired in FDIC-assisted acquisitions and amortization of the overstatement of FDIC indemnification asset.
(6)
Net interest-earning assets represent total average interest-earning assets less total average interest-bearing liabilities.
(7)
Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(8)
Net interest margin represents net interest income as a percentage of average interest-earning assets.
(9)
Net interest margin, excluding the effects of purchase accounting represents net interest income excluding accretion and amortization of loss share loans receivable as a percentage of average net interest earning assets excluding loan accretable discounts in the amount of $3.9 million and $5.5 million for the quarters ended June 30, 2015 and June 30, 2014, respectively.
(10)
Annualized.

10
Exhibit 99.1

Charter Financial Corporation
Average Balances, Interest Rates and Yields (unaudited)
dollars in thousands
 
Fiscal Year to Date
 
6/30/2015
 
6/30/2014
 
Average Balance
 
Interest
 
Average Yield/Cost (10)
 
Average Balance
 
Interest
 
Average Yield/Cost (10)
Assets:
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 

 
 

 
 

 
 

 
 

 
 

Interest-earning deposits in other financial institutions
$
50,140

 
$
85

 
0.23
%
 
$
146,869

 
$
267

 
0.24
%
FHLB common stock and other equity securities
3,276

 
109

 
4.44

 
3,748

 
103

 
3.66

Mortgage-backed securities and collateralized mortgage obligations available for sale
163,857

 
2,359

 
1.92

 
184,775

 
2,794

 
2.02

Other investment securities available for sale (1)
23,029

 
374

 
2.17

 
19,126

 
56

 
0.39

Loans receivable (1)(2)(3)(4)
647,306

 
22,422

 
4.62

 
584,630

 
21,249

 
4.85

Accretion and amortization of loss share loans receivable (5)
 
 
2,024

 
0.41

 
 
 
2,719

 
0.62

Total interest-earning assets
887,608

 
27,373

 
4.11

 
939,148

 
27,188

 
3.86

Total noninterest-earning assets
107,218

 
 
 
 

 
134,998

 
 
 
 

Total assets
$
994,826

 
 
 
 

 
$
1,074,146

 
 
 
 

Liabilities and Equity:
 

 
 

 
 

 
 

 
 

 
 

Interest-bearing liabilities:
 

 
 

 
 

 
 

 
 

 
 

Interest bearing checking
$
169,518

 
$
157

 
0.12
%
 
$
175,754

 
$
149

 
0.11
%
Bank rewarded checking
48,730

 
77

 
0.21

 
48,342

 
87

 
0.24

Savings accounts
49,270

 
7

 
0.02

 
48,243

 
8

 
0.02

Money market deposit accounts
124,565

 
196

 
0.21

 
127,567

 
211

 
0.22

Certificate of deposit accounts
226,293

 
1,627

 
0.96

 
256,980

 
2,025

 
1.05

Total interest-bearing deposits
618,376

 
2,064

 
0.45

 
656,886

 
2,480

 
0.50

Borrowed funds
53,077

 
1,725

 
4.33

 
57,956

 
1,872

 
4.31

Total interest-bearing liabilities
671,453

 
3,789

 
0.75

 
714,842

 
4,352

 
0.81

Noninterest-bearing deposits
97,598

 
 
 
 
 
77,572

 
 
 
 
Other noninterest-bearing liabilities
11,807

 
 
 
 
 
11,459

 
 
 
 
Total noninterest-bearing liabilities
109,405

 
 
 
 
 
89,031

 
 
 
 
Total liabilities
780,858

 
 
 
 
 
803,873

 
 
 
 
Total stockholders' equity
213,968

 
 
 
 
 
270,273

 
 
 
 
Total liabilities and stockholders' equity
$
994,826

 
 
 
 
 
$
1,074,146

 
 
 
 
Net interest income
 

 
$
23,584

 
 

 
 

 
$
22,836

 
 

Net interest earning assets (6)
 

 
$
216,155

 
 

 
 

 
$
224,306

 
 

Net interest rate spread (7)
 

 
 

 
3.36
%
 
 

 
 

 
3.05
%
Net interest margin (8)
 

 
 

 
3.54
%
 
 

 
 

 
3.24
%
Net interest margin, excluding the effects of purchase accounting (9)
 
 
 
 
3.22
%
 
 
 
 
 
2.84
%
Ratio of average interest-earning assets to average interest-bearing liabilities
 

 
 

 
132.19
%
 
 

 
 

 
131.38
%
__________________________________
(1)
Tax exempt or tax-advantaged securities and loans are shown at their contractual yields and are not shown at a tax equivalent yield.
(2)
Includes net loan fees deferred and accreted pursuant to applicable accounting requirements.
(3)
Interest income on loans is interest income as recorded in the income statement and, therefore, does not include interest income on nonaccrual loans.
(4)
Interest income on loans excludes discount accretion and amortization of the indemnification asset.
(5)
Accretion of accretable purchase discount on loans acquired in FDIC-assisted acquisitions and amortization of the overstatement of FDIC indemnification asset.
(6)
Net interest-earning assets represent total average interest-earning assets less total average interest-bearing liabilities.
(7)
Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(8)
Net interest margin represents net interest income as a percentage of average interest-earning assets.
(9)
Net interest margin, excluding the effects of purchase accounting represents net interest income excluding accretion and amortization of loss share loans receivable as a percentage of average net interest earning assets excluding loan accretable discounts in the amount of $4.8 million and $4.5 million for the three months ended June 30, 2015 and June 30, 2014, respectively.
(10)
Annualized.

11
Exhibit 99.2

 
 
NEWS RELEASE
Contact:
 
 
Robert L. Johnson, Chairman & CEO
 
At Dresner Corporate Services
Curt Kollar, CFO
 
Steve Carr
706-645-1391
 
312-780-7211
 
 
 


CHARTER FINANCIAL DECLARES REGULAR
QUARTERLY CASH DIVIDEND

West Point, Georgia, July 23, 2015 – Charter Financial Corporation (NASDAQ: CHFN) today announced that its board of directors has declared a regular quarterly cash dividend of $0.05 per share. The dividend is payable on August 24, 2015, to stockholders of record as of August 10, 2015.
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. CharterBank is headquartered in West Point, Georgia, and operates branches in west-central Georgia, east-central Alabama, and the Florida Gulf Coast. CharterBank's deposits are insured by the Federal Deposit Insurance Corporation. Investors may obtain additional information about Charter Financial Corporation and CharterBank on the internet at www.charterbk.com under About Us.




1

 
Forward-Looking Statement 2 This presentation may contain certain forward-looking statements regarding our prospective performance and strategies within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the Safe Harbor Provision for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of said safe harbor provision. Forward- looking statements can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect” and words of similar meaning. These forward-looking statements include, but are not limited to:  statements of our goals, intentions and expectations;  statements regarding our business plans, prospects, growth and operating strategies;  statements regarding the asset quality of our loan and investment portfolios; and  estimates of our risks and future costs and benefits. These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:  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 on 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. Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date of this presentation. Except as required by applicable law or regulation, we do not undertake, and specifically disclaim any obligation to update any forward-looking statements that may be made from time to time by or on behalf of the Company. Please see “Risk Factors” beginning on page 19 of the Company’s Prospectus dated February 11, 2013.

 
Market Profile 3 NASDAQ: CHFN Recent Price1 (07/20/2015): $12.33 Shares Outstanding (06/30/2015): 16.4 Million Market Capitalization2: $202.3 Million Price/Tangible Book Value3: 99.1% Dividend Yield: 1.62% Total Assets (06/30/2015): $1.0 Billion 1- Source: Bloomberg 2- Based on July 20, 2015 closing market price and June 30, 2015 shares outstanding. 3- Based on July 20, 2015 closing market price, June 30, 2015 shares outstanding and June 30, 2015 tangible book value.

 
Corporate Profile 4  Headquartered in West Point, Georgia  Founded in 1954 as First Federal Savings and Loan Association  Organic & acquisitive growth  Three FDIC-assisted acquisitions (June 2009, March 2010, Sept 2011)  Approximately 274 FTE’s servicing over 48,000 checking accounts  15 Branches along I-85 & I-20 in GA/AL and NW Florida  June 30, 2015: Total Assets: $1.0 Billion Total Net Loans: $672.8 Million Total Deposits: $734.2 Million Total Capital: $208.9 Million

 
Overview of Management Team 5  Focus on Growing Atlanta MSA Presence  Conservative Credit  M&A Experience … 5 Transactions Both Assisted & Unassisted  Full Conversion From Mutual Thrift – Established Strong Capital Position  Transformed Balance Sheet From Traditional Thrift to Commercial Bank Top Executives NAME POSITION (Banking/CharterBank) EXPERIENCE Robert Lee Johnson Chairman & CEO 33/31 Lee Washam President, CharterBank 31/15 Curtis R. Kollar Senior VP & CFO 28/24

 
6 Market Conditions  Auto Industry is Strong on I-85 Corridor  Most of Our Markets have Significant Manufacturing, University or Military Influences  Lending Opportunities in Metro Markets  Gradual Recovery in Non-Metro Markets  Active Regional M&A Market

 
7 Recent Accomplishments  EPS Growth  Improving Operating Leverage  Flat Expenses and Core NIM Expansion  Annualized Loan Growth 14.6% in Three Quarters  Continued Growth in Checking Accounts and Bank Card Fees  Accretive Impact of Stock Repurchases  Good Credit Quality –Non Performing Assets 0.55% of Assets  Reduced Shares Outstanding by 28% in the Last 2 Years  All Purchased Below Tangible Book Value

 
Capital Management Strategies 8  TCE of 20.31% at June 30, 2015  Uses of Capital  Disciplined Approach to Growth  Organic Balance Sheet Growth  Metro Markets Lender Lift Outs  Whole Bank Acquisitions  Branch Purchases  Stock Repurchases and Dividends

 
Growth Strategies 9  Focus on Whole Bank Targets Providing High EPS Accretion  Reasonable Tangible Book Value Earn-Back  Metro Institution With Loan Growth Potential  Interstate or Franchise Add-On for Income Accretion and Funding  Lender Lift-out in Key Markets

 
11.20 11.40 11.60 11.80 12.00 12.20 12.40 12.60 15 16 17 18 19 20 21 22 23 24 $ DollarsM ill ion s Shares Outstanding Tangible Book Value per Share Stock Repurchases 10 Reduced Outstanding Shares by 28%

 
Financial Information

 
Fiscal YTD 2015 (9 Months) Results and Developments 12 Total Loans, Net Tangible Common Equity/Total Assets Net Income $5.0 million Fully Diluted EPS** $0.30 Loan Loss Reserves $8.5 million (Non-covered)  ALL / Non-covered NPLs – 196.86%  ALL as a % of Total Non-covered Loans - 1.33%  Continued advances in core profitability Nonperforming Assets / Assets 0.55%*  Superior asset quality 20.31% $673 million  5 consecutive quarters of total loan growth * For non-covered assets. **Diluted net income per share for the nine months ended June 30, 2015 was computed by dividing net income by weighted average shares outstanding plus potential common shares resulting from dilutive stock options and unvested restricted shares, determined using the treasury stock method. ROAA 0.67%  Improved Basic EPS over Fiscal YTD 2014 (9 Months) by 39.1%  June Qtr. Basic EPS $0.12  June Qtr. ROA 0.76%  Well capitalized & protective of book value per share  Actively repurchasing common shares Basic EPS $0.32

 
Balance Sheet Highlights 13 Note: Unless otherwise noted, the above chart displays information based on Charter’s fiscal year end, which is September 30. [1] Includes FDIC Acquisition of Neighborhood Community Bank. [2] Includes FDIC Acquisition of McIntosh Commercial Bank. [3] Includes FDIC Acquisition of First National Bank of Florida. [4] Core deposits consist of transaction accounts, money market accounts, and savings accounts. [5] Incremental capital raise of approximately $30 million (net). [6] Second step conversion and reorganization resulted in $142.9 million in gross offering proceeds. (Dollars in $000's) 2009 [1] 2010 [2] 2011 [3] 2012 2013 2014 Q3 2015 Total Assets $936,880 $1,186,082 $1,171,710 $1,032,220 $1,089,406 $1,010,361 $1,004,936 Loans, net 552,550 599,370 655,028 593,904 579,854 606,367 672,830 Non Covered 462,786 451,231 419,979 427,676 470,863 536,732 627,006 Covered 89,764 148,138 235,050 166,228 108,991 69,635 45,824 Securities 206,061 133,183 158,737 189,379 215,118 188,743 189,791 Total Liabilities $838,623 $1,052,746 $1,032,294 $889,699 $815,628 $785,406 $796,017 Retail Deposits 463,566 739,691 883,389 779,397 745,900 717,192 703,471 Core [4] 216,902 313,170 447,176 456,292 475,426 486,248 505,721 Time 246,664 426,521 436,213 323,105 270,475 230,944 228,517 Total Borrowings 227,000 212,000 110,000 81,000 60,000 55,000 50,000 Total Equity $98,257 $135,788 [5] $139,416 $142,521 $273,778 [6] $224,955 $208,919

 
Funding Mix 14 32.1% At June 30, 2015 Average cost of deposits for the three months ended June 30, 2015: 0.43% Deposits by Type • Core Deposits – Transaction, Savings & Money Market Accounts Funding by Type ($ Million) $0 $200 $400 $600 $800 $1,000 $1,200 Core Deposits Retail CD's Wholesale Funding 55% 21% 24% 46% 25% 29% 64% 17% 19% 48% 27% 25% 26% 30% 44% 30% 41% 29% 43% 13% 44% $710 $703 $1,021 $825 $1,035 $881 11% 37% 52% $811 8% 59% 33% $702$688 $687 19% 17% 64% $784 10% 25% 64% $722 7% 30% 63%Time Deposits (Excluding Wholesale Deposits) 27% Savings & Money Market 24% Transaction Accounts 45% Wholesale Time Deposits 4%

 
Loans Outstanding at June 30, 2015 15 1-4 Family 26% Comm RE - Owner Occupied 12% Comm RE - Non Owner Occupied - Other 35% Comm RE - Hotels 5% Comm RE - Multifamily 6% Commercial & Industrial 5% Consumer & Other 1% Real Estate Construction 10% Note: Unless otherwise noted, the above chart displays information based on Charter’s fiscal year end, which is September 30. At 2009 2010 2011 2012 2013 2014 6/30/15 Non-Covered NPAs / Total Non-Covered Assets (%) 2.16% 2.33% 1.99% 0.69% 0.49% 0.65% 0.55% on- overed COs / Average Non-Covered Loans (%) 0.71 0.90 0.48 0.86 0.32 0.08 --- ALLL Non-Covered Loans / Non-Covered NPLs (x) 0.70x 0.84x 0.80x 2.38x 2.80x 2.00x 1.97x Non-Covered Allowance / Total Non-Covered oans (%) 1.97% 2.12% 2.19% 1.87% 1.70% 1.55% 1.33%

 
$564.3 $579.9 $576.6 $572.0 $582.4 $606.4 $627.7 $656.2 $672.8 $300.0 $350.0 $400.0 $450.0 $500.0 $550.0 $600.0 $650.0 $700.0 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Net Loans Outstanding Trend ($ Million) 16

 
Income Statement Highlights 17 Note: Unless otherwise noted, the above chart displays information based on Charter’s fiscal year end, which is September 30. YTD 2015 (Dollars in $000s) 2009 2010 2011 2012 2013 2014 Annualized Net Interest Income $17,741 $27,201 $30,559 $37,512 $35,275 $29,918 $31,444 Provision for Non Covered Loan Losses $4,550 $5,800 $1,700 $3,300 $1,400 $300 $0 Provision for Covered Loan Losses $0 $420 $1,200 $1,202 $89 ($1,012) $0 Non-Interest Income $12,012 $17,510 $9,291 $12,912 $11,653 $14,277 $14,444 Non-Interest Expense $22,581 $30,469 $33,950 $40,305 $36,314 $36,210 $35,799 Income Tax Expense $306 $2,087 $695 $639 $2,869 $2,742 $3,397 Net Income $2,316 $5,935 $2,305 $4,979 $6,256 $5,955 $6,692

 
Return on Average Assets 18 Note: Unless otherwise noted, the above chart displays information based on Charter’s fiscal year end, which is September 30. 0.27% 0.56% 0.22% 0.46% 0.58% 0.56% 0.67% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 YTD 2015

 
5.24% 5.64% 5.38% 5.35% 4.61% 3.83% 4.07% 4.10% 4.16% 3.22% 2.55% 1.85% 1.23% 0.95% 0.81% 0.80% 0.74% 0.72% 2.35% 3.19% 3.59% 4.17% 3.82% 3.22% 3.47% 3.54% 3.62% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Q1 2015 Q2 2015 Q3 2015 Yield on Interest Earning Assets Cost of Interest Bearing Liabilities Net Interest Margin Net Interest Margin Trends 19 Note: Unless otherwise noted, the above chart displays information based on Charter’s fiscal year end, which is September 30. 2.90% 2.95% 3.14% 3.31% 3.21% 2.00% 2.20% 2.40% 2.60% 2.80% 3.00% 3.20% 3.40% Q3 2014 Q4 2014 Q1 2015 Q2 2 15 Q3 2015 Net Interest Margin Excluding the effects of Purchase Accounting

 
Operating Leverage 20 ($ Million) *Adjusted Net Operating Revenue = Net Interest Income + Non-Interest Income – Net Purchase Accounting Loan Accretion **Efficiency Ratio = Non-Interest Expense / (Net Interest Income + Non-Interest Income – Net Purchase Accounting Loan Accretion) $28.1 $37.0 $31.6 $41.4 $38.0 $41.1 $43.2 80% 82% 107% 97% 96% 88% 83% 76% 79% 85% 80% 77% 82% 78% 60% 70% 80% 90% 100% 110% 120% $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 YTD 2015 Annualized Adjusted Net Operating Revenue* Bargain Purchase Gain Adjusted Efficiency Ratio** Efficiency Ratio

 
Operating Leverage 21 ($ Million) $20 $25 $30 $35 $40 $45 $50 $55 FY 2011 FY 2012 FY 2013 FY 2014 YTD 2015 Annualized Net Operating Revenue Adjusted Net Operating Revenue* Expenses *Adjusted Net Operating Revenue excludes Net Purchase Accounting Loan Accretion

 
Noninterest Expense 22 Note: Unless otherwise noted, the above chart displays information based on Charter’s fiscal year end, which is September 30. ($ Million) $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 YTD 2015 Annualized Marketing Professional Services Occupancy & Furn. and Equip. Other Salaries and Benefits $35.8 $30.5 21.7% 22.8% $22.6 $34.0 $40.3 $36.3 22.4% 17.9% 50.8%48.0% 21.7% 21.6% 46.4% 21.1% 21.5% 45.3% 44.5% 26.0% 20.5% 54.6% 14.1% 22.7% $36.2 56.3% 13.3% 23.3%

 
Investment Merits  Positioned to be opportunistic….  Favorable credit quality, robust capital position & profitable  Trading at 99.1% of tangible book value  Implemented consecutive stock repurchase plans  Disciplined acquisition approach/Actively seeking opportunities  Existing infrastructure can support a larger balance sheet  Track record of returns to shareholders with annualized total return since:  2013 stock conversion of 12%  2010 stock offering of 15% 23

 
Robert L. Johnson Chairman and Chief Executive Officer [email protected] (706) 645-3249 Lee W. Washam President [email protected] (706) 645-3630 Curtis R. Kollar Senior Vice President and Chief Financial Officer [email protected] (706) 645-3237 24 Investor Contacts 1233 O. G. Skinner Drive West Point, Georgia 31833 1-800-763-4444 www.charterbk.com

 
Appendix

 
Board & Executive Team 26 Name Position(s) Held With Charter Financial Corporation Age (1) Director Since (2) Current Term Expires Directors Continuing in Office Jane W. Darden Director 64 1988 2015 Thomas M. Lane Director 60 1996 2015 Edward D. Smith Director 40 2011 2016 Curti M. Johnson General Counsel and Senior Vice President, Director 55 2007 2016 Robert L. Johnson Chief Executive Officer, President and Director 61 1986 2017 David Z. Cauble, III Director 62 1996 2017 David L. Strobel Director 63 2003 2017 Executive Officers Who Are Not Directors Curtis R. Kollar Senior Vice President and Chief Financial Officer 62 Lee Washam President of CharterBank 53 (1) As of December 31, 2014. (2) Includes service as a director of CharterBank prior to its mutual-to-stock conversion.

 
__________________________________ (1) Assumes an instantaneous uniform change in interest rates at all maturities. (2) NPV is the difference between the present value of an institution’s assets and liabilities. (3) Present value of assets represents the discounted present value of incoming cash flows on interest- earning assets. (4) NPV Ratio represents NPV divided by the present value of assets. Net Portfolio Value 27 At June 30, 2015 Change in Interest Rates (bp) (1) Estimated NPV (2) Estimated Increase (Decrease) in NPV Percentage Change in NPV NPV Ratio as a Percent of Present Value of Assets ( 3 ) ( 4 ) Increase (Decrease) in NPV Ratio as a Percent of Present Value of Assets ( 3 ) ( 4 ) (dollars in thousands) 300 $208,412 $1,286 0.6% 20.8% 0.2% 200 $208,487 $1,361 0.7% 20.8% 0.2% 100 $208,122 $997 0.5% 20.7% 0.1% — $207,126 — — 20.6% — (100) $199,612 ($7,514) (3.6%) 19.9% (0.7%)

 
End of Presentation

 

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