- Net Income of $1.5 million
- Credit metrics improved quarter over quarter
- Allowance for loan losses at 143% of nonperforming loans
- Regulatory core capital increases to 12.33%
WEST POINT, Ga., July 31, 2012 (GLOBE NEWSWIRE) -- Charter Financial Corporation (Nasdaq:CHFN) today reported net income of $1.5 million, or $0.08 per basic and diluted share, for the quarter ended June 30, 2012, compared with net income of $1.5 million, or $0.09 per basic and diluted share, for the quarter ended June 30, 2011. Fiscal 2012 earnings to date total $3.2 million, or $0.18 per basic and diluted share, compared to $2.1 million, or $0.11 per basic and diluted share, for the prior-year period.
The Company's total assets were $1.05 billion at June 30, 2012, down from $1.17 billion at September 30, 2011, but up from $955.8 million at June 30, 2011. Total loans outstanding were $616.8 million at June 30, 2012, of which $186.5 million, or 30.2%, were covered by FDIC loss sharing agreements. Total loans outstanding at September 30, 2011, and June 30, 2011, were $655.0 million and $554.4 million, respectively. Loans not covered by loss sharing agreements were $430.3 million at June 30, 2012, which is up from the September 30, 2011 balance of $420.0 million.
Nonperforming assets not covered by loss sharing agreements declined to $9.4 million at June 30 2012, from $17.2 million at June 30, 2011, and from $15.8 million at September 30, 2011. The allowance for loan losses increased to 143.14% of non-covered nonperforming loans from 80.12% at September 30, 2011, and 75.78% at June 30, 2011. The Company had net charge-offs on loans not covered by loss sharing of $280,000 for the quarter ended June 30, 2012, compared to $634,000 for the same quarter of 2011.
Chairman and CEO Robert Johnson stated, "Our credit metrics continue to improve in both the legacy bank and in loans acquired from failed banks and covered by FDIC loss sharing agreements. Organic loan growth has been slow to materialize due to ongoing consumer and business concerns with the economy. We believe in the near future that loan growth is more likely to come via acquisitions than organically."
Total deposits were $821.5 million at June 30, 2012, compared with $911.1 million at September 30, 2011. During the three months ended June 30, 2012, time deposits decreased from $374.7 million to $353.7 million due to lower rates paid on certificates of deposit. Non-time deposits at June 30, 2012, were 57.0% of total deposits.
Net interest income increased to $9.5 million for the quarter ended June 30, 2012, from $8.2 million for the quarter ended June 30, 2011. Total interest income increased to $11.8 million for the quarter ended June 30, 2012, compared to $11.4 million for the same quarter last year. Interest expense decreased to $2.3 million for the quarter ended June 30, 2012, from $3.2 million for the same quarter of 2011.
Net interest margin increased to 4.33% for the quarter ended June 30, 2012, compared with 4.06% for the same quarter of 2011.
Noninterest expense increased to $11.5 million for the quarter ended June 30, 2012, compared to $8.0 million for the same quarter of 2011. The majority of the increase relates to the Company's FDIC-assisted acquisitions, including the costs associated with acquiring, integrating and operating the additional branches, as well as resolving the acquired problem assets. The June 2012 quarter includes a $442,000 write-down of a recently closed branch facility. The Company will close another branch in September, which will lower overall costs and have minimal closing expense, as it is a leased facility. The Company will then have 16 branches compared with 14 in the third quarter of 2011. The June 2012 quarter also includes $431,000 in acquisition costs and $731,000 in Real Estate Owned (REO) expense, including a $200,000 write-down anticipating a liquidation auction.
Noninterest income increased to $2.9 million for the quarter ended June 30, 2012, compared to $2.5 million for the same quarter in 2011. Noninterest income for the current quarter was higher due to increased accretion on the Company's FDIC indemnification assets, which totaled $251,000 and $181,000 for the three months ending June 30, 2012 and 2011, respectively. Additionally, fees on deposits increased to $1.7 million for the quarter ended June 30, 2012, compared to $1.4 million for the quarter ended June 30, 2011.
The Company recorded a loan loss provision of $300,000 on non-covered loans and $75,000 on covered loans for the quarter ended June 30, 2012, compared to $300,000 on non-covered loans and no provision on covered loans for the same quarter in 2011.
For the quarter ended June 30, 2012, income taxes were a net benefit of $897,000 due to the resolution of previous tax uncertainties.
Mr. Johnson continued, "We are pleased with our earnings growth, the rising quality of our legacy loan portfolio, and the improvements in our core deposit base. We have successfully completed our first OCC regulatory examination as we transition from the OTS to the OCC as required under the Dodd-Frank Act. Our strong regulatory leverage capital of 12.33% allows us to continue to seek opportunities to expand our franchise.
"The integration and cost savings of the September 2011 FNB acquisition has gone well. We kept a higher level of performing loans and attacked costs more aggressively than we had in previous FDIC assisted acquisitions. Also, the Florida branches produced $123,000 of deposit fees for the 2012 third quarter which is indicative of the core deposit base quality."
Mr. Johnson concluded, "Our branch network serves an attractive geographic region in West Central Georgia, East Central Alabama, and the North Florida Gulf Coast. Our solid capital standing and our acquisition experience position CharterBank to be a successful consolidator among southeastern banks and to build an enviable community bank footprint with strong shareholder returns."
About Charter Financial Corporation
Charter Financial Corporation is a savings and loan holding company and the parent company of CharterBank, a growing full-service community bank. Charter Financial Corporation is in the mutual holding company structure. 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.
Forward-Looking Statements
This release contains "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. 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.
| Charter Financial Corporation | |||
| Selected Financial Data (unaudited) | |||
| In thousands except share and per share data: | |||
|
June 30, 2012 |
September 30, 2011*** |
June 30, 2011 |
|
| Total Assets | $1,049,436 | $1,171,710 | $955,842 |
| Cash and Cash Equivalents | 76,488 | 148,850 | 65,318 |
| Loans Receivable, Net | 616,837 | 655,028 | 554,449 |
| Non-covered Loans Receivable, Net | 430,292 | 419,979 | 434,310 |
| Covered Loans Receivable, Net | 186,545 | 235,049 | 120,139 |
| Real Estate Owned | 24,365 | 28,765 | 24,322 |
| Non-covered Real Estate Owned | 3,437 | 4,093 | 4,838 |
| Covered Real Estate Owned | 20,928 | 24,672 | 19,484 |
| Securities Available for Sale | 199,140 | 158,737 | 135,292 |
| Core Deposits* | 467,868 | 447,176 | 319,360 |
| Retail Deposits** | 800,575 | 883,389 | 663,834 |
| Total Deposits | 821,532 | 911,094 | 695,818 |
| Borrowings | 80,000 | 110,000 | 110,000 |
| Total Stockholders' Equity | 139,568 | 139,416 | 138,907 |
| Book Value per Share | $7.82 | $7.68 | $7.65 |
| Tangible Book Value per Share | 7.5 | 7.34 | 7.37 |
| Minority Shares Outstanding | 6,397,851 | 6,706,423 | 6,694,232 |
| Total Shares Outstanding – at Period End | 17,855,775 | 18,164,347 | 18,152,156 |
| Weighted Average Total Shares Outstanding – Basic | 17,932,227 | 18,146,627 | 18,140,655 |
| Weighted Average Total Shares Outstanding – Fully Diluted | 17,966,416 | 18,183,938 | 18,187,929 |
| *Core deposits include transaction accounts, money market accounts and savings accounts. | |||
| **Retail deposits include Core Deposits and certificates of deposits excluding brokered and wholesale certificates of deposits. | |||
| ***Financial information as of September 30, 2011 has been derived from audited financial statements. | |||
| Selected Operating Data (in thousands except share and per share data): | ||||||
| Three Months Ended | Nine Months Ended | |||||
| June 30, | March 31, | December 31, | June 30, | |||
| 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |
| Total Interest Income | $ 11,805 | $ 11,397 | $ 12,642 | $ 12,500 | $ 36,946 | $ 35,094 |
| Total Interest Expense | 2,271 | 3,244 | 2,851 | 3,333 | 8,455 | 12,072 |
| Net Interest Income | 9,534 | 8,153 | 9,791 | 9,167 | 28,491 | 23,022 |
| Provision for Loan Losses on non-covered loans | 300 | 300 | 300 | 1,500 | 2,100 | 1,400 |
| Provision for Loan Losses on covered loans | 75 | -- | 290 | 600 | 965 | 400 |
| Net Interest Income after Provision for Loan Losses | 9,159 | 7,853 | 9,201 | 7,067 | 25,426 | 21,222 |
| Noninterest Income | 2,929 | 2,449 | 2,632 | 3,816 | 9,378 | 7,573 |
| Noninterest Expense | 11,506 | 7,968 | 10,024 | 10,264 | 31,795 | 26,004 |
| Income before Income Taxes | 582 | 2,334 | 1,809 | 619 | 3,009 | 2,791 |
| Income Tax Expense (Benefit) | (897) | 785 | 548 | 131 | (219) | 715 |
| Net Income | $ 1,479 | $ 1,549 | $ 1,261 | $ 488 | $ 3,228 | $ 2,076 |
| Earnings per Share – Basic | $ 0.08 | $ 0.09 | $ 0.07 | $ 0.03 | $ 0.18 | $ 0.11 |
| Earnings per Share – Fully Diluted | 0.08 | 0.09 | 0.07 | 0.03 | 0.18 | 0.11 |
| Cash Dividends per Share | 0.05 | 0.05 | -- | 0.05 | 0.10 | 0.15 |
| Net Charge-offs – Legacy Loans | 280 | 634 | 595 | 2,050 | 2,924 | 1,837 |
| Deposit Fees | 1,713 | 1,448 | 1,618 | 1,724 | 5,055 | 4,242 |
| Gain on Sale of Loans | 261 | 127 | 161 | 185 | 608 | 506 |
| Three Months Ended | Nine Months Ended | |||||
| June 30, | March 31, | December 31, | June 30, | |||
| 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |
| Return on Equity | 4.27% | 4.12% | 3.68% | 1.41% | 3.11% | 1.70% |
| Return on Assets | 0.57% | 0.63% | 0.46% | 0.17% | 0.39% | 0.26% |
| Net Interest Margin | 4.33% | 4.06% | 4.35% | 3.94% | 4.20% | 3.60% |
| Bank Core Capital Ratio | 12.33% | 13.16% | 11.93% | 11.28% | 12.33% | 13.16% |
| Bank Total Risk Based Capital | 20.86% | 26.43% | 21.62% | 21.59% | 20.86% | 26.43% |
| Effective (Benefit) Tax Rate | (154.17%) | 33.64% | 30.29% | 21.07% | (7.27%) | 25.62% |
| Ratios of Non-covered Assets: | ||||||
| Allowance for loan losses as a % of Total Loans | 1.94% | 2.12% | 1.92% | 2.05% | 1.94% | 2.12% |
| Allowance for loan losses as a % of Nonperforming Loans | 143.14% | 75.78% | 124.34% | 96.58% | 143.14% | 75.78% |
| Nonperforming Assets as a % of Total Loans and REO | 2.13% | 3.83% | 2.33% | 2.82% | 2.13% | 3.83% |
| Nonperforming Assets as a % of Total Assets | 1.19% | 2.28% | 1.35% | 1.63% | 1.19% | 1.98% |
| Net Charge-offs as a % of Average Loans | 0.25% | 0.57% | 0.40% | 1.90% | 0.71% | 0.54% |