- Total equity to assets of 25.13%
- Noncovered loan growth of 10.10%
- Noninterest expense 9.9% lower than prior year
- Nonperforming noncovered assets at 0.49% of total noncovered assets
- Basic and diluted EPS of $0.30 for the year
WEST POINT, Ga., Nov. 8, 2013 (GLOBE NEWSWIRE) -- Charter Financial Corporation (the "Company") (Nasdaq:CHFN) today reported net income of $6.3 million, or $0.30 per basic and diluted share for the year ended September 30, 2013, an improvement from $5.0 million, or $0.26 per basic and diluted share, for the year ended September 30, 2012. For the quarter ended September 30, 2013 net income was $0.9 million, or $0.04 per basic and diluted share, compared with $1.8 million, or $0.09 per basic and diluted share, for the quarter ended September 30, 2012.
The Company's total assets were $1.1 billion at September 30, 2013, an increase of $57.2 million from September 30, 2012. Total stockholders' equity grew to $273.8 million at September 30, 2013 from $142.5 million at September 30, 2012 due to the completion of the conversion to a full stock company from the mutual holding company structure. Net non-covered loans grew $43.2 million, or 10.10%, to $470.9 million at September 30, 2013 from $427.7 million at September 30, 2012. At September 30, 2013, $109.0 million of net loans receivable were covered by FDIC loss sharing, down from $166.2 million at September 30, 2012. Of the remaining $109.0 million of loans covered by loss sharing, $21.4 million are considered problem loans and are handled by the Company's special assets group with the remaining $87.6 million generally considered "pass" credits.
Chairman and CEO Robert L. Johnson said, "This was a progressive year for Charter Financial as we successfully completed the conversion to a full-stock company, enhanced financial results, and ended the year with a robust capital position. Further, we are pleased with the non-covered loan growth for the year and, particularly for the quarter ended September 30, 2013, that the legacy loan growth exceeded the covered loan run-off. We hope these trends continue, thereby allowing us to invest some of the liquidity acquired in the FDIC-assisted acquisitions. We continue to face headwinds as our purchased loan discount accretion declines. Accordingly, achieving loan growth is a key component of our strategy to replace income."
Total deposits were $751.3 million at September 30, 2013 compared with $800.3 million at September 30, 2012. Core deposits increased to $475.4 million at September 30, 2013 from $456.3 million at September 30, 2012. Total deposits were lower at September 30, 2013 due to decreases of $15.5 million in wholesale time deposits and $52.6 million in non-wholesale time deposits. Borrowings decreased to $60.0 million at September 30, 2013 from $81.0 million at September 30, 2012.
Net interest income decreased to $35.3 million for the year ended September 30, 2013, from $37.5 million for the year ended September 30, 2012. Total interest income decreased to $42.6 million for the year ended September 30, 2013, compared to $48.1 million for the year ended September 30, 2012 primarily as a result of a decrease in the average loan balances. Interest expense decreased to $7.4 million for the year ended September 30, 2013, compared to $10.6 million for the year ended September 30, 2012, primarily as a result of lower expenses on certificates of deposit and borrowings. The average balance of certificates of deposit decreased $76.1 million and the average yield decreased 0.28%.
Net interest margin decreased to 3.82% for the year ended September 30, 2013, compared with 4.17% for the year ended September 30, 2012. The net interest margin for the quarter ended September 30, 2013 was 3.44% compared to 4.09% for the same quarter of the prior year. The net interest margin without accretion for the quarter ended September 30, 2013 was 2.68%.
Noninterest income decreased to $11.7 million for the year ended September 30, 2013, compared to $12.9 million for the year ended September 30, 2012. Noninterest income was lower due to a decrease in FDIC indemnification asset income of $1.4 million for the year ended September 30, 2013, compared to the year ended September 30, 2012. The decrease in indemnification asset income was partially due to reduced accretion and the remainder was due to impairment. Fees on deposits increased to $7.8 million for the year ended September 30, 2013, compared to $7.0 million for the year ended September 30, 2012.
Noninterest expense decreased to $36.3 million for the year ended September 30, 2013, compared to $40.3 million for the year ended September 30, 2012. A decrease in net cost of REO contributed $1.1 million to the reduction. Compensation expense decreased $0.9 million and marketing expense decreased $0.6 million both due to increased 2012 costs related to acquisitions.
The Company recorded a loan loss provision of $1.4 million on non-covered loans and $89,000 on covered loans for the year ended September 30, 2013, compared to $3.3 million on non-covered loans and $1.2 million on covered loans for the year ended September 30, 2012.
"We are delighted with the continued improvement in our asset quality. Nonperforming assets not covered by FDIC loss-sharing stand at 0.49% of total assets and our loan loss reserves are 1.70% of loans not covered by loss-sharing. We continuously review our progress with the resolution of the assets covered by loss sharing and are pleased with developments. We recorded $0.6 million of indemnification asset impairment this year and have approximately the same amount to amortize over the next year."
For the year ended September 30, 2013, income tax expense was $2.9 million, or an effective tax rate of 31.44%, compared to $639,000, or an effective tax rate of 11.38% for the year ended September 30, 2012. This increase was due primarily to a lower than normal income tax expense for the year ended September 30, 2012 related to an uncertain tax position that was resolved in that year.
Mr. Johnson concluded, "We have continued challenges ahead but believe we are well positioned to continue our momentum into 2014. Given the capital management tools available to us and our new capital, we have opportunities for long-term growth."
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. On April 8, 2013, Charter Financial completed its conversion and reorganization from the mutual holding company form of organization to the stock holding company form of organization. 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 | |||
| September 30, | September 30, | June 30, | |
| 2013 | 2012 (1) | 2013 | |
| Total Assets | $ 1,089,406 | $ 1,032,220 | $ 1,125,362 |
| Cash and Cash Equivalents | 161,452 | 108,828 | 190,657 |
| Loans Receivable, Net | 579,854 | 593,904 | 564,293 |
| Non-covered Loans Receivable, Net | 470,863 | 427,676 | 443,581 |
| Covered Loans Receivable, Net | 108,991 | 166,228 | 120,712 |
| Other Real Estate Owned | 15,684 | 24,010 | 14,546 |
| Non-covered Other Real Estate Owned | 1,615 | 2,107 | 1,386 |
| Covered Other Real Estate Owned | 14,069 | 21,903 | 13,160 |
| Securities Available for Sale | 215,118 | 189,379 | 226,551 |
| Core Deposits (2) | 475,426 | 456,292 | 481,230 |
| Retail Deposits (3) | 745,900 | 779,397 | 761,602 |
| Total Deposits | 751,297 | 800,262 | 769,781 |
| Borrowings | 60,000 | 81,000 | 70,000 |
| Total Stockholders' Equity | 273,778 | 142,521 | 279,131 |
| Book Value per Share (4) (5) | $ 12.03 | N/A | $ 12.27 |
| Tangible Book Value per Share (4) (5) | $ 11.81 | N/A | $ 12.04 |
| Minority Shares Outstanding (4) | — | 7,923,379 | — |
| Total Shares Issued – at Period End (4) | 22,752,214 | 19,974,515 | 22,752,214 |
| Weighted Average Total Shares Outstanding – Basic (4) | 20,629,531 | 19,501,312 | 20,165,850 |
| Weighted Average Total Shares Outstanding – Fully Diluted (4) | 20,792,089 | 19,537,348 | 20,296,461 |
| (1) Financial information as of September 30, 2012 has been derived from audited financial statements. | |||
| (2) Core deposits include transaction accounts, money market accounts and savings accounts. | |||
| (3) Retail deposits include Core Deposits and certificates of deposit excluding brokered and wholesale certificates of deposit. | |||
| (4) Share and per share amounts have been restated to reflect the completion of the second-step conversion using a conversion ratio of 1.2471 on shares held by the public prior to April 8, 2013. | |||
| (5) Due to the completion of the second-step conversion on April 8, 2013, September 30, 2012 per share amounts are not comparable to other periods presented and have not been included. | |||
| Charter Financial Corporation | ||||||
| Selected Operating Data (unaudited) | ||||||
| in thousands except share and per share data | ||||||
| Year Ended | Three Months Ended | |||||
| September 30, | September 30, | June 30, | March 31, | |||
| 2013 | 2012 | 2013 | 2012 | 2013 | 2013 | |
| Total Interest Income | $ 42,636 | $ 48,101 | $ 9,925 | $ 11,155 | $ 10,654 | $ 11,006 |
| Total Interest Expense | 7,361 | 10,589 | 1,661 | 2,134 | 1,743 | 1,902 |
| Net Interest Income | 35,275 | 37,512 | 8,264 | 9,021 | 8,911 | 9,104 |
| Provision for Loan Losses on Non-covered Loans | 1,400 | 3,300 | 300 | 1,200 | 500 | 300 |
| Provision (Credit) for Loan Losses on Covered Loans | 89 | 1,202 | (5) | 237 | 42 | (42) |
| Net Interest Income after Provision for Loan Losses | 33,786 | 33,010 | 7,969 | 7,584 | 8,369 | 8,846 |
| Noninterest Income | 11,653 | 12,912 | 2,802 | 3,618 | 2,662 | 2,977 |
| Noninterest Expense | 36,314 | 40,304 | 9,469 | 8,593 | 8,763 | 9,757 |
| Income before Income Taxes | 9,125 | 5,618 | 1,302 | 2,609 | 2,268 | 2,066 |
| Income Tax Expense | 2,869 | 639 | 382 | 858 | 650 | 682 |
| Net Income | $ 6,256 | $ 4,979 | $ 920 | $ 1,751 | $ 1,618 | $ 1,384 |
| Earnings per Share – Basic (1) | $ 0.30 | $ 0.26 | $ 0.04 | $ 0.09 | $ 0.07 | $ 0.07 |
| Earnings per Share – Fully Diluted (1) | 0.30 | 0.26 | 0.04 | 0.09 | 0.07 | 0.07 |
| Cash Dividends per Share | 0.35 | 0.08 | 0.30 | — | 0.05 | — |
| Net Charge-offs – Legacy Loans | $ 1,401 | $ 4,480 | $ 492 | $ 1,556 | $ 665 | $ 136 |
| Deposit Fees | 7,754 | 7,012 | 2,011 | 1,950 | 1,915 | 1,878 |
| Gain on Sale of Loans | 1,334 | 962 | 192 | 353 | 407 | 385 |
| (1) Shares held by the public prior to April 8, 2013, have been restated to reflect the completion of the second-step conversion using a conversion ratio of 1.2471. | ||||||
| Charter Financial Corporation | ||||||
| Financial Ratios (unaudited) | ||||||
| Year Ended | Three Months Ended | |||||
| September 30, | September 30, | June 30, | March 31, | |||
| 2013 | 2012 | 2013 | 2012 | 2013 | 2013 | |
| Return on Equity (annualized) | 2.98% | 3.58% | 1.32% | 4.95% | 2.38% | 3.83% |
| Return on Assets (annualized) | 0.58% | 0.46% | 0.33% | 0.68% | 0.56% | 0.54% |
| Net Interest Margin (annualized) | 3.82% | 4.17% | 3.44% | 4.09% | 3.63% | 4.14% |
| Bank Core Capital Ratio | 18.56% | 12.16% | 18.56% | 12.16% | 17.94% | 11.33% |
| Bank Total Risk Based Capital | 33.83% | 19.22% | 33.83% | 19.22% | 34.62% | 23.01% |
| Effective Tax Rate | 31.44% | 11.38% | 29.37% | 32.88% | 28.64% | 33.02% |
| Ratios of Non-covered Assets: | ||||||
| Allowance for Loan Losses as a % of Total Loans | 1.70% | 1.87% | 1.70% | 1.87% | 1.85% | 1.98% |
| Allowance for Loan Losses as a % of Nonperforming Loans | 280.32% | 237.69% | 280.32% | 237.69% | 237.93% | 276.92% |
| Nonperforming Assets as a % of Total Loans and REO | 0.94% | 1.27% | 0.94% | 1.27% | 1.08% | 1.00% |
| Nonperforming Assets as a % of Total Assets | 0.49% | 0.69% | 0.49% | 0.69% | 0.52% | 0.46% |
| Net Charge-offs as a % of Average Loans (annualized) | 0.32% | 0.86% | 0.43% | 1.43% | 0.61% | 0.13% |