- Total year to date average equity to average assets of 25.2%
- Nonperforming non-covered assets at 0.62% of total non-covered assets as of June 30, 2014
- Net non-covered organic loan growth of 13.3% over prior year quarter
- Basic and diluted EPS of $0.09 for quarter, up $0.02, respectively, on a year-over-year basis
- Tangible book value per share of $11.95 at June 30, 2014
WEST POINT, Ga., July 28, 2014 (GLOBE NEWSWIRE) -- Charter Financial Corporation (the "Company") (Nasdaq:CHFN) today reported net income of $1.8 million, or $0.09 per basic and diluted share, for the quarter ended June 30, 2014, compared with $1.6 million, or $0.07 per basic and diluted share, for the quarter ended June 30, 2013. The increase in net income was primarily attributable to an $834,000 negative loan loss provision on covered loans related to improved credit quality and workout experience, along with the absence of a non-covered loan loss provision in the 2014 third quarter versus $500,000 in the prior year quarter and a $573,000 increase in noninterest income. The increase was partially offset by a decline in net interest income of $1.3 million for the quarter ended June 30, 2014. Net income for the nine months ended June 30, 2014, was $4.9 million, or $0.23 and $0.22 per basic and diluted share, respectively, compared with $5.3 million, or $0.26 per basic and diluted share, for the nine months ended June 30, 2013. The decrease in net income and earnings per share for the nine months ended June 30, 2014, was primarily the result of lower net purchase discount accretion, partially offset by reduced provision for loan losses due to improved credit quality and higher noninterest income.
Quarterly Operating Results
The improvement in reported quarterly earnings for the third quarter of fiscal 2014 compared with the third quarter of fiscal 2013 resulted primarily from the following items:
- Recorded an $834,000 negative loan loss provision on covered loans.
- Borrowing expense decreased $146,000, or 19.7%.
- Deposit expense decreased by $211,000, or 21.1%.
- The cost of deposits remained stable at 49 basis points for the quarter ended June 30, 2014 compared to 57 basis points for the quarter ended June 30, 2013.
- Net interest margin excluding accretion and amortization of loss share receivable was 2.90% for the quarter ended June 30, 2014 compared with 2.75% the same quarter of 2013.
- Noninterest income increased by $573,000, or 21.5%.
- Deposit and bankcard fee income increased by a combined $455,000.
- Recognized a net gain of $201,000 on the sale of securities available for sale.
The improvement was partially mitigated by the following items:
- Loan interest income decreased $809,000 primarily due to a decrease in net accretion income.
- The average yield on loans was 5.44% for the quarter ended June 30, 2014 compared to 6.83% for the quarter ended June 30, 2013.
- Salaries and employee benefits increased by $509,000, primarily related to stock awards made during the 2014 fiscal year.
- Noninterest expense and income tax expense increased by a combined $493,000.
- Recorded a $248,000 loss on the write down of fixed assets associated with a branch to be closed in the fourth quarter of fiscal 2014.
- The net cost of operations of real estate owned increased $110,000.
Chairman and CEO Robert L. Johnson said, "While economic activity remains slow in our markets we achieved modest loan growth. We increased net organic loans not covered by loss sharing by $31.7 million since September 30, 2013, and by $58.9 million from June 30, 2013. With the purchase discount accretion reductions in our covered loan portfolio and limited opportunity for loan growth, we will continue to face significant near-term earnings challenges. However, longer term, we remain optimistic in our ability to improve earnings."
Financial Condition
The Company's total assets were $1.0 billion at June 30, 2014, a decrease of $49.2 million from September 30, 2013. Net non-covered loans grew $40.3 million, or 8.6%, to $511.2 million at June 30, 2014, from $470.9 million at September 30, 2013. Of the $40.3 million in net non-covered loan growth, $8.6 million was a transfer of non-single family loans that are no longer covered by the FDIC due to the expiration of a non-single family loss sharing agreement. At June 30, 2014, $71.2 million of net loans receivable were covered by FDIC loss sharing, down from $109.0 million at September 30, 2013.
Total deposits were $729.6 million at June 30, 2014, compared with $751.3 million at September 30, 2013. Core deposits increased from $475.4 million at September 30, 2013, to $486.4 million at June 30, 2014, due primarily to an increase in transaction accounts.
Total stockholders' equity decreased to $243.4 million at June 30, 2014, compared to $273.8 million at September 30, 2013, due predominantly to the repurchase of shares during the two previous quarters.
Net Interest Income and Net Interest Margin
Net interest income decreased to $7.6 million for the quarter ended June 30, 2014, from $8.9 million for the quarter ended June 30, 2013. Total interest income decreased to $9.0 million for the quarter ended June 30, 2014, compared to $10.7 million for the same quarter last year primarily as a result of a $1.3 million decrease in net accretion income. Interest expense was lower at $1.4 million for the quarter ended June 30, 2014, compared with $1.7 million for the same quarter of 2013, primarily as a result of lower expenses on certificates of deposit and borrowings.
The Company's net interest margin, excluding accretion and amortization of loss share receivable, was 2.90% for the quarter ended June 30, 2014, compared with 2.75% for the quarter ended June 30, 2013. Net interest margin, including the impact of loss share accounting, decreased to 3.26% for the quarter ended June 30, 2014, compared with 3.63% for the same quarter of 2013. The Company has excess cash that is invested in Fed Funds and thus provides an opportunity for earnings improvement as these funds can be deployed into loans and the repurchase of shares.
Provision for Loan Losses
The Company recorded no provision for loan losses on non-covered loans and a negative provision of $834,000 on covered loans for the quarter ended June 30, 2014, compared to a provision of $500,000 on non-covered loans and provision of $42,000 on covered loans for the same quarter in 2013. In the quarter ended June 30, 2014, the last quarter of the non-single family loss sharing agreement related to the Company's first FDIC-assisted acquisition, the Company successfully resolved several loss share assets resulting in the negative provision on covered loans.
Accounting for FDIC-Assisted Acquisitions
The Company reevaluates estimated losses quarterly on covered loans and foreclosed properties and the related FDIC indemnification asset. The Company has three and nine quarters, respectively, of loss sharing remaining on its second and third non-single family loss share agreements resulting from its FDIC-assisted acquisitions. At June 30, 2014, the Company had $71.2 million of total loans, net and $8.0 million of other real estate owned covered by loss share agreements, and is aggressively working to complete the resolution of the problem assets during the remaining loss share periods. The discount accretion included in interest income, net of amortization of FDIC indemnification asset overstatement relating to these assets acquired in the FDIC acquisitions, was $795,000 for the current quarter and $2.1 million in the same quarter last year. There is $6.0 million of discount remaining to accrete into interest income over the remaining life of all acquired loans with the accretion heavily weighted towards the early quarters. Additionally, there is an estimated $2.5 million overstatement of FDIC indemnification asset that will be amortized over the remaining life of the acquired loan pools or the agreement with the FDIC, whichever is shorter.
During the Company's quarterly reevaluation of cash flows on acquired loans, the Company improved its estimate of cash flows related to covered loans resulting in a transfer of $1.8 million from nonaccretable discount to accretable yield related to the McIntosh Commercial Bank and First National Bank of Florida agreements. In accordance with accounting guidance, the transferred amount will be accreted into income prospectively over the estimated remaining life of the loan pools. There was also a transfer of $1.2 million from Neighborhood Community Bank's allowance discount with $400,000 being transferred into the non-covered allowance and approximately $834,000 posted as a negative provision. Concurrently, an estimate of approximately $2.5 million which previously represented cash flows receivable from the FDIC and included in the FDIC receivable for loss sharing agreements on the balance sheet, will be amortized into interest income over the remaining life of the loan pools or the agreement with the FDIC, whichever is shorter.
Noninterest Income and Expense
Noninterest income increased $573,000 to $3.2 million for the quarter ended June 30, 2014, compared with $2.7 million for the same quarter in 2013, due primarily to an increase in bankcard and deposit fees as well as gains recognized on securities available for sale. The increase in noninterest income was partially offset by the write down of assets related to the planned closure of an underperforming bank branch in the fourth quarter of fiscal 2014 which will provide anticipated cost savings in future periods.
Noninterest expense increased to $9.0 million for the quarter ended June 30, 2014, compared to $8.8 million for the same quarter of 2013. The increase was primarily attributable to an increase in stock benefits due to stock awards made in fiscal 2014.
Asset Quality
Asset quality remained strong with nonperforming assets not covered by loss sharing agreements at 0.62% of total non-covered assets and the allowance for loan losses at 1.65% of total non-covered loans and 192.06% of nonperforming non-covered loans at June 30, 2014. The Company's first commercial loss share agreement expired and resulted in a transfer to the non-covered allowance for loan losses of $400,000 and a negative provision of approximately $800,000 during the third quarter of fiscal 2014 due to improved workout experience and credit quality. The Company had net loan charge-offs of $225,000 on non-covered loans for the three months ended June 30, 2014, compared to net loan charge-offs of $665,000 on non-covered loans for the same period in 2013.
Capital Management
During the quarter ended June 30, 2014, the Company repurchased 2.6 million shares for approximately $29.0 million, or $10.96 per share.
Mr. Johnson said, "Since December 2013, we have completed two stock buyback programs, whereby the company repurchased a combined 2.8 million shares, or approximately 12% of our common stock, at a discount to tangible book value. Meanwhile, in June we announced the approval of a new stock buyback program for up to 2,030,000 shares, or approximately 10% of our outstanding shares, which allows us to continue our share repurchase. The Company's solid financial position affords us the ability to repurchase these shares which currently trade at a discount to tangible book value per share. We believe that this use of capital, along with our quarterly cash dividend, provides excellent stockholder value. We will also continue to consider acquisitions where the additional franchise value and earnings more than offset the book value dilution."
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. 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 | ||
Condensed Consolidated Statements of Financial Condition | ||
(unaudited) | (audited) | |
June 30, | September 30, | |
2014 | 2013 | |
Assets | ||
Cash and amounts due from depository institutions | $ 6,961,232 | $ 10,069,875 |
Interest-earning deposits in other financial institutions | 142,307,370 | 151,382,606 |
Cash and cash equivalents | 149,268,602 | 161,452,481 |
Loans held for sale, fair value of $2,380,651 and $1,883,244 | 2,332,156 | 1,857,393 |
Securities available for sale | 185,040,274 | 215,118,407 |
Federal Home Loan Bank stock | 3,442,900 | 3,940,300 |
Loans receivable: | ||
Not covered under FDIC loss sharing agreements | 521,035,113 | 480,152,265 |
Covered under FDIC loss sharing agreements | 71,883,355 | 112,915,868 |
Allowance for loan losses (covered loans) | (657,133) | (3,924,278) |
Unamortized loan origination fees, net (non-covered loans) | (1,252,972) | (1,100,666) |
Allowance for loan losses (non-covered loans) | (8,605,698) | (8,188,896) |
Loans receivable, net | 582,402,665 | 579,854,293 |
Other real estate owned: | ||
Not covered under FDIC loss sharing agreements | 1,331,356 | 1,615,036 |
Covered under FDIC loss sharing agreements | 8,014,010 | 14,068,846 |
Accrued interest and dividends receivable | 2,424,460 | 2,728,902 |
Premises and equipment, net | 20,739,910 | 21,750,756 |
Goodwill | 4,325,282 | 4,325,282 |
Other intangible assets, net of amortization | 503,372 | 803,886 |
Cash surrender value of life insurance | 46,851,349 | 39,825,881 |
FDIC receivable for loss sharing agreements | 14,921,803 | 29,941,862 |
Deferred income taxes | 10,750,880 | 11,350,745 |
Other assets | 7,888,340 | 771,779 |
Total assets | $ 1,040,237,359 | $ 1,089,405,849 |
Liabilities and Stockholders' Equity | ||
Liabilities: | ||
Deposits | $ 729,608,889 | $ 751,296,668 |
FHLB advances | 55,000,000 | 60,000,000 |
Advance payments by borrowers for taxes and insurance | 931,770 | 1,054,251 |
Other liabilities | 11,282,376 | 3,277,094 |
Total liabilities | 796,823,035 | 815,628,013 |
Stockholders' equity: | ||
Common stock, $0.01 par value; 19,959,971 shares issued and outstanding at June 30, 2014 and 22,752,214 shares issued and outstanding at September 30, 2013 | 199,600 | 227,522 |
Preferred stock, $0.01 par value; 50,000,000 shares authorized at June 30, 2014 and September 30, 2013 | — | — |
Additional paid-in capital | 138,090,060 | 171,729,570 |
Unearned compensation – ESOP | (5,984,317) | (6,480,949) |
Retained earnings | 111,784,129 | 110,141,286 |
Accumulated other comprehensive loss | (675,148) | (1,839,593) |
Total stockholders' equity | 243,414,324 | 273,777,836 |
Total liabilities and stockholders' equity | $ 1,040,237,359 | $ 1,089,405,849 |
Charter Financial Corporation | ||||
Condensed Consolidated Statements of Income (unaudited) | ||||
Three Months Ended June 30, | Nine Months Ended June 30, | |||
2014 | 2013 | 2014 | 2013 | |
Interest income: | ||||
Loans receivable | $ 8,833,596 | $ 9,642,115 | $ 25,564,268 | $ 29,969,312 |
Mortgage-backed securities and collateralized mortgage obligations | 871,899 | 816,602 | 2,794,019 | 2,285,175 |
Federal Home Loan Bank stock | 35,601 | 29,307 | 102,778 | 95,097 |
Other investment securities available for sale | 18,286 | 41,817 | 56,314 | 136,289 |
Interest-earning deposits in other financial institutions | 97,321 | 123,869 | 266,816 | 225,263 |
Amortization of FDIC loss share receivable | (849,919) | — | (1,596,310) | — |
Total interest income | 9,006,784 | 10,653,710 | 27,187,885 | 32,711,136 |
Interest expense: | ||||
Deposits | 790,011 | 1,001,276 | 2,479,856 | 3,307,644 |
Borrowings | 595,829 | 741,881 | 1,872,357 | 2,391,919 |
Total interest expense | 1,385,840 | 1,743,157 | 4,352,213 | 5,699,563 |
Net interest income | 7,620,944 | 8,910,553 | 22,835,672 | 27,011,573 |
Provision for loan losses, not covered under FDIC loss sharing agreements | — | 500,000 | 300,000 | 1,100,000 |
Provision for covered loan losses | (834,086) | 41,838 | (885,664) | 94,321 |
Net interest income after provision for loan losses | 8,455,030 | 8,368,715 | 23,421,336 | 25,817,252 |
Noninterest income: | ||||
Service charges on deposit accounts | 1,463,698 | 1,277,072 | 4,263,639 | 3,952,695 |
Bankcard fees | 906,013 | 637,943 | 2,596,743 | 1,790,922 |
Gain on securities available for sale | 200,704 | — | 200,704 | 219,913 |
Bank owned life insurance | 278,487 | 211,491 | 925,467 | 694,431 |
Gain on sale of loans and loan servicing release fees | 298,405 | 407,176 | 737,236 | 1,142,387 |
Brokerage commissions | 124,128 | 153,205 | 452,479 | 468,543 |
FDIC receivable for loss sharing agreements accretion (impairment) | 68,400 | (114,993) | 61,533 | 218,918 |
Other | (104,205) | 90,602 | 1,330,929 | 362,959 |
Total noninterest income | 3,235,630 | 2,662,496 | 10,568,730 | 8,850,768 |
Noninterest expenses: | ||||
Salaries and employee benefits | 4,969,325 | 4,460,128 | 14,522,114 | 13,502,879 |
Occupancy | 1,863,131 | 1,845,412 | 5,629,280 | 5,324,176 |
Legal and professional | 369,360 | 458,735 | 1,309,946 | 1,275,322 |
Marketing | 339,774 | 335,708 | 976,048 | 927,110 |
Federal insurance premiums and other regulatory fees | 199,167 | 254,002 | 701,428 | 356,718 |
Net cost (benefit) of operations of real estate owned | 87,846 | (22,205) | 374,538 | 977,302 |
Furniture and equipment | 225,753 | 203,276 | 550,200 | 615,235 |
Postage, office supplies and printing | 239,874 | 282,903 | 646,500 | 807,034 |
Core deposit intangible amortization expense | 94,454 | 116,317 | 300,514 | 364,716 |
Other | 646,682 | 829,473 | 1,805,148 | 2,694,791 |
Total noninterest expenses | 9,035,366 | 8,763,749 | 26,815,716 | 26,845,283 |
Income before income taxes | 2,655,294 | 2,267,462 | 7,174,350 | 7,822,737 |
Income tax expense | 870,116 | 649,513 | 2,261,294 | 2,486,092 |
Net income | $ 1,785,178 | $ 1,617,949 | $ 4,913,056 | $ 5,336,645 |
Basic net income per share | $ 0.09 | $ 0.07 | $ 0.23 | $ 0.26 |
Diluted net income per share | $ 0.09 | $ 0.07 | $ 0.22 | $ 0.26 |
Weighted average number of common shares outstanding | 20,746,759 | 21,747,891 | 21,486,082 | 20,165,850 |
Weighted average number of common and potential common shares outstanding | 21,300,951 | 21,878,502 | 22,040,274 | 20,296,461 |
Charter Financial Corporation | |||||||
Supplemental Financial Data (unaudited) | |||||||
in thousands except per share data | |||||||
Quarter to Date | Year to Date | ||||||
6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | 6/30/2013 | 6/30/2014 | 6/30/2013 | |
Consolidated balance sheet data: | |||||||
Total assets | $ 1,040,237 | $ 1,077,870 | $ 1,079,911 | $ 1,089,406 | $ 1,125,362 | $ 1,040,237 | $ 1,125,362 |
Cash and cash equivalents | 149,269 | 175,114 | 157,268 | 161,452 | 190,657 | 149,269 | 190,657 |
Loans receivable, net | 582,403 | 572,040 | 576,567 | 579,854 | 564,293 | 582,403 | 564,293 |
Non-covered loans receivable, net | 511,176 | 481,907 | 476,467 | 470,863 | 443,581 | 511,176 | 443,581 |
Covered loans receivable, net | 71,227 | 90,133 | 100,100 | 108,991 | 120,712 | 71,227 | 120,712 |
Other real estate owned | 9,345 | 10,744 | 11,996 | 15,684 | 14,546 | 9,345 | 14,546 |
Non-covered other real estate owned | 1,331 | 849 | 1,054 | 1,615 | 1,386 | 1,331 | 1,386 |
Covered other real estate owned | 8,014 | 9,895 | 10,942 | 14,069 | 13,160 | 8,014 | 13,160 |
Securities available for sale | 185,040 | 201,578 | 208,064 | 215,118 | 226,551 | 185,040 | 226,551 |
Core deposits (2) | 486,392 | 491,585 | 474,389 | 475,426 | 481,230 | 486,392 | 481,230 |
Total deposits | 729,609 | 742,064 | 737,654 | 751,297 | 769,781 | 729,609 | 769,781 |
Borrowings | 55,000 | 55,000 | 60,000 | 60,000 | 70,000 | 55,000 | 70,000 |
Total stockholders' equity | 243,414 | 270,265 | 273,164 | 273,778 | 279,131 | 243,414 | 279,131 |
Consolidated earnings summary: | |||||||
Interest income | $ 9,007 | $ 8,923 | $ 9,257 | $ 9,925 | $ 10,654 | $ 27,188 | $ 32,711 |
Interest expense | 1,386 | 1,430 | 1,536 | 1,661 | 1,743 | 4,352 | 5,700 |
Net interest income | 7,621 | 7,493 | 7,721 | 8,264 | 8,911 | 22,836 | 27,011 |
Provision for loan losses on non-covered loans | — | — | 300 | 300 | 500 | 300 | 1,100 |
Provision for loan losses on covered loans | (834) | (54) | 2 | (5) | 42 | (885) | 94 |
Net interest income after provision for loan losses | 8,455 | 7,547 | 7,419 | 7,969 | 8,369 | 23,421 | 25,817 |
Noninterest income | 3,236 | 3,217 | 4,116 | 2,802 | 2,662 | 10,569 | 8,852 |
Noninterest expense | 9,036 | 8,580 | 9,200 | 9,469 | 8,763 | 26,816 | 26,846 |
Income tax expense | 870 | 693 | 698 | 382 | 650 | 2,261 | 2,486 |
Net income | $ 1,785 | $ 1,491 | $ 1,637 | $ 920 | $ 1,618 | $ 4,913 | $ 5,337 |
Per share data: | |||||||
Earnings per share – basic | $ 0.09 | $ 0.07 | $ 0.07 | $ 0.04 | $ 0.07 | $ 0.23 | $ 0.26 |
Earnings per share – fully diluted | $ 0.09 | $ 0.07 | $ 0.07 | $ 0.04 | $ 0.07 | $ 0.22 | $ 0.26 |
Cash dividends per share | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.30 | $ 0.05 | $ 0.15 | $ 0.05 |
Weighted average basic shares | 20,747 | 21,701 | 22,007 | 22,005 | 21,748 | 21,486 | 20,166 |
Weighted average diluted shares | 21,301 | 22,224 | 22,528 | 22,167 | 21,879 | 22,040 | 20,296 |
Total shares outstanding | 19,960 | 22,603 | 22,998 | 22,752 | 22,752 | 19,960 | 22,752 |
Book value per share | $ 12.20 | $ 11.96 | $ 11.88 | $ 12.03 | $ 12.27 | $ 12.20 | $ 12.27 |
Tangible book value per share | $ 11.95 | $ 11.74 | $ 11.66 | $ 11.81 | $ 12.04 | $ 11.95 | $ 12.04 |
__________________________________ | |||||||
(1) Financial information as of September 30, 2013 has been derived from audited financial statements. | |||||||
(2) Core deposits include transaction accounts, money market accounts and savings accounts. |
Charter Financial Corporation | |||||||
Supplemental Information (unaudited) | |||||||
dollars in thousands | |||||||
Quarter to Date | Year to Date | ||||||
6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | 6/30/2013 | 6/30/2014 | 6/30/2013 | |
Not covered by loss share agreements | |||||||
Loans receivable: (1) | |||||||
1-4 family residential real estate | $ 139,803 | $ 135,181 | $ 133,331 | $ 124,571 | $ 113,255 | $ 139,803 | $ 113,255 |
Commercial real estate | 284,591 | 271,156 | 267,818 | 269,609 | 254,743 | 284,591 | 254,743 |
Commercial | 21,172 | 21,501 | 22,793 | 23,774 | 19,215 | 21,172 | 19,215 |
Real estate construction | 58,459 | 47,112 | 45,200 | 44,653 | 47,904 | 58,459 | 47,904 |
Consumer and other | 17,010 | 16,531 | 16,908 | 17,545 | 17,876 | 17,010 | 17,876 |
Total non-covered loans receivable | $ 521,035 | $ 491,481 | $ 486,050 | $ 480,152 | $ 452,993 | $ 521,035 | $ 452,993 |
Allowance for loan losses: | |||||||
Balance at beginning of period | $ 8,431 | $ 8,494 | $ 8,189 | $ 8,380 | $ 8,546 | $ 8,189 | $ 8,190 |
Charge-offs | (238) | (93) | (68) | (501) | (705) | (399) | (1,100) |
Recoveries | 13 | 30 | 73 | 10 | 39 | 116 | 190 |
Provision | — | — | 300 | 300 | 500 | 300 | 1,100 |
Transfer (2) | 400 | — | — | — | — | 400 | — |
Balance at end of period | $ 8,606 | $ 8,431 | $ 8,494 | $ 8,189 | $ 8,380 | $ 8,606 | $ 8,380 |
Nonperforming assets: (3) | |||||||
Nonaccrual loans | $ 4,243 | $ 4,743 | $ 4,975 | $ 2,874 | $ 3,480 | $ 4,243 | $ 3,480 |
Loans delinquent 90 days or greater and still accruing | 238 | — | — | 47 | 42 | 238 | 42 |
Total nonperforming non-covered loans | 4,481 | 4,743 | 4,975 | 2,921 | 3,522 | 4,481 | 3,522 |
Other real estate owned | 1,331 | 849 | 1,053 | 1,615 | 1,386 | 1,331 | 1,386 |
Total nonperforming non-covered assets | $ 5,812 | $ 5,592 | $ 6,028 | $ 4,536 | $ 4,908 | $ 5,812 | $ 4,908 |
Trouble debt restructuring: | |||||||
Trouble debt restructurings - accruing | $ 7,352 | $ 7,603 | $ 8,589 | $ 12,302 | $ 12,129 | $ 7,352 | $ 12,129 |
Trouble debt restructurings - nonaccrual | 2,094 | 2,094 | 2,261 | 439 | 500 | 2,094 | 500 |
Total trouble debt restructurings | $ 9,446 | $ 9,697 | $ 10,850 | $ 12,741 | $ 12,629 | $ 9,446 | $ 12,629 |
Covered by loss sharing agreements | |||||||
Nonperforming assets: | |||||||
Other real estate owned | $ 8,014 | $ 9,895 | $ 10,942 | $ 14,069 | $ 13,160 | $ 8,014 | $ 13,160 |
Covered loans 90+ days delinquent (4) | 3,156 | 8,825 | 8,661 | 8,574 | 13,223 | 3,156 | 13,223 |
Total nonperforming covered assets | $ 11,170 | $ 18,720 | $ 19,603 | $ 22,643 | $ 26,383 | $ 11,170 | $ 26,383 |
__________________________________ | |||||||
(1) Includes previously acquired loans in the amount of $9.1 million related to the Neighborhood Community Bank non single-family loss sharing agreement with the FDIC that expired in June 2014. | |||||||
(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 are regarded as accruing loans. | |||||||
(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. |
Charter Financial Corporation | |||||||
Supplemental Information (unaudited) | |||||||
Quarter to Date | Year to Date | ||||||
6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | 6/30/2013 | 6/30/2014 | 6/30/2013 | |
Return on equity (annualized) | 2.71% | 2.19% | 2.39% | 1.32% | 2.38% | 2.42% | 3.81% |
Return on assets (annualized) | 0.67% | 0.55% | 0.60% | 0.33% | 0.56% | 0.61% | 0.67% |
Net interest margin (annualized) | 3.26% | 3.18% | 3.29% | 3.44% | 3.63% | 3.24% | 3.95% |
Bank core capital ratio | 19.51% | 19.25% | 19.05% | 18.56% | 17.94% | 19.51% | 17.94% |
Bank total risk based capital | 32.69% | 34.18% | 33.83% | 33.83% | 34.62% | 32.69% | 34.62% |
Effective tax rate | 32.77% | 31.73% | 29.90% | 29.37% | 28.64% | 31.52% | 31.78% |
Yield on loans | 5.44% | 5.41% | 5.55% | 6.14% | 6.83% | 5.47% | 6.92% |
Cost of deposits | 0.49% | 0.49% | 0.53% | 0.55% | 0.57% | 0.50% | 0.62% |
Ratios of non-covered assets: | |||||||
Allowance for loan losses as a % of total loans | 1.65% | 1.71% | 1.74% | 1.70% | 1.85% | 1.65% | 1.85% |
Allowance for loan losses as a % of nonperforming loans | 192.06% | 177.76% | 170.74% | 280.32% | 237.93% | 192.06% | 237.93% |
Nonperforming assets as a % of total loans and REO | 1.11% | 1.14% | 1.24% | 0.94% | 1.08% | 1.11% | 1.08% |
Nonperforming assets as a % of total assets | 0.62% | 0.59% | 0.64% | 0.49% | 0.52% | 0.62% | 0.52% |
Net charge-offs as a % of average loans (annualized) | 0.18% | 0.05% | —% | 0.43% | 0.61% | 0.08% | 0.28% |
Charter Financial Corporation | ||||||
Average Balances, Interest Rates and Yields (unaudited) | ||||||
dollars in thousands | ||||||
Quarter to Date | ||||||
6/30/2014 | 6/30/2013 | |||||
Average | Average | |||||
Average | Yield/ | Average | Yield/ | |||
Balance | Interest | Cost (3) | Balance | Interest | Cost (3) | |
Assets: | ||||||
Interest-earning assets: | ||||||
Interest-earning deposits in other financial institutions | $ 151,348 | $ 97 | 0.26% | $ 203,091 | $ 124 | 0.24% |
FHLB common stock and other equity securities | 3,443 | 36 | 4.14 | 4,407 | 29 | 2.66 |
Mortgage-backed securities and collateralized mortgage obligations available for sale | 176,194 | 872 | 1.98 | 184,833 | 817 | 1.77 |
Other investment securities available for sale | 18,290 | 18 | 0.40 | 25,986 | 42 | 0.64 |
Loans receivable | 586,797 | 7,189 | 4.90 | 564,863 | 7,543 | 5.34 |
Accretion and amortization of loss share loans receivable (1) | — | 795 | 0.54 | — | 2,099 | 1.49 |
Total interest-earning assets | 936,072 | 9,007 | 3.85 | 983,180 | 10,654 | 4.33 |
Total noninterest-earning assets | 123,453 | 170,008 | ||||
Total assets | $ 1,059,525 | $ 1,153,188 | ||||
Liabilities and Equity: | ||||||
Interest-bearing liabilities: | ||||||
NOW accounts | $ 178,771 | $ 51 | 0.11% | $ 162,665 | $ 54 | 0.13% |
Reward accounts | 48,429 | 29 | 0.24 | 51,863 | 44 | 0.34 |
Savings accounts | 48,482 | 2 | 0.02 | 49,702 | 6 | 0.05 |
Money market deposit accounts | 120,903 | 65 | 0.21 | 141,723 | 68 | 0.19 |
Certificate of deposit accounts | 247,197 | 643 | 1.04 | 296,014 | 829 | 1.12 |
Total interest-bearing deposits | 643,782 | 790 | 0.49 | 701,967 | 1,001 | 0.57 |
Borrowed funds | 55,000 | 596 | 4.33 | 69,978 | 742 | 4.24 |
Total interest-bearing liabilities | 698,782 | 1,386 | 0.79 | 771,945 | 1,743 | 0.90 |
Noninterest-bearing deposits | 85,061 | 101,677 | ||||
Other noninterest-bearing liabilities | 11,979 | 7,498 | ||||
Total noninterest-bearing liabilities | 97,040 | 109,175 | ||||
Total liabilities | 795,822 | 881,120 | ||||
Total stockholders' equity | 263,703 | 272,068 | ||||
Total liabilities and stockholders' equity | $ 1,059,525 | $ 1,153,188 | ||||
Net interest income | $ 7,621 | $ 8,911 | ||||
Net interest-earning assets | $ 237,290 | $ 211,235 | ||||
Net interest rate spread | 3.06% | 3.43% | ||||
Net interest margin | 3.26% | 3.63% | ||||
Net interest margin, excluding the effects of purchase accounting (2) | 2.90% | 2.75% | ||||
Ratio of average interest-earning assets to average interest-bearing liabilities | 133.96% | 127.36% | ||||
__________________________________ | ||||||
(1) Accretion of accretable purchase discount on loans acquired in FDIC-assisted acquisitions and amortization of impairment of FDIC indemnification asset. | ||||||
(2) Net interest income excluding accretion and amortization of loss share loans receivable divided by net interest earning assets excluding loan accretable discounts in the amount of $5.5 million and $7.9 million for the quarter ended June 30, 2014 and June 30, 2013, respectively. | ||||||
(3) Annualized. |
Charter Financial Corporation | |||||||
Average Balances, Interest Rates and Yields (unaudited) | |||||||
dollars in thousands | |||||||
Year to Date | |||||||
6/30/2014 | 6/30/2013 | ||||||
Average | Average | ||||||
Average | Yield/ | Average | Yield/ | ||||
Balance | Interest | Cost (3) | Balance | Interest | Cost (3) | ||
Assets: | |||||||
Interest-earning assets: | |||||||
Interest-earning deposits in other financial institutions | $ 146,869 | $ 267 | 0.24% | $ 134,628 | $ 225 | 0.22% | |
FHLB common stock and other equity securities | 3,748 | 103 | 3.66 | 4,965 | 95 | 2.55 | |
Mortgage-backed securities and collateralized mortgage obligations available for sale | 184,775 | 2,794 | 2.02 | 169,320 | 2,285 | 1.80 | |
Other investment securities available for sale | 19,126 | 56 | 0.39 | 25,141 | 137 | 0.73 | |
Loans receivable | 584,630 | 21,249 | 4.85 | 577,277 | 22,840 | 5.28 | |
Accretion and amortization of loss share loans receivable (1) | 2,719 | 0.62 | 7,129 | 1.64 | |||
Total interest-earning assets | 939,148 | 27,188 | 3.86 | 911,331 | 32,711 | 4.79 | |
Total noninterest-earning assets | 134,998 | 153,793 | |||||
Total assets | $ 1,074,146 | $ 1,065,124 | |||||
Liabilities and Equity: | |||||||
Interest-bearing liabilities: | |||||||
NOW accounts | $ 175,754 | $ 149 | 0.11% | $ 154,547 | $ 155 | 0.13% | |
Rewards checking | 48,342 | 87 | 0.24 | 52,035 | 146 | 0.37 | |
Savings accounts | 48,243 | 8 | 0.02 | 49,596 | 18 | 0.05 | |
Money market deposit accounts | 127,567 | 211 | 0.22 | 133,077 | 245 | 0.25 | |
Certificate of deposit accounts | 256,980 | 2,025 | 1.05 | 317,961 | 2,743 | 1.15 | |
Total interest-bearing deposits | 656,886 | 2,480 | 0.50 | 707,216 | 3,307 | 0.62 | |
Borrowed funds | 57,956 | 1,872 | 4.31 | 76,418 | 2,392 | 4.17 | |
Total interest-bearing liabilities | 714,842 | 4,352 | 0.81 | 783,634 | 5,699 | 0.97 | |
Noninterest-bearing deposits | 77,572 | 88,018 | |||||
Other noninterest-bearing liabilities | 11,459 | 6,781 | |||||
Total noninterest-bearing liabilities | 89,031 | 94,799 | |||||
Total liabilities | 803,873 | 878,433 | |||||
Total stockholders' equity | 270,273 | 186,691 | |||||
Total liabilities and stockholders' equity | $ 1,074,146 | $ 1,065,124 | |||||
Net interest income | $ 22,836 | $ 27,012 | |||||
Net interest earning assets | $ 224,306 | $ 127,697 | |||||
Net interest rate spread | 3.05% | 3.82% | |||||
Net interest margin | 3.24% | 3.95% | |||||
Net interest margin, excluding the effects of purchase accounting (2) | 2.84% | 2.88% | |||||
Ratio of average interest-earning assets to average interest-bearing liabilities | 131.38% | 116.3% | |||||
__________________________________ | |||||||
(1) Accretion of accretable purchase discount on loans acquired in FDIC-assisted acquisitions and amortization of impairment of FDIC indemnification asset. | |||||||
(2) Net interest income excluding accretion and amortization of loss share loans receivable divided by net interest earning assets excluding loan accretable discounts in the amount of $4.5 million and $10.3 million for the nine months ended June 30, 2014 and 2013, respectively. | |||||||
(3) Annualized. |