- Net loan growth for the year of $108.4 million, or 17.9%
- Tangible book value per share of $12.48 at September 30, 2015, up $0.42 year over year
- Basic EPS of $0.35 for the year, a 20.7% increase year over year, which includes an after-tax charge of $0.08 in the current year related to the early termination of FDIC loss share agreements
- Bankcard and deposit fee income grew by $1.1 million, or 11.8%, during the year
- Relatively flat noninterest expense
- Nonperforming assets at 0.73% of total assets at September 30, 2015
- Repurchased 2.2 million shares for $25.5 million during the year
WEST POINT, Ga., Oct. 29, 2015 (GLOBE NEWSWIRE) -- Charter Financial Corporation (the “Company”) (NASDAQ:CHFN) today reported net income of $5.6 million for the year ended September 30, 2015, or $0.35 and $0.34 per basic and diluted share, respectively, compared with $6.0 million, or $0.29 and $0.28 per basic and diluted share, respectively, for the year ended September 30, 2014. Net income for the quarter ended September 30, 2015, was $553,000, or $0.04 per basic and diluted share, compared with $1.0 million, or $0.06 per basic and diluted share, for the quarter ended September 30, 2014.
During the fourth quarter of fiscal 2015, the Company announced that its wholly-owned subsidiary, CharterBank (the “Bank”), entered into agreements with the Federal Deposit Insurance Corporation (the “FDIC”) that terminated the Bank's loss share agreements with the FDIC. Due to the early termination of these agreements, the Bank realized a one-time pre-tax charge of approximately $2.5 million, resulting primarily from the write-off of the remaining FDIC indemnification asset and settlement charges paid to the FDIC. The after tax one-time charge, along with related amortization, had an $0.08 impact on earnings per share for the quarter and year ended September 30, 2015.
Despite the one-time charge to income, earnings per basic share for the year ended September 30, 2015 increased 20.7% due primarily to a 9.9% increase in net interest income and relatively flat noninterest expense, combined with a reduced outstanding share count as a result of the continued share repurchase program.
Quarterly Operating Results
Quarterly earnings for the fourth quarter of fiscal 2015 compared with the fourth quarter of fiscal 2014 were positively impacted by the following items:
- Loan interest income, excluding accretion and amortization of loss share receivable, increased $848,000.
- Net interest margin, excluding accretion and amortization of loss share receivable, was 3.37% for the quarter ended September 30, 2015, compared with 2.95% for the same quarter of fiscal 2014.
- The cost of deposits decreased to 42 basis points for the quarter ended September 30, 2015, compared to 49 basis points for the quarter ended September 30, 2014.
- Total interest expense decreased $154,000, or 11.2%.
- Deposit and bankcard fee income increased by a combined $255,000.
- Gain on sale of loans and loan servicing release fees increased $92,000, or 25.2%.
- Net cost of operations of real estate owned decreased by $79,000.
The above increases to net income were more than offset by the following items:
- One-time charge to noninterest income of $2.5 million due to early termination of FDIC loss share agreements.
- Total noninterest expense increased $588,000.
Chairman and CEO Robert L. Johnson said, “Despite the one-time charge to income related to the FDIC loss share termination, we still generated net income of $553,000, or $0.04 basic and diluted earnings per share, for the final quarter of fiscal 2015. We are pleased with the continued improvement in our core earnings. Our net interest margin, excluding purchase accounting, was 3.37% for the quarter ending September 30, 2015, which was significantly improved from 2.95% for the quarter ending September 30, 2014.”
Financial Condition
The Company's total assets remained relatively unchanged at $1.0 billion at September 30, 2015, compared with September 30, 2014. Net loan growth and shares repurchased during fiscal 2015 were funded primarily by the utilization of the Company's cash and cash equivalents. Net loans grew $108.4 million, or 17.9%, to $714.8 million at September 30, 2015, from $606.4 million at September 30, 2014.
Mr. Johnson continued, “During the fourth quarter of fiscal 2015, our total loan portfolio increased on a year-over-year basis for the eighth consecutive quarter. Continued loan portfolio growth is important to realizing increased profitability through higher operating and capital leverage.”
Total deposits were $738.9 million at September 30, 2015, compared with $717.2 million at September 30, 2014. This increase was due in part to a $13.2 million increase in transaction accounts during the year ended September 30, 2015.
Total stockholders' equity decreased to $204.9 million at September 30, 2015, compared to $225.0 million at September 30, 2014, due predominantly to $25.5 million of share repurchases during fiscal 2015. Tangible book value per share grew to $12.48 at September 30, 2015, an increase of $0.42, compared to $12.06 at September 30, 2014.
Net Interest Income and Net Interest Margin
Net interest income increased to $9.3 million for the quarter ended September 30, 2015, compared with $7.1 million for the quarter ended September 30, 2014. Interest income increased $2.1 million due to an $848,000 increase in loan interest income, excluding accretion and amortization of loss share receivable, combined with a $1.2 million increase in net purchase discount accretion and amortization. This improvement in net interest income was further aided by a $154,000, or 11.2%, decrease in total interest expense quarter over quarter. The Company's net interest margin, excluding the effects of purchase accounting, was 3.37% for the quarter ended September 30, 2015, compared with 2.95% for the quarter ended September 30, 2014.
Net interest income for the year ended September 30, 2015, increased $3.0 million to $32.9 million compared to the prior year, while interest expense decreased by $717,000. Net interest margin, excluding the effects of purchase accounting, improved 39 basis points to 3.26%, while net interest margin, including the impact of purchase accounting, improved 45 basis points to 3.67% for the year ended September 30, 2015.
Provision for Loan Losses
The Company recorded no provision for loan losses in the quarter or year ended September 30, 2015, due to the continued improvement in the credit quality of the loan portfolio and a negative provision related to covered loans in fiscal 2014.
Accounting for FDIC-Assisted Acquisitions
As mentioned previously, the Bank terminated all loss share agreements with the FDIC related to FDIC-assisted acquisitions of failed banks between 2009 and 2011.
Mr. Johnson continued, “We are very pleased to have reached the agreement with the FDIC to end all loss share agreements. Although the overall venture was successful for the Bank, as well as the affected customers and communities, we look forward to realizing the long-term benefits associated with loss share termination.”
Under purchase accounting rules, the Company currently expects to realize remaining loan discount accretion of $3.5 million over the next two years.
Noninterest Income and Expense
Noninterest income for the quarter ended September 30, 2015 decreased $2.2 million, due to the one-time charge related to the end of loss share with the FDIC. Noninterest income for the quarter ended September 30, 2015 was $1.5 million compared with $3.7 million for the prior year period. Partially offsetting the FDIC receivable impairment was a $255,000 increase to bankcard fee and other deposit fee income. Noninterest expense for the quarter ended September 30, 2015 of $10.0 million increased $588,000 compared with the same period in fiscal 2014. This increase was primarily attributable to increases in salaries and employee benefits, occupancy and furniture and equipment.
Noninterest income for the year ended September 30, 2015 decreased $1.9 million, or 13.7%, due primarily to the $2.5 million loss share charge in the current year and a $1.1 million true-up receipt from the completion and renegotiation of a processing contract in the prior year. Bankcard fee income and other deposit fee income increased $1.1 million and gain on sale of loans increased $509,000 for the year ended September 30, 2015 compared to the prior year. Noninterest expense remained relatively unchanged at $36.8 million for the year ended September 30, 2015. 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 at 0.73% of total assets and the allowance for loan losses at 1.30% of total loans and 229.85% of nonperforming loans at September 30, 2015. Due to the termination of loss share agreements with the FDIC in the fourth quarter of fiscal 2015, approximately $2.9 million of previously covered other real estate owned (OREO) was added to the Company's consolidated nonperforming assets. The Company had net loan recoveries of $281,000 on non-covered loans for the year ended September 30, 2015, compared to net loan charge-offs of $416,000 on non-covered loans for the same period in fiscal 2014.
Capital Management
During the quarter ended September 30, 2015, the Company repurchased 377,207 shares for approximately $4.7 million, or $12.42 per share. During fiscal 2014 and 2015, the Company repurchased a combined 7.1 million shares, or 31.2%, of the Company's common stock at a discount to tangible book value of $9.7 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, payment of dividends, and loan portfolio growth. Meanwhile, we are actively working on potential acquisitions and opportunities that would be accretive to earnings. We will also continue to seek 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,” “working on,” “continue to,” “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 the Company's inability to implement its business strategy; 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 loan defaults and charge-off rates; changes in the value of securities and other assets, adequacy of loan loss reserves, or deposit levels necessitating an increase in borrowing to fund loans and investments; 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.
| Charter Financial Corporation | |||||||
| Condensed Consolidated Statements of Financial Condition (unaudited) | |||||||
| September 30, | September 30, | ||||||
| 2015 | 2014 | ||||||
| Assets | |||||||
| Cash and amounts due from depository institutions | $ | 9,921,822 | $ | 10,996,959 | |||
| Interest-earning deposits in other financial institutions | 20,421,403 | 88,465,994 | |||||
| Cash and cash equivalents | 30,343,225 | 99,462,953 | |||||
| Loans held for sale, fair value of $1,444,042 and $2,090,469 | 1,406,902 | 2,054,722 | |||||
| Investment securities available for sale | 184,404,089 | 188,743,273 | |||||
| Federal Home Loan Bank stock | 3,515,600 | 3,442,900 | |||||
| Loans receivable | 725,673,178 | 617,219,716 | |||||
| Unamortized loan origination fees, net | (1,423,456 | ) | (1,382,106 | ) | |||
| Allowance for loan losses | (9,488,512 | ) | (9,470,897 | ) | |||
| Loans receivable, net | 714,761,210 | 606,366,713 | |||||
| Other real estate owned | 3,410,538 | 7,315,791 | |||||
| Accrued interest and dividends receivable | 2,668,406 | 2,459,347 | |||||
| Premises and equipment, net | 19,660,012 | 20,571,541 | |||||
| Goodwill | 4,325,282 | 4,325,282 | |||||
| Other intangible assets, net of amortization | 547,581 | 423,676 | |||||
| Cash surrender value of life insurance | 48,423,510 | 47,178,128 | |||||
| FDIC receivable for loss sharing agreements | — | 10,531,809 | |||||
| Deferred income taxes | 7,378,312 | 8,231,002 | |||||
| Other assets | 6,234,667 | 9,254,001 | |||||
| Total assets | $ | 1,027,079,334 | $ | 1,010,361,138 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Liabilities: | |||||||
| Deposits | $ | 738,855,076 | $ | 717,192,200 | |||
| FHLB advances | 62,000,000 | 55,000,000 | |||||
| Advance payments by borrowers for taxes and insurance | 1,745,753 | 1,312,283 | |||||
| Other liabilities | 19,547,895 | 11,901,786 | |||||
| Total liabilities | 822,148,724 | 785,406,269 | |||||
| Stockholders’ equity: | |||||||
| Common stock, $0.01 par value; 16,027,654 shares issued and outstanding at September 30, 2015 and 18,261,388 shares issued and outstanding at September 30, 2014 | 160,277 | 182,614 | |||||
| Preferred stock, $0.01 par value; 50,000,000 shares authorized at September 30, 2015 and September 30, 2014 | — | — | |||||
| Additional paid-in capital | 95,355,054 | 119,586,164 | |||||
| Unearned compensation – ESOP | (5,551,193 | ) | (5,984,317 | ) | |||
| Retained earnings | 114,362,386 | 111,924,543 | |||||
| Accumulated other comprehensive income (loss) | 604,086 | (754,135 | ) | ||||
| Total stockholders’ equity | 204,930,610 | 224,954,869 | |||||
| Total liabilities and stockholders’ equity | $ | 1,027,079,334 | $ | 1,010,361,138 | |||
__________________________________
(1) Financial information at September 30, 2014 has been derived from audited financial statements.
| Charter Financial Corporation | |||||||||||||||
| Condensed Consolidated Statements of Income (unaudited) | |||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||
| Interest income: | |||||||||||||||
| Loans receivable | $ | 9,542,999 | $ | 9,439,668 | $ | 36,375,782 | $ | 35,003,936 | |||||||
| Mortgage-backed securities and collateralized mortgage obligations | 691,233 | 818,617 | 3,050,233 | 3,612,636 | |||||||||||
| Federal Home Loan Bank stock | 33,945 | 32,017 | 142,947 | 134,795 | |||||||||||
| Other investment securities available for sale | 243,461 | 16,022 | 617,677 | 72,336 | |||||||||||
| Interest-earning deposits in other financial institutions | 7,973 | 64,229 | 93,432 | 331,045 | |||||||||||
| Amortization of FDIC loss share receivable | — | (1,910,707 | ) | (2,387,205 | ) | (3,507,017 | ) | ||||||||
| Total interest income | 10,519,611 | 8,459,846 | 37,892,866 | 35,647,731 | |||||||||||
| Interest expense: | |||||||||||||||
| Deposits | 663,474 | 775,176 | 2,727,372 | 3,255,032 | |||||||||||
| Borrowings | 559,800 | 602,376 | 2,285,550 | 2,474,733 | |||||||||||
| Total interest expense | 1,223,274 | 1,377,552 | 5,012,922 | 5,729,765 | |||||||||||
| Net interest income | 9,296,337 | 7,082,294 | 32,879,944 | 29,917,966 | |||||||||||
| Provision for loan losses | — | (126,896 | ) | — | (712,560 | ) | |||||||||
| Net interest income after provision for loan losses | 9,296,337 | 7,209,190 | 32,879,944 | 30,630,526 | |||||||||||
| Noninterest income: | |||||||||||||||
| Service charges on deposit accounts | 1,690,972 | 1,551,840 | 6,449,248 | 5,815,479 | |||||||||||
| Bankcard fees | 1,075,541 | 960,011 | 4,032,421 | 3,556,754 | |||||||||||
| (Loss) gain on investment securities available for sale | — | — | (27,209 | ) | 200,704 | ||||||||||
| Bank owned life insurance | 320,565 | 326,779 | 1,245,382 | 1,252,246 | |||||||||||
| Gain on sale of loans and loan servicing release fees | 458,699 | 366,350 | 1,612,335 | 1,103,586 | |||||||||||
| Brokerage commissions | 164,987 | 137,776 | 732,336 | 590,255 | |||||||||||
| FDIC receivable for loss sharing agreements impairment | (2,529,134 | ) | (235,824 | ) | (2,434,903 | ) | (174,291 | ) | |||||||
| Other | 314,535 | 601,348 | 719,620 | 1,932,277 | |||||||||||
| Total noninterest income | 1,496,165 | 3,708,280 | 12,329,230 | 14,277,010 | |||||||||||
| Noninterest expenses: | |||||||||||||||
| Salaries and employee benefits | 5,585,634 | 5,241,096 | 20,712,215 | 19,763,210 | |||||||||||
| Occupancy | 2,029,880 | 1,847,491 | 7,670,236 | 7,476,771 | |||||||||||
| Legal and professional | 404,274 | 371,722 | 1,382,300 | 1,681,667 | |||||||||||
| Marketing | 343,766 | 469,915 | 1,282,226 | 1,445,963 | |||||||||||
| Federal insurance premiums and other regulatory fees | 191,337 | 190,187 | 755,872 | 891,615 | |||||||||||
| Net (benefit) cost of operations of real estate owned | (19,011 | ) | 59,896 | 35,562 | 434,433 | ||||||||||
| Furniture and equipment | 278,160 | 177,427 | 881,465 | 727,627 | |||||||||||
| Postage, office supplies and printing | 186,055 | 219,353 | 872,837 | 865,853 | |||||||||||
| Core deposit intangible amortization expense | 60,045 | 79,696 | 266,451 | 380,210 | |||||||||||
| Other | 922,206 | 737,691 | 2,972,536 | 2,542,841 | |||||||||||
| Total noninterest expenses | 9,982,346 | 9,394,474 | 36,831,700 | 36,210,190 | |||||||||||
| Income before income taxes | 810,156 | 1,522,996 | 8,377,474 | 8,697,346 | |||||||||||
| Income tax expense | 257,463 | 480,919 | 2,805,312 | 2,742,213 | |||||||||||
| Net income | $ | 552,693 | $ | 1,042,077 | $ | 5,572,162 | $ | 5,955,133 | |||||||
| Basic net income per share | $ | 0.04 | $ | 0.06 | $ | 0.35 | $ | 0.29 | |||||||
| Diluted net income per share | $ | 0.04 | $ | 0.06 | $ | 0.34 | $ | 0.28 | |||||||
| Weighted average number of common shares outstanding | 15,299,717 | 17,936,142 | 15,717,421 | 20,591,302 | |||||||||||
| Weighted average number of common and potential common shares outstanding | 15,982,127 | 18,446,228 | 16,399,831 | 21,101,388 | |||||||||||
__________________________________
(1) Financial information for the year ended September 30, 2014 has been derived from audited financial statements.
| Charter Financial Corporation | ||||||||||||||||||||||||||||
| Supplemental Financial Data (unaudited) | ||||||||||||||||||||||||||||
| in thousands except per share data | ||||||||||||||||||||||||||||
| Quarter to Date | Year to Date | |||||||||||||||||||||||||||
| 9/30/2015 | 6/30/2015 | 3/31/2015 | 12/31/2014 | 9/30/2014 | 9/30/2015 | 9/30/2014 | ||||||||||||||||||||||
| Consolidated balance sheet data: | ||||||||||||||||||||||||||||
| Total assets | $ | 1,027,079 | $ | 1,004,936 | $ | 1,010,645 | $ | 979,777 | $ | 1,010,361 | $ | 1,027,079 | $ | 1,010,361 | ||||||||||||||
| Cash and cash equivalents | 30,343 | 39,951 | 64,564 | 48,732 | 99,463 | 30,343 | 99,463 | |||||||||||||||||||||
| Loans receivable, net | 714,761 | 672,830 | 656,212 | 627,740 | 606,367 | 714,761 | 606,367 | |||||||||||||||||||||
| Other real estate owned | 3,411 | 3,290 | 4,487 | 5,508 | 7,316 | 3,411 | 7,316 | |||||||||||||||||||||
| Securities available for sale | 184,404 | 189,791 | 182,982 | 191,995 | 188,743 | 184,404 | 188,743 | |||||||||||||||||||||
| Transaction accounts | 327,373 | 328,961 | 328,012 | 310,891 | 314,201 | 327,373 | 314,201 | |||||||||||||||||||||
| Total deposits | 738,855 | 734,238 | 736,803 | 701,475 | 717,192 | 738,855 | 717,192 | |||||||||||||||||||||
| Borrowings | 62,000 | 50,000 | 50,000 | 55,000 | 55,000 | 62,000 | 55,000 | |||||||||||||||||||||
| Total stockholders’ equity | 204,931 | 208,919 | 211,246 | 213,186 | 224,955 | 204,931 | 224,955 | |||||||||||||||||||||
| Consolidated earnings summary: | ||||||||||||||||||||||||||||
| Interest income | $ | 10,519 | $ | 9,365 | $ | 9,040 | $ | 8,969 | $ | 8,460 | $ | 37,893 | $ | 35,648 | ||||||||||||||
| Interest expense | 1,223 | 1,218 | 1,236 | 1,336 | 1,378 | 5,013 | 5,730 | |||||||||||||||||||||
| Net interest income | 9,296 | 8,147 | 7,804 | 7,633 | 7,082 | 32,880 | 29,918 | |||||||||||||||||||||
| Provision for loan losses | — | — | (4 | ) | 4 | (127 | ) | — | (713 | ) | ||||||||||||||||||
| Net interest income after provision for loan losses | 9,296 | 8,147 | 7,808 | 7,629 | 7,209 | 32,880 | 30,631 | |||||||||||||||||||||
| Noninterest income | 1,496 | 3,816 | 3,451 | 3,566 | 3,708 | 12,329 | 14,277 | |||||||||||||||||||||
| Noninterest expense | 9,982 | 9,050 | 9,064 | 8,735 | 9,394 | 36,832 | 36,211 | |||||||||||||||||||||
| Income tax expense | 257 | 1,001 | 761 | 786 | 481 | 2,805 | 2,742 | |||||||||||||||||||||
| Net income | $ | 553 | $ | 1,912 | $ | 1,434 | $ | 1,674 | $ | 1,042 | $ | 5,572 | $ | 5,955 | ||||||||||||||
| Per share data: | ||||||||||||||||||||||||||||
| Earnings per share – basic | $ | 0.04 | $ | 0.12 | $ | 0.09 | $ | 0.10 | $ | 0.06 | $ | 0.35 | $ | 0.29 | ||||||||||||||
| Earnings per share – fully diluted | $ | 0.04 | $ | 0.12 | $ | 0.09 | $ | 0.10 | $ | 0.06 | $ | 0.34 | $ | 0.28 | ||||||||||||||
| Cash dividends per share | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.20 | $ | 0.20 | ||||||||||||||
| Weighted average basic shares | 15,300 | 15,560 | 15,835 | 16,175 | 17,936 | 15,717 | 20,591 | |||||||||||||||||||||
| Weighted average diluted shares | 15,982 | 16,210 | 16,376 | 16,710 | 18,446 | 16,400 | 21,101 | |||||||||||||||||||||
| Total shares outstanding | 16,028 | 16,404 | 16,664 | 16,963 | 18,261 | 16,028 | 18,261 | |||||||||||||||||||||
| Book value per share | $ | 12.79 | $ | 12.74 | $ | 12.68 | $ | 12.57 | $ | 12.32 | $ | 12.79 | $ | 12.32 | ||||||||||||||
| Tangible book value per share | $ | 12.48 | $ | 12.44 | $ | 12.39 | $ | 12.29 | $ | 12.06 | $ | 12.48 | $ | 12.06 | ||||||||||||||
__________________________________
(1) Financial information at and for the year ended September 30, 2014 has been derived from audited financial statements.
| Charter Financial Corporation | ||||||||||||||||||||||||||||
| Supplemental Information (unaudited) | ||||||||||||||||||||||||||||
| dollars in thousands | ||||||||||||||||||||||||||||
| Quarter to Date | Year to Date | |||||||||||||||||||||||||||
| 9/30/2015 | 6/30/2015 | 3/31/2015 | 12/31/2014 | 9/30/2014 | 9/30/2015 | 9/30/2014 | ||||||||||||||||||||||
| Loans receivable: | ||||||||||||||||||||||||||||
| 1-4 family residential real estate | $ | 188,044 | $ | 182,290 | $ | 179,748 | $ | 167,582 | $ | 163,656 | $ | 188,044 | $ | 163,656 | ||||||||||||||
| Commercial real estate | 416,576 | 394,417 | 380,691 | 368,308 | 356,642 | 416,576 | 356,642 | |||||||||||||||||||||
| Commercial | 37,444 | 31,847 | 31,271 | 30,824 | 28,298 | 37,444 | 28,298 | |||||||||||||||||||||
| Real estate construction | 77,217 | 70,189 | 70,758 | 67,196 | 63,485 | 77,217 | 63,485 | |||||||||||||||||||||
| Consumer and other | 6,392 | 4,924 | 4,632 | 4,800 | 5,139 | 6,392 | 5,139 | |||||||||||||||||||||
| Total loans receivable (1) | $ | 725,673 | $ | 683,667 | $ | 667,100 | $ | 638,710 | $ | 617,220 | $ | 725,673 | $ | 617,220 | ||||||||||||||
| Allowance for loan losses: | ||||||||||||||||||||||||||||
| Balance at beginning of period | $ | 9,433 | $ | 9,409 | $ | 9,507 | $ | 9,471 | $ | 9,263 | $ | 9,471 | $ | 12,113 | ||||||||||||||
| Charge-offs | (263 | ) | (54 | ) | (59 | ) | (153 | ) | (342 | ) | (529 | ) | (1,266 | ) | ||||||||||||||
| Recoveries | 319 | 78 | 41 | 109 | 677 | 547 | 887 | |||||||||||||||||||||
| Provision (2) | — | — | (80 | ) | 80 | (127 | ) | — | (2,263 | ) | ||||||||||||||||||
| Balance at end of period | $ | 9,489 | $ | 9,433 | $ | 9,409 | $ | 9,507 | $ | 9,471 | $ | 9,489 | $ | 9,471 | ||||||||||||||
| Nonperforming assets: (3) | ||||||||||||||||||||||||||||
| Nonaccrual loans | $ | 4,114 | $ | 4,310 | $ | 3,410 | $ | 3,274 | $ | 3,508 | $ | 4,114 | $ | 3,508 | ||||||||||||||
| Loans delinquent 90 days or greater and still accruing | 14 | — | — | 64 | 736 | 14 | 736 | |||||||||||||||||||||
| Total nonperforming loans | 4,128 | 4,310 | 3,410 | 3,338 | 4,244 | 4,128 | 4,244 | |||||||||||||||||||||
| Other real estate owned (4) | 3,411 | 3,290 | 4,487 | 5,508 | 7,316 | 3,411 | 7,316 | |||||||||||||||||||||
| Total nonperforming assets | $ | 7,539 | $ | 7,600 | $ | 7,898 | $ | 8,846 | $ | 11,560 | $ | 7,539 | $ | 11,560 | ||||||||||||||
| Troubled debt restructuring: | ||||||||||||||||||||||||||||
| Troubled debt restructurings - accruing | $ | 6,046 | $ | 6,105 | $ | 6,064 | $ | 6,094 | $ | 6,154 | $ | 6,046 | $ | 6,154 | ||||||||||||||
| Troubled debt restructurings - nonaccrual | 1,607 | 1,790 | 1,673 | 1,673 | 1,674 | 1,607 | 1,674 | |||||||||||||||||||||
| Total troubled debt restructurings | $ | 7,653 | $ | 7,895 | $ | 7,737 | $ | 7,767 | $ | 7,828 | $ | 7,653 | $ | 7,828 | ||||||||||||||
__________________________________
(1) Included in the loan balances are loans that were previously covered under loss share agreements with the FDIC in the amount of $46.8 million, $50.0 million, $68.0 million, and $70.6 million at June 30, 2015, March 31, 2015, December 31, 2014, and September 30, 2014, respectively.
(2) In prior periods, only the Company’s loss share percentage of the provision for covered loan losses was recognized in the Statement of Income as a provision expense (benefit). The remainder was recorded as an increase (decrease) to the FDIC receivable for loss sharing agreements in the Statement of Financial Condition.
(3) Loans that were previously covered under loss share agreements with the FDIC and were greater than 90 days delinquent or otherwise considered nonperforming loans are excluded from this table due to the recognition of accretion income established at the time of acquisition.
(4) Included in the balances is OREO that was previously covered under loss share agreements with the FDIC in the amount of $2.4 million, $3.3 million, $4.6 million, and $5.6 million at June 30, 2015, March 31, 2015, December 31, 2014, and September 30, 2014, respectively.
| Charter Financial Corporation | |||||||||||||||||||||
| Supplemental Information (unaudited) | |||||||||||||||||||||
| Quarter to Date | Year to Date | ||||||||||||||||||||
| 9/30/2015 | 6/30/2015 | 3/31/2015 | 12/31/2014 | 9/30/2014 | 9/30/2015 | 9/30/2014 | |||||||||||||||
| Return on equity (annualized) | 1.06 | % | 3.62 | % | 2.69 | % | 3.09 | % | 1.78 | % | 2.62 | % | 2.28 | % | |||||||
| Return on assets (annualized) | 0.22 | % | 0.76 | % | 0.58 | % | 0.68 | % | 0.41 | % | 0.56 | % | 0.56 | % | |||||||
| Net interest margin (annualized) | 4.05 | % | 3.62 | % | 3.54 | % | 3.47 | % | 3.14 | % | 3.67 | % | 3.22 | % | |||||||
| Net interest margin, excluding the effects of purchase accounting (1) | 3.37 | % | 3.21 | % | 3.31 | % | 3.14 | % | 2.95 | % | 3.26 | % | 2.87 | % | |||||||
| Bank tier 1 leverage ratio (2) | 16.04 | % | 16.70 | % | 16.73 | % | 18.31 | % | 17.67 | % | 16.04 | % | 17.67 | % | |||||||
| Bank total risk-based capital ratio | 21.71 | % | 22.88 | % | 23.42 | % | 26.46 | % | 27.90 | % | 21.71 | % | 27.90 | % | |||||||
| Effective tax rate | 31.78 | % | 34.36 | % | 34.67 | % | 31.96 | % | 31.58 | % | 33.49 | % | 31.53 | % | |||||||
| Yield on loans | 5.40 | % | 5.02 | % | 4.95 | % | 5.14 | % | 5.05 | % | 5.13 | % | 5.36 | % | |||||||
| Cost of deposits | 0.42 | % | 0.43 | % | 0.43 | % | 0.48 | % | 0.49 | % | 0.44 | % | 0.50 | % | |||||||
| Asset quality ratios: (3) | |||||||||||||||||||||
| Allowance for loan losses as a % of total loans | 1.30 | % | 1.33 | % | 1.37 | % | 1.49 | % | 1.55 | % | 1.30 | % | 1.55 | % | |||||||
| Allowance for loan losses as a % of nonperforming loans | 229.85 | % | 196.86 | % | 248.17 | % | 254.47 | % | 199.64 | % | 229.85 | % | 199.64 | % | |||||||
| Nonperforming assets as a % of total loans and OREO | 1.03 | % | 0.82 | % | 0.74 | % | 0.75 | % | 1.09 | % | 1.03 | % | 1.09 | % | |||||||
| Nonperforming assets as a % of total assets | 0.73 | % | 0.55 | % | 0.48 | % | 0.48 | % | 0.65 | % | 0.73 | % | 0.65 | % | |||||||
| Net charge-offs (recoveries) as a % of average loans (annualized) | (0.15 | )% | (0.01 | )% | 0.02 | % | (0.01 | )% | 0.10 | % | (0.17 | )% | 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 $3.8 million, $3.9 million, $5.1 million, $5.5 million, and $6.1 million for the quarters ended September 30, 2015, June 30, 2015, March 31, 2015, December 31, 2014, and September 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.
(3) Due to the early termination of the FDIC loss share agreements in the fourth quarter of fiscal 2015, ratios for the three and twelve months ended September 30, 2015, include all previously covered assets with the exception of FAS ASC 310-30 loans that are excluded from nonperforming loans due to the ongoing recognition of accretion income established at the time of acquisition. Ratios for periods prior to September 30, 2015, represent non-covered data only.
| Charter Financial Corporation | |||||||||||||||||||||
| Average Balances, Interest Rates and Yields (unaudited) | |||||||||||||||||||||
| dollars in thousands | |||||||||||||||||||||
| Quarter to Date | |||||||||||||||||||||
| 9/30/2015 | 9/30/2014 | ||||||||||||||||||||
| Average | Average | ||||||||||||||||||||
| Average | Yield/ | Average | Yield/ | ||||||||||||||||||
| Balance | Interest | Cost (10) | Balance | Interest | Cost (10) | ||||||||||||||||
| Assets: | |||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||
| Interest-earning deposits in other financial institutions | $ | 21,165 | $ | 8 | 0.15 | % | $ | 115,090 | $ | 64 | 0.22 | % | |||||||||
| FHLB common stock and other equity securities | 3,387 | 34 | 4.01 | 3,443 | 32 | 3.72 | |||||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations available for sale | 147,514 | 691 | 1.87 | 173,113 | 819 | 1.89 | |||||||||||||||
| Other investment securities available for sale (1) | 39,603 | 243 | 2.46 | 15,744 | 16 | 0.41 | |||||||||||||||
| Loans receivable (1)(2)(3)(4) | 706,724 | 8,009 | 4.53 | 595,959 | 7,161 | 4.81 | |||||||||||||||
| Accretion and amortization of loss share loans receivable (5) | 1,534 | 0.86 | 368 | 0.24 | |||||||||||||||||
| Total interest-earning assets | 918,393 | 10,519 | 4.58 | 903,349 | 8,460 | 3.75 | |||||||||||||||
| Total noninterest-earning assets | 98,994 | 118,774 | |||||||||||||||||||
| Total assets | $ | 1,017,387 | $ | 1,022,123 | |||||||||||||||||
| Liabilities and Equity: | |||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||
| Interest bearing checking | $ | 178,538 | $ | 57 | 0.13 | % | $ | 173,813 | $ | 42 | 0.10 | % | |||||||||
| Bank rewarded checking | 46,915 | 23 | 0.20 | 45,798 | 27 | 0.23 | |||||||||||||||
| Savings accounts | 51,300 | 3 | 0.02 | 48,734 | 2 | 0.02 | |||||||||||||||
| Money market deposit accounts | 126,889 | 69 | 0.22 | 123,641 | 70 | 0.23 | |||||||||||||||
| Certificate of deposit accounts | 232,738 | 511 | 0.88 | 238,705 | 635 | 1.06 | |||||||||||||||
| Total interest-bearing deposits | 636,380 | 663 | 0.42 | 630,691 | 776 | 0.49 | |||||||||||||||
| Borrowed funds | 58,773 | 560 | 3.81 | 55,000 | 602 | 4.38 | |||||||||||||||
| Total interest-bearing liabilities | 695,153 | 1,223 | 0.70 | 685,691 | 1,378 | 0.80 | |||||||||||||||
| Noninterest-bearing deposits | 100,544 | 87,829 | |||||||||||||||||||
| Other noninterest-bearing liabilities | 13,379 | 14,024 | |||||||||||||||||||
| Total noninterest-bearing liabilities | 113,923 | 101,853 | |||||||||||||||||||
| Total liabilities | 809,076 | 787,544 | |||||||||||||||||||
| Total stockholders' equity | 208,311 | 234,579 | |||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 1,017,387 | $ | 1,022,123 | |||||||||||||||||
| Net interest income | $ | 9,296 | $ | 7,082 | |||||||||||||||||
| Net interest earning assets (6) | $ | 223,240 | $ | 217,658 | |||||||||||||||||
| Net interest rate spread (7) | 3.88 | % | 2.95 | % | |||||||||||||||||
| Net interest margin (8) | 4.05 | % | 3.14 | % | |||||||||||||||||
| Net interest margin, excluding the effects of purchase accounting (9) | 3.37 | % | 2.95 | % | |||||||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 132.11 | % | 131.74 | % | |||||||||||||||||
__________________________________
(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 $3.8 million and $6.1 million for the quarters ended September 30, 2015 and September 30, 2014, respectively.
(10) Annualized.
| Charter Financial Corporation | |||||||||||||||||||||
| Average Balances, Interest Rates and Yields (unaudited) | |||||||||||||||||||||
| dollars in thousands | |||||||||||||||||||||
| Fiscal Year to Date | |||||||||||||||||||||
| 9/30/2015 | 9/30/2014 | ||||||||||||||||||||
| Average | Average | ||||||||||||||||||||
| Average | Yield/ | Average | Yield/ | ||||||||||||||||||
| Balance | Interest | Cost | Balance | Interest | Cost | ||||||||||||||||
| Assets: | |||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||
| Interest-earning deposits in other financial institutions | $ | 42,836 | $ | 93 | 0.22 | % | $ | 138,859 | $ | 331 | 0.24 | % | |||||||||
| FHLB common stock and other equity securities | 3,304 | 143 | 4.33 | 3,671 | 135 | 3.67 | |||||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations available for sale | 159,738 | 3,050 | 1.91 | 181,836 | 3,613 | 1.99 | |||||||||||||||
| Other investment securities available for sale (1) | 27,206 | 618 | 2.27 | 18,273 | 72 | 0.40 | |||||||||||||||
| Loans receivable (1)(2)(3)(4) | 662,283 | 30,431 | 4.59 | 587,486 | 28,410 | 4.84 | |||||||||||||||
| Accretion and amortization of loss share loans receivable (5) | 3,558 | 0.53 | 3,087 | 0.52 | |||||||||||||||||
| Total interest-earning assets | 895,367 | 37,893 | 4.23 | 930,125 | 35,648 | 3.83 | |||||||||||||||
| Total noninterest-earning assets | 105,145 | 130,908 | |||||||||||||||||||
| Total assets | $ | 1,000,512 | $ | 1,061,033 | |||||||||||||||||
| Liabilities and Equity: | |||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||
| Interest bearing checking | $ | 171,792 | $ | 214 | 0.12 | % | $ | 175,265 | $ | 190 | 0.11 | % | |||||||||
| Bank rewarded checking | 48,272 | 100 | 0.21 | 47,701 | 114 | 0.24 | |||||||||||||||
| Savings accounts | 49,782 | 10 | 0.02 | 48,367 | 10 | 0.02 | |||||||||||||||
| Money market deposit accounts | 125,151 | 265 | 0.21 | 126,578 | 281 | 0.22 | |||||||||||||||
| Certificate of deposit accounts | 227,917 | 2,138 | 0.94 | 252,374 | 2,660 | 1.05 | |||||||||||||||
| Total interest-bearing deposits | 622,914 | 2,727 | 0.44 | 650,285 | 3,255 | 0.50 | |||||||||||||||
| Borrowed funds | 54,513 | 2,286 | 4.19 | 57,211 | 2,475 | 4.33 | |||||||||||||||
| Total interest-bearing liabilities | 677,427 | 5,013 | 0.74 | 707,496 | 5,730 | 0.81 | |||||||||||||||
| Noninterest-bearing deposits | 98,340 | 80,157 | |||||||||||||||||||
| Other noninterest-bearing liabilities | 12,203 | 12,104 | |||||||||||||||||||
| Total noninterest-bearing liabilities | 110,543 | 92,261 | |||||||||||||||||||
| Total liabilities | 787,970 | 799,757 | |||||||||||||||||||
| Total stockholders' equity | 212,542 | 261,276 | |||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 1,000,512 | $ | 1,061,033 | |||||||||||||||||
| Net interest income | $ | 32,880 | $ | 29,918 | |||||||||||||||||
| Net interest earning assets (6) | $ | 217,940 | $ | 222,629 | |||||||||||||||||
| Net interest rate spread (7) | 3.49 | % | 3.02 | % | |||||||||||||||||
| Net interest margin (8) | 3.67 | % | 3.22 | % | |||||||||||||||||
| Net interest margin, excluding the effects of purchase accounting (9) | 3.26 | % | 2.87 | % | |||||||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 132.17 | % | 131.47 | % | |||||||||||||||||
__________________________________
(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 $4.6 million and $4.9 million for the three months ended September 30, 2015 and September 30, 2014, respectively.