Registration No. 333-167634 |
Federal
|
6712
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58-2659667
|
(State
or Other Jurisdiction of
|
(Primary
Standard Industrial
|
(I.R.S.
Employer
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Incorporation
or Organization)
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Classification
Code Number)
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Identification
Number)
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Large accelerated filer o | Accelerated filer o | |
Non-accelerated filer x | Smaller reporting company o | |
(Do
not check if a smaller reporting company)
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Title
of each class of
securities
to be registered
|
Amount
to be
registered
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Proposed
maximum
offering
price per share
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Proposed
maximum
aggregate
offering price
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Amount
of
registration
fee
|
Common
Stock, $0.01 par value per share
|
5,961,573
Shares
|
$10.52
|
$62,715,747
(1)
|
$4,472
(2)
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(1)
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Estimated
solely for the purpose of calculating the registration
fee.
|
(2)
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A fee off $4,833
was previously
paid.
|
4,281,060
Shares
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5,961,573
Shares
|
|||||||||||||||
Minimum Price
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Maximum Price
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Minimum Price
|
Maximum Price
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|||||||||||||
Price
per
share
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$ | 7.78 | $ | 10.52 | $ | 7.78 | $ | 10.52 | ||||||||
Gross
offering proceeds
(1)
|
$ | 33,306,647 | $ | 45,036,751 | $ | 46,381,038 | $ | 62,715,748 | ||||||||
Estimated
offering expenses, excluding selling
agent commissions and
expenses
|
$ | 1,770,000 | $ | 1,770,000 | $ | 1,770,000 | $ | 1,770,000 | ||||||||
Estimated
selling agent fees and expenses ( 2 )( 3 )
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$ | 1,803,799 | $ | 2,331,654 | $ | 2,392,147 | $ | 3,127,209 | ||||||||
Estimated
net
proceeds
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$ | 29,732,848 | $ | 40,935,097 | $ | 42,218,891 | $ | 57,818,539 | ||||||||
Estimated
net proceeds per
share
|
$ | 6.95 | $ | 9.56 | $ | 7.08 | $ | 9.70 |
|
This
investment involves a degree of risk, including the possible loss of
principal.
|
|
Please
read “Risk Factors” beginning on page
16.
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STIFEL
NICOLAUS
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1
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16
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31
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34
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41
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42
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44
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45
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46
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47
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49
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55
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97
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105
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113
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115
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141
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142
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159
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160
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160
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160
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161
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F-1
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G-1
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●
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Raising
additional capital and leveraging our capital base and acquisition
experience to pursue additional strategic growth opportunities, especially
FDIC-assisted acquisitions, such as NCB and
MCB.
|
|
●
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Growing
our retail banking presence throughout the markets within west-central
Georgia and east-central Alabama, including our expanded retail footprint
resulting from the NCB and MCB acquisitions, while continuing to reduce
our emphasis on wholesale banking.
|
|
●
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Continuing
to emphasize convenience for our customers by offering extended hours at
most of our offices, alternative bank delivery systems that allow
customers to pay bills, transfer funds and monitor account balances at any
time, as well as products and services designed to meet the changing needs
of our customers, such as our Rewards checking
program.
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|
●
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Reducing
our nonperforming assets and classified assets through diligent monitoring
and resolution efforts, including problem assets acquired in the NCB and
MCB acquisitions.
|
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●
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Continuing
to integrate the assets and liabilities we acquired from NCB in June 2009
and MCB in March 2010, achieving operational efficiencies through the
consolidation or relocation of our branches and building on the NCB and
MCB franchises by offering expanded products and
services.
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●
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supporting
internal growth through increased lending in the communities we serve,
including our new markets resulting from the NCB and MCB
acquisitions;
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●
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providing
capital to support acquisitions of financial institutions as opportunities
arise, especially troubled financial institutions with FDIC assistance,
although we do not currently have any agreements to acquire a financial
institution or other entity;
|
|
●
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improving
our capital position during a period of significant economic, regulatory
and political uncertainty, especially for the financial services
industry;
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●
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enabling
us to enhance existing products and services to meet the needs of our
marketplace;
|
|
●
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assisting
us in managing interest rate risk;
and
|
|
●
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improving
the liquidity of our shares of common stock and enhancing shareholder
returns through more flexible capital management
strategies.
|
Selected
Pricing Ratios on a Fully-Converted Basis
|
||||||||||||||||
Price-to-earnings
multiple (1)
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Core
Price-to-
earnings
multiple
(1)
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Price-to-book
value
ratio
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Price-to-
tangible
book
value ratio
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|||||||||||||
Charter
Financial (on a pro forma basis,
|
||||||||||||||||
assuming
completion of the stock offering)
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||||||||||||||||
Maximum
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18.26 | x | 123.62 | x | 74.73 | % | 76.31 | % | ||||||||
Midpoint
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16.31 | x | 130.77 | x | 70.30 | % | 71.99 | % | ||||||||
Minimum
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14.25 | x | 141.87 | x | 65.25 | % | 66.87 | % | ||||||||
Valuation
of peer group companies (on an historical basis)
|
||||||||||||||||
Averages
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23.5 4 | x | 24.55 | x | 75.89 | % | 77.17 | % | ||||||||
Medians
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25.38 | x | 24.25 | x | 76.40 | % | 80.41 | % |
(1)
|
Price-to-earnings
multiples calculated by RP Financial in the independent appraisal are
based on trailing twelve month earnings through March 31,
2010. Core price-to-earnings are based on estimates by RP
Financial of recurring earnings, which are different than those presented
in “Pro Forma Data.”
|
Price-to-earnings
multiple
(1)
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Price-to-book
value
ratio
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Price-to-tangible
book
value ratio
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||||||||||||||||||||||
4,281,060
Shares
Sold
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5,961,573
Shares
Sold
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4,281,060
Shares
Sold
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5,961,573
Shares
Sold
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4,281,060
Shares
Sold
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5,961,573
Shares
Sold
|
|||||||||||||||||||
Charter
Financial (on a pro forma basis,
|
||||||||||||||||||||||||
assuming
completion of the stock offering)
|
||||||||||||||||||||||||
Maximum
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21.97 | x | 21.34 | x | 133.20 | % | 119.44 | % | 138.09 | % | 123.50 | % | ||||||||||||
Midpoint
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19.21 | x | 18.72 | x | 119.92 | % | 108.67 | % | 124.66 | % | 112.54 | % | ||||||||||||
Minimum
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16.41 | x | 16.06 | x | 105.67 | % | 96.86 | % | 110.01 | % | 100.48 | % | ||||||||||||
Valuation
of peer group companies (on an
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||||||||||||||||||||||||
historical
basis) (2)
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||||||||||||||||||||||||
Averages
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25.69 | x | 25.69 | x | 128.16 | % | 128.16 | % | 132.40 | % | 132.40 | % | ||||||||||||
Medians
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21.12 | x | 21.12 | x | 130.73 | % | 130.73 | % | 134.71 | % | 134.71 | % |
(1)
|
Price-to-earnings
multiples calculated by RP Financial in the independent appraisal are
based on trailing twelve month reported earnings through March 31,
2010. These ratios are different than those presented in “Pro
Forma Data.” Price-to-earnings ratios calculated based on
estimated core earnings are not meaningful and were omitted from this
table.
|
(2)
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The
information for publicly traded mutual holding companies may not be
meaningful for investors because it presents average and median
information for mutual holding companies that issued a different
percentage of their stock in their offerings than the 22.9% to 31.9% that
we are issuing to the public if we sell the minimum and maximum number of
shares we are offering. In addition, the effect of stock
repurchases also affects the ratios to a greater or lesser degree
depending upon repurchase activity.
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Shares
to be Granted or Purchased (1)
|
||||||||||||||||||||
Number
of
Shares
|
As
a Percentage
of
Common
Stock
Sold in
the
Offering (2)
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As
a Percentage
of
Common
Stock
Outstanding
Upon
Completion
of
the
Offering
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Dilution
Resulting
From
Issuance
of
Shares for
Stock-Based
Incentive
Plans
(3)
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Value
of
Grants,
in
thousands
(4)
|
||||||||||||||||
Employee
stock ownership plan
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300,000 | 5.03 | % | 1.61 | % | N/A | $ | 2,967 | ||||||||||||
Restricted
stock awards
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82,000 | 1.38 | % | 0.44 | % | 0.44 | % | 811 | ||||||||||||
Stock
options
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207,000 | 3.47 | % | 1.11 | % | 1.10 | % | 453 | ||||||||||||
Total
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589,000 | 9.88 | % | 3.15 | % | 1.52 | % | $ | 4,231 |
(1)
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The
table assumes that the stock-based incentive plan is implemented within
twelve months after the completion of the stock offering, and that
CharterBank’s tangible capital is at least 10% at the time the plan is
implemented. If the stock-based incentive plan is implemented
more than twelve months after the completion of the stock offering, grants
of options and restricted stock may exceed these percentage limitations,
provided shares used to fund the plan in excess of these limits come from
repurchased shares.
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(2)
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Assumes
that the maximum number of shares offered, or 5,961,573 shares, are sold
in the stock offering.
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(3)
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No
dilution is reflected for the employee stock ownership plan because such
shares are assumed to be purchased in the stock
offering.
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(4)
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Assumes
that shares are sold at $ 10.52 per
share. The actual value of restricted stock awards will be
determined based on their fair value as of the date grants are
made. For purposes of this table, fair value for stock awards
is assumed to be $ 10.52 per
share. The fair value of stock options has been estimated at
$2.19 per option using the Black-Scholes option pricing model and the
following assumptions: a grant-date share price and option exercise price
of $ 10.52 ; an expected option life of eight
years; a dividend yield of 2.0% equal to the average dividend yield of
publicly-traded thrifts; an interest rate of 3.16%; and a volatility rate
of 25.0% based on an index of publicly traded institutions in the mutual
holding company structure. The actual value of option grants will be
determined by the grant-date fair value of the options, which will depend
on a number of factors, including the valuation assumptions used in the
option pricing model ultimately
adopted.
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Existing
and New Stock Benefit Plans
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Participants
|
Shares
|
Estimated
Value of
Shares
|
Percentage
of Shares
Outstanding
Upon
Completion
of the
Offering
(1)
|
||||||||||
Employee
Stock Ownership Plan:
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Employees
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|||||||||||||
Shares
purchased in 2001 offering
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317,158 | (2) | $ | 3,336,502 | 1.70 | % | ||||||||
Shares
to be purchased in this offering
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300,000 | 3,156,000 | 1.61 | |||||||||||
Total
employee stock ownership plan shares
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617,158 | $ | 6,492,502 | 3.31 | % | |||||||||
Restricted
Stock Awards:
|
Directors,
Officers and Employees
|
|||||||||||||
2001
Recognition and Retention Plan
|
283,177 | (3) | $ | 2,979,022 | (4) | 1.52 | % | |||||||
New
shares of restricted stock
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82,000 | 862,640 | (4) | 0.44 | ||||||||||
Total
shares of restricted stock
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365,177 | $ | 3,841,662 | 1.96 | % | |||||||||
Stock
Options:
|
Directors,
Officers and Employees
|
|||||||||||||
2001
Stock Option Plan
|
707,943 | (5) | $ | 1,645,909 | 3.79 | % | ||||||||
New
stock options
|
207,000 | 481,258 | (6) | 1.11 | ||||||||||
Total
stock options
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914,943 | $ | 2,127,167 | 4.90 | % | |||||||||
Total
of stock benefit plans
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1,897,278 | $ | 12,461,331 | 10.16 | % |
(1)
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Percentages
are based on 18,672,361 shares outstanding upon completion of the stock
offering, which includes 154,699 shares held by the employee stock
ownership plan that have not been allocated and 93,505 shares reserved for
issuance as restricted stock awards under the 2001 Recognition and
Retention Plan.
|
(2)
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As
of March 31, 2010, 162,459 of these shares have been
allocated.
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(3)
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As
of March 31, 2010, 222,788 of these shares have been awarded, and 189,672
shares have vested.
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(4)
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The
value of restricted stock awards is determined based on their fair value
as of the date grants are made. For purposes of this table, the
fair value of awards under the new stock-based incentive plan is assumed
to be $ 10.52 , the maximum per share offering
price for the stock offering.
|
(5)
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As
of March 31, 2010, options to purchase 412,425 of these shares have been
awarded, and options to purchase 295,518 of these shares remain available
for future grants.
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(6)
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The
weighted-average fair value of stock options has been estimated at $ 2.32 per option using the Black-Scholes option
pricing model and the following assumptions: a grant-date share price and
option exercise price of $ 10.52 , the maximum
per share offering price for the stock offering; an expected option life
of eight years; a dividend yield of 2.0% equal to the average dividend
yield of publicly-traded thrifts; an interest rate of 3.16%; and a
volatility rate of 25.0% based on an index of publicly traded institutions
in the mutual holding company
structure.
|
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(i)
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First,
to depositors with accounts at CharterBank, Neighborhood Community Bank or
McIntosh Commercial Bank with combined aggregate balances of at least $50
at the close of business on December 31,
2008;
|
|
(ii)
|
Second,
to our tax-qualified employee benefit plans, including CharterBank’s
employee stock ownership plan;
|
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(iii)
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Third,
to depositors with accounts at CharterBank with aggregate balances of at
least $50 at the close of business on [SERD];
and
|
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(iv)
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Fourth,
to borrowers of CharterBank as of October 16, 2001 whose borrowings
remained outstanding at the close of business on
[SERD].
|
|
●
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your
spouse or relatives of you or your spouse living in your
house;
|
|
●
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most
companies, trusts or other entities in which you are a trustee, have a
substantial beneficial interest or hold a senior position;
or
|
|
●
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other
persons who may be your associates or persons acting in concert with
you.
|
|
(i)
|
personal
check, bank check or money order made payable directly to Charter
Financial Corporation; or
|
|
(ii)
|
authorizing
us to withdraw funds from the types of CharterBank deposit accounts
designated on the stock order form.
|
|
●
|
demand
for our loans, deposits and services may
decline;
|
|
●
|
loan
delinquencies, problem assets and foreclosures may
increase;
|
|
●
|
collateral
for our loans may decline further in value;
and
|
|
●
|
the
amount of our low-cost or non-interest bearing deposits may
decrease.
|
|
●
|
Potential
exposure to unknown or contingent liabilities we
acquire;
|
|
●
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Exposure
to potential asset quality issues of the acquired financial institutions,
businesses or branches;
|
|
●
|
Difficulty
and expense of integrating the operations and personnel of financial
institutions, businesses or branches we
acquire;
|
|
●
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Potential
diversion of our management’s time and
attention;
|
|
●
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The
possible loss of key employees and customers of financial institutions,
businesses or branches we acquire;
|
|
●
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Difficulty
in estimating the value of the financial institutions, businesses or
branches to be acquired; and
|
|
●
|
Potential
changes in banking or tax laws or regulations that may affect the
financial institutions or businesses to be
acquired.
|
|
●
|
Mutual
holding company structure. Under federal law, at least
50.1% of our voting stock must be owned by First Charter, MHC, which is
controlled by its Board of Directors, who are currently the members of our
Board of Directors. First Charter, MHC, acting through its Board of
Directors, is able to control our business and operations, and is able to
prevent any challenge to the control of Charter Financial by public
shareholders. In addition, a corporation in the mutual holding company
structure cannot be acquired by a stock financial institution or its stock
holding company, but can only be acquired by a mutual institution or a
corporation in the mutual holding company
structure.
|
|
●
|
Bylaw and
statutory provisions. Provisions of our
bylaws and federal law may make it more difficult and expensive to pursue
a takeover attempt that management opposes. These provisions also make
more difficult the removal of our current Board of Directors or
management, or the appointment of new directors. These provisions include
supermajority voting requirements for certain business combinations and
the election of directors to staggered terms of three years. Our bylaws
also contain provisions regarding the timing and content of shareholder
proposals and nominations.
|
At
March 31,
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At
September 30,
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|||||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
2005
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|||||||||||||||||||
(In
thousands)
|
||||||||||||||||||||||||
Selected
Financial Condition Data:
|
||||||||||||||||||||||||
Total
assets
|
$ | 1,242,740 | $ | 936,880 | $ | 801,501 | $ | 1,021,856 | $ | 1,097,321 | $ | 1,050,570 | ||||||||||||
Non-covered
loans receivable, net (1)
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463,934 | 462,786 | 428,472 | 405,553 | 374,726 | 356,808 | ||||||||||||||||||
Covered
loans receivable, net (2)
|
213,755 | 89,764 | — | — | — | — | ||||||||||||||||||
Investment
and mortgage securities available for sale (3)
|
205,546 | 206,061 | 277,139 | 295,143 | 345,732 | 376,173 | ||||||||||||||||||
Freddie
Mac common stock
|
— | — | — | 200,782 | 294,339 | 254,776 | ||||||||||||||||||
Retail
deposits (4)
|
737,036 | 463,566 | 356,237 | 378,463 | 321,279 | 250,391 | ||||||||||||||||||
Total
deposits
|
906,580 | 597,634 | 420,175 | 430,683 | 372,057 | 320,129 | ||||||||||||||||||
Deferred
income taxes
|
419 | 7,289 | 6,872 | 72,503 | 108,186 | 93,271 | ||||||||||||||||||
Total
borrowings
|
212,232 | 227,000 | 267,000 | 272,058 | 337,928 | 382,336 | ||||||||||||||||||
Total
retained earnings
|
109,148 | 102,215 | 103,301 | 99,926 | 63,548 | 63,790 | ||||||||||||||||||
Accumulated
other comprehensive income (loss)
|
(3,031 | ) | (8,277 | ) | (6,849 | ) | 116,886 | 172,489 | 149,405 | |||||||||||||||
Total
equity
|
110,673 | 98,257 | 102,302 | 225,072 | 267,709 | 243,230 |
For
the Six Months Ended
March
31,
|
Years
Ended September 30,
|
|||||||||||||||||||||||||||
2010
|
2009
|
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||||||||
(In
thousands)
|
||||||||||||||||||||||||||||
Selected
Operating Data:
|
||||||||||||||||||||||||||||
Interest
and dividend income
|
$ | 22,274 | $ | 19,229 | $ | 40,559 | $ | 46,377 | $ | 54,646 | $ | 53,802 | $ | 44,689 | ||||||||||||||
Interest
expense
|
10,378 | 11,336 | 22,599 | 26,771 | 29,827 | 27,801 | 21,782 | |||||||||||||||||||||
Net interest
income
|
11,896 | 7,893 | 17,960 | 19,606 | 24,819 | 26,001 | 22,907 | |||||||||||||||||||||
Provision
for loan losses
|
3,800 | 2,550 | 4,550 | 3,250 | — | — | 75 | |||||||||||||||||||||
Net
interest income after provision for loan losses
|
8,096 | 5,343 | 13,410 | 16,356 | 24,819 | 26,001 | 22,832 | |||||||||||||||||||||
Total
noninterest income
|
17,415 | 5,894 | 11,792 | 18,950 | 76,924 | 10,827 | 10,966 | |||||||||||||||||||||
Total
noninterest expenses
|
13,349 | 9,389 | 22,581 | 20,284 | 21,926 | 21,130 | 18,269 | |||||||||||||||||||||
Income
before provision for income taxes
|
12,162 | 1,848 | 2,621 | 15,022 | 79,817 | 15,698 | 15,529 | |||||||||||||||||||||
Income tax
expense
|
4,428 | 419 | 306 | 4,491 | 28,877 | 2,353 | 4,116 | |||||||||||||||||||||
Net income | $ | 7,734 | $ | 1,429 | $ | 2,315 | $ | 10,531 | $ | 50,940 | $ | 13,345 | $ | 11,413 | ||||||||||||||
Basic
earnings per share
|
$ | 0.42 | $ | 0.08 | $ | 0.13 | $ | 0.55 | $ | 2.67 | $ | 0.69 | $ | 0.58 | ||||||||||||||
Fully
diluted earnings per share
|
$ | 0.42 | $ | 0.08 | $ | 0.12 | $ | 0.55 | $ | 2.65 | $ | 0.68 | $ | 0.58 | ||||||||||||||
Dividends
declared per share
|
$ | 0.25 | $ | 0.50 | $ | 1.00 | $ | 1.75 | $ | 4.45 | $ | 3.80 | $ | 3.20 |
(1)
|
Excludes
“covered loans” acquired from the FDIC subject to loss-sharing
agreements. See Note 3 to the Notes to our Consolidated
Financial Statements beginning on page F-1 of this prospectus, and the
Statement of Assets Acquired and Liabilities Assumed beginning on page G-1
of this prospectus. Loans shown are net of deferred loan (fees)
costs and allowance for loan losses and exclude loans held for
sale.
|
(2)
|
Consists
of loans acquired from the FDIC subject to loss sharing
agreements. See Note 3 to the Notes to our Consolidated
Financial Statements beginning on page F-1 of this prospectus, and the
Statement of Assets Acquired and Liabilities Assumed beginning on page G-1
of this prospectus.
|
(3)
|
Includes
all CharterBank investment and mortgage securities available for sale,
excluding Freddie Mac common stock.
|
(4)
|
Retail
deposits include core deposits and certificates of deposit other than
brokered and wholesale certificates of
deposit.
|
At
or For the Six Months
Ended
March 31,
|
At
or For the Years Ended September 30,
|
|||||||||||||||||||||||||||
2010
|
2009
|
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||||||||
Selected
Financial Ratios and Other Data:
|
||||||||||||||||||||||||||||
Performance
Ratios:
|
||||||||||||||||||||||||||||
Return
on average assets (ratio of net income to average total
assets)
|
1.63 | % | 0.36 | % | 0.27 | % | 1.16 | % | 4.81 | % | 1.22 | % | 1.06 | % | ||||||||||||||
Return
on average equity (ratio of net income to average equity)
|
15.23 | % | 2.80 | % | 2.25 | % | 6.23 | % | 20.30 | % | 5.18 | % | 4.23 | % | ||||||||||||||
Interest
rate spread (1)
|
2.83 | % | 1.80 | % | 2.08 | % | 1.47 | % | 1.00 | % | 1.10 | % | 0.96 | % | ||||||||||||||
Net
interest margin (2)
|
2.91 | % | 2.15 | % | 2.35 | % | 2.32 | % | 2.46 | % | 2.48 | % | 2.18 | % | ||||||||||||||
Efficiency
ratio (3)
|
45.54 | % | 68.10 | % | 75.90 | % | 52.61 | % | 21.55 | % | 57.73 | % | 53.93 | % | ||||||||||||||
Non-interest
expense to average total assets
|
2.82 | % | 2.35 | % | 2.68 | % | 2.23 | % | 2.07 | % | 1.94 | % | 1.69 | % | ||||||||||||||
Average
interest-earning assets as a ratio of average interest-bearing
liabilities
|
1.02 | x | 1.10 | x | 1.09 | x | 1.27 | x | 1.50 | x | 1.52 | x | 1.59 | x | ||||||||||||||
Average
equity to average total assets
|
10.74 | % | 12.78 | % | 12.12 | % | 18.56 | % | 23.70 | % | 23.60 | % | 24.97 | % | ||||||||||||||
Dividend
payout ratio (7)
|
10.14 | % | 93.39 | % | 153.79 | % | 66.97 | % | 27.83 | % | 101.81 | % | 98.56 | % | ||||||||||||||
Asset
Quality Ratios (4) (5):
|
||||||||||||||||||||||||||||
Covered
Assets:
|
||||||||||||||||||||||||||||
Non-performing
loans to covered loans
|
22.57 | % | N/A | 19.60 | % | N/A | N/A | N/A | N/A | |||||||||||||||||||
FDIC
loss-sharing coverage plus non-accretable credit risk discounts as a
percentage of covered assets
|
85.24 | % | N/A | 85.93 | % | N/A | N/A | N/A | N/A | |||||||||||||||||||
Non-performing
assets to total covered assets
|
30.35 | % | N/A | 25.72 | % | N/A | N/A | N/A | N/A | |||||||||||||||||||
Non-covered
Assets (4):
|
||||||||||||||||||||||||||||
Non-performing
assets to total assets
|
2.06 | % | 2.65 | % | 2.16 | % | 1.63 | % | 0.72 | % | 0.30 | % | 0.49 | % | ||||||||||||||
Non-performing
loans to total loans
|
2.76 | % | 3.48 | % | 2.82 | % | 2.35 | % | 1.74 | % | 0.74 | % | 1.12 | % | ||||||||||||||
Allowance
for loan losses as a ratio of non-performing loans
|
0.87 | x | 0.57 | x | 0.70 | x | 0.80 | x | 0.84 | x | 2.15 | x | 1.51 | x | ||||||||||||||
Allowance
for loan losses to total loans
|
2.40 | % | 1.99 | % | 1.98 | % | 1.89 | % | 1.46 | % | 1.59 | % | 1.69 | % | ||||||||||||||
Net
charge-offs as a percentage of average non-covered loans
outstanding
|
0.30 | % | 0.36 | % | 0.71 | % | 0.24 | % | 0.02 | % | 0.02 | % | 0.16 | % | ||||||||||||||
Bank
Regulatory Capital Ratios:
|
||||||||||||||||||||||||||||
Total
capital (to risk-weighted assets)
|
16.53 | % | 17.80 | % | 15.71 | % | 18.15 | % | 24.18 | % | 26.21 | % | 27.62 | % | ||||||||||||||
Tier
I capital (to risk-weighted assets)
|
16.51 | % | 16.57 | % | 14.65 | % | 16.90 | % | 12.57 | % | 13.11 | % | 14.69 | % | ||||||||||||||
Tier
I capital (to average assets)
|
8.27 | % | 10.78 | % | 9.30 | % | 10.51 | % | 9.43 | % | 9.71 | % | 9.86 | % | ||||||||||||||
Consolidated
Capital Ratio:
|
||||||||||||||||||||||||||||
Total
equity to total assets
|
8.91 | % | 12.88 | % | 10.49 | % | 12.76 | % | 22.03 | % | 24.40 | % | 23.15 | % | ||||||||||||||
Tangible
total equity to total assets
|
8.51 | % | 12.30 | % | 9.99 | % | 12.18 | % | 21.61 | % | 24.01 | % | 22.73 | % | ||||||||||||||
Other
Data:
|
||||||||||||||||||||||||||||
Number
of full service offices
|
16 | 14 | 14 | 10 | 9 | 9 | 9 | |||||||||||||||||||||
Full
time equivalent employees (6)
|
212 | 174 | 209 | 178 | 173 | 179 | 169 |
(1)
|
The
interest rate spread represents the difference between the
weighted-average yield on interest-earning assets and the weighted-
average cost of interest-bearing liabilities for the
period.
|
(2)
|
The
net interest margin represents net interest income as a percent of average
interest-earning assets for the
period.
|
(3)
|
The
efficiency ratio represents non-interest expense divided by the sum of net
interest income and non-interest
income.
|
(4)
|
Covered
assets consist of assets of Neighborhood Community Bank (“NCB”) and
McIntosh Commercial Bank (“MCB”) acquired from the FDIC subject to loss
sharing agreements. Non-covered assets consist of assets other
than covered assets. See Note 3 to the Notes to our
Consolidated Financial Statements beginning on page F-1 of this
prospectus, and the Statement of Assets Acquired and Liabilities Assumed
beginning on page G-1 of this
prospectus.
|
(5)
|
These
ratios has been computed based on a minimum 80% FDIC loss sharing coverage
for covered assets related to both NCB and MCB. If cumulative losses with
respect to covered assets related to NCB exceed $82 million, FDIC loss
sharing coverage will increase to 95% of losses on NCB related covered
assets exceeding $82 million. If cumulative losses with respect
to covered assets related to MCB exceed $106 million, FDIC loss sharing
coverage will increase to 95% of losses on MCB related covered assets
exceeding $106 million. If the recovery of losses on covered
assets related to NCB and MCB was limited solely to amounts to be received
under the loss sharing agreements with the FDIC, we have estimated that
our maximum loss exposure, net of established non-accretable discounts, as
of March 31, 2010, would approximate $5.5 million with respect to NCB, and
$9.5 million with respect to MCB. At such date, remaining
accretable discounts for NCB and MCB exceeded such estimated maximum loss
exposures for both NCB and MCB,
respectively.
|
(6)
|
Does
not reflect employees that will be retained in connection with the
acquisition of McIntosh Commercial
Bank
|
(7)
|
The
dividend payout ratio represents dividends declared per share divided by
net income per share. The following table sets forth the aggregate cash
dividends paid per period and the amount of dividends paid to public
shareholders and to First Charter,
MHC:
|
For
the Six Months Ended
March
31,
|
For
the Year Ended September 31,
|
|||||||||||||||||||||||||||
2010
|
2009
|
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||||||||
(In
Thousands)
|
||||||||||||||||||||||||||||
Dividends paid to
public stockholders
|
$ | 650,908 | $ | 1,355,559 | $ | 2,651,554 | $ | 5,656,953 | $ | 14,562,112 | $ | 13,586,605 | $ | 11,248,779 | ||||||||||||||
Dividends paid to
First Charter, MHC
|
150,000 | — | 750,000 | 1,500,000 | — | — | — | |||||||||||||||||||||
Total dividends paid | 800,908 | 1,355,559 | 3,401,554 | 7,156,953 | 14,562,112 | 13,586,605 | 11,248,779 |
|
First
Charter, MHC waived dividends of $3.8 million and $7.9 million during the
six month periods ended March 31, 2010 and 2009, respectively, and waived
dividends of $28.7 million, $26.3 million, $70.6 million, $60.3 million
and $50.7 million during the years ended September 30, 2009, 2008, 2007,
2006 and 2005, respectively.
|
At
June 30,
|
At
September 30,
|
|||||||
2010
|
2009
|
|||||||
(In
thousands)
|
||||||||
Selected
Financial Condition Data:
|
||||||||
Total
assets
|
$ | 1,146,076 | $ | 936,880 | ||||
Non-covered
loans receivable, net (1)
|
463,725 | 462,786 | ||||||
Covered
loans receivable, net (2)
|
201,673 | 89,764 | ||||||
Investment
and mortgage securities available for sale (3)
|
160,328 | 206,061 | ||||||
Retail
deposits (4)
|
710,620 | 463,587 | ||||||
Total
deposits
|
811,058 | 597,634 | ||||||
Total
borrowings
|
212,175 | 227,000 | ||||||
Total
equity
|
112,513 | 98,257 |
For
the Three Months Ended
June
30,
|
For
the Nine Months Ended
June
30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
(In
thousands)
|
||||||||||||||||
Selected
Operating Data:
|
||||||||||||||||
Interest
and dividend income
|
$ | 14,354 | $ | 9,141 | $ | 36,628 | $ | 28,370 | ||||||||
Interest
expense
|
6,193 | 5,346 | 16,572 | 16,681 | ||||||||||||
Net interest
income
|
8,161 | 3,795 | 20,056 | 11,689 | ||||||||||||
Provision
for loan losses
|
1,300 | 600 | 5,100 | 3,150 | ||||||||||||
Net
interest income after provision for loan losses
|
6,861 | 3,195 | 14,956 | 8,539 | ||||||||||||
Total
noninterest income
|
2,844 | 2,418 | 20,259 | 8,312 | ||||||||||||
Total
noninterest expenses
|
8,038 | 5,388 | 21,387 | 14,777 | ||||||||||||
Income
before provision for income taxes
|
1,667 | 225 | 13,828 | 2,074 | ||||||||||||
Income
tax expense (benefit)
|
553 | (151 | ) | 4,981 | 268 | |||||||||||
Net income | $ | 1,114 | $ | 376 | $ | 8,847 | $ | 1,806 | ||||||||
Basic
earnings per share
|
$ | 0.06 | $ | 0.02 | $ | 0.48 | $ | 0.10 | ||||||||
Fully
diluted earnings per share
|
$ | 0.06 | $ | 0.02 | $ | 0.48 | $ | 0.10 | ||||||||
Dividends
declared per share
|
$ | 0.10 | $ | 0.25 | $ | 0.35 | $ | 0.75 |
(1)
|
Excludes “covered
loans” acquired from the FDIC subject to loss-sharing
agreements. See Note 3 to the Notes to our Consolidated
Financial Statements beginning on page F-1 of this prospectus, and the
Statement of Assets Acquired and Liabilities Assumed beginning on page G-1
of this prospectus. Loans shown are net of deferred loan (fees)
costs and allowance for loan losses and exclude loans held for
sale.
|
(2)
|
Consists
of loans acquired from the FDIC subject to loss sharing
agreements. See Note 3 to the Notes to our Consolidated
Financial Statements beginning on page F-1 of this prospectus, and the
Statement of Assets Acquired and Liabilities Assumed beginning on page G-1
of this prospectus.
|
(3)
|
Includes
all CharterBank investment and mortgage securities available for
sale.
|
(4)
|
Retail
deposits include core deposits and certificates of deposit other than
brokered and wholesale certificates of
deposit.
|
At
or For the Three Months Ended June 30,
|
At
or For the Nine Months Ended
June
30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Selected
Financial Ratios and Other Data:
|
||||||||||||||||
Performance
Ratios:
|
||||||||||||||||
Return
on average assets (ratio of net income to average total
assets)
|
0.38 | % | 0.19 | % | 1.16 | % | 0.30 | % | ||||||||
Return
on average equity (ratio of net income to average equity)
|
3.92 | % | 1.46 | % | 11.19 | % | 2.31 | % | ||||||||
Interest
rate spread (1)
|
3.52 | % | 1.82 | % | 3.12 | % | 1.81 | % | ||||||||
Net
interest margin (2)
|
3.42 | % | 2.08 | % | 3.12 | % | 2.13 | % | ||||||||
Efficiency
ratio (3)
|
73.04 | % | 86.71 | % | 53.05 | % | 73.88 | % | ||||||||
Non-interest
expense to average total assets (annualized)
|
2.75 | % | 2.67 | % | 2.79 | % | 2.44 | % | ||||||||
Average
interest-earning assets as a ratio of average interest-bearing
liabilities
|
0.96 | x | 1.09 | x | 1.00 | x | 1.10 | x | ||||||||
Average
equity to average total assets
|
9.67 | % | 12.74 | % | 10.33 | % | 12.94 | % | ||||||||
Dividend
payout ratio (7)
|
49.99 | % | 329.89 | % | 15.16 | % | 142.68 | % | ||||||||
Asset
Quality Ratios (4) (5):
|
||||||||||||||||
Covered
Assets:
|
||||||||||||||||
Non-performing
loans to covered loans
|
44.33 | % | 40.31 | % | 44.33 | % | 40.31 | % | ||||||||
FDIC
loss-sharing coverage plus non-accretable credit risk discounts as a
percentage of covered assets
|
85.79 | % | 94.17 | % | 85.79 | % | 94.17 | % | ||||||||
Non-performing
assets to total covered assets
|
50.99 | % | 44.80 | % | 50.99 | % | 44.80 | % | ||||||||
Non-covered
Assets (4):
|
||||||||||||||||
Non-performing
assets to total assets
|
2.64 | % | 2.18 | % | 2.64 | % | 2.18 | % | ||||||||
Non-performing
loans to total loans
|
2.72 | % | 2.93 | % | 2.72 | % | 2.93 | % | ||||||||
Allowance
for loan losses as a ratio of non-performing loans
|
0.73 | x | 0.62 | x | 0.73 | x | 0.62 | x | ||||||||
Allowance
for loan losses to total loans
|
2.00 | % | 1.81 | % | 2.00 | % | 1.81 | % | ||||||||
Net
charge-offs as a percentage of average non-covered loans
outstanding
|
2.70 | % | 1.19 | % | 1.24 | % | 0.90 | % | ||||||||
Bank
Regulatory Capital Ratios:
|
||||||||||||||||
Total
capital (to risk-weighted assets)
|
18.99 | % | 17.80 | % | 18.99 | % | 17.80 | % | ||||||||
Tier
I capital (to risk-weighted assets)
|
19.77 | % | 16.57 | % | 19.77 | % | 16.57 | % | ||||||||
Tier
I capital (to total assets)
|
9.11 | % | 10.78 | % | 9.11 | % | 10.78 | % | ||||||||
Consolidated
Capital Ratio:
|
||||||||||||||||
Total
equity to total assets
|
9.82 | % | 9.96 | % | 9.82 | % | 9.96 | % | ||||||||
Tangible
total equity to total assets
|
9.40 | % | 9.47 | % | 9.40 | % | 9.47 | % | ||||||||
Other
Data:
|
||||||||||||||||
Number
of full service offices
|
16 | 14 | 16 | 14 | ||||||||||||
Full
time equivalent employees (6)
|
254 | 177 | 254 | 177 |
(1)
|
The
interest rate spread represents the difference between the
weighted-average yield on interest-earning assets and the weighted-
average cost of interest-bearing liabilities for the
period.
|
(2)
|
The
net interest margin represents net interest income as a percent of average
interest-earning assets for the
period.
|
(3)
|
The
efficiency ratio represents non-interest expense divided by the sum of net
interest income and non-interest
income.
|
(4)
|
Covered assets
consist of assets of Neighborhood Community Bank (“NCB”) and McIntosh
Commercial Bank (“MCB”) acquired from the FDIC subject to loss sharing
agreements. Non-covered assets consist of assets other than
covered assets. See Note 3 to the Notes to our Consolidated
Financial Statements beginning on page F-1 of this prospectus, and the
Statement of Assets Acquired and Liabilities Assumed beginning on page G-1
of this prospectus.
|
(5)
|
These
ratios have been computed based on a minimum
80% FDIC loss sharing coverage for covered assets related to both NCB and
MCB. If cumulative losses with respect to covered assets related to NCB
exceed $82 million, FDIC loss sharing coverage will increase to 95% of
losses on NCB related covered assets exceeding $82 million. If
cumulative losses with respect to covered assets related to MCB exceed
$106 million, FDIC loss sharing coverage will increase to 95% of losses on
MCB related covered assets exceeding $106
million.
|
(6)
|
Does
not reflect employees that will be retained in connection with the
acquisition of McIntosh Commercial
Bank.
|
(7)
|
The
dividend payout ratio represents dividends declared per share divided by
net income per share.
|
|
●
|
statements
of our goals, intentions and
expectations;
|
|
●
|
statements
regarding our business plans, prospects, growth and operating
strategies;
|
|
●
|
statements
regarding the asset quality of our loan and investment portfolios;
and
|
|
●
|
estimates
of our risks and future costs and
benefits.
|
|
●
|
general
economic conditions, either nationally or in our market areas, that are
worse than expected;
|
|
●
|
competition
among depository and other financial
institutions;
|
|
●
|
changes
in the interest rate environment that reduce our margins or reduce the
fair value of financial
instruments;
|
|
●
|
adverse
changes in the securities markets;
|
|
●
|
changes
in laws or government regulations or policies affecting financial
institutions, including changes in regulatory fees and capital
requirements;
|
|
●
|
our
ability to enter new markets successfully and capitalize on growth
opportunities;
|
|
●
|
our
ability to successfully integrate acquired
entities;
|
|
●
|
our
incurring higher than expected loan charge-offs with respect to assets
acquired in FDIC-assisted
acquisitions;
|
|
●
|
changes
in consumer spending, borrowing and savings
habits;
|
|
●
|
changes
in accounting policies and practices, as may be adopted by the bank
regulatory agencies and the Financial Accounting Standards Board;
and
|
|
●
|
changes
in our organization, compensation and benefit
plans.
|
Gross
Stock Offering Proceeds
|
|||||||||
$ 33.3 million (1)
|
$ 62.7 million ( 2 )
|
||||||||
(In
thousands)
|
|||||||||
Offering
proceeds
|
$ | 33,307 | $ | 62,716 | |||||
Less:
offering expenses
|
$ | 3,574 | $ | 4,897 | |||||
Net
offering
proceeds
|
$ | 29,733 | $ | 57,819 | |||||
Distribution
of proceeds to CharterBank
|
$ | 14,866 | $ | 28,909 | |||||
Proceeds
used for loan to employee
stock
ownership plan
|
$ | 2,334 | $ | 3,156 | |||||
Retained
by Charter Financial
|
$ | 12,533 | $ | 25,754 |
(1)
|
Based
on 4,281,060 shares sold at $ 7.78 per
share.
|
(2)
|
Based
on 5,961,573 shares sold at $ 10.52 per
share.
|
|
●
|
to
fund a loan to our employee stock ownership plan to purchase 300,000
shares of common stock in the offering at a cost of $2. 3 million assuming a per share price of $ 7.78 and the sale of 4,281,060 shares, and $3. 2 million assuming a per share price of $ 10.52 and the sale of 5,961,573
shares;
|
|
●
|
to
finance the acquisition of financial institutions, especially troubled
institutions with FDIC assistance, or other financial services companies
as opportunities arise, although we do not currently have any agreements
or understandings regarding any specific acquisition
transaction;
|
|
●
|
to
pay cash dividends to shareholders;
|
|
●
|
to
repurchase shares of our common
stock;
|
|
●
|
to
invest in securities; and
|
|
●
|
for
other general corporate purposes.
|
|
●
|
to
fund new loans, including one- to four-family residential mortgage loans,
commercial real estate and commercial business loans, real estate
construction loans and consumer
loans;
|
|
●
|
to
expand its retail banking franchise by acquiring new branches or by
acquiring other financial institutions, especially troubled institutions
with FDIC assistance, or other financial services companies as
opportunities arise, although we do not currently have any agreements to
acquire a financial institution or other
entity;
|
|
●
|
to
enhance existing products and services and to support the development of
new products and services;
|
|
●
|
to
reduce wholesale funding;
|
|
●
|
to
invest in securities; and
|
|
●
|
for
other general corporate purposes.
|
Price
Per Share
|
Cash Dividend Declared |
|||||||||||
High
|
Low
|
|||||||||||
Fiscal
2010
|
||||||||||||
Fourth
quarter (through _______________)
|
$ | $ | $ | |||||||||
Third quarter | 11.00 | 9.62 | 0.10 | * | ||||||||
Second
quarter
|
10.70 | 9.25 | — | * | ||||||||
First
quarter
|
12.30 | 8.65 | $ | 0.25 | ||||||||
Fiscal
2009
|
||||||||||||
Fourth
quarter
|
$ | 17.00 | $ | 11.75 | $ | 0.25 | ||||||
Third
quarter
|
14.50 | 8.26 | 0.25 | |||||||||
Second
quarter
|
10.94 | 7.30 | 0.25 | |||||||||
First
quarter
|
11.00 | 6.00 | 0.25 | |||||||||
Fiscal
2008
|
||||||||||||
Fourth
quarter
|
$ | 14.70 | $ | 8.50 | $ | 0.25 | ||||||
Third
quarter
|
32.00 | 24.00 | 0.50 | |||||||||
Second
quarter
|
40.90 | 26.00 | 0.50 | |||||||||
First
quarter
|
53.85 | 30.75 | 0.50 |
*
|
The
cash dividend with respect to the second quarter of fiscal 2010 was
delayed until the third fiscal
quarter.
|
CharterBank
Historical
at
March
31, 2010
|
Pro
Forma at March 31, 2010, Assuming Gross Stock
Offering
Proceeds of
|
|||||||||||||||||||||||
$ 33.3 million (1)
|
$ 62.7 million (2)
|
|||||||||||||||||||||||
Amount
|
Percent
of Assets ( 3 )
|
Amount
|
Percent
of Assets ( 3 )
|
Amount
|
Percent
of Assets ( 3 )
|
|||||||||||||||||||
(Dollars
in Thousands)
|
||||||||||||||||||||||||
Equity
capital
|
$ | 105,188 | 8.45 | % | $ | 117,082 | 9.30 | % | $ | 130,079 | 10. 22 | % | ||||||||||||
Tier
1 risk-based capital ( 4 )( 5 )
|
$ | 102,848 | 16.51 | % | $ | 114,74 2 | 18. 33 | % | $ | 127,739 | 20. 32 | % | ||||||||||||
Tier
1 risk-based requirement
|
37,373 | 6 .00 | 37,551 | 6 .00 | 37,720 | 6 .00 | ||||||||||||||||||
Excess
|
$ | 65,475 | 10.51 | % | $ | 77,191 | 12.33 | % | $ | 90,019 | 14.32 | % | ||||||||||||
Core
(leverage) capital ( 4 )( 5 )
|
$ | 102,848 | 8.27 | % | $ | 114,742 | 9. 12 | % | $ | 127,739 | 10.04 | % | ||||||||||||
Core
(leverage) requirement
|
62,170 | 5 .00 | 62, 913 | 5 .00 | 63,615 | 5 .00 | ||||||||||||||||||
Excess
|
$ | 40,678 | 3.27 | % | $ | 51, 829 | 4.12 | % | $ | 64,124 | 5.04 | % | ||||||||||||
Total
risk-based capital ( 4 )( 5 )
|
$ | 102,932 | 16.53 | % | $ | 114, 826 | 18. 35 | % | $ | 127,823 | 20.33 | % | ||||||||||||
Risk-based
requirement
|
62,288 | 10 .00 | 62, 586 | 10 .00 | 62,866 | 10 .00 | ||||||||||||||||||
Excess
|
$ | 40,644 | 6 .53 | % | $ | 52,240 | 8.35 | % | $ | 64,957 | 10.33 | % | ||||||||||||
Net
Proceeds Infused
|
$ | 14,866 | $ | 28,909 | ||||||||||||||||||||
Less:
ESOP
|
(2, 334 | ) | ( 3,156 | ) | ||||||||||||||||||||
Less:
stock-based incentive plan
|
( 638 | ) | ( 863 | ) | ||||||||||||||||||||
Pro
Forma Increase
|
$ | 11, 894 | $ | 24,890 |
(1)
|
Based
on 4,281,060 shares sold at $ 7.78 per
share.
|
(2)
|
Based
on 5,961,573 shares sold at $ 10.52 per
share.
|
(3)
|
Core
capital levels are shown as a percentage of total adjusted assets.
Risk-based capital levels are shown as a percentage of risk-weighted
assets.
|
(4)
|
Pro
forma capital levels assume that the employee stock ownership plan
purchases 300,000 shares of common stock with funds borrowed from Charter
Financial. Pro forma GAAP and regulatory capital have been
reduced by the amount required to fund this plan. See
“Management” for a discussion of the employee stock ownership
plan.
|
(5)
|
Pro
forma amounts and percentages assume net proceeds are invested in assets
that carry a 20% risk
weighting.
|
Pro
Forma Consolidated Capitalization,
Assuming
Gross Stock Offering
Proceeds
of
|
||||||||||||
Historical
Capitalization
|
$ 33.3 million (1)
|
$ 62.7 million (2)
|
||||||||||
(Dollars
in Thousands)
|
||||||||||||
Deposits
( 3 )
|
$ | 906,580 | $ | 906,580 | $ | 906,580 | ||||||
Borrowed
funds
|
212,232 | 212,232 | 212,232 | |||||||||
Total
deposits and borrowed funds
|
$ | 1,118,812 | $ | 1,118,812 | $ | 1,118,812 | ||||||
Stockholders’
equity:
|
||||||||||||
Preferred
stock, no par value, 10,000,000 shares authorized
(post-offering)
|
||||||||||||
Common
stock, $.01 par value, 50,000,000 shares authorized (post-offering);
shares
to
be issued as reflected ( 4 )
|
$ | 199 | $ | 199 | $ | 199 | ||||||
Additional
paid-in capital
|
42,807 | 72,540 | 100,626 | |||||||||
Retained
earnings ( 5 )
|
109,148 | 109,148 | 109,148 | |||||||||
Accumulated
other comprehensive loss
|
(3,031 | ) | (3,031 | ) | (3,031 | ) | ||||||
Less:
|
||||||||||||
Treasury
stock
|
(36,903 | ) | (36,903 | ) | (36,903 | ) | ||||||
Common
stock held by employee stock ownership plan ( 6 )
|
(1,547 | ) | (3, 881 | ) | (4, 703 | ) | ||||||
Common
stock acquired by stock-based incentive plans ( 7 )
|
— | ( 638 | ) | (8 63 | ) | |||||||
Total
stockholders’ equity
|
$ | 110,673 | $ | 13 7,434 | $ | 16 4,473 | ||||||
Pro Forma Shares
Outstanding:
|
||||||||||||
Total
shares outstanding
|
18,672,361 | 18,672,361 | 18,672,361 | |||||||||
Shares
held by First Charter, MHC
|
15,857,924 | 11,576,864 | 9,896,351 | |||||||||
Shares
held by shareholders other than
First
Charter, MHC
|
2,814,437 | 2,814,437 | 2,814,437 | |||||||||
Shares
sold in stock offering
|
— | 4,281,060 | 5,961,573 | |||||||||
Total
shareholders’ equity as a percentage of total assets
|
8.91 | % | 10.8 3 | % | 12. 6 9 | % | ||||||
Total
tangible shareholders’ equity as a percentage of total
assets
|
8. 51 | % | 10. 40 | % | 12. 27 | % |
(1)
|
Based
on 4,281,060 shares sold at $ 7.78 per
share.
|
(2)
|
Based
on 5,961,573 shares sold at $ 10.52 per
share.
|
(3)
|
Does
not reflect withdrawals from deposit accounts for the purchase of shares
of common stock in the stock offering. These withdrawals would reduce pro
forma deposits and assets by the amount of the
withdrawals.
|
(4)
|
No
effect has been given to the issuance of additional shares of common stock
as restricted stock awards or pursuant to the exercise of options under
one or more stock-based benefit plans. If the plans are implemented within
the first year after the closing of the stock offering, the plans will
reserve up to 82,000 shares of common stock for issuance as restricted
stock awards and 207,000 shares of common stock for issuance upon the
exercise of options. No effect has been given to the exercise of options
currently outstanding. See
“Management.”
|
(5)
|
The
retained earnings of Charter Financial are substantially restricted due to
regulatory capital requirements applicable to
CharterBank.
|
(6)
|
Assumes
that the employee stock ownership plan purchases 300,000 shares of common
stock with funds borrowed from Charter Financial. The cost of
common stock that may be acquired by the employee stock ownership plan is
reflected as a reduction of shareholders’
equity.
|
(7)
|
Assumes
that a stock-based incentive plan is implemented within the first year
after the closing of the offering and that we reserve 82,000 shares of
common stock for issuance as restricted stock awards and 207,000 shares of
common stock for issuance upon the exercise of options. The
dollar amount of common stock to be purchased is based on an assumed fair
value for stock awards of $ 10.52 per share,
the maximum per share offering price for the stock
offering. The fair value of stock options has been estimated at
$ 2.32 per option using the Black-Scholes
option pricing model and the following assumptions: a grant-date share
price and option exercise price of $ 10.52 , the
maximum per share offering price for the stock offering; an expected
option life of eight years; a dividend yield of 2.0% equal to the average
dividend yield of publicly-traded thrifts; an interest rate of 3.16%; and
a volatility rate of 25.0% based on an index of publicly traded
institutions in the mutual holding company structure. The actual value of
option grants will be determined by the grant-date fair value of the
options, which will depend on a number of factors, including the valuation
assumptions used in the option pricing model ultimately
adopted. The actual value of restricted stock awards will be
determined based on their fair value as of the date grants are
made. As the Company accrues compensation expense to reflect
the vesting of shares pursuant to the stock-based benefit plans, the
credit to equity will be offset by a charge to noninterest expense. The
funds to be used by the stock-based benefit plans will be provided by the
Company.
|
|
(i)
|
the
employee stock ownership plan will purchase 300,000 shares of common stock
in the stock offering (although it is not required to do
so);
|
|
(ii)
|
officers,
directors, and employees of Charter Financial and CharterBank and their
immediate families will purchase in the aggregate $300,000 of common
stock;
|
|
(iii)
|
Stifel,
Nicolaus & Company, Incorporated will receive a fee equal to the
greater of $125,000 or 1.0% of the dollar amount of shares of common stock
sold in the subscription offering and 6.0% of the dollar amount of shares
sold in the syndicated offering and 25% of the total shares will be
subscribed for in the subscription offering. No fee will be
paid with respect to shares of common stock purchased by our qualified and
non-qualified employee stock benefit plans, or stock purchased by our
officers, directors and employees, and their immediate families;
and
|
|
(iv)
|
total
expenses of the offering, including the marketing fees to be paid to
Stifel, Nicolaus & Company, Incorporated, will be between $3. 6 million at the minimum of the offering range and
$ 4.9 million at the maximum of the offering
range.
|
At
or For the Six Months Ended March 31, 2010
|
||||||||||||
Minimum
Shares Offered (4,281,060 Shares)
|
||||||||||||
$7.78
Per
Share
|
$9.15
Per
Share
|
$10.52
Per
Share
|
||||||||||
(Dollars
In Thousands, Except Per Share Amounts)
|
||||||||||||
Pro
forma shares owned by public stockholders
|
7,095,497 | 7,095,497 | 7,095,497 | |||||||||
Pro
forma shares owned by First Charter, MHC
|
11,576,864 | 11,576,854 | 11,576,864 | |||||||||
Total
shares outstanding
|
18,672,361 | 18,672,361 | 18,672,361 | |||||||||
Pro
forma ownership percentage of public stockholders
|
38.0 | % | 38.0 | % | 38.0 | % | ||||||
Gross
proceeds
|
$ | 33,307 | $ | 39,172 | $ | 45,037 | ||||||
Less:
Stock offering expenses and commissions
|
3,574 | 3,838 | 4,102 | |||||||||
Estimated
net proceeds
|
29,733 | 35,334 | 40,935 | |||||||||
Less:
Common stock purchased by employee
stock
ownership plan
|
(2,334 | ) | (2,745 | ) | (3,156 | ) | ||||||
Common
stock purchased by restricted stock
plans
|
(638 | ) | (750 | ) | (863 | ) | ||||||
Investable
net proceeds
|
$ | 26,761 | $ | 31,839 | $ | 36,916 | ||||||
Consolidated
net income:
|
||||||||||||
Historical
|
$ | 7,734 | $ | 7,734 | $ | 7,734 | ||||||
Pro
forma income on net proceeds, net of tax
|
210 | 249 | 289 | |||||||||
Pro
forma employee stock ownership plan
adjustment,
net of tax (1)
|
(24 | ) | (28 | ) | (32 | ) | ||||||
Pro
forma restricted stock plan adjustment, net of tax
(2)
|
(39 | ) | (46 | ) | (53 | ) | ||||||
Pro
forma stock option plan adjustment, net of tax (3)
|
(32 | ) | (38 | ) | (44 | ) | ||||||
Pro
forma net income
|
$ | 7,848 | $ | 7,871 | $ | 7,894 | ||||||
Diluted
net income per share (4):
|
||||||||||||
Historical,
as adjusted
|
$ | 0.42 | $ | 0.42 | $ | 0.42 | ||||||
Pro
forma income on net proceeds
|
0.01 | 0.01 | 0.02 | |||||||||
Pro
forma employee stock ownership plan
adjustment
(1)
|
— | — | — | |||||||||
Pro
forma restricted stock plan adjustment (2)
|
— | — | — | |||||||||
Pro
forma stock option plan adjustment (3)
|
— | — | — | |||||||||
Pro
forma diluted net income per share
|
$ | 0.43 | $ | 0.43 | $ | 0.44 | ||||||
Stock
price as a multiple of pro forma earnings per share
(5)
|
9.05 | x | 10.64 | x | 11.95 | x | ||||||
Shares
used for calculating pro forma earnings per share
|
18,121,507 | 18,121,507 | 18,121,507 | |||||||||
Stockholders’
equity:
|
||||||||||||
Historical:
|
$ | 110,673 | $ | 110,673 | $ | 110,673 | ||||||
Estimated
net proceeds
|
29,733 | 35,334 | 40,935 | |||||||||
Less:
Common stock acquired by employee
stock
ownership plan (1)
|
(2,334 | ) | (2,745 | ) | (3,156 | ) | ||||||
Less:
Common stock acquired by restricted
stock
plan (2)
|
(638 | ) | (750 | ) | (863 | ) | ||||||
Pro
forma stockholders’ equity
|
137,434 | 142,512 | 147,590 | |||||||||
Less:
Intangible assets
|
(5,372 | ) | (5,372 | ) | (5,372 | ) | ||||||
Pro
forma tangible stockholders’ equity
|
$ | 132,062 | $ | 137,140 | $ | 142,218 | ||||||
Stockholders’
equity per share (4):
|
||||||||||||
Historical
|
$ | 5.92 | $ | 5.93 | $ | 5.93 | ||||||
Estimated
net proceeds
|
1.59 | 1.89 | 2.19 | |||||||||
Less:
Common stock acquired by employee
stock
ownership plan (1)
|
(0.12 | ) | (0.15 | ) | (0.17 | ) | ||||||
Less:
Common stock acquired by restricted
stock
plan (2)
|
(0.03 | ) | (0.04 | ) | (0.05 | ) | ||||||
Pro
forma stockholders’ equity per share
|
$ | 7.36 | $ | 7.63 | $ | 7.90 | ||||||
Intangible
assets
|
(0.29 | ) | (0.29 | ) | (0.29 | ) | ||||||
Pro
forma tangible stockholders’ equity per share
|
$ | 7.07 | $ | 7.34 | $ | 7.61 | ||||||
Offering
price as a percentage of pro forma stockholders’ equity per
share
|
105.71 | % | 119.92 | % | 133.16 | % | ||||||
Offering
price as a percentage of pro forma tangible stockholders’ equity per
share
|
110.04 | % | 124.66 | % | 138.24 | % | ||||||
Number
of shares outstanding for pro forma book value per share
calculations
|
18,672,361 | 18,672,361 | 18,672,361 |
At
or For the Six Months Ended March 31, 2010
|
||||||||||||
Maximum
Shares Offered (5,961,573 Shares)
|
||||||||||||
$7.78
Per
Share
|
$9.15
Per
Share
|
$10.52
Per
Share
|
||||||||||
(Dollars
In Thousands, Except Per Share Amounts)
|
||||||||||||
Pro
forma shares owned by public stockholders
|
8,776,010 | 8,776,010 | 8,776,010 | |||||||||
Pro
forma shares owned by First Charter, MHC
|
9,896,351 | 9,896,351 | 9,896,351 | |||||||||
Total
shares outstanding
|
18,672,361 | 18,672,361 | 18,672,361 | |||||||||
Pro
forma ownership percentage of public stockholders
|
47.0 | % | 47.0 | % | 47.0 | % | ||||||
Gross
proceeds
|
$ | 46,381 | $ | 54,548 | $ | 62,716 | ||||||
Less:
Stock offering expenses and commissions
|
4,162 | 4,530 | 4,897 | |||||||||
Estimated
net proceeds
|
42,219 | 50,019 | 57,819 | |||||||||
Less:
Common stock purchased by employee
stock
ownership plan
|
(2,334 | ) | (2,745 | ) | (3,156 | ) | ||||||
Common
stock purchased by restricted stock
plans
|
(638 | ) | (705 | ) | (863 | ) | ||||||
Investable
net proceeds
|
$ | 39,247 | $ | 46,523 | $ | 53,800 | ||||||
Consolidated
net income:
|
||||||||||||
Historical
|
$ | 7,734 | $ | 7,734 | $ | 7,734 | ||||||
Pro
forma income on net proceeds, net of tax
|
307 | 364 | 421 | |||||||||
Pro
forma employee stock ownership plan
adjustment,
net of tax (1)
|
(24 | ) | (28 | ) | (32 | ) | ||||||
Pro
forma restricted stock plan adjustment, net of tax
(2)
|
(39 | ) | (46 | ) | (53 | ) | ||||||
Pro
forma stock option plan adjustment, net of tax (3)
|
(32 | ) | (38 | ) | (44 | ) | ||||||
Pro
forma net income
|
$ | 7,946 | $ | 7,986 | $ | 8,026 | ||||||
Diluted
net income per share (4):
|
||||||||||||
Historical,
as adjusted
|
$ | 0.42 | $ | 0.42 | $ | 0.42 | ||||||
Pro
forma income on net proceeds
|
0.02 | 0.02 | 0.02 | |||||||||
Pro
forma employee stock ownership plan
adjustment
(1)
|
— | — | — | |||||||||
Pro
forma restricted stock plan adjustment (2)
|
— | — | — | |||||||||
Pro
forma stock option plan adjustment (3)
|
— | — | — | |||||||||
Pro
forma diluted net income per share
|
$ | 0.44 | $ | 0.44 | $ | 0.44 | ||||||
Stock
price as a multiple of pro forma earnings per share
(5)
|
8.84 | x | 10.40 | x | 11.95 | x | ||||||
Shares
used for calculating pro forma earnings per share
|
18,121,507 | 18,121,507 | 18,121,507 | |||||||||
Stockholders’
equity:
|
||||||||||||
Historical:
|
$ | 110,673 | $ | 110,673 | $ | 110,673 | ||||||
Estimated
net proceeds
|
42,219 | 50,019 | 57,819 | |||||||||
Less:
Common stock acquired by employee
stock
ownership plan (1)
|
(2,334 | ) | (2,745 | ) | (3,156 | ) | ||||||
Less:
Common stock acquired by restricted
stock
plan (2)
|
(638 | ) | (705 | ) | (863 | ) | ||||||
Pro
forma stockholders’ equity
|
149,920 | 157,196 | 164,473 | |||||||||
Less:
Intangible assets
|
(5,372 | ) | (5,372 | ) | (5,372 | ) | ||||||
Pro
forma tangible stockholders’ equity
|
$ | 144,548 | $ | 151,824 | $ | 159,101 | ||||||
Stockholders’
equity per share (4):
|
||||||||||||
Historical
|
$ | 5.92 | $ | 5.93 | $ | 5.93 | ||||||
Estimated
net proceeds
|
2.26 | 2.68 | 3.10 | |||||||||
Less:
Common stock acquired by employee
stock
ownership plan (1)
|
(0.12 | ) | (0.15 | ) | (0.17 | ) | ||||||
Less:
Common stock acquired by restricted
stock
plan (2)
|
(0.03 | ) | (0.04 | ) | (0.05 | ) | ||||||
Pro
forma stockholders’ equity per share
|
$ | 8.03 | $ | 8.42 | $ | 8.81 | ||||||
Intangible
assets
|
(0.29 | ) | (0.29 | ) | (0.29 | ) | ||||||
Pro
forma tangible stockholders’ equity per share
|
$ | 7.74 | $ | 8.13 | $ | 8.52 | ||||||
Offering
price as a percentage of pro forma stockholders’ equity per
share
|
96.89 | % | 108.67 | % | 119.41 | % | ||||||
Offering
price as a percentage of pro forma tangible stockholders’ equity per
share
|
100.52 | % | 112.55 | % | 123.47 | % | ||||||
Number
of shares outstanding for pro forma book value per share
calculations
|
18,672,361 | 18,672,361 | 18,672,361 |
At
or For the Year Ended September 30, 2009
|
||||||||||||
Minimum
Shares Offered (4,281,066 Shares)
|
||||||||||||
$7.78
Per
Share
|
$9.15
Per
Share
|
$10.52
Per
Share
|
||||||||||
(Dollars
In Thousands, Except Per Share Amounts)
|
||||||||||||
Pro
forma shares owned by public stockholders
|
7,095,497 | 7,095,497 | 7,095,497 | |||||||||
Pro
forma shares owned by First Charter, MHC
|
11,576,864 | 11,576,864 | 11,576,864 | |||||||||
Total
shares outstanding
|
18,672,361 | 18,672,361 | 18,672,361 | |||||||||
Pro
forma ownership percentage of public stockholders
|
38.0 | % | 38.0 | % | 38.0 | % | ||||||
Gross
proceeds
|
$ | 33,307 | $ | 39,172 | $ | 45,037 | ||||||
Less:
Stock offering expenses and commissions
|
3,574 | 3,838 | 4,102 | |||||||||
Estimated
net proceeds
|
29,733 | 35,334 | 40,935 | |||||||||
Less:
Common stock purchased by employee
stock
ownership plan
|
(2,334 | ) | (2,745 | ) | (3,156 | ) | ||||||
Common
stock purchased by restricted stock
plans
|
(638 | ) | (705 | ) | (863 | ) | ||||||
Investable
net proceeds
|
$ | 26,761 | $ | 31,839 | $ | 36,916 | ||||||
Consolidated
net income:
|
||||||||||||
Historical
|
$ | 2,315 | $ | 2,315 | $ | 2,315 | ||||||
Pro
forma income on net proceeds, net of tax
|
419 | 499 | 578 | |||||||||
Pro
forma employee stock ownership plan
adjustment,
net of tax (1)
|
(48 | ) | (56 | ) | (65 | ) | ||||||
Pro
forma restricted stock plan adjustment, net of tax
(2)
|
(78 | ) | (92 | ) | (106 | ) | ||||||
Pro
forma stock option plan adjustment, net of tax (3)
|
(64 | ) | (76 | ) | (87 | ) | ||||||
Pro
forma net income
|
$ | 2,544 | $ | 2,590 | $ | 2,636 | ||||||
Diluted
net income per share (4):
|
||||||||||||
Historical,
as adjusted
|
$ | 0.12 | $ | 0.12 | $ | 0.12 | ||||||
Pro
forma income on net proceeds
|
0.02 | 0.03 | 0.03 | |||||||||
Pro
forma employee stock ownership plan
adjustment
(1)
|
— | — | — | |||||||||
Pro
forma restricted stock plan adjustment (2)
|
— | (0.01 | ) | (0.01 | ) | |||||||
Pro
forma stock option plan adjustment (3)
|
— | — | — | |||||||||
Pro
forma diluted net income per share
|
$ | 0.14 | $ | 0.14 | $ | 0.14 | ||||||
Stock
price as a multiple of pro forma earnings per share
|
55.57 | x | 65.36 | x | 75.14 | x | ||||||
Shares
used for calculating pro forma earnings per share
|
18,189,297 | 18,189,297 | 18,189,297 | |||||||||
Stockholders’
equity:
|
||||||||||||
Historical:
|
$ | 98,257 | $ | 98,257 | $ | 98,257 | ||||||
Estimated
net proceeds
|
29,733 | 35,334 | 40,935 | |||||||||
Less:
Common stock acquired by employee
stock
ownership plan (1)
|
(2,334 | ) | (2,745 | ) | (3,156 | ) | ||||||
Less:
Common stock acquired by restricted
stock
plan (2)
|
(638 | ) | (750 | ) | (863 | ) | ||||||
Pro
forma stockholders’ equity
|
125,018 | 130,096 | 135,174 | |||||||||
Less:
Intangible assets
|
(5,180 | ) | (5,180 | ) | (5,180 | ) | ||||||
Pro
forma tangible stockholders’ equity
|
$ | 119,838 | $ | 124,916 | $ | 129,994 | ||||||
Stockholders’
equity per share (4):
|
||||||||||||
Historical
|
$ | 5.26 | $ | 5.27 | $ | 5.27 | ||||||
Estimated
net proceeds
|
1.59 | 1.89 | 2.19 | |||||||||
Less:
Common stock acquired by employee
stock
ownership plan (1)
|
(0.12 | ) | (0.15 | ) | (0.17 | ) | ||||||
Less:
Common stock acquired by restricted
stock
plan (2)
|
(0.03 | ) | (0.04 | ) | (0.05 | ) | ||||||
Pro
forma stockholders’ equity per share
|
$ | 6.70 | $ | 6.97 | $ | 7.24 | ||||||
Intangible
assets
|
(0.28 | ) | (0.28 | ) | (0.28 | ) | ||||||
Pro
forma tangible stockholders’ equity per share
|
$ | 6.42 | $ | 6.69 | $ | 6.96 | ||||||
Offering
price as a percentage of pro forma stockholders’ equity per
share
|
116.12 | % | 131.28 | % | 145.30 | % | ||||||
Offering
price as a percentage of pro forma tangible stockholders’ equity per
share
|
121.18 | % | 136.77 | % | 151.15 | % | ||||||
Number
of shares outstanding for pro forma book value per share
calculations
|
18,672,361 | 18,672,361 | 18,672,361 |
At
or For the Year Ended September 30, 2009
|
||||||||||||
Minimum
Shares Offered (5,961,573 Shares)
|
||||||||||||
$7.78
Per
Share
|
$9.15
Per
Share
|
$10.52
Per
Share
|
||||||||||
(Dollars
In Thousands, Except Per Share Amounts)
|
||||||||||||
Pro
forma shares owned by public stockholders
|
8,776,010 | 8,776,010 | 8,776,010 | |||||||||
Pro
forma shares owned by First Charter, MHC
|
9,896,351 | 9,896,351 | 9,896,351 | |||||||||
Total
shares outstanding
|
18,672,361 | 18,672,361 | 18,672,361 | |||||||||
Pro
forma ownership percentage of public stockholders
|
47.0 | % | 47.0 | % | 47.0 | % | ||||||
Gross
proceeds
|
$ | 46,381 | $ | 54,548 | $ | 62,716 | ||||||
Less:
Stock offering expenses and commissions
|
4,162 | 4,530 | 4,897 | |||||||||
Estimated
net proceeds
|
42,219 | 50,019 | 57,819 | |||||||||
Less:
Common stock purchased by employee
stock
ownership plan
|
(2,334 | ) | (2,745 | ) | (3,156 | ) | ||||||
Common
stock purchased by restricted stock
plans
|
(638 | ) | (750 | ) | (863 | ) | ||||||
Investable
net proceeds
|
$ | 39,247 | $ | 46,523 | $ | 53,800 | ||||||
Consolidated
net income:
|
||||||||||||
Historical
|
$ | 2,315 | $ | 2,315 | $ | 2,315 | ||||||
Pro
forma income on net proceeds, net of tax
|
615 | 728 | 842 | |||||||||
Pro
forma employee stock ownership plan
adjustment,
net of tax (1)
|
(48 | ) | (56 | ) | (65 | ) | ||||||
Pro
forma restricted stock plan adjustment, net of tax
(2)
|
(78 | ) | (92 | ) | (106 | ) | ||||||
Pro
forma stock option plan adjustment, net of tax (3)
|
(64 | ) | (76 | ) | (87 | ) | ||||||
Pro
forma net income
|
$ | 2,739 | $ | 2,819 | $ | 2,900 | ||||||
Diluted
net income per share (4):
|
||||||||||||
Historical,
as adjusted
|
$ | 0.12 | $ | 0.13 | $ | 0.12 | ||||||
Pro
forma income on net proceeds
|
0.03 | 0.04 | 0.05 | |||||||||
Pro
forma employee stock ownership plan
adjustment
(1)
|
— | — | — | |||||||||
Pro
forma restricted stock plan adjustment (2)
|
— | (0.01 | ) | (0.01 | ) | |||||||
Pro
forma stock option plan adjustment (3)
|
— | — | — | |||||||||
Pro
forma diluted net income per share
|
$ | 0.15 | $ | 0.16 | $ | 0.16 | ||||||
Stock
price as a multiple of pro forma earnings per share
|
51.87 | x | 57.19 | x | 65.75 | x | ||||||
Shares
used for calculating pro forma earnings per share
|
18,189,297 | 18,189,297 | 18,189,297 | |||||||||
Stockholders’
equity:
|
||||||||||||
Historical:
|
$ | 98,257 | $ | 98,257 | $ | 98,257 | ||||||
Estimated
net proceeds
|
42,219 | 50,019 | 57,819 | |||||||||
Less:
Common stock acquired by employee
stock
ownership plan (1)
|
(2,334 | ) | (2,745 | ) | (3,156 | ) | ||||||
Less:
Common stock acquired by restricted
stock
plan (2)
|
(638 | ) | (750 | ) | (863 | ) | ||||||
Pro
forma stockholders’ equity
|
137,504 | 144,780 | 152,057 | |||||||||
Less:
Intangible assets
|
(5,180 | ) | (5,180 | ) | (5,180 | ) | ||||||
Pro
forma tangible stockholders’ equity
|
$ | 132,324 | $ | 139,600 | $ | 146,877 | ||||||
Stockholders’
equity per share (4):
|
||||||||||||
Historical
|
$ | 5.26 | $ | 5.26 | $ | 5.26 | ||||||
Estimated
net proceeds
|
2.26 | 2.68 | 3.10 | |||||||||
Less:
Common stock acquired by employee
stock
ownership plan (1)
|
(0.12 | ) | (0.15 | ) | (0.17 | ) | ||||||
Less:
Common stock acquired by restricted
stock
plan (2)
|
(0.03 | ) | (0.04 | ) | (0.05 | ) | ||||||
Pro
forma stockholders’ equity per share
|
$ | 7.36 | $ | 7.75 | $ | 8.14 | ||||||
Intangible
assets
|
(0.28 | ) | (0.28 | ) | (0.28 | ) | ||||||
Pro
forma tangible stockholders’ equity per share
|
$ | 7.08 | $ | 7.47 | $ | 7.86 | ||||||
Offering
price as a percentage of pro forma stockholders’ equity per
share
|
105.71 | % | 118.06 | % | 129.24 | % | ||||||
Offering
price as a percentage of pro forma tangible stockholders’ equity per
share
|
109.89 | % | 122.49 | % | 133.84 | % | ||||||
Number
of shares outstanding for pro forma book value per share
calculations
|
18,672,361 | 18,672,361 | 18,672,361 |
(1)
|
Assumes
that 300,000 shares of the common stock sold in the offering will be
purchased by the employee stock ownership plan, and that the funds used to
acquire these shares will be borrowed from Charter
Financial The employee stock ownership plan loan is assumed to
be repaid in 30 equal annual installments of principal and shares are to
be released to plan participants ratably as the employee stock ownership
plan repays the loan. Statement of Position 93-6 requires that
an employer record compensation expense in an amount equal to the fair
value of the shares committed to be released to the
employees. The pro forma net income assumes that: (i) 1.67% of
the employee stock ownership plan shares were committed to be released
during the six months ended March 31, 2010, and 3.33% were committed to be
released during fiscal 2009 at an average fair value assumed to be the
price at which the shares are sold in the stock offering, (ii) dividends
on shares not released to the participants were used to fund debt service
payments and (iii) Charter Financial made no other contributions to the
employee stock ownership plan. If the shares were to appreciate
in value over time, compensation expense relating to the employee stock
ownership plan would increase. The cost of the shares issued to
the employee stock ownership plan is reflected as a reduction of
stockholders’ equity.
|
(2)
|
If
approved by our shareholders within one year after the stock offering, we
expect that the new stock recognition and retention plan will purchase
82,000 shares of common stock. Shareholder approval of the stock
recognition and retention plan and purchases by the stock recognition and
retention plan may not occur earlier than six months after the completion
of the stock offering. The shares may be acquired directly from Charter
Financial or through open market purchases. The funds to be
used by the stock recognition and retention plan to purchase the shares
will be provided by Charter Financial The table assumes that
(i) the stock recognition and retention plan acquires the shares
through open market purchases at the price per share at which the shares
of common stock are sold in the stock offering, (ii) 10% of the
amount contributed to the stock recognition and retention plan was
amortized as an expense during the six months ended March 31, 2010 and 20%
was amortized as an expense during the fiscal year ended September 30,
2009 and (iii) the stock recognition and retention plan expense
reflects a marginal combined federal and state tax rate of
38.60%.
|
(3)
|
If
approved by our shareholders within one year after the stock offering, we
expect that the stock option plan will reserve 207,000 shares of common
stock for issuance upon the exercise of options. Shareholder
approval of the stock option plan may not occur earlier than six months
after the completion of the stock offering. In calculating the
pro forma effect of the stock options, the fair value of options was
estimated at $ 2.32 per option using the
Black-Scholes option pricing model and the following assumptions: a
grant-date share price and option exercise price of $ 10.52 , the maximum per share offering price for the
stock offering; an expected option life of eight years; a dividend yield
of 2.0% equal to the average dividend yield of publicly-traded thrifts; an
interest rate of 3.16%; and a volatility rate of 25.0% based on an index
of publicly traded institutions in the mutual holding company
structure. The actual expense of the stock option plan will be
determined by the grant-date fair value of the options, which will depend
on a number of factors, including the valuation assumptions used in the
option pricing model ultimately adopted. As the Company accrues
compensation expense to reflect the vesting of shares pursuant to the
stock-based benefit plans, the credit to equity will be offset by a charge
to noninterest expense. The funds to be used by the stock-based benefit
plans will be provided by the
Company.
|
(4)
|
Diluted
net income per share data is based on 18,416,507 and 18,479,297 weighted
average shares of common stock outstanding for the six months ended March
31, 2010 and the year ended September 30, 2009, respetively, adjusted for
employee stock ownership plan shares assumed to be acquired and committed
to be released during the period. Pro forma adjustments to
diluted net income per share data are calculated in the same
manner. Historical and pro forma stockholders’ equity per share
amounts are based on the 18,672,361 shares outstanding as of March 31,
2010. No effect has been given to the issuance of shares of
common stock under the stock option plan we intend to adopt following the
stock offering.
|
(5)
|
Annualized.
|
|
●
|
Raising
additional capital and leveraging our capital base and acquisition
experience to pursue additional strategic growth opportunities, especially
FDIC-assisted acquisitions, such as NCB and MCB. As a result of the NCB
and MCB acquisitions, we have broader market coverage, particularly in
west-central Georgia. Moreover, we expect that the high level
of service and expanded product offerings we are providing to the former
NCB and MCB customers will facilitate
growth.
|
|
●
|
Growing
our retail banking presence throughout the markets in west-central Georgia
and east-central Alabama, including the expanded retail footprint
resulting from the NCB and MCB acquisitions, while reducing our emphasis
on wholesale banking. We have paid off all borrowings acquired
in the NCB acquisition and at March 31, 2010, 100% of NCB’s wholesale
deposits had been eliminated. Since acquiring MCB, we have paid
off $9.3 million of borrowings acquired in the MCB acquisition
and, subsequent to March 31, 2010,
more than 36.6% of MCB’s wholesale deposits were eliminated. We
intend to build a diversified balance sheet, positioning CharterBank as a
full-service community bank that offers both retail and commercial loan
and deposit products to all markets within the I-85 corridor and the
adjacent markets resulting from our acquisitions of NCB and
MCB.
|
|
●
|
Continuing
to emphasize convenience for our customers by offering extended hours at
the majority of our offices, alternative banking delivery systems that
allow customers to pay bills, transfer funds and monitor account balances
at any time, as well as products and services designed to meet the
changing needs of our customers, such as our Rewards checking program
discussed under the heading “Business of Charter Financial Corporation and
CharterBank—Sources of Funds.”
|
|
●
|
Reducing
our nonperforming assets and classified assets through our diligent
monitoring and resolution efforts, including problem assets of NCB and
MCB. As of March 31, 2010, we had $85.3 million of
non-performing loans and loans 90 days or more delinquent as well as $43.1
million of real estate owned, of which $72.2 million and $35.7 million,
respectively, related to covered assets acquired from NCB and
MCB. We have established problem asset resolution teams to
resolve nonperforming assets and classified assets acquired in the NCB and
MCB transactions. While the majority of these nonperforming
assets do not pose a significant credit risk because they are covered
under loss sharing agreements with the FDIC, reducing the amount of
non-performing assets acquired in the NCB and MCB acquisitions will reduce
the cost of carrying these assets. See “Asset
Quality.”
|
|
●
|
Integrating
the assets and liabilities we acquired from NCB in June 2009 and from MCB
in March 2010, achieving operational efficiencies through the
consolidation or relocation of our branches, and building on the NCB and
MCB franchises through expanded products and
services.
|
As
Recorded
by NCB |
Aggregate
fair
value and other acquisition accounting adjustments |
As
Recorded by
CharterBank |
||||||||||
Assets:
|
||||||||||||
Cash
and due from banks
|
$ | 10,602,000 | $ | 19,415,000 | (1) | $ | 30,017,000 | |||||
Securities
|
12,763,000 | (14,000 | ) (2) | 12,749,000 | ||||||||
FHLB
stock
|
1,158,000 | — | 1,158,000 | |||||||||
Loans,
net of unearned income
|
159,901,000 | (65,195,000 | ) (3) | 94,706,000 | ||||||||
Other
real estate owned
|
17,676,000 | (10,240,000 | ) (4) | 7,436,000 | ||||||||
FDIC
receivable for loss sharing agreements
|
— | 49,991,000 | (6) | 49,991,000 | ||||||||
Other
assets
|
692,000 | — | 692,000 | |||||||||
Total
assets acquired
|
$ | 202,792,000 | $ | (6,043,000 | ) | $ | 196,749,000 | (5) | ||||
Liabilities:
|
||||||||||||
Deposits
|
$ | 181,326,000 | $ | 912,000 | (7) | $ | 182,238,000 | |||||
FHLB
advances
|
13,000,000 | 77,000 | (8) | 13,077,000 | ||||||||
Other
liabilities
|
981,000 | 453,000 | (9) | 1,434,000 | ||||||||
Total
liabilities assumed
|
195,307,000 | 1,442,000 | 196,749,000 | |||||||||
Excess
of assets acquired over liabilities assumed
|
$ | 7,485,000 | ||||||||||
Aggregate
fair value and other acquisition accounting adjustments
|
$ | 7,485,000 |
(1)
|
Reflects
the initial funds received from the FDIC on the acquisition
date.
|
(2)
|
Reflects
fair value adjustments based on CharterBank’s evaluation of the acquired
investment securities portfolio.
|
(3)
|
Reflects
fair value adjustments based on CharterBank’s evaluation of the acquired
loan portfolio. The fair value adjustment includes adjustments
for estimated credit losses, liquidity, market yield and servicing
costs.
|
(4)
|
Reflects
the estimated other real estate owned losses based on CharterBank’s
evaluation of the acquired other real estate owned
portfolio.
|
(5)
|
The
carrying value of certain long-term assets, primarily the estimated fair
value of acquired core deposit intangible of $1.1 million, was reduced to
zero by the excess of the fair value of net assets acquired over
liabilities assumed in the
acquisition.
|
(6)
|
Reflects
the estimated fair value of payments CharterBank will receive from the
FDIC under the loss sharing
agreements.
|
(7)
|
Reflects
fair value adjustments based on CharterBank’s evaluation of the acquired
time deposit portfolio.
|
(8)
|
This
adjustment is required because rates on Federal Home Loan Bank advances
were higher than rates available on similar borrowings as of the
acquisition date.
|
(9)
|
Adjustments
reflect estimated qualifying acquisition costs in the
transaction.
|
As
Recorded by
MCB |
Fair
Value
Adjustments |
As
Recorded by
CharterBank |
||||||||||
Assets:
|
||||||||||||
Cash
and due from banks
|
$ | 32,285,757 | $ | 36,629,236 | (1) | $ | 68,914,993 | |||||
FHLB
and other bank stock
|
1,321,710 | (200,410 | ) | (2) | 1,121,300 | |||||||
Investment
securities
|
24,744,318 | (75,028 | ) | (2) | 24,669,290 | |||||||
Loans,
net of unearned income
|
207,644,252 | (75,396,640 | ) | (3) | 132,247,612 | |||||||
Other
real estate owned
|
55,267,968 | (31,618,504 | ) | (4) | 23,649,464 | |||||||
FDIC
receivable for loss sharing agreements
|
— | 70,746,613 | (5) | 70,746,613 | ||||||||
Core
deposit intangible
|
— | 258,811 | (6) | 258,811 | ||||||||
Other
assets
|
1,313,923 | (427,702 | ) | (7) | 886,221 | |||||||
Total
assets acquired
|
$ | 322,577,928 | $ | (83,624 | ) | $ | 322,494,304 | |||||
Liabilities:
|
||||||||||||
Deposits:
|
||||||||||||
Noninterest-bearing
|
$ | 5,443,673 | $ | — | $ | 5,443,673 | ||||||
Interest-bearing
|
289,862,953 | 683,100 | (8) | 290,546,053 | ||||||||
Total
Deposits
|
295,306,626 | 683,100 | 295,989,726 | |||||||||
FHLB
advances
|
9,491,486 | — | 9,491,486 | |||||||||
Deferred
tax liability
|
— | 5,998,193 | (9) | 5,998,193 | ||||||||
Other
liabilities
|
1,409,052 | — | 1,409,052 | |||||||||
Total
liabilities assumed
|
306,207,164 | 6,681,293 | $ | 312,888,457 | ||||||||
Excess
of assets acquired over liabilities assumed
|
$ | 16,370,764 | (10) | |||||||||
Aggregate
fair value adjustments
|
$ | (6,764,917 | ) | |||||||||
Net
assets of MCB acquired
|
$ | 9,605,847 |
(1)
|
Reflects
the initial funds received from the FDIC on the acquisition
date.
|
(2)
|
Reflects
fair value adjustments based on CharterBank’s evaluation of the acquired
investment securities portfolio.
|
(3)
|
Reflects
fair value adjustments based on CharterBank’s evaluation of the acquired
loan portfolio. The fair value adjustment includes adjustments
for estimated credit losses, liquidity and servicing
costs.
|
(4)
|
Reflects
the estimated other real estate owned losses based on CharterBank’s
evaluation of the acquired other real estate owned
portfolio.
|
(5)
|
The
estimated fair value of payments CharterBank will receive from the FDIC
under the loss sharing agreements.
|
(6)
|
The
estimated fair value of acquired core deposit
intangible.
|
(7)
|
Reflects
the estimated fair value adjustment of other
assets.
|
(8)
|
Reflects
fair value adjustments based on CharterBank’s evaluation of the acquired
time deposit portfolio.
|
(9)
|
Adjustment
reflects differences between the financial statement and tax bases of
assets acquired and liabilities
assumed.
|
(10)
|
Represents
the excess of assets acquired over liabilities assumed; since the asset
discount bid of $53 million exceeded this amount, the difference resulted
in a cash settlement from the FDIC on the acquisition
date.
|
|
(i)
|
the
employee stock ownership plan will acquire 300,000 shares of common stock
with a $3.0 million loan that is expected to be repaid over 30 years,
resulting in an annual pre-tax expense of approximately $ 105,000 (assuming that the shares of common stock
are sold at and maintain a value of $ 10.52 per
share); and
|
|
(ii)
|
the
new stock-based incentive plan would award 82,000 shares of restricted
stock to eligible participants, and such awards would be expensed as the
awards vest. Assuming all shares are awarded under the plan at
a price of $ 10.52 per share, and that the
awards vest over five years, the corresponding annual pre-tax expense
associated with shares awarded under the plan would be approximately
$ 172,500 ;
and
|
|
(iii)
|
the
new stock-based incentive plan would award options to purchase 207,000
shares of common stock to eligible participants, and such options would be
expensed as the options vest. Assuming all options are awarded
under the stock-based incentive plan at a price of $ 10.52 per share, and that the options vest over a
minimum of five years, the corresponding annual pre-tax expense associated
with options awarded under the stock-based incentive plan would be
approximately $ 96,300 (assuming a grant-date
fair value of $ 2.32 per option, using the
Black-Scholes option valuation
methodology).
|
At
March 31,
|
At
September 30,
|
|||||||||||||||||||||||||||||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||||||||||||||||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||||||||||||||
One-
to four-family residential real estate (1)
|
$ | 114,406 | 14.4 | % | $ | 126,097 | 20.9 | % | $ | 138,205 | 31.6 | % | $ | 138,528 | 33.6 | % | $ | 143,888 | 37.7 | % | $ | 148,466 | 40.8 | % | ||||||||||||||||||||||||
Commercial
real estate
|
270,786 | 34.0 | 270,062 | 44.8 | 222,056 | 50.8 | 181,585 | 44.0 | 158,003 | 41.4 | 150,993 | 41.5 | ||||||||||||||||||||||||||||||||||||
Real
estate construction (2)
|
50,248 | 6.3 | 43,965 | 7.3 | 39,563 | 9.0 | 52,040 | 12.6 | 43,655 | 11.5 | 32,163 | 8.8 | ||||||||||||||||||||||||||||||||||||
Commercial
|
18,331 | 2.3 | 10,466 | 1.7 | 15,543 | 3.6 | 18,999 | 4.6 | 16,921 | 4.4 | 13,490 | 3.7 | ||||||||||||||||||||||||||||||||||||
Consumer
and other loans (3)
|
22,458 | 2.8 | 22,715 | 3.7 | 22,154 | 5.0 | 21,267 | 5.2 | 19,255 | 5.0 | 18,787 | 5.2 | ||||||||||||||||||||||||||||||||||||
Covered
loans (4)
|
319,827 | 40.2 | 129,197 | 21.6 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Total
loans
|
796,056 | 100.00 | % | 602,502 | 100.0 | % | 437,521 | 100.0 | % | 412,419 | 100.0 | % | 381,722 | 100.0 | % | 363,899 | 100.0 | % | ||||||||||||||||||||||||||||||
Other
items:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Net
deferred loan (fees)
|
(898 | ) | (857 | ) | (804 | ) | (852 | ) | (909 | ) | (931 | ) | ||||||||||||||||||||||||||||||||||||
Allowance
for loan losses-noncovered loans
|
(11,397 | ) | (9,332 | ) | (8,244 | ) | (6,013 | ) | (6,086 | ) | (6,160 | ) | ||||||||||||||||||||||||||||||||||||
Allowance
for loan losses-covered loans (5)
|
(19,113 | ) | (23,832 | ) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Accretable
discount (5)
|
(23,583 | ) | (8,794 | ) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Non-accretable
discount (5)
|
(63,376 | ) | (7,137 | ) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Loans
receivable, net
|
$ | 677,689 | $ | 552,550 | $ | 428,473 | $ | 405,554 | $ | 374,727 | $ | 356,808 |
(1)
|
Excludes
loans held for sale of $690 at March 31, 2010, and $1,123, $1,292, $921,
$909 and $1,234 at September 30, 2009, 2008, 2007, 2006 and 2005,
respectively.
|
(2)
|
Net
of undisbursed proceeds on
loans-in-process.
|
(3)
|
Includes
home equity loans, lines of credit and second
mortgages.
|
(4)
|
Consists
of loans and commitments acquired in the NCB and MCB acquisitions that are
covered by loss sharing agreements with the
FDIC.
|
(5)
|
See
Note 3 to the Notes to our Consolidated Financial Statements beginning on
page F-1 of this prospectus, and the Statement of Assets Acquired and
Liabilities Assumed beginning on page G-1 of this
prospectus.
|
One-
to four-family
residential
real estate (1)
|
Commercial
real
estate(2)
|
Real
estate
Construction
(3)
|
||||||||||||||||||||||
Amount
|
Weighted
Average
Rate
|
Amount
|
Weighted
Average
Rate
|
Amount
|
Weighted
Average
Rate
|
|||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||
Due
During the Years
Ending
September 30,
|
||||||||||||||||||||||||
2010
|
$ | 1,701 | 6.41 | % | $ | 107,146 | 4.85 | % | $ | 36,882 | 4.20 | % | ||||||||||||
2011
|
283 | 5.31 | 35,351 | 5.15 | 5,478 | 5.86 | ||||||||||||||||||
2012
|
228 | 6.92 | 46,523 | 5.41 | — | — | ||||||||||||||||||
2013
to 2014
|
2,955 | 5.78 | 33,426 | 5.71 | 1,605 | 5.85 | ||||||||||||||||||
2015
to 2019
|
18,984 | 5.21 | 20,945 | 6.02 | — | — | ||||||||||||||||||
2020
to 2024
|
17,840 | 6.06 | 35,486 | 6.08 | — | — | ||||||||||||||||||
2025
and beyond
|
84,106 | 5.62 | 86,084 | 6.40 | — | — | ||||||||||||||||||
Total
|
$ | 126,097 | 5.63 | % | $ | 364,960 | 5.74 | % | $ | 43,965 | 4.47 | % |
Commercial
(4)
|
Consumer
and
other
loans (5)
|
Total
|
||||||||||||||||||||||
Amount
|
Weighted
Average
Rate
|
Amount
|
Weighted
Average
Rate
|
Amount
|
Weighted
Average
Rate
|
|||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||
Due
During the Years
Ending
September 30,
|
||||||||||||||||||||||||
2010
|
$ | 11,052 | 5.10 | % | $ | 3,600 | 2.92 | % | $ | 160,381 | 4.66 | % | ||||||||||||
2011
|
3,204 | 5.10 | 1,602 | 7.29 | 45,918 | 5.34 | ||||||||||||||||||
2012
|
9,817 | 6.82 | 3,070 | 5.70 | 59,638 | 5.46 | ||||||||||||||||||
2013
to 2014
|
4,038 | 6.21 | 4,711 | 5.21 | 46,735 | 5.69 | ||||||||||||||||||
2015
to 2019
|
3,253 | 3.45 | 20,655 | 5.13 | 63,837 | 5.39 | ||||||||||||||||||
2020
to 2024
|
1,038 | 6.07 | 499 | 8.41 | 54,863 | 6.09 | ||||||||||||||||||
2025
and beyond
|
730 | 7.00 | 211 | 6.69 | 171,130 | 6.02 | ||||||||||||||||||
Total
|
$ | 33,132 | 5.02 | % | $ | 34,348 | 5.54 | % | $ | 602,502 | 5.57 | % |
(1)
|
Includes
$0 of covered loans.
|
(2)
|
Includes
$94,898 of covered loans.
|
(3)
|
Includes
$0 of covered loans. Presented net of
undisbursed proceeds on loans-in-progress.
|
(4)
|
Includes
$22,666 of covered loans.
|
(5)
|
Includes
$11,633 of covered loans.
|
Due
After September 30, 2010
|
|||||||||||||
Fixed
|
Adjustable
|
Total
|
|||||||||||
(In
thousands)
|
|||||||||||||
One-
to four-family residential real estate
|
$ | 42,852 | $ | 81,544 | $ | 124,396 | |||||||
Commercial
real estate
|
68,339 | 189,475 | 257,814 | ||||||||||
Real
estate construction
|
5,903 | 1,180 | 7,083 | ||||||||||
Commercial
|
8,721 | 13,359 | 22,080 | ||||||||||
Consumer
and other
loans
|
5,769 | 24,979 | 30,748 | ||||||||||
Total
loans
|
$ | 131,584 | $ | 310,537 | $ | 442,121 |
At March 31, | At September 30, | |||||||||||||||||||||||||||||||
2010 |
2009
|
2008
|
2007
|
|||||||||||||||||||||||||||||
Amortized
Cost |
Fair
Value
|
Amortized
Cost |
Fair
Value
|
Amortized
Cost |
Fair
Value
|
Amortized
Cost |
Fair
Value
|
|||||||||||||||||||||||||
(In
thousands)
|
||||||||||||||||||||||||||||||||
Investment
securities:
|
||||||||||||||||||||||||||||||||
U.S.
Government sponsored
|
$ | 3,743 | $ | 3,962 | $ | 4,157 | $ | 4,435 | $ | 34,351 | $ | 34,291 | $ | 30,879 | $ | 30,785 | ||||||||||||||||
Municipal
bonds
|
— | — | — | — | — | — | 1,001 | 1,007 | ||||||||||||||||||||||||
Total
investment securities
|
3,743 | 3,962 | 4,157 | 4,435 | 34,351 | 34,291 | 31,880 | 31,792 | ||||||||||||||||||||||||
Mortgage-backed
and mortgage-related securities:
|
||||||||||||||||||||||||||||||||
Fannie
Mae
|
45,411 | 46,115 | 53,593 | 53,975 | 95,183 | 94,669 | 87,996 | 85,471 | ||||||||||||||||||||||||
Ginnie
Mae
|
13,743 | 13,985 | 5,745 | 5,979 | 9,323 | 9,378 | 10,676 | 10,794 | ||||||||||||||||||||||||
Freddie
Mac
|
30,424 | 31,015 | 27,438 | 27,679 | 6,384 | 6,358 | 9,451 | 9,350 | ||||||||||||||||||||||||
Total
mortgage-backed and mortgage- related securities
|
89,578 | 91,115 | 86,776 | 87,633 | 110,890 | 110,405 | 108,123 | 105,615 | ||||||||||||||||||||||||
Collateralized
mortgage obligations:
|
||||||||||||||||||||||||||||||||
Fannie
Mae
|
27,911 | 28,101 | 37,302 | 37,706 | 20,786 | 20,055 | 35,370 | 34,003 | ||||||||||||||||||||||||
Ginnie
Mae
|
15,530 | 15,533 | — | — | 998 | 999 | 997 | 972 | ||||||||||||||||||||||||
Freddie
Mac
|
13,986 | 14,122 | 19,206 | 19,380 | 28,712 | 28,213 | 33,846 | 33,068 | ||||||||||||||||||||||||
Other
|
59,390 | 52,713 | 71,160 | 56,908 | 92,529 | 83,176 | 90,919 | 89,693 | ||||||||||||||||||||||||
Total
collateralized mortgage obligations
|
116,817 | 110,469 | 127,668 | 113,994 | 143,025 | 132,443 | 161,132 | 157,736 | ||||||||||||||||||||||||
Total mortgage-backed
securities and collateralized mortgage obligations
|
206,395 | 201,584 | 214,444 | 201,627 | 253,915 | 242,848 | 269,255 | 263,351 | ||||||||||||||||||||||||
Freddie
Mac common stock
|
— | — | — | — | — | — | 4,725 | 200,782 | ||||||||||||||||||||||||
Total
|
$ | 210,138 | $ | 205,546 | $ | 218,601 | $ | 206,062 | $ | 288,266 | $ | 277,139 | $ | 305,860 | $ | 495,925 |
Description
(Ticker) (1)
|
Credit
Ratings (2)
|
Geography
(3)
|
Book
Value
|
Market
Value
|
Unrealized
Gain
(Loss)
|
|||||||||||
AMAC
2003-10 A1 (WHARM)
(4)
|
Aa3
|
CA
31.8
|
$ | 1,744,352 | $ | 1,781,521 | $ | 37,169 | ||||||||
CWALT
2005-63 2A2 (ALTARM)
(5)(6)
|
C |
CA
19.9
|
809,625 | 605,550 | (204,075 | ) | ||||||||||
CMSI
1993-14 A3 (WHARM)
|
Aaa
|
NY
89.6
|
244,346 | 232,244 | (12,102 | ) | ||||||||||
CMLTI
2004-HYB1 A31 (WHARM)
|
Aaa
|
CA
50.0
|
2,129,034 | 1,831,504 | (297,530 | ) | ||||||||||
FHASI
2003-8 1A21 (WH15)
|
Aaa
|
CA
30.3
|
1,709,737 | 1,566,513 | (143,224 | ) | ||||||||||
GMACM
2003-J9 A2 (WH30)
|
Aaa
|
CA
29.6
|
66,802 | 66,857 | 55 | |||||||||||
GMACM
2003-AR1 A5 (WH30)
(4)
|
Aaa
|
CA
25.6
|
6,186,078 | 6,130,642 | (55,436 | ) | ||||||||||
GSR
2003-4F 1A2 (WH30)
|
AAA
|
OH
43.4
|
1,797,390 | 1,814,784 | 17,394 | |||||||||||
GSR
2005-2F 1A2 (WHARM)
|
AAA
|
CA
48.4
|
2,729,372 | 2,496,354 | (233,018 | ) | ||||||||||
MASTR
2003-8 4A1 (WH15)
|
Aaa
|
CA
100.0
|
2,191,357 | 2,208,370 | 17,013 | |||||||||||
MARM
2004-7 5A1 (WH15)
|
Aa2
|
CA
45.4
|
7,402,357 | 6,866,660 | (535,697 | ) | ||||||||||
MARM
2004-13 B1 (WHARM) (6)
|
B+ |
CA
86.7
|
7,701,452 | 5,065,872 | (2,635,580 | ) | ||||||||||
MARM
2004-15 4A1 (WHARM)
|
Baa2
|
CA
49.7
|
3,661,843 | 3,191,742 | (470,101 | ) | ||||||||||
MALT
2004-1 4A1 (WH15)
(4)
|
AAA
|
CA
39.2
|
3,979,536 | 3,936,773 | (42,763 | ) | ||||||||||
RFMSI
2006-S10 2A1 (WH15) (4)
|
CCC
|
CA
19.0
|
3,038,336 | 2,981,221 | (57,115 | ) | ||||||||||
RFMSI
2006-S12 1A1 (WH30) (4)
|
B1 |
CA
16.4
|
2,114,184 | 2,066,044 | (48,140 | ) | ||||||||||
SARM
2005-15 2A2 (WHARM) (5)(6)
|
CCC
|
CA
26.0
|
3,801,406 | 2,352,612 | (1,448,794 | ) | ||||||||||
SARM
2004-6 3A3 (WH15)
|
AAA
|
CA
58.8
|
1,591,289 | 1,163,971 | (427,318 | ) | ||||||||||
WFMBS
2003-F A1 (WHARM)
(4)
|
Aaa
|
CA
41.2
|
2,939,202 | 2,825,673 | (113,529 | ) | ||||||||||
WFMBS
2003-2 A6 (WH15)
|
Aaa
|
CA
25.5
|
168,807 | 168,529 | (278 | ) | ||||||||||
WFMBS
2006-12 A1 (ALTARM)
|
Baa2
|
CA
34.1
|
3,383,789 | 3,360,037 | (23,752 | ) | ||||||||||
Total
|
$ | 59,390,294 | $ | 52,713,473 | $ | (6,676,821 | ) |
(1)
|
“Ticker”
indicates the nature of the underlying collateral for the security, with
WH15 representing 15 year fixed rate whole loans, WH30 representing 30
year fixed rate whole loans, AltA 30 representing 30 year ALT-A loans,
WHARM representing adjustable rate whole loans and ALTARM represents Alt-A
adjustable rate loans. None of the underlying loans have
negative amortization.
|
(2)
|
Represents
the lowest credit rating.
|
(3)
|
Represents
the amount of loans in the state with the highest amount of loans
collateralizing the security, as a percentage of the amount of all loans
providing collateral.
|
(4)
|
These
securities were sold after March 31,
2010.
|
(5)
|
Net
of other than temporary impairment
charges.
|
(6)
|
The
following information is provided with respect to the security listed in
the table above with the highest unrealized loss and the two securities
listed in the table above with other-than-temporary
impairment.
|
Less
than One Year
|
More
than One Year
through
Five Years
|
More
than Five Years
through
Ten Years
|
More
than Ten Years
|
Total
Securities
|
||||||||||||||||||||||||||||||||||||||||
Amortized
Cost
|
Weighted
Average
Yield
|
Amortized
Cost
|
Weighted
Average
Yield
|
Amortized
Cost
|
Weighted
Average
Yield
|
Amortized
Cost
|
Weighted
Average
Yield
|
Amortized
Cost
|
Fair
Value
|
Weighted
Average
Yield
|
||||||||||||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||||||||||
Investment
securities:
|
||||||||||||||||||||||||||||||||||||||||||||
U.S.
Governmental sponsored
|
$ | — | — | % | $ | — | — | % | $ | 3,742,722 | 4.97 | % | $ | — | — | % | $ | 3,742,722 | $ | 3,962,010 | 4.97 | % | ||||||||||||||||||||||
Municipal
bonds
|
— | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Total
investment securities
|
— | — | — | — | 3,742,722 | 4.97 | — | — | 3,742,722 | 3,962,010 | 4.97 | |||||||||||||||||||||||||||||||||
Mortgage-backed
securities:
|
||||||||||||||||||||||||||||||||||||||||||||
Fannie
Mae
|
— | — | 1,442,363 | 4.04 | 30,245,165 | 3.26 | 13,723,655 | 3.16 | 45,411,183 | 46,115,358 | 3.26 | |||||||||||||||||||||||||||||||||
Ginnie
Mae
|
— | — | 1,849,262 | 6.19 | 8,557,663 | 2.67 | 3,335,992 | 5.65 | 13,742,917 | 13,984,438 | 3.87 | |||||||||||||||||||||||||||||||||
Freddie
Mac
|
— | — | — | — | 14,878,469 | 4.02 | 15,545,214 | 3.21 | 30,423,683 | 31,014,466 | 3.66 | |||||||||||||||||||||||||||||||||
Total mortgage-backed
and mortgage-related securities
|
— | — | 3,291,625 | 5.25 | 53,681,297 | 3.38 | 32,604,861 | 3.44 | 89,577,783 | 91,114,262 | 3.49 | |||||||||||||||||||||||||||||||||
Collateralized
mortgage
obligations:
|
||||||||||||||||||||||||||||||||||||||||||||
Fannie
Mae
|
— | — | — | — | 1,795,326 | 4.07 | 26,115,625 | 3.79 | 27,910,951 | 28,101,313 | 3.81 | |||||||||||||||||||||||||||||||||
Ginnie
Mae
|
— | 1,702,244 | 2.11 | — | — | 13,828,160 | 2.84 | 15,530,404 | 15,532,862 | 2.76 | ||||||||||||||||||||||||||||||||||
Freddie
Mac
|
720,175 | 2.05 | 2,980,935 | .58 | 2,168,501 | 4.44 | 8,116,196 | 2.84 | 13,985,807 | 14,121,789 | 2.60 | |||||||||||||||||||||||||||||||||
Other
|
— | — | — | 11,298,772 | 5.51 | 48,091,522 | 3.88 | 59,390,294 | 52,713,471 | 4.19 | ||||||||||||||||||||||||||||||||||
Total
collateralized mortgage obligations
|
720,175 | 2.05 | 4,683,179 | 1.14 | 15,262,599 | 5.19 | 96,151,503 | 3.62 | 116,817,456 | 110,469,435 | 3.69 | |||||||||||||||||||||||||||||||||
Total
|
$ | 720,175 | 2.05 | % | $ | 7,974,804 | 2.83 | % | $ | 72,686,618 | 3.84 | % | $ | 128,756,364 | 3.57 | % | $ | 210,137,961 | $ | 205,545,707 | 3.63 | % |
For
the Six Months Ended March 31,
|
For
the Year Ended September 30,
|
|||||||||||||||||||||||
2010
|
2009
|
|||||||||||||||||||||||
Average
Balance
|
Percent
|
Weighted
Average
Rate
|
Average
Balance
|
Percent
|
Weighted
Average
Rate
|
|||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||
Deposit
type:
|
||||||||||||||||||||||||
Savings
accounts
|
$ | 16,231 | 2.6 | % | 0.25 | % | $ | 12,842 | 2.7 | % | 0.25 | % | ||||||||||||
Certificates
of deposit
|
388,219 | 62.8 | 2.32 | 291,760 | 61.3 | 2.46 | ||||||||||||||||||
Money
market
|
79,455 | 12.8 | 0.74 | 80,759 | 17.0 | 5.55 | ||||||||||||||||||
Demand
and NOW
|
134,611 | 21.8 | 1.36 | 90,445 | 19.0 | 0.31 | ||||||||||||||||||
Total
deposits
|
$ | 618,516 | 100.0 | % | 1.90 | % | $ | 475,806 | 100.0 | % | 2.55 | % |
For
the Years Ended September 30
|
||||||||||||||||||||||||
2008
|
2007
|
|||||||||||||||||||||||
Average
Balance
|
Percent
|
Weighted
Average
Rate
|
Average
Balance
|
Percent
|
Weighted
Average
Rate
|
|||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||
Deposit
type:
|
||||||||||||||||||||||||
Savings
accounts
|
$ | 11,616 | 2.6 | % | 0.25 | % | $ | 12,571 | 3.2 | % | 0.25 | % | ||||||||||||
Certificates
of deposit
|
256,037 | 57.7 | 3.60 | 207,068 | 52.5 | 4.41 | ||||||||||||||||||
Money
market
|
94,838 | 21.4 | 1.06 | 94,810 | 24.1 | 1.21 | ||||||||||||||||||
Demand
and NOW
|
81,110 | 18.3 | 0.30 | 79,744 | 20.2 | 0.51 | ||||||||||||||||||
Total
deposits
|
$ | 443,601 | 100.0 | % | 2.37 | % | $ | 394,193 | 100.0 | % | 2.71 | % |
At
March 31
|
At
September 30,
|
|||||||||||||||
2010
|
2009
|
2008
|
2007
|
|||||||||||||
(In
thousands)
|
||||||||||||||||
Interest
Rate:
|
||||||||||||||||
Less
than 2.00%
|
$ | 180,476 | $ | 125,167 | $ | 4,409 | $ | 222 | ||||||||
2.00%
to 2.99%
|
309,282 | 108,007 | 32,539 | 25,716 | ||||||||||||
3.00%
to 3.99%
|
60,747 | 85,961 | 104,867 | 13,047 | ||||||||||||
4.00%
to 4.99%
|
18,750 | 45,922 | 63,765 | 11,347 | ||||||||||||
5.00%
to 5.99%
|
17,497 | 15,675 | 45,093 | 176,927 | ||||||||||||
6.00%
to 6.99%
|
— | — | 2 | 46 | ||||||||||||
Total
|
$ | 586,752 | $ | 380,732 | $ | 250,675 | $ | 227,305 |
At March 31, 2010 | ||||||||||||||||||||||||
Period to Maturity | ||||||||||||||||||||||||
Less
Than or Equal
to
One
Year
|
More
Than
One
to
Two
Years
|
More
Than
Two
to
Three
Years
|
More
Than
Three
Years
|
Total |
Percent
of
Total
|
|||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Interest Rate Range: | ||||||||||||||||||||||||
2.99%
and below
|
$ | 413,806 | $ | 52,874 | $ | 15,974 | $ | 7,104 | $ | 489,758 | 83.5 | % | ||||||||||||
3.00%
to 3.99%
|
17,324 | 17,018 | 1,424 | 24,981 | 60,747 | 10.4 | ||||||||||||||||||
4.00%
to 4.99%
|
12,569 | 3,790 | 1,463 | 928 | 18,750 | 3.2 | ||||||||||||||||||
5.00%
to 5.99%
|
12,106 | 2,852 | 2,539 | — | 17,497 | 2.9 | ||||||||||||||||||
Total
|
$ | 455,805 | $ | 76,534 | $ | 21,400 | $ | 33,013 | $ | 586,752 | 100.0 | % |
At
March 31, 2010
|
||||||||
Retail
(1)
|
Wholesale
(2)
|
|||||||
(In
thousands)
|
||||||||
Three
months or
less
|
$ | 26,396 | $ | 27,452 | ||||
Over
three months through six months
|
25,736 | 22,419 | ||||||
Over
six months through one year
|
67,263 | 39,117 | ||||||
Over
one year to three years
|
28,429 | 24,621 | ||||||
Over
three
years
|
16,458 | 5,201 | ||||||
Total
|
$ | 164,282 | $ | 118,810 |
(1)
|
Retail
certificates of deposit consist of deposits held directly by
customers. The weighted average interest rate for all retail
certificates of deposit at March 31, 2010, was
2.52%.
|
(2)
|
Wholesale
certificates of deposit include brokered deposits and deposits from other
financial institutions. The weighted average interest rate for
all wholesale certificates of deposit at March 31, 2010, was 1.93%. After
March 31, 2010, CharterBank reduced the interest rate on approximately $60
million of MCB’s wholesale deposits to 15 basis points, which resulted in
the withdrawal of essentially all of these
deposits.
|
At
or For the
Six
Months
Ended
March
31,
|
At
or For the Years Ended September 30,
|
|||||||||||||||
2010
|
2009
|
2008
|
2007
|
|||||||||||||
(Dollars
in thousands)
|
||||||||||||||||
Balance
at end of year
|
$ | 212,000 | $ | 227,000 | $ | 267,000 | $ | 272,058 | ||||||||
Average
balance during year
|
$ | 218,009 | $ | 260,158 | $ | 255,740 | $ | 304,077 | ||||||||
Maximum
outstanding at any month end
|
$ | 217,000 | $ | 275,500 | $ | 267,000 | $ | 312,000 | ||||||||
Weighted
average interest rate at end of year
|
4.91 | % | 4.82 | % | 4.65 | % | 4.83 | % | ||||||||
Average
interest rate during year
|
4.82 | % | 4.80 | % | 4.79 | % | 4.50 | % |
At
or For the
Six
Months
Ended
March
31,
|
At
or For the Years Ended September 30,
|
|||||||||||||||
2010
|
2009
|
2008
|
2007
|
|||||||||||||
(Dollars
in thousands)
|
||||||||||||||||
Balance
at end of year
|
$ | 232 | $ | — | $ | — | $ | 10,058 | ||||||||
Average
balance during year
|
$ | 5 | $ | — | $ | 4,713 | 17,377 | |||||||||
Maximum
outstanding at any month end
|
$ | 232 | $ | — | $ | 9,935 | 18,598 | |||||||||
Weighted
average interest rate at end of year
|
0.87 | % | — | % | — | % | 5.19 | % | ||||||||
Average
interest rate during year
|
0.87 | % | — | % | 4.67 | % | 5.52 | % |
At
or For the
Six
Months
Ended
March
31,
|
At
or For the Years Ended September 30,
|
|||||||||||||||
2010
|
2009
|
2008
|
2007
|
|||||||||||||
(Dollars
in thousands)
|
||||||||||||||||
Balance
at end of year
|
$ | — | $ | — | $ | — | $ | — | ||||||||
Average
balance during year
|
$ | — | $ | 100,000 | $ | — | $ | — | ||||||||
Maximum
outstanding at any month end
|
$ | — | $ | 10,000,000 | $ | — | $ | — | ||||||||
Weighted
average interest rate at end of year
|
% | — | % | — | % | — | % | |||||||||
Average
interest rate during year
|
% | 0.30 | % | — | % | — | % |
At
March 31,
2010
|
For the Six Months Ended March 31, | |||||||||||||||||||||||||||
2010 | 2009 | |||||||||||||||||||||||||||
Yield/
Rate(1)
|
Average
Outstanding
Balance
|
Interest
|
Yield/
Rate
|
Average
Outstanding
Balance
|
Interest
|
Yield/
Rate
|
||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Interest-earning
assets:
|
||||||||||||||||||||||||||||
Loans
(2)(3):
|
||||||||||||||||||||||||||||
One-
to four-family residential real estate
|
7.03 | % | $ | 123,775 | $ | 3,468 | 5.60 | % | $ | 136,973 | $ | 3,822 | 5.58 | % | ||||||||||||||
Commercial
real estate
|
6.46 | 332,498 | 11,510 | 6.92 | 229,968 | 6,940 | 6.04 | |||||||||||||||||||||
Real
estate construction
|
4.68 | 58,509 | 1,076 | 3.68 | 43,420 | 1,012 | 4.66 | |||||||||||||||||||||
Commercial
|
5.37 | 36,933 | 1,259 | 6.82 | 16,614 | 572 | 6.89 | |||||||||||||||||||||
Consumer
and other loans
|
6.18 | 32,959 | 843 | 5.12 | 22,155 | 788 | 7.11 | |||||||||||||||||||||
Total
loans
|
6.29 | 584,674 | 18,156 | 6.21 | 449,130 | 13,134 | 5.85 | |||||||||||||||||||||
Securities(3):
|
||||||||||||||||||||||||||||
Mortgage-backed
securities and collateralized mortgage obligations
|
3.93 | 191,645 | 3,962 | 4.13 | 236,920 | 5,754 | 4.86 | |||||||||||||||||||||
Municipal
bonds
|
— | — | — | — | — | — | — | |||||||||||||||||||||
FHLB
common stock and other equity securities
|
0.20 | 14,060 | 15 | 0.21 | 13,575 | — | — | |||||||||||||||||||||
Other
securities
|
5.00 | 4,223 | 99 | 4.69 | 28,454 | 330 | 2.32 | |||||||||||||||||||||
Total
securities
|
3.69 | 209,928 | 4,076 | 3.88 | 278,949 | 6,084 | 4.36 | |||||||||||||||||||||
Freddie
Mac common stock
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Interest-bearing
deposits in other financial institutions
|
0.28 | 23,556 | 42 | 0.36 | 7,596 | 12 | 0.32 | |||||||||||||||||||||
Total
interest-earning assets including Freddie Mac common stock
|
4.53 | 818,158 | 22,274 | 5.44 | 735,675 | 19,230 | 5.23 | |||||||||||||||||||||
Noninterest-earning
assets
|
130,453 | — | 66,437 | — | ||||||||||||||||||||||||
Total
assets
|
$ | 948,611 | 22,274 | $ | 802,112 | 19,230 | ||||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||||||
Savings
accounts
|
0.15 | % | $ | 16,231 | $ | 22 | 0.27 | % | $ | 11,823 | $ | 15 | 0.25 | % | ||||||||||||||
Certificates
of deposit
|
1.40 | 388,219 | 4,093 | 2.11 | 256,252 | 4,498 | 3.51 | |||||||||||||||||||||
Money
market accounts
|
0.57 | 79,455 | 311 | 0.78 | 78,874 | 560 | 1.42 | |||||||||||||||||||||
Demand
and NOW accounts
|
1.08 | 91,900 | 701 | 1.53 | 48,013 | 157 | 0.65 | |||||||||||||||||||||
Total
deposits
|
1.20 | 575,805 | 5,127 | 1.78 | 394,962 | 5,230 | 2.65 | |||||||||||||||||||||
Federal
Home Loan Bank
advances
|
4.95 | 218,013 | 5,252 | 4.82 | 266,283 | 6,107 | 4.59 | |||||||||||||||||||||
Securities
sold under agreement to repurchase
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Other
borrowings
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Total
interest-bearing liabilities
|
1.94 | 793,818 | 10,379 | 2.61 | 661,245 | 11,337 | 3.43 | |||||||||||||||||||||
Non-interest-bearing
liabilities
|
52,939 | 36,299 | ||||||||||||||||||||||||||
Total
liabilities
|
846,757 | 10,379 | 697,544 | 11,337 | ||||||||||||||||||||||||
Equity
|
101,854 | 104,568 | ||||||||||||||||||||||||||
Total
liabilities and equity
|
$ | 948,611 | 10,379 | $ | 802,112 | 11,337 | ||||||||||||||||||||||
Net
interest income
|
$ | 11,895 | $ | 7,893 | ||||||||||||||||||||||||
Net
interest rate spread (4)
|
3.00 | % | 2.83 | % | 1.80 | % | ||||||||||||||||||||||
Net
interest-earning
assets (5) |
$ | 24,340 | $ | 74,430 | ||||||||||||||||||||||||
Net
interest margin (6)
|
2.91 | % | 2.15 | % | ||||||||||||||||||||||||
Average
of interest-earning assets to interest-bearing liabilities
|
92.04 | % | 103.07 | % | 111.26 | % |
(footnotes
on following page)
|
For
the Years Ended September 30,
|
||||||||||||||||||||||||||||||||||||
2009
|
2008
|
2007
|
||||||||||||||||||||||||||||||||||
Average
Outstanding
Balance
|
Interest
|
Yield/
Rate
(1) |
Average
Outstanding
Balance
|
Interest
|
Yield/
Rate
|
Average
Outstanding
Balance
|
Interest
|
Yield/
Rate
|
||||||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||
Interest-earning
assets:
|
||||||||||||||||||||||||||||||||||||
Loans
(2)(3):
|
||||||||||||||||||||||||||||||||||||
One-
to four-family residential real
estate
|
$ | 133,382 | $ | 7,566 | 5.67 | % | $ | 136,445 | $ | 7,994 | 5.86 | % | $ | 140,984 | $ | 8,209 | 5.82 | % | ||||||||||||||||||
Commercial
real estate
|
259,050 | 16,888 | 6.52 | 200,863 | 14,944 | 7.44 | 171,879 | 13,609 | 7.92 | |||||||||||||||||||||||||||
Real
estate construction
|
49,853 | 2,278 | 4.57 | 45,411 | 3,130 | 6.89 | 47,594 | 4,007 | 8.42 | |||||||||||||||||||||||||||
Commercial
|
23,243 | 1,139 | 4.90 | 18,585 | 1,182 | 6.36 | 19,317 | 1,322 | 6.84 | |||||||||||||||||||||||||||
Consumer
and other loans
|
25,336 | 1,441 | 5.69 | 22,213 | 1,622 | 7.30 | 20,881 | 1,737 | 8.32 | |||||||||||||||||||||||||||
Total
loans
|
490,864 | 29,312 | 5.97 | 423,517 | 28,872 | 6.82 | 400,655 | 28,884 | 7.21 | |||||||||||||||||||||||||||
Securities(3):
|
||||||||||||||||||||||||||||||||||||
Mortgage-backed
securities and collateralized mortgage obligations
|
223,851 | 10,700 | 4.78 | 257,462 | 12,210 | 4.74 | 284,543 | 13,788 | 4.85 | |||||||||||||||||||||||||||
Municipal
bonds
|
— | — | — | 173 | 7 | — | 880 | 39 | — | |||||||||||||||||||||||||||
FHLB
common stock and other equity securities
|
13,572 | 29 | 0.21 | 13,026 | 670 | 5.14 | 15,107 | 860 | 5.69 | |||||||||||||||||||||||||||
Other
securities
|
21,419 | 484 | 2.26 | 32,208 | 1,190 | 3.67 | 33,394 | 1,760 | 5.27 | |||||||||||||||||||||||||||
Total
securities
|
258,842 | 11,213 | 4.33 | 302,869 | 14,070 | 4.65 | 333,924 | 16,447 | 4.93 | |||||||||||||||||||||||||||
Freddie
Mac common stock
|
— | — | — | 92,992 | 2,499 | 2.69 | 235,240 | 7,305 | 3.11 | |||||||||||||||||||||||||||
Interest-bearing
deposits in other financial institutions
|
14,915 | 34 | 0.23 | 27,240 | 936 | 3.44 | 39,232 | 2,010 | 5.12 | |||||||||||||||||||||||||||
Total
interest-earning assets including Freddie Mac common
stock
|
764,621 | 40,559 | 5.30 | 846,618 | 46,377 | 5.48 | 1,009,051 | 54,646 | 5.42 | |||||||||||||||||||||||||||
Noninterest-earning
assets
|
78,030 | 64,636 | 49,941 | |||||||||||||||||||||||||||||||||
Total
assets
|
$ | 842,651 | $ | 911,254 | $ | 1,058,992 | ||||||||||||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||||||||||||||
Savings
accounts
|
$ | 12,842 | 33 | 0.26 | % | $ | 11,616 | $ | 28 | 0.24 | % | $ | 12,571 | $ | 31 | 0.25 | % | |||||||||||||||||||
Certificates
of deposit
|
291,760 | 8,741 | 3.00 | 256,037 | 11,287 | 4.41 | 207,068 | 9,742 | 4.70 | |||||||||||||||||||||||||||
Money
market accounts
|
80,759 | 935 | 1.16 | 94,838 | 2,644 | 2.79 | 94,810 | 4,495 | 4.74 | |||||||||||||||||||||||||||
Demand
and NOW accounts
|
55,553 | 391 | 0.70 | 49,051 | 566 | 1.15 | 49,689 | 920 | 1.85 | |||||||||||||||||||||||||||
Total
deposits
|
440,914 | 10,100 | 2.29 | 411,542 | 14,525 | 3.53 | 364,138 | 15,188 | 4.17 | |||||||||||||||||||||||||||
Federal
Home Loan Bank advances
|
260,158 | 12,499 | 4.80 | 251,028 | 12,026 | 4.79 | 293,302 | 13,679 | 4.66 | |||||||||||||||||||||||||||
Securities
sold under agreement to
repurchase
|
— | — | — | 4,712 | 219 | 4.65 | 17,377 | 960 | 5.53 | |||||||||||||||||||||||||||
Other borrowings
|
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Total
interest-bearing liabilities
|
701,072 | 22,599 | 3.22 | 667,282 | 26,770 | 4.01 | 674,817 | 29,827 | 4.42 | |||||||||||||||||||||||||||
Non-interest-bearing
liabilities
|
38,864 | 74,842 | 133,210 | |||||||||||||||||||||||||||||||||
Total
liabilities
|
739,936 | 742,124 | 808,027 | |||||||||||||||||||||||||||||||||
Equity
|
102,715 | 169,130 | 250,965 | |||||||||||||||||||||||||||||||||
Total
liabilities and equity
|
$ | 842,651 | $ | 911,254 | $ | 1,058,992 | ||||||||||||||||||||||||||||||
Net
interest income
|
$ | 17,960 | $ | 19,607 | $ | 24,819 | ||||||||||||||||||||||||||||||
Net
interest rate spread (4)
|
2.08 | % | 1.47 | % | 1.00 | % | ||||||||||||||||||||||||||||||
Net
interest-earning assets (5)
|
$ | 63,549 | $ | 179,336 | $ | 334,234 | ||||||||||||||||||||||||||||||
Net
interest margin (6)
|
2.35 | % | 2.32 | % | 2.46 | % | ||||||||||||||||||||||||||||||
Average
of interest-earning assets to interest-bearing liabilities
|
109.06 | % | 126.88 | % | 149.35 | % |
(1)
|
Includes
net loan fees deferred and accreted pursuant to applicable accounting
requirements.
|
(2)
|
Interest
income on loans is interest income as recorded in the income statement
and, therefore, does not include interest income on non-accrual
loans.
|
(3)
|
Tax
exempt or tax-advantaged securities and loans are shown at their
contractual yields and are not shown at a tax equivalent
yield.
|
(4)
|
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.
|
(5)
|
Net
interest-earning assets represent total interest-earning assets less total
interest-bearing liabilities.
|
(6)
|
Net
interest margin represents net interest income as a percentage of average
interest-earning assets.
|
Six
Months Ended March 31, 2010 Compared to Six
Months
Ended
March
31, 2009
Increase/(Decrease)
|
Year
Ended September 30, 2009
Compared
to Year Ended
September
30, 2008
Increase/(Decrease)
|
Year
Ended September 30, 2008
Compared
to Year Ended
September
30, 2007
Increase/(Decrease)
|
||||||||||||||||||||||||||||||||||||||||||||||
Due
to
|
Due
to
|
Due
to
|
||||||||||||||||||||||||||||||||||||||||||||||
Volume
|
Rate
|
Combined
|
Net
|
Volume
|
Rate
|
Combined
|
Net
|
Volume
|
Rate
|
Combined
|
Net
|
|||||||||||||||||||||||||||||||||||||
(In
thousands)
|
||||||||||||||||||||||||||||||||||||||||||||||||
Interest
earning assets:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing
deposits in other
financial
institutions
|
$ | 25 | $ | 2 | $ | 3 | $ | 30 | $ | (424 | ) | $ | (874 | ) | $ | 395 | $ | (902 | ) | $ | (614 | ) | $ | (662 | ) | $ | 202 | $ | (1,074 | ) | ||||||||||||||||||
FHLB
common stock and other
equity
securities
|
— | 14 | 1 | 15 | 28 | (642 | ) | (27 | ) | (641 | ) | (124 | ) | (122 | ) | 17 | (229 | ) | ||||||||||||||||||||||||||||||
Mortgage-backed
securities and
collateralized
mortgage
obligations
available for sale
|
(1,100 | ) | (856 | ) | 164 | (1,792 | ) | (1,594 | ) | 97 | (13 | ) | (1,510 | ) | (1,312 | ) | (294 | ) | 28 | (1,578 | ) | |||||||||||||||||||||||||||
Other
investment securities
available
for sale
|
(281 | ) | 337 | (287 | ) | (231 | ) | (403 | ) | (458 | ) | 155 | (706 | ) | (97 | ) | (500 | ) | 28 | (569 | ) | |||||||||||||||||||||||||||
Loans
receivable
|
3,702 | 1,030 | 290 | 5,022 | 4,591 | (3,582 | ) | (570 | ) | 440 | 1,648 | (1,571 | ) | (90 | ) | (13 | ) | |||||||||||||||||||||||||||||||
Total
interest-earning assets
|
2,346 | 527 | 171 | 3,044 | 2,199 | (5,459 | ) | (59 | ) | (3,319 | ) | (499 | ) | (3,149 | ) | 185 | (3,463 | ) | ||||||||||||||||||||||||||||||
Freddie
Mac common stock(1)
|
— | — | — | — | (2,499 | ) | — | — | (2,499 | ) | (44 | ) | (4,757 | ) | (5 | ) | (4,806 | ) | ||||||||||||||||||||||||||||||
Total
interest-earning assets and Freddie Mac common stock
|
2,346 | 527 | 171 | 3,044 | $ | (300 | ) | $ | (5,459 | ) | $ | (59 | ) | $ | (5,818 | ) | $ | (543 | ) | $ | (7,906 | ) | $ | 180 | $ | (8,269 | ) | |||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||||||||||||||||||||||||||
NOW
accounts
|
$ | 144 | $ | 209 | $ | 191 | $ | 543 | $ | 75 | $ | (221 | ) | $ | (29 | ) | $ | (175 | ) | $ | (12 | ) | $ | (347 | ) | $ | 4 | $ | (355 | ) | ||||||||||||||||||
Savings
accounts
|
5 | 2 | 1 | 8 | 3 | 2 | — | 5 | (2 | ) | (1 | ) | — | (3 | ) | |||||||||||||||||||||||||||||||||
Money
market deposit accounts
|
4 | (251 | ) | (2 | ) | (249 | ) | (393 | ) | (1,546 | ) | 230 | (1,709 | ) | 1 | (1,842 | ) | (1 | ) | (1,842 | ) | |||||||||||||||||||||||||||
Certificates
of deposit
|
2,316 | (1,796 | ) | (925 | ) | (405 | ) | 1,575 | (3,616 | ) | (505 | ) | (2,546 | ) | 2,304 | (613 | ) | (145 | ) | 1,546 | ||||||||||||||||||||||||||||
Total
interest-bearing deposits
|
2,469 | (1,837 | ) | (735 | ) | (103 | ) | 1,260 | (5,381 | ) | (304 | ) | (4,425 | ) | 2,291 | (2,803 | ) | (142 | ) | (654 | ) | |||||||||||||||||||||||||||
Borrowed
funds
|
(1,107 | ) | 308 | (56 | ) | (855 | ) | 212 | 42 | 1 | 254 | (2,589 | ) | 237 | (42 | ) | (2,394 | ) | ||||||||||||||||||||||||||||||
Total
interest-bearing liabilities
|
$ | 1,362 | $ | (1,529 | ) | $ | (791 | ) | $ | (958 | ) | $ | 1,472 | $ | (5,339 | ) | $ | (303 | ) | $ | (4,171 | ) | $ | (298 | ) | $ | (2,566 | ) | $ | (184 | ) | $ | (3,048 | ) | ||||||||||||||
Change
in net interest income including
Freddie
Mac common stock
|
$ | 984 | $ | 2,056 | $ | 962 | $ | 4,002 | $ | (1,771 | ) | $ | (120 | ) | $ | 244 | $ | (1,647 | ) | $ | (245 | ) | $ | (5,340 | ) | $ | 364 | $ | (5,221 | ) |
(1)
|
The
entire decrease in income from Freddie Mac common stock from fiscal 2008
to 2009 has been attributed to volume as all remaining shares were sold
prior to the end of fiscal
2008.
|
|
●
|
Establishing
loan resolution groups led by experienced CharterBank senior credit
officers with a combined 50 years of workout experience. One of
these credit officers served as the Dean of a major regional bank credit
school and also taught credit seminars for the Federal Reserve Board,
state banking examiners, and Risk Management
Associates.
|
|
●
|
Retaining
selected NCB and MCB asset resolution staff to assist in working out
problem assets as quickly as possible, while minimizing the resolution
costs to both CharterBank and the
FDIC.
|
|
●
|
Reviewing
all nonperforming loans with bank counsel to develop a resolution
strategy. Through May 19, 2010 the Company had received $28.3
million from the FDIC for reimbursements associated with the FDIC
loss-sharing agreements and had submitted an additional $26.0 million in
claims for reimbursement.
|
At
September 30,
|
||||||||||||||||||||
At
March 31, 2010
|
2009
|
|||||||||||||||||||
Covered
|
Non-covered
|
Covered
|
Non-covered
|
2008
|
||||||||||||||||
Non-accrual
loans:
|
(In
thousands)
|
|||||||||||||||||||
One-
to four-family residential real estate
|
11,154 | 3,376 | $ | — | $ | 2,182 | $ | 2,027 | ||||||||||||
Commercial
real estate
|
18,873 | 9,417 | 3,831 | 10,590 | 8,496 | |||||||||||||||
Real
estate construction
|
25,375 | — | 3,098 | — | — | |||||||||||||||
Commercial
|
14,148 | 214 | 17,447 | 146 | 145 | |||||||||||||||
Consumer
and other loans
|
1,195 | 97 | 1,007 | 182 | 103 | |||||||||||||||
Total
non-accrual loans
|
70,745 | 13,104 | 25,383 | 13,100 | 10,771 | |||||||||||||||
Loans
delinquent 90 days or greater and still accruing:
|
||||||||||||||||||||
One-
to four-family residential real estate
|
— | — | — | 181 | — | |||||||||||||||
Commercial
real estate
|
1,447 | — | — | — | — | |||||||||||||||
Real
estate construction
|
— | — | — | — | — | |||||||||||||||
Commercial
|
— | 9 | — | — | — | |||||||||||||||
Consumer
and other loans
|
— | — | — | 32 | — | |||||||||||||||
Total
loans delinquent 90 days or greater and still accruing
|
1,447 | 9 | — | 213 | — | |||||||||||||||
Total
non-performing loans
|
72,193 | 13,096 | 25,383 | 13,313 | 10,771 | |||||||||||||||
Real
estate owned:
|
||||||||||||||||||||
One-
to four-family residential real estate
|
15,319 | 1,637 | 3,753 | 1,683 | 788 | |||||||||||||||
Commercial
real estate
|
20,175 | 5,772 | 6,928 | 3,095 | 1,892 | |||||||||||||||
Real
estate construction
|
238 | — | — | — | — | |||||||||||||||
Commercial
|
— | — | — | — | — | |||||||||||||||
Consumer
and other loans
|
— | — | — | — | — | |||||||||||||||
Total
real estate owned
|
35,732 | 7,409 | 10,681 | 4,778 | 2,680 | |||||||||||||||
Total
non-performing assets
|
$ | 107,925 | $ | 20,505 | $ | 36,064 | $ | 18,091 | $ | 13,451 | ||||||||||
Ratios:
|
||||||||||||||||||||
Non-performing
loans as a percentage of total non-covered
loans
|
N/M | 2.75 | % | N/M | 2.82 | % | 2.46 | % | ||||||||||||
Non-performing
assets as a percentage of total non-covered assets
|
N/M | 2.53 | % | N/M | 2.16 | % | 1.68 | % |
N/M
|
Not
meaningful.
|
(1)
|
See
Note 3 to the Notes to our Consolidated Financial Statements beginning on
page F-1 of this prospectus, and the Statement of Assets Acquired and
Liabilities Assumed beginning on page G-1 of this
prospectus.
|
At
September 30,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
(In
thousands)
|
||||||||||||
Non-accrual
loans:
|
||||||||||||
One-
to four-family residential real estate
|
$ | 901 | $ | 1,209 | $ | 2,128 | ||||||
Commercial
real estate
|
4,588 | 1,497 | 1,715 | |||||||||
Real
estate construction
|
1,595 | — | — | |||||||||
Commercial
|
48 | 109 | 208 | |||||||||
Consumer
and other loans
|
62 | 21 | 24 | |||||||||
Total
non-accrual loans
|
7,194 | 2,836 | 4,075 | |||||||||
Loans
delinquent 90 days or greater and still accruing:
|
||||||||||||
One-
to four-family residential real estate
|
260 | — | — | |||||||||
Commercial
real estate
|
489 | 340 | 81 | |||||||||
Real
estate construction
|
— | — | — | |||||||||
Commercial
|
— | 52 | 52 | |||||||||
Consumer
and other loans
|
14 | — | — | |||||||||
Total
loans delinquent 90 days or greater and still accruing
|
763 | 392 | 133 | |||||||||
Total
non-performing loans
|
7,957 | 3,228 | 4,208 | |||||||||
Real
estate owned:
|
||||||||||||
One-
to four-family residential real estate
|
134 | 279 | 273 | |||||||||
Commercial
real estate
|
46 | 181 | 847 | |||||||||
Real
estate construction
|
— | — | — | |||||||||
Commercial
|
— | — | — | |||||||||
Consumer
and other loans
|
— | — | — | |||||||||
Total
real estate owned
|
180 | 460 | 1,120 | |||||||||
Total
non-performing assets
|
$ | 8,137 | $ | 3,688 | $ | 5,328 | ||||||
Ratios:
|
||||||||||||
Non-performing
loans as a percentage of total non-covered loans
|
1.93 | % | 0.74 | % | 1.12 | % | ||||||
Non-performing
assets as a percentage of total non-covered assets
|
0.80 | % | 0.30 | % | 0.49 | % |
(1)
|
See
Note 3 to the Notes to our Consolidated Financial Statements beginning on
page F-1 of this prospectus, and the Statement of Assets Acquired and
Liabilities Assumed beginning on page G-1 of this
prospectus.
|
Loans
Delinquent For
|
||||||||||||||||||||||||
30-89
Days
|
90
Days and Over
|
Total
|
||||||||||||||||||||||
Number
|
Amount
|
Number
|
Amount
|
Number
|
Amount
|
|||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||
At
March 31, 2010
|
||||||||||||||||||||||||
Non-covered
Loans:
|
||||||||||||||||||||||||
One-
to four-family residential real estate
|
26 | $ | 3,237 | — | $ | — | 26 | $ | 3,237 | |||||||||||||||
Commercial
real estate
|
14 | 7,309 | — | — | 14 | 7,309 | ||||||||||||||||||
Real
estate construction
|
4 | 544 | — | — | 4 | 544 | ||||||||||||||||||
Commercial
|
15 | 1,850 | 1 | 8 | 16 | 1,858 | ||||||||||||||||||
Consumer
and other loans
|
26 | 412 | — | — | 26 | 412 | ||||||||||||||||||
Total
non-covered loans
|
85 | $ | 13,552 | 1 | $ | 8 | 86 | $ | 13,360 | |||||||||||||||
Covered
Loans:
|
||||||||||||||||||||||||
One-
to four-family residential real estate
|
16 | $ | 695 | 5 | $ | 1,208 | 21 | $ | 1,903 | |||||||||||||||
Commercial
real estate
|
44 | 16,985 | 2 | 418 | 46 | 17,403 | ||||||||||||||||||
Real
estate construction
|
7 | 4,666 | 2 | 211 | 9 | 4,877 | ||||||||||||||||||
Commercial
|
40 | 4,394 | 7 | 1,459 | 7 | 5,853 | ||||||||||||||||||
Consumer
and other loans
|
19 | 251 | 3 | 22 | 22 | 273 | ||||||||||||||||||
Total
covered
loans
|
126 | $ | 26,991 | 19 | $ | 3,318 | 145 | $ | 30,309 | |||||||||||||||
Total
loans
|
211 | $ | 40,343 | 20 | $ | 3,326 | 231 | $ | 43,669 |
Loans
Delinquent For
|
||||||||||||||||||||||||
30-89
Days
|
90
Days and Over
|
Total
|
||||||||||||||||||||||
Number
|
Amount
|
Number
|
Amount
|
Number
|
Amount
|
|||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||
At
September 30, 2009
|
||||||||||||||||||||||||
Non-covered
Loans:
|
||||||||||||||||||||||||
One-
to four-family residential real estate
|
15 | $ | 2,631 | 3 | $ | 181 | 18 | $ | 2,812 | |||||||||||||||
Commercial
real estate
|
15 | 4,296 | — | — | 15 | 4,296 | ||||||||||||||||||
Real
estate construction
|
— | — | — | — | — | — | ||||||||||||||||||
Commercial
|
2 | 190 | — | — | 2 | 190 | ||||||||||||||||||
Consumer
and other loans
|
20 | 109 | 2 | 32 | 22 | 141 | ||||||||||||||||||
Total
non-covered loans
|
52 | $ | 7,226 | 5 | $ | 213 | $ | 57 | $ | 7,439 | ||||||||||||||
Covered
Loans:
|
||||||||||||||||||||||||
One-
to four-family residential real estate
|
— | $ | — | — | $ | — | — | $ | — | |||||||||||||||
Commercial
real estate
|
— | — | — | — | — | — | ||||||||||||||||||
Real
estate construction
|
1 | 86 | — | — | 1 | 86 | ||||||||||||||||||
Commercial
|
17 | 695 | — | — | 17 | 695 | ||||||||||||||||||
Consumer
and other loans
|
16 | 330 | — | — | 16 | 330 | ||||||||||||||||||
Total
covered loans
|
34 | $ | 1,111 | — | $ | — | 34 | $ | 1,111 | |||||||||||||||
Total
loans
|
86 | $ | 8,337 | 5 | $ | 213 | 91 | $ | 8,550 |
Loans
Delinquent For
|
||||||||||||
30-89
Days
|
90
Days
and
Over
|
Total
|
||||||||||
(Dollars
in thousands)
|
||||||||||||
At September 30,
2008
|
||||||||||||
One-
to four-family residential real estate
|
$ | 1,029 | $ | — | $ | 1,029 | ||||||
Commercial
real estate
|
1,564 | — | 1,564 | |||||||||
Real
estate construction
|
376 | — | 376 | |||||||||
Commercial
|
318 | — | 318 | |||||||||
Consumer
and other loans
|
144 | — | 144 | |||||||||
Total
loans
|
$ | 3,431 | $ | — | $ | 3,431 | ||||||
At September 30,
2007
|
||||||||||||
One-
to four-family residential real estate
|
$ | 921 | $ | 260 | $ | 1,181 | ||||||
Commercial
real estate
|
1,380 | 489 | 1,869 | |||||||||
Real
estate construction
|
595 | — | 595 | |||||||||
Commercial
|
413 | — | 413 | |||||||||
Consumer
and other loans
|
240 | 14 | 254 | |||||||||
Total
loans
|
$ | 3,549 | $ | 763 | $ | 4,312 | ||||||
At September 30,
2006
|
||||||||||||
One-
to four-family residential real estate
|
$ | 466 | $ | — | $ | 466 | ||||||
Commercial
real estate
|
945 | 340 | 1,285 | |||||||||
Real
estate construction
|
— | — | — | |||||||||
Commercial
|
147 | 52 | 199 | |||||||||
Consumer
and other loans
|
114 | — | 114 | |||||||||
Total
loans
|
$ | 1,672 | $ | 392 | $ | 2,064 | ||||||
At September 30,
2005
|
||||||||||||
One-
to four-family residential real estate
|
$ | 1,216 | $ | — | $ | 1,216 | ||||||
Commercial
real estate
|
2,354 | 81 | 2,435 | |||||||||
Real
estate construction
|
36 | — | 36 | |||||||||
Commercial
|
122 | 52 | 174 | |||||||||
Consumer
and other loans
|
115 | — | 115 | |||||||||
Total
loans
|
$ | 3,843 | $ | 133 | $ | 3,976 |
At
September 30,
|
||||||||||||||||||||
At
March 31, 2010
|
2009
|
2008
|
||||||||||||||||||
Covered
|
Non-covered
|
Covered
|
Non-covered
|
|||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||
Substandard
assets:
|
||||||||||||||||||||
Loans
|
$ | 113,532 | $ | 13,306 | $ | 30,940 | $ | 18,297 | $ | 18,625 | ||||||||||
Other
real estate owned
|
35,693 | 7,409 | 10,681 | 4,778 | 2,680 | |||||||||||||||
Securities
|
— | 14,839 | — | 7,534 | — | |||||||||||||||
Doubtful
assets
|
4,390 | 183 | 725 | 1,968 | 1,857 | |||||||||||||||
Loss
assets
|
— | — | — | — | — | |||||||||||||||
Total classified assets
|
$ | 153,615 | $ | 35,737 | $ | 42,346 | $ | 32,577 | $ | 23,162 |
At
or For the Six Months Ended March 31, 2010 |
At
or For the Years Ended September 30,
|
|||||||||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||||||
Balance
at beginning of period
|
$ | 9,332 | $ | 8,244 | $ | 6,013 | $ | 6,086 | $ | 6,160 | $ | 6,623 | ||||||||||||
Charge-offs:
|
||||||||||||||||||||||||
One-
to four-family residential real estate
|
(112 | ) | (648 | ) | (348 | ) | (107 | ) | (180 | ) | (57 | ) | ||||||||||||
Commercial
real estate
|
(172 | ) | (2,961 | ) | (42 | ) | (17 | ) | — | (222 | ) | |||||||||||||
Real
estate construction
|
(1,281 | ) | (31 | ) | (424 | ) | — | — | (319 | ) | ||||||||||||||
Commercial
|
(177 | ) | (119 | ) | (136 | ) | (40 | ) | — | |||||||||||||||
Consumer
and other loans
|
(22 | ) | (55 | ) | (97 | ) | (28 | ) | (62 | ) | (61 | ) | ||||||||||||
Total
charge-offs
|
(1,764 | ) | (3,814 | ) | (1,047 | ) | (192 | ) | (242 | ) | (659 | ) | ||||||||||||
Recoveries:
|
||||||||||||||||||||||||
One-
to four-family residential real estate
|
— | 41 | 1 | 30 | 33 | 18 | ||||||||||||||||||
Commercial
real estate
|
— | 300 | — | — | — | — | ||||||||||||||||||
Real
estate construction
|
— | — | — | — | — | — | ||||||||||||||||||
Commercial
|
— | 2 | 11 | 56 | 65 | 24 | ||||||||||||||||||
Consumer
and other loans
|
29 | 9 | 16 | 33 | 70 | 79 | ||||||||||||||||||
Total
recoveries
|
29 | 352 | 28 | 119 | 168 | 121 | ||||||||||||||||||
Net
(charge-offs) recoveries
|
(1,735 | ) | (3,462 | ) | (1,019 | ) | (73 | ) | (74 | ) | (538 | ) | ||||||||||||
Provision for
loan losses
|
3,800 | 4,550 | 3,250 | — | — | 75 | ||||||||||||||||||
Balance
at end of year
|
$ | 11,397 | $ | 9,332 | $ | 8,244 | $ | 6,013 | $ | 6,086 | $ | 6,160 | ||||||||||||
Ratios:
|
||||||||||||||||||||||||
Net
(charge-offs) recoveries as a percentage of average non-covered loans
outstanding
|
(0.31 | )% | (0.71 | )% | (0.24 | )% | (0.02 | )% | (0.02 | )% | (0.16 | )% | ||||||||||||
Allowance
for loan losses as a percentage of non-covered non-performing loans at
year end
|
87.1 | % | 70.1 | % | 77.0 | % | 76.0 | % | 187 | % | 146 | % | ||||||||||||
Allowance
for loan losses as a percentage of total non-covered loans receivable at
year end (1)
|
2.39 | % | 1.97 | % | 1.88 | % | 1.46 | % | 1.59 | % | 1.69 | % |
(1)
|
Does
not include loans held for sale or deferred
fees.
|
At
September 30,
|
||||||||||||||||||||||||
At
March 31, 2010
|
2009
|
2008
|
||||||||||||||||||||||
Allowance
for
Loan Losses |
Percent
of
Noncovered Loans in Each Category to Total Noncovered Loans |
Allowance
for
Loan Losses |
Percent
of
Loans in Each Category to Total Loans |
Allowance
for
Loan Losses |
Percent
of
Loans in Each Category to Total Loans |
|||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||
One-
to four-family residential real estate
|
$ | 558 | 24.0 | % | $ | 451 | 26.6 | % | $ | 563 | 31.6 | % | ||||||||||||
Commercial
real estate
|
7,828 | 56.9 | 5,540 | 57.1 | 4,823 | 50.8 | ||||||||||||||||||
Real
estate construction
|
1,740 | 10.6 | 2,157 | 9.3 | 1,439 | 9.0 | ||||||||||||||||||
Commercial
|
319 | 3.8 | 99 | 2.2 | 267 | 3.6 | ||||||||||||||||||
Consumer
and other loans
|
102 | 4.7 | 117 | 4.8 | 202 | 5.0 | ||||||||||||||||||
Total
allocated allowance
|
10,547 | 8,364 | 7,294 | |||||||||||||||||||||
Unallocated
|
849 | — | 968 | — | 950 | — | ||||||||||||||||||
Total
|
$ | 11,396 | 100.0 | % | $ | 9,332 | 100.0 | % | $ | 8,244 | 100.0 | % |
At
September 30,
|
||||||||||||||||||||||||
2007
|
2006
|
2005
|
||||||||||||||||||||||
Allowance
for
Loan Losses |
Percent
of
Loans in Each Category to Total Loans |
Allowance
for
Loan Losses |
Percent
of
Loans in Each Category to Total Loans |
Allowance
for
Loan Losses |
Percent
of
Loans in Each Category to Total Loans |
|||||||||||||||||||
(Dollars
in
thousands) |
||||||||||||||||||||||||
One-
to four-family residential real estate
|
$ | 1,077 | 33.6 | % | $ | 838 | 37.7 | % | $ | 1,042 | 40.8 | % | ||||||||||||
Commercial
real estate
|
2,212 | 44.0 | 2,506 | 41.4 | 2,711 | 41.5 | ||||||||||||||||||
Real
estate construction
|
1,100 | 12.6 | 578 | 5.0 | 574 | 5.2 | ||||||||||||||||||
Commercial
|
551 | 4.6 | 512 | 4.4 | 403 | 3.7 | ||||||||||||||||||
Consumer
and other loans
|
632 | 5.2 | 1,077 | 11.5 | 863 | 8.8 | ||||||||||||||||||
Total
allocated allowance
|
5,572 | 5,511 | 5,593 | |||||||||||||||||||||
Unallocated
|
441 | — | 575 | — | 567 | — | ||||||||||||||||||
Total
|
$ | 6,013 | 100.0 | % | $ | 6,086 | 100.0 | % | $ | 6,160 | 100.0 | % |
|
●
|
selling
fixed rate mortgages we originate to the secondary market, generally on a
servicing released basis;
|
|
●
|
maintaining
the diversity of our existing loan portfolio by originating commercial
real estate and consumer loans, which typically have adjustable rates and
shorter terms than residential
mortgages;
|
|
●
|
emphasizing
investments with adjustable interest
rates;
|
|
●
|
maintaining
fixed rate borrowings from the Federal Home Loan Bank of Atlanta;
and
|
|
●
|
increasing
retail transaction deposit accounts, which typically have long
durations.
|
Change
in Interest
Rates (bp) (1) |
Estimated
NPV (2)
|
Estimated
Increase
(Decrease) in NPV |
Percentage
Change
in NPV |
NPV
Ratio as a
Percent of Present Value of
Assets (3)(4)
|
Increase
(Decrease)
in NPV Ratio as a Percent or Present value of Assets (3)(4) |
|||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||
+300 | $ | 113,868 | $ | (10,818 | ) | (9 | )% | 9.13 | % | (59 | )% | |||||||||||
+200 | $ | 118,840 | $ | (5,846 | ) | (5 | )% | 9.42 | % | (29 | )% | |||||||||||
+100 | $ | 122,168 | $ | (2,519 | ) | (2 | )% | 9.58 | % | (13 | )% | |||||||||||
0 | $ | 124,687 | — | — | 9.71 | % | — | |||||||||||||||
(100 | ) | $ | 130,350 | $ | (5,664 | ) | 5 | % | 10.10 | % | 39 | % |
(1)
|
Assumes
an instantaneous uniform change in interest rates at all
maturities.
|
(2)
|
NPV
is the difference between the present value of an institution’s assets and
liabilities.
|
(3)
|
Present
value of assets represents the discounted present value of incoming cash
flows on interest-earning assets.
|
(4)
|
NPV
Ratio represents NPV divided by the present value of
assets.
|
Payments
Due by Period
|
||||||||||||||||||||
Contractual
Obligations
|
One
year
or
less
|
More
than
one
year to
three
years
|
More
than
three
years to
five years |
More
than
five
years
|
Total
|
|||||||||||||||
(In
thousands)
|
||||||||||||||||||||
Loan
commitments to originate mortgage loans
|
$ | 262 | $ | — | $ | — | $ | — | $ | 262 | ||||||||||
Loan
commitments to fund construction loans in process
|
18,017 | — | — | — | 18,017 | |||||||||||||||
Loan
commitments to originate nonresidential mortgage loans
|
12,348 | — | — | — | 12,348 | |||||||||||||||
Loan
commitments to originate consumer loans
|
— | — | — | — | — | |||||||||||||||
Available
home equity and unadvanced lines of credit
|
26,661 | — | — | — | 26,661 | |||||||||||||||
Letters
of
credit
|
760 | — | — | — | 760 | |||||||||||||||
Lease
agreements
|
356 | 1,189 | 1,178 | 540 | 3,263 | |||||||||||||||
Certificates
of
deposit
|
318,627 | 55,230 | 6,875 | — | 380,732 | |||||||||||||||
FHLB
advances
|
15,000 | 132,000 | 25,000 | 55,000 | 227,000 | |||||||||||||||
Total
|
$ | 392,031 | $ | 188,419 | $ | 33,053 | $ | 55,540 | $ | 669,043 |
|
●
|
minimize
the risk of loss of principal or
interest;
|
|
●
|
generate
favorable returns without incurring undue interest rate and credit
risk;
|
|
●
|
manage
the interest rate sensitivity of our assets and
liabilities;
|
|
●
|
meet
daily, cyclical and long term liquidity requirements while complying with
our established policies and regulatory liquidity
requirements;
|
|
●
|
diversify
assets and address maturity or interest repricing imbalances;
and
|
|
●
|
provide
collateral for pledging
requirements.
|
Location
|
Leased
or Owned
|
Year
Acquired
or
Leased
|
Square Footage |
Net
Book Value of
Real
Property
|
||||||||||
(In thousands) | ||||||||||||||
Administrative
Office:
|
||||||||||||||
1233
O.G. Skinner Drive
West
Point, Georgia
|
Owned
|
2005 | 28,000 | $ | 1,235 | |||||||||
Full
Service Branches:
|
||||||||||||||
600
Third Avenue
West
Point, Georgia
|
Owned
|
1965 | 8,922 | 1,497 | ||||||||||
300
Church Street
LaGrange,
Georgia
|
Owned
|
1976 | 2,941 | 1,148 | ||||||||||
3500 20th
Avenue(2)
Valley,
Alabama
|
Owned
|
1963 | 6,000 | 953 | ||||||||||
91
River Road(2)
Valley,
Alabama
|
Owned
|
1989 | 5,300 | 140 | ||||||||||
1605
East University Drive
Auburn,
Alabama
|
Owned
|
2001 | 6,000 | 1,981 | ||||||||||
2320
Moore’s Mill Road (3)
Auburn,
Alabama
|
Owned
|
2002 | 2,300 | 384 | ||||||||||
555
South Davis Road
LaGrange,
Georgia
|
Owned
|
2005 | 15,000 | 2,830 | ||||||||||
701 2nd
Avenue
Opelika,
Alabama
|
Owned
|
2006 | 6,800 | 2,054 | ||||||||||
1684
South College Street
Auburn,
Alabama
|
Owned
|
2006 | 6,000 | 2,846 | ||||||||||
1861
Roanoke Road
LaGrange,
Georgia 30240
|
Leased
|
2007 | 450 | — | ||||||||||
145
Millard Farmer Industrial Blvd.
Newnan,
GA 30263
|
Leased
|
2009 | 11,705 | — | ||||||||||
60
Salbide Avenue
Newnan,
GA 30263
|
Owned/Land
Lease
|
2009 | 2,378 | — | ||||||||||
300
Finance Avenue
Peachtree
City, GA 30269
|
Leased
|
2009 | 6,600 | — | ||||||||||
820
Dixie Street (4)
Carrollton,
GA 30117
|
Leased
|
2010 | 18,500 | — | ||||||||||
406
Alabama Avenue (4)
Bremen,
GA 30110
|
Leased
|
2010 | 5,467 | — | ||||||||||
1114 Pace Street
(5)
Covington,
GA 30014
|
Leased
|
2010 | 200 | — | ||||||||||
Loan
Origination Office:
|
||||||||||||||
5448
Spalding Drive
Building
100, Suite C
Norcross,
Georgia 30092
|
Leased
|
2007 | 3,000 | — |
(1)
|
Lease
expiration dates assume all options to extend lease terms are
exercised.
|
(2)
|
Includes
time period operated by Citizens National Bank prior to the Citizens
acquisition.
|
(3)
|
Includes
time period operated by Eagle Bank prior to the EBA
acquisition.
|
(4)
|
CharterBank
has options to acquire these two branches from the FDIC. The
cost to acquire the two branches has been determined, but it is expected
that the aggregate cost to acquire both branches would be less than $4.0
million.
|
(5)
|
CharterBank
expects to close this branch by April
2011.
|
|
●
|
the
total capital distributions for the applicable calendar year exceed the
sum of the association’s net income for that year to date plus the
association’s retained net income for the preceding two
years;
|
|
●
|
the
association would not be at least adequately capitalized following the
distribution;
|
|
●
|
the
distribution would violate any applicable statute, regulation, agreement
or Office of Thrift Supervision-imposed condition;
or
|
|
●
|
the
association is not eligible for expedited treatment of its
filings.
|
|
●
|
the
association would be undercapitalized following the
distribution;
|
|
●
|
the
proposed capital distribution raises safety and soundness concerns;
or
|
|
●
|
the
capital distribution would violate a prohibition contained in any statute,
regulation or agreement.
|
|
●
|
well-capitalized
(at least 5% leverage capital, 6% Tier 1 risk-based capital and 10% total
risk-based capital);
|
|
●
|
adequately
capitalized (at least 4% leverage capital, 4% Tier 1 risk-based capital
and 8% total risk-based capital);
|
|
●
|
undercapitalized
(less than 8% total risk-based capital, 4% Tier 1 risk-based capital or 3%
leverage capital);
|
|
●
|
significantly
undercapitalized (less than 6% total risk-based capital, 3% Tier 1
risk-based capital or 3% leverage capital);
and
|
|
●
|
critically
undercapitalized (less than 2% tangible
capital).
|
|
●
|
Truth-In-Lending
Act, governing disclosures of credit terms to consumer
borrowers;
|
|
●
|
Home
Mortgage Disclosure Act, requiring financial institutions to provide
information to enable the public and public officials to determine whether
a financial institution is fulfilling its obligation to help meet the
housing needs of the community it
serves;
|
|
●
|
Equal
Credit Opportunity Act, prohibiting discrimination on the basis of race,
creed or other prohibited factors in extending
credit;
|
|
●
|
Fair
Credit Reporting Act, governing the use and provision of information to
credit reporting agencies;
|
|
●
|
Fair
Debt Collection Act, governing the manner in which consumer debts may be
collected by collection agencies;
|
|
●
|
Truth
in Savings Act; and
|
|
●
|
rules
and regulations of the various federal agencies charged with the
responsibility of implementing such federal
laws.
|
|
●
|
Right
to Financial Privacy Act, which imposes a duty to maintain confidentiality
of consumer financial records and prescribes procedures for complying with
administrative subpoenas of financial
records;
|
|
●
|
Electronic
Funds Transfer Act and Regulation E promulgated thereunder, which govern
automatic deposits to and withdrawals from deposit accounts and customers’
rights and liabilities arising from the use of automated teller machines
and other electronic banking
services;
|
|
●
|
Check
Clearing for the 21st
Century Act (also known as “Check 21”), which gives “substitute checks,”
such as digital check images and copies made from that image, the same
legal standing as the original paper
check;
|
|
●
|
The
USA PATRIOT Act, which requires savings banks to, among other things,
establish broadened anti-money laundering compliance programs, and due
diligence policies and controls to ensure the detection and reporting of
money laundering. Such required compliance programs are intended to
supplement existing compliance requirements that also apply to financial
institutions under the Bank Secrecy Act and the Office of Foreign Assets
Control regulations; and
|
|
●
|
The
Gramm-Leach-Bliley Act, which places limitations on the sharing of
consumer financial information by financial institutions with unaffiliated
third parties. Specifically, the Gramm-Leach-Bliley Act requires all
financial institutions offering financial products or services to retail
customers to provide such customers with the financial institution’s
privacy policy and provide such customers the opportunity to “opt out” of
the sharing of certain personal financial information with unaffiliated
third parties.
|
Name
|
Age
|
Position
|
||
Robert
L. Johnson
|
55
|
President,
Chief Executive Officer and Director
|
||
Curtis
R. Kollar
|
57
|
Senior
Vice President and Chief Financial Officer
|
||
Lee
Washam
|
48
|
President
of CharterBank
|
||
William
C. Gladden
|
57
|
Senior
Vice President and Secretary
|
||
Ronald
Warner
|
47
|
Senior
Vice President, Credit Administration and Senior Lending Officer for
CharterBank
|
Name(1)
|
Position(s)
Held With
Charter
Financial
|
Age
|
Director
Since
|
Current
Term
Expires
|
||||
Robert
L. Johnson
|
Chairman
of the Board of Directors, President and Chief Executive
Officer
|
55
|
1986
|
2011
|
||||
David
Z. Cauble, III
|
Director
|
56
|
1996
|
2011
|
||||
Jane
W. Darden
|
Director
|
58
|
1988
|
2012
|
||||
William
B. Hudson
|
Director
|
79
|
1975
|
2013
|
||||
Curti
M. Johnson
|
Director
|
49
|
2007
|
2013
|
||||
Thomas
M. Lane
|
Director
|
54
|
1996
|
2012
|
||||
David
L. Strobel
|
Director
|
57
|
2003
|
2011
|
(1)
|
The
mailing address for each person listed is 1233 O.G. Skinner Dr., West
Point, Georgia 31833. Each of the persons listed as a director
is also a director of CharterBank, as well as First Charter,
MHC.
|
Nominating
and Corporate
Governance
|
Personnel
and Compensation
|
Audit
|
||||
David
Z. Cauble, III
|
X*
|
X
|
X*
|
|||
Jane
W. Darden
|
X
|
X
|
||||
William
B. Hudson
|
X
|
X
|
||||
Thomas
M. Lane
|
X
|
X*
|
X
|
|||
David
L. Strobel
|
X
|
X
|
||||
Meetings
in Fiscal 2009
|
1
|
3
|
6
|
*
|
Denotes
committee chair as of September 30,
2009.
|
|
●
|
the
compensation mix is not overly weighted toward annual incentives. The
target performance-based cash incentive for meeting the pretax net income
budget, expressed as a percent of annual base salary, is 30% for the Chief
Executive Officer and 17.5% for the four other executive officers of
Charter Financial. Employees who are not officers do not participate in
the performance-based cash incentive
plan.
|
|
●
|
Charter
Financial is not engaged in higher risk activities such as trading
securities and derivative
instruments.
|
|
●
|
loan
originations and investment purchases, which represent the higher risk
activities of Charter Financial, must be in compliance with policies
established by the Board of Directors and are subject to procedures that
monitor compliance with the
policies.
|
|
●
|
no
significant portion of Charter Financial’s earnings is derived from one
particular type of activity.
|
|
●
|
the
thresholds that have to be met for payment of performance-based cash
incentives are reviewed and approved annually by the Compensation
Committee. The thresholds are considered to be reasonable. The Committee
also has the authority to increase or deny payments that otherwise would
be called for by the performance-based cash incentive
plan.
|
|
●
|
compliance
and ethical behavior are integral factors in all performance assessments.
All officers, directors and employees of Charter Financial must attest
annually as to their compliance with Charter Financial’s Code of Business
Conduct and Ethics.
|
|
●
|
Attract,
retain, motivate and reward highly qualified and productive executives by
providing overall compensation that is competitive with that offered by
our competitors;
|
|
●
|
Motivate
each individual to perform, to the best of his/her ability, in order to
achieve targeted goals for the individual and Charter Financial
Corporation;
|
|
●
|
Improve
Charter Financial Corporation’s performance, balancing risk-taking with
standards of safety and soundness;
|
|
●
|
Establish
compensation levels that provide the greatest potential rewards for
positions of greatest responsibility within an equitable
framework;
|
|
●
|
Promote
the long-term increase in the value of Charter Financial Corporation by
providing a portion of compensation in the form of our common stock that
vests over a period of
years; and
|
|
●
|
Analyze
compensation, taking into account all compensation elements, to determine
the appropriate mix of compensation that will encourage superior
performance and create alignment with the interests of our
shareholders.
|
|
●
|
To
maximize long-term shareholder value by reinforcing achievement of key
operating goal(s) as defined in our business plan and commitment to
achievement of long-term strategic
objectives.
|
|
●
|
To
foster teamwork and cooperation, yet reinforce the importance of
individual
performance.
|
|
●
|
To
reward measureable, demonstrated results and require a minimum level of
performance before paying
incentives.
|
|
●
|
the
failure of Charter Financial Corporation to appoint or re-appoint or elect
or re-elect him to his executive position or, if he is also a director,
the failure of the shareholders to elect or re-elect him as a member of
the Board of
Directors;
|
|
●
|
a
material reduction in duties, functions or responsibilities not cured
after 30 days notice; involuntary relocation of the executive’s principal
place of employment to a location more than 35 miles from Charter
Financial Corporation’s principal office in West Point, Georgia, and more
than 35 miles from the executive’s principal
residence;
|
|
●
|
any
reduction in base salary in effect from time to time or any change in the
terms of any compensation or benefits programs in which he participates,
which individually, or together with other changes, has a material adverse
effect on the aggregate value of his total compensation package;
or
|
|
●
|
other
material breach of contract by Charter Financial Corporation or
CharterBank which is not cured within 30
days.
|
|
●
|
a
loss of title or position held immediately prior to the change of control
or failure to vest in the executive the functions, duties or
responsibilities customarily associated with such position that is not
cured within 30 days after notice from the
executive;
|
|
●
|
any
reduction in base salary in effect from time to time or any change in the
terms of any compensation or benefits programs in which the executive
participates, which individually, or together with other changes, has a
material adverse effect on the aggregate value of his total compensation
package;
|
|
●
|
an
involuntary relocation of his principal place of employment to a location
more than 35 miles from CharterBank’s principal office on the day before
the change of control and more than 35 miles from the officer’s principal
residence;
or
|
|
●
|
any
other material breach of contract which is not cured within 30
days.
|
SUMMARY
COMPENSATION TABLE
|
||||||||||||||||||||||||||||||||||
Name
and principal position
|
Year
|
Salary ($)(1)
|
Bonus
($)
|
Stock
awards ($)(3)
|
Option
awards ($)(4)
|
Non-equity
incentive
plan
compensation
($)
|
Change
in
pension
value
and
nonqualified
deferred
compensation
earnings ($)(5)
|
All
other
compensation
($)(6)
|
Total
($)
|
|||||||||||||||||||||||||
Robert
L. Johnson
President,
Chief Executive Officer and Director
|
2009
|
$ | 315,311 | (2) | $ | — | $ | — | $ | 45,140 | $ | — | $ | 76,955 | $ | 136,357 | $ | 573,763 | ||||||||||||||||
Curtis
R. Kollar
Senior
Vice President and Chief Financial Officer
|
2009
|
147,854 | — | — | 19,444 | — | 15,868 | 39,385 | 222,551 | |||||||||||||||||||||||||
Lee
Washam
President
of Charter Bank
|
2009
|
189,302 | — | — | 18,300 | — | 33,661 | 64,726 | 305,989 | |||||||||||||||||||||||||
William
C. Gladden
Senior
Vice President
|
2009
|
94,605 | — | — | 10,370 | — | — | 17,069 | 122,044 | |||||||||||||||||||||||||
Ronald
Warner
Senior
Vice President, Credit Administration and Senior Lending
Officer
|
2009
|
109,567 | — | — | 7,320 | — | — | 8,224 | 125,111 |
(1)
|
Includes
$14,938, $16,012, $10,048, $12,786 and $2,191 of elective deferrals to
Charter Financial Corporation’s 401(k) plan by Messrs. Johnson, Kollar,
Washam, Gladden and Warner,
respectively.
|
(2)
|
Includes
director fees in the amount of
$37,900.
|
(3)
|
No
stock awards were granted in the 2009 fiscal
year.
|
(4)
|
Reflects
the grant date fair value of option awards that had been granted under the
Charter Financial Corporation 2001 Stock Option Plan on January 27,
2009. The fair value is the amount recognized for financial
statement reporting purposes in accordance with Financial Accounting
Standards Board (“FASB”) Accounting Standards Codification Topic 718,
Stock Compensation (formerly FASB Statement 123R). The option
valuations are based upon the Black-Scholes valuation model using the
following assumptions for the awards in 2009: (1) expected term
of option, 8 years; (2) annual volatility of common stock, 42.13%; (3)
expected dividend yield of common stock, 11.75%; and (4) risk-free
interest rate, 3.21% per annum, which results in a valuation of $.61 per
option.
|
(5)
|
Reflects
change in value in Salary Continuation Agreements
only.
|
(6)
|
All
other compensation was comprised of the following elements for the year
ended September 30, 2009:
|
Johnson
|
Kollar
|
Washam
|
Gladden
|
Warner
|
||||||||||||||||
Employee
Stock Ownership Plan
|
$ | 16,850 | $ | 14,905 | $ | 16,130 | $ | 11,119 | $ | 6,032 | ||||||||||
Benefit
Restoration Plan
|
28,052 | — | — | — | — | |||||||||||||||
Life
Insurance Premiums (1)
|
875 | 891 | 332 | 891 | 239 | |||||||||||||||
Dividends
on Restricted Stock(2)
|
80,229 | 23,181 | 38,635 | 3,091 | 1,545 | |||||||||||||||
Automobile
|
3,206 | — | 3,900 | — | — | |||||||||||||||
Country
Club Dues
|
— | — | 2,322 | 1,560 | — | |||||||||||||||
Executive
Health Benefits
|
6,737 | — | 2,999 | — | — | |||||||||||||||
Long-term
Disability Premiums
|
408 | 408 | 408 | 408 | 408 | |||||||||||||||
136,357 | 39,385 | 64,726 | 17,069 | 8,224 |
(1)
|
Reflects
payments for life insurance reported as taxable compensation on the Named
Executive Officer’s Form W-2.
|
(2)
|
Reflects
dividends and interest paid on shares of restricted common stock that
vested during 2009, which we reported as taxable compensation on the Named
Executive’s Officer’s Form W-2.
|
Estimated
Future Payouts
under
Non-Equity Incentive
Plan
Awards
|
All
other
stock
awards:
number
of
shares
or
units
(#)
|
All
other
option
awards:
number
of
securities
underlying
options
(#)
|
Exercise
or
base
price
of
option
awards
($/Sh)
|
Grant
Date
Fair
Value of
Stock
and
Option
Awards (2)
|
||||||||||||||||||||||
Name
|
Grant
date
|
Threshold
|
Target
(1)
|
|||||||||||||||||||||||
Robert
L. Johnson
|
1/27/2009
|
85,306 | 170,612 | - | 74,000 | 11.00 | $ | 45,140 | ||||||||||||||||||
Curtis
R. Kollar
|
1/27/2009
|
36,455 | 72,910 | - | 31,875 | 11.00 | 19,444 | |||||||||||||||||||
Lee
Washam
|
1/27/2009
|
26,394 | 52,788 | - | 30,000 | 11.00 | 18,300 | |||||||||||||||||||
William
C. Gladden
|
1/27/2009
|
17,611 | 35,222 | - | 17,000 | 11.00 | 10,370 | |||||||||||||||||||
Ronald
Warner
|
1/27/2009
|
22,329 | 44,658 | - | 12,000 | 11.00 | 7,320 |
(1)
|
The
non-equity incentive compensation plan does not provide a maximum award
limit. Achievement above the target level results in a
proportionately higher incentive compensation
award.
|
(2)
|
Options
were valued at $.61 per option using the Black-Scholes valuation
method. For further information on the determination of option
value, see footnote (4) to the Summary Compensation
Table.
|
OUTSTANDING EQUITY AWARDS AT SEPTEMBER 30, 2009(1) | ||||||||||||||||||||||||||||||||||
Option awards | Stock awards | |||||||||||||||||||||||||||||||||
Name
|
Number of securities underlying unexercised options (#) exercisable |
Number
of
securities
underlying
unexercised
options
(#)
unexercisable
(2)
|
Equity
incentive
plan
awards:
number
of
securities
underlying
unexercised
earned
options
(#)
|
Option
exercise
price
($)
|
Option
expiration
date
|
Number
of
shares
or units
of
stock that
have
not
vested
(#)
|
Market
value of
shares
or units of
stock
that have
not
vested
($)(8)
|
Equity
incentive
plan
awards:
number
of
unearned
shares,
units
or other
rights
that have
not
vested (#)
|
Equity
incentive
plan
awards:
market
or
payout
value
of
unearned
shares,
units
or
other rights
that
have not
vested
($)
|
|||||||||||||||||||||||||
Robert
L. Johnson
|
— | 74,000 | — | $ | 11.00 |
1/27/19
|
20,766 | (3) | $ | 254,384 | — | — | ||||||||||||||||||||||
Curtis
R. Kollar
|
— | 31,875 | — | $ | 11.00 |
1/27/19
|
1,000 | (4) | $ | 12,250 | — | — | ||||||||||||||||||||||
Lee
Washam
|
— | 30,000 | — | $ | 11.00 |
1/27/19
|
6,500 | (5) | $ | 79,625 | — | — | ||||||||||||||||||||||
William
C. Gladden
|
— | 17,000 | — | $ | 11.00 |
1/27/19
|
200 | (6) | $ | 2,450 | — | — | ||||||||||||||||||||||
Ronald
Warner
|
— | 12,000 | — | $ | 11.00 |
1/27/19
|
200 | (7) | $ | 2,450 | — | — |
(1)
|
All
equity awards reflected in this table were granted pursuant to Charter
Financial Corporation’s 2001 Recognition and Retention Plan or 2001 Stock
Option Plan, described above.
|
(2)
|
All
unvested stock options will vest on January 27,
2014.
|
(3)
|
5,192,
5,191, 5,192 and 5,191 restricted stock awards will vest on July 27, 2010,
July 27, 2011, July 27, 2012 and July 27, 2013,
respectively.
|
(4)
|
All
restricted stock awards will vest on September 27,
2010.
|
(5)
|
2,500,
2,500 and 1,500 restricted stock awards will vest on January 30, 2011,
January 30, 2012 and September 27, 2010,
respectively.
|
(6)
|
All
restricted stock awards will vest on September 27,
2010.
|
(7)
|
All
restricted stock awards will vest on September 27,
2010.
|
(8)
|
Based
on the $12.25 per share trading price of our common stock on September 30,
2009.
|
OPTION
EXERCISES AND STOCK VESTED FOR THE YEAR ENDED
SEPTEMBER
30, 2009
|
||||||||||||||||
Option
awards
|
Stock
awards
|
|||||||||||||||
Name
|
Number
of shares
acquired on exercise (#) |
Value
realized on
exercise ($) |
Number
of shares
acquired on vesting (#) |
Value
realized on
vesting ($) (1) |
||||||||||||
Robert
L. Johnson
|
— | — | 5,191 | $ | 73,972 | |||||||||||
Curtis
R. Kollar
|
— | — | 1,500 | 21,375 | ||||||||||||
Lee
Washam
|
— | — | 2,500 | 35,625 | ||||||||||||
William
C. Gladden
|
— | — | 200 | 2,850 | ||||||||||||
Ronald
Warner
|
— | — | 100 | 1,425 |
(1)
|
Based
on the $14.25 per share trading price of our common stock on the vesting
date, which was August 1, 2009.
|
PENSION
BENEFITS AT AND FOR THE YEAR ENDED SEPTEMBER 30,
2009
|
||||||||||||||
Name
|
Plan
name
|
Number
of years
credited service (#) |
Present
value of
accumulated benefit ($) |
Payments
during last
fiscal year ($) |
||||||||||
Robert
L. Johnson
|
Salary
Continuation Agreement
|
— | 76,955 | — | ||||||||||
Curtis
R. Kollar
|
Salary
Continuation Agreement
|
— | 15,868 | — | ||||||||||
Lee
Washam
|
Salary
Continuation Agreement
|
— | 33,661 | — |
Nonqualified
Deferred Compensation At And For The Year Ended September 30,
2009
|
||||||||||||||||||||
Name
|
Executive
contributions in last fiscal year ($) (1) |
Registrant
contributions in last fiscal year ($) (1) |
Aggregate
earnings in last fiscal year ($) (2) |
Aggregate
withdrawals/ distributions ($) |
Aggregate
balance
at last fiscal year end ($) |
|||||||||||||||
Robert
L. Johnson
|
— | $ | 28,052 | 10,862 | — | $ | 822,116 |
(1)
|
Contributions
included in the “Registrant contributions in last fiscal year” column are
included as compensation for Robert L. Johnson in the Summary Compensation
Table.
|
(2)
|
Amounts
included in the “Aggregate earnings in last fiscal year” are not included
as compensation for Mr. Johnson in the Summary Compensation Table because
such earnings are not “above
market.”
|
Robert
L. Johnson
|
||||||||||||||||||||||||
Type
of Benefit
|
Voluntary
Resignation
or Retirement |
Termination
without
Cause |
Termination
for Cause
|
Termination
for Good
Reason before or after Change in Control |
Disability
|
Death
|
||||||||||||||||||
Salary
Continuation Plan
|
$ | — | $ | — | $ | — | $ | — | $ | 1,258,467 | (2) | $ | — | |||||||||||
Benefit
Restoration Plan
|
$ | 822,116 | (3) | $ | 822,116 | (3) | $ | 822,116 | (3) | $ | 822,116 | (3) | $ | 822,116 | (3) | $ | 822,116 | (3) | ||||||
2001
Stock Option Plan
|
$ | $ | ― | $ | ― | $ | 92,500 | (5) | $ | 92,500 | (5) | $ | 92,500 | (5) | ||||||||||
2001
Recognition and Retention Plan
|
$ | 254,384 | (6) | $ | — | $ | — | $ | 254,384 | (6) | $ | 254,384 | (6) | $ | 254,384 | (6) | ||||||||
Employment
Agreement
|
$ | — | $ | 2,181,514 | (7) | $ | — | $ | 2,041,826 | (8) | $ | 138,706 | (9) | $ | — | |||||||||
Curtis
R. Kollar
|
||||||||||||||||||||||||
Type
of Benefit
|
Voluntary
Resignation
|
Termination
without Cause
|
Termination
for Cause
|
Termination
for Good Reason before or after Change in Control
|
Disability
|
Death
|
||||||||||||||||||
Salary
Continuation Plan
|
$ | 15,868 | (1) | $ | 15,868 | (1) | $ | ― | $ | 15,868 | (1) | $ | 1,108,905 | (2) | $ | 15,868 | (4) | |||||||
2001
Stock Option Plan
|
$ | $ | ― | $ | ― | $ | 39,844 | (5) | $ | 39,844 | (5) | $ | 39,844 | (5) | ||||||||||
2001
Recognition and Retention Plan
|
$ | 12,250 | (6) | $ | ― | $ | ― | $ | 12,250 | (6) | $ | 12,250 | (6) | $ | 12,250 | (6) | ||||||||
Change
in Control Agreement
|
$ | ― | $ | 210,104 | (10) | $ | ― | $ | 210,104 | (10) | $ | 73,927 | (9) | $ | ― | |||||||||
Lee
Washam
|
||||||||||||||||||||||||
Type
of Benefit
|
Voluntary
Resignation
|
Termination
without Cause
|
Termination
for Cause
|
Termination
for Good Reason before or after Change in Control
|
Disability
|
Death
|
||||||||||||||||||
Salary
Continuation Plan
|
$ | 33,361 | (1) | $ | 33,361 | (1) | $ | — | $ | 33,361 | (1) | $ | 1,419,765 | (2) | $ | 33,361 | (4) | |||||||
2001
Stock Option Plan
|
$ | ― | $ | ― | $ | ― | $ | 37,500 | (5) | $ | 37,500 | (5) | $ | 37,500 | (5) | |||||||||
2001
Recognition and Retention Plan
|
$ | ― | $ | ― | $ | ― | $ | 79,625 | (6) | $ | 79,625 | (6) | $ | 79,625 | (6) | |||||||||
Change
in Control Agreement
|
$ | ― | $ | 274,938 | (10) | $ | ― | $ | 274,938 | (10) | $ | 94,651 | (9) | $ | ― | |||||||||
William
C. Gladden
|
||||||||||||||||||||||||
Type
of Benefit
|
Voluntary
Resignation
|
Termination
without Cause
|
Termination
for Cause
|
Termination
for Good Reason before or after Change in Control
|
Disability
|
Death
|
||||||||||||||||||
2001
Stock Option Plan
|
$ | $ | ― | $ | ― | $ | 21,250 | (5) | $ | 21,250 | (5) | $ | 21,250 | (5) | ||||||||||
2001
Recognition and Retention Plan
|
$ | 2,450 | (6) | $ | ― | $ | ― | $ | 2,450 | (6) | $ | 2,450 | (6) | $ | 2,450 | (6) | ||||||||
Change
in Control Agreement
|
$ | ― | $ | 134,535 | (10) | $ | ― | $ | 134,535 | (10) | $ | 47,303 | (9) | $ | ― | |||||||||
Ronald
Warner
|
||||||||||||||||||||||||
Type
of Benefit
|
Voluntary
Resignation
|
Termination
without
Cause
|
Termination
for Cause
|
Termination
for Good Reason before or after Change in Control
|
Disability
|
Death
|
||||||||||||||||||
2001
Stock Option Plan
|
$ | — | $ | — | $ | — | $ | 15,000 | (5) | $ | 15,000 | (5) | $ | 15,000 | (5) | |||||||||
2001
Recognition and Retention Plan
|
$ | — | $ | — | $ | — | $ | 2,450 | (6) | $ | 2,450 | (6) | $ | 2,450 | (6) |
(1)
|
The
Salary Continuation Plan provides an early termination benefit if an
executive terminates employment after completing ten years of service but
before attaining age 62 for a reason other than death, disability or
termination for cause. Each of Messrs. Johnson, Kollar and
Gladden are entitled to an early termination benefit as of September 30,
2009. The early termination benefit is equal to the accrual
balance as of the last day of the year preceding the year of
termination. The benefit is payable over 180 months commencing
in the month after the executive attains age 65. For Mr.
Johnson only, the amount of his benefit is reduced by the amount of the
benefit payable under the Benefit Restoration Plan, and consequently he is
not entitled to a benefit. Messrs. Gladden and Warner do not
participate in the Salary Continuation Plan. Amounts shown have
not been discounted to present
value.
|
(2)
|
The
Salary Continuation Plan provides a disability benefit equal to 50% of the
average of the executive’s three years of base salary, payable monthly for
15 years, with the first payment commencing in the month after the
executive’s disability. Amounts shown have not been discounted
to present value. For Mr. Johnson only, the amount of his
benefit is reduced by the amount of the benefit payable under the Benefit
Restoration Plan.
|
(3)
|
As
of September 30, 2009, the Benefit Restoration Plan provides that upon a
termination of service the executive will receive a single lump sum
payment equal to the amount accrued for the executive. Mr.
Johnson is the sole participant in the
plan.
|
(4)
|
The
Salary Continuation Plan provides a death benefit equal to the executive’s
accrual balance as of the last day of the plan year preceding the date of
death. The benefit is payable over 180 months commencing in the
month after the executive’s death. Amounts shown have not been
discounted to present value. For Mr. Johnson only, the amount
of his benefit is reduced by the amount of the benefit payable under the
Benefit Restoration Plan and consequently he is not entitled to a
benefit.
|
(5)
|
As
of September 30, 2009, none of the stock option awards have
vested. For Messrs. Johnson, Kollar, Washam, Gladden and
Warner, 74,000, 31,875, 30,000, 17,000 and 12,000 stock options,
respectively, will vest in the event of a change in control or the
executive’s death, disability or normal (but not early)
retirement. The amount shown represents the difference between
the fair market value of the stock as of September 30, 2009 ($12.25) and
the exercise price ($11) times the number of stock
options.
|
(6)
|
As
of September 30, 2009, for Messrs. Johnson, Kollar, Washam, Gladden and
Warner, 20,766, 1,000, 6,500, 200, 200 shares of restricted stock,
respectively, will vest in the event of a change in control, death,
disability or retirement. The restricted shares of common stock
granted under the plan were valued at $12.25 per share, the share price as
of September 30, 2009. Messrs. Johnson, Kollar and Gladden
satisfy the plan’s definition of retirement and consequently will be fully
vested upon voluntary resignation or
retirement.
|
(7)
|
Amount
represents the aggregate value of the payments and benefits Mr. Johnson
would be entitled to receive under his employment agreement in the event
of his involuntary termination of employment (other than an involuntary
termination of employment following a change in control) during the term
of his employment agreement. Under the employment agreement, in
the event of a termination without cause, Mr. Johnson would be entitled to
receive a lump sum cash payment equal to three times the sum of his five
year average of Form W-2 compensation, payable within 30 days of
termination.
|
(8)
|
Amount
represents the value of the payments and benefits Mr. Johnson would be
entitled to receive under his employment agreement in the event of his
involuntary termination of employment following a change in control of the
corporation. Such amount was reduced in order to avoid an
“excess parachute payment” under Section 280G of the
Code. Under the employment agreement, in the event of a
termination for “good reason,” Mr. Johnson would be entitled to receive a
lump sum cash payment equal to three times the sum of his five year
average of Form W-2 compensation, payable within 30 days of termination,
subject to reduction to avoid an “excess parachute payment” under Section
280G of the Code.
|
(9)
|
Amount
represents the gross benefit payable to Mr. Johnson upon termination
(whether before or after a change in control) due to disability and to
Messrs. Kollar, Washam, Gladden and Warner in the event of a termination
due to disability following a change in control of the corporation, which
is 50% of base salary for up to six
months.
|
(10)
|
Amount
represents the value of the payments and benefits Messrs. Kollar, Washam
and Gladden would be entitled to receive under their change in control
agreements in the event of either their involuntary termination of
employment or termination for good reason following a change in control of
the corporation. Such amount is subject to reduction in order
to avoid an “excess parachute payment” under Section 280G of the Code;
however, the amount of the payments were not required to be reduced
pursuant to Section 280G of the Code. Under the change in
control agreements, each executive would be entitled to receive (i) a lump
sum cash payment equal to one times the sum of the executive’s salary,
bonus and short and long-term cash compensation payable in the year prior
to the year of termination, payable within 30 days of termination, and
(ii) continued life, health, dental, accident and long-term disability
insurance for one year, with the executive paying his share of the
employee premiums.
|
DIRECTOR
COMPENSATION TABLE FOR THE YEAR ENDED SEPTEMBER 30,
2009
|
||||||||||||||||||||||||||||
Name
|
Fees
earned or
paid in cash ($) |
Stock
awards
($)(1)
|
Option
awards
($) (1),
(2)
|
Non-equity
incentive plan compensation ($) |
Change
in
pension value and nonqualified deferred compensation earnings ($) |
All
other
compensation ($)(9) |
Total
($)
|
|||||||||||||||||||||
Jane
W. Darden
|
$ | 43,200 | — | (3) | 6,710 | (3) | — | — | $ | 1,986 | $ | 51,896 | ||||||||||||||||
Thomas
M. Lane
|
42,400 | — | (4) | 5,246 | (4) | — | — | 1,785 | 49,431 | |||||||||||||||||||
Curti
M. Johnson
|
39,700 | — | (5) | 3,050 | (5) | — | — | — | 42,750 | |||||||||||||||||||
David
Z. Cauble, III
|
42,700 | — | (6) | 6,710 | (6) | — | — | 1,888 | 51,298 | |||||||||||||||||||
William
B. Hudson
|
40,500 | — | (7) | 6,710 | (7) | — | — | 1,420 | 48,630 | |||||||||||||||||||
David
L. Strobel
|
41,100 | — | (8) | 4,880 | (8) | — | — | 1,940 | 47,920 |
(1)
|
No
stock awards were granted to directors in fiscal
2009.
|
(2)
|
Reflects
the grant date fair value of option awards that had been granted under the
Charter Financial Corporation 2001 Stock Option Plan on January 27, 2009,
which was $.61 per option. The value was determined under the
Black-Scholes valuation model using the following assumptions for the
awards repriced in 2009: (1) expected term of option, 10 years; (2) annual
volatility of common stock, 42.13%; (3) expected dividend yield of common
stock, 11.75%; and (4) risk-free interest rate, 3.21% per
annum.
|
(3)
|
At
September 30, 2009, Ms. Darden had 11,000 stock options outstanding and
400 unvested shares of restricted common
stock.
|
(4)
|
At
September 30, 2009, Mr. Lane had 8,600 stock options outstanding and 400
unvested shares of restricted common
stock.
|
(5)
|
At
September 30, 2009, Mr. Johnson had 5,000 stock options outstanding and no
unvested shares of restricted common
stock.
|
(6)
|
At
September 30, 2009, Mr. Cauble had 11,000 stock options outstanding and
400 unvested shares of restricted common
stock.
|
(7)
|
At
September 30, 2009, Mr. Hudson had 11,000 stock options outstanding and
400 unvested shares of restricted common
stock.
|
(8)
|
At
September 30, 2009, Mr. Strobel had 8,000 stock options outstanding and
400 unvested shares of restricted common
stock.
|
(9)
|
Represents
income recognized when dividends on stock awards are distributed when the
underlying award vests and, for all directors other than Messrs. Johnson
and Hudson, payments for life insurance reported as taxable compensation
on the individual’s Form 1099.
|
Name
|
Position
|
Nature
Of
Transaction
(1)
|
Largest
Aggregate
Balance
from 10/01/08 to
9/30/09
|
Interest
Rate
|
Principal
Balance
9/30/09
|
Principal
Paid
10/01/08
to
9/30/09
|
Interest
Paid
10/01/08
to
9/30/09
|
|||||||||||||||
Robert
L. Johnson
|
Officer/CEO
|
S/F
Mortgage
|
$ | 718,580.90 | 4.625 | % | $ | 718,579.86 | $ | 1.04 | $ | 30,464.79 | ||||||||||
Curtis
R. Kollar
|
Officer/CFO
|
S/F
Mortgage
|
649,346.71 | 5.950 | 615,732.18 | 31,279.99 | 40,593.33 | |||||||||||||||
Lee
W. Washam
|
Officer/President
|
S/F
Mortgage
|
251,117.41 | 4.750 | — | 251,117.41 | 4,068.77 |
Name
|
Position
|
Nature
Of
Transaction
(1)
|
Largest
Aggregate
Balance
from 10/01/07 to
9/30/08
|
Interest
Rate
|
Principal
Balance
9/30/08
|
Principal
Paid
10/01/07
to
9/30/08
|
Interest
Paid
10/01/07
to
9/30/08
|
|||||||||||||||
Robert
L. Johnson
|
Officer/CEO
|
S/F
Mortgage
|
$ | 718,757.04 | 4.625 | % | $ | 718,580.90 | $ | 176.14 | $ | 36,006.52 | ||||||||||
Curtis
R. Kollar
|
Officer/CFO
|
S/F
Construction
|
498,400.00 | 6.875 | — | 498,400.00 | 11,995.06 | |||||||||||||||
Curtis
R. Kollar
|
Officer/CFO
|
S/F
Mortgage
|
126,662.61 | 5.125 | — | 126,662.61 | 4,162.29 | |||||||||||||||
Curtis
R. Kollar
|
Officer/CFO
|
S/F
Mortgage
|
650,000.00 | 5.950 | 649,346.71 | 653.29 | 3,330.35 | |||||||||||||||
Lee
W. Washam
|
Officer/President
|
S/F
Mortgage
|
295,911.37 | 4.750 | 251,117.41 | 44,793.96 | 15,433.72 |
Name
|
Position
|
Nature
Of
Transaction
(1)
|
Largest
Aggregate
Balance
from 10/01/06 to
9/30/07
|
Interest
Rate
|
Principal
Balance
9/30/07
|
Principal
Paid
10/01/06
to
9/30/07
|
Interest
Paid
10/01/06
to
9/30/07
|
|||||||||||||||
Robert
L. Johnson
|
Officer/CEO
|
S/F
Mortgage
|
$ | 718,823.17 | 4.625 | % | $ | 718,757.04 | $ | 66.21 | $ | 33,244.25 | ||||||||||
Curtis
R. Kollar
|
Officer/CFO
|
S/F
Construction
|
5,008.00 | 6.875 | 5,008.00 | — | — | |||||||||||||||
Curtis
R. Kollar
|
Officer/CFO
|
S/F
Mortgage
|
134,673.14 | 5.125 | 126,662.61 | 8,708.09 | 6,735.25 | |||||||||||||||
Lee
W. Washam
|
Officer/President
|
S/F
Mortgage
|
299,187.49 | 4.750 | 295,911.37 | 4,088.62 | 14,223.88 |
●
|
non-employee
directors in the aggregate may not receive more than 30% of the options
and restricted stock awards authorized under the
plan;
|
|
●
|
any
one non-employee director may not receive more than 5% of the options and
restricted stock awards authorized under the
plan;
|
|
●
|
any
officer or employee may not receive more than 25% of the options and
restricted stock awards authorized under the
plan;
|
|
●
|
any
tax-qualified employee stock benefit plans and management stock benefit
plans, in the aggregate, may not acquire more than 10% of the number of
shares sold in the offering, unless CharterBank has tangible capital of
10% or more, in which case any tax-qualified employee stock benefit plans
and management stock benefit plans, may acquire up to 12% of the number of
shares sold in the offering;
|
|
●
|
stock
options and restricted stock awards may not vest more rapidly than 20% per
year, beginning on the first anniversary of shareholder approval of the
plan;
|
|
●
|
accelerated
vesting is not permitted except for death, disability or upon a change in
control of CharterBank or Charter Financial;
and
|
●
|
our
executive officers or directors must exercise or forfeit their options in
the event that CharterBank becomes critically undercapitalized, is subject
to enforcement action or receives a capital
directive.
|
Total
Shares to be Held
|
||||||||||||||||
Name
of Beneficial Owner
|
Number
of
Shares Held at July 31, 2010 |
Shares
Proposed
to be Purchased in the Offering (1) |
Number
of Shares
|
Percentage
of Shares Outstanding (2)
|
||||||||||||
Robert
L. Johnson
|
134,711 | 15,000 | 149,711 | * | ||||||||||||
David
Z. Cauble, III
|
14,850 | 5,000 | 19,850 | * | ||||||||||||
Jane
W. Darden
|
25,750 | 4,000 | 29,750 | * | ||||||||||||
William
B. Hudson
|
16,050 | 1,000 | 17,050 | * | ||||||||||||
Curti
M. Johnson
|
56,017 | 1,000 | 57,017 | * | ||||||||||||
Thomas
M. Lane
|
17,349 | 2,500 | 19,849 | * | ||||||||||||
David
L. Strobel
|
7,095 | 1,000 | 8,095 | * | ||||||||||||
Curtis
R. Kollar
|
68,450 | 4,000 | 72,450 | * | ||||||||||||
Lee
Washam
|
62,950 | 10,000 | 72,950 | * | ||||||||||||
William
C. Gladden
|
21,932 | 1,000 | 22,932 | * | ||||||||||||
Ronald
Warner
|
4,008 | 500 | 4,508 | * | ||||||||||||
Total
for Directors and Officers
(11 persons)
|
429,162 | 45,000 | 474,162 | 2.5 | % |
*
|
Less
than 1%.
|
(1)
|
Includes
proposed subscriptions, if any, by associates. Assumes a per share
purchase price of $10.52, the maximum purchase
price.
|
(2)
|
Percentages
are based on 18,672,361 total shares
outstanding.
|
|
●
|
the
present and projected results and financial condition of Charter
Financial;
|
|
●
|
the
economic and demographic conditions in Charter Financial’s existing market
area;
|
|
●
|
certain
historical, financial and other information relating to Charter
Financial;
|
|
●
|
a
comparative evaluation of the operating and financial characteristics of
Charter Financial with those of ten similarly situated publicly traded
financial institutions in the mutual holding company structure (the “peer
group”);
|
|
●
|
the
range of the aggregate size of the offering of the shares of common
stock;
|
|
●
|
the
impact of the stock offering on Charter Financial’s stockholders’ equity
and earnings potential;
|
|
●
|
the
proposed dividend policy of Charter Financial;
and
|
|
●
|
the
trading market for securities of comparable institutions and general
conditions in the market for such
securities.
|
Company
Name and Ticker Symbol
|
Exchange
|
Headquarters
|
Total
Assets
|
||||||
(in
millions)
|
|||||||||
Alliance
Bank (ALLB)
|
NASDAQ
|
Broomall,
PA
|
$ | 472 | |||||
Clifton
Savings Bancorp (CSBK)
|
NASDAQ
|
Clifton,
NJ
|
1,060 | ||||||
Greene
County Bancorp (GCBC)
|
NASDAQ
|
Catskill,
NY
|
479 | ||||||
Kearny
Financial Corp (KRNY)
|
NASDAQ
|
Fairfield,
NJ
|
2,252 | ||||||
Lake
Shore Bancorp (LSBK)
|
NASDAQ
|
Dunkirk,
NY
|
432 | ||||||
Meridian
Financial Services (EBSB)
|
NASDAQ
|
East
Boston, MA
|
1,719 | ||||||
Prudential
Bancorp (PBIP)
|
NASDAQ
|
Philadelphia,
PA
|
508 | ||||||
Rockville
Financial (RCKB)
|
NASDAQ
|
Vernon
Rockville, CT
|
1,560 | ||||||
Roma
Financial Group (ROMA)
|
NASDAQ
|
Robbinsville,
NJ
|
1,370 | ||||||
SI
Financial Group, Inc. (SIFI)
|
NASDAQ
|
Willimantic,
CT
|
882 |
Selected Pricing Ratios on a Fully-Converted
Basis
|
||||||||||||||||
Price-to-earnings multiple (1)
|
Core Price-to-earnings
multiple (1)
|
Price-to-book
value ratio
|
Price-to-tangible
book value ratio
|
|||||||||||||
Charter Financial (on a pro forma basis,
assuming completion of the stock
offering)
|
||||||||||||||||
Maximum
|
18.26 | x | 123.62 | x | 74.73 | % | 76.31 | % | ||||||||
Midpoint
|
16.31 | x | 130.77 | x | 70.30 | % | 71.99 | % | ||||||||
Minimum
|
14.25 | x | 141.87 | x | 65.25 | % | 66.87 | % | ||||||||
Valuation of peer group companies (on
an
historical
basis)
|
||||||||||||||||
Averages
|
23.54 | x | 24.55 | x | 75.89 | % | 77.17 | % | ||||||||
Medians
|
25.38 | x | 24.25 | x | 76.40 | % | 80.41 | % |
(1)
|
Price-to-earnings
multiples calculated by RP Financial in the independent appraisal are
based on trailing twelve month earnings through March 31,
2010. Core price-to-earnings are based on estimates by RP
Financial of recurring earnings, which are different than those presented
in “Pro Forma Data.”
|
Price-to-earnings
multiple (1)
|
Price-to-book
value ratio
|
Price-to-tangible
book value ratio
|
||||||||||||||||||||||
4,281,060
Shares Sold
|
5,961,573
Shares Sold
|
4,281,060
Shares Sold
|
5,961,573
Shares Sold
|
4,281,060
Shares Sold
|
5,961,573
Shares Sold
|
|||||||||||||||||||
Charter Financial (on a pro forma basis,
assuming completion of the stock
offering)
|
||||||||||||||||||||||||
Maximum
|
21.97 | x | 21.34 | x | 133.20 | % | 119.44 | % | 138.09 | % | 123.50 | % | ||||||||||||
Midpoint
|
19.21 | x | 18.72 | x | 119.92 | % | 108.67 | % | 124.66 | % | 112.54 | % | ||||||||||||
Minimum
|
16.41 | x | 16.06 | x | 105.67 | % | 96.86 | % | 110.01 | % | 100.48 | % | ||||||||||||
Valuation of peer group companies (on an
historical
basis) (2)
|
||||||||||||||||||||||||
Averages
|
25.69 | x | 25.69 | x | 128.16 | % | 128.16 | % | 132.40 | % | 132.40 | % | ||||||||||||
Medians
|
21.12 | x | 21.12 | x | 130.73 | % | 130.73 | % | 134.71 | % | 134.71 | % |
(1)
|
Trailing
twelve month reported earnings through March 31, 2010. These
ratios are different than those presented in “Pro Forma
Data.” Price-to-earnings ratios calculated based on estimated
core earnings are not meaningful and were omitted from this
table.
|
(2)
|
The
information for publicly traded mutual holding companies may not be
meaningful for investors because it presents average and median
information for mutual holding companies that issued a different
percentage of their stock in their offerings than the 22.9% to 31.9% that
we are issuing to the public if we sell the minimum and maximum number of
shares we are offering. In addition, the effect of stock
repurchases also affects the ratios to a greater or lesser degree
depending upon repurchase activity.
|
|
●
|
Charter
Financial’s financial condition and results of
operations;
|
|
●
|
comparison
of financial performance ratios of Charter Financial to those of other
financial institutions of similar
size;
|
|
●
|
market
conditions generally and in particular for financial institutions;
and
|
|
●
|
the
historical trading price of the publicly held shares of Charter Financial
common stock.
|
|
(i)
|
The
aggregate amount of our outstanding common stock owned or controlled by
persons other than First Charter, MHC at the close of the stock offering
must be less than 50% of the total issued and outstanding common stock of
Charter Financial.
|
|
(ii)
|
No
person may purchase fewer than 25 shares. Accordingly,
your subscription must be for at least
$ 263.00 of common stock to be accepted. No person may
purchase more than $1.5 million of common
stock.
|
|
(iii)
|
The
maximum purchase of common stock in the subscription offering by a group
of persons through a single deposit account is $1.5 million. Except for
the employee stock ownership plan, as described above, no person or
entity, together with associates or persons acting in concert with such
person or entity, may purchase, in all categories of the offering
combined, more than 5% of the shares of common stock issued in the
offering.
|
|
(iv)
|
Current
shareholders of Charter Financial, other than our employee stock ownership
plan, are subject to an ownership limitation. The number of
shares of common stock that a shareholder may purchase in the offering,
together with associates or persons acting in concert with such
shareholder, plus any shares of Charter Financial common stock that they
own immediately prior to the completion of the stock offering, may not
exceed 5% of the shares of common stock issued in the
offering.
|
|
(v)
|
The
aggregate amount of common stock acquired in the stock offering, plus all
prior issuances by Charter Financial, by any one or more tax-qualified
employee stock benefit plans of Charter Financial, exclusive of any shares
of common stock acquired by such plans in the secondary market, may not,
at the conclusion of the stock offering, exceed 4.9% of (A) the
outstanding shares of common stock of Charter Financial, or (B) the
shareholders’ equity of Charter
Financial.
|
|
(vi)
|
The
aggregate amount of common stock acquired in the stock offering, plus all
prior issuances by Charter Financial, by any one or more tax-qualified
employee stock benefit plans and stock recognition and award plans of
Charter Financial, exclusive of any shares of common stock acquired by
such plans in the secondary market, shall not exceed 4.9% (5.88% with
Office of Thrift Supervision approval if CharterBank’s tangible capital
ratio is at least 10% at the time a plan is implemented) of (A) the
outstanding shares of common stock of Charter Financial, or (ii) the
shareholders’ equity of Charter
Financial.
|
|
(vii)
|
The
aggregate amount of common stock acquired in the stock offering, plus all
prior issuances by Charter Financial, by all non-tax-qualified employee
stock benefit plans of Charter Financial, or by directors and executive
officers and their associates, exclusive of any shares of common stock
acquired by such plans or persons in the secondary market, may not exceed
25% of the outstanding common stock held by persons other than First
Charter, MHC at the conclusion of the stock offering. In calculating the
number of shares of directors and executive officers and their associates
under this paragraph, shares held by any tax-qualified employee stock
benefit plan or non-tax-qualified employee stock benefit plan that are
attributable to such person shall not be
counted.
|
|
(i)
|
any
corporation or organization, other than Charter Financial, CharterBank or
a majority-owned subsidiary of CharterBank, of which the person is a
senior officer, partner or 10% beneficial
shareholder;
|
|
(ii)
|
any
trust or other estate in which the person has a substantial beneficial
interest or serves as a trustee or in a similar fiduciary capacity;
provided, however, it does not include any employee stock benefit plan in
which the person has a substantial beneficial interest or serves as
trustee or in a similar fiduciary capacity;
and
|
|
(iii)
|
any
blood or marriage relative of the person, who either has the same home as
the person or who is a director or officer of Charter Financial or
CharterBank.
|
|
(i)
|
knowing
participation in a joint activity or interdependent conscious parallel
action towards a common goal whether or not pursuant to an express
agreement; or
|
|
(ii)
|
a
combination or pooling of voting or other interests in the securities of
an issuer for a common purpose pursuant to any contract, understanding,
relationship, agreement or other arrangement, whether written or
otherwise.
|
|
(i)
|
personal
check, bank check or money order, made payable to Charter Financial
Corporation; or
|
|
(ii)
|
authorizing
us to withdraw funds from CharterBank the types of deposit accounts (not
checking accounts) designated on the stock order
form.
|
Report
of Dixon Hughes PLLC, Independent Registered Public Accounting
Firm
|
F-2 | |
Report
of KPMG LLP, Independent Registered Public Accounting Firm
|
F-3 | |
Consolidated
Balance Sheets at March 31, 2010 (unaudited) and September 30, 2009 and
2008
|
F-4 | |
Consolidated
Statements of Income for the six months ended March 31, 2010 and 2009
(unaudited) and for the years ended September 30, 2009, 2008 and
2007
|
F-5 | |
Consolidated
Statements of Equity and Comprehensive Income (Loss) for the six months
ended March 31, 2010 (unaudited) and the years ended September 30, 2009,
2008 and 2007
|
F-6 | |
Consolidated
Statements of Cash Flows for the six months ended March 31, 2010 and 2009
(unaudited) and for the years ended September 30, 2009, 2008 and
2007
|
F-8 | |
Notes to Consolidated Financial Statements | F-10 |
225 Peachtree Street NE, Suite 600 | ||
Atlanta, GA 30303-1728 | ||
Ph. 404.575.8900 Fx. 404.575.8860 | ||
www.dixon-hughes.com | ||
KPMG
LLP
Suite 1800
420 20th Street North
Birmingham, AL 35203
|
KPMG LLP, a U.S. limited liability partnership, is the U.S.
member firm of KPMG International, a Swiss
cooperative.
|
(Unaudited)
|
||||||||||||
March
31,
|
September
30,
|
|||||||||||
2010
|
2009
|
2008
|
||||||||||
Assets
|
||||||||||||
Cash
and amounts due from depository institutions
|
$ | 111,091,656 | $ | 36,679,210 | $ | 11,978,998 | ||||||
Interest-bearing
deposits in other financial institutions
|
30,544,762 | 17,160,826 | 2,660,130 | |||||||||
Cash
and cash equivalents
|
141,636,418 | 53,840,036 | 14,639,128 | |||||||||
Loans
held for sale, fair value of $694,900, $1,129,286 and
$1,297,165
|
690,301 | 1,123,489 | 1,292,370 | |||||||||
Mortgage-backed
securities and collateralized mortgage obligations available for
sale
|
201,583,697 | 201,625,975 | 242,848,419 | |||||||||
Other
investment securities available for sale
|
3,962,010 | 4,434,732 | 34,290,733 | |||||||||
Federal
Home Loan Bank stock
|
15,157,100 | 14,035,800 | 13,605,900 | |||||||||
Loans
receivable:
|
||||||||||||
Not
covered under FDIC loss sharing agreements
|
476,227,837 | 472,974,693 | 437,520,665 | |||||||||
Covered
under FDIC loss sharing agreements, net
|
213,755,529 | 89,763,944 | - | |||||||||
Unamortized
loan origination fees, net
|
(897,488 | ) | (856,538 | ) | (804,475 | ) | ||||||
Allowance
for loan losses (non-covered loans)
|
(11,396,504 | ) | (9,331,612 | ) | (8,243,931 | ) | ||||||
Loans
receivable, net
|
677,689,374 | 552,550,487 | 428,472,259 | |||||||||
Other
real estate owned:
|
||||||||||||
Not
covered under FDIC loss sharing agreements
|
7,409,175 | 4,777,542 | 2,680,430 | |||||||||
Covered
under FDIC loss sharing agreements
|
35,732,671 | 10,681,499 | - | |||||||||
Accrued
interest and dividends receivable
|
4,286,580 | 3,746,080 | 3,272,628 | |||||||||
Premises
and equipment, net
|
17,513,373 | 17,287,140 | 17,302,517 | |||||||||
Goodwill
|
4,325,282 | 4,325,282 | 4,325,282 | |||||||||
Other
intangible assets, net of amortization
|
1,046,196 | 854,586 | 988,988 | |||||||||
Cash
surrender value of life insurance
|
31,116,214 | 30,549,849 | 29,280,581 | |||||||||
FDIC
receivable for loss sharing agreements
|
94,089,464 | 26,481,146 | - | |||||||||
Deferred
income taxes
|
419,076 | 7,289,043 | 6,872,020 | |||||||||
Other
assets
|
6,082,679 | 3,277,447 | 1,629,327 | |||||||||
Total
assets
|
$ | 1,242,739,610 | $ | 936,880,133 | $ | 801,500,582 | ||||||
Liabilities
and Stockholders’ Equity
|
||||||||||||
Liabilities:
|
||||||||||||
Deposits
|
$ | 906,580,112 | $ | 597,633,669 | $ | 420,175,064 | ||||||
FHLB
advances and other borrowings
|
212,232,472 | 227,000,000 | 267,000,000 | |||||||||
Advance
payments by borrowers for taxes and insurance
|
793,091 | 1,279,440 | 1,237,494 | |||||||||
Other
liabilities
|
12,460,724 | 12,710,364 | 10,786,103 | |||||||||
Total
liabilities
|
1,132,066,399 | 838,623,473 | 699,198,661 | |||||||||
Stockholders’
Equity:
|
||||||||||||
Common
stock, $0.01 par value; 19,859,219 shares issued at March 31, 2010,
September 30, 2009 and 2008, respectively; 18,578,856, 18,577,356 and
18,794,999 shares outstanding at March 31, 2010, September 30, 2009 and
2008, respectively
|
198,592 | 198,592 | 198,592 | |||||||||
Preferred
Stock, no par value; 10,000,000 shares authorized
|
- | - | - | |||||||||
Additional
paid-in capital
|
42,807,498 | 42,751,898 | 42,537,428 | |||||||||
Treasury
stock, at cost; 1,186,858, 1,281,863, and 1,064,220 shares at March 31,
2010, September 30, 2009 and 2008, respectively
|
(36,903,102 | ) | (36,948,327 | ) | (35,060,409 | ) | ||||||
Unearned
compensation - ESOP
|
(1,546,990 | ) | (1,683,990 | ) | (1,825,390 | ) | ||||||
Retained
earnings
|
109,148,101 | 102,215,498 | 103,301,290 | |||||||||
Accumulated
other comprehensive loss - net unrealized holding losses on securities
available for sale, net of tax
|
(3,030,888 | ) | (8,277,011 | ) | (6,849,590 | ) | ||||||
Total
stockholders’ equity
|
110,673,211 | 98,256,660 | 102,301,921 | |||||||||
Commitments
and contingencies
Total liabilities and stockholders’ equity |
$ | 1,242,739,610 | $ | 936,880,133 | $ | 801,500,582 |
(Unaudited)
|
||||||||||||||||||||
Six
Months Ended
|
||||||||||||||||||||
March
31,
|
Years
Ended September 30,
|
|||||||||||||||||||
2010
|
2009
|
2009
|
2008
|
2007
|
||||||||||||||||
Interest
and dividend income:
|
||||||||||||||||||||
Loans
receivable
|
$ | 18,155,653 | $ | 13,133,776 | $ | 29,311,959 | $ | 28,872,156 | $ | 28,884,292 | ||||||||||
Mortgage-backed
securities and collateralized mortgage obligations
|
3,961,812 | 5,753,657 | 10,700,219 | 12,210,454 | 13,787,660 | |||||||||||||||
Equity
securities
|
15,268 | — | 29,394 | 3,168,878 | 8,203,630 | |||||||||||||||
Debt
securities
|
98,610 | 329,815 | 484,064 | 1,189,925 | 1,759,595 | |||||||||||||||
Interest-bearing
deposits in other financial institutions
|
42,400 | 12,187 | 33,636 | 935,991 | 2,010,338 | |||||||||||||||
Total
interest and dividend income
|
22,273,743 | 19,229,435 | 40,559,272 | 46,377,404 | 54,645,515 | |||||||||||||||
Interest
expense:
|
||||||||||||||||||||
Deposits
|
5,125,902 | 5,229,443 | 10,099,376 | 14,525,764 | 15,187,922 | |||||||||||||||
Borrowings
|
5,252,253 | 6,106,722 | 12,499,232 | 12,245,020 | 14,639,019 | |||||||||||||||
Total
interest expense
|
10,378,155 | 11,336,165 | 22,598,608 | 26,770,784 | 29,826,941 | |||||||||||||||
Net
interest income
|
11,895,588 | 7,893,270 | 17,960,664 | 19,606,620 | 24,818,574 | |||||||||||||||
Provision
for loan losses
|
3,800,000 | 2,550,000 | 4,550,000 | 3,250,000 | — | |||||||||||||||
Net
interest income after provision for loan losses
|
8,095,588 | 5,343,270 | 13,410,664 | 16,356,620 | 24,818,574 | |||||||||||||||
Noninterest
income:
|
||||||||||||||||||||
Service
charges on deposit accounts
|
2,672,460 | 2,250,483 | 4,664,364 | 5,027,499 | 4,532,045 | |||||||||||||||
Gain
(loss) on sale of investments
|
203,188 | 182,798 | 2,160,760 | (38,272 | ) | — | ||||||||||||||
Total
impairment losses on securities
|
(5,179,492 | ) | — | — | — | — | ||||||||||||||
Portion
of losses recognized in other comprehensive income
|
1,652,818 | — | — | — | — | |||||||||||||||
Net
impairment losses recognized in earnings
|
(3,526,674 | ) | — | — | — | — | ||||||||||||||
Gain
on sale of other assets held for sale
|
— | 2,086,053 | 2,086,053 | — | — | |||||||||||||||
Bank
owned life insurance
|
566,365 | 636,522 | 1,269,268 | 1,059,224 | 591,478 | |||||||||||||||
Gain
on sale of loans and loan servicing release fees
|
468,245 | 312,486 | 681,524 | 762,227 | 1,151,839 | |||||||||||||||
Gain
on sale of Freddie Mac common stock
|
— | — | — | 9,556,639 | 69,453,332 | |||||||||||||||
Loan
servicing fees
|
137,178 | 102,977 | 223,375 | 291,183 | 272,040 | |||||||||||||||
Gain
on operations of covered call program
|
— | — | — | 1,722,977 | 368,799 | |||||||||||||||
Brokerage
commissions
|
248,909 | 141,983 | 301,469 | 402,183 | 424,299 | |||||||||||||||
Acquisition
gain
|
15,604,040 | — | — | — | — | |||||||||||||||
Other
|
1,041,314 | 180,793 | 405,321 | 166,797 | 130,479 | |||||||||||||||
Total
noninterest income
|
17,415,025 | 5,894,095 | 11,792,134 | 18,950,457 | 76,924,311 | |||||||||||||||
Noninterest
expenses:
|
||||||||||||||||||||
Salaries
and employee benefits
|
6,243,395 | 4,759,464 | 10,056,639 | 11,436,562 | 13,811,000 | |||||||||||||||
Occupancy
|
2,929,966 | 1,896,241 | 3,970,052 | 3,786,348 | 3,530,652 | |||||||||||||||
FHLB
advance prepayment penalty
|
— | — | 1,408,275 | — | — | |||||||||||||||
Legal
and professional
|
956,271 | 420,582 | 989,230 | 669,789 | 429,444 | |||||||||||||||
Marketing
|
719,275 | 387,668 | 1,040,867 | 930,174 | 987,648 | |||||||||||||||
Federal
insurance premiums and other regulatory fees
|
544,160 | 490,763 | 1,390,873 | 336,290 | 260,907 | |||||||||||||||
Net
cost of operations of real estate owned
|
526,071 | 45,719 | 800,985 | 18,826 | 44,340 | |||||||||||||||
Furniture
and equipment
|
314,186 | 304,845 | 647,878 | 624,530 | 667,495 | |||||||||||||||
Postage,
office supplies, and printing
|
341,540 | 301,860 | 625,110 | 614,302 | 560,072 | |||||||||||||||
Core
deposit intangible amortization expense
|
67,201 | 67,201 | 134,402 | 136,864 | 147,684 | |||||||||||||||
Other
|
706,945 | 714,550 | 1,517,087 | 1,730,124 | 1,486,457 | |||||||||||||||
Total
noninterest expenses
|
13,349,010 | 9,388,893 | 22,581,398 | 20,283,809 | 21,925,699 | |||||||||||||||
Income
before income taxes
|
12,161,603 | 1,848,472 | 2,621,400 | 15,023,268 | 79,817,186 | |||||||||||||||
Income
tax expense
|
4,428,092 | 419,072 | 305,638 | 4,491,036 | 28,877,364 | |||||||||||||||
Net
income
|
$ | 7,733,511 | $ | 1,429,400 | $ | 2,315,762 | $ | 10,532,232 | $ | 50,939,822 | ||||||||||
Basic
net income per share
|
$ | 0.42 | $ | 0.08 | $ | 0.13 | $ | 0.55 | $ | 2.67 | ||||||||||
Diluted
net income per share
|
$ | 0.42 | $ | 0.08 | $ | 0.12 | $ | 0.55 | $ | 2.65 | ||||||||||
Weighted
average number of common shares outstanding
|
18,416,507 | 18,522,909 | 18,497,297 | 19,022,259 | 19,097,807 | |||||||||||||||
Weighted
average number of common and potential common shares
outstanding
|
18,416,507 | 18,522,909 | 18,558,523 | 19,082,960 | 19,210,548 |
Accumulated
|
|||||||||||||||||||||||||||
Common
stock
|
Unearned
|
other
|
Total
|
||||||||||||||||||||||||
Comprehensive
|
Number
|
Additional
|
Treasury
|
compensation
|
Retained
|
comprehensive
|
stockholders’
|
||||||||||||||||||||
income
(loss)
|
of
shares
|
Amount
|
paid-in
capital
|
stock
|
ESOP
|
earnings
|
income
(loss)
|
equity
|
|||||||||||||||||||
Balance
at September 30, 2006
|
19,837,816
|
$
|
198,378
|
$
|
39,031,515
|
$
|
(5,436,393
|
)
|
$
|
(2,121,940
|
)
|
$
|
63,548,301
|
$
|
172,489,384
|
$
|
267,709,245
|
||||||||||
Comprehensive
income (loss):
|
|||||||||||||||||||||||||||
Net
income
|
$
|
50,939,822
|
-
|
-
|
-
|
-
|
-
|
50,939,822
|
-
|
50,939,822
|
|||||||||||||||||
Other
comprehensive income (loss) – change in unrealized gain on securities, net
of income taxes of $34,955,781
|
(55,603,237
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
(55,603,237
|
)
|
(55,603,237
|
)
|
|||||||||||||||
Total
comprehensive loss
|
$
|
(4,663,415
|
)
|
||||||||||||||||||||||||
Dividends
paid, $4.45 per share
|
-
|
-
|
-
|
-
|
-
|
(14,562,112
|
)
|
-
|
(14,562,112
|
)
|
|||||||||||||||||
Allocation
of ESOP common stock
|
-
|
-
|
454,887
|
-
|
150,500
|
-
|
-
|
605,387
|
|||||||||||||||||||
Vesting
of non-vested shares
|
-
|
-
|
(91,980
|
)
|
801,245
|
-
|
-
|
-
|
709,265
|
||||||||||||||||||
Tax
benefit of disqualifying dispositions of stock options
|
-
|
-
|
139,365
|
-
|
-
|
-
|
-
|
139,365
|
|||||||||||||||||||
Stock
based compensation expense
|
-
|
-
|
1,311,019
|
-
|
-
|
-
|
-
|
1,311,019
|
|||||||||||||||||||
Income
tax benefits of non-vested share awards
|
-
|
-
|
424,189
|
-
|
-
|
-
|
-
|
424,189
|
|||||||||||||||||||
Repurchase
of shares
|
-
|
-
|
-
|
(27,064,470
|
)
|
-
|
-
|
-
|
(27,064,470
|
)
|
|||||||||||||||||
Exercise
of stock options, including income tax benefit of $59,860
|
17,803
|
178
|
463,469
|
-
|
-
|
-
|
-
|
463,647
|
|||||||||||||||||||
Balance
at September 30, 2007
|
19,855,619
|
$
|
198,556
|
$
|
41,732,464
|
$
|
(31,699,618
|
)
|
$
|
(1,971,440
|
)
|
$
|
99,926,011
|
$
|
116,886,147
|
$
|
225,072,120
|
||||||||||
Comprehensive
income (loss):
|
|||||||||||||||||||||||||||
Net
income
|
$
|
10,532,232
|
-
|
-
|
-
|
-
|
-
|
10,532,232
|
-
|
10,532,232
|
|||||||||||||||||
Other
comprehensive income (loss) – change in unrealized gain on securities, net
of income taxes of $77,788,265
|
(123,735,737
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
(123,735,737
|
)
|
(123,735,737
|
)
|
|||||||||||||||
Total
comprehensive loss
|
$
|
(113,203,505
|
)
|
||||||||||||||||||||||||
Dividends
paid, $1.75 per share
|
-
|
-
|
-
|
-
|
-
|
(7,156,953
|
)
|
-
|
(7,156,953
|
)
|
|||||||||||||||||
Allocation
of ESOP common stock
|
-
|
-
|
554,466
|
-
|
146,050
|
-
|
-
|
700,516
|
|||||||||||||||||||
Vesting
of non-vested shares
|
-
|
-
|
51,460
|
1,315,387
|
-
|
-
|
-
|
1,366,847
|
|||||||||||||||||||
Tax
benefit of disqualifying dispositions of stock options
|
-
|
-
|
9,700
|
-
|
-
|
-
|
-
|
9,700
|
|||||||||||||||||||
Stock
based compensation expense
|
-
|
-
|
84,038
|
-
|
-
|
-
|
-
|
84,038
|
|||||||||||||||||||
Repurchase
of shares
|
-
|
-
|
-
|
(4,676,178
|
)
|
-
|
-
|
-
|
(4,676,178
|
)
|
|||||||||||||||||
Exercise
of stock options, including income tax benefit of $0
|
3,600
|
36
|
105,300
|
-
|
-
|
-
|
-
|
105,336
|
|||||||||||||||||||
Balance
at September 30, 2008
|
19,859,219
|
$
|
198,592
|
$
|
42,537,428
|
$
|
(35,060,409
|
)
|
$
|
(1,825,390
|
)
|
$
|
103,301,290
|
$
|
(6,849,590
|
)
|
$
|
102,301,921
|
Accumulated
|
|||||||||||||||||||||||||||
Common
stock
|
Unearned
|
other
|
Total
|
||||||||||||||||||||||||
Comprehensive
|
Number
|
Additional
|
Treasury
|
compensation
|
Retained
|
comprehensive
|
stockholders’
|
||||||||||||||||||||
income
(loss)
|
of
shares
|
Amount
|
paid-in
capital
|
stock
|
ESOP
|
earnings
|
income
(loss)
|
equity
|
|||||||||||||||||||
Balance
at September 30, 2008
|
19,859,219
|
$
|
198,592
|
$
|
42,537,428
|
$
|
(35,060,409
|
)
|
$
|
(1,825,390
|
)
|
$
|
103,301,290
|
$
|
(6,849,590
|
)
|
$
|
102,301,921
|
|||||||||
Comprehensive
income (loss):
|
|||||||||||||||||||||||||||
Net
income
|
$
|
2,315,762
|
-
|
-
|
-
|
-
|
-
|
2,315,762
|
-
|
2,315,762
|
|||||||||||||||||
Other
comprehensive income (loss) – change in unrealized loss on securities, net
of income taxes of $897,369
|
(1,427,421
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,427,421
|
)
|
(1,427,421
|
)
|
|||||||||||||||
Total
comprehensive income
|
$
|
888,341
|
|||||||||||||||||||||||||
Dividends
paid, $1.00 per share
|
-
|
-
|
-
|
-
|
-
|
(3,401,554
|
)
|
-
|
(3,401,554
|
)
|
|||||||||||||||||
Allocation
of ESOP common stock
|
-
|
-
|
148,470
|
-
|
141,400
|
-
|
-
|
289,870
|
|||||||||||||||||||
Vesting
of non-vested shares
|
-
|
-
|
32,066
|
340,424
|
-
|
-
|
-
|
372,490
|
|||||||||||||||||||
Stock
based compensation expense
|
-
|
-
|
33,934
|
-
|
-
|
-
|
-
|
33,934
|
|||||||||||||||||||
Repurchase
of shares
|
-
|
-
|
-
|
(2,228,342
|
)
|
-
|
-
|
-
|
(2,228,342
|
)
|
|||||||||||||||||
Balance
at September 30, 2009
|
19,859,219
|
198,592
|
42,751,898
|
(36,948,327
|
)
|
(1,683,990
|
)
|
102,215,498
|
(8,277,011
|
)
|
98,256,660
|
||||||||||||||||
Comprehensive
income (loss):
|
|||||||||||||||||||||||||||
Net
income
|
$
|
7,733,511
|
-
|
-
|
-
|
-
|
-
|
7,733,511
|
-
|
7,733,511
|
|||||||||||||||||
Other
comprehensive income (loss) – change in unrealized loss on securities, net
of income tax benefit of $2,7002,548
|
5,246,123
|
-
|
-
|
-
|
-
|
-
|
-
|
5,246,123
|
5,246,123
|
||||||||||||||||||
Total
comprehensive income
|
$
|
12,979,634
|
|||||||||||||||||||||||||
Dividends
paid, $0.25 per share
|
-
|
-
|
-
|
-
|
-
|
(800,908
|
)
|
-
|
(800,908
|
)
|
|||||||||||||||||
Allocation
of ESOP common stock
|
-
|
-
|
10,034
|
-
|
137,000
|
-
|
-
|
147,034
|
|||||||||||||||||||
Vesting
of non-vested shares
|
-
|
-
|
28,650
|
45,225
|
-
|
-
|
-
|
73,875
|
|||||||||||||||||||
Stock
based compensation expense
|
-
|
-
|
16,916
|
-
|
-
|
-
|
-
|
16,916
|
|||||||||||||||||||
Repurchase
of shares
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||
Balance
at March 31, 2010
|
19,859,219
|
$
|
198,592
|
$
|
42,807,498
|
$
|
(36,903,102
|
)
|
$
|
(1,546,990
|
)
|
$
|
109,148,101
|
$
|
(3,030,888
|
)
|
$
|
110,673,211
|
(Unaudited)
|
||||||||||||||||||||
Six
Months Ended
|
||||||||||||||||||||
March
31,
|
Years
Ended September 30,
|
|||||||||||||||||||
2010
|
2009
|
2009
|
2008
|
2007
|
||||||||||||||||
Cash
flows from operating activities:
|
||||||||||||||||||||
Net
income
|
$ | 7,733,511 | $ | 1,429,400 | $ | 2,315,762 | $ | 10,532,232 | $ | 50,939,822 | ||||||||||
Adjustments
to reconcile net income to net cash (used in) provided by operating
activities:
|
||||||||||||||||||||
Provision
for loan losses
|
3,800,000 | 2,550,000 | 4,550,000 | 3,250,000 | — | |||||||||||||||
Depreciation
and amortization
|
522,261 | 501,021 | 1,007,408 | 963,964 | 989,788 | |||||||||||||||
Deferred
income tax expense (benefit)
|
4,167,419 | 1,920,594 | (430,209 | ) | (1,920,594 | ) | (422,086 | ) | ||||||||||||
Accretion
and amortization of premiums and discounts, net
|
585,851 | 9,749 | 127,242 | (26,437 | ) | (138,640 | ) | |||||||||||||
Accretion
of fair value discounts related to covered loans
|
(3,333,953 | ) | — | (1,698,238 | ) | — | — | |||||||||||||
Gain
on sale of loans and loan servicing release fees
|
(468,245 | ) | (312,486 | ) | (681,524 | ) | (762,227 | ) | (1,151,839 | ) | ||||||||||
Proceeds
from sale of loans
|
10,454,196 | 10,891,312 | 25,996,713 | 18,548,793 | 41,099,310 | |||||||||||||||
Originations
and purchases of loans held for sale
|
(9,552,763 | ) | (9,877,357 | ) | (25,146,308 | ) | (18,157,816 | ) | (39,959,385 | ) | ||||||||||
Gain
on acquisition
|
(15,604,040 | ) | — | — | — | — | ||||||||||||||
Gain
on sale of Freddie Mac common stock
|
— | — | — | (9,556,639 | ) | (69,453,332 | ) | |||||||||||||
(Gain)
loss on sale of mortgage-backed securities, collateralized mortgage
obligations, and other investments
|
(203,188 | ) | (182,798 | ) | (2,160,760 | ) | 38,272 | — | ||||||||||||
Other-than-temporary
impairment
|
3,526,674 | — | — | — | — | |||||||||||||||
Write
down of real estate owned
|
199,776 | — | 669,870 | 39,219 | 30,800 | |||||||||||||||
Loss
(gain) on sale of real estate owned
|
(81,263 | ) | (16,044 | ) | (113,007 | ) | (113,946 | ) | (414 | ) | ||||||||||
Recovery
payable to FDIC on other real estate owned gains
|
(449,858 | ) | — | (130,046 | ) | — | — | |||||||||||||
Gain
on sale of other assets held for sale
|
— | — | (2,086,053 | ) | — | (47,539 | ) | |||||||||||||
FHLB
advance prepayment penalty
|
— | — | 1,408,275 | — | — | |||||||||||||||
Restricted
stock award expense
|
105,784 | 144,497 | 285,046 | 851,640 | 669,319 | |||||||||||||||
Stock
option expense
|
16,916 | 17,016 | 33,934 | 84,038 | 1,971,608 | |||||||||||||||
Excess
tax benefit on exercise of stock options
|
— | — | — | — | (59,860 | ) | ||||||||||||||
Increase
in cash surrender value on bank owned life insurance
|
(566,365 | ) | (636,522 | ) | (1,269,268 | ) | (1,059,224 | ) | (591,478 | ) | ||||||||||
Changes
in assets and liabilities:
|
||||||||||||||||||||
Decrease
(increase) in accrued interest and dividends receivable
|
109,301 | 60,136 | 192,004 | 404,950 | (99,207 | ) | ||||||||||||||
(Increase)
decrease in other assets
|
(3,568,812 | ) | (2,892,523 | ) | 437,171 | 159,085 | 113,019 | |||||||||||||
(Decrease)
increase in other liabilities
|
(1,543,567 | ) | (5,743,109 | ) | 867,398 | 454,559 | 2,067,504 | |||||||||||||
Net
cash (used in) provided by operating activities
|
(4,150,365 | ) | (2,137,114 | ) | 4,175,411 | 3,729,869 | (14,042,610 | ) | ||||||||||||
Cash
flows from investing activities:
|
||||||||||||||||||||
Proceeds
from sales of mortgage-backed securities and collateralized mortgage
obligations available for sale
|
15,026,370 | 19,178,518 | 89,435,458 | 5,894,659 | — | |||||||||||||||
Principal
collections on government sponsored entities available for
sale
|
411,790 | — | 1,103,987 | 606,401 | 789,064 | |||||||||||||||
Principal
collections on mortgage-backed securities and collateralized mortgage
obligations available for sale
|
28,893,423 | 24,878,214 | 69,470,730 | 47,745,518 | 50,442,863 | |||||||||||||||
Purchase
of mortgage-backed securities and collateralized mortgage obligations
available for sale
|
(14,107,959 | ) | (27,442,753 | ) | (111,700,517 | ) | (38,269,681 | ) | (4,003,362 | ) | ||||||||||
Purchase
of equity securities and other investments
|
— | — | (21,891,798 | ) | (10,083,386 | ) | — | |||||||||||||
Proceeds
from sale of Freddie Mac common stock
|
— | — | — | 14,281,888 | 70,646,923 | |||||||||||||||
Proceeds
from the sale or issuer call of equity securities and other
investments
|
— | 29,050,000 | 58,055,440 | 990,025 | — | |||||||||||||||
Proceeds
from maturities of other securities available for sale
|
— | — | — | 5,974,000 | 5,000,000 | |||||||||||||||
Purchase
of FHLB stock
|
— | (1,903,500 | ) | (2,236,500 | ) | (3,042,000 | ) | (1,125,000 | ) | |||||||||||
Proceeds
from redemption of FHLB stock
|
— | 2,473,500 | 2,806,500 | 3,103,900 | 3,438,400 | |||||||||||||||
Proceeds
from redemption of FRB stock acquired
|
— | — | 157,800 | — | — | |||||||||||||||
Net
increase in loans receivable
|
(3,472,622 | ) | (26,616,448 | ) | (43,655,083 | ) | (30,990,857 | ) | (31,402,364 | ) | ||||||||||
Net
decrease in FDIC receivable
|
3,972,605 | — | 23,729,476 | — | — | |||||||||||||||
Proceeds
from sale of real estate owned
|
5,578,994 | 1,020,861 | 5,443,005 | 2,395,548 | 826,044 | |||||||||||||||
Proceeds
from sale of premises and equipment
|
— | 708,523 | 781,510 | — | 149,516 | |||||||||||||||
Purchases
of premises and equipment
|
(681,293 | ) | (311,033 | ) | (1,639,139 | ) | (1,328,770 | ) | (701,216 | ) | ||||||||||
Net
cash received from acquisitions
|
68,914,993 | — | 30,017,337 | — | — | |||||||||||||||
Purchase
of life insurance
|
— | — | — | (15,000,000 | ) | — | ||||||||||||||
Net
cash provided by (used in) investing activities
|
104,536,301 | 21,035,882 | 99,878,206 | (17,722,755 | ) | 94,060,868 |
(Unaudited)
|
||||||||||||||||||||
Six
Months Ended
|
||||||||||||||||||||
March
31,
|
Years
Ended September 30,
|
|||||||||||||||||||
2010
|
2009
|
2009
|
2008
|
2007
|
||||||||||||||||
Cash
flows from financing activities:
|
||||||||||||||||||||
Purchase
of treasury stock
|
$ | — | $ | (1,012,435 | ) | $ | (2,228,342 | ) | $ | (4,676,178 | ) | $ | (27,064,470 | ) | ||||||
Stock
options exercised
|
— | — | — | 105,336 | 403,787 | |||||||||||||||
Excess
tax benefit on exercise of stock options
|
— | — | — | — | 59,860 | |||||||||||||||
Dividends
on restricted stock awards
|
(16,684 | ) | (20,641 | ) | ||||||||||||||||
Dividends
paid
|
(784,224 | ) | (1,334,918 | ) | (3,401,554 | ) | (15,871,868 | ) | (5,847,197 | ) | ||||||||||
Net
increase (decrease) in deposits
|
12,956,717 | 13,740,193 | (4,779,819 | ) | (10,508,011 | ) | 58,626,378 | |||||||||||||
Proceeds
from Federal Home Loan Bank advances
|
— | 56,300,000 | 56,300,000 | 68,800,000 | 25,000,000 | |||||||||||||||
Principal
payments on Federal Home Loan Bank advances
|
(24,259,014 | ) | (66,300,000 | ) | (110,784,940 | ) | (63,800,000 | ) | (75,000,000 | ) | ||||||||||
Proceeds
from other borrowings
|
— | — | — | 49,333,000 | 210,178,000 | |||||||||||||||
Principal
payments on other borrowings
|
— | — | — | (59,391,000 | ) | (226,048,000 | ) | |||||||||||||
Net
increase (decrease) in advance payments by borrowers for taxes and
insurance
|
(486,349 | ) | (409,207 | ) | 41,946 | (29,818 | ) | (76,909 | ) | |||||||||||
Net
cash (used in) provided by financing activities
|
(12,589,554 | ) | 962,992 | (64,852,709 | ) | (36,038,539 | ) | (39,768,551 | ) | |||||||||||
Net
increase (decrease) in cash and cash equivalents
|
87,796,382 | 19,861,760 | 39,200,908 | (50,031,425 | ) | 40,249,707 | ||||||||||||||
Cash
and cash equivalents at beginning of period
|
53,840,036 | 14,639,128 | 14,639,128 | 64,670,553 | 24,420,846 | |||||||||||||||
Cash
and cash equivalents at end of period
|
$ | 141,636,418 | $ | 34,500,888 | $ | 53,840,036 | $ | 14,639,128 | $ | 64,670,553 | ||||||||||
Supplemental
disclosures of cash flow information:
|
||||||||||||||||||||
Interest
paid
|
$ | 10,298,627 | $ | 12,349,845 | $ | 23,210,377 | $ | 26,134,886 | $ | 29,376,630 | ||||||||||
Income
taxes paid
|
$ | 2,450,000 | $ | 192,869 | $ | 330,697 | $ | 8,585,768 | $ | 27,416,431 | ||||||||||
Supplemental
disclosure of noncash activities:
|
||||||||||||||||||||
Real
estate acquired through foreclosure of the loans
receivable
|
$ | 9,280,990 | $ | 3,502,689 | $ | 11,211,995 | $ | 4,821,478 | $ | 575,981 | ||||||||||
Issuance
of ESOP common stock
|
$ | 137,000 | $ | 289,870 | $ | 289,870 | $ | 700,516 | $ | 605,387 | ||||||||||
Issuance
of common stock under stock benefit plans
|
$ | 83,909 | $ | — | $ | 372,490 | $ | 1,366,847 | $ | 709,265 | ||||||||||
Issuance
of common stock through net share settlement exercises
|
$ | — | $ | — | $ | — | $ | — | $ | 261,943 | ||||||||||
Tax
benefit from disqualifying dispositions
|
$ | — | $ | — | $ | — | $ | 9,700 | $ | 139,365 | ||||||||||
Dividends
declared not yet paid
|
$ | — | $ | — | $ | — | $ | — | $ | 8,714,915 | ||||||||||
Unrealized
gain (loss) on securities available for sale, net
|
$ | 5,246,123 | $ | 2,442,502 | $ | (1,427,421 | ) | $ | (123,735,737 | ) | $ | (55,603,237 | ) | |||||||
Acquisitions:
|
||||||||||||||||||||
Assets
acquired at fair value
|
$ | 322,494,304 | $ | — | $ | 196,749,266 | $ | — | $ | — | ||||||||||
Liabilities
assumed at fair value
|
312,888,457 | — | 196,749,266 | — | — | |||||||||||||||
Net
assets acquired
|
$ | 9,605,847 | $ | — | $ | — | $ | — | $ | — |
(1)
|
Summary
of Significant Accounting Policies
|
(a)
|
Basis
of Presentation
|
(b)
|
Cash
and Cash Equivalents
|
(c)
|
Investments,
Mortgage–Backed Securities, and Collateralized Mortgage
Obligations
|
(d)
|
Loans
and Interest Income
|
(e)
|
Allowance
for Loan Losses
|
(f)
|
Real
Estate Owned
|
(g)
|
Premises
and Equipment
|
(h)
|
Receivable
from FDIC for Loss Sharing
Agreements
|
(i) | Mortgage Banking Activities |
(j)
|
Insurance
|
(k)
|
Income
Taxes
|
(l)
|
Comprehensive
Income
|
(m)
|
Goodwill
and other intangible Assets
|
(n)
|
Acquisitions
|
(o) |
Stock–Based
Compensation
|
(p)
|
Income
Per Share
|
(Unaudited)
|
|||||||||||||||||||||
Six
Months Ended
|
|||||||||||||||||||||
March
31,
|
Years
Ended September 30,
|
||||||||||||||||||||
2010
|
2009
|
2009
|
2008
|
2007
|
|||||||||||||||||
Net
income
|
$ | 7,733,511 | $ | 1,429,400 | $ | 2,315,762 | $ | 10,532,232 | $ | 50,939,822 | |||||||||||
Denominator:
|
|||||||||||||||||||||
Weighted
average common shares outstanding
|
18,416,507 | 18,522,909 | 18,497,297 | 19,022,259 | 19,097,807 | ||||||||||||||||
Equivalent
shares issuable upon exercise of stock
options
|
- | 45,974 | 61,226 | 60,701 | 112,741 | ||||||||||||||||
Diluted
shares
|
18,416,507 | 18,568,883 | 18,558,523 | 19,082,960 | 19,210,548 | ||||||||||||||||
Net
income per share
|
|||||||||||||||||||||
Basic
|
$ | 0.42 | $ | 0.08 | $ | 0.13 | $ | 0.55 | $ | 2.67 | |||||||||||
Diluted
|
$ | 0.42 | $ | 0.08 | $ | 0.12 | $ | 0.55 | $ | 2.65 |
(q)
|
Treasury
Stock
|
(r)
|
Employee
Stock Ownership Plan (ESOP)
|
(s)
|
Other
Derivatives
|
(t)
|
Bank
Owned Life Insurance
|
(u)
|
Recent
Accounting Pronouncements
|
(2)
|
Goodwill
and Other Intangible Assets
|
(Unaudited)
|
|||||||||||||
March
31,
|
September
30,
|
||||||||||||
2010
|
2009
|
2008
|
|||||||||||
Goodwill
|
$ | 4,325,282 | $ | 4,325,282 | $ | 4,325,282 | |||||||
Core
deposit intangible
|
2,234,752 | 1,975,941 | 1,975,941 | ||||||||||
Less
accumulated amortization
|
1,188,556 | 1,121,355 | 986,953 | ||||||||||
1,046,196 | 854,586 | 988,988 | |||||||||||
Total
intangible assets
|
$ | 5,371,478 | $ | 5,179,868 | $ | 5,314,270 |
(Unaudited)
|
|||||||||
March
31,
|
September
30,
|
||||||||
2010
|
2009
|
||||||||
2010
|
$ | 237,927 | $ | 134,402 | |||||
2011
|
196,517 | 134,402 | |||||||
2012
|
165,459 | 134,402 | |||||||
2013
|
162,861 | 134,402 | |||||||
2014
|
146,236 | 134,402 | |||||||
Thereafter
|
137,196 | 182,576 | |||||||
$ | 1,046,196 | $ | 854,586 |
(3)
|
Federally
Assisted Acquisition of Neighborhood Community
Bank
|
As
Recorded
by NCB
|
Aggregate
Fair
Value
and Other
Acquisition
Accounting
Adjustments
|
As
Recorded
by
the
Bank
|
||||||||||
Assets
|
||||||||||||
Cash and due from banks
|
$ | 10,602,482 | $ | 19,414,855 |
(a)
|
$ | 30,017,337 | |||||
Securities
|
12,763,061 | (14,395 | ) |
(b)
|
12,748,666 | |||||||
FHLB and FRB stock
|
1,157,700 | - | 1,157,700 | |||||||||
Loans, net of unearned income
|
159,900,960 | (65,194,681 | ) |
(c)
|
94,706,279 | |||||||
Other real estate owned
|
17,676,456 | (10,240,018 | ) |
(d)
|
7,436,438 | |||||||
FDIC receivable for loss sharing agreements
|
- | 49,991,245 |
(e)
|
49,991,245 | ||||||||
Other assets
|
691,601 | 1,100,000 |
(i)
|
691,601 | ||||||||
(1,100,000 | ) |
(i)
|
|
|||||||||
Total
assets acquired
|
$ | 202,792,260 | $ | (6,042,994 | ) | $ | 196,749,266 |
(i)
|
||||
Liabilities
|
||||||||||||
Deposits
|
$ | 181,325,925 | $ | 912,499 |
(f)
|
$ | 182,238,424 | |||||
FHLB advances
|
13,000,000 | 76,665 |
(g)
|
13,076,665 | ||||||||
Other liabilities
|
981,190 | 452,987 |
(h)
|
1,434,177 | ||||||||
Total
liabilities assumed
|
195,307,115 | 1,442,151 | 196,749,266 | |||||||||
Excess of assets acquired over liabilities assumed
|
$ | 7,485,145 | ||||||||||
Aggregate fair value and other acquisition accounting
adjustments
|
$ | (7,485,145 | ) |
|
(a)
–
|
Adjustment
reflects the initial wire received from the FDIC on the acquisition
date.
|
|
(b)
–
|
Adjustment
reflects fair value adjustments based on the Bank’s evaluation of the
acquired investment securities
portfolio.
|
|
(c)
–
|
Adjustment
reflects fair value adjustments based on the Bank’s evaluation of the
acquired loan portfolio. The fair value adjustment includes
adjustments for estimated credit losses, liquidity, market yield and
servicing costs.
|
|
(d)
–
|
Adjustment
reflects the estimated other real estate owned losses based on the Bank’s
evaluation of the acquired other real estate owned
portfolio.
|
|
(e)
–
|
Adjustment
reflects the estimated fair value of payments the Bank will receive from
the FDIC under loss sharing
agreements.
|
|
(f)
–
|
Adjustment
reflects fair value adjustments based on the Bank’s evaluation of the
acquired time deposit portfolio.
|
|
(g)
–
|
Adjustment
arises since the rates on acquired FHLB advances are higher than rates
available on similar borrowings as of the acquisition
date.
|
(h) –
|
Adjustment
reflects estimated qualifying acquisition costs in the
transactions.
|
(i) –
|
The
carrying values of certain long-term assets, primarily the estimated fair
value of acquired core deposit intangible of $1.1 million, were reduced to
zero by the excess of the fair value of net assets acquired over
liabilities assumed in the
acquisition.
|
(4)
|
Investment
Securities
|
(Unaudited) | |||||||||||||||||
March 31, 2010 | |||||||||||||||||
Gross
|
Gross
|
||||||||||||||||
Amortized
|
unrealized
|
unrealized
|
Estimated
|
||||||||||||||
cost
|
gains
|
losses
|
fair
value
|
||||||||||||||
U.S.
government sponsored entities
|
$ | 3,742,722 | $ | 219,288 | $ | - | $ | 3,962,010 | |||||||||
September 30, 2009 | |||||||||||||||||
Gross
|
Gross
|
||||||||||||||||
Amortized
|
unrealized
|
unrealized
|
Estimated
|
||||||||||||||
cost
|
gains
|
losses
|
fair
value
|
||||||||||||||
|
|||||||||||||||||
U.S.
government sponsored entities
|
$ | 4,157,380 | $ | 277,352 | $ | - | $ | 4,434,732 | |||||||||
September 30, 2008 | |||||||||||||||||
Gross
|
Gross
|
||||||||||||||||
Amortized
|
unrealized
|
unrealized
|
Estimated
|
||||||||||||||
cost
|
gains
|
losses
|
fair
value
|
||||||||||||||
U.S.
government sponsored entities
|
$ | 34,351,416 | $ | - | $ | (60,683 | ) | $ | 34,290,733 |
(Unaudited)
|
|||||||||
Amortized
|
Estimated
|
||||||||
cost
|
fair
value
|
||||||||
Less
than 1 year
|
$ | - | $ | - | |||||
1-5
years
|
- | - | |||||||
5-10
years
|
3,742,722 | 3,962,010 | |||||||
$ | 3,742,722 | $ | 3,962,010 |
Amortized
|
Estimated
|
|||||||||
cost
|
fair
value
|
|||||||||
Less
than 1 year
|
$ | - | $ | - | ||||||
1-5
years
|
- | - | ||||||||
5-10
years
|
4,157,380 | 4,434,732 | ||||||||
$ | 4,157,380 | $ | 4,434,732 |
(5)
|
Mortgage–Backed
Securities and Collateralized Mortgage
Obligations
|
(Unaudited)
|
|||||||||||||||||
March
31, 2010
|
|||||||||||||||||
Gross
|
Gross
|
||||||||||||||||
Amortized
|
unrealized
|
unrealized
|
Estimated
|
||||||||||||||
cost
|
gains
|
losses
|
fair
value
|
||||||||||||||
Mortgage–backed
securities:
|
|||||||||||||||||
FNMA
certificates
|
$ | 45,411,183 | $ | 705,547 | $ | (1,372 | ) | $ | 46,115,358 | ||||||||
GNMA
certificates
|
13,742,917 | 241,521 | - | 13,984,438 | |||||||||||||
FHLMC
certificates
|
30,423,684 | 590,782 | - | 31,014,466 | |||||||||||||
Collateralized
mortgage obligations:
|
|||||||||||||||||
FNMA
|
27,910,952 | 231,562 | (41,201 | ) | 28,101,313 | ||||||||||||
FHLMC
|
13,985,808 | 190,228 | (54,247 | ) | 14,121,789 | ||||||||||||
GNMA
|
15,530,404 | 2,458 | - | 15,532,862 | |||||||||||||
Other:
|
|||||||||||||||||
Rated
AAA
|
36,993,843 | 71,631 | (1,909,036 | ) | 35,156,438 | ||||||||||||
Rated
BBB
|
14,747,084 | - | (3,129,433 | ) | 11,617,651 | ||||||||||||
Rated
CCC
|
7,649,368 | - | (1,709,986 | ) | 5,939,382 | ||||||||||||
$ | 206,395,243 | $ | 2,033,729 | $ | (6,845,275 | ) | $ | 201,583,697 |
September
30, 2009
|
|||||||||||||||||
Gross
|
Gross
|
||||||||||||||||
Amortized
|
unrealized
|
unrealized
|
Estimated
|
||||||||||||||
cost
|
gains
|
losses
|
fair
value
|
||||||||||||||
Mortgage–backed
securities:
|
|||||||||||||||||
FNMA
certificates
|
$ | 53,593,424 | $ | 382,886 | $ | (1,734 | ) | $ | 53,974,576 | ||||||||
GNMA
certificates
|
5,744,809 | 236,716 | (2,613 | ) | 5,978,912 | ||||||||||||
FHLMC
certificates
|
27,438,166 | 240,789 | - | 27,678,955 | |||||||||||||
Collateralized
mortgage obligations:
|
|||||||||||||||||
FNMA
|
37,302,274 | 528,296 | (124,835 | ) | 37,705,735 | ||||||||||||
FHLMC
|
19,205,684 | 218,811 | (44,825 | ) | 19,379,670 | ||||||||||||
Other:
|
|||||||||||||||||
Rated
AAA
|
39,491,803 | - | (6,064,232 | ) | 33,427,571 | ||||||||||||
Rated
AA
|
13,153,296 | 14,053 | (4,887,440 | ) | 8,279,909 | ||||||||||||
Rated
A
|
8,139,195 | - | (600,672 | ) | 7,538,523 | ||||||||||||
Rated
B
|
7,605,580 | - | (472,088 | ) | 7,133,492 | ||||||||||||
Rated
CCC
|
2,770,019 | - | (2,241,387 | ) | 528,632 | ||||||||||||
$ | 214,444,250 | $ | 1,621,551 | $ | (14,439,826 | ) | $ | 201,625,975 |
September
30, 2008
|
|||||||||||||||||
Gross
|
Gross
|
||||||||||||||||
Amortized
|
unrealized
|
unrealized
|
Estimated
|
||||||||||||||
cost
|
gains
|
losses
|
fair
value
|
||||||||||||||
Mortgage–backed
securities:
|
|||||||||||||||||
FNMA
certificates
|
$ | 95,183,109 | $ | 289,676 | $ | (804,240 | ) | $ | 94,668,545 | ||||||||
GNMA
certificates
|
9,322,512 | 73,792 | (18,544 | ) | 9,377,760 | ||||||||||||
FHLMC
certificates
|
6,384,068 | 15,553 | (41,287 | ) | 6,358,334 | ||||||||||||
Collateralized
mortgage obligations:
|
|||||||||||||||||
FNMA
|
20,786,166 | 63,253 | (794,041 | ) | 20,055,378 | ||||||||||||
FHLMC
|
28,712,262 | 103,970 | (602,743 | ) | 28,213,489 | ||||||||||||
GNMA
|
997,567 | 1,160 | - | 998,727 | |||||||||||||
Other:
|
|||||||||||||||||
Rated
AAA
|
81,608,839 | - | (5,762,751 | ) | 75,846,088 | ||||||||||||
Rated
AA
|
7,962,680 | - | (2,812,419 | ) | 5,150,261 | ||||||||||||
Rated
A3
|
2,957,224 | - | (777,387 | ) | 2,179,837 | ||||||||||||
$ | 253,914,427 | $ | 547,404 | $ | (11,613,412 | ) | $ | 242,848,419 |
(Unaudited)
|
|||||||||||||
March
31, 2010
|
|||||||||||||
Gross
|
|||||||||||||
Amortized
|
unrealized
|
Estimated
|
|||||||||||
cost
|
losses
|
fair
value
|
|||||||||||
Mortgage–backed
securities:
|
|||||||||||||
FNMA
certificates
|
$ | - | $ | - | $ | - | |||||||
FHLMC
certificates
|
- | - | - | ||||||||||
GNMA
|
- | - | - | ||||||||||
Collateralized
mortgage obligations:
|
|||||||||||||
FNMA
|
19,334,019 | (41,201 | ) | 19,292,818 | |||||||||
FHLMC
certificates
|
902,537 | (6,531 | ) | 896,006 | |||||||||
Other
|
2,129,035 | (297,530 | ) | 1,831,505 | |||||||||
$ | 22,365,591 | $ | (345,262 | ) | $ | 22,020,329 | |||||||
September
30, 2009
|
|||||||||||||
Gross
|
|||||||||||||
Amortized
|
unrealized
|
Estimated
|
|||||||||||
cost
|
losses
|
fair
value
|
|||||||||||
Mortgage–backed
securities:
|
|||||||||||||
FNMA
certificates
|
$ | - | $ | - | $ | - | |||||||
FHLMC
certificates
|
- | - | - | ||||||||||
GNMA
|
632,042 | (1,151 | ) | 630,891 | |||||||||
Collateralized
mortgage obligations:
|
|||||||||||||
FNMA
|
- | - | - | ||||||||||
FHLMC
certificates
|
4,357,974 | (44,825 | ) | 4,313,149 | |||||||||
Other
|
8,943,800 | (1,372,020 | ) | 7,571,780 | |||||||||
$ | 13,933,816 | $ | (1,417,996 | ) | $ | 12,515,820 |
September
30, 2008
|
|||||||||||||
Gross
|
|||||||||||||
Amortized
|
unrealized
|
Estimated
|
|||||||||||
cost
|
losses
|
fair
value
|
|||||||||||
Mortgage–backed
securities:
|
|||||||||||||
FNMA
certificates
|
$ | 54,394,728 | $ | (568,640 | ) | $ | 53,826,088 | ||||||
FHLMC
certificates
|
1,968,235 | (12,146 | ) | 1,956,089 | |||||||||
GNMA
|
3,572,295 | (14,716 | ) | 3,557,579 | |||||||||
Collateralized
mortgage obligations:
|
|||||||||||||
FNMA
|
4,212,251 | (11,653 | ) | 4,200,598 | |||||||||
FHLMC
certificates
|
13,526,758 | (284,028 | ) | 13,242,730 | |||||||||
Other
|
26,303,943 | (1,374,130 | ) | 24,929,813 | |||||||||
$ | 103,978,210 | $ | (2,265,313 | ) | $ | 101,712,897 | |||||||
(Unaudited)
|
|||||||||||||
March
31, 2010
|
|||||||||||||
Gross
|
|||||||||||||
Amortized
|
unrealized
|
Estimated
|
|||||||||||
cost
|
losses
|
fair
value
|
|||||||||||
Mortgage–backed
securities:
|
|||||||||||||
FNMA
certificates
|
$ | 90,342 | $ | (1,372 | ) | $ | 88,970 | ||||||
FHLMC
certificates
|
- | - | - | ||||||||||
GNMA
|
- | - | - | ||||||||||
Collateralized
mortgage obligations:
|
|||||||||||||
FNMA
|
- | - | - | ||||||||||
FHLMC
certificates
|
2,980,935 | (47,716 | ) | 2,933,219 | |||||||||
Other
|
48,934,687 | (6,450,925 | ) | 42,483,762 | |||||||||
$ | 52,005,964 | $ | (6,500,013 | ) | $ | 45,505,951 |
September 30, 2009 | ||||||||||||
Amortized
cost
|
Gross
unrealized
losses
|
Estimated
fair
value
|
||||||||||
Mortgage–backed
securities:
|
||||||||||||
FNMA
certificates
|
$ | 92,007 | $ | (1,734 | ) | $ | 90,273 | |||||
FHLMC
certificates
|
- | - | - | |||||||||
GNMA
|
264,200 | (1,462 | ) | 262,738 | ||||||||
Collateralized
mortgage obligations:
|
||||||||||||
FNMA
|
6,442,475 | (124,835 | ) | 6,317,640 | ||||||||
FHLMC
certificates
|
- | - | - | |||||||||
Other
|
60,185,581 | (12,893,799 | ) | 47,291,782 | ||||||||
$ | 66,984,263 | $ | (13,021,830 | ) | $ | 53,962,433 | ||||||
September 30, 2008 | ||||||||||||
Amortized
cost
|
Gross
unrealized
losses
|
Estimated
fair
value
|
||||||||||
Mortgage–backed
securities:
|
||||||||||||
FNMA
certificates
|
$ | 11,707,337 | $ | (235,600 | ) | $ | 11,471,737 | |||||
FHLMC
certificates
|
2,518,897 | (29,141 | ) | 2,489,756 | ||||||||
GNMA
|
311,229 | (3,829 | ) | 307,400 | ||||||||
Collateralized
mortgage obligations:
|
||||||||||||
FNMA
|
14,648,573 | (1,038,521 | ) | 13,610,052 | ||||||||
FHLMC
certificates
|
12,452,059 | (318,715 | ) | 12,133,344 | ||||||||
Other
|
61,507,512 | (7,722,293 | ) | 53,785,219 | ||||||||
$ | 103,145,607 | $ | (9,348,099 | ) | $ | 93,797,508 |
Beginning
balance of credit losses previously recognized in earnings
|
$
|
-
|
||
Amount
related to credit losses for securities for which an other-than-temporary
impairment was not previously recognized in earnings
|
3,526,674
|
|||
Amount
related to credit losses for securities for which an other-than-temporary
impairment was recognized in earnings
|
-
|
|||
Ending
balance of cumulative credit losses recognized in earnings
|
$
|
3,526,674
|
(6)
|
Derivative
Instruments
|
(7)
|
Loans
Receivable
|
(Unaudited) | ||||||||||||
March 31, | September 30, | |||||||||||
2010 | 2009 | 2008 | ||||||||||
Loans
not covered by loss sharing agreements:
|
||||||||||||
1-4
family residential real estate mortgage
|
$ | 114,406,107 | $ | 126,096,545 | $ | 138,204,594 | ||||||
Commercial
real estate
|
270,785,866 | 270,061,803 | 222,056,426 | |||||||||
Commercial
|
18,330,518 | 10,466,242 | 15,543,065 | |||||||||
Real
estate construction
|
50,247,796 | 43,965,320 | 39,563,042 | |||||||||
Consumer
and other
|
22,457,550 | 22,384,783 | 22,153,538 | |||||||||
Loans
receivable, net of undisbursed proceeds of loans in
process
|
476,227,837 | 472,974,693 | 437,520,665 | |||||||||
Less:
|
||||||||||||
Unamortized
loan origination fees, net
|
897,488 | 856,538 | 804,475 | |||||||||
Allowance
for loan losses
|
11,396,504 | 9,331,612 | 8,243,931 | |||||||||
Total
loans not covered, net
|
$ | 463,933,845 | $ | 462,786,543 | $ | 428,472,259 |
Impaired
Loans
at
Acquisition
|
All
Other
Acquired
Loans
|
Total
Covered
Loans
|
||||||||||
Loans
covered by loss sharing agreements:
|
||||||||||||
1-4
family residential real estate mortgage
|
$ | 20,322,390 | $ | 18,277,068 | $ | 38,599,458 | ||||||
Commercial
real estate
|
32,101,540 | 94,006,794 | 126,108,334 | |||||||||
Commercial
|
53,993,060 | 40,647,206 | 94,640,266 | |||||||||
Real
estate construction
|
19,240,365 | 25,389,531 | 44,629,896 | |||||||||
Consumer
and other
|
2,330,852 | 13,518,573 | 15,849,425 | |||||||||
Loans
receivable, gross
|
127,988,207 | 191,839,172 | 319,827,379 | |||||||||
Less:
|
||||||||||||
Non-accretable
difference
|
55,981,646 | 7,394,438 | 63,376,084 | |||||||||
Allowance
for covered loan losses
|
- | 19,113,290 | 19,113,290 | |||||||||
Accretable
discount
|
10,144,541 | 13,437,935 | 23,582,476 | |||||||||
Total
loans covered, net
|
$ | 61,862,020 | $ | 151,893,509 | $ | 213,755,529 |
Impaired
Loans
at
Acquisition
|
All
Other
Acquired
Loans
|
Total
Covered
Loans
|
||||||||||
Loans
covered by loss sharing agreements:
|
||||||||||||
1-4
family residential real estate mortgage
|
$ | - | $ | - | $ | - | ||||||
Commercial
real estate
|
17,447,242 | 61,661,859 | 79,109,101 | |||||||||
Commercial
|
3,831,034 | 18,834,759 | 22,665,793 | |||||||||
Real
estate construction
|
3,098,395 | 12,691,002 | 15,789,397 | |||||||||
Consumer
and other
|
1,006,789 | 10,956,360 | 11,963,149 | |||||||||
Loans
receivable, gross
|
25,383,460 | 104,143,980 | 129,527,440 | |||||||||
Less:
|
||||||||||||
Non-accretable
difference
|
7,136,864 | - | 7,136,864 | |||||||||
Allowance
for covered loan losses
|
- | 23,832,265 | 23,832,265 | |||||||||
Accretable
discount
|
- | 8,794,367 | 8,794,367 | |||||||||
Total
loans covered, net
|
$ | 18,246,596 | $ | 71,517,348 | $ | 89,763,944 |
NCB
as of June 26, 2009
|
||||||||||||
Impaired
|
All
Other
|
Total
|
||||||||||
Loans
at
|
Acquired
|
Covered
|
||||||||||
Acquisition
|
Loans
|
Loans
|
||||||||||
Loans
covered by loss sharing agreements:
|
||||||||||||
Contractually
required principal and interest payments
|
$ | 54,039,612 | $ | 118,850,871 | $ | 172,890,483 | ||||||
Interest
not expected to be collected
|
(3,061,251 | ) | (2,172,306 | ) | (5,233,557 | ) | ||||||
Non-accretable
principal difference
|
(30,999,727 | ) | - | (30,999,727 | ) | |||||||
Allowance
for covered loan losses
|
- | (23,832,265 | ) | (23,832,265 | ) | |||||||
Cash
flows expected to be collected
|
19,978,634 | 92,846,300 | 112,824,934 | |||||||||
Interest
expected to be collected
|
- | (7,755,966 | ) | (7,755,966 | ) | |||||||
Accretable
yield
|
- | 10,362,689 | ) | (10,362,689 | ) | |||||||
Fair
value of loans acquired
|
$ | 19,978,634 | $ | 74,727,645 | $ | 94,706,279 | ||||||
MCB as of March 26, 2010 | ||||||||||||
Impaired
|
All
Other
|
Total
|
||||||||||
Loans
at
|
Acquired
|
Covered
|
||||||||||
Acquisition
|
Loans
|
Loans
|
||||||||||
Loans
covered by loss sharing agreements:
|
||||||||||||
Contractually
required principal and interest payments
|
$ | 117,154,665 | $ | 110,331,830 | $ | 227,486,495 | ||||||
Interest
not expected to be collected
|
(5,570,451 | ) | (667,223 | ) | (6,237,674 | ) | ||||||
Non-accretable
principal difference
|
(50,612,159 | ) | (7,394,438 | ) | (58,006,597 | ) | ||||||
Cash
flows expected to be collected
|
60,972,055 | 102,270,169 | 163,242,224 | |||||||||
Interest
expected to be collected
|
(618,939 | ) | (12,985,630 | ) | (13,604,569 | ) | ||||||
Accretable
yield
|
(10,144,541 | ) | (7,245,502 | ) | (17,390,043 | ) | ||||||
Fair
value of loans acquired
|
$ | 50,208,575 | $ | 82,039,037 | $ | 132,247,612 |
Balance,
September 30, 2008
|
$
|
-
|
||
Fair
value of acquired impaired loans covered under loss sharing
agreements
|
19,978,634
|
|||
Reductions
since acquisition date resulting from repayments, write-offs and
foreclosures
|
(1,732,038
|
)
|
||
Balance,
September 30, 2009
|
18,246,596
|
|||
Fair
value of acquired impaired loans covered under loss sharing
agreements
|
50,208,575
|
|||
Reductions
since acquisition date resulting from repayments, write-offs and
foreclosures
|
(6,593,151
|
)
|
||
Balance,
March 31, 2010 (unaudited)
|
$
|
61,862,020
|
Impaired
|
All
Other
|
Total
|
||||||||||
Loans
at
|
Acquired
|
Covered
|
||||||||||
Acquisition
|
Loans
|
Loans
|
||||||||||
Balance,
September 30, 2008
|
$ | - | $ | - | $ | - | ||||||
Non-accretable
principal difference at
acquisition
|
30,999,727 | - | 30,999,727 | |||||||||
Reductions
since acquisition date resulting from charge-offs
|
(23,862,863 | ) | - | (23,862,863 | ) | |||||||
Balance,
September 30, 2009
|
7,136,864 | - | 7,136,864 | |||||||||
Non-accretable
principal difference acquired
|
50,612,159 | 7,394,438 | 58,006,597 | |||||||||
Reductions
since acquisition date resulting from charge-offs
|
(1,767,377 | ) | - | (1,767,377 | ) | |||||||
Balance,
March 31, 2010 (unaudited)
|
$ | 55,981,646 | $ | 7,394,438 | $ | 63,376,084 |
Balance,
September 30, 2008
|
$
|
-
|
||
Allowance
for loan losses at acquisition
|
23,832,265
|
|||
Loans
charged-off (gross)
|
-
|
|||
Recoveries
on loans previously charged-off
|
-
|
|||
Provision
for loan losses charged to operations
|
-
|
|||
Balance,
September 30, 2009
|
23,832,265
|
|||
Loans
charged-off (gross)
|
(4,718,975
|
)
|
||
Recoveries
on loans previously charged-off
|
-
|
|||
Provision
for loan losses charged to operations
|
-
|
|||
Balance,
March 31, 2010 (unaudited)
|
$
|
19,113,290
|
|
The
following table documents changes in the carrying value of the FDIC
receivable for loss sharing agreements relating to covered loans and other
real estate during the year ended September 30, 2009 and the six months
ended March 31, 2010:
|
Balance,
September 30, 2008
|
$
|
-
|
||
Fair
value of FDIC receivable for loss sharing agreements at
acquisition
|
49,991,245
|
|||
Reductions
since acquisition date resulting from:
|
||||
Wires
received
|
(23,685,634
|
)
|
||
Recovery
of previous loss reimbursements
|
(130,045
|
)
|
||
Additions
since acquisition date resulting from:
|
||||
Accretion
of fair value adjustment
|
219,377
|
|||
External
expenses qualifying under loss sharing agreements
|
86,203
|
|||
Balance,
September 30, 2009
|
26,481,146
|
|||
Fair
value of FDIC receivable for loss sharing agreements
acquired
|
70,746,613
|
|||
Reductions
resulting from:
|
||||
Wires
received
|
(4,617,605
|
)
|
||
Recovery
of previous loss reimbursements
|
(485,293
|
)
|
||
Additions
resulting from:
|
||||
Accretion
of fair value adjustment
|
834,310
|
|||
External
expenses qualifying under loss sharing agreements
|
1,130,293
|
|||
Balance,
March 31, 2010 (unaudited)
|
$
|
94,089,464
|
(Unaudited)
|
||||||||||||
March
31,
|
September 30, | |||||||||||
2010
|
2009
|
2008
|
||||||||||
Beginning
balance
|
$ | 10,340,240 | $ | 10,792,200 | $ | 1,313,534 | ||||||
New
loans-funded
|
58,520 | 316,753 | 9,873,280 | |||||||||
Repayments
|
220,070 | 768,713 | 394,614 | |||||||||
Ending
balance
|
$ | 10,178,690 | $ | 10,340,240 | $ | 10,792,200 |
(Unaudited) | ||||||||||||||||||||
Six Months Ended | ||||||||||||||||||||
March 31, | Years Ended September 30, | |||||||||||||||||||
2010
|
2009
|
2009
|
2008
|
2007
|
||||||||||||||||
Interest
income at contractual rates
|
$ | 875,285 | $ | 837,686 | $ | 683,036 | $ | 701,460 | $ | 658,333 | ||||||||||
Interest
income actually recorded
|
(179,546 | ) | (271,461 | ) | (146,658 | ) | (390,504 | ) | (266,941 | ) | ||||||||||
Reduction
of interest income
|
$ | 695,739 | $ | 566,225 | $ | 536,378 | $ | 310,956 | $ | 391,392 |
(Unaudited) | ||||||||||||||||||||
Six Months Ended | ||||||||||||||||||||
March 31, | Years Ended September 30, | |||||||||||||||||||
2010 | 2009 | 2009 | 2008 |
2007
|
||||||||||||||||
Balance,
beginning of year
|
$ | 9,331,612 | $ | 8,243,931 | $ | 8,243,931 | $ | 6,013,350 | $ | 6,086,205 | ||||||||||
Loans
charged off
|
(1,763,577 | ) | (1,704,739 | ) | (3,814,196 | ) | (1,046,926 | ) | (191,598 | ) | ||||||||||
Recoveries
on loans previously charged off
|
28,469 | 46,033 | 351,877 | 27,507 | 118,743 | |||||||||||||||
Provision
for loan losses charged to operations
|
3,800,000 | 2,550,000 | 4,550,000 | 3,250,000 | - | |||||||||||||||
Balance,
end of year
|
$ | 11,396,504 | $ | 9,135,225 | $ | 9,331,612 | $ | 8,243,931 | $ | 6,013,350 |
(8)
|
Accrued
Interest and Dividends
Receivable
|
(Unaudited)
|
||||||||||||
March
31,
|
September 30, | |||||||||||
2010
|
2009
|
2008
|
||||||||||
Loans
receivable
|
$ | 3,482,241 | $ | 2,904,852 | $ | 2,124,751 | ||||||
Mortgage–backed
securities and collateralized mortgage obligations
|
793,061 | 833,557 | 1,005,066 | |||||||||
Other
investment securities
|
6,907 | 7,671 | 46,358 | |||||||||
FHLB
and other bank stock
|
4,371 | - | 96,453 | |||||||||
$ | 4,286,580 | $ | 3,746,080 | $ | 3,272,628 |
(9)
|
Real
Estate Owned
|
(Unaudited)
|
||||||||||||
March
31,
|
September
30,
|
|||||||||||
2010
|
2009
|
2008
|
||||||||||
Balance,
beginning of year
|
$ | 4,777,542 | $ | 2,680,430 | $ | 179,773 | ||||||
Real
estate acquired through foreclosure of loans receivable
|
4,821,380 | 6,822,044 | 4,821,478 | |||||||||
Real
estate sold
|
(2,048,408 | ) | (4,135,558 | ) | (2,395,548 | ) | ||||||
Write
down of real estate owned
|
(110,234 | ) | (669,870 | ) | (39,219 | ) | ||||||
Gain
(loss) on sale of real estate owned
|
(31,105 | ) | 80,496 | 113,946 | ||||||||
Balance,
end of year
|
$ | 7,409,175 | $ | 4,777,542 | $ | 2,680,430 |
Covered
real estate owned
|
||||||||
(Unaudited)
|
||||||||
March
31,
|
September
30,
|
|||||||
2010
|
2009
|
|||||||
Balance,
beginning of year
|
$ | 10,681,499 | $ | - | ||||
Real
estate acquired and subject to FDIC loss sharing agreement
|
23,649,464 | 7,436,438 | ||||||
Real
estate acquired through foreclosure of loans receivable
|
4,459,514 | 4,389,951 | ||||||
Real
estate sold
|
(3,530,586 | ) | (1,307,447 | ) | ||||
Write
down of real estate owned
|
(89,542 | ) | - | |||||
Gain
(loss) on sale of real estate owned:
|
||||||||
Recognized
in noninterest income, 20%
|
112,464 | 32,511 | ||||||
Reduction
of FDIC receivable for loss sharing agreements, 80% of recovery
(loss)
|
449,858 | 130,046 | ||||||
Balance,
end of year
|
$ | 35,732,671 | $ | 10,681,499 |
(10)
|
Premises
and Equipment
|
(Unaudited)
|
||||||||||||
March
31,
|
September
30,
|
|||||||||||
2010
|
2009
|
2008
|
||||||||||
Land
|
$ | 5,181,812 | $ | 5,181,812 | $ | 5,781,355 | ||||||
Buildings
and improvements
|
13,396,335 | 13,116,948 | 12,266,206 | |||||||||
Furniture,
fixtures, and equipment
|
4,572,367 | 4,315,527 | 3,995,831 | |||||||||
Construction
in progress
|
352,311 | 170,491 | 2,600 | |||||||||
23,502,825 | 22,784,778 | 22,045,992 | ||||||||||
Less
accumulated depreciation
|
5,989,452 | 5,497,638 | 4,743,475 | |||||||||
$ | 17,513,373 | $ | 17,287,140 | $ | 17,302,517 |
(11)
|
Deposits
|
(Unaudited)
|
||||||||
March
31, 2010
|
||||||||
Weighted
|
||||||||
Range
of
|
average
|
|||||||
Amount
|
interest
rates
|
interest
rates
|
||||||
Demand,
NOW, and money market accounts
|
$
|
290,103,636
|
0.00
– 4.90
|
%
|
1.24
|
%
|
||
Savings
deposits
|
29,724,514
|
0.25
– 1.01
|
%
|
0.25
|
%
|
|||
Time
deposits by original term:
|
||||||||
Time
deposits $100,000 and over
|
283,092,199
|
0.00
– 5.92
|
%
|
2.34
|
%
|
|||
Other
time deposits:
|
||||||||
12
months or less
|
247,421,644
|
0.02
– 5.75
|
%
|
2.12
|
%
|
|||
13
– 36 months
|
44,883,673
|
1.00
– 5.84
|
%
|
3.00
|
%
|
|||
37
months or more
|
11,354,446
|
1.68
– 4.35
|
%
|
3.36
|
%
|
|||
Total
deposits
|
906,580,112
|
1.90
|
%
|
|||||
Accrued
interest payable
|
905,808
|
|||||||
$
|
907,485,920
|
September
30, 2009
|
September
30, 2008
|
|||||||||||||||||||||||
Weighted
|
Weighted
|
|||||||||||||||||||||||
Range
of
|
average
|
Range
of
|
average
|
|||||||||||||||||||||
Amount
|
interest
rates
|
interest
rates
|
Amount
|
interest
rates
|
interest
rates
|
|||||||||||||||||||
Demand,
NOW, and money market accounts
|
$ | 202,890,009 | 0.00-4.89 | % | 0.82 | % | $ | 158,113,289 | 0.00-5.50 | % | 1.44 | % | ||||||||||||
Savings
deposits
|
14,011,765 | 0.25 | % | 0.25 | % | 11,385,228 | 0.25 | % | 0.25 | % | ||||||||||||||
Time
deposits by original term:
|
||||||||||||||||||||||||
Time
deposits $100,000 and over
|
196,216,364 | 0.00-5.69 | % | 2.21 | % | 116,428,717 | 0.00-5.69 | % | 3.85 | % | ||||||||||||||
Other
time deposits:
|
||||||||||||||||||||||||
12
months or less
|
149,448,755 | 0.24-5.50 | % | 2.61 | % | 107,326,781 | 1.39-6.97 | % | 3.76 | % | ||||||||||||||
13
– 36 months
|
30,991,706 | 1.08-5.50 | % | 3.56 | % | 22,750,312 | 1.89-5.50 | % | 4.20 | % | ||||||||||||||
37
months or more
|
4,075,070 | 1.72-5.40 | % | 3.62 | % | 4,170,737 | 2.96-5.50 | % | 4.29 | % | ||||||||||||||
Total
deposits
|
597,633,669 | 1.71 | % | 420,175,064 | 2.84 | % | ||||||||||||||||||
Accrued
interest payable
|
874,218 | 1,434,807 | ||||||||||||||||||||||
$ | 598,507,887 | $ | 421,609,871 |
(Unaudited)
|
||||||||
March
31,
|
September
30,
|
|||||||
2010
|
2009
|
|||||||
2010
|
$ | 455,804,464 | $ | 318,627,932 | ||||
2011
|
76,532,537 | 37,539,612 | ||||||
2012
|
21,401,408 | 17,689,491 | ||||||
2013
|
10,807,692 | 3,274,641 | ||||||
2014
and thereafter
|
22,205,861 | 3,600,219 | ||||||
$ | 586,751,962 | $ | 380,731,895 |
(Unaudited) | ||||||||||||||||||||
Six Months Ended | ||||||||||||||||||||
March 31, | Years Ended September 30, | |||||||||||||||||||
2010
|
2009
|
2009
|
2008
|
2007
|
||||||||||||||||
Demand,
NOW, and money market accounts
|
$ | 1,011,184 | $ | 716,933 | $ | 1,326,016 | $ | 3,210,150 | $ | 5,415,233 | ||||||||||
Savings
deposits
|
21,506 | 14,587 | 32,605 | 28,486 | 30,717 | |||||||||||||||
Time
deposits
|
4,093,212 | 4,497,923 | 8,740,755 | 11,287,128 | 9,741,972 | |||||||||||||||
$ | 5,125,902 | $ | 5,229,443 | $ | 10,099,376 | $ | 14,525,764 | $ | 15,187,922 |
(12)
|
Borrowings
|
(Unaudited)
|
||||||||||||
March
31,
|
September 30, | |||||||||||
2010
|
2009
|
2008
|
||||||||||
Federal
Home Loan Bank advances
|
$ | 212,000,000 | $ | 227,000,000 | $ | 267,000,000 | ||||||
Repurchase
agreements
|
232,472 | - | - | |||||||||
Total
Borrowings
|
$ | 212,232,472 | $ | 227,000,000 | $ | 267,000,000 |
(Unaudited) | ||||||||||||
March 31, 2010 | ||||||||||||
Range
of
|
Weighted
|
|||||||||||
Due |
Amount
|
interest
rates
|
average
rate
|
|||||||||
Less
than one year
|
$ | 102,000,000 | 5.40 – 6.14 | % | 5.64 | % | ||||||
One
to two years
|
30,000,000 | 3.30 – 4.87 | % | 4.61 | % | |||||||
Two
to three years
|
20,000,000 | 3.42 – 3.88 | % | 3.65 | % | |||||||
Three
to four years
|
5,000,000 | 3.80 | % | 3.80 | % | |||||||
Four
to five years
|
5,000,000 | 3.99 | % | 3.99 | % | |||||||
Thereafter
|
50,000,000 | 4.30 – 4.33 | % | 4.32 | % | |||||||
$ | 212,000,000 | 4.91 | % |
September
30, 2009
|
September
30, 2008
|
|||||||||||||||||||||||
Range
of
|
Weighted
|
Range
of
|
Weighted
|
|||||||||||||||||||||
Due
|
Amount
|
interest
rates
|
average
rate
|
Amount
|
interest
rates
|
average
rate
|
||||||||||||||||||
Less
than one year
|
$ | 15,000,000 | 2.65-3.93 | % | 3.50 | % | $ | 15,000,000 | 2.53-3.31 | % | 3.05 | % | ||||||||||||
One
to two years
|
102,000,000 | 5.40-6.14 | % | 5.64 | % | 40,000,000 | 2.65-6.22 | % | 5.20 | % | ||||||||||||||
Two
to three years
|
30,000,000 | 3.30-4.87 | % | 4.61 | % | 102,000,000 | 5.40-6.14 | % | 5.64 | % | ||||||||||||||
Three
to four years
|
20,000,000 | 3.42-3.88 | % | 3.65 | % | 30,000,000 | 3.30-4.87 | % | 4.61 | % | ||||||||||||||
Four
to five years
|
5,000,000 | 3.80 | % | 3.80 | % | 20,000,000 | 3.42-3.88 | % | 3.66 | % | ||||||||||||||
Thereafter
|
55,000,000 | 3.99-4.33 | % | 4.29 | % | 60,000,000 | 2.51-4.33 | % | 3.50 | % | ||||||||||||||
$ | 227,000,000 | 4.82 | % | $ | 267,000,000 | 4.86 | % |
(Unaudited)
|
||||||||||||||||
March
31,
|
September 30, | |||||||||||||||
2010
|
2009
|
2008
|
2007
|
|||||||||||||
Weighted
average borrowing rate at period–end
|
4.91 | % | 4.82 | % | 4.65 | % | 4.83 | % | ||||||||
Weighted
average borrowing rate during the period
|
4.82 | % | 4.80 | % | 4.79 | % | 4.50 | % | ||||||||
Average
daily balance during period
|
$ | 218,008,603 | $ | 260,158,013 | $ | 255,739,607 | $ | 304,077,384 | ||||||||
Maximum
month–end balance during the period
|
$ | 217,000,000 | $ | 275,500,000 | $ | 267,000,000 | $ | 312,000,000 |
(Unaudited)
|
||||||||||||||||
March
31,
|
September 30, | |||||||||||||||
2010
|
2009
|
2008
|
2007
|
|||||||||||||
Weighted
average borrowing rate at period–end
|
0.87 | % | - | % | - | % | 5.19 | % | ||||||||
Weighted
average borrowing rate during the period
|
0.87 | % | - | % | 4.67 | % | 5.52 | % | ||||||||
Average
daily balance during period
|
$ | 4,618 | $ | - | $ | 4,712,830 | $ | 17,377,438 | ||||||||
Maximum
month–end balance during the period
|
$ | 232,472 | $ | - | $ | 9,935,000 | $ | 18,598,000 |
(Unaudited) | ||||||||||||||||||||
Six Months Ended | ||||||||||||||||||||
March 31, | Years Ended September 30, | |||||||||||||||||||
2010
|
2009
|
2009
|
2008
|
2007
|
||||||||||||||||
Securities
sold under agreements to repurchase
|
$ | 25 | $ | - | $ | - | $ | 219,769 | $ | 959,995 | ||||||||||
Federal
Home Loan Bank advances
|
5,252,228 | 6,106,722 | 12,499,232 | 12,025,251 | 13,679,024 | |||||||||||||||
$ | 5,252,253 | $ | 6,106,722 | $ | 12,499,232 | $ | 12,245,020 | $ | 14,639,019 |
(13)
|
Income
Taxes
|
(Unaudited)
|
||||||||||||||||||||
Six
Months Ended
|
||||||||||||||||||||
March
31,
|
Years
Ended September 30,
|
|||||||||||||||||||
2010
|
2009
|
2009
|
2008
|
2007
|
||||||||||||||||
Federal:
|
||||||||||||||||||||
Current
|
$ | 216,055 | $ | 812,031 | $ | 710,508 | $ | 5,945,422 | $ | 25,066,763 | ||||||||||
Deferred
|
3,552,183 | (423,371 | ) | (259,804 | ) | (1,580,048 | ) | (339,854 | ) | |||||||||||
Total
federal tax expense
|
3,768,238 | 388,660 | 450,704 | 4,365,374 | 24,726,909 | |||||||||||||||
State:
|
||||||||||||||||||||
Current
|
44,619 | 38,078 | 25,339 | 466,208 | 4,232,687 | |||||||||||||||
Deferred
|
615,235 | (7,666 | ) | (170,405 | ) | (340,546 | ) | (82,232 | ) | |||||||||||
Total
state tax expense
|
659,854 | 30,412 | (145,066 | ) | 125,662 | 4,150,455 | ||||||||||||||
$ | 4,428,092 | $ | 419,072 | $ | 305,638 | $ | 4,491,036 | $ | 28,877,364 |
(Unaudited)
|
||||||||||||||||||||
Six
Months Ended
|
||||||||||||||||||||
March
31,
|
Years
Ended September 30,
|
|||||||||||||||||||
2010
|
2009
|
2009
|
2008
|
2007
|
||||||||||||||||
Computed
“expected” tax expense
|
$ | 4,256,561 | $ | 646,965 | $ | 917,490 | $ | 5,258,144 | $ | 27,936,015 | ||||||||||
Increase
(decrease) in tax expense resulting from:
|
||||||||||||||||||||
Dividends
received deduction
|
- | - | - | (612,194 | ) | (1,789,725 | ) | |||||||||||||
State
income taxes, net of federal tax effect
|
428,905 | 19,768 | (94,293 | ) | 81,680 | 2,697,795 | ||||||||||||||
Tax–exempt
income
|
(198,228 | ) | (222,783 | ) | (444,244 | ) | (373,412 | ) | (240,252 | ) | ||||||||||
Change
in tax contingency accrual
|
- | - | - | 14,192 | (117,279 | ) | ||||||||||||||
Market
value depreciation of ESOP shares
|
1,695 | (7,601 | ) | (3,864 | ) | 100,947 | 199,720 | |||||||||||||
Other,
net
|
(60,841 | ) | (17,277 | ) | (69,451 | ) | 21,679 | 191,090 | ||||||||||||
$ | 4,428,092 | $ | 419,072 | $ | 305,638 | $ | 4,491,036 | $ | 28,877,364 |
(Unaudited)
|
||||||||||||
March 31, |
September
30,
|
|||||||||||
2010 | 2009 |
2008
|
||||||||||
Deferred
tax assets:
|
||||||||||||
Allowance
for loan losses
|
$ | 4,444,696 | $ | 3,639,801 | $ | 3,168,967 | ||||||
Interest
on nonaccrual loans
|
- | 209,215 | 119,532 | |||||||||
Deferred
compensation
|
1,015,541 | 1,009,356 | 1,013,388 | |||||||||
Stock
option expense
|
771,996 | 769,193 | 752,447 | |||||||||
Real
estate acquired through foreclosure
|
420,438 | 294,816 | 18,460 | |||||||||
State
credits
|
252,388 | 289,258 | 248,500 | |||||||||
Other
than temporary impairment
|
1,374,698 | - | - | |||||||||
Net
unrealized holding losses on securities available for sale
|
1,561,366 | 4,263,915 | 4,277,099 | |||||||||
Other
|
241,909 | 208,726 | 70,820 | |||||||||
Total
gross deferred tax assets
|
10,083,032 | 10,684,280 | 9,669,213 | |||||||||
Deferred
tax liabilities:
|
||||||||||||
Deferred
loans costs, net
|
378,164 | 405,959 | 452,104 | |||||||||
Depreciation
|
2,303,691 | 1,928,768 | 1,197,618 | |||||||||
Investment
securities market adjustment for tax reporting
|
- | 160,852 | 1,055,165 | |||||||||
FDIC
transaction
|
6,902,374 | 819,931 | - | |||||||||
Other
|
79,727 | 79,727 | 92,306 | |||||||||
Total
gross deferred tax liabilities
|
9,663,956 | 3,395,237 | 2,797,193 | |||||||||
Net deferred tax assets | $ | 419,076 | $ | 7,289,043 | $ | 6,872,020 |
(14)
|
Employee
Benefits
|
2009
|
||||
Risk-
free interest rate
|
3.21 | % | ||
Dividend
yield
|
11.75 | % | ||
Expected
life at date of grant
|
10
years
|
|||
Volatility
|
42.13 | % | ||
Weighted
average grant-date fair value
|
$ | 0.61 |
Shares
|
Weighted
average
exercise
price/share
|
Weighted
average
remaining
life
(years)
|
||||||||||
Options
outstanding- September 30, 2006
|
258,300 | 31.24 | 7 | |||||||||
Options
exercised
|
(22,750 | ) | 29.26 | 5 | ||||||||
Options
forfeited
|
(4,350 | ) | 31.62 | 6 | ||||||||
Granted
in 2007
|
330,000 | 45.50 | 9 | |||||||||
Options
outstanding- September 30, 2007
|
561,200 | 39.73 | 9 | |||||||||
Options
exercisable at end of year – September 30, 2007
|
425,250 | 41.86 | 9 | |||||||||
Options
outstanding- September 30, 2007
|
561,200 | 39.70 | 9 | |||||||||
Options
exercised
|
(3,600 | ) | 29.26 | 4 | ||||||||
Options
forfeited
|
(1,750 | ) | 29.79 | 5 | ||||||||
Granted
in 2008
|
- | - | - | |||||||||
Options
outstanding- September 30, 2008
|
555,850 | 39.80 | 9 | |||||||||
Options
exercisable at end of year – September 30, 2008
|
500,350 | 40.56 | 8 | |||||||||
Options
outstanding- September 30, 2008
|
555,850 | 39.80 | 9 | |||||||||
Options
exercised
|
- | - | - | |||||||||
Options
forfeited
|
(603,600 | ) | 37.35 | 9 | ||||||||
Granted
in 2009
|
405,525 | 11.00 | 10 | |||||||||
Options
outstanding- September 30, 2009
|
357,775 | 11.35 | 10 | |||||||||
Options
exercisable at end of year – September 30, 2009
|
5,750 | 29.42 | 4 | |||||||||
Options
outstanding- September 30, 2009
|
357,775 | 11.35 | 10 | |||||||||
Options
exercised
|
- | - | - | |||||||||
Options
forfeited
|
- | - | - | |||||||||
Options
granted
|
- | - | - | |||||||||
Options
outstanding- March 31, 2010 (unaudited)
|
357,775 | 11.35 | 10 | |||||||||
Options
exercisable six month period ended – March 31, 2010
(unaudited)
|
5,750 | 29.42 | 4 |
Weighted
|
Weighted
|
||||||||||||||
Number
|
average
|
average
|
|||||||||||||
outstanding
at
|
remaining
|
Exercise
|
exercise
|
||||||||||||
March
31,
|
contractual
|
price
|
price
|
||||||||||||
2010
(unaudited)
|
life
in years
|
per
share
|
per
share
|
||||||||||||
5,500 | 3 | $ | 29.26 | $ | 29.26 | ||||||||||
250 | 5 | $ | 32.99 | $ | 32.99 | ||||||||||
352,025 | 9 | $ | 11.00 | $ | 11.00 | ||||||||||
357,775 | |||||||||||||||
Weighted
|
Weighted
|
||||||||||||||
Number
|
average
|
average
|
|||||||||||||
outstanding
at
|
remaining
|
Exercise
|
exercise
|
||||||||||||
September
30,
|
contractual
|
price
|
price
|
||||||||||||
2009
|
life
in years
|
per
share
|
per
share
|
||||||||||||
5,500 | 3 | $ | 29.26 | $ | 29.26 | ||||||||||
250 | 5 | $ | 32.99 | $ | 32.99 | ||||||||||
352,025 | 9 | $ | 11.00 | $ | 11.00 | ||||||||||
357,775 |
(Unaudited) | ||||||||||||||||||||
Six Months Ended | ||||||||||||||||||||
March 31, | Years Ended September 30, | |||||||||||||||||||
2010
|
2009
|
2009
|
2008
|
2007
|
||||||||||||||||
Shares
granted
|
- | - | - | - | 8,000 | |||||||||||||||
Fair
value per share at grant date
|
- | - | - | - | 47.75-50.00 | |||||||||||||||
Aggregate
value at grant date
|
- | - | - | - | 397,750 | |||||||||||||||
Vesting
for current year grants
|
- | - | - | - |
3
to 5 years
|
|||||||||||||||
Expensed
for year
|
$ | 105,784 | $ | 144,497 | $ | 285,046 | $ | 851,640 | $ | 669,319 |
Weighted
average
|
||||||||
grant
date fair
|
||||||||
Shares
|
value
per award
|
|||||||
Fiscal 2007 activity
|
||||||||
Granted
|
8,000
|
$
|
49.72
|
|||||
Vested
|
25,698
|
27.60
|
||||||
Cancelled
or expired
|
500
|
33.17
|
||||||
Unvested
Restricted stock awards- September 30, 2007
|
88,948
|
34.52
|
||||||
Fiscal 2008 activity
|
||||||||
Granted
|
-
|
-
|
||||||
Vested
|
42,841
|
32.99
|
||||||
Cancelled
or expired
|
-
|
|||||||
Unvested
Restricted stock awards- September 30, 2008
|
46,107
|
35.97
|
||||||
Fiscal 2009 activity
|
||||||||
Granted
|
-
|
-
|
||||||
Vested
|
11,291
|
32.99
|
||||||
Cancelled
or expired
|
200
|
33.45
|
||||||
Unvested
Restricted stock awards- September 30, 2009
|
34,616
|
36.96
|
||||||
Fiscal 2010 activity
(unaudited)
|
||||||||
Granted
|
-
|
-
|
||||||
Vested
|
1,500
|
49.25
|
||||||
Cancelled
or expired
|
-
|
-
|
||||||
Unvested
Restricted stock awards- March 31, 2010
|
33,116
|
36.44
|
(15)
|
Commitments
and Contingent Liabilities
|
(Unaudited)
|
||||||||
March
31,
|
September
30,
|
|||||||
2010
|
2009
|
|||||||
2010
|
$ | 607,836 | $ | 620,904 | ||||
2011
|
593,236 | 594,337 | ||||||
2012
|
587,736 | 594,336 | ||||||
2013
|
568,736 | 589,936 | ||||||
2014
|
530,736 | 587,736 | ||||||
Thereafter
|
514,536 | 540,236 | ||||||
$ | 3,402,816 | $ | 3,527,485 |
(16)
|
Fair
Value of Financial Instruments and Fair Value
Measurement
|
(Unaudited)
|
||||||||||||||||||||||||
March
31, 2010
|
September
30, 2009
|
September
30, 2008
|
||||||||||||||||||||||
Carrying
|
Estimated
|
Carrying
|
Estimated
|
Carrying
|
Estimated
|
|||||||||||||||||||
Amount
|
Fair
Value
|
Amount
|
Fair
Value
|
Amount
|
Fair
Value
|
|||||||||||||||||||
Financial
assets:
|
||||||||||||||||||||||||
Cash
and cash equivalents
|
$ | 141,636,418 | $ | 141,636,418 | $ | 53,840,036 | $ | 53,840,036 | $ | 14,639,128 | $ | 14,639,128 | ||||||||||||
Investments
available for sale
|
220,702,807 | 220,702,807 | 220,096,507 | 220,096,507 | 290,745,052 | 290,745,052 | ||||||||||||||||||
Loans
receivable, net
|
667,689,374 | 649,019,224 | 552,550,487 | 539,884,951 | 428,472,259 | 430,739,723 | ||||||||||||||||||
Loans
held for sale
|
690,301 | 694,900 | 1,123,489 | 1,129,286 | 1,292,370 | 1,297,165 | ||||||||||||||||||
Cash
surrender value
|
||||||||||||||||||||||||
of
life insurance
|
31,116,214 | 31,116,214 | 30,549,849 | 30,549,849 | 29,280,581 | 29,280,581 | ||||||||||||||||||
FDIC
Receivable for loss
|
94,089,464 | 94,089,464 | 26,481,146 | 26,481,146 | - | - | ||||||||||||||||||
sharing
agreements
|
||||||||||||||||||||||||
Financial
liabilities:
|
||||||||||||||||||||||||
Deposits
|
$ | 906,580,112 | $ | 914,087,322 | $ | 597,633,669 | $ | 601,081,260 | $ | 420,175,064 | $ | 421,968,589 | ||||||||||||
FHLB
advances
|
212,000,000 | 222,839,195 | 227,000,000 | 230,882,910 | 267,000,000 | 273,669,709 | ||||||||||||||||||
Repurchase
agreements
|
232,472 | 232,472 | - | - | - | - | ||||||||||||||||||
Accrued
interest payable
|
905,808 | 905,808 | 874,218 | 874,218 | 1,434,807 | 1,434,807 |
|
(a)
|
Cash
and Cash Equivalents
|
|
(b)
|
Investments
and Mortgage–Backed Securities and Collateralized Mortgage Obligations
Available for Sale
|
(Unaudited)
|
||||||||||||
March
31,
|
September 30, | |||||||||||
2010
|
2009
|
2008
|
||||||||||
Other
investment securities
|
$ | 3,962,010 | $ | 4,434,732 | $ | 34,290,733 | ||||||
Mortgage-backed
securities and collateralized mortgage obligations
|
201,583,697 | 201,625,975 | 242,848,419 | |||||||||
Federal
Home Loan Bank stock
|
15,157,100 | 14,035,800 | 13,605,900 | |||||||||
$ | 220,702,807 | $ | 220,096,507 | $ | 290,745,052 |
|
(c)
|
Loans
Receivable
|
(Unaudited)
|
||||||||
March
31, 2010
|
||||||||
Carrying
|
Estimated
|
|||||||
amount
|
fair
value
|
|||||||
Loans
covered by loss sharing agreements, net
|
$ | 213,755,529 | $ | 213,755,529 | ||||
Loans
not covered by loss sharing agreements
|
476,227,837 | 447,557,687 | (a) | |||||
Loans
receivable
|
689,983,366 | 661,313,216 | ||||||
Unamortized
loan origination fees, net
|
(897,488 | ) | (897,488 | ) | ||||
Allowance
for loan losses (non-covered loans)
|
(11,396,504 | ) | (11,396,504 | ) | ||||
Loans
receivable, net
|
$ | 677,689,374 | $ | 649,019,224 | ||||
Loans
held for sale
|
$ | 690,301 | $ | 694,900 |
September
30, 2009
|
September
30, 2008
|
|||||||||||||||
Carrying
|
Estimated
|
Carrying
|
Estimated
|
|||||||||||||
amount
|
fair
value
|
amount
|
fair
value
|
|||||||||||||
Loans
covered by loss sharing agreements, net
|
$ | 89,763,944 | $ | 89,763,944 | $ | - | $ | - | ||||||||
Loans
not covered by loss sharing agreements
|
472,974,693 | 460,309,157 |
(a)
|
437,520,665 | 439,788,129 | |||||||||||
Loans
receivable
|
562,738,637 | 550,073,101 | 437,520,665 | 439,788,129 | ||||||||||||
Unamortized
loan origination fees, net
|
(856,538 | ) | (856,538 | ) | (804,475 | ) | (804,475 | ) | ||||||||
Allowance
for loan losses (non-covered loans)
|
(9,331,612 | ) | (9,331,612 | ) | (8,243,931 | ) | (8,243,931 | ) | ||||||||
Loans
receivable, net
|
$ | 552,550,487 | $ | 539,884,951 | $ | 428,472,259 | $ | 430,739,723 | ||||||||
Loans
held for sale
|
$ | 1,123,489 | $ | 1,129,286 | $ | 1,292,370 | $ | 1,297,165 |
(e)
|
Cash
Surrender Value of Life Insurance
|
(Unaudited) | ||||||||||||
March
31,
|
September 30, | |||||||||||
2010
|
2009
|
2008
|
||||||||||
Cash
surrender value of life insurance
|
$ | 31,116,214 | $ | 30,549,849 | $ | 29,280,581 |
(f)
|
FDIC
Receivable for Loss Sharing
Agreements
|
(Unaudited)
|
||||||||||||
March
31,
|
September
30,
|
|||||||||||
2010 |
2009
|
2008
|
||||||||||
FDIC
receivable for loss sharing agreements
|
$ | 94,089,464 | $ | 26,481,146 | $ | - |
(g)
|
Deposits
|
(Unaudited)
|
|||||||||
March
31, 2010
|
|||||||||
Carrying
|
Estimated
|
||||||||
amount
|
fair
value
|
||||||||
Demand,
NOW, and money market accounts
|
$ | 290,103,636 | $ | 290,103,636 | |||||
Savings
deposits
|
29,724,514 | 29,724,514 | |||||||
Time
deposits
|
586,751,962 | 594,259,172 | |||||||
$ | 906,580,112 | $ | 914,087,322 |
September 30, 2009 | September 30, 2008 | |||||||||||||||
Carrying
|
Estimated
|
Carrying
|
Estimated
|
|||||||||||||
amount
|
fair
value
|
amount
|
fair
value
|
|||||||||||||
Demand,
NOW, and money market accounts
|
$ | 202,890,009 | $ | 202,890,009 | $ | 158,113,289 | $ | 158,113,289 | ||||||||
Savings
deposits
|
14,011,765 | 14,011,765 | 11,385,228 | 11,385,228 | ||||||||||||
Time
deposits
|
380,731,895 | 384,179,486 | 250,676,547 | 252,470,072 | ||||||||||||
$ | 597,633,669 | $ | 601,081,260 | $ | 420,175,064 | $ | 421,968,589 |
(h)
|
Borrowings
|
(Unaudited) | |||||||||
March 31, 2010 | |||||||||
Carrying
|
Estimated
|
||||||||
amount
|
fair
value
|
||||||||
FHLB
advances
|
$ | 212,000,000 | $ | 222,839,195 | |||||
Repurchase
agreements
|
232,472 | 232,472 | |||||||
$ | 212,232,472 | $ | 223,071,667 |
September
30, 2009
|
September
30, 2008
|
|||||||||||||||
Carrying amount |
Estimated fair
value |
Carrying amount |
Estimated fair
value |
|||||||||||||
FHLB
advances
|
$ | 227,000,000 | $ | 230,882,910 | $ | 267,000,000 | $ | 273,669,709 |
(i)
|
Accrued
Interest and Dividends Receivable and
Payable
|
(j)
|
Commitments
|
(Unaudited)
|
||||||||||||
March
31,
|
September
30,
|
|||||||||||
2010
|
2009
|
2008
|
||||||||||
Financial
instruments whose contract amounts represent credit risk – commitments to
originate loans:
|
||||||||||||
Mortgage
loans
|
$ | 494,500 | $ | 261,500 | $ | 723,000 | ||||||
Non-mortgage
loans
|
22,407,743 | 12,348,000 | 14,905,855 | |||||||||
Open-end
consumer loans
|
11,480,270 | 10,442,640 | 11,700,978 | |||||||||
Open-end
commercial loans
|
3,518,172 | 16,218,451 | 17,093,387 | |||||||||
Construction
loans
|
19,817,953 | 18,016,661 | 13,906,781 | |||||||||
Total
commitments to originate loans
|
$ | 57,718,638 | $ | 57,287,252 | $ | 58,330,001 |
Amount
|
Range
of Rate
|
|||||||
March
31, 2010 (unaudited)
|
$ | 4,399,500 | 4.50 – 6.50 | % | ||||
September
30, 2009
|
$ | 12,609,500 | 4.50 – 8.50 | % | ||||
September
30, 2008
|
$ | 15,628,855 | 4.75 – 7.75 | % |
(k)
|
Derivatives
|
(l)
|
Limitations
|
(Unaudited)
|
||||||||||||||||
March
31, 2010
|
Fair
value measurements using:
|
|||||||||||||||
Quoted
prices in
|
Significant
|
|||||||||||||||
active
markets for
|
Quoted
prices
|
unobservable
|
||||||||||||||
Fair
|
identical
assets
|
for
similar assets
|
inputs
|
|||||||||||||
value
|
(Level
1 inputs)
|
(Level
2 inputs)
|
(Level
3 inputs)
|
|||||||||||||
Investment
securities available for sale:
|
||||||||||||||||
U.S.
Government sponsored entities:
|
$ | 3,962,010 | $ | - | $ | 3,962,010 | $ | - | ||||||||
Mortgage–backed
securities:
|
||||||||||||||||
FNMA
certificates
|
46,115,358 | 3,954,656 | 42,160,702 | - | ||||||||||||
GNMA
certificates
|
13,984,438 | 9,023,260 | 4,961,178 | - | ||||||||||||
FHLMC
certificates
|
31,014,465 | - | 31,014,465 | - | ||||||||||||
Collateralized
mortgage obligations:
|
||||||||||||||||
FNMA
|
28,101,312 | - | 28,101,312 | - | ||||||||||||
FHLMC
|
14,121,788 | - | 14,121,788 | - | ||||||||||||
GNMA
|
15,532,862 | 15,532,862 | - | - | ||||||||||||
Other:
|
||||||||||||||||
Rated
AAA
|
35,156,439 | 35,156,439 | - | |||||||||||||
Rated
AA
|
- | - | - | - | ||||||||||||
Rated
A
|
- | - | - | - | ||||||||||||
Rated
BBB
|
11,617,652 | - | 11,617,652 | - | ||||||||||||
Rated
CCC
|
5,939,383 | - | 5,939,383 | - | ||||||||||||
Available
for sale securities
|
$ | 205,545,707 | $ | 28,510,778 | $ | 177,034,929 | $ | - |
September
30, 2009
|
Fair
value measurements using:
|
|||||||||||||||
Quoted
prices in
|
Significant
|
|||||||||||||||
active
markets for
|
Quoted
prices
|
unobservable
|
||||||||||||||
Fair
|
identical
assets
|
for
similar assets
|
inputs
|
|||||||||||||
value
|
(Level
1 inputs)
|
(Level
2 inputs)
|
(Level
3 inputs)
|
|||||||||||||
Investment
securities available for sale:
|
||||||||||||||||
U.S.
Government sponsored entities:
|
$ | 4,434,732 | $ | - | $ | 4,434,732 | $ | - | ||||||||
Mortgage–backed
securities:
|
||||||||||||||||
FNMA
certificates
|
53,974,576 | 24,725,231 | 29,249,345 | - | ||||||||||||
GNMA
certificates
|
5,978,912 | - | 5,978,912 | - | ||||||||||||
FHLMC
certificates
|
27,678,955 | 10,282,892 | 17,396,063 | - | ||||||||||||
Collateralized
mortgage obligations:
|
||||||||||||||||
FNMA
|
37,705,735 | 15,651,011 | 22,054,724 | - | ||||||||||||
FHLMC
|
19,379,670 | - | 19,379,670 | - | ||||||||||||
GNMA
|
- | - | - | - | ||||||||||||
Other:
|
||||||||||||||||
Rated
AAA
|
33,427,571 | - | 33,427,571 | - | ||||||||||||
Rated
AA
|
8,279,909 | - | 8,279,909 | - | ||||||||||||
Rated
A
|
7,538,523 | - | 7,538,523 | - | ||||||||||||
Rated
B
|
7,133,492 | - | 7,133,492 | - | ||||||||||||
Rated
CCC
|
528,632 | - | 528,632 | - | ||||||||||||
Available
for sale securities
|
$ | 206,060,707 | $ | 50,659,134 | $ | 155,401,573 | $ | - |
September
30, 2008
|
Fair
value measurements using:
|
|||||||||||||||
Quoted
prices in
|
Significant
|
|||||||||||||||
active
markets for
|
Quoted
prices
|
unobservable
|
||||||||||||||
Fair
|
identical
assets
|
for
similar assets
|
inputs
|
|||||||||||||
value
|
(Level
1 inputs)
|
(Level
2 inputs)
|
(Level
3 inputs)
|
|||||||||||||
Investment
securities available for sale:
|
||||||||||||||||
U.S.
Government sponsored entities:
|
$ | 34,290,733 | $ | - | $ | 34,290,733 | $ | - | ||||||||
Mortgage–backed
securities:
|
||||||||||||||||
FNMA
certificates
|
94,668,545 | - | 94,668,545 | - | ||||||||||||
GNMA
certificates
|
9,377,760 | - | 9,377,760 | - | ||||||||||||
FHLMC
certificates
|
6,358,334 | - | 6,358,334 | - | ||||||||||||
Collateralized
mortgage obligations:
|
||||||||||||||||
FNMA
|
20,055,378 | - | 20,055,378 | - | ||||||||||||
FHLMC
|
28,213,489 | - | 28,213,489 | - | ||||||||||||
GNMA
|
998,727 | - | 998,727 | - | ||||||||||||
Other:
|
||||||||||||||||
Rated
AAA
|
75,846,088 | 9,388,785 | 66,457,303 | - | ||||||||||||
Rated
AA
|
5,150,261 | - | 5,150,261 | - | ||||||||||||
Rated
A
|
2,179,837 | - | 2,179,837 | - | ||||||||||||
Rated
B
|
- | - | - | - | ||||||||||||
Rated
CCC
|
- | - | - | - | ||||||||||||
Available
for sale securities
|
$ | 277,139,152 | $ | 9,388,785 | $ | 267,750,367 | $ | - |
Fair
value measurements using:
|
||||||||||||||||
Quoted
prices in
|
Significant
|
|||||||||||||||
active
markets for
|
Quoted
prices
|
unobservable
|
||||||||||||||
Fair
|
identical
assets
|
for
similar assets
|
inputs
|
|||||||||||||
(Unaudited)
|
value
|
(Level
1 inputs)
|
(Level
2 inputs)
|
(Level
3 inputs)
|
||||||||||||
March 31, 2010
|
||||||||||||||||
Impaired
loans:
|
||||||||||||||||
Not
covered under loss share
|
$ | 11,694,685 | $ | - | $ | - | $ | 11,694,685 | ||||||||
Covered
under loss share
|
61,862,020 | - | - | 61,862,020 | ||||||||||||
Other
real estate owned:
|
||||||||||||||||
Not
covered under loss share
|
7,409,175 | - | - | 7,409,175 | ||||||||||||
Covered
under loss share
|
35,732,671 | - | - | 35,732,671 | ||||||||||||
September 30, 2009
|
||||||||||||||||
Impaired
loans:
|
||||||||||||||||
Not
covered under loss share
|
6,802,740 | - | - | 6,802,740 | ||||||||||||
Covered
under loss share
|
18,246,596 | - | - | 18,246,596 | ||||||||||||
Other
real estate owned:
|
||||||||||||||||
Not
covered under loss share
|
4,777,542 | - | - | 4,777,542 | ||||||||||||
Covered
under loss share
|
10,681,499 | - | - | 10,681,499 | ||||||||||||
September 30, 2008
|
||||||||||||||||
Impaired
loans:
|
||||||||||||||||
Not
covered under loss share
|
4,605,732 | - | - | 4,605,732 | ||||||||||||
Covered
under loss share
|
- | - | - | - | ||||||||||||
Other
real estate owned:
|
||||||||||||||||
Not
covered under loss share
|
2,680,430 | - | - | 2,680,430 | ||||||||||||
Covered
under loss share
|
- | - | - | - |
(17)
|
Regulatory
Matters
|
(Unaudited)
|
||||||||||||||||
March
31, 2010
|
||||||||||||||||
Core/
|
Tier
1
|
Total
|
||||||||||||||
Tangible
|
leverage
|
risk-based
|
risk-based
|
|||||||||||||
capital
|
capital
|
capital
|
capital
|
|||||||||||||
Total
equity
|
$ | 105,188 | $ | 105,188 | $ | 105,188 | $ | 105,188 | ||||||||
General
valuation allowances
|
- | - | - | 7,785 | ||||||||||||
Investments
required to be deducted
|
- | - | - | (7,701 | ) | |||||||||||
Goodwill
and other intangible assets
|
(5,371 | ) | (5,371 | ) | (5,371 | ) | (5,371 | ) | ||||||||
Accumulated
other comprehensive loss
|
3,031 | 3,031 | 3,031 | 3,031 | ||||||||||||
Regulatory
capital
|
$ | 102,848 | $ | 102,848 | $ | 102,848 | $ | 102,932 | ||||||||
Total
assets
|
$ | 1,244,171 | $ | 1,244,171 | $ | 1,244,171 | $ | 1,244,171 | ||||||||
Regulatory
total assets
|
$ | 1,243,392 | $ | 1,243,392 | $ | - | $ | - | ||||||||
Risk-weighted
assets
|
$ | - | $ | - | $ | 622,882 | $ | 622,882 | ||||||||
Capital
ratio
|
8.27 | % | 8.27 | % | 16.51 | % | 16.53 | % | ||||||||
Regulatory
capital category:
|
||||||||||||||||
Adequately
capitalized or minimum FIRREA requirement equal to or greater
than
|
1.5 | % | 3.00 | % | N/A | 8.00 | % | |||||||||
Capital
exceeding requirement
|
$ | 84,197 | $ | 65,546 | $ | N/A | $ | 53,101 | ||||||||
Adequately
capitalized or minimum FDICIA requirement equal to or greater
than
|
N/A | 4.00 | % | 4.00 | % | 8.00 | % | |||||||||
Capital
exceeding requirement
|
$ | N/A | $ | 53,112 | $ | 77,933 | $ | 53,101 | ||||||||
Well
capitalized, equal to or greater than
|
N/A | 5.00 | % | 6.00 | % | 10.00 | % | |||||||||
Capital
exceeding requirement
|
$ | N/A | $ | 40,678 | $ | 65,475 | $ | 40,644 |
September
30, 2009
|
||||||||||||||||
Core/
|
Tier
1
|
Total
|
||||||||||||||
Tangible
|
leverage
|
risk-based
|
risk-based
|
|||||||||||||
capital
|
capital
|
capital
|
capital
|
|||||||||||||
Total
equity
|
$ | 84,479 | $ | 84,479 | $ | 84,479 | $ | 84,479 | ||||||||
General
valuation allowances
|
- | - | - | 6,324 | ||||||||||||
Allowable
unrealized gains
|
- | - | - | - | ||||||||||||
Goodwill
and other intangible assets
|
(5,180 | ) | (5,180 | ) | (5,180 | ) | (5,180 | ) | ||||||||
Accumulated
other comprehensive loss
|
8,277 | 8,277 | 8,277 | 8,277 | ||||||||||||
Regulatory
capital
|
$ | 87,576 | $ | 87,576 | $ | 87,576 | $ | 93,900 | ||||||||
Total
assets
|
$ | 933,117 | $ | 933,117 | $ | 933,117 | $ | 933,117 | ||||||||
Regulatory
total assets
|
$ | 940,755 | $ | 941,489 | $ | - | $ | - | ||||||||
Risk-weighted
assets
|
$ | - | $ | - | $ | 597,598 | $ | 597,598 | ||||||||
Capital
ratio
|
9.31 | % | 9.30 | % | 14.65 | % | 15.71 | % | ||||||||
Regulatory
capital category:
|
||||||||||||||||
Adequately
capitalized or minimum FIRREA requirement equal to or greater
than
|
1.50 | % | 3.00 | % | N/A | 8.00 | % | |||||||||
Capital
exceeding requirement
|
$ | 73,465 | $ | 59,331 | $ | N/A | $ | 46,092 | ||||||||
Adequately
capitalized or minimum FDICIA requirement equal to or greater
than
|
N/A | 4.00 | % | 4.00 | % | 8.00 | % | |||||||||
Capital
exceeding requirement
|
$ | N/A | $ | 49,916 | $ | 63,672 | $ | 46,092 | ||||||||
Well
capitalized, equal to or greater than
|
N/A | 5.00 | % | 6.00 | % | 10.00 | % | |||||||||
Capital
exceeding requirement
|
$ | N/A | $ | 40,502 | $ | 51,720 | $ | 34,140 |
September
30, 2008
|
||||||||||||||||
Core/
|
Tier
1
|
Total
|
||||||||||||||
Tangible
|
leverage
|
risk-based
|
risk-based
|
|||||||||||||
capital
|
capital
|
capital
|
capital
|
|||||||||||||
Total
equity
|
$ | 83,040 | $ | 83,040 | $ | 83,040 | $ | 83,040 | ||||||||
General
valuation allowances
|
- | - | - | 6,256 | ||||||||||||
Allowable
unrealized gains
|
- | - | - | - | ||||||||||||
Goodwill
and other intangible assets
|
(5,314 | ) | (5,314 | ) | (5,314 | ) | (5,314 | ) | ||||||||
Accumulated
other comprehensive loss
|
6,850 | 6,850 | 6,850 | 6,850 | ||||||||||||
Regulatory
capital
|
$ | 84,576 | $ | 84,576 | $ | 84,576 | $ | 90,832 | ||||||||
Total
assets
|
$ | 799,119 | $ | 799,119 | $ | 799,119 | $ | 799,119 | ||||||||
Regulatory
total assets
|
$ | 804,932 | $ | 804,932 | $ | - | $ | - | ||||||||
Risk-weighted
assets
|
$ | - | $ | - | $ | 500,492 | $ | 500,492 | ||||||||
Capital
ratio
|
10.51 | % | 10.51 | % | 16.90 | % | 18.15 | % | ||||||||
Regulatory
capital category:
|
||||||||||||||||
Adequately
capitalized or minimum FIRREA requirement equal to or greater
than
|
1.50 | % | 3.00 | % | N/A | 8.00 | % | |||||||||
Capital
exceeding requirement
|
$ | 72,524 | $ | 60,450 | $ | N/A | $ | 50,800 | ||||||||
Adequately
capitalized or minimum FDICIA requirement equal to or greater
than
|
N/A | 4.00 | % | 4.00 | % | 8.00 | % | |||||||||
Capital
exceeding requirement
|
$ | N/A | $ | 52,401 | $ | 64,563 | $ | 50,800 | ||||||||
Well
capitalized, equal to or greater than
|
N/A | 5.00 | % | 6.00 | % | 10.00 | % | |||||||||
Capital
exceeding requirement
|
$ | N/A | $ | 44,352 | $ | 54,554 | $ | 40,790 |
(18)
|
Related
Parties
|
(19)
|
Condensed
Financial Statements of Charter Financial Corporation (Parent
Only)
|
Condensed
Balance Sheet
|
||||||||||||
(Unaudited)
|
||||||||||||
March
31,
|
September
30,
|
|||||||||||
2010
|
2009
|
2008
|
||||||||||
Assets
|
||||||||||||
Cash
|
$ | 4,247,728 | $ | 12,645,616 | $ | 18,622,957 | ||||||
Interest-bearing
deposits in other financial institutions
|
671 | 671 | 29,968 | |||||||||
Investment
in thrift subsidiary
|
105,187,667 | 84,479,199 | 83,040,132 | |||||||||
Other
assets
|
4,413,673 | 2,541,168 | 2,211,420 | |||||||||
Total
assets
|
$ | 113,849,739 | $ | 99,666,654 | $ | 103,904,477 | ||||||
Liabilities
and Stockholders’ Equity
|
||||||||||||
Liabilities:
|
||||||||||||
Accrued
expenses
|
$ | 3,176,528 | $ | 1,409,994 | $ | 1,602,556 | ||||||
Total
liabilities
|
3,176,528 | 1,409,994 | 1,602,556 | |||||||||
Stockholders’
equity:
|
||||||||||||
Common
stock, $0.01 par value; issued 19,859,219 shares in 2010, 2009 and 2008,
respectively; outstanding 18,672,361, 18,672,363 and 18,901,295 shares in
2010, 2009 and 2008, respectively
|
198,592 | 198,592 | 198,592 | |||||||||
Preferred
Stock, no par value; 10,000,000 shares authorized
|
- | - | - | |||||||||
Additional
paid-in capital
|
42,807,498 | 42,751,898 | 42,537,428 | |||||||||
Treasury
stock, at cost; 1,186,858, 1,186,856 and 1,064,220 shares in 2010, 2009
and 2008, respectively
|
(36,903,102 | ) | (36,948,327 | ) | (35,060,409 | ) | ||||||
Unearned
compensation - ESOP
|
(1,546,990 | ) | (1,683,990 | ) | (1,825,390 | ) | ||||||
Retained
earnings
|
109,148,101 | 102,215,498 | 103,301,290 | |||||||||
Accumulated
other comprehensive loss
|
(3,030,888 | ) | (8,277,011 | ) | (6,849,590 | ) | ||||||
Total
stockholders’ equity
|
110,673,211 | 98,256,660 | 102,301,921 | |||||||||
$ | 113,849,739 | $ | 99,666,654 | $ | 103,904,477 |
(Unaudited)
Six
Months Ended
March
31,
|
Years
Ended September 30,
|
|||||||||||||||||||
2010
|
2009
|
2009
|
2008
|
2007
|
||||||||||||||||
Income:
|
||||||||||||||||||||
Interest
income
|
$ | 72,170 | $ | 177,332 | $ | 282,455 | $ | 643,926 | $ | 1,374,154 | ||||||||||
Dividend
income
|
- | 128 | - | 620,000 | 2,194,999 | |||||||||||||||
Dividends
received from Bank subsidiary
|
- | - | - | 3,000,000 | 8,500,000 | |||||||||||||||
Gain
on sale of Freddie Mac common stock
|
- | - | - | 823,429 | 69,453,332 | |||||||||||||||
Loss
on other investment
|
(1,000,000 | ) | - | - | - | - | ||||||||||||||
Other
income
|
- | - | - | 787,194 | 369,056 | |||||||||||||||
Total
operating (loss) income
|
(927,830 | ) | 177,460 | 282,455 | 5,874,549 | 81,891,541 | ||||||||||||||
Expenses:
|
||||||||||||||||||||
Salaries
and employee benefits
|
122,585 | 291,988 | 531,599 | 696,087 | 1,427,421 | |||||||||||||||
Stock
option expense
|
2,046 | 2,862 | 4,908 | 14,244 | 1,971,608 | |||||||||||||||
Occupancy
|
12,324 | 12,324 | 24,648 | 24,648 | 24,648 | |||||||||||||||
Legal
and professional
|
51,559 | 70,259 | 216,997 | 101,594 | 60,070 | |||||||||||||||
Marketing
|
67,569 | 51,468 | 90,095 | 91,969 | 149,828 | |||||||||||||||
Other
|
88,670 | 62,743 | 124,482 | 135,804 | 146,847 | |||||||||||||||
Total
operating expenses
|
344,753 | 491,644 | 992,729 | 1,064,346 | 3,780,422 | |||||||||||||||
(Loss)
income before income taxes
|
(1,272,583 | ) | (314,184 | ) | (710,274 | ) | 4,810,203 | 78,111,119 | ||||||||||||
Income
tax expense (benefit)
|
(538,099 | ) | (122,218 | ) | (269,620 | ) | 535,343 | 25,803,188 | ||||||||||||
(Loss)
income before equity in undistributed net income of
subsidiaries
|
(734,484 | ) | (191,966 | ) | (440,654 | ) | 4,274,860 | 52,307,931 | ||||||||||||
Equity
(deficit) in undistributed net income of subsidiaries
|
8,467,995 | 1,621,366 | 2,756,416 | 6,257,372 | (1,368,109 | ) | ||||||||||||||
Net
income
|
$ | 7,733,511 | $ | 1,429,400 | $ | 2,315,762 | $ | 10,532,232 | $ | 50,939,822 |
(Unaudited)
Six
Months Ended
March
31,
|
Years
Ended September 30,
|
|||||||||||||||||||
2010
|
2009
|
2009
|
2008
|
2007
|
||||||||||||||||
Cash
flows from operating activities:
|
||||||||||||||||||||
Net
income
|
$ | 7,733,511 | $ | 1,429,400 | $ | 2,315,762 | $ | 10,532,232 | $ | 50,939,822 | ||||||||||
Adjustments
to reconcile net income to net cash (used in) provided by operating
activities:
|
||||||||||||||||||||
Gain
on sale of Freddie Mac common stock
|
- | - | - | (823,429 | ) | (69,453,332 | ) | |||||||||||||
Deferred
tax benefit
|
- | - | (398,881 | ) | (1,920,594 | ) | (740,384 | ) | ||||||||||||
Restricted
stock award expense
|
- | - | 285,046 | 851,640 | 669,319 | |||||||||||||||
Stock
based compensation expense
|
16,916 | 17,016 | 33,934 | 84,038 | 1,971,608 | |||||||||||||||
Equity
in undistributed net income of subsidiaries
|
(8,467,995 | ) | (1,621,366 | ) | (2,756,416 | ) | (9,257,372 | ) | (7,131,891 | ) | ||||||||||
Allocation
of ESOP common stock
|
137,000 | 141,400 | 141,400 | 146,050 | 150,500 | |||||||||||||||
(Increase)
decrease in other assets
|
478,298 | (49,280 | ) | (179,964 | ) | 596,205 | (398,657 | ) | ||||||||||||
Increase
(decrease) in accrued expenses
|
(510,394 | ) | 155,611 | 184,752 | (585,350 | ) | 2,145,926 | |||||||||||||
Net
cash (used in) provided by operating activities
|
(612,664 | ) | 72,782 | (374,367 | ) | (376,580 | ) | (21,847,089 | ) | |||||||||||
Cash
flows from investing activities:
|
||||||||||||||||||||
Capital
(infusion) distribution from Bank subsidiary
|
(7,000,000 | ) | - | - | 3,000,000 | 8,500,000 | ||||||||||||||
Proceeds
from the sale of Freddie Mac common Stock
|
- | - | - | 1,997,864 | 70,646,923 | |||||||||||||||
Net
cash (used in) provided by investing activities
|
(7,000,000 | ) | - | - | 4,997,864 | 79,146,923 |
(Unaudited)
Six
Months Ended
March
31,
|
Years
Ended September 30,
|
|||||||||||||||||||
2010
|
2009
|
2009
|
2008
|
2007
|
||||||||||||||||
Cash
flows from financing activities:
|
||||||||||||||||||||
Purchase
of treasury stock
|
$ | - | $ | (1,012,435 | ) | $ | (2,228,342 | ) | $ | (4,676,178 | ) | $ | (27,064,470 | ) | ||||||
Net
proceeds from the exercise of stock options
|
- | - | - | 105,336 | 403,787 | |||||||||||||||
Dividends
on restricted stock awards
|
(1,001 | ) | (1,250 | ) | (2,375 | ) | (6,417 | ) | (22,643 | ) | ||||||||||
Excess
tax benefit on exercise of stock options
|
- | - | - | - | 59,860 | |||||||||||||||
Dividends
paid
|
(784,223 | ) | (1,334,918 | ) | (3,401,554 | ) | (15,871,868 | ) | (5,847,197 | ) | ||||||||||
Net
cash used in financing activities
|
(785,224 | ) | (2,348,603 | ) | (5,632,271 | ) | (20,449,127 | ) | (32,470,663 | ) | ||||||||||
Net
(decrease) increase in cash
|
(8,397,888 | ) | (2,275,822 | ) | (6,006,638 | ) | (15,827,843 | ) | 24,829,171 | |||||||||||
Cash
and cash equivalents, beginning of period
|
12,646,287 | 18,652,925 | 18,652,925 | 34,480,768 | 9,651,597 | |||||||||||||||
Cash
and cash equivalents, end of period
|
$ | 4,248,399 | $ | 16,377,103 | $ | 12,646,287 | $ | 18,652,925 | $ | 34,480,768 | ||||||||||
Supplemental
disclosures of cash flow information:
|
||||||||||||||||||||
Income
taxes paid
|
$ | - | $ | - | $ | 330,697 | $ | 4,665,545 | $ | 24,776,000 | ||||||||||
Issuance
of ESOP common stock
|
185,818 | 289,870 | 289,870 | 700,516 | 605,387 | |||||||||||||||
Grant
of common stock under stock benefit plans
|
73,875 | - | 372,490 | 1,366,847 | 709,265 | |||||||||||||||
Tax
benefit from disqualifying dispositions
|
- | - | - | - | 50,505 | |||||||||||||||
Additional
paid in capital adjustment for taxes
|
- | - | - | - | 55,917 | |||||||||||||||
Unrealized
gain (loss) on securities available for sale, net
|
5,246,123 | 2,442,502 | (1,427,421 | ) | (123,735,737 | ) | (55,603,237 | ) |
(20)
|
Other
Comprehensive Income (Loss)
|
Pretax
|
After
tax
|
|||||||||||
(Unaudited)
|
amount
|
Tax
effect
|
amount
|
|||||||||
March
31, 2010:
|
||||||||||||
Net
unrealized holding gains on investment and mortgage securities available
for sale arising during the year
|
$ | 5,625,188 | $ | (1,912,564 | ) | $ | 3,712,624 | |||||
Noncredit
portion of other-than-temporary impairment losses recognized in
earnings
|
(2,526,671 | ) | 859,068 | (1,667,603 | ) | |||||||
Less
reclassification adjustment for net gains realized in net
income
|
203,188 | (69,084 | ) | 134,104 | ||||||||
Other
comprehensive gain
|
$ | 7,948,671 | $ | (2,702,548 | ) | $ | 5,246,123 | |||||
September
30, 2009:
|
||||||||||||
Net
unrealized holding losses on investment and mortgage securities available
for sale arising during the year
|
$ | (164,030 | ) | $ | 63,316 | $ | (100,714 | ) | ||||
Less
reclassification adjustment for net gains realized in net
income
|
2,160,760 | (834,053 | ) | 1,326,707 | ||||||||
Other
comprehensive loss
|
$ | (2,324,790 | ) | $ | 897,369 | $ | (1,427,421 | ) | ||||
September
30, 2008:
|
||||||||||||
Net
unrealized holding losses on investment and mortgage securities available
for sale arising during the year
|
$ | (192,005,635 | ) | $ | 74,114,175 | $ | (117,891,460 | ) | ||||
Less
reclassification adjustment for net gains realized in net
income
|
9,518,367 | (3,674,090 | ) | 5,844,277 | ||||||||
Other
comprehensive loss
|
$ | (201,524,002 | ) | $ | 77,788,265 | $ | (123,735,737 | ) | ||||
September
30, 2007:
|
||||||||||||
Net
unrealized holding losses on investment and mortgage securities available
for sale arising during the year
|
$ | (21,105,686 | ) | $ | 8,146,795 | $ | (12,958,891 | ) | ||||
Less
reclassification adjustment for net gains realized in net
income
|
69,453,332 | (26,808,986 | ) | 42,644,346 | ||||||||
Other
comprehensive loss
|
$ | (90,559,018 | ) | $ | 34,955,781 | $ | (55,603,237 | ) |
(21)
|
Other
Contingencies
|
(22)
|
Federally
Assisted Acquisition of McIntosh Commercial
Bank
|
As
recorded by
|
Fair
value
|
As
recorded by
|
||||||||||
MCB
|
adjustments
|
CharterBank
|
||||||||||
Assets
|
||||||||||||
Cash
and due from banks
|
$ | 32,285,757 | $ | 36,629,236 | (a) | $ | 68,914,993 | |||||
FHLB
and other bank stock
|
1,321,710 | (200,410 | ) (b) | 1,121,300 | ||||||||
Mortgage-backed
securities
|
24,744,318 | (75,028 | ) (c) | 24,669,290 | ||||||||
Loans
|
207,644,252 | (75,396,640 | ) (d) | 132,247,612 | ||||||||
Other
real estate owned
|
55,267,968 | (31,618,504 | ) (e) | 23,649,464 | ||||||||
FDIC
receivable for loss sharing agreements
|
- | 70,746,613 | (f) | 70,746,613 | ||||||||
Core
deposit intangible
|
- | 258,811 | (g) | 258,811 | ||||||||
Other
assets
|
1,313,923 | (427,702 | ) (h) | 886,221 | ||||||||
Total
assets
|
$ | 322,577,928 | $ | (83,624 | ) | $ | 322,494,304 | |||||
Liabilities
|
||||||||||||
Deposits:
|
||||||||||||
Noninterest-bearing
|
$ | 5,443,673 | $ | - | $ | 5,443,673 | ||||||
Interest-bearing
|
289,862,953 | 683,100 | (i) | 290,546,053 | ||||||||
Total
deposits
|
295,306,626 | 683,100 | 295,989,726 | |||||||||
FHLB
advance and other borrowings
|
9,491,486 | - | 9,491,486 | |||||||||
Deferred
tax liability
|
- | 5,998,193 | (j) | 5,998,193 | ||||||||
Other
liabilities
|
1,409,052 | - | 1,409,052 | |||||||||
Total
liabilities
|
306,207,164 | 6,681,293 | 312,888,457 | |||||||||
Excess
of assets acquired over liabilities assumed
|
$ | 16,370,764 | (k) | |||||||||
Aggregate
fair value adjustments
|
$ | (6,764,917 | ) | |||||||||
Net
assets of MCB acquired
|
$ | 9,605,847 |
|
(a)
–
|
Adjustment
reflects the initial wire received from the FDIC on the acquisition
date.
|
|
(b)
–
|
Adjustment
reflects the estimated fair value of other bank
stock.
|
|
(c)
–
|
Adjustment
reflects fair value adjustments based on the Bank’s evaluation of the
acquired mortgage-backed securities
portfolio.
|
|
(d)
–
|
Adjustment
reflects fair value adjustments based on the Bank’s evaluation of the
acquired loan portfolio. The fair value adjustment includes
adjustments for estimated credit losses, liquidity and servicing
costs.
|
|
(e)
–
|
Adjustment
reflects the estimated other real estate owned losses based on the Bank’s
evaluation of the acquired other real estate owned
portfolio.
|
|
(f)
–
|
Adjustment
reflects the estimated fair value of payments the Bank will receive from
the FDIC under loss sharing agreements. The receivable was
recorded at present value of the estimated cash flows using an average
discount rate of one and a half
percent.
|
|
(g)
–
|
Adjustment
reflects fair value adjustments to record the estimated core deposit
intangible.
|
|
(h)
–
|
Adjustment
reflects fair value adjustments to record certain other assets acquired in
this transaction.
|
|
(i)
–
|
Adjustment
reflects fair value adjustments based on the Bank’s evaluation of the
acquired time deposit portfolio.
|
|
(j)
–
|
Adjustment
reflects differences between the financial statement and tax bases of
assets acquired and liabilities
assumed.
|
|
(k)
–
|
Amount
represents the excess of assets acquired over liabilities assumed and
since the asset discount bid by CharterBank of $53 million exceeded this
amount, the difference resulted in a cash settlement with the
FDIC on the acquisition date.
|
(23)
|
Subsequent
Event (unaudited)
|
Report of Independent Registered Public Accounting Firm | G-2 | |
Statement of Assets Acquired and Liabilities Assumed at March 26, 2010 | G-3 | |
Notes to Statement of Assets Acquired and Liabilities Assumed | G-4 |
225 Peachtree Street NE, Suite 600 | ||
Atlanta, GA 30303-1728 | ||
Ph. 404.575.8900 Fx. 404.575.8860 | ||
www.dixon-hughes.com | ||
Assets
|
||||
Cash
and due from banks
|
$
|
68,914,993
|
||
FHLB
stock
|
1,121,300
|
|||
Mortgage-backed
securities
|
24,669,290
|
|||
Loans
covered by loss sharing agreements
|
132,247,612
|
|||
Other
real estate owned covered by loss sharing agreements
|
23,649,464
|
|||
FDIC
receivable for loss sharing agreements
|
70,746,613
|
|||
Core
deposit intangible
|
258,811
|
|||
Other
assets
|
886,221
|
|||
Total
assets acquired
|
322,494,304
|
|||
Liabilities
|
||||
Deposits:
|
||||
Noninterest-bearing
|
5,443,673
|
|||
Interest-bearing
|
290,546,053
|
|||
Total
deposits
|
295,989,726
|
|||
FHLB
advance and other borrowings
|
9,491,486
|
|||
Deferred
tax liability
|
5,998,193
|
|||
Other
liabilities
|
1,409,052
|
|||
Total
liabilities assumed
|
312,888,457
|
|||
Net
assets acquired
|
$
|
9,605,847
|
(1)
|
FDIC-Assisted
Acquisition of Certain Assets and Liabilities of McIntosh Commercial
Bank
|
(2)
|
Basis
of Presentation
|
(3)
|
Fair
Value Adjustments
|
As recorded by
MCB
|
Fair
value
adjustments
|
As
recorded by
CharterBank
|
|||||||||||
Assets
|
|||||||||||||
Cash
and due from banks
|
$ | 32,285,757 | $ | 36,629,236 | (a) | $ | 68,914,993 | ||||||
FHLB
and other bank stock
|
1,321,710 | (200,410 | ) (b) | 1,121,300 | |||||||||
Mortgage-backed
securities
|
24,744,318 | (75,028 | ) (c) | 24,669,290 | |||||||||
Loans
|
207,644,252 | (75,396,640 | ) (d) | 132,247,612 | |||||||||
Other
real estate owned
|
55,267,968 | (31,618,504 | ) (e) | 23,649,464 | |||||||||
FDIC
receivable for loss sharing agreements
|
- | 70,746,613 | (f) | 70,746,613 | |||||||||
Core
deposit intangible
|
- | 258,811 | (g) | 258,811 | |||||||||
Other
assets
|
1,313,923 | (427,702 | ) (h) | 886,221 | |||||||||
Total
assets
|
$ | 322,577,928 | $ | (83,624 | ) | $ | 322,494,304 | ||||||
Liabilities
|
|||||||||||||
Deposits:
|
|||||||||||||
Noninterest-bearing
|
$ | 5,443,673 | $ | - | $ | 5,443,673 | |||||||
Interest-bearing
|
289,862,953 | 683,100 | (i) | 290,546,053 | |||||||||
Total
deposits
|
295,306,626 | 683,100 | 295,989,726 | ||||||||||
FHLB
advance and other borrowings
|
9,491,486 | - | 9,491,486 | ||||||||||
Deferred
tax liability
|
- | 5,998,193 | (j) | 5,998,193 | |||||||||
Other
liabilities
|
1,409,052 | - | 1,409,052 | ||||||||||
Total
liabilities
|
306,207,164 | 6,681,293 | 312,888,457 | ||||||||||
Excess
of assets acquired over liabilities assumed
|
$ | 16,370,764 | (k) | ||||||||||
Aggregate
fair value adjustments
|
$ | (6,764,917 | ) | ||||||||||
Net
assets of MCB acquired
|
$ | 9,605,847 |
|
(a)
–
|
Adjustment
reflects the initial wire received from the FDIC on the acquisition
date.
|
|
(b)
–
|
Adjustment
reflects the estimated fair value of other bank
stock.
|
|
(c)
–
|
Adjustment
reflects fair value adjustments based on the Bank’s evaluation of the
acquired mortgage-backed securities
portfolio.
|
|
(d)
-
|
Adjustment
reflects fair value adjustments based on the Bank’s evaluation of the
acquired loan portfolio. The fair value adjustment includes
adjustments for estimated credit losses, liquidity and servicing
costs.
|
|
(e)
–
|
Adjustment
reflects the estimated other real estate owned losses based on the Bank’s
evaluation of the acquired other real estate owned
portfolio.
|
|
(f)
–
|
Adjustment
reflects the estimated fair value of payments the Bank will receive from
the FDIC under loss sharing agreements. The receivable was
recorded at present value of the estimated cash flows using an average
discount rate of one and a half
percent.
|
|
(g)
–
|
Adjustment
reflects fair value adjustments to record the estimated core deposit
intangible.
|
|
(h)
–
|
Adjustment
reflects fair value adjustments to record certain other assets acquired in
this transaction.
|
|
(i)
–
|
Adjustment
reflects fair value adjustments based on the Bank’s evaluation of the
acquired time deposit portfolio.
|
|
(j)
–
|
Adjustment
reflects differences between the financial statement and tax bases of
assets acquired and liabilities
assumed.
|
|
(k)
–
|
Amount
represents the excess of assets acquired over liabilities assumed and
since the asset discount bid by CharterBank of $53 million exceeded this
amount, the difference resulted in a cash settlement with the
FDIC on the acquisition date.
|
(4)
|
Premises
and Equipment
|
(5)
|
Mortgage-Backed
Securities
|
Fair
value
|
Purchased
yield
|
||||||||
GNMA
mortgage-backed securities
|
$ | 24,669,290 | 4.04 | % | |||||
Total
investment securities
|
$ | 24,669,290 | 4.04 | % |
Maturing:
|
|||||
Due
within one year
|
$ | 116,338 | |||
Due
after one through five years
|
1,702,244 | ||||
Due
after five through ten years
|
4,743,216 | ||||
Due
after ten years
|
18,107,492 | ||||
Total
investment securities
|
$ | 24,669,290 |
(6)
|
Loans
|
Impaired
Loans
|
Non-impaired
Loans
|
Total
|
|||||||||||
Contractual
balance of acquired loans:
|
|||||||||||||
Construction/land
development
|
$ | 5,249,056 | $ | 2,135,485 | $ | 7,384,541 | |||||||
Commercial
mortgage
|
69,556,822 | 52,436,862 | 121,993,684 | ||||||||||
Residential
mortgage
|
19,247,857 | 19,192,252 | 38,440,109 | ||||||||||
Commercial
and industrial
|
15,059,573 | 20,984,477 | 36,044,050 | ||||||||||
Consumer
|
1,851,967 | 1,929,901 | 3,781,868 | ||||||||||
Total
contractual balance of acquired loans
|
110,965,274 | 96,678,978 | 207,644,252 | ||||||||||
Fair
value adjustments on loans purchased
|
(60,756,699 | ) | (14,639,941 | ) | (75,396,640 | ) | |||||||
Fair
value of loans acquired
|
$ | 50,208,575 | $ | 82,039,037 | $ | 132,247,612 |
Impaired
Loans
|
Non-impaired
Loans
|
Total
|
|||||||||||
Contractually
required principal and interest payments
|
$ | 117,154,665 | $ | 110,331,830 | $ | 227,486,495 | |||||||
Interest
not expected to be collected
|
(5,570,451 | ) | (667,223 | ) | 6,237,674 | ||||||||
Non-accretable
principal difference
|
(50,612,159 | ) | (7,394,438 | ) | (58,006,597 | ) | |||||||
Cash
flows expected to be collected
|
60,972,055 | 102,270,169 | 163,242,224 | ||||||||||
Interest expected
to be collected
|
(618,939 | ) | (12,985,630 | ) | (13,604,569 | ) | |||||||
Accretable
yield
|
(10,144,541 | ) | (7,245,502 | ) | (17,390,043 | ) | |||||||
Fair
value of loans acquired
|
$ | 50,208,575 | $ | 82,039,037 | $ | 132,247,612 |
(7)
|
Deposits
|
Demand
|
$ | 57,732,475 | |||
Savings
|
676,147 | ||||
Time
|
237,581,104 | ||||
Total
assumed deposits
|
$ | 295,989,726 |
2011
|
$ | 188,151,659 | |||
2012
|
44,011,264 | ||||
2013
|
4,537,944 | ||||
2014
|
121,549 | ||||
Thereafter
|
758,688 | ||||
Total
assumed time deposits
|
$ | 237,581,104 |
(8)
|
FHLB
Advance and Other Borrowings
|
(9)
|
Deferred
Income Taxes
|
(10)
|
Contingencies
|
(11)
|
Subsequent
Events
|
PART II: |
INFORMATION
NOT REQUIRED IN PROSPECTUS
|
Item 13. | Other Expenses of Issuance and Distribution |
Amount
|
|||||
*
|
Registrant’s
Legal Fees and Expenses
|
$ | 950,000 | ||
*
|
Registrant’s
Accounting Fees and Expenses
|
195,000 | |||
*
|
Marketing
Agent Fees
|
3,362,587 | (1) | ||
*
|
Marketing
Agent Expenses (Including Legal Fees and Expenses)
|
130,000 | |||
*
|
Appraisal
Fees and Expenses
|
125,000 | |||
*
|
Business
Plan Fees and Expenses
|
43,000 | |||
*
|
Printing,
Edgar and Mailing Fees (Excluding Postage)
|
205,000 | |||
*
|
Postage
|
80,000 | |||
*
|
Filing
Fees (FINRA, Nasdaq, SEC, OTS)
|
109,500 | |||
*
|
Transfer
Agent and Registrar Fees and Expenses
|
2,500 | |||
*
|
Data
Processing Fees and Expenses
|
40,000 | |||
*
|
Other
|
20,000 | |||
|
Total
|
$ | 5,262,587 |
* | Estimated | |
(1)
|
Charter
Financial Corporation has retained Stifel, Nicolaus & Company,
Incorporated to assist in the sale of common stock on a best efforts basis
in the offerings. Fees are estimated at the adjusted maximum of
the offering range.
|
Item
14.
|
Indemnification of Directors and
Officers
|
|
(a)
|
Any
person against whom any action is brought or threatened because that
person is or was a director or officer of the savings association shall be
indemnified by the savings association
for:
|
|
(i)
|
Any
amount for which that person becomes liable under a judgment in such
action; and
|
|
(ii)
|
Reasonable
costs and expenses, including reasonable attorneys’ fees, actually paid or
incurred by that person in defending or settling such action, or in
enforcing his or her rights under this section if he or she attains a
favorable judgment in such enforcement
action.
|
|
(i)
|
Final
judgment on the merits is in his or her favor;
or
|
|
(ii)
|
In
case of:
|
a.
|
Settlement,
|
|
b.
|
Final
judgment against him or her, or
|
|
c.
|
Final
judgment in his or her favor, other than on the
merits,
|
|
if
a majority of the disinterested directors of the savings association
determine that he or she was acting in good faith within the scope of his
or her employment or authority as he or she could reasonably have
perceived it under the circumstances and for a purpose he or she could
reasonably have believed under the circumstances was in the best interest
of the savings association or its members. However, no
indemnification shall be made unless the association gives the OTS at
least 60 days notice of its intention to make such
indemnification. Such notice shall state the facts on which the
action arose, the terms of any settlement, and any disposition of the
action by a court. Such notice, a copy thereof, and a certified
copy of the resolution containing the required determination by the board
of directors shall be sent to the applicable Regional Director of the OTS,
who shall promptly acknowledge receipt thereof. The notice
period shall run from the date of such receipt. No such
indemnification shall be made if the OTS advises the association in
writing, within such notice period, of its objection
thereto.
|
|
(i)
|
“Action”
means any judicial or administrative proceeding, or threatened proceeding,
whether civil, criminal, or otherwise, including any appeal or other
proceeding for review;
|
|
(ii)
|
“Court”
includes, without limitation, any court to which or in which any appeal or
any proceeding for review is
brought;
|
|
(iii)
|
“Final
Judgment” means a judgment, decree, or order which is not appealable or as
to which the period for appeal has expired with no appeal taken;
and
|
|
(iv)
|
“Settlement”
includes the entry of a judgment by consent or confession or a plea of
guilty or of nolo
contendere.
|
Item 15. | Recent Sales of Unregistered Securities |
Not Applicable. |
Item 16. | Exhibits and Financial Statement Schedules: |
The exhibits and financial statement schedules filed as part of this registration statement are as follows: |
1.1
|
Engagement
Letter between Charter Financial Corporation and Stifel, Nicolaus &
Company, Incorporated
|
1.2
|
Form
of Agency Agreement between Charter Financial Corporation and Stifel,
Nicolaus & Company, Incorporated *
|
2.1
|
Stock
Issuance Plan*
|
2.2
|
Purchase
and Assumption Agreement dated as of June 26, 2009 among the Federal
Deposit Insurance Corporation, Receiver of Neighborhood Community Bank,
Newnan, Georgia, CharterBank and the Federal Deposit Insurance Corporation
acting in its corporate capacity*
|
2.3
|
Purchase
and Assumption Agreement dated as of March 26, 2010 among the Federal
Deposit Insurance Corporation, Receiver of McIntosh Commercial Bank,
Carrollton, Georgia, CharterBank and the Federal Deposit Insurance
Corporation acting in its corporate capacity*
|
4.1
|
Federal
Stock Charter of Charter Financial Corporation*
|
4.2
|
Bylaws
of Charter Financial Corporation*
|
4.3
|
Form
of Common Stock Certificate of Charter Financial
Corporation*
|
5
|
Opinion
of Luse Gorman Pomerenk & Schick, P.C. regarding legality of
securities being registered*
|
10.1
|
Employment
Agreement between Charter Financial Corporation and Robert L.
Johnson*
|
10.2
|
First
Amendment to Employment Agreement between Charter Financial Corporation
and Robert L. Johnson*
|
10.3
|
Amended
and Restated Change in Control Agreement with Curtis R.
Kollar*
|
10.4
|
Amended
and Restated Change in Control Agreement with William C.
Gladden*
|
10.5
|
Amended
and Restated Change in Control Agreement with Lee
Washam*
|
10.6
|
Salary
Continuation Agreement with Robert L. Johnson*
|
10.7
|
Salary
Continuation Agreement with Curtis R. Kollar*
|
10.8
|
Salary
Continuation Agreement with Lee Washam*
|
10.9
|
Amended
and Restated Benefit Restoration Plan*
|
10.10
|
Amendment
to Amended and Restated Benefit Restoration Plan*
|
10.11
|
2001
Stock Option Plan*
|
10.12
|
2001
Recognition and Retention Plan*
|
10.13
|
Split-Dollar
Life Insurance Plan with Robert L. Johnson*
|
10.14
|
Split-Dollar
Life Insurance Plan with Curtis R. Kollar*
|
10.15
|
Split-Dollar
Life Insurance Plan with Lee Washam*
|
10.16
|
Split-Dollar
Life Insurance Plan with William C. Gladden*
|
10.17
|
Split-Dollar
Life Insurance Plan with Ronald Warner*
|
10.18
|
Split-Dollar
Life Insurance Agreement with David Z. Cauble*
|
10.19
|
Split-Dollar
Life Insurance Agreement with Jane W. Darden*
|
10.20
|
Split-Dollar
Life Insurance Agreement with Thomas M. Lane*
|
10.21
|
Split-Dollar
Life Insurance Agreement with David L. Strobel*
|
10.22
|
Incentive
Compensation Plan *
|
10.23
|
Amendments
to the 2001 Recognition and Retention Plan *
|
10.24
|
Amendments
to the 2001 Stock Option Plan *
|
21
|
Subsidiaries
of Registrant*
|
23.1
|
Consent
of Luse Gorman Pomerenk & Schick, P.C. (contained in Opinion included
as Exhibit 5)
|
23.2
|
Consent
of Dixon Hughes PLLC
|
23.3
|
Consent
of KPMG LLP
|
23.4
|
Consent
of RP Financial, LC.*
|
24
|
Power
of Attorney (set forth on signature page)
|
99.1
|
Appraisal
Agreement between CharterBank and RP Financial, LC.*
|
99.2
|
Amended Appraisal Report of RP Financial,
LC.**
|
99.3
|
Marketing
Materials
|
99.4
|
Stock
Order and Certification Form
|
99.5
|
Business
Plan Agreement with Keller & Company,
Inc.*
|
*
|
Previously
filed
|
**
|
Supporting
financial schedules filed in paper format only pursuant to Rule 202 of
Regulation S-T. Available for inspection during business hours
at the principal offices of the SEC in Washington,
D.C.
|
|
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
|
|
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the “Calculation of Registration Fee” table in
the effective registration statement;
|
|
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or
any material change to such information in the registration
statement.
|
|
(i) Any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule 424
(§230.424 of this chapter);
|
|
(ii) Any
free writing prospectus relating to the offering prepared by or on behalf
of the undersigned registrant or used or referred to by the undersigned
registrant;
|
|
(iii) The
portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant;
and
|
(iv) Any other communication that is an offer in the offering
made by the undersigned registrant to the
purchaser.
|
CHARTER FINANCIAL CORPORATION | |||
|
By:
|
/s/ Robert L. Johnson | |
Robert L. Johnson | |||
President and Chief Executive Officer | |||
(Duly Authorized Representative) |
Signatures
|
Title
|
Date | ||
/s/
Robert L. Johnson
|
President,
Chief Executive Officer and Director (Principal Executive
Officer)
|
August
11 , 2010
|
||
Robert
L. Johnson
|
||||
/s/
Curtis R. Kollar
|
Senior
Vice President and Chief Financial Officer (Principal Financial and
Accounting Officer)
|
August
11 , 2010
|
||
Curtis R. Kollar | ||||
/s/
David Z. Cauble, III
|
Director
|
August
11 , 2010
|
||
David Z. Cauble, III | ||||
/s/
Jane W. Darden
|
Director
|
August
11 , 2010
|
||
Jane W. Darden | ||||
/s/
William B. Hudson
|
Director
|
August
11 , 2010
|
||
William B. Hudson | ||||
/s/
Curti M. Johnson
|
Director
|
August
11 , 2010
|
||
Curti M. Johnson | ||||
/s/
Thomas M. Lane
|
Director
|
August
11 , 2010
|
||
Thomas M. Lane | ||||
/s/
David L. Strobel
|
Director
|
August
11 , 2010
|
||
David
L. Strobel
|
Registration No. 333-167634 |
1.1
|
Engagement
Letter between Charter Financial Corporation and Stifel, Nicolaus &
Company, Incorporated
|
1.2
|
Form
of Agency Agreement between Charter Financial Corporation and Stifel,
Nicolaus & Company, Incorporated *
|
2.1
|
Stock
Issuance Plan*
|
2.2
|
Purchase
and Assumption Agreement dated as of June 26, 2009 among the Federal
Deposit Insurance Corporation, Receiver of Neighborhood Community Bank,
Newnan, Georgia, CharterBank and the Federal Deposit Insurance Corporation
acting in its corporate capacity*
|
2.3
|
Purchase
and Assumption Agreement dated as of March 26, 2010 among the Federal
Deposit Insurance Corporation, Receiver of McIntosh Commercial Bank,
Carrollton, Georgia, CharterBank and the Federal Deposit Insurance
Corporation acting in its corporate capacity*
|
4.1
|
Federal
Stock Charter of Charter Financial Corporation*
|
4.2
|
Bylaws
of Charter Financial Corporation*
|
4.3
|
Form
of Common Stock Certificate of Charter Financial
Corporation*
|
5
|
Opinion
of Luse Gorman Pomerenk & Schick, P.C. regarding legality of
securities being registered*
|
10.1
|
Employment
Agreement between Charter Financial Corporation and Robert L.
Johnson*
|
10.2
|
First
Amendment to Employment Agreement between Charter Financial Corporation
and Robert L. Johnson*
|
10.3
|
Amended
and Restated Change in Control Agreement with Curtis R.
Kollar*
|
10.4
|
Amended
and Restated Change in Control Agreement with William C.
Gladden*
|
10.5
|
Amended
and Restated Change in Control Agreement with Lee
Washam*
|
10.6
|
Salary
Continuation Agreement with Robert L. Johnson*
|
10.7
|
Salary
Continuation Agreement with Curtis R. Kollar*
|
10.8
|
Salary
Continuation Agreement with Lee Washam*
|
10.9
|
Amended
and Restated Benefit Restoration Plan*
|
10.10
|
Amendment
to Amended and Restated Benefit Restoration Plan*
|
10.11
|
2001
Stock Option Plan*
|
10.12
|
2001
Recognition and Retention Plan*
|
10.13
|
Split-Dollar
Life Insurance Plan with Robert L. Johnson*
|
10.14
|
Split-Dollar
Life Insurance Plan with Curtis R. Kollar*
|
10.15
|
Split-Dollar
Life Insurance Plan with Lee Washam*
|
10.16
|
Split-Dollar
Life Insurance Plan with William C. Gladden*
|
10.17
|
Split-Dollar
Life Insurance Plan with Ronald Warner*
|
10.18
|
Split-Dollar
Life Insurance Agreement with David Z. Cauble*
|
10.19
|
Split-Dollar
Life Insurance Agreement with Jane W. Darden*
|
10.20
|
Split-Dollar
Life Insurance Agreement with Thomas M. Lane*
|
10.21
|
Split-Dollar
Life Insurance Agreement with David L. Strobel*
|
10.22 | Incentive Compensation Plan* |
10.23 | Amendments to the 2001 Recognition and Retention Plan* |
10.24 | Amendments to the 2001 Stock Option Plan* |
21
|
Subsidiaries
of Registrant*
|
23.1
|
Consent
of Luse Gorman Pomerenk & Schick, P.C. (contained in Opinion included
as Exhibit 5)
|
23.2
|
Consent
of Dixon Hughes PLLC
|
23.3
|
Consent
of KPMG LLP
|
23.4
|
Consent
of RP Financial, LC.*
|
24
|
Power
of Attorney (set forth on signature page)
|
99.1
|
Appraisal
Agreement between CharterBank and RP Financial, LC.*
|
99.2
|
Amended Appraisal Report of RP Financial,
LC.**
|
99.3
|
Marketing
Materials
|
99.4
|
Stock
Order and Certification Form
|
99.5
|
Business
Plan Agreement with Keller & Company,
Inc.*
|
*
|
Previously
filed
|
**
|
Supporting
financial schedules filed in paper format only pursuant to Rule 202 of
Regulation S-T. Available for inspection during business hours
at the principal offices of the SEC in Washington,
D.C.
|