WEST POINT, Ga., April 24 /PRNewswire-FirstCall/ -- Charter Financial Corporation (BULLETIN BOARD: CHFN) today reported second quarter fiscal 2008 net income of $3.9 million, or $0.20 per share, compared with $2.0 million, or $0.10 per share, for same quarter of the prior year. Net income for the six months ended March 31, 2008 was $5.9 million or $0.31 per share compared with $47.8 million or $2.49 per share for the comparable period in the prior year.

   The rise in net income for the second quarter was attributed to a pretax $3.4 million increase in noninterest income due to larger gains on the sale of Freddie Mac stock and on covered calls related to Freddie Mac stock. The increase in net income for the second quarter also reflects a $256,000 decrease in noninterest expense that was partially offset by a $1.2 million decline in net interest income, a $150,000 loan loss provision, and a $399,000 increase in tax expense.

   The company noted that the higher net income for the six months ended March 31, 2007 was due to the sale of one million shares of Freddie Mac stock during the first quarter of fiscal 2007, which resulted in a pre-tax gain of $69.5 million ($42.6 million after tax), compared with a pre-tax gain of $2.6 million in the first two quarters of the current year. For the second fiscal quarter 2008, the pretax gain on sale of Freddie Mac stock was $1.3 million compared with $1.3 million in fiscal first quarter 2008 and no gain in fiscal second quarter 2007.

   Income from covered calls for the quarter ended March 31, 2008 was $2.0 million compared with a $515,000 loss for the December 2007 quarter. Of the $2.0 million covered call income for the quarter, $1.1 million was realized and the remaining $930,000 was from mark to market. Contributing to the increase in noninterest income was $100,000 in earnings from an additional investment of $15 million in bank-owned life insurance.

   "We continue to monitor our asset quality closely and believe that our loan loss reserves are adequate," said Robert L. Johnson, President and CEO. "Less than ten percent of our assets are acquisition, development or construction loans. More than two thirds of our nonaccrual loans are less than thirty days delinquent. Capital is strong, standing at 17.4% of total assets. CharterBank's regulatory core capital is 9.67%, which is almost twice the well capitalized requirement of 5%."

   Net interest income was $5.1 million for the quarter ended March 31, 2008, which was $1.2 million lower than the prior year quarter, with the largest contributor to the decline being the reduced dividend on Freddie Mac stock.

   Discussing the company's outlook, Johnson said: "We continue to anticipate a significant boost to the economy in our market area over the next several years from the new KIA Motors Corporation assembly plant to be located between West Point and LaGrange.

   "The plant is tentatively scheduled to begin operations in 2009. KIA and its suppliers have announced intentions to employ approximately 4,300 in West Point, Georgia and several thousand more in surrounding communities. As a leading community bank in the area, we expect to see accelerated growth in our retail banking business.

   "We continue to make progress in building our retail franchise. Net loans receivable climbed to a record $414.1 million, which is up $5.9 million from December 31, 2007 and up $14.1 million from March 31, 2007. We grew retail deposits $5.0 million for the quarter to $390.3 million compared with $385.3 million at December 31, 2007," concluded Johnson.

Additional financial information is available at http://www.charterbank.net/ .

   Charter Financial Corporation is a savings and loan holding company and the parent company of CharterBank, a full-service community bank and a federal savings institution. Charter Financial Corporation and CharterBank are in a mutual holding company structure. Charter Financial owns 3.4 million shares of Freddie Mac common stock with a market value of $84.0 million. CharterBank is headquartered in West Point, Georgia, and operates ten branches on the I-85 corridor from LaGrange, Georgia to Auburn, Alabama. CharterBank's deposits are insured by the Federal Deposit Insurance Corporation.

                         FINANCIAL TABLES FOLLOW



                      Charter Financial Corporation

 Selected Financial Data (in thousands except share and per share data):


                       March 31,   December 31,  September 30,  March 31,
                          2008         2007           2007        2007
                                            Unaudited

  Total Assets          $905,426     $912,263    $1,021,856    $1,064,835
  Loans Receivable, Net  414,076      408,124       405,553       399,969
  Mortgage Securities
   Available for Sale    270,952      257,221       263,351       285,083
  Freddie Mac Common
   Stock                  83,999      114,475       200,782       202,415
  Other Investment
   Securities             36,548       30,654        31,792        32,249
  Core Deposits*         188,397      199,986       203,348       202,715
  Retail Deposits**      390,284      385,295       378,498       362,909
  Total Deposits         453,102      438,708       430,683       413,682
  Deferred Income Taxes   29,009       40,355        72,504        74,174
  Borrowings             257,000      246,797       272,058       329,731
  Realized
   Stockholders'
   Equity***             110,474      108,197       108,186       114,088
  Accumulated Other
   Comprehensive
   Income****             47,413       65,637       116,886       118,799

  Total Stockholders'
   Equity                157,887      173,734       225,072       232,887

  Book Value per Share     $8.21        $9.05        $11.73        $12.15
  Tangible Book Value
   per Share                7.93         8.77         11.44         11.86

  Minority Shares
   Outstanding         3,564,622    3,533,648     3,136,085     3,112,697
  Total Shares
   Outstanding        19,225,402   18,997,284    18,994,009    19,167,765
  Weighted Average
   Total Shares
   Outstanding-Basic  19,018,570   18,997,097    19,097,807    18,967,899
  Weighted Average
   Total Shares
   Outstanding -
   Diluted            19,064,622   19,111,743    19,210,548    19,144,179

  *    Core Deposits includes transaction accounts, money market accounts,
       and savings accounts.
  **   Retail Deposits includes Core Deposits, and certificates of deposits
       excluding brokered and wholesale.
  ***  Includes Total Stockholders' Equity less Accumulated Other
       Comprehensive Income.
  **** Includes unrealized gains and losses on Freddie Mac common stock and
       other investment securities adjusted for income taxes at a tax rate
       of 38.6%.



                      Charter Financial Corporation

 Selected Operating Data (in thousands except share and per share data):

                               Three months ended          Six months ended
                              March 31,     December 31,      March 31,
                          2008       2007      2007       2008        2007
                                            Unaudited

  Total Interest
   Income               $11,942    $13,722    $12,689    $24,631    $27,567
  Total Interest
   Expense                6,812      7,366      7,297     14,109     14,838
    Net Interest
     Income               5,130      6,356      5,392     10,522     12,729
  Provision for Loan
   Losses                   150          -          -        150          -
    Net Interest Income
     after
    Provision for Loan
     Losses               4,980      6,356      5,392     10,372     12,729
  Noninterest Income      5,173      1,752      2,764      7,938     73,040
  Noninterest Expense     4,828      5,084      5,367     10,197     10,024
    Income before Income
     Taxes                5,325      3,024      2,789      8,113     75,745
  Income Tax Expense      1,451      1,052        769      2,219     27,975
    Net Income           $3,874     $1,972     $2,020     $5,894    $47,770

  Earnings per
   Share - Basic          $0.20      $0.10      $0.11      $0.31      $2.49
  Earnings per
   Share - Diluted         0.20       0.10       0.11       0.31       2.46
  Cash Dividends
   per Share               0.50       0.50       0.50       1.00       0.95

  Net Charge-offs
   (Recoveries)             285         10        518        803         57
  Deposit Fees            1,248      1,064      1,311      2,559      2,106
  Gain on Sale of Loans     170        260        260        430        483
  Gain on Sale of
   Freddie Mac Common
   Stock                  1,302          -      1,348      2,649     69,453
  Gain on Covered Calls
   Related to Freddie Mac
   Common Stock           1,993        112       (515)     1,478        300



                                   Three months ended      Six months ended
                               March 31,     December 31,       March 31,
                            2008      2007      2007        2008       2007
                                             Unaudited

  Return on Equity          9.24%     3.22%     3.92%       6.30%     36.26%
  Return on Assets          1.70      0.74      0.83        1.25       8.76
  Net Interest Margin       2.40      2.50      2.34        2.37       2.44
  Loan Loss Reserve as
   a % of Total Loans       1.28      1.48      1.33        1.28       1.48
  Loan Loss Reserve as
   a % of Nonperforming
   Assets                  58.04     99.49     70.45       58.04      99.49
  Nonperforming Assets
   as a % of Total Loans
   and REO                  2.19      1.49      1.87        2.19       1.49
  Net Chargeoffs as a %
   of Average Loans         0.27      0.01      0.51        0.39       0.03
  Nonperforming Assets
   to Total Assets          1.02      0.57      0.86        1.02       0.57
  Bank Core Capital
   Ratio                    9.67      8.76      9.94        9.67       8.76
  Dividend Payout Ratio    41.11     78.92    151.98       79.10       6.66
  Effective Tax Rate       27.25     34.78     27.57       27.36      36.93

Source: Charter Financial Corporation