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| 8-K - FORM 8-K - CHARTER FINANCIAL CORP | chfn-8k07312017.htm |
This presentation may contain certain forward-looking statements
regarding our prospective performance and strategies within the
meaning of Section 27A of the Securities Act of 1933, as amended and
Section 21E of the Securities Exchange Act of 1934, as amended. We
intend such forward-looking statements to be covered by the Safe
Harbor Provision for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995, and are including
this statement for purposes of said safe harbor provision. Forward-
looking statements can be identified by the use of words such as
“estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,”
“seek,” “expect” and words of similar meaning. These forward-
looking statements include, but are not limited to:
• 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.
These forward-looking statements are based on current beliefs and
expectations of our management and are inherently subject to significant
business, economic and competitive uncertainties and contingencies, many
of which are beyond our control. In addition, these forward-looking
statements are subject to assumptions with respect to future business
strategies and decisions that are subject to change.
The following factors, among others, could cause actual results to differ
materially from the anticipated results or other expectations expressed in
the forward-looking statements:
• general economic conditions, either nationally or in our market
areas, that are worse than expected;
• competition among depository and other financial institutions
FORWARD-LOOKING STATEMENT
• 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 identify, acquire, and integrate future
acquisitions;
• 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.
Because of these and other uncertainties, our actual future results may
be materially different from the results indicated by these forward-looking
statements. Readers are cautioned not to place undue reliance on the
forward-looking statements contained herein, which speak only as of
the date of this presentation. Except as required by applicable law or
regulation, we do not undertake, and specifically disclaim any obligation to
update any forward-looking statements that may be made from time to
time by or on behalf of the Company. Please see “Risk Factors” beginning
on page 19 of the Company’s Prospectus dated February 11, 2013.
2
NASDAQ: CHFN
Recent Price1 (07/21/2017): $17.76
Shares Outstanding (06/30/2017): 15.1 Million
Market Capitalization2: $268.4 Million
Price/Tangible Book Value3: 148.99%
Estimated P/E4 19.7x
Dividend Yield5: 1.58%
Total Assets (06/30/2017): $1.5 Billion
1 - Source: Bloomberg
2 - Based on July 21, 2017 closing market price and June 30, 2017 shares outstanding.
3 - Based on July 21, 2017 closing market price, June 30, 2017 shares outstanding and June 30, 2017
tangible book value.
4 - Based on July 21, 2017 closing market price, June 30, 2017 shares outstanding and LTM $1.04
earnings/share.
5 - Based on July 21, 2017 closing market price
MARKET PROFILE
3
• Founded in 1954 in West Point, Georgia
• Pending Resurgens Bancorp acquisition
• Acquired Community Bank of the South
with four Metro Atlanta branches on
April 15, 2016
• History of organic and acquisitive growth
• Approximately 340 FTE’s servicing 59,000
checking accounts
• 20 Branches (22 including Resurgens)
• 9 Branches (11 including Resurgens) in
Atlanta Metropolitan Statistical Areas
(“MSA”)
CORPORATE PROFILE
June 30, 2017
Total Assets: $1.5 Billion
Total Net Loans: $1.0 Billion
Total Deposits: $1.2 Billion
Total Capital: $212.1 Million
4
Strategic Direction
• Small Town Mutual Thrift (1954 – 2000)
• MHC 20% (2001 – 2008)
• Raised $39 Million in capital
• Buybacks and dividends (dividend waiver) totaling $85 Million
• Financial Crisis (2009 – 2012)
• Three assisted bank acquisitions
• Two Atlanta MSA
• Supplemental capital raises to 40% public
• Financial Recovery (2013 – 2015)
• Full conversion
• Capital raised $143 Million
• Buybacks
• Bought back 35.6% of outstanding stock
• Growth (2016 – Current)
• Acquisitions to build earnings and improve markets
5
z
• Focus on strategic growth
• M&A execution experience … 6 transactions both assisted & unassisted; one
additional pending
• Maintained conservative credit
• Built strong retail deposit franchise
• History of rewarding shareholders
OVERVIEW OF MANAGEMENT TEAM
TOP EXECUTIVES
(Banking/CharterBank)
NAME POSITION EXPERIENCE
ROBERT L. JOHNSON CHAIRMAN & CEO 35/33
LEE W. WASHAM PRESIDENT 33/17
CURTIS R. KOLLAR SENIOR VICE-PRESIDENT & CFO 30/26
6
RECENT ACCOMPLISHMENTS
• Continued North Atlanta Expansion
• Pending Acquisition of Resurgens
• Acquisition of Community Bank of the South (“CBS”) (2016)
• Buckhead Branch (2017)
• Norcross Branch/LPO (2008)
• Growing into an earnings & markets-driven stock
• Consecutive quarterly dividend increases
• Strong credit quality
• Near-complete leverage of thrift conversion capital
7
MARKET CONDITIONS
• Atlanta MSA employment growing at 3.3%
• I-85 corridor legacy markets energized with
automotive & logistics-related job growth
• Most markets have significant
manufacturing, university or military influences
• Active regional M&A market
8
DEPOSIT HIGHLIGHTS
9
• As of June 30, 2017
• 58,962 checking accounts
• 50,379 active debit cards
• 2.7%* gross fee yield on checking account balances
• Bank card revenue 42.4% of deposit fees
• 62.5% checking accounts accept electronic
statements
• 47 bps cost of deposits
* Annualized fees divided by average checking account balances
CHECKING FEES
10
* Annualized fees
Note: Unless otherwise noted, the above chart displays information based on Charter’s fiscal year end, which is September 30.
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
Accounts$
Do
lla
rs
Total Checking Fees Total # Checking Accounts
CHECKING FEES
11
• 2000 – Total checking
accounts 5,000
• 2017 – Total checking
accounts 59,000
* Annualized fees
Note: Unless otherwise noted, the above chart displays information based on Charter’s fiscal year end, which is September 30.
20%
25%
30%
35%
40%
45%
50%
55%
60%
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
% Bank Card Fees of Total Checking Fees Total Checking Fees
CHECKING FEES
12
($ Millions)
Note: Unless otherwise noted, the above chart displays information based on Charter’s fiscal year end, which is September 30.
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 YTD 2017 Annualized
Total Checking Fees Bank Card Fees & Other NSF Fees
SWIPE AND DRIVE
13
*Based on SNL Financial ranking as of June 2016
• Growth of CHFN’s Atlanta MSA deposit base
to $578 million
• $712 million deposits pro forma with Resurgens
ranking 8th* among community banks
(under $10.0 billion assets)
• Opened Buckhead branch February 2017
• CHFN loans at 51% in Atlanta MSA
• Pro Forma loans including Resurgens 56%
14
INCREASING POSITION IN
ATLANTA METRO MARKET
CAPITAL LEVERAGE STRATEGY
Holding Company CET1 of 16.40% at June 30,
2017; 13.63% Pro Forma with Resurgens
• M&A
• Organic growth
• Adding loan producers
• Cash dividends
15
Reduced outstanding shares by approximately 35.6%
EFFECTIVE STOCK BUYBACKS
16
-
3.00
6.00
9.00
12.00
15.00
18.00
21.00
24.00
27.00
30.00
-
3
6
9
12
15
18
21
24
27
30
33
$ Do
llar
sMi
llio
ns
Shares Outstanding Stock Price
Continued Positioning in the Atlanta
Metro Market
17
• Will rank 8th in deposit market share among community banks in Atlanta MSA with less than $10.0 billion in assets1 and
20th overall
• CHFN’s Atlanta MSA pro forma loans will increase to 56% or $662 million2
• Atlanta MSA proportion of CHFN’s deposits will increase to 54% or $712 million2
(1) Assets as of March 31, 2017, deposit data as of June 30, 2016
(2) Loans and Deposits as of June 30, 2017
Source: SNL Financial
(1)
Institution (ST) 2016 Rank
Number of
Branches
June 2016
Total Deposits in
Market ($000)
Total
Market
Share (%)
Fidelity Southern Corp. (GA) 9 46 2,927,509 1.92
Brand Group Holdings Inc. (GA) 12 7 1,910,125 1.25
Atlantic Capital Bcshs Inc. (GA) 13 1 1,427,057 0.93
Hamilton State Bancshares (GA) 14 24 1,317,796 0.86
State Bank Finl Corp. (GA) 15 7 1,232,279 0.81
United Bank Corp. (GA) 17 14 901,260 0.59
Renasant Corp. (MS) 18 18 892,067 0.58
Pro Forma Entity 11 710,282 0.46
Charter Financial Corp. (GA) 22 9 583,345 0.38
Resurgens Bancorp (GA) 50 2 126,937 0.08
Market Total 1260 152,829,823
PRO FORMA LOANS
18
CharterBank Resurgens Combined
Note: Regulatory data shown, does not include purchase accounting adjustments
Source: SNL Financial
June 30, 2017
C&D
13.8%
1-4 Fam
21.3%
HELOC
3.2%
OwnOcc CRE
17.0%
Other CRE
29.4%
Multifam
2.5%
C&I
7.4%
Consr & Other
5.3%
C&D
18.3%
1-4 Fam
18.5%
HELOC
6.5%
OwnOcc CRE
23.9%
Other CRE
16.8%
Multifam
2.4%
C&I
13.5%
Consr & Other
0.2%
C&D
14.3%
1-4 Fam
21.0%
HELOC
3.6%
OwnOcc CRE
17.8%
Other CRE
28.0%
Multifam
2.5%
C&I
8.1%
Consr & Other
4.7%
Composition Composition Composition
Loan Type ($000) % of Total Loan Type ($000) % of Total Loan Type ($000) % of Total
Constr & Dev 143,980 13.8% Constr & Dev 24,808 18.3% Constr & Dev 168,788 14.3%
1-4 Family Residential 222,832 21.3% 1-4 Family Residential 25,028 18.5% 1-4 Family Residential 247,860 21.0%
Home Equity 33,708 3.2% Home Equity 8,801 6.5% Home Equity 42,509 3.6%
Owner - Occ CRE 178,046 17.0% Owner - Occ CRE 32,452 23.9% Owner - Occ CRE 210,498 17.8%
Other CRE 307,731 29.4% Other CRE 22,732 16.8% Other CRE 330,463 28.0%
Multifamily 26,220 2.5% Multifamily 3,302 2.4% Multifamily 29,522 2.5%
Commercial & Industrial 77,344 7.4% Commercial & Industrial 18,245 13.5% Commercial & Industrial 95,589 8.1%
Consr & Other 55,712 5.3% Consr & Other 234 0.2% Consr & Other 55,946 4.7%
Total Loans $1,045,573 100.0% Total Loans $135,304 100.0% Total Loans $1,181,175 100.0%
PRO FORMA DEPOSITS
19
June 30, 2017
CharterBank Resurgens Combined
Note: Regulatory data shown, does not include purchase accounting adjustments
Source: SNL Financial
Non Int.
Bearing
16.2%
NOW & Other
Trans
26.2%
MMDA & Sav
26.0%
Time < $100k
15.5%
Time > $100k
16.0%
Non Int.
Bearing
19.1%
NOW & Other
Trans
9.2%
MMDA & Sav
34.8%
Time < $100k
10.7%
Time > $100k
26.2%
Non Int.
Bearing
16.5%
NOW & Other
Trans
24.5%
MMDA & Sav
26.9%
Time < $100k
15.1%
Time > $100k
17.0%
Composition Composition Composition
Deposit Type ($000) % of Total Deposit Type ($000) % of Total Deposit Type ($000) % of Total
Non Interest Bearing 195,437 16.2% Non Interest Bearing 25,523 19.1% Non Interest Bearing 220,960 16.5%
NOW & Other Trans 316,524 26.2% NOW & Other Trans 12,259 9.2% NOW & Other Trans 328,783 24.5%
MMDA & Sav 314,284 26.0% MMDA & Sav 46,459 34.8% MMDA & Sav 360,743 26.9%
Time Deposits < $100k 187,648 15.5% Time Deposits < $100k 14,330 10.7% Time Deposits < $100k 201,978 15.1%
Ti e Deposits > $100k 193,581 16.0% Ti e Deposits > $100k 35,049 26.2% Ti e Deposits > $100k 228,630 17.0%
Total Deposits $1,207,474 100.0% Total Deposits $133,620 100.0% Total Deposits $1,341,094 100.0%
Loans / Deposits 86.6% Loans / Deposits 101.3% Loans / Deposits 88.1%
RESURGENS TRANSACTION SUMMARY
20
• Drives high-teens % EPS accretion and overall shareholder value
• Infills two attractive “in-town” submarkets to CHFN’s growing Atlanta
presence
• CHFN’s broader product line, higher lending limits and expected
retention of Resurgens’ leadership team create opportunities for growth
and synergies across CHFN’s Atlanta market system
• Pro forma institution remains well capitalized and poised to deliver
continued balance sheet and earnings growth
• Consistent with CHFN’s disciplined capital management and growth
strategy
Key Attributes Resurgens Rationale
Franchise Aspects:
• High-growth metro market? Attractive “in-town” infill in the attractive Atlanta MSA
• Complementary culture? Similar culture, efficient transition
• Attractive core deposit base?
Good core mix includes $38mm of
checking deposits with $27mm non-
interest bearing; 60 bps deposit cost
Fundamentals:
• Accretive to EPS day 1? Immediate EPS Accretion1
• TBV earn back period within 5 years? Less than 4 years
• Conservative credit marks? 1.5% of total loans
• Good IRR? +20% IRR2
Resurgens Transaction Meets M&A
Disciplines
21
(1) Excludes one-time merger costs
(2) Based on 14 P/E terminal value
TRANSACTION TERMS & ASSUMPTIONS
22
Resurgens Bancorp
Transaction Value1 $26.3 million
Consideration 100% Cash
Price/TBV 168.6%
Price/LTM EPS2 18.9x
Required
Approvals
Customary regulatory
and shareholder
approval
Expected Closing September 2017
Estimated
Cost Savings:
25% of Resurgens LTM non-
interest expense
Revenue
Synergies:
None assumed
Transaction
Expenses:
$2.7 million, pretax
Core Deposit
Intangible:
$1.0 million
Fair Value
Marks:
1.5% aggregate mark on total
loans
(1) Based on shares outstanding, options, and warrants
(2) Based on LTM tax-effected net income at 34% of $1.4 million
RESURGENS TRANSACTION HIGHLIGHTS
23
• Two branches with more than $130 million of deposits and loans in
highly desirable in-town Atlanta sub-markets
• Energetic management team with capacity to expand market share
• Attractive core deposit mix
• History of consistent earnings
• Solid credit
• Strong IRR
• Compelling EPS accretion
RESURGENS TRANSACTION RATIONALE
24
• Deploys CHFN’s capital, operating capacity and proven M&A expertise in
growing, attractive metro areas
• Ambitious team with proven C&I and ability to grow Atlanta further
• Infills desirable submarkets supporting prior Atlanta acquisition and
Buckhead de novo branch
Strategic
Rationale
Financially
Attractive
• Conservative credit mark after comprehensive due diligence
• De-conversion from same system in most recent prior acquisition
• Simple operations
• Significant management team retention
Low Risk
Integration
• High-teens (%) EPS accretion
• Adds to CHFN’s operating and capital leverage
• Moderate TBV Dilution Payback Period
• Clean credit profile
• +20% IRR
1
(1) Based on 14 P/E terminal value
FINANCIAL INFORMATION
25
Total Loans, Net
Net Income $11.9 million
Fully Diluted EPS1 $0.78
Total Deposits $1.2 billion
• ALL as a % of Nonperforming Loans – 586.83%
• ALL as a % of Total Loans – 1.04%
• Continued advances in core earnings
Asset Quality 0.26% NPA
16.40%
$1.0 billion
1 - Diluted net income per share for the nine months ended June 30, 2017 was computed by dividing net income by weighted average
shares outstanding plus potential common shares resulting from dilutive stock options and unvested restricted shares, determined using the
treasury stock method.
• Basic EPS up 48% from June 2016
• Bank Common Equity Tier 1 of 15.69%
Basic EPS $0.83
FISCAL 2017 YTD (9 Months Ended June 2017)
RESULTS AND DEVELOPMENTS
26
ROA 1.08%
• Total Loans, Net up 4% from June 2016
• Total Deposits up 3% from June 2016
Holding Company
Common Equity Tier 1
Note: Unless otherwise noted, the above chart displays information based on Charter’s fiscal year end, which is September 30.
1 - Core deposits consist of transaction accounts, money market accounts, and savings accounts.
BALANCE SHEET HIGHLIGHTS
27
($ Millions) 2012 2013 2014 2015 2016 Q3 2017
Total Assets $1,032,220 $1,089,406 $1,010,361 $1,027,079 $1,438,389 $1,480,122
Loans, net 593,904 579,854 606,367 714,761 994,052 1,032,107
Securities 189,379 215,118 188,743 184,404 206,336 187,655
Total Liabilities $889,699 $815,628 $785,406 $822,149 $1,235,240 $1,268,042
Retail Deposits 779,397 745,900 717,192 703,278 1,125,067 1,157,450
Core1 456,292 475,426 486,248 505,154 784,705 813,025
Time 323,105 270,475 230,944 198,124 340,362 344,425
Total Borrowings 81,000 60,000 55,000 62,000 56,588 56,690
Total Equity $142,521 $273,778 $224,955 $204,931 $203,150 $212,080
32.1%
Note: Core Deposits = Transaction, Savings & Money Market Accounts
Wholesale Funding = Wholesale Deposits, Borrowings & TRUPS
($ Millions)
DEPOSIT GROWTH
28
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
Core Deposits Retail CD's Wholesale Funding
48%
27%
25% 26%
30%
44%
30%
41%
29%
43%
13%
44%
$1,021
$825
$1,035
$881
11%
37%
52%
$811
8%
59%
33%
$687
$801
12%
25%
63%
$772
7%
30%
63%
$1,218
64%
28%
8%
7%
28%
65%
$1,251
Average cost of deposits for the three
months ended June 30, 2017:
0.47%
DEPOSIT MIX – June 30, 2017
29
Time
Deposits
(Excluding
Wholesale
Deposits)
29%Savings &
Money
Market
25%
Transaction
Accounts
43%
Wholesale
Time
Deposits
3%
$672.8
$714.8
$679.9 $701.4
$993.8 $994.1 $990.6 $1,007.6
$1,032.1
$300.0
$400.0
$500.0
$600.0
$700.0
$800.0
$900.0
$1,000.0
$1,100.0
Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17
($ Millions)
NET LOANS OUTSTANDING
30
1-4 Family
21%
Comm RE -
Owner Occupied
17%
Comm RE - Non
Owner Occupied
Other
34%
Comm RE -
Hotels
6%
Comm RE
Multifamily
3%
Commercial
& Industrial
8%
Consumer &
Other
4%
Real Estate
Construction
7%
Note: Unless otherwise noted, the above chart displays information based on Charter’s fiscal year end, which is September 30.
[1] Due to the early termination of the FDIC loss share agreements in the fourth quarter of fiscal 2015, ratios for fiscal year ended 2016, include
all previously covered assets with the exception of FAS ASC 310-30 loans that are excluded from nonperforming loans due to the ongoing
recognition of accretion income established at the time of acquisition. Ratios for periods prior to September 30, 2015, represent non-covered data
only.
LOAN MIX – June 30, 2017
31
Asset quality ratios[1]: At
2012 2013 2014 2015 2016 6/30/17
NPAs / Total Assets (%) 0.69% 0.49% 0.65% 0.73% 0.45% 0.26%
COs / Average Loans (%) 0.86 0.32 0.08 0.00 -0.13% -0.17
ALLL Loans / NPLs (x) 2.38x 2.80x 2.00x 2.30x 2.78x 5.87x
Allowance / Total Loans (%) 1.87% 1.70% 1.55% 1.30% 1.03% 1.04%
Note: Unless otherwise noted, the above chart displays information based on Charter’s fiscal year end, which is September 30.
INCOME STATEMENT HIGHLIGHTS
32
Q3 2017
($ Millions) 2012 2013 2014 2015 2016 YTD
Net Interest Income $37,512 $35,275 $29,918 $32,880 $42,154 $35,842
Provision for Loan Losses $4,503 $1,489 ($713) $0 ($250) ($900)
Non-Interest Income $12,912 $11,653 $14,277 $12,329 $20,964 $14,168
Non-Interest Expense $40,303 $36,314 $36,211 $36,832 $45,398 $32,136
Income Tax Expense $639 $2,869 $2,742 $2,805 $6,107 $6,898
Net Income $4,979 $6,256 $5,955 $5,572 $11,863 $11,876
Memo: Net Accretion Income $8,988 $8,923 $3,087 $3,558 $4,371 $1,255
Net Interest Income Less Net Accretion Income $28,524 $26,352 $26,831 $29,322 $37,783 $34,587
5.35%
4.61%
3.83%
4.23%
4.40%
4.11%
1.23%
0.95%
0.81% 0.74% 0.66% 0.62%
4.17%
3.82%
3.22%
3.67%
3.89%
3.61%
3.11%
2.82% 2.87%
3.26%
3.47% 3.48%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Q3 2017 YTD
Yield on Interest Earning Assets
Cost of Interest Bearing Liabilities
Net Interest Margin
Net Interest Margin Excluding Purchase Accounting
*Adjusted for net purchase discount accretion and amortization
Note: Unless otherwise noted, the above chart displays information based on Charter’s fiscal year end, which is September 30.
33
NET INTEREST MARGIN TRENDS
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Q3 2017
YTD
*Impact of Purchase Accounting on Net Interest Margi
*Net Interest Margin Excluding the effects of Purchase Accounting
Net Interest Margin Including the effects of Purchase Accounting
($ Millions)
* Adjusted for net purchase discount accretion and amortization; loss share buyout;
recoveries on purchased loans, and acquisition deal costs
34
OPERATING LEVERAGE
$39.9
$38.0
$41.3
$44.1
$55.1
$48.5
101%
96%
88% 83%
75%
66%
80% 77%
82% 81%
72%
63%
30%
40%
50%
60%
70%
80%
90%
100%
110%
120%
130%
140%
150%
160%
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 YTD 2017
Adjusted Net Operating Revenue* Adjusted Efficiency Ratio* Efficiency Ratio
$20
$30
$40
$50
$60
$70
$80
$90
$100
$110
FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 YTD 2017
Annualized
Net Operating Rev nue Adjusted Net Operating Revenue* G&A Expenses
Note: Unless otherwise noted, the above chart displays information based on Charter’s fiscal year end, which is September 30.
($ Millions)
35
NONINTEREST INCOME
Noninterest Income adjusted for FDIC purchase accounting accretion
*Other includes BOLI, Brokerage Commissions, Gain/Loss on Sale of Securities
$0
$5
$10
$15
$20
$25
FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Q3 YTD 2017
Recovery on Purchase Accounting Loans
Other*
1-4 Loan Gain on Sale
Deposit Fees
$11.5
21.8%
66.7%61.2%
30.4%
64.9%
27.5%
$14.5
57.2%
15.5%$14.8
71.0%
18.1%
$21.0
$11.6 10.1%
10.9%
7.6%
11.5%
8.4%
17.2%
68.1%
12.8%
1.8%
17.3%
$14.2
Note: Unless otherwise noted, the above chart displays information based on Charter’s fiscal year end, which is September 30.
($ Millions)
36
NONINTEREST EXPENSE
FY 2016 - Noninterest Expense includes $4.2 million of deal costs.
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Q3 YTD 2017
Marketing
Professional Services
Occupancy & Furn. and Equip.
Other
Salaries and Benefits
22.4%
17.9%
50.8%48.0%
21.7%
21.6%
54.6%
14.1%
22.7%
$36.2
56.5%
11.9%
23.3%
$36.8
23.2%
56.2%
13.3%
$45.4
$40.3
$36.3
58.3%
21.4%
13.4%
$32.1
Accelerating EPS growth
Capacity for additional operating and capital leverage
Focused on organic growth
Strategic M&A potential
Favorable credit quality
Track record of returns to shareholders with annualized total
return since:
2013 stock conversion approximately 16%*
37
INVESTMENT MERITS
*Source: Bloomberg with dividends reinvested
INVESTOR CONTACTS
1233 O. G. Skinner Drive
West Point, Georgia 31833
1-800-763-4444
www.charterbk.com
38
Robert L. Johnson
Chairman and Chief Executive Officer
bjohnson@charterbank.net
(706) 645-3249
Lee W. Washam
President
lwasham@charterbank.net
(706) 645-3630
Curtis R. Kollar
Senior Vice President and
Chief Financial Officer
ckollar@charterbank.net
(706) 645-3237
39
APPENDIX
INTEREST RATE RISK
BANK NET PORTFOLIO VALUE
At June 30, 2017
40
(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.
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 of Present
Value of Assets (3)(4)
(dollars in thousands)
300 $292,328 $6,959 2.4% 19.9% 0.3%
200 $290,905 $5,536 1.9% 19.8% 0.4%
100 $288,657 $3,288 1.2% 19.6% 0.2%
— $285,369 — — 19.4% —
(100) $265,055 ($20,314) (7.1%) 18.0% (1.4%)
