Charter Financial Reports FY07 Net Income Increases Sharply

The increase in fiscal 2007 net income was primarily attributed to apre-tax gain on the partial sale of the company's Freddie Mac stock of$69.5 million. For the year ended September 30, 2006, the company had a gainof $4.8 million from sales of Freddie Mac stock.

There were 19,210,548 fully diluted shares outstanding at September 30,2007 and 19,591,492 at September 30, 2006.

The company's total assets were $1.022 billion at September 30, 2007versus almost $1.097 billion at the September 30, 2006. Charter Financial'sborrowings were down for the year to $272 million from $338 million at the endof fiscal 2006. This decrease resulted from maturing borrowings being paidoff using cash flow from mortgage securities holdings.

Total interest income rose slightly to $54.6 million from $53.8 millionlast year. Interest expense was $29.8 million for fiscal 2007, up from$27.8 million so that our net interest income was down slightly to$24.8 million from $26.0 million a year ago. The net interest margin wasalmost steady at 2.46 versus 2.48 last year. Noninterest expense for fiscal2007 was $21.9 million, up $796,000 over the prior year. Noninterest expensefor the quarter was $6.9 million, up over the June 2007 third quarter by$1.9 million due to a $1.9 million noncash expense for fully vested stockoptions granted during the fourth quarter. Noninterest expense was up alittle over $950,000 from the fourth quarter a year ago.

Building Retail Bank Franchise

"We made significant progress in building our retail franchise andimproving its earnings," said Robert L. Johnson, president and chief executiveofficer. "We increased our retail deposits by a strong $57.2 million to$378.5 million and net loans receivable by $30.8 million to $405.6 million.The increases were due to effective marketing efforts and continued growth insome segments of our local economy."

Deposit fees increased 21.6 percent to $4.5 million for the year from$3.7 million for the prior year. "The increase in deposit fees was acombination of growth in core deposits and improved pricing of fees", Mr.Johnson said.

Mr. Johnson noted that the company added a "grocery store branch" inLaGrange, Ga., which is operating in space set aside inside a well known localoutlet as a full branch with an ATM. That brought the total number ofbranches to ten.

"Like most banks, our credit quality has been impacted by the housingslowdown as nonperforming assets increased to .72 percent of total assets asof September 30, 2007 from .30 percent last year. While net charge-offs forfiscal 2007 of $73,000 were similar to 2006 levels, we expect net charge-offsin fiscal 2008 to be somewhat higher." Johnson said. "However, we remaincomfortable that our loan loss reserves are adequate."

Our local economy is mixed with slow downs in housing sales and thecontinued shrinkage of textile related employment. The economy is beingstimulated by the activity related to the large new Kia Motors assembly plantin West Point, Georgia. As the plant nears its opening, expected in late2009, we expect to see a more positive effect on the growth of our retailbusiness. We are continuing to prepare and position ourselves for theexpected boost to our area.

Capital Management

Mr. Johnson stated that Charter Financial took significant steps incapital management with the repurchase of over half a million shares of itsstock through a dutch auction tender offer completed in January 2007 and thedeclaration of a special cash dividend of $2.50 per share in the fourthquarter of 2007. Charter Financial increased its regular quarterly cashdividend to $0.50 per share in the second quarter from $0.45 per share, acurrent indicated annual rate of $2.00 with an estimated four percent returnshould the stock be at $50. Since converting to the mutual holding companystructure in 2001 the company has declared dividends of $13.35 per share.During fiscal 2007, the company provided distributions to stockholders througha combination of stock buybacks of 515,329 shares for $26.0 million anddividends of $14.2 million.

CharterBank's regulatory core capital ratio is a healthy 9.53 percent.Last year it totaled 9.71 percent. The Company's total capital to totalassets is 22.03 percent.

Managing Freddie Mac Common Stock

During the year, the company recognized a pre-tax gain on the sale of1.035 million shares of Freddie Mac stock of $69.5 million. Charter alsorecognized $369,000 in income from covered calls on Freddie Mac common stockcompared with $278,000 in the prior year. At September 30, 2007, the companyowned Freddie Mac common stock with a market value of $200.8 million comparedto $294.3 million at September 30, 2006. The Company holds 3,402,500 shareswhich had a market value of $59.01 per share on September 30, 2007 and as ofrelease date were trading about $25.50 per share.

About Charter Financial Corporation

Charter Financial Corporation is a savings and loan holding company andthe parent company of CharterBank, a full-service community bank and a federalsavings institution. Charter Financial Corporation and subsidiary CharterBankare in a mutual holding company structure. CharterBank is headquartered inWest Point, Georgia, and operates ten branches on the I-85 corridor fromLaGrange, Georgia to Auburn, Alabama. CharterBank's deposits are insured bythe Federal Deposit Insurance Corporation.

Forward-Looking Statements

This release may contain "forward-looking statements" that may beidentified by use of such words as "believe," "expect," "anticipate,""should," "planned," "estimated," and "potential." Examples of forward-lookingstatements include, but are not limited to, estimates with respect to ourfinancial condition and results of operation and business that are subject tovarious factors that could cause actual results to differ materially fromthese estimates. These factors include but are not limited to general andlocal economic conditions; changes in interest rates, deposit flows, demandfor mortgages and other loans, real estate values, and competition; changes inaccounting principles, policies, or guidelines; changes in legislation orregulation; and other economic, competitive, governmental, regulatory, andtechnological factors affecting our operations, pricing, products, andservices. Any or all forward-looking statements in this release and in anyother public statements we make may turn out to be wrong. They can be affectedby inaccurate assumptions we might make or known or unknown risks anduncertainties. Consequently, no forward-looking statements can be guaranteed.The Company disclaims any obligation to subsequently revise or update anyforward-looking statements to reflect events or circumstances after the dateof such statements or to reflect the occurrence of anticipated orunanticipated events.

                           Financial Tables Follow          Selected Financial Data (in thousands except share data):                                   September 30,  September 30,     June 30,                                        2007           2006          2007                                     Unaudited                    Unaudited    Total Assets                    $1,021,856     $1,097,321    $1,028,646    Loans Receivable, Net              405,553        374,726       401,910    Mortgage Securities     Available for Sale                263,351        308,150       268,073    Freddie Mac Common Stock           200,782        294,339       206,532    Other Investment Securities         31,792         37,582        31,994    Retail Deposits                    378,498        321,288       372,662    Core Deposits                      203,348        169,129       206,001    Total Deposits                     430,683        372,057       401,060    Deferred Income Taxes               72,504        108,186        74,213    Borrowings                         272,058        337,928       303,759    Realized Stockholders' Equity*     108,186         95,220       114,700    Accumulated Other     Comprehensive Income**            116,886        172,489       118,939    Total Equity                       225,072        267,709       233,639    Book Value per Share                $11.73         $13.61        $12.19    Tangible Book Value per Share        11.44          13.33         11.90    Minority Shares Outstanding      3,136,085      3,592,863     3,116,197    Total Shares Outstanding -     at Quarter End                 18,994,009     19,662,981    19,170,765    Weighted Average Total Shares     Outstanding - Basic            19,097,807     19,438,844    18,972,247    Weighted Average Total Shares     Outstanding - Fully Diluted    19,210,548     19,591,492    19,158,884    *  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%          Selected Operating Data (in thousands except share data):                                     Year Ended       Three months ended                                    September 30,    September 30,  June 30,                                   2007     2006     2007     2006    2007                                                  Unaudited    Total Interest Income        $54,646  $53,802  $13,415  $14,003 $13,664    Total Interest Expense        29,827   27,801    7,413    7,605   7,576      Net Interest Income         24,819   26,001    6,002    6,398   6,088    Provision for Loan Losses          -        -        -        -       -      Net Interest Income after      Provision for Loan Losses   24,819   26,001    6,002    6,398   6,088    Noninterest Income            76,924   10,826    1,987    1,383   1,897    Noninterest Expense           21,926   21,130    6,876    5,917   5,025      Income before Income Taxes  79,817   15,697    1,113    1,864   2,960    Income Tax Expense (Benefit)  28,877    2,353       57   (1,045)    846      Net Income                 $50,940  $13,344   $1,056  $ 2,909  $2,114    Earnings per Share             $2.67    $0.69    $0.06    $0.15   $0.11    Earnings per Share -     Fully Diluted                  2.65     0.68     0.06     0.15    0.11    Cash Dividends per Share***     4.45     3.80     3.00     2.20    0.50    Net Charge-offs (Recoveries)      73       74       27      (10)    (12)    Deposit Fees                   4,532    3,728    1,235    1,031   1,192    Gain on Sale of Loans          1,152      741      296      232     372    Gain on Sale of Freddie Mac      Common Stock                69,453    4,769        -        -       -    Gain (Loss) on Covered Calls      Related to Freddie Mac      Common Stock                   369      278       68     (260)      -    *** First Charter, MHC has waived its portion of these dividends,        resulting in payment only to the minority stockholders.                                      Year Ended        Three months ended    Performance Ratios:              September 30,     September 30, June 30,                                     2007     2006     2007     2006   2007                                                     Unaudited    Return on Equity                20.30%    5.10%    1.80%    4.64%  3.48%    Return on Assets                 4.81     1.22     0.42     1.06   0.81    Net Interest Margin              2.46     2.48     2.55     2.45   2.45    Loan Loss Reserve as a     % of Total Loans                1.46     1.59     1.46     1.59   1.48    Loan Loss Reserve as a     % of Nonperforming Assets      81.54   184.60    81.54   184.60 106.57    Nonperforming Assets as a % of     Total Loans and REO             1.79     0.86     1.79     0.86   1.38    Net Chargeoffs (Recoveries)     as a % of Average Loans         0.02     0.02     0.01        -      -    Nonperforming Assets to     Total Assets                    0.72     0.30     0.72     0.30   0.55    Bank Core Capital Ratio          9.53     9.71     9.53     9.71   9.38    Dividend Payout Ratio           27.83   101.81   891.28   271.67  73.70    Effective Tax Rate Expense     (Benefit)                      36.18    14.99     5.11   (56.04) 28.57