THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Charter Financial Corporation (CHFN)

1/27/2006 Proxy Information

CharterBank makes loans to its directors and executive officers and offers loans to all of its employees through an employee loan program. At September 30, 2005, loans and open lines of credit to executive officers, directors and their associates totaled $1,463,513. These loans were made in the ordinary course of business, were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and did not involve more than the normal risk of collectability or present other unfavorable features.

CharterBankÕs general counsel is the law firm of Johnson, Caldwell & McCoy. Curt M. Johnson, the brother of Robert L. Johnson and the son of John W. Johnson, Jr., is a partner of this law firm. The firm represents CharterBank in real estate and commercial loan closings and other matters, wherein CharterBankÕs borrower typically pays the legal fees and expenses. CharterBank directly paid the law firm $93,218 for the year ended September 30, 2005. Borrowers of CharterBank paid additional fees related to loan closings to the law firm.

CharterBank and Charter Financial routinely transact business with Smith Barney in LaGrange, Georgia. Director Hudson received $6,285 in commissions relative to these routine transactions.

CharterBank leases its Shawmut branch, which is located at 3500 20th Avenue, Valley, Alabama, from the Taunton-Johnson Corporation in which Robert L. Johnson owns a minority interest and serves as the Vice President. CharterBank paid Taunton-Johnson Corporation $76,052 for the year ended September 30, 2005 for the lease of the Shawmut Branch.