EXHIBIT 99.1
NEWS RELEASE DATED 04-09-2002
| | | |
| | | For Additional Information, |
| | | Contact Robert O. Bratton, |
| | | Chief Financial Officer |
| | | (704) 688-4473 |
| | | or |
| | | Jan H. Hollar, |
| | | Director of Finance |
| | | (704) 688-4467 |
FOR IMMEDIATE RELEASE
April 9, 2002
FIRST CHARTER ANNOUNCES
FIRST QUARTER EARNINGS
Charlotte, North Carolina – First Charter Corporation (NASDAQ: FCTR) reported today that diluted earnings per share for the first quarter of 2002 was $0.28, equal to the first quarter of 2001, and an increase over the $0.26 reported for the fourth quarter of 2001. Net income for the first quarter of 2002 was $8.6 million compared to $8.8 million for the first quarter of 2001 and $8.2 million for the fourth quarter of 2001.
“We are very pleased with our results for the first quarter of 2002,” commented President and Chief Executive Officer Lawrence M. Kimbrough. “The continued growth in deposits and consumer loans reflects our company-wide focus on understanding and meeting the traditional banking needs of our customers. In addition, as evidenced by our 30% increase in noninterest income, First Charter is aggressively growing non-traditional banking services as well.”
Net Interest Income
Net interest income for the first quarter of 2002 increased to $27.6 million compared to $25.4 million for the same period in 2001. The increase in net interest income was driven by decreased interest expense, increased loan growth and increased securities interest income. The reduced interest expense for 2002 was due to the lower cost of funding in a declining rate environment. The increased securities interest income was due to the additional securities purchased during 2001, which began late in the first quarter of 2001, to offset the effects of the dampened loan growth. The net interest margin was 3.64% in the first quarter of 2002, an increase from 3.62% for the quarter ended December 31, 2001 and a decrease from 3.90% for the quarter ended March 31, 2001. The decrease in net interest margin as compared to the March 31, 2001 level was driven by the 475 basis point reduction in rates during 2001 which reduced our net interest margin significantly since First Charter’s balance sheet is asset sensitive.
Noninterest Income
Noninterest income for the first quarter of 2002 increased 30% to $10.9 million compared to $8.4 million for the same period in 2001. The increase in noninterest income was driven by increased service charge income on deposit accounts, trading gains, brokerage revenues and the continued growth of First Charter Insurance Services. Premiums earned on written covered call options on fixed income securities comprised the majority of our trading gains.
During the first quarter of 2002, we restructured a portion of our securities available for sale investment portfolio. We sold approximately $87.3 million of longer maturities and replaced them with securities having shorter maturities. In addition, our equity securities portfolio was reduced in order to focus our efforts on other activities that we believe could result in greater returns. These restructurings resulted in gains aggregating approximately $2.9 million. In addition, gains on sales of callable securities amounted to $0.9 million for the first quarter of 2002. As part of the active management of our securities available for sale investment portfolio, callable securities which appear to be on the verge of being called are sold in order to recognize their gain in value.
During the first quarter of 2002, net losses from equity method investments of $3.0 million offset a portion of the increases experienced in noninterest income. First Charter’s equity method investments represent investments in venture capital limited partnerships. First Charter recognizes gains or losses from equity method investments based upon changes in our share of the fair market value of the limited partnerships’ investments as reported by such limited partnerships.
Noninterest Expense and Income Tax Expense
Noninterest expense for the first quarter of 2002 totaled $24.6 million compared to $20.0 million for the same period in 2001. The major contributors to that expense increase for the first quarter were the increase in occupancy and equipment associated with the move into the First Charter Center, expenses related to the implementation of a new computer operating system and the costs associated with additional personnel added during 2001. Additionally, as revenues increased in certain noninterest income categories, incentive compensation based on that revenue increased as well. The efficiency ratio for the first quarter of 2002 increased to 69.8% compared to 58.9% for the first quarter of 2001. Although this ratio has increased as infrastructure was added during 2001, the majority of the increase relates to the losses from equity method investments recognized during the first quarter of 2002. The efficiency ratio for the first quarter of 2002 would be 64.4% excluding the $3.0 million of losses from equity method investments.
Total income tax expense for the first quarter of 2002 amount to $3.2 million compared to $4.2 million for the same period in 2001. In the normal course of business, First Charter evaluates and implements tax-planning strategies. As a result of these strategies, our effective tax rate for the first quarter of 2002 decreased to 27.3% compared to 32.0% for the same period in 2001.
Balance Sheet
Total assets at March 31, 2002 amounted to $3.41 billion as compared to $3.33 billion at December 31, 2001 and $3.08 billion at March 31, 2001. Net loans at March 31, 2002 amounted to $2.03 billion as compared to $1.93 billion at December 31, 2001 and $1.96 billion at March 31, 2001. The increase in net loans reflects increased loan demand experienced during the first quarter of 2002. As the economy begins to signal improvement, we remain cautious in our underwriting and approval process in consideration of the current economic environment.
The securities available for sale investment portfolio increased to $1.11 billion at March 31, 2002 as compared to $1.08 billion at December 31, 2001 and $0.88 billion at March 31, 2001. The increase over the same period in 2001 reflects the purchases begun in early 2001 to increase earning assets and offset the lack of loan growth.
Total deposits at March 31, 2002 amounted to $2.21 billion, compared to $2.16 billion at December 31, 2001 and $2.01 billion at March 31, 2001. Shareholders’ equity at March 31, 2002 was $303.7 million, which represented a book value per share of $9.86 and an equity-to-asset ratio of 8.92%. Based on the $18.67 closing price of First Charter Corporation common stock at March 28, 2002, the last trading day during the quarter, the Corporation had a market capitalization of $575.1 million.
Asset Quality
The provision for loan losses for the three months ended March 31, 2002, amounted to $2.1 million, compared to $0.8 million for the same period in 2001. The increase in the provision was due to the $74.7 million in net loan growth and higher net charge-offs during the first quarter of 2002. Net charge-offs for the three months ended March 31, 2002, amounted to $1.4 million compared to $0.7 million for the same period in 2001. First Charter continues to monitor the asset quality of the loan portfolio and charge-offs are recorded based upon the financial condition of the borrower and the likelihood of repayment.
Nonaccrual loans at March 31, 2002 amounted to $27.6 million, an increase from $23.8 million at December 31, 2001 and a decrease from $28.4 million at March 31, 2001. The increase in nonaccrual loans during the first quarter of 2002 was primarily due to the addition of two large commercial relationships to nonaccrual status during the quarter. During the first quarter of 2002, other real estate decreased to $7.2 million from $8.0 million at December 31, 2001 and increased from $2.2 million at March 31, 2001. The increase in other real estate over the same period in 2001 was due to one large commercial relationship moving from nonaccrual loans to other real estate as such loan was foreclosed on during the fourth quarter of 2001. Total nonperforming assets and loans 90 days or more past due and still accruing at March 31, 2002 increased to $34.8 million compared to $32.0 million at December 31, 2001 and $30.7 million at March 31, 2001. As a percentage of total assets, nonperforming assets increased to 1.02% at March 31, 2002 compared to 0.96% at December 31, 2001 and 0.99% at March 31, 2001.
Net loan charge-offs as a percentage of average gross loans decreased to 0.28% for the annualized three months ended March 31, 2002 compared to 0.33% for the year ended December 31, 2001 and increased from 0.15% for the annualized three months ended March 31, 2001. At March 31, 2002 the allowance for loan losses as a percentage of gross loans decreased to 1.31% compared to 1.32% at December 31, 2001 and 1.41% at March 31, 2001. First Charter monitors the adequacy of the allowance for loan losses to cover inherent losses in the loan portfolio through the use of a loan loss migration model and considers the allowance to be adequate as of March 31, 2002.
Share Repurchase Program
On January 24, 2002, First Charter Corporation announced the authorization to repurchase up to 1.5 million shares of its common stock. As of March 31, 2002, no shares have been repurchased under this authorization.
Conference Call
First Charter executive management will be available via telephone conference to discuss the contents of this press release as well as to present growth and earnings estimates for the second quarter of 2002 on Wednesday, April 10, 2002 at 1:00 p.m. The following table outlines access information for the conference call and audio replay:
| | | | | |
| | | US/Canada Participants | | International Participants |
| | |
| |
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| Live Conference Call | | 877-560-4952
ID # 3594229 | | 706-679-7347
ID # 3594229 |
| Internet Live and Replay | | www.FirstCharter.com
“Investor Relations” section | | www.FirstCharter.com “Investor Relations” section |
| Audio Replay | | 800-642-1687
ID # 3594229 | | 706-645-9291
ID # 3594229 |
Corporate Profile
First Charter Corporation is a regional financial services company with assets of $3.41 billion and is the holding company for First Charter Bank. First Charter operates 52 financial centers, five insurance offices and 99 ATMs located in 17 counties throughout the western half of North Carolina. First Charter also operates one mortgage origination office in Virginia. First Charter provides businesses and individuals with a broad range of financial services, including banking, financial planning, funds management, investments, insurance, mortgages and a full array of employee benefit programs. Additional information about First Charter can be found by visitingwww.FirstCharter.com or by calling 1-800-601-8471. First Charter’s common stock is traded under the symbol “FCTR” on the NASDAQ National Market.
Forward Looking Statements
This news release contains forward looking statements with respect to the financial conditions and results of operations of First Charter Corporation. These forward looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward looking statements include, among others, the following possibilities: (1) projected business increases in connection with the implementation of our business plan are lower than expected; (2) competitive pressure among financial services companies increases significantly; (3) costs or difficulties related to the integration of acquisitions or expenses in general are greater than expected; (4) general economic conditions, in the markets in which the company does business, are less favorable than expected; (5) changes in the interest rate environment reduce interest margins and affect funding sources; (6) changes in market rates and prices may adversely affect the value of financial products; (7) legislation or regulatory requirements or changes adversely affect the businesses in which the company is engaged; and (8) decisions to change the business mix of the company. For further information and other factors which could affect the accuracy of forward looking statements, please see First Charter’s reports filed with the SEC pursuant to the Securities Exchange Act of 1934 which are available at the SEC’s website (www.sec.gov) or at First Charter’s website (www.FirstCharter.com). Readers are cautioned not to place undue reliance on these forward looking statements, which reflect management’s judgments only as of the date hereof. The company undertakes no obligation to publicly revise those forward looking statements to reflect events and circumstances that arise after the date hereof.
(Selected financial information is attached)
(NASDAQ: FCTR)
First Charter Corporation and Subsidiaries
Quarterly Earnings Release
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| | | | | For the Three Months Ended | | Increase (Decrease) |
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| (Dollars in thousands, except per share data) | | 3/31/2002 | | 3/31/2001 | | Amount | | Percentage |
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| INCOME STATEMENT | | | | | | | | | | | | | | | | |
| | Interest income — taxable equivalent | | $ | 49,495 | | | $ | 54,567 | | | $ | (5,072 | ) | | | (9.3 | )% |
| | Interest expense | | | 21,490 | | | | 28,691 | | | | (7,201 | ) | | | (25.1 | ) |
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| | Net interest income — taxable equivalent | | | 28,005 | | | | 25,876 | | | | 2,129 | | | | 8.2 | |
| | Less: Taxable equivalent adjustment | | | 455 | | | | 497 | | | | (42 | ) | | | (8.5 | ) |
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| | | Net interest income | | | 27,550 | | | | 25,379 | | | | 2,171 | | | | 8.6 | |
| | Provision for loan losses | | | 2,105 | | | | 750 | | | | 1,355 | | | | 180.7 | |
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| | | Net interest income after provision for loan losses | | | 25,445 | | | | 24,629 | | | | 816 | | | | 3.3 | |
| | Noninterest income | | | 10,928 | | | | 8,420 | | | | 2,508 | | | | 29.8 | |
| | Noninterest expense | | | 24,556 | | | | 20,043 | | | | 4,513 | | | | 22.5 | |
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| | Income before income taxes | | | 11,817 | | | | 13,006 | | | | (1,189 | ) | | | (9.1 | ) |
| | Income taxes | | | 3,226 | | | | 4,162 | | | | (936 | ) | | | (22.5 | ) |
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| | | Net income | | $ | 8,591 | | | $ | 8,844 | | | $ | (253 | ) | | | (2.9 | )% |
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| EARNINGS PER SHARE DATA Basic | | $ | 0.28 | | | $ | 0.28 | | | $ | — | | | | — | % |
| | Diluted | | | 0.28 | | | | 0.28 | | | | — | | | | — | |
| | Weighted average shares — basic | | | 30,798,728 | | | | 31,696,764 | | | | | | | | | |
| | Weighted average shares — diluted | | | 30,993,981 | | | | 31,833,564 | | | | | | | | | |
| | Dividends paid on common shares | | $ | 0.18 | | | $ | 0.18 | | | $ | — | | | | — | % |
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| PERFORMANCE RATIOS | | | | | | | | | | | | | | | | |
| | Return on average assets | | | 1.03 | % | | | 1.24 | % | | | | | | | | |
| | Return on average equity | | | 10.82 | | | | 11.46 | | | | | | | | | |
| | Efficiency — taxable equivalent (*) | | | 69.82 | | | | 58.90 | | | | | | | | | |
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| | | | | For the Three Months Ended |
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| | | | | 3/31/2002 | | 3/31/2001 |
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| SCHEDULE OF OTHER ITEMS INCLUDED IN EARNINGS | | | | | | | | |
| | Noninterest income | | | | | | | | |
| | | Equity portfolio restructuring gains | | $ | 834 | | | $ | — | |
| | | Bond portfolio restructuring gains | | | 2,070 | | | | — | |
| | | Equity investment write down | | | (20 | ) | | | (144 | ) |
| | | Equity method income (loss) | | | (2,959 | ) | | | 111 | |
| | Noninterest expense | | | | | | | | |
| | | Amortization of intangibles | | | (339 | ) | | | (490 | ) |
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| | Total other items | | $ | (414 | ) | | $ | (523 | ) |
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| | Other items, net of tax | | $ | (301 | ) | | $ | (355 | ) |
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| | | Notes: Applicable ratios are annualized. |
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| | | Reclassifications of certain amounts in the previously issued consolidated financial statements have been made to conform to the financial statement presentation for 2002. Such reclassifications had no effect on the net income or shareholders’ equity of the combined entity as previously reported. |
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| * | | - Noninterest expense divided by the sum of taxable equivalent net interest income plus noninterest income less gain on sale of securities. |
(NASDAQ: FCTR)
First Charter Corporation and Subsidiaries
Quarterly Earnings Release
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | As of / For the Three Months Ended | | Increase (Decrease) | | | | |
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| (Dollars in thousands, except per share data) | | 3/31/2002 | | 3/31/2001 | | Amount | Percentage | |
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BALANCE SHEET | | | | | | | | | | | | | | | | |
| | ASSETS: | | | | | | | | | | | | | | | | |
| | Cash and due from banks | | $ | 89,611 | | | $ | 67,770 | | | $ | 21,841 | | | | 32.2 | % |
| | Federal funds sold | | | 1,363 | | | | 1,233 | | | | 130 | | | | 10.5 | |
| | Interest earning bank deposits | | | 16,984 | | | | 6,298 | | | | 10,686 | | | | 169.7 | |
| | Securities available for sale | | | 1,107,939 | | | | 875,946 | | | | 231,993 | | | | 26.5 | |
| | Loans | | | | | | | | | | | | | | | | |
| | | Commercial | | | 1,114,469 | | | | 1,112,121 | | | | 2,348 | | | | 0.2 | |
| | | Real estate | | | 536,919 | | | | 579,869 | | | | (42,950 | ) | | | (7.4 | ) |
| | | Home equity | | | 241,078 | | | | 188,016 | | | | 53,062 | | | | 28.2 | |
| | | Installment | | | 137,271 | | | | 106,760 | | | | 30,511 | | | | 28.6 | |
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| | | | Total loans | | | 2,029,737 | | | | 1,986,766 | | | | 42,971 | | | | 2.2 | |
| | | Less: Unearned income | | | (277 | ) | | | (281 | ) | | | 4 | | | | (1.4 | ) |
| | | | | Allowance for loan losses | | | (26,576 | ) | | | (28,049 | ) | | | 1,473 | | | | (5.3 | ) |
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| | | Loans, net | | | 2,002,884 | | | | 1,958,436 | | | | 44,448 | | | | 2.3 | |
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| | Other assets | | | 186,839 | | | | 171,580 | | | | 15,259 | | | | 8.9 | |
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| | | Total assets | | $ | 3,405,620 | | | $ | 3,081,263 | | | $ | 324,357 | | | | 10.5 | % |
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| | LIABILITIES AND SHAREHOLDERS’ EQUITY: | | | | | | | | | | | | | | | | |
| | Deposits | | | | | | | | | | | | | | | | |
| | | Noninterest-bearing deposits | | $ | 257,864 | | | $ | 248,212 | | | $ | 9,652 | | | | 3.9 | % |
| | | Interest checking and savings | | | 383,145 | | | | 369,718 | | | | 13,427 | | | | 3.6 | |
| | | Money market deposits | | | 298,574 | | | | 251,547 | | | | 47,027 | | | | 18.7 | |
| | | Time deposits | | | 1,270,725 | | | | 1,142,610 | | | | 128,115 | | | | 11.2 | |
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| | | | Total deposits | | | 2,210,308 | | | | 2,012,087 | | | | 198,221 | | | | 9.9 | |
| | Other borrowings | | | 836,769 | | | | 696,134 | | | | 140,635 | | | | 20.2 | |
| | Other liabilities | | | 54,798 | | | | 54,063 | | | | 735 | | | | 1.4 | |
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| | | Total liabilities | | | 3,101,875 | | | | 2,762,284 | | | | 339,591 | | | | 12.3 | |
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| | | Total shareholders’ equity | | | 303,745 | | | | 318,979 | | | | (15,234 | ) | | | (4.8 | ) |
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| | | Total liabilities and shareholders’ equity | | $ | 3,405,620 | | | $ | 3,081,263 | | | $ | 324,357 | | | | 10.5 | % |
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SELECTED AVERAGE BALANCES | | | | | | | | | | | | | | | | |
| | Loans | | $ | 1,983,455 | | | $ | 2,043,217 | | | $ | (59,762 | ) | | | (2.9 | )% |
| | Securities | | | 1,101,683 | | | | 620,522 | | | | 481,161 | | | | 77.5 | |
| | Interest earning assets | | | 3,093,516 | | | | 2,676,436 | | | | 417,080 | | | | 15.6 | |
| | Assets | | | 3,377,791 | | | | 2,884,703 | | | | 493,088 | | | | 17.1 | |
| | Deposits | | | 2,183,990 | | | | 1,973,002 | | | | 210,988 | | | | 10.7 | |
| | Interest bearing liabilities | | | 2,756,185 | | | | 2,286,163 | | | | 470,022 | | | | 20.6 | |
| | Shareholders’ equity | | | 321,966 | | | | 313,081 | | | | 8,885 | | | | 2.8 | |
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| | | | | As of / For the Quarter Ended |
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| | | | | 3/31/2002 | | 12/31/2001 | | 9/30/2001 | | 6/30/2001 | | 3/31/2001 |
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| MISCELLANEOUS INFORMATION | | | | | | | | | | | | | | | | | | | | |
| | Common stock prices (daily close) | | | | | | | | | | | | | | | | | | | | | | |
| | | High | | $ | 19.4500 | | | $ | 18.4900 | | | $ | 18.4500 | | | $ | 18.7500 | | | $ | 16.0000 | |
| | | Low | | | 16.7500 | | | | 15.8500 | | | | 15.4600 | | | | 15.1250 | | | | 13.4380 | |
| | | End of period | | | 18.6700 | | | | 16.9100 | | | | 16.3500 | | | | 18.7500 | | | | 15.5625 | |
| | Book Value | | | 9.86 | | | | 10.06 | | | | 10.49 | | | | 10.22 | | | | 10.06 | |
| | Market Capitalization | | | 575,138,200 | | | | 519,856,216 | | | | 510,503,408 | | | | 594,775,763 | | | | 493,491,824 | |
| | Weighted average shares — basic | | | 30,798,728 | | | | 31,197,190 | | | | 31,314,550 | | | | 31,719,241 | | | | 31,696,764 | |
| | Weighted average shares — diluted | | | 30,993,981 | | | | 31,364,373 | | | | 31,545,721 | | | | 31,906,705 | | | | 31,833,564 | |
| | End of period shares outstanding | | | 30,805,474 | | | | 30,742,532 | | | | 31,223,450 | | | | 31,721,374 | | | | 31,710,318 | |
Note: Reclassifications of certain amounts in the previously issued consolidated financial statements have been made to conform to the financial statement presentation for 2002. Such reclassifications had no effect on the net income or shareholders’ equity of the combined entity as previously reported.
6
(NASDAQ: FCTR)
First Charter Corporation and Subsidiaries
Quarterly Earnings Release
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| | | | | As of / For the Quarter Ended |
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| (Dollars in thousands, except per share data) | | 3/31/2002 | | 12/31/2001 | | 9/30/2001 | | 6/30/2001 | | 3/31/2001 |
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INCOME STATEMENT | | | | | | | | | | | | | | | | | | | | |
| | Interest income — taxable equivalent | | | | | | | | | | | | | | | | | | | | |
| | Interest and fees on loans | | $ | 32,920 | | | $ | 35,735 | | | $ | 39,155 | | | $ | 40,609 | | | $ | 43,931 | |
| | Interest on securities | | | 16,543 | | | | 15,764 | | | | 15,898 | | | | 15,165 | | | | 10,449 | |
| | Other interest income | | | 32 | | | | 129 | | | | 62 | | | | 96 | | | | 187 | |
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| | | Total interest income — taxable equivalent | | | 49,495 | | | | 51,628 | | | | 55,115 | | | | 55,870 | | | | 54,567 | |
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| | Interest expense | | | | | | | | | | | | | | | | | | | | |
| | Interest on deposits | | | 13,749 | | | | 16,781 | | | | 19,704 | | | | 20,638 | | | | 21,129 | |
| | Other interest expense | | | 7,741 | | | | 7,571 | | | | 8,122 | | | | 8,405 | | | | 7,562 | |
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| | | Total interest expense | | | 21,490 | | | | 24,352 | | | | 27,826 | | | | 29,043 | | | | 28,691 | |
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| | Net interest income — taxable equivalent | | | 28,005 | | | | 27,276 | | | | 27,289 | | | | 26,827 | | | | 25,876 | |
| | Less: Taxable equivalent adjustment | | | 455 | | | | 462 | | | | 466 | | | | 479 | | | | 497 | |
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| | | Net interest income | | | 27,550 | | | | 26,814 | | | | 26,823 | | | | 26,348 | | | | 25,379 | |
| | Provision for loan losses | | | 2,105 | | | | 1,200 | | | | 1,325 | | | | 1,190 | | | | 750 | |
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| | | Net interest income after provision for loan losses | | | 25,445 | | | | 25,614 | | | | 25,498 | | | | 25,158 | | | | 24,629 | |
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| | Noninterest income | | | | | | | | | | | | | | | | | | | | |
| | Service charges on deposit accounts | | | 4,665 | | | | 4,255 | | | | 3,689 | | | | 3,568 | | | | 3,224 | |
| | Financial management income | | | 668 | | | | 339 | | | | 569 | | | | 640 | | | | 775 | |
| | Gain on sale of securities | | | 3,763 | | | | 1,026 | | | | 824 | | | | 282 | | | | 267 | |
| | (Loss) income from equity method investments | | | (2,959 | ) | | | (524 | ) | | | 73 | | | | (102 | ) | | | 111 | |
| | Mortgage loan fees | | | 407 | | | | 723 | | | | 662 | | | | 749 | | | | 509 | |
| | Brokerage services income | | | 637 | | | | 356 | | | | 476 | | | | 520 | | | | 394 | |
| | Insurance services income | | | 2,231 | | | | 1,866 | | | | 1,959 | | | | 1,865 | | | | 1,991 | |
| | Trading gains | | | 420 | | | | 1,530 | | | | 829 | | | | 233 | | | | — | |
| | Other noninterest income | | | 1,096 | | | | 1,612 | | | | 1,275 | | | | 1,059 | | | | 1,149 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | Total noninterest income | | | 10,928 | | | | 11,183 | | | | 10,356 | | | | 8,814 | | | | 8,420 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | Noninterest expense | | | | | | | | | | | | | | | | | | | | |
| | Salaries and employee benefits | | | 12,897 | | | | 12,501 | | | | 11,206 | | | | 10,659 | | | | 10,353 | |
| | Occupancy and equipment | | | 4,241 | | | | 3,804 | | | | 3,434 | | | | 3,799 | | | | 3,570 | |
| | Data processing | | | 622 | | | | 615 | | | | 601 | | | | 494 | | | | 410 | |
| | Marketing | | | 640 | | | | 575 | | | | 593 | | | | 552 | | | | 643 | |
| | Postage and supplies | | | 1,189 | | | | 1,155 | | | | 1,340 | | | | 1,136 | | | | 1,189 | |
| | Professional services | | | 1,662 | | | | 2,531 | | | | 1,614 | | | | 1,418 | | | | 1,164 | |
| | Telephone | | | 546 | | | | 448 | | | | 576 | | | | 553 | | | | 418 | |
| | Amortization of intangibles | | | 339 | | | | 466 | | | | 472 | | | | 447 | | | | 490 | |
| | Other noninterest expense | | | 2,420 | | | | 2,671 | | | | 2,056 | | | | 1,820 | | | | 1,806 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | Total noninterest expense | | | 24,556 | | | | 24,766 | | | | 21,892 | | | | 20,878 | | | | 20,043 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | Income before taxes | | | 11,817 | | | | 12,031 | | | | 13,962 | | | | 13,094 | | | | 13,006 | |
| | Income taxes | | | 3,226 | | | | 3,881 | | | | 4,502 | | | | 4,223 | | | | 4,162 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | Net income | | $ | 8,591 | | | $ | 8,150 | | | $ | 9,460 | | | $ | 8,871 | | | $ | 8,844 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
EARNINGS PER SHARE DATA | | | | | | | | | | | | | | | | | | | | |
| | Basic | | $ | 0.28 | | | $ | 0.26 | | | $ | 0.30 | | | $ | 0.28 | | | $ | 0.28 | |
| | Diluted | | | 0.28 | | | | 0.26 | | | | 0.30 | | | | 0.28 | | | | 0.28 | |
| | Dividends paid on common shares | | | 0.18 | | | | 0.18 | | | | 0.18 | | | | 0.18 | | | | 0.18 | |
PERFORMANCE RATIOS | | | | | | | | | | | | | | | | | | | | |
| | Return on average assets | | | 1.03 | % | | | 1.00 | % | | | 1.18 | % | | | 1.15 | % | | | 1.24 | % |
| | Return on average equity | | | 10.82 | | | | 9.88 | | | | 11.72 | | | | 11.12 | | | | 11.46 | |
| | Efficiency — taxable equivalent (*) | | | 69.82 | | | | 66.16 | | | | 59.46 | | | | 59.05 | | | | 58.90 | |
| | Noninterest income as a percentage of total income | | | 28.40 | | | | 29.43 | | | | 27.85 | | | | 25.07 | | | | 24.91 | |
| | Equity as a percentage of total assets | | | 8.92 | | | | 9.28 | | | | 9.78 | | | | 10.33 | | | | 10.35 | |
| | Average earning assets as a percentage of average assets | | | 91.58 | | | | 92.56 | | | | 92.86 | | | | 93.00 | | | | 92.78 | |
| | Average loans as a percentage of average deposits | | | 90.82 | | | | 91.15 | | | | 92.38 | | | | 95.50 | | | | 103.56 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | As of / For the Quarter Ended |
| | | | |
|
| | | | | 3/31/2002 | | 12/31/2001 | | 9/30/2001 | | 6/30/2001 | | 3/31/2001 |
| | | | |
| |
| |
| |
| |
|
SCHEDULE OF OTHER ITEMS INCLUDED IN EARNINGS | | | | | | | | | | | | | | | | | | | | |
| | Noninterest income | | | | | | | | | | | | | | | | | | | | |
| | | Equity portfolio restructuring gains | | $ | 834 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | Bond portfolio restructuring gains | | | 2,070 | | | | — | | | | — | | | | — | | | | — | |
| | | Equity investment write down | | | (20 | ) | | | — | | | | — | | | | — | | | | (144 | ) |
| | | Equity method (loss) income | | | (2,959 | ) | | | (524 | ) | | | 73 | | | | (102 | ) | | | 111 | |
| | | Gain on sale of properties | | | — | | | | 287 | | | | 129 | | | | — | | | | — | |
| | Noninterest expense | | | | | | | | | | | | | | | | | | | | |
| | | Amortization of intangibles | | | (339 | ) | | | (466 | ) | | | (472 | ) | | | (447 | ) | | | (490 | ) |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | Total other items | | $ | (414 | ) | | $ | (703 | ) | | $ | (270 | ) | | $ | (549 | ) | | $ | (523 | ) |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | Other items, net of tax | | $ | (301 | ) | | $ | (479 | ) | | $ | (183 | ) | | $ | (374 | ) | | $ | (355 | ) |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| Notes: | Applicable ratios are annualized. |
| |
| | Reclassifications of certain amounts in the previously issued consolidated financial statements have been made to conform to the financial statement presentation for 2002. Such reclassifications had no effect on the net income or shareholders’ equity of the combined entity as previously reported. |
| |
| * - | Noninterest expense divided by the sum of taxable equivalent net interest income plus noninterest income less gain on sale of securities. |
7
(NASDAQ: FCTR)
First Charter Corporation and Subsidiaries
Quarterly Earnings Release
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | As of / For the Quarter Ended |
| | | | | |
|
| (Dollars in thousands, except per share data) | | 3/31/2002 | | 12/31/2001 | | 9/30/2001 | | 6/30/2001 | | 3/31/2001 |
| |
| |
| |
| |
| |
|
BALANCE SHEET | | | | | | | | | | | | | | | | | | | | |
| ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | $ | 89,611 | | | $ | 134,084 | | | $ | 79,288 | | | $ | 75,696 | | | $ | 67,770 | |
| Federal funds sold | | | 1,363 | | | | 1,161 | | | | — | | | | 902 | | | | 1,233 | |
| Interest earning bank deposits | | | 16,984 | | | | 6,220 | | | | 3,194 | | | | 4,439 | | | | 6,298 | |
| Securities available for sale | | | 1,107,939 | | | | 1,076,324 | | | | 1,133,333 | | | | 938,951 | | | | 875,946 | |
| Loans | | | | | | | | | | | | | | | | | | | | |
| | Commercial | | | 1,114,469 | | | | 1,099,353 | | | | 1,137,570 | | | | 1,089,482 | | | | 1,112,121 | |
| | Real estate | | | 536,919 | | | | 500,943 | | | | 511,357 | | | | 572,004 | | | | 579,869 | |
| | Home equity | | | 241,078 | | | | 228,169 | | | | 212,763 | | | | 200,537 | | | | 188,016 | |
| | Installment | | | 137,271 | | | | 126,621 | | | | 125,707 | | | | 107,864 | | | | 106,760 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | Total loans | | | 2,029,737 | | | | 1,955,086 | | | | 1,987,397 | | | | 1,969,887 | | | | 1,986,766 | |
| | Less: Unearned income | | | (277 | ) | | | (191 | ) | | | (227 | ) | | | (222 | ) | | | (281 | ) |
| | | | Allowance for loan losses | | | (26,576 | ) | | | (25,843 | ) | | | (28,221 | ) | | | (28,049 | ) | | | (28,049 | ) |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | Loans, net | | | 2,002,884 | | | | 1,929,052 | | | | 1,958,949 | | | | 1,941,616 | | | | 1,958,436 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| Other assets | | | 186,839 | | | | 185,896 | | | | 174,106 | | | | 177,385 | | | | 171,580 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | Total assets | | $ | 3,405,620 | | | $ | 3,332,737 | | | $ | 3,348,870 | | | $ | 3,138,989 | | | $ | 3,081,263 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| LIABILITIES AND SHAREHOLDERS’ EQUITY: | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | | | | | | | | |
| | Noninterest-bearing deposits | | $ | 257,864 | | | $ | 276,699 | | | $ | 262,331 | | | $ | 257,443 | | | $ | 248,212 | |
| | Interest checking and savings | | | 383,145 | | | | 378,341 | | | | 370,120 | | | | 369,995 | | | | 369,718 | |
| | Money market deposits | | | 298,574 | | | | 286,653 | | | | 274,697 | | | | 262,903 | | | | 251,547 | |
| | Time deposits | | | 1,270,725 | | | | 1,221,252 | | | | 1,256,651 | | | | 1,228,686 | | | | 1,142,610 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | Total deposits | | | 2,210,308 | | | | 2,162,945 | | | | 2,163,799 | | | | 2,119,027 | | | | 2,012,087 | |
| Other borrowings | | | 836,769 | | | | 808,512 | | | | 806,141 | | | | 643,483 | | | | 696,134 | |
| Other liabilities | | | 54,798 | | | | 51,939 | | | | 51,357 | | | | 52,375 | | | | 54,063 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | Total liabilities | | | 3,101,875 | | | | 3,023,396 | | | | 3,021,297 | | | | 2,814,885 | | | | 2,762,284 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | Total shareholders’ equity | | | 303,745 | | | | 309,341 | | | | 327,573 | | | | 324,104 | | | | 318,979 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | Total liabilities and shareholders’ equity | | $ | 3,405,620 | | | $ | 3,332,737 | | | $ | 3,348,870 | | | $ | 3,138,989 | | | $ | 3,081,263 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
SELECTED AVERAGE BALANCES | | | | | | | | | | | | | | | | | | | | |
| | Loans | | $ | 1,983,455 | | | $ | 1,977,638 | | | $ | 1,973,373 | | | $ | 1,968,304 | | | $ | 2,043,217 | |
| | Securities | | | 1,101,683 | | | | 1,001,763 | | | | 977,176 | | | | 904,758 | | | | 620,522 | |
| | Interest earning assets | | | 3,093,516 | | | | 3,005,225 | | | | 2,957,440 | | | | 2,881,629 | | | | 2,676,436 | |
| | Assets | | | 3,377,791 | | | | 3,246,863 | | | | 3,184,788 | | | | 3,098,598 | | | | 2,884,703 | |
| | Deposits | | | 2,183,990 | | | | 2,169,743 | | | | 2,136,217 | | | | 2,060,997 | | | | 1,973,002 | |
| | Interest bearing liabilities | | | 2,756,185 | | | | 2,605,572 | | | | 2,565,744 | | | | 2,484,604 | | | | 2,286,163 | |
| | Shareholders’ equity | | | 321,966 | | | | 327,410 | | | | 320,242 | | | | 319,968 | | | | 313,081 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | Note: | Reclassifications of certain amounts in the previously issued consolidated financial statements have been made to conform to the financial statement presentation for 2002. Such reclassifications had no effect on the net income or shareholders’ equity of the combined entity as previously reported. |
8
| | |
| First Charter Corporation and Subsidiaries | (NASDAQ: FCTR) |
| Quarterly Earnings Release |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | As of / For the Quarter Ended |
| | | | | |
|
| (Dollars in thousands, except per share data) | | 3/31/2002 | | 12/31/2001 | | 9/30/2001 | | 6/30/2001 | | 3/31/2001 |
| |
| |
| |
| |
| |
|
ASSET QUALITY ANALYSIS | | | | | | | | | | | | | | | | | | | | |
| | Allowance for Loan Losses | | | | | | | | | | | | | | | | | | | | |
| | | Beginning balance | | $ | 25,843 | | | $ | 28,221 | | | $ | 28,049 | | | $ | 28,049 | | | $ | 28,447 | |
| | | Provision for loan losses | | | 2,105 | | | | 1,200 | | | | 1,325 | | | | 1,190 | | | | 750 | |
| | | Allowance related to loans securitized | | | — | | | | — | | | | — | | | | — | | | | (417 | ) |
| | | Charge-offs | | | (1,557 | ) | | | (3,719 | ) | | | (1,372 | ) | | | (1,365 | ) | | | (950 | ) |
| | | Recoveries | | | 185 | | | | 141 | | | | 219 | | | | 175 | | | | 219 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | | Net charge-offs | | | (1,372 | ) | | | (3,578 | ) | | | (1,153 | ) | | | (1,190 | ) | | | (731 | ) |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | Ending balance | | $ | 26,576 | | | $ | 25,843 | | | $ | 28,221 | | | $ | 28,049 | | | $ | 28,049 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | Nonperforming Assets and Loans 90 days or more past due accruing interest |
| | | Nonaccrual loans | | $ | 27,558 | | | $ | 23,824 | | | $ | 26,502 | | | $ | 28,605 | | | $ | 28,384 | |
| | | Other real estate | | | 7,208 | | | | 8,049 | | | | 3,067 | | | | 3,454 | | | | 2,207 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | | Total nonperforming assets | | | 34,766 | | | | 31,873 | | | | 29,569 | | | | 32,059 | | | | 30,591 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | Loans 90 days or more past due accruing interest | | | 38 | | | | 152 | | | | 114 | | | | 199 | | | | 154 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | | Total | | $ | 34,804 | | | $ | 32,025 | | | $ | 29,683 | | | $ | 32,258 | | | $ | 30,745 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | Asset Quality Ratios |
| | | Nonaccrual loans as a percentage of total loans | | | 1.36 | % | | | 1.22 | % | | | 1.33 | % | | | 1.45 | % | | | 1.43 | % |
| | | Nonperforming assets as a percentage of total assets | | | 1.02 | | | | 0.96 | | | | 0.88 | | | | 1.02 | | | | 0.99 | |
| | | Nonperforming assets as a percentage of total loans and other real estate | | | 1.71 | | | | 1.62 | | | | 1.49 | | | | 1.62 | | | | 1.54 | |
| | | Net charge-offs as a percentage of average loans (annualized) | | | 0.28 | | | | 0.72 | | | | 0.23 | | | | 0.24 | | | | 0.15 | |
| | | Allowance for loan losses as a percentage of loans | | | 1.31 | | | | 1.32 | | | | 1.42 | | | | 1.42 | | | | 1.41 | |
| | | Ratio of allowance for loan losses to: | | | | | | | | | | | | | | | | | | | | |
| | | | Net charge-offs | | | 4.78 | x | | | 1.82 | x | | | 6.17 | x | | | 5.88 | x | | | 9.46 | x |
| | | | Nonaccrual loans | | | 0.96 | | | | 1.08 | | | | 1.06 | | | | 0.98 | | | | 0.99 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | | | | | | | | | | | | | | | | | |
| | | | | As of / For the Three Months Ended | | Increase (Decrease) |
| | | | |
| |
|
| | | | | 3/31/2002 | | 3/31/2001 | | Amount | Percentage |
| | | | |
| |
| |
|
|
Allowance for Loan Losses | | | | | | | | | | | | | | | | |
| | Beginning balance | | $ | 25,843 | | | $ | 28,447 | | | $ | (2,604 | ) | | | (9.2 | )% |
| | Provision for loan losses | | | 2,105 | | | | 750 | | | | 1,355 | | | | 180.7 | |
| | Allowance related to loans sold and securitized | | | — | | | | (417 | ) | | | 417 | | | | (100.0 | ) |
| | Charge-offs | | | (1,557 | ) | | | (950 | ) | | | (607 | ) | | | 63.9 | |
| | Recoveries | | | 185 | | | | 219 | | | | (34 | ) | | | (15.5 | ) |
| | | |
| | | |
| | | |
| | | |
| |
| | | Net charge-offs | | | (1,372 | ) | | | (731 | ) | | | (641 | ) | | | 87.7 | |
| | | |
| | | |
| | | |
| | | |
| |
| | Ending balance | | $ | 26,576 | | | $ | 28,049 | | | $ | (1,473 | ) | | | (5.3 | )% |
| | | |
| | | |
| | | |
| | | |
| |
Asset Quality Ratios | | | | | | | | | | | | | | | | |
| | Net charge-offs as a percentage of average loans (annualized) | | | 0.28 | % | | | 0.15 | % | | | | | | | | |
| | Ratio of allowance for loan losses to net charge-offs (annualized) | | | 4.78 | x | | | 9.46 | x | | | | | | | | |
| | | |
| | | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | For the Quarter Ended |
| | | | |
|
| | | | | 3/31/2002 | | 12/31/2001 | | 9/30/2001 | | 6/30/2001 | | 3/31/2001 |
| | | | |
| |
| |
| |
| |
|
ANNUALIZED INTEREST YIELDS / RATES (*) | | | | | | | | | | | | | | | | | | | | |
| | Interest income: | | | | | | | | | | | | | | | | | | | | |
| | | Yield on loans | | | 6.73 | % | | | 7.17 | % | | | 7.87 | % | | | 8.28 | % | | | 8.72 | % |
| | | Yield on securities | | | 6.01 | | | | 6.29 | | | | 6.51 | | | | 6.70 | | | | 6.74 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | Yield on interest earning assets | | | 6.46 | | | | 6.83 | | | | 7.41 | | | | 7.77 | | | | 8.25 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | Interest expense: | | | | | | | | | | | | | | | | | | | | |
| | | Cost of interest bearing deposits | | | 2.89 | | | | 3.50 | | | | 4.15 | | | | 4.56 | | | | 4.94 | |
| | | Cost of borrowings | | | 3.80 | | | | 4.27 | | | | 4.72 | | | | 5.03 | | | | 5.57 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | Cost of interest bearing liabilities | | | 3.16 | | | | 3.71 | | | | 4.30 | | | | 4.69 | | | | 5.09 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | Interest rate spread | | | 3.30 | | | | 3.12 | | | | 3.11 | | | | 3.08 | | | | 3.16 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | Net yield on earning assets | | | 3.64 | % | | | 3.62 | % | | | 3.68 | % | | | 3.73 | % | | | 3.90 | % |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
| | | Notes: Applicable ratios are annualized. |
| |
| * | | - Fully taxable equivalent yields. |
9
