First Charter 8-K First Charter Announces Second Quarter Results

Exhibit 99.1

NEWS RELEASE DATED 7-15-2003

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
July 15, 2003

First Charter Announces Second Quarter Results

Charlotte, North Carolina – First Charter Corporation (NASDAQ: FCTR) reported today first half 2003 earnings of $5.8 million or $0.19 per diluted share, a decrease from earnings of $18.9 million or $0.61 per diluted share, a year ago. For the second quarter, First Charter reported a net loss of $4.2 million, or $0.14 per diluted share compared to earnings of $10.2 million or $0.33 per diluted share for the same period in 2002. As previously reported, the decrease in earnings for the three and six months ended June 30, 2003 was primarily due to an increase in the provision for loan losses arising from initiatives designed to improve asset quality and from current adverse business conditions. In addition, earnings were also negatively affected by a decrease in interest income because assets have been added at rates below the weighted average yield of assets previously on the balance sheet.

“In response to the current weak economic environment, First Charter has implemented several initiatives designed to improve asset quality and to reposition and strengthen the balance sheet,” commented Lawrence M. Kimbrough, President and Chief Executive Officer. “Although these initiatives have had a short-term negative impact on earnings, we are confident that they are sound and they will contribute to the long-term success of our company.”

Second Quarter 2003 Highlights (compared to First quarter 2003)

• During the second quarter of 2003, $60.9 million in nonaccruing and accruing higher risk loans were sold.

• Nonperforming loans decreased $18.9 million to $11.1 million.

• Other real estate owned (“OREO”) decreased $4.3 million to $6.9 million.

• Average earning assets increased $174.4 million or 5 percent.

• Average deposits increased $139.8 million or 6 percent.

• The Corporation continued its share repurchase program with the repurchase and retirement of 240,000 shares in the second quarter of 2003.

Second Quarter 2003 Highlights (compared to Second Quarter 2002)

• Net interest income decreased $2.6 million to $26.0 million.

• Provision for loan losses increased $17.3 million primarily due to the aforementioned loan sale and adverse business conditions.

• Noninterest income increased $8.6 million ($7.4 million of which was due to securities gains resulting from the restructuring of the balance sheet and $1.0 million was due to income from bank owned life insurance (“BOLI”)).

• Noninterest expense increased $8.9 million ($7.4 million of which was due to prepayment costs of refinancing Federal Home Loan Bank advances and $1.0 million was due to professional services related to the loan sale).

• Net charge-offs increased $0.5 million to $2.1 million due to adverse business conditions.

• Customer satisfaction scores increased from 75 percent to 80 percent “Very Satisfied”.

• Core retail households increased 21 percent to 74,200.

Year-to-Date 2003 Highlights (compared to Year-to-Date 2002)

• Net interest income decreased $3.5 million to $52.6 million.

• Provision for loan losses increased $17.2 million primarily due to the aforementioned loan sale and adverse business conditions.

• Noninterest income increased $13.2 million ($7.4 million of which was due to the securities gains resulting from the aforementioned balance sheet restructuring, $2.2 million was due to the gain on the sale of the credit card portfolio and $1.9 million was due to income from BOLI).

• Noninterest expense increased $10.7 million ($7.4 million of which was due to prepayment costs of refinancing Federal Home Loan Bank advances and $1.0 million was due to professional services related to the loan sale).

• Average earning assets increased $404.7 million or 13 percent.

• Average deposits increased $242.3 million or 11 percent.

• During the first six months of 2003, the Corporation repurchased and retired 365,000 shares under its share repurchase program.

Financial Highlights

	For the Three Months						For the Six Months
	Ended June 30						Ended June 30
Earnings (Dollars in thousands, except per share data)	2003			2002			2003			2002
Total revenues	$	46,288		$	40,302		$	88,441		$	78,780
Net (loss) income		(4,204	)		10,162			5,742			18,927
Diluted (loss) earnings per share		(0.14	)		0.33			0.19			0.61
Return on average assets		(0.42	)%		1.17	%		0.30	%		1.11	%
Return on average equity		(5.04	)		12.64			3.47			11.84
Efficiency-taxable equivalent ratio (*)		85.66			60.22			73.74			64.18

*   — Noninterest expense divided by the sum of taxable equivalent net interest income plus noninterest income less gain on sale of securities.

					Increase (Decrease)
	June 30		March 31
Balance Sheet (Dollars in thousands)	2003		2003		Amount			Percentage
Loans held for sale	$	45,311	$	69,894	$	(24,583	)		(35.17	)%
Loans, net		2,040,815		2,050,943		(10,128	)		(0.49	)
Investments		1,518,918		1,453,827		65,091			4.48
Total assets		3,988,534		3,991,267		(2,733	)		(0.07	)
Demand, savings and money market deposits		1,285,612		1,175,580		110,032			9.36
Total deposits		2,558,549		2,492,929		65,620			2.63
Other borrowings		1,076,595		1,116,223		(39,628	)		(3.55	)
Shareholders’ equity		313,916		326,071		(12,155	)		(3.73	)

Net Interest Income/Margin

Second Quarter

Net interest income decreased $2.6 million, or 9 percent, to $26.0 million compared to the second quarter of 2002. The decrease was primarily due to lower yields on earning assets resulting from the continued effects of a declining interest rate environment. In addition, the Corporation sold $70 million in bonds in the fourth quarter of 2002 and reinvested the proceeds into BOLI, to help offset the rise in employee benefit costs. This investment is classified as an other asset on the balance sheet, and the income is recognized as other noninterest income rather than being recognized as interest income. For the second quarter of 2003, income earned on BOLI amounted to approximately $1.0 million, which is nontaxable. On a taxable equivalent basis, income from Bank Owned Life Insurance was approximately $1.5 million for an annualized taxable equivalent yield of 8.57 percent. Also, the mortgage-backed securities portfolio has produced lower effective yields due to increased prepayment speeds and amortization of premiums. In order to stabilize cash flows and to improve effective yields in this portfolio, the Corporation sold approximately $371.7 million of these mortgage-backed securities. These proceeds were reinvested in mortgage-backed securities of a lower current coupon, which the Corporation expects will stabilize cash flows and should result in higher effective book yields. In addition, using standard rate shock analysis, the Corporation expects that the extension risk in the reinvested portfolio should be less than that of the securities sold. The decrease in net interest income was partially offset by a $1.7 million decrease in interest expense due to a decline in interest rates across the yield curve and the refinancing of $100 million of fixed-term advances during the fourth quarter of 2002.

The net interest margin decreased to 2.92 percent in the second quarter of 2003 from 3.64 percent for the same period in 2002. This decrease reflects the impact of the declining interest rate environment, which had a negative impact on the net interest margin as assets repriced faster than liabilities due to the asset sensitive nature of the balance sheet. In addition, assets added to the balance sheet during 2002 and 2003 have been added at rates below the weighted average yield of assets previously on the balance sheet.

Year-to-Date

Net interest income decreased $3.5 million to $52.6 million compared to the same period in 2002. Net interest income decreased primarily due to (a) lower interest income on earning assets resulting from the continued effects of a declining interest rate environment, (b) lower yielding mortgage-backed securities due to increased prepayment speeds resulting in lower reinvestment yields on increased cash flows plus the acceleration of amortization of premiums and (c) the effects of the sale of $70 million of bonds to purchase BOLI, the income from which is recognized as noninterest income. The decrease in net interest income was partially offset by a $4.4 million decrease in interest expense due to a decline in interest rates across the yield curve and the refinancing of $100 million of fixed-term advances during the fourth quarter of 2002.

The net interest margin for the six months ended June 30, 2003 decreased to 3.03 percent from 3.66 percent for the same period in 2002. This decrease reflects the impact of the declining interest rate environment, which had a negative impact on the net interest margin as assets repriced faster than liabilities due to the asset sensitive nature of the balance sheet. In addition, assets added to the balance sheet during 2002 and 2003 have been added at rates below the weighted average yield of assets previously on the balance sheet.

Noninterest Income

Second Quarter

Noninterest income increased $8.6 million to $20.2 million compared to $11.7 million for the second quarter of 2002. The increase includes $8.3 million of gains on the sales of callable agency securities with a high probability of being called and mortgage-backed securities, which were experiencing accelerating prepayment speeds, compared to $1.0 million of securities gains in the same period of 2002. The remaining components of this increase were $1.0 million of income recognized from the Corporation’s investment in BOLI, a $0.8 million increase in service charges on deposit accounts, a $0.4 million increase in brokerage revenues, a $0.2 million increase in mortgage loan fees, a $0.1 million increase in insurance services income, a $0.1 million increase in trading gains and a $0.2 million increase in other income due to increased ATM and merchant income. These improvements were partially offset by a $0.3 million increase in net losses from equity method investments, a $0.2 million decrease in financial management income and a $0.1 million increase in the write-down of mortgage servicing rights due to increasing prepayment speeds in the current low interest rate environment. In addition, second quarter 2002 included a $1.0 million gain on the sale of excess bank property.

The Corporation’s equity method investments represent investments in venture capital limited partnerships, and gains or losses are recognized based upon changes in its share of the fair market value of the limited partnership’s investee companies. At June 30, 2003, the total book value in equity method investments was $2.4 million. Of the $2.4 million, $1.0 million represents investments in venture capital partnerships which invest primarily in equity securities. The remaining $1.4 million is invested in Small Business Investment Companies (SBICs), which make debt investments that qualify for the investment test under the Community Reinvestment Act. At June 30, 2003, the Corporation’s remaining commitment to fund the equity method investments was $1.8 million and represented commitments to three venture funds that are SBICs.

Year-to-Date

Noninterest income increased $13.2 million, or 58 percent, to $35.8 million compared to the same period in 2002. The increase includes a $2.2 million gain on the sale of the credit card portfolio in the first quarter of 2003 and a $4.8 million increase in gains on the sales of callable agency and mortgage-backed securities. The remaining components of this increase were $1.9 million of income recognized from the Corporation’s investment in BOLI, a $1.3 million increase in service charges on deposit accounts, a $0.9 million increase in trading gains, a $0.5 million increase in mortgage loan fees, a $0.3 million increase in insurance service income and a $0.2 million increase in brokerage revenues. In addition, net losses from equity method investments amounted to $0.4 million in the first half of 2003 versus net losses of $2.9 million in the first half of 2002. These improvements were partially offset by a $0.3 million decrease in financial management income and a $0.3 million increase in the write-down of mortgage servicing rights due to increasing prepayment speeds in the current low interest rate environment. Also, the first half of 2002 included a $1.0 million gain on the sale of excess bank property.

Noninterest Expense

Second Quarter

Noninterest expense increased $8.9 million compared to the second quarter of 2002. The major contributing factor to this increase was $7.4 million of prepayment costs of refinancing $50 million in longer-term, fixed rate Federal Home Loan Bank advances. The refinancing of borrowings was occasioned by the extraordinarily low interest rate environment and the prepayment costs incurred were offset by gains recognized from the sale of callable agency and mortgage-backed securities. This prepayment is estimated to result in lower interest expense of approximately $0.9 million for the remainder of the year. Other contributing factors to this increase were a $1.5 million increase in professional fees of which $1.0 million was associated with the loan sale, a $0.5 million increase in marketing expense associated with the implementation of the Checking Account Marketing Program (“CHAMP”), a strategy for developing new customer relationships, and a $0.7 million increase in other operating expense primarily due to increased mortgage servicing fees and non-credit losses. These increases were partially offset by a $0.7 million decrease in salaries and employee benefits due to lower incentive compensation accruals as the result of a decrease in forecasted earnings, a $0.3 million decrease in occupancy and equipment and $0.2 million decrease in data processing.

Year-to-Date

Noninterest expense increased $10.7 million compared to the first half of 2003. The major contributing factors to this increase were $7.4 million of prepayment costs of refinancing $50 million of Federal Home Loan Bank advances, a $1.6 million increase in professional fees of which $1.0 million was associated with the loan sale in the second quarter of 2003, a $1.0 million increase in marketing expense primarily associated with the implementation of CHAMP, and a $0.9 million increase in other operating expense due to increased mortgage servicing fees and non-credit losses. These increases were partially offset by a $0.3 million decrease in occupancy and equipment and a $0.1 million decrease in data processing.

The efficiency ratio increased to 73.7 percent compared to 64.2 percent for the first six months of 2002. A significant portion of the increase in the efficiency ratio relates to the costs associated with the prepayment of Federal Home Loan Bank advances and the fees associated with the loan sale during the second quarter of 2003.

Income Tax Expense

The second quarter net loss of $4.2 million, created an income tax benefit of $2.0 million, compared to an income tax expense of $3.8 million for the second quarter of 2002. The income tax expense for the first half of 2003 amounted to $2.1 million compared to $7.1 million for the first half of 2002. The income tax benefit for the second quarter and the decrease in the income tax expense for the first half of 2003 were attributable to the decrease in taxable income resulting from the additional provision for loan losses and prepayment costs incurred during the second quarter of 2003.

Loans Held for Sale

Loans held for sale consists primarily of 15 and 30 year mortgage loans which the Corporation intends to sell as whole loans or to securitize in order to improve its liquidity position. Loans held for sale decreased to $45.3 million at June 30, 2003 as compared to $158.4 million at December 31, 2002. The decrease was due to the securitization of approximately $230.6 million of mortgage loans during the first half of 2003.

Loans

During the second quarter of 2003, $60.9 million in nonaccruing and accruing higher risk loans were sold to investors. In addition, the Corporation’s $11.7 million credit card portfolio was sold during the first quarter of 2003. As a result of these sales, gross loans at June 30, 2003 decreased slightly to $2.06 billion compared to $2.07 billion at December 31, 2002. The decrease in gross loans attributable to such loan sales was partially offset by $64.6 million of loan growth including a $30.0 million increase in home equity loans and a $20.2 million increase in primarily adjustable rate mortgage loans.

Securities

The securities available for sale portfolio increased to $1.52 billion at June 30, 2003 as compared to $1.13 billion at December 31, 2002. The increase in securities available for sale was primarily due to the securitization of $230.6 million of mortgage loans held for sale during the first half of 2003, as well as the net purchase of $159.1 million of securities used to increase earning assets. The Corporation increased its securities available for sale portfolio early in the first quarter of 2003 to offset the effects of slowing loan growth.

Deposits

Total deposits increased to $2.56 billion at June 30, 2003 as compared to $2.32 billion at December 31, 2002. The increase in deposits was due to a $229.5 million increase in money market accounts and a $35.3 million increase in noninterest-bearing deposits and was partially offset by a $22.3 million decrease in time deposits. During the fourth quarter of 2002, the Corporation introduced CHAMP for individuals and the Corporation introduced Business CHAMP during the first quarter of 2003. The emphasis of these programs is to develop new customer relationships, generate additional fee income opportunities, and to shift our funding mix towards lower cost funding sources. As a result, 2.7 times as many checking accounts were opened during the first six months of 2003 than the first six months of 2002. In addition, during the first quarter of 2003 the Corporation introduced the Money Market Max Account designed to reduce our dependency on certificates of deposit. The Money Market Max Account offers an above market introductory interest rate for 90 days, which are now being repriced downward to market rates. As the rates paid on these accounts continue to decline, the interest expense will decline as well. This product has been very successful with total balances at June 30, 2003 of $308.9 million.

Other Borrowings

Other borrowings increased to $1.08 billion at June 30, 2003 as compared to $1.04 billion at December 31, 2002. The increase was primarily due to increases in Federal Home Loan Bank borrowings, which were at lower rates than comparable retail funding rates. The proceeds of these borrowings were used to fund the growth in earning assets.

Shareholders’ Equity

Shareholders’ equity at June 30, 2003 decreased to $313.9 million and represented 7.87 percent of period-end assets. During the first six months of 2003, 365,000 shares were repurchased and retired under the January 24, 2002 authorization to repurchase 1.5 million shares. A total of 1.2 million shares have been repurchased and retired under this authorization. At June 30, 2003, the book value per share was $10.55. Based on the $17.59 closing price of First Charter Corporation common stock at June 30, 2003, the Corporation had a market capitalization of $523.5 million.

Asset Quality

Provision for Loan Losses

The provision for loan losses increased to $19.5 million for the three months ended June 30, 2003 compared to $2.2 million for the same year ago period. The provision for loan losses for the six months ended June 30, 2003 amounted to $21.5 million compared to $4.3 million a year ago. The increase in the provision for loan losses was attributable to the following components:

(a)  As a result of deteriorating financial results of several large commercial relationships and recently received independent appraisals of collateral, the Corporation added $7.5 million to the provision for loan losses. The decrease in appraised values and deteriorating financial results reflect the impact of the continued weakness in the economy on these customers. These relationships have been sold as part of the second quarter loan sale.

(b)  The Corporation made an additional provision of $4.0 million related to the discount taken in the aforementioned loan sale. Such a discount is customary in a sale of nonaccruing and accruing higher risk loans to compensate the buyer for assuming the longer-term risk of owning and resolving such loans.

(c)  As a result of the impact of the aforementioned loan sale on the historical loss ratios used in the allowance model and management’s continuous evaluation of the current economic environment and operational risks, the Corporation added $3.5 million to the provision for loan losses.

(d)  The Corporation identified up to 165 residential rental property loans totaling approximately $12.8 million some of which appear to have questionable appraisals and collateral value. These loans were made by one loan officer who is no longer employed by the Corporation or its subsidiaries. The appraisals received by the Corporation were completed by appraisers who were not employees of the Corporation or its subsidiaries. This matter has been reported by management to authorities and is under continuing investigation by management and by those authorities. As a result of management’s investigation, the Corporation has increased the provision for loan losses by approximately $2.4 million. As management’s investigation continues, it is possible that an additional provision for loan losses may be required with respect to these loans.

Net Charge-Offs

Net charge-offs for the three months ended June 30, 2003 amounted to $2.1 million, or 0.39 percent of average loans, compared to $1.6 million, or 0.31 percent of average loans for the same 2002 period. Net charge-offs for the six months ended June 30, 2003 amounted to $4.3 million, or 0.41 percent of average loans compared to $3.0 million, or 0.30 percent of average loans for the same 2002 period. These increases in net charge-offs were due to higher commercial loan charge-offs due to the impact of the continued weak economic environment. In accordance with generally accepted accounting principles, the impact on the allowance for loan losses of the aforementioned loan sale is not included in net charge-offs but rather is reflected as a reduction in the allowance for sale of loans. The inherent losses incurred in the loan sale were used to determine the commercial loan allowance allocation factors, which are driven by actual loss experience in our model, to assess the adequacy of the allowance for loan losses.

Nonperforming Assets

Nonaccrual loans at June 30, 2003 decreased to $11.1 million as compared to $30.0 million at March 31, 2003 and $26.5 million at December 31, 2002 primarily due to the aforementioned loan sale. OREO decreased to $6.9 million at June 30, 2003 from $11.2 million at March 31, 2003 and $10.3 million at December 31, 2002. This decrease is due to the sale of the two largest properties in the OREO portfolio during the second quarter of 2003. These properties were sold in cash transactions valued at $4.7 million for a gain of $0.3 million.

Asset Quality Ratios

As a result of these initiatives, our asset quality ratios have significantly improved as evidenced in the following table:

Asset Quality (1)

	June 30			March 31			December 31
	2003			2003			2002
Past Due Ratio
Past due loans over 30 days as a percentage of loans		0.67	%		1.03	%		1.20	%
Problem Assets
Classified assets as a percentage of loans		1.99	%		4.71	%		4.32	%
Nonaccrual Loans
Nonaccrual loans as a percentage of loans		0.54	%		1.44	%		1.28	%
Nonperforming Assets
Nonperforming assets as a percentage of loans and other real estate owned		0.87	%		1.97	%		1.76	%
Charge-offs
Net charge-offs as a percentage of average loans-annualized		0.39	%		0.43	%		0.37	%
Allowance for Loan Losses
Allowance for loan losses as a percentage of loans		1.15	%		1.28	%		1.31	%
Allowance for loan losses as a percentage of nonaccrual loans		212	%		88	%		103	%

(1) Excludes loans held for sale.

Allowance for Loan Losses

The allowance for loan losses as a percentage of total loans decreased to 1.15 percent at June 30, 2003 compared to 1.28 percent at March 31, 2003 and 1.31 percent at December 31, 2002. The allowance for loan losses was reduced primarily due to the sale of $60.9 million in nonaccruing and accruing higher risk loans. These loans had a higher percentage of allocated allowance for loan losses due to their higher probable rate of loss. In addition, the allowance for loan losses was reduced by the sale of the Corporation’s credit card portfolio during the first quarter of 2003. These loans also had a higher percentage of allocated allowance for loan losses due to their unsecured nature and higher historical loss experience. As a result of the aforementioned transactions, the Corporation’s ratio of the allowance for loan losses to loans was reduced largely due to the significant improvement in our asset quality profile as noted in the table above. 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. Management believes the Corporation is adequately reserved based on its assessment of its credit risk profile.

Subsequent Event

In an ongoing effort to increase our wealth management business, the Corporation purchased a third party benefits administrator on July 7, 2003, in a stock transaction. The purchase price delivered at closing consisted of First Charter common stock valued at $1.32 million and the agreement contemplates additional common stock payments based on the post closing performance of the business. The value of such additional payments, if earned, are expected to total approximately $880,000. The purchase adds new customers, expands our product line and improves our technology platform. Revenues from the purchased business are expected to be $4.0 million annually. The transaction is not expected to have an impact on earnings per share in 2003 and is expected to be accretive to earnings in 2004.

Conference Call

First Charter executive management will be available via telephone conference to discuss the contents of this press release, present growth and earnings estimates for the third quarter of 2003 as well as strategic plans for the remainder of 2003 on Tuesday, July 15, 2003 at 11:00 a.m. The following table outlines access information for the conference call and internet/audio replay:

	US/Canada Participants	International Participants
Live Conference Call	800-379-3953	706-679-5254
	ID # 1609360	ID # 1609360
Internet Live and Replay	www.FirstCharter.com	www.FirstCharter.com
	“Investor Relations” section	“Investor Relations” section
	SHOW # 116754	SHOW # 116754
Audio Replay	800-642-1687	706-645-9291
	ID # 1609360	ID # 1609360

Corporate Profile

First Charter Corporation is a regional financial services company with assets of $4.0 billion and is the holding company for First Charter Bank. First Charter operates 53 financial centers, five insurance offices and 93 ATMs located in 17 counties throughout the piedmont and 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.comor

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 results 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) risks inherent in making loans, including repayment risks and risks associated with collateral values, are greater than expected; (6) changes in the interest rate environment reduce interest margins and affect funding sources; (7) changes in market rates and prices may adversely affect the value of financial products; (8) legislation or regulatory requirements or changes thereto adversely affect the businesses in which the company is engaged; (9) regulatory compliance cost increases are greater than expected; and (10) 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)

First Charter Corporation and Subsidiaries	(NASDAQ: FCTR)
Quarterly Earnings Release

					As of / For the Six Months Ended						Increase (Decrease)
(Dollars in thousands, except per share data)					6/30/2003			6/30/2002			Amount			Percentage
BALANCE SHEET
	ASSETS:
	Cash and due from banks				$	103,199		$	93,287		$	9,912			10.6	%
	Federal funds sold					1,233			948			285			30.1
	Interest earning bank deposits					38,308			16,513			21,795			132.0
	Securities available for sale					1,518,918			1,104,995			413,923			37.5
	Loans held for sale					45,311			1,486			43,825			2,949.0
	Loans
		Commercial Real Estate				765,303			682,301			83,002			12.2
		Commercial Non Real Estate				212,753			237,120			(24,367	)		(10.3	)
		Construction				209,926			304,921			(94,995	)		(31.2	)
		Mortgage				257,236			349,931			(92,695	)		(26.5	)
		Consumer				271,734			279,778			(8,044	)		(2.9	)
		Home equity				347,716			270,282			77,434			28.6
			Total loans			2,064,668			2,124,333			(59,665	)		(2.8	)
		Less: Unearned income				(209	)		(254	)		45			(17.7	)
				Allowance for loan losses		(23,644	)		(27,213	)		3,569			(13.1	)
		Loans, net				2,040,815			2,096,866			(56,051	)		(2.7	)
	Other assets					240,750			176,637			64,113			36.3
		Total assets			$	3,988,534		$	3,490,732		$	497,802			14.3	%
	LIABILITIES AND SHAREHOLDERS’ EQUITY:
	Deposits
		Noninterest-bearing deposits			$	341,176		$	282,324		$	58,852			20.8	%
		Interest checking and savings				409,415			390,270			19,145			4.9
		Money market deposits				535,021			295,243			239,778			81.2
		Time deposits				1,272,937			1,295,122			(22,185	)		(1.7	)
			Total deposits			2,558,549			2,262,959			295,590			13.1
	Other borrowings					1,076,595			847,752			228,843			27.0
	Other liabilities					39,474			55,623			(16,149	)		(29.0	)
		Total liabilities				3,674,618			3,166,334			508,284			16.1
		Total shareholders’ equity				313,916			324,398			(10,482	)		(3.2	)
		Total liabilities and shareholders’ equity			$	3,988,534		$	3,490,732		$	497,802			14.3	%
SELECTED AVERAGE BALANCES
	Loans and loans held for sale				$	2,145,946		$	2,032,162		$	113,784			5.6	%
	Securities					1,354,558			1,116,197			238,361			21.4
	Interest earning assets					3,561,743			3,157,037			404,706			12.8
	Assets					3,903,019			3,435,268			467,751			13.6
	Deposits					2,449,733			2,207,434			242,299			11.0
	Interest bearing liabilities					3,212,849			2,807,945			404,904			14.4
	Shareholders’ equity					334,007			322,270			11,737			3.6

			As of/For the Quarter Ended
			6/30/2003		3/31/2003		12/31/2002		9/30/2002		6/30/2002
MISCELLANEOUS INFORMATION
	Common stock prices (daily close)
		High	$	19.5600	$	19.4000	$	19.1900		17.9900	$	20.5700
		Low		16.6900		17.2500		16.0500		15.3300		17.3000
		End of period		17.5900		17.3200		18.0100		16.5700		18.0800
	Book Value			10.55		10.87		10.80		10.78		10.52
	Market Capitalization			523,475,726		519,442,197		541,545,337		499,413,073		557,404,502
	Weighted average shares — basic			29,801,059		30,006,417		30,081,995		30,379,838		30,829,356
	Weighted average shares — diluted			29,801,059		30,188,853		30,220,294		30,506,426		31,098,379
	End of period shares outstanding			29,759,848		29,990,889		30,069,147		30,139,594		30,829,895

11

First Charter Corporation and Subsidiaries	(NASDAQ: FCTR)
Quarterly Earnings Release

				As of/For the Quarter Ended
(Dollars in thousands, except per share data)				6/30/2003			3/31/2003			12/31/2002			9/30/2002			6/30/2002
BALANCE SHEET
ASSETS:
Cash and due from banks				$	103,199		$	97,713		$	162,087		$	85,811		$	93,287
Federal funds sold					1,233			1,121			1,154			3,570			948
Interest earning bank deposits					38,308			72,431			6,609			9,849			16,513
Securities available for sale					1,518,918			1,453,827			1,129,212			1,212,742			1,104,995
Loans held for sale					45,311			69,894			158,404			14,532			1,486
Loans
	Commercial Real Estate				765,303			800,593			798,664			730,601			682,301
	Commercial Non Real Estate				212,753			227,159			223,178			230,809			237,120
	Construction				209,926			216,784			215,859			307,802			304,921
	Mortgage				257,236			240,115			237,085			378,088			349,931
	Consumer				271,734			260,594			280,201			283,990			279,778
	Home equity				347,716			332,392			317,730			296,073			270,282
		Total loans			2,064,668			2,077,637			2,072,717			2,227,363			2,124,333
	Less: Unearned income				(209	)		(199	)		(247	)		(225	)		(254	)
			Allowance for loan losses		(23,644	)		(26,495	)		(27,204	)		(27,411	)		(27,213	)
	Loans, net				2,040,815			2,050,943			2,045,266			2,199,727			2,096,866
Other assets					240,750			245,338			243,217			174,698			176,637
	Total assets			$	3,988,534		$	3,991,267		$	3,745,949		$	3,700,929		$	3,490,732
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Deposits
	Noninterest-bearing deposits			$	341,176		$	308,664		$	305,924		$	302,584		$	282,324
	Interest checking and savings				409,415			415,895			416,005			407,019			390,270
	Money market deposits				535,021			451,021			305,530			299,456			295,243
	Time deposits				1,272,937			1,317,349			1,295,188			1,304,729			1,295,122
		Total deposits			2,558,549			2,492,929			2,322,647			2,313,788			2,262,959
Other borrowings					1,076,595			1,116,223			1,042,440			1,004,836			847,752
Other liabilities					39,474			56,044			56,176			57,550			55,623
	Total liabilities				3,674,618			3,665,196			3,421,263			3,376,174			3,166,334
	Total shareholders’ equity				313,916			326,071			324,686			324,755			324,398
	Total liabilities and shareholders’ equity			$	3,988,534		$	3,991,267		$	3,745,949		$	3,700,929		$	3,490,732
SELECTED AVERAGE BALANCES
	Loans and loans held for sale			$	2,179,291		$	2,112,226		$	2,253,317		$	2,170,961		$	2,080,227
	Securities				1,412,491			1,295,982			1,144,045			1,129,206			1,130,552
	Interest earning assets				3,648,447			3,474,071			3,418,176			3,311,707			3,219,752
	Assets				3,990,872			3,814,209			3,678,945			3,586,969			3,491,868
	Deposits				2,519,240			2,379,454			2,309,971			2,278,758			2,230,620
	Interest bearing liabilities				3,286,646			3,138,232			2,999,871			2,914,391			2,859,137
	Shareholders’ equity				334,537			334,431			332,998			333,165			322,508

12

First Charter Corporation and Subsidiaries	(NASDAQ: FCTR)
Quarterly Earnings Release

			For the Three Months Ended						Increase (Decrease)
(Dollars in thousands, except per share data)			6/30/2003			6/30/2002			Amount			Percentage
INCOME STATEMENT
	Interest income — taxable equivalent		$	45,689		$	50,115		$	(4,426	)		(8.8	)%
	Interest expense			19,102			20,825			(1,723	)		(8.3	)
	Net interest income — taxable equivalent			26,587			29,290			(2,703	)		(9.2	)
	Less: taxable equivalent adjustment			548			682			(134	)		(19.6	)
		Net interest income		26,039			28,608			(2,569	)		(9.0	)
	Provision for loan losses			19,492			2,240			17,252			770.2
		Net interest income after provision for loan losses		6,547			26,368			(19,821	)		(75.2	)
	Noninterest income			20,249			11,694			8,555			73.2
	Noninterest expense			33,022			24,084			8,938			37.1
	(Loss) income before income taxes			(6,226	)		13,978			(20,204	)		(144.5	)
	Income tax (benefit) expense			(2,022	)		3,816			(5,838	)		(153.0	)
		Net (loss) income	$	(4,204	)	$	10,162		$	(14,366	)		(141.4	)%
(LOSS) EARNINGS PER SHARE DATA
	Basic		$	(0.14	)	$	0.33		$	(0.47	)		(142.4	)%
	Diluted			(0.14	)		0.33			(0.47	)		(142.4	)
	Weighted average shares — basic			29,801,059			30,829,356
	Weighted average shares — diluted			29,801,059			31,098,379
	Dividends paid on common shares		$	0.185		$	0.180		$	0.005			5.6	%
PERFORMANCE RATIOS
	Return on average assets			(0.42	)		1.17	%
	Return on average equity			(5.04	)		12.64
	Efficiency — taxable equivalent (*)			85.66			60.22

			For the Three Months Ended
			6/30/2003			6/30/2002
SCHEDULE OF SELECTED ITEMS INCLUDED IN EARNINGS
	Noninterest income
		Gain on sale of securities	$	8,286		$	989
		Equity method (loss) income		(276	)		23
		Trading gains		432			322
		Gain on sale of properties		—			1,013
	Noninterest expense
		Prepayment costs on borrowings		(7,366	)		—

Notes: Applicable ratios are annualized.

*   — Noninterest expense divided by the sum of taxable equivalent net interest income plus noninterest income less gain on sale of securities.

13

First Charter Corporation and Subsidiaries	(NASDAQ: FCTR)
Quarterly Earnings Release

			For the Six Months Ended						Increase (Decrease)
(Dollars in thousands, except per share data)			6/30/2003			6/30/2002			Amount			Percentage
INCOME STATEMENT
	Interest income — taxable equivalent		$	91,706		$	99,856		$	(8,150	)	$	(8.2	)
	Interest expense			37,887			42,315			(4,428	)		(10.5	)
	Net interest income — taxable equivalent			53,819			57,541			(3,722	)		(6.5	)
	Less: taxable equivalent adjustment			1,197			1,383			(186	)		(13.4	)
		Net interest income		52,622			56,158			(3,536	)		(6.3	)
	Provision for loan losses			21,543			4,345			17,198			395.8
		Net interest income after provision for loan losses		31,079			51,813			(20,734	)		(40.0	)
	Noninterest income			35,819			22,622			13,197			58.3
	Noninterest expense			59,086			48,401			10,685			22.1
	Income before income taxes			7,812			26,034			(18,222	)		(70.0	)
	Income taxes			2,070			7,107			(5,037	)		(70.9	)
		Net income	$	5,742		$	18,927			(13,185	)		(69.7	)
EARNINGS PER SHARE DATA
	Basic		$	0.19		$	0.61		$	(0.42	)		(68.9	)
	Diluted			0.19			0.61			(0.42	)		(68.9	)
	Weighted average shares — basic			29,903,170			30,814,127
	Weighted average shares — diluted			30,079,806			31,046,469
	Dividends paid on common shares		$	0.37		$	0.36		$	0.01			2.8	%
PERFORMANCE RATIOS
	Return on average assets			0.30	%		1.11	%
	Return on average equity			3.47			11.84
	Efficiency — taxable equivalent (*)			73.74			64.18

			For the Six Months Ended
			6/30/2003			6/30/2002
SCHEDULE OF SELECTED ITEMS INCLUDED IN EARNINGS
	Noninterest income
		Gain on sale of securities	$	9,512		$	4,752
		Gain on sale of credit card loans		2,213			—
		Equity investment write down		—			(20	)
		Equity method loss		(376	)		(2,936	)
		Trading gains		1,596			742
		Gain on sale of properties		—			1,013
	Noninterest expense
		Prepayment costs on borrowings		(7,366	)		—

Notes: Applicable ratios are annualized.

*   — Noninterest expense divided by the sum of taxable equivalent net interest income plus noninterest income less gain on sale of securities.

14

First Charter Corporation and Subsidiaries	(NASDAQ: FCTR)
Quarterly Earnings Release

			As of/For the Quarter Ended
(Dollars in thousands, except per share data)			6/30/2003			3/31/2003			12/31/2002			9/30/2002			6/30/2002
INCOME STATEMENT
	Interest income — taxable equivalent
	Interest and fees on loans		$	30,593		$	30,458		$	34,225		$	34,888		$	33,656
	Interest on securities			14,931			15,374			14,500			15,514			16,421
	Other interest income			165			185			69			50			38
		Total interest income — taxable equivalent		45,689			46,017			48,794			50,452			50,115
	Interest expense
	Interest on deposits			11,667			11,465			12,016			12,498			12,694
	Other interest expense			7,435			7,320			8,079			8,319			8,131
		Total interest expense		19,102			18,785			20,095			20,817			20,825
	Net interest income — taxable equivalent			26,587			27,232			28,699			29,635			29,290
	Less: Taxable equivalent adjustment			548			649			661			670			682
		Net interest income		26,039			26,583			28,038			28,965			28,608
	Provision for loan losses			19,492			2,051			2,175			1,750			2,240
		Net interest income after provision for loan losses		6,547			24,532			25,863			27,215			26,368
	Noninterest income
	Service charges on deposit accounts			5,571			5,130			4,998			4,689			4,781
	Financial management income			488			578			483			566			679
	Gain on sale of securities			8,286			1,226			5,371			1,416			989
	Gain on sale of credit card loan portfolio			—			2,213			—			—			—
	(Loss) income from equity method investments			(276	)		(100	)		(340	)		(2,525	)		23
	Mortgage loan fees			612			672			1,137			504			409
	Brokerage services income			812			486			591			640			420
	Insurance services income			2,229			2,437			2,112			2,313			2,114
	Trading gains			432			1,164			1,038			298			322
	Bank owned life insurance			967			946			16			—			—
	(Loss) gain on sale of properties			—			—			(109	)		—			1,013
	Other noninterest income			1,128			818			982			829			944
		Total noninterest income		20,249			15,570			16,279			8,730			11,694
	Noninterest expense
	Salaries and employee benefits			12,554			13,757			12,213			11,988			13,208
	Occupancy and equipment			3,913			4,166			3,768			3,839			4,184
	Data processing			634			678			760			758			828
	Marketing			1,161			1,153			658			630			634
	Postage and supplies			1,152			1,136			1,099			967			1,078
	Professional services			3,230			1,772			1,841			1,393			1,719
	Telephone			513			603			376			461			568
	Amortization of intangibles			77			85			89			88			90
	Prepayment costs on borrowings			7,366			—			3,284			—			—
	Other noninterest expense			2,422			2,714			3,543			1,616			1,775
		Total noninterest expense		33,022			26,064			27,631			21,740			24,084
	(Loss) income before taxes			(6,226	)		14,038			14,511			14,205			13,978
	Income tax (benefit) expense			(2,022	)		4,092			3,962			3,878			3,816
		Net (loss) income	$	(4,204	)	$	9,946		$	10,549		$	10,327		$	10,162
(LOSS) EARNINGS PER SHARE DATA
	Basic		$	(0.14	)	$	0.33		$	0.35		$	0.34		$	0.33
	Diluted			(0.14	)		0.33			0.35			0.34			0.33
	Dividends paid on common shares			0.185			0.185			0.185			0.185			0.180
PERFORMANCE RATIOS
	Return on average assets			(0.42	)%		1.06	%		1.14	%		1.14	%		1.17	%
	Return on average equity			(5.04	)		12.06			12.57			12.30			12.64
	Efficiency — taxable equivalent (*)			85.66			62.69			69.76			58.84			60.22
	Noninterest income as a percentage of total income			43.75			36.94			36.73			23.16			29.02
	Equity as a percentage of total assets			7.87			8.17			8.67			8.77			9.29
	Average earning assets as a percentage of average assets			91.42			91.08			92.91			92.33			92.21
	Average loans as a percentage of average deposits			86.51			88.77			97.55			95.27			93.26

			As of/For the Quarter Ended
			6/30/2003			12/31/2002			9/30/2002			6/30/2002			3/31/2003
SCHEDULE OF SELECTED ITEMS INCLUDED IN EARNINGS
	Noninterest income
		Gain on sale of securities	$	8,286		$	1,226		$	5,371		$	1,416		$	989
		Gain on sale of credit card loans		—			2,213			—			—			—
		Equity method (loss) income		(276	)		(100	)		(340	)		(2,525	)		23
		Trading gains		432			1,164			1,038			298			322
		(Loss) gain on sale of properties		—			—			(109	)		—			1,013
	Noninterest expense
		Prepayment costs on borrowings		(7,366	)		—			(3,284	)		—			—
		Reserve for contingent liability		—			—			(840	)		—			—

Notes: Applicable ratios are annualized.

*   — Noninterest expense divided by the sum of taxable equivalent net interest income plus noninterest income less gain on sale of securities.

15

First Charter Corporation and Subsidiaries	(NASDAQ: FCTR)
Quarterly Earnings Release

				As of/For the Quarter Ended
(Dollars in thousands, except per share data)				6/30/2003			3/31/2003			12/31/2002			9/30/2002			6/30/2002
ASSET QUALITY ANALYSIS
	Allowance for Loan Losses
		Beginning balance		$	26,495		$	27,204		$	27,411		$	27,213		$	26,576
		Provision for loan losses			19,492			2,051			2,175			1,750			2,240
		Allowance related to loans sold or transferred to held for sale			(20,236	)		(547	)		(325	)		(322	)		—
		Charge-offs			(2,448	)		(2,466	)		(2,138	)		(1,517	)		(1,778	)
		Recoveries			341			253			81			287			175
			Net charge-offs		(2,107	)		(2,213	)		(2,057	)		(1,230	)		(1,603	)
		Ending balance		$	23,644		$	26,495		$	27,204		$	27,411		$	27,213
	Nonperforming Assets and Loans 90 days or more past due accruing interest
		Nonaccrual loans		$	11,144		$	30,021		$	26,467		$	24,418		$	30,656
		Other real estate			6,866			11,200			10,278			9,675			8,367
			Total nonperforming assets		18,010			41,221			36,745			34,093			39,023
		Loans 90 days or more past due accruing interest			312			—			—			—			—
			Total	$	18,322		$	41,221		$	36,745		$	34,093		$	39,023
	Asset Quality Ratios (*)
		Nonaccrual loans as a percentage of total loans			0.54	%		1.44	%		1.28	%		1.10	%		1.44	%
		Nonperforming assets as a percentage of total assets			0.45			1.03			0.98			0.92			1.12
		Nonperforming assets as a percentage of total loans and other real estate			0.87			1.97			1.76			1.52			1.83
		Net charge-offs as a percentage of average loans (annualized)			0.39			0.43			0.37			0.23			0.31
		Allowance for loan losses as a percentage of loans			1.15			1.28			1.31			1.23			1.28
		Ratio of allowance for loan losses to:
			Net charge-offs		2.80	x		2.95	x		3.33	x		5.62	x		4.23	x
			Nonaccrual loans		2.12			0.88			1.03			1.12			0.89

			As of / For the Six Months Ended						Increase (Decrease)
			6/30/2003			6/30/2002			Amount			Percentage
Allowance for Loan Losses
	Beginning balance		$	27,204		$	25,843		$	1,361			5.3	%
	Provision for loan losses			21,543			4,345			17,198			395.8
	Allowance related to loans sold			(20,783	)		—			(20,783	)		N/A
	Charge-offs			(4,914	)		(3,335	)		1,579			47.3
	Recoveries			594			360			234			65.0
		Net charge-offs		(4,320	)		(2,975	)		1,345			45.2
	Ending balance		$	23,644		$	27,213		$	(3,569	)		(13.1	)%
Asset Quality Ratios (*)
	Net charge-offs as a percentage of average loans (annualized)			0.41	%		0.30	%
	Ratio of allowance for loan losses to net charge-offs (annualized)			2.71	x		4.54	x

			For the Quarter Ended
			6/30/2003			3/31/2003			12/31/2002			9/30/2002				6/30/2002
ANNUALIZED INTEREST YIELDS / RATES (**)
	Interest income:
		Yield on loans and loans held for sale		5.63	%		5.85	%		6.03	%		6.38	%	��		6.49	%
		Yield on securities		4.23			4.75			5.07			5.50				5.81
		Yield on interest earning assets		5.02			5.35			5.68			6.06				6.24
	Interest expense:
		Cost of interest bearing deposits		2.12			2.23			2.37			2.49				2.58
		Cost of borrowings		2.75			2.83			3.26			3.57				3.67
		Cost of interest bearing liabilities		2.33			2.43			2.66			2.83				2.92
	Interest rate spread			2.69			2.92			3.02			3.23				3.32
	Net yield on earning assets			2.92	%		3.15	%		3.34	%		3.57	%			3.64	%

Notes: Applicable ratios are annualized.

(*) — Excludes loans held for sale.

(**) — Fully taxable equivalent yields.

16