First Charter 8-K First Charter Announces Third Quarter Earnings

Exhibit 99.1

NEWS RELEASE DATED 10-14-2003

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
October 14, 2003

First Charter Announces Third Quarter Earnings

Charlotte, North Carolina — First Charter Corporation (NASDAQ: FCTR) today reported earnings of $8.9 million or $0.30 per diluted share for the third quarter of 2003, a decrease from earnings of $10.3 million or $0.34 per diluted share for the same period in 2002. While the Corporation continued to make broad based gains in generating recurring noninterest income, earnings continue to be negatively impacted by historically low interest rates which have compressed the net interest margin.

For the nine months ended September 30, 2003, First Charter reported earnings of $14.6 million, or $0.49 per diluted share compared to earnings of $29.3 million or $0.95 per diluted share for the same period in 2002. The decrease in earnings for the nine months ended September 30, 2003 was primarily due to a $17.8 million increase in the provision for loan losses primarily attributable to the initiatives designed to improve asset quality including the sale of $60.9 million of nonaccruing and accruing higher risk loans, previously reported in the Corporation’s second quarter results, and from current adverse business conditions. In addition, earnings continue to be negatively impacted by historically low interest rates which have compressed the net interest margin.

“Although a meaningful rebound in business activity remains elusive, First Charter continues to attract new relationships at a record-setting pace,” commented Lawrence M. Kimbrough, President and Chief Executive Officer. “Through the first nine months of the year, our new checking account growth is 250 percent higher than in 2002. Noninterest bearing deposits are up 11.5 percent over 2002 and service charge income is growing steadily.”

Financial Highlights

Third Quarter 2003 compared to Second Quarter 2003

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• Gross loans increased $44.8 million or 2 percent.

• Average earning assets increased $82.2 million or 2 percent.

• Average transaction based deposits increased $78.7 million or 6 percent.

• The Corporation continued its share repurchase program with the repurchase and retirement of 200,000 shares in the third quarter of 2003.

Third Quarter 2003 compared to Third Quarter 2002

• Net interest income decreased $2.8 million or 10 percent.

• Provision for loan losses increased $0.7 million or 37 percent.

• Noninterest income increased $6.1 million or 70 percent.

• Noninterest expense increased $4.8 million or 22 percent.

• Customer satisfaction scores increased from 79 percent to 82 percent “Very Satisfied”.

• Core retail households increased 25 percent to 76,485.

Year-to-Date 2003 compared to Year-to-Date 2002

• Average earning assets increased $409.5 million or 13 percent.

• $60.9 million in nonaccruing and accruing higher risk loans were sold.

• Average deposits increased $250.0 million or 11 percent.

• The Corporation repurchased and retired 565,000 shares under its share repurchase program.

• Net interest income decreased $6.3 million or 7 percent.

• Provision for loan losses increased $17.8 million primarily due to the aforementioned loan sale and adverse business conditions.

• Noninterest income increased $19.3 million or 62 percent.

• Noninterest expense increased $15.5 million or 22 percent.

	For the Three Months						For the Nine Months
	Ended September 30						Ended September 30
Earnings                (Dollars in thousands, except per share data)	2003			2002			2003			2002
Total revenues	$	41,044		$	37,695		$	129,485		$	116,475
Net income		8,894			10,327			14,636			29,254
Diluted earnings per share		0.30			0.34			0.49			0.95
Return on average assets		0.87	%		1.14	%		0.50	%		1.12	%
Return on average equity		11.31			12.30			6.13			12.00
Efficiency-taxable equivalent ratio (*)		64.26			58.84			70.52			62.43

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

					Increase (Decrease)
	September 30		June 30
Balance Sheet                               (Dollars in thousands)	2003		2003		Amount			Percentage
Loans held for sale	$	14,784	$	45,311	$	(30,527	)		(67.37	)%
Loans, net		2,085,338		2,040,815		44,523			2.18
Investments		1,603,262		1,518,918		84,344			5.55
Total assets		4,087,967		3,988,534		99,433			2.49
Demand, savings and money market deposits		1,296,776		1,285,612		11,164			0.87
Total deposits		2,481,582		2,558,549		(76,967	)		(3.01	)
Other borrowings		1,261,412		1,076,595		184,817			17.17
Shareholders’ equity		302,263		313,916		(11,653	)		(3.71	)

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Net Interest Income/Margin

Third quarter

Net interest income decreased $2.8 million, or 10 percent, to $26.2 million compared to the third 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. As previously discussed, the Corporation sold $60.9 million in nonaccruing and accruing higher risk loans. The reinvestment of these proceeds was made in lower yielding mortgage-backed securities. In addition, the Corporation sold $70 million in bonds in the fourth quarter of 2002 and reinvested the proceeds into Bank Owned Life Insurance (“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 third quarter of 2003, income earned on BOLI amounted to approximately $1.0 million, which is nontaxable. Also, the mortgage-backed securities portfolio has produced lower effective yields due to increased amortization of premiums resulting from increased prepayment speeds of underlying mortgages. During the first half of 2003, the Corporation sold approximately $371.7 million of these mortgage-backed securities in order to stabilize cash flows and to improve effective yields in this portfolio. These proceeds were reinvested in fixed term agency securities and mortgage-backed securities of a shorter average life and at a lower current coupon. 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. These actions, coupled with weak loan demand, have resulted in a change in the mix of earning assets from higher yielding loans to lower yielding securities. The decrease in net interest income was partially offset by a $3.8 million decrease in interest expense due to (a) a decline in interest rates across the yield curve, (b) a planned shift in funding sources from higher cost retail deposits to lower-cost transaction based accounts and (c) the benefits from the refinancing of $100 million and $50 million of fixed-term advances during the fourth quarter of 2002 and second quarter of 2003, respectively.

The net interest margin decreased to 2.86 percent in the third quarter of 2003 from 3.57 percent for the same period in 2002. This decrease reflects the impact of the declining interest rate environment, as assets repriced faster than liabilities due to the asset sensitive nature of the Corporation’s balance sheet. In addition, reinvestment rates were lower than rates earned by assets previously held on the balance sheet including the sale of $40.0 million in accruing higher risk loans.

Year-to-Date

Net interest income decreased $6.3 million to $78.8 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 effective yields from the mortgage-backed securities portfolio due to the acceleration of amortization of premiums resulting from increased prepayment speeds, (c) lower reinvestment yields on increased cash flows, (d) the effects of the sale of $70 million of bonds to purchase BOLI, the income from which is recognized as noninterest income and (e) a change in the mix of earning assets from higher yielding loans to lower yielding securities. The decrease in net interest income was partially offset by an $8.2 million decrease in interest expense due to (a) a decline in interest rates across the yield curve, (b) a planned shift in funding sources from higher cost retail deposits to lower cost transaction based accounts and (c) the benefits from the refinancing of fixed-term advances.

The net interest margin for the nine months ended September 30, 2003 decreased to 2.97 percent from 3.63 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

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liabilities due to the asset sensitive nature of the Corporation’s balance sheet. In addition, reinvestment rates were lower than rates earned by assets previously held on the balance sheet including the sale of $40.0 million in accruing higher risk loans.

Noninterest Income

Third quarter

Noninterest income increased $6.1 million to $14.8 million compared to $8.7 million for the third quarter of 2002. The increase was due to $1.0 million of income recognized from the Corporation’s investment in BOLI, a $1.0 million increase in service charges on deposit accounts, an $0.8 million increase in financial management income primarily due to the purchase of a third party benefits administrator, an $0.8 million increase in mortgage loan income as the low interest rate environment continued to fuel record mortgage originations and refinance activity, a $0.2 million increase in brokerage services income, and a $0.5 million increase in other income due to increased ATM fees, mortgage servicing income and lower write-downs of mortgage servicing rights. The increase also includes $0.4 million of gains on the sale of bank property. In addition, income from equity method investments amounted to $0.1 million in the third quarter of 2003 versus net losses of $2.5 million for the same period in 2002. These improvements were partially offset by a $1.1 million decrease in gains on sales of securities and a $0.1 million decrease in trading gains.

Year-to-Date

Noninterest income increased $19.3 million, or 62 percent, to $50.7 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 $3.6 million increase in gains on the sales of callable agency and mortgage-backed securities. The remaining components of this increase were $2.9 million of income recognized from the Corporation’s investment in BOLI, a $2.2 million increase in service charges on deposit accounts, a $1.3 million increase in mortgage loan income, a $0.7 million increase in trading gains, a $0.6 million increase in financial management income primarily due to the purchase of a third party benefits administrator, a $0.5 million increase in brokerage revenues, a $0.3 million increase in insurance service income, and a $0.4 million increase in other noninterest income due to increased ATM fees, merchant income and mortgage servicing income. In addition, net losses from equity method investments amounted to $0.3 million in the nine months ended September 30, 2003 versus net losses of $5.5 million for the same period in 2002. These results included gains on the sale of bank property of $0.4 million and $1.0 million for the nine months ended September 30, 2003 and September 30, 2002 respectively.

Noninterest Expense

Third quarter

Noninterest expense increased $4.8 million compared to the third quarter of 2002. The variance includes a $1.8 million increase in professional fees primarily due to $0.5 million of consulting services related to the review and revision of our procedures to comply with the Bank Secrecy Act, $0.4 million of consulting services to ensure compliance with Section 404 of the Sarbanes-Oxley Act, and $0.2 million of fees related to the investigation and collection of questionable residential rental property loans. The balance of the increase in professional fees relates to various other consulting services. Noninterest expense was also impacted by a $1.3 million increase in salaries and employee benefits due to additional personnel associated with the purchase of a third party benefits administrator in July and increased commission-based compensation in our mortgage, brokerage and insurance services areas. These increases were partially offset by a $0.6 million decrease in incentive compensation accruals as a result of a revision in estimated payouts. In addition, noninterest expense was impacted by a $0.8 million increase in other operating expense primarily due to increased mortgage servicing fees, non-credit losses

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and other miscellaneous expenses and a $0.5 million increase in marketing expense associated with the implementation of the CHecking Account Marketing Program (“CHAMP”).

Year-to-Date

Noninterest expense increased $15.5 million compared to the nine months ended September 30, 2002. The major contributing factors to this increase were $7.4 million of prepayment costs associated with the refinancing of $50 million of Federal Home Loan Bank advances, a $3.4 million increase in professional fees due to the aforementioned loan sale, consulting services to ensure compliance with Section 404 of the Sarbanes-Oxley Act, the review and revision of our procedures for compliance with the Bank Secrecy Act, and fees related to the investigation and collection of questionable residential rental property loans. Noninterest expense was also impacted by a $1.8 million increase in other operating expense primarily due to increased mortgage servicing fees, non-credit losses and other miscellaneous expenses, a $1.6 million increase in marketing expense primarily associated with the implementation of CHAMP, a $1.5 million increase in salaries and employee benefits due to additional personnel associated with the purchase of a third party benefits administrator in July and increased commission-based compensation in our mortgage, brokerage and insurance services areas. These increases were partially offset by lower incentive compensation accruals as a result of a revision in estimated payouts.

The efficiency ratio increased to 70.5 percent compared to 62.4 percent for the nine 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 of $7.4 million and the previously discussed $3.4 million increase in professional fees. In addition, the calculation of the efficiency ratio excludes gains on sale of securities of $9.8 million and $6.2 million for the nine months ended September 30, 2003 and 2002, respectively.

Income Tax Expense

Total income tax expense for the third quarter of 2003 was $3.2 million for an effective tax rate of 26.5 percent, compared to $3.9 million for an effective tax rate of 27.3 percent for the third quarter of 2002. The income tax expense for the nine months ended September 30, 2003 amounted to $5.3 million for an effective tax rate of 26.5 percent, compared to $11.0 million for an effective tax rate of 27.3 for the first nine months of 2002. The decrease in the income tax expense for the three and nine months ended September 30, 2003 was attributable to a decrease in taxable income and the effective tax rate.

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. Loans held for sale decreased to $14.8 million at September 30, 2003 as compared to $158.4 million at December 31, 2002. The decrease was due to the securitization of approximately $286.9 million of mortgage loans and the sale of approximately $126.0 million of loans held for sale during the nine months ended September 30, 2003.

Loans

Gross loans increased to $2.11 billion at September 30, 2003 as compared to $2.07 billion at December 31, 2002. The increase in loans was primarily due to a $59.1 million increase in construction loans, which includes $24.8 million of 1-4 family construction loans purchased in late September, a $46.5 million increase in home equity loans and a $21.8 million increase in primarily adjustable rate mortgage loans. These increases were partially offset by the sale of $60.9 million in nonaccruing and accruing higher risk loans to investors during the second quarter of 2003 and the sale of the Corporation’s $11.7 million credit card portfolio during the first quarter of 2003.

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Securities

The securities available for sale portfolio increased to $1.60 billion at September 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 $286.9 million of mortgage loans held for sale during the nine months ended September 30, 2003, as well as the net purchase of $187.1 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 weak loan demand.

Equity Method Investments

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 September 30, 2003, the total book value in equity method investments was $2.5 million. Of the $2.5 million, $1.1 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 September 30, 2003, the Corporation’s remaining commitment to fund the equity method investments was $1.7 million and represented commitments to three venture funds that are SBICs.

Deposits

Total deposits increased to $2.48 billion at September 30, 2003 as compared to $2.32 billion at December 31, 2002. The increase in deposits was due to a $228.6 million increase in money market accounts, and a $40.7 million increase in low-cost interest checking, savings and noninterest bearing deposits. These increases were partially offset by a $110.4 million planned decrease in time deposits.

The ability to generate deposits has been enhanced by the introduction of CHAMP for individuals during the fourth quarter of 2002 and Business CHAMP during the first quarter of 2003. As a result, 2.7 times as many checking accounts were opened during the first nine months of 2003 than the first nine months of 2002. In addition, during the first quarter of 2003 the Corporation introduced a new money market account, the Money Market Max Account. This product has been very successful with total balances at September 30, 2003 of $322.9 million. The emphasis of these programs is to develop new customer relationships to generate additional fee income opportunities, and to shift our funding mix towards lower-cost funding sources.

Other Borrowings

Other borrowings increased to $1.26 billion at September 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 September 30, 2003 decreased to $302.3 million and represented 7.39 percent of period-end assets. During 2003, 565,000 shares of First Charter Corporation common stock were repurchased and retired under the January 24, 2002 authorization to repurchase 1.5 million shares. A total of 1.4 million shares have been repurchased and retired under this authorization. At September 30, 2003, the book value per share was $10.20. Based on the $19.60 closing price of First Charter Corporation common stock at September 30, 2003, the Corporation had a market capitalization of $581.0 million.

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Provision for Loan Losses

Third Quarter

The provision for loan losses increased to $2.4 million for the three months ended September 30, 2003 compared to $1.8 million for the same year ago period. The increase was primarily due the impact of the aforementioned loan sale on the historical loss ratios and allocation factors used in the allowance model. In addition, consumer and commercial net charge-offs increased.

Year-to-date

The provision for loan losses for the nine months ended September 30, 2003 amounted to $23.9 million compared to $6.1 million a year ago. The increase in the provision for loan losses was primarily attributable to the following second quarter 2003 events:

(a)  As a result of deteriorating financial results of several large commercial relationships and 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 loan relationships were 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, during the second quarter of 2003, the Corporation increased the provision for loan losses by approximately $2.4 million. In the third quarter of 2003, $0.4 million of these loans were charged-off. In addition, loans totaling $0.3 million were foreclosed and moved to OREO and $0.2 million were paid down or paid-off. 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

Third Quarter

Net charge-offs for the three months ended September 30, 2003 amounted to $2.1 million, or 0.40 percent of average loans, compared to $1.2 million, or 0.23 percent of average loans for the same 2002 period. The increase in net charge-offs was primarily due to (a) $0.4 million of residential rental property loan charge-offs which was previously provided for in the allowance for loan losses, (b) a $0.3 million increase in consumer loan charge-offs and (c) a $0.3 million increase in commercial loan charge-offs.

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Year-to-date

Net charge-offs for the nine months ended September 30, 2003 amounted to $6.4 million, or 0.41 percent of average loans compared to $4.2 million, or 0.27 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 and the previously discussed $0.5 million of residential rental property loan charge-offs.

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 September 30, 2003 increased to $13.4 million as compared to $11.1 million at June 30, 2003 primarily due to the addition of several commercial loans to nonaccrual status as some of our customers continue to experience difficulties in this current economic environment. Management is taking steps to remediate these loans. OREO decreased to $6.7 million at September 30, 2003 from $6.9 million at June 30, 2003.

Nonaccrual loans at September 30, 2003 decreased to $13.4 million as compared to $26.5 million at December 31, 2002, primarily due to the aforementioned loan sale. OREO decreased to $6.7 million at September 30, 2003 from $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 the initiatives taken in the second quarter of 2003, our asset quality ratios improved significantly. The third quarter of 2003 asset quality ratios were impacted by an increase in nonaccrual loans, which Management is taking steps to remediate.

Asset Quality(1)	September 30			June 30			March 31			December 31
	2003			2003			2003			2002
Past Due Ratio
Past due loans over 30 days as a percentage of loans		0.71	%		0.67	%		1.03	%		1.20	%
Problem Assets
Classified assets as a percentage of loans		1.87	%		1.99	%		4.71	%		4.32	%
Nonaccrual Loans
Nonaccrual loans as a percentage of loans		0.64	%		0.54	%		1.44	%		1.28	%
Nonperforming Assets
Nonperforming assets as a percentage of loans and other real estate owned		0.95	%		0.87	%		1.97	%		1.76	%
Charge-offs
Net charge-offs as a percentage of average loans-annualized		0.40	%		0.39	%		0.43	%		0.37	%
Allowance for Loan Losses
Allowance for loan losses as a percentage of loans		1.14	%		1.15	%		1.28	%		1.31	%
Allowance for loan losses as a percentage of nonaccrual loans		179	%		212	%		88	%		103	%

(1) Excludes loans held for sale.

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Allowance for Loan Losses

The allowance for loan losses as a percentage of total loans decreased to 1.14 percent at September 30, 2003 compared to 1.15 percent at June 30, 2003 and 1.31 percent at December 31, 2002. The allowance for loan losses decreased 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 $11.9 million 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. The decrease in the allowance for loan losses as a percent of total loans from June 30, 2003 was due to changes in the loan portfolio mix and risk factors. 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.

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 fourth quarter of 2003 as well as strategic plans for the remainder of 2003 on Tuesday, October 14, 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 # 2821403	ID # 2821403
	www.FirstCharter.com	www.FirstCharter.com
Internet Live and Replay	“Investor Relations” section	“Investor Relations” section
	SHOW # 133522	SHOW # 133522
Audio Replay	800-642-1687	706-645-9291
	ID # 2821403	ID # 2821403

Corporate Profile

First Charter Corporation is a regional financial services company with assets of $4.1 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

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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.

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

					As of / For the Nine Months Ended						Increase (Decrease)
(Dollars in thousands, except per share data)					9/30/2003			9/30/2002			Amount			Percentage
BALANCE SHEET
	ASSETS:
	Cash and due from banks				$	84,468		$	85,811		$	(1,343	)		(1.6	)%
	Federal funds sold					2,004			3,570			(1,566	)		(43.9	)
	Interest earning bank deposits					42,560			9,849			32,711			332.1
	Securities available for sale					1,603,262			1,212,742			390,520			32.2
	Loans held for sale					14,784			14,532			252			1.7
	Loans
		Commercial Real Estate				732,434			730,601			1,833			0.3
		Commercial Non Real Estate				199,412			230,809			(31,397	)		(13.6	)
		Construction				275,005			307,802			(32,797	)		(10.7	)
		Mortgage				258,927			378,088			(119,161	)		(31.5	)
		Consumer				279,512			283,990			(4,478	)		(1.6	)
		Home equity				364,191			296,073			68,118			23.0
			Total loans			2,109,481			2,227,363			(117,882	)		(5.3	)
		Less: Unearned income				(190	)		(225	)		35			(15.6	)
				Allowance for loan losses		(23,953	)		(27,411	)		3,458			(12.6	)
		Loans, net				2,085,338			2,199,727			(114,389	)		(5.2	)
	Other assets					255,551			174,698			80,853			46.3
		Total assets			$	4,087,967		$	3,700,929		$	387,038			10.5	%
	LIABILITIES AND SHAREHOLDERS’ EQUITY:
	Deposits
		Noninterest-bearing deposits			$	337,409		$	302,584		$	34,825			11.5	%
		Interest checking and savings				425,219			407,019			18,200			4.5
		Money market deposits				534,148			299,456			234,692			78.4
		Time deposits				1,184,806			1,304,729			(119,923	)		(9.2	)
			Total deposits			2,481,582			2,313,788			167,794			7.3
	Other borrowings					1,261,412			1,004,836			256,576			25.5
	Other liabilities					42,710			57,550			(14,840	)		(25.8	)
		Total liabilities				3,785,704			3,376,174			409,530			12.1
		Total shareholders’ equity				302,263			324,755			(22,492	)		(6.9	)
		Total liabilities and shareholders’ equity			$	4,087,967		$	3,700,929		$	387,038			10.5	%
SELECTED AVERAGE BALANCES
	Loans and loans held for sale				$	2,140,652		$	2,078,937		$	61,715			3.0	%
	Securities					1,423,936			1,120,581			303,355			27.1
	Interest earning assets					3,618,677			3,209,160			409,517			12.8
	Assets					3,952,528			3,486,391			466,137			13.4
	Deposits					2,481,486			2,231,470			250,016			11.2
	Interest bearing liabilities					3,269,824			2,843,817			426,007			15.0
	Shareholders’ equity					319,048			326,026			(6,978	)		(2.1	)

			As of / For the Quarter Ended
			9/30/2003		6/30/2003		3/31/2003		12/31/2002		9/30/2002
MISCELLANEOUS INFORMATION
	Common stock prices (daily close)
		High	$	20.4000	$	19.5600	$	19.4000	$	19.1900	$	17.9900
		Low		17.0400		16.6900		17.2500		16.0500		15.3300
		End of period		19.6000		17.5900		17.3200		18.0100		16.5700
	Book Value			10.20		10.55		10.87		10.80		10.78
	Market Capitalization			581,005,034		523,475,726		519,442,197		541,545,337		499,413,073
	Weighted average shares — basic			29,672,137		29,801,059		30,006,417		30,081,995		30,379,838
	Weighted average shares — diluted			29,904,440		29,801,059		30,188,853		30,220,294		30,506,426
	End of period shares outstanding			29,643,114		29,759,848		29,990,889		30,069,147		30,139,594

11

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

				As of / For the Quarter Ended
(Dollars in thousands, except per share data)				9/30/2003			6/30/2003			3/31/2003			12/31/2002			9/30/2002
BALANCE SHEET
ASSETS:
Cash and due from banks				$	84,468		$	103,199		$	97,713		$	162,087		$	85,811
Federal funds sold					2,004			1,233			1,121			1,154			3,570
Interest earning bank deposits					42,560			38,308			72,431			6,609			9,849
Securities available for sale					1,603,262			1,518,918			1,453,827			1,129,212			1,212,742
Loans held for sale					14,784			45,311			69,894			158,404			14,532
Loans
	Commercial Real Estate				732,434			765,303			800,593			798,664			730,601
	Commercial Non Real Estate				199,412			212,753			227,159			223,178			230,809
	Construction				275,005			209,926			216,784			215,859			307,802
	Mortgage				258,927			257,236			240,115			237,085			378,088
	Consumer				279,512			271,734			260,594			280,201			283,990
	Home equity				364,191			347,716			332,392			317,730			296,073
		Total loans			2,109,481			2,064,668			2,077,637			2,072,717			2,227,363
	Less: Unearned income				(190	)		(209	)		(199	)		(247	)		(225	)
			Allowance for loan losses		(23,953	)		(23,644	)		(26,495	)		(27,204	)		(27,411	)
	Loans, net				2,085,338			2,040,815			2,050,943			2,045,266			2,199,727
Other assets					255,551			240,750			245,338			243,217			174,698
	Total assets			$	4,087,967		$	3,988,534		$	3,991,267		$	3,745,949		$	3,700,929
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Deposits
	Noninterest-bearing deposits			$	337,409		$	341,176		$	308,664		$	305,924		$	302,584
	Interest checking and savings				425,219			409,415			415,895			416,005			407,019
	Money market deposits				534,148			535,021			451,021			305,530			299,456
	Time deposits				1,184,806			1,272,937			1,317,349			1,295,188			1,304,729
		Total deposits			2,481,582			2,558,549			2,492,929			2,322,647			2,313,788
Other borrowings					1,261,412			1,076,595			1,116,223			1,042,440			1,004,836
Other liabilities					42,710			39,474			56,044			56,176			57,550
	Total liabilities				3,785,704			3,674,618			3,665,196			3,421,263			3,376,174
	Total shareholders’ equity				302,263			313,916			326,071			324,686			324,755
	Total liabilities and shareholders’ equity			$	4,087,967		$	3,988,534		$	3,991,267		$	3,745,949		$	3,700,929
SELECTED AVERAGE BALANCES
	Loans and loans held for sale			$	2,130,236		$	2,179,291		$	2,112,226		$	2,253,317		$	2,170,961
	Securities				1,560,430			1,412,491			1,295,982			1,144,045			1,129,206
	Interest earning assets				3,730,688			3,648,447			3,474,071			3,418,176			3,311,707
	Assets				4,071,214			3,990,872			3,814,209			3,678,945			3,586,969
	Deposits				2,543,301			2,519,240			2,379,454			2,309,971			2,278,758
	Interest bearing liabilities				3,381,916			3,286,646			3,138,232			2,999,871			2,914,391
	Shareholders’ equity				311,962			334,537			334,431			332,998			333,165

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)			9/30/2003			9/30/2002			Amount			Percentage
INCOME STATEMENT
	Interest income — taxable equivalent		$	43,764		$	50,452		$	(6,688	)		(13.3	)%
	Interest expense			17,033			20,817			(3,784	)		(18.2	)
	Net interest income — taxable equivalent			26,731			29,635			(2,904	)		(9.8	)
	Less: taxable equivalent adjustment			531			670			(139	)		(20.7	)
		Net interest income		26,200			28,965			(2,765	)		(9.5	)
	Provision for loan losses			2,400			1,750			650			37.1
		Net interest income after provision for loan losses		23,800			27,215			(3,415	)		(12.5	)
	Noninterest income			14,844			8,730			6,114			70.0
	Noninterest expense			26,543			21,740			4,803			22.1
	Income before income taxes			12,101			14,205			(2,104	)		(14.8	)
	Income tax expense			3,207			3,878			(671	)		(17.3	)
		Net income	$	8,894		$	10,327		$	(1,433	)		(13.9	)%
EARNINGS PER SHARE DATA
	Basic		$	0.30		$	0.34		$	(0.04	)		(11.8	)%
	Diluted			0.30			0.34			(0.04	)		(11.8	)
	Weighted average shares — basic			29,672,137			30,379,838
	Weighted average shares — diluted			29,904,440			30,506,426
	Dividends paid on common shares		$	0.185		$	0.185		$	—			—	%
PERFORMANCE RATIOS
	Return on average assets			0.87	%		1.14	%
	Return on average equity			11.31			12.30
	Efficiency — taxable equivalent (*)			64.26			58.84

		For the Three Months Ended
SCHEDULE OF SELECTED ITEMS INCLUDED IN EARNINGS		9/30/2003		9/30/2002
Noninterest income
	Gain on sale of securities	$	270	$	1,416
	Gain on sale of credit card loans		49		—
	Equity method income (loss)		78		(2,525	)
	Trading gains		158		298
	Gain on sale of properties		382		—

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 Nine Months Ended						Increase (Decrease)
(Dollars in thousands, except per share data)			9/30/2003			9/30/2002			Amount			Percentage
INCOME STATEMENT
	Interest income — taxable equivalent		$	135,470		$	150,308		$	(14,838	)		(9.9	)%
	Interest expense			54,920			63,132			(8,212	)		(13.0	)
	Net interest income — taxable equivalent			80,550			87,176			(6,626	)		(7.6	)
	Less: taxable equivalent adjustment			1,728			2,053			(325	)		(15.8	)
		Net interest income		78,822			85,123			(6,301	)		(7.4	)
	Provision for loan losses			23,943			6,095			17,848			292.8
		Net interest income after provision for loan losses		54,879			79,028			(24,149	)		(30.6	)
	Noninterest income			50,663			31,352			19,311			61.6
	Noninterest expense			85,629			70,141			15,488			22.1
	Income before income taxes			19,913			40,239			(20,326	)		(50.5	)
	Income taxes			5,277			10,985			(5,708	)		(52.0	)
		Net income	$	14,636		$	29,254		$	(14,618	)		(50.0	)%
EARNINGS PER SHARE DATA
	Basic		$	0.49		$	0.95		$	(0.46	)		(48.4	)%
	Diluted			0.49			0.95			(0.46	)		(48.4	)
	Weighted average shares — basic			29,825,313			30,667,773
	Weighted average shares — diluted			30,020,709			30,864,476
	Dividends paid on common shares		$	0.56		$	0.55		$	0.01			1.8	%
PERFORMANCE RATIOS
	Return on average assets			0.50	%		1.12	%
	Return on average equity			6.13			12.00
	Efficiency — taxable equivalent (*)			70.52			62.43

		For the Nine Months Ended
SCHEDULE OF SELECTED ITEMS INCLUDED IN EARNINGS		9/30/2003			9/30/2002
Noninterest income
	Gain on sale of securities	$	9,782		$	6,168
	Gain on sale of credit card loans		2,262			—
	Equity investment write down		—			(20	)
	Equity method loss		(298	)		(5,461	)
	Trading gains		1,754			1,040
	Gain on sale of properties		382			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)			9/30/2003			6/30/2003			3/31/2003			12/31/2002			9/30/2002
INCOME STATEMENT
	Interest income — taxable equivalent
	Interest and fees on loans		$	29,042		$	30,593		$	30,458		$	34,225		$	34,888
	Interest on securities			14,625			14,931			15,374			14,500			15,514
	Other interest income			97			165			185			69			50
		Total interest income — taxable equivalent		43,764			45,689			46,017			48,794			50,452
	Interest expense
	Interest on deposits			9,963			11,667			11,465			12,016			12,498
	Other interest expense			7,070			7,435			7,320			8,079			8,319
		Total interest expense		17,033			19,102			18,785			20,095			20,817
	Net interest income — taxable equivalent			26,731			26,587			27,232			28,699			29,635
	Less: Taxable equivalent adjustment			531			548			649			661			670
		Net interest income		26,200			26,039			26,583			28,038			28,965
	Provision for loan losses			2,400			19,492			2,051			2,175			1,750
		Net interest income after provision for loan losses		23,800			6,547			24,532			25,863			27,215
	Noninterest income
	Service charges on deposit accounts			5,674			5,571			5,130			4,998			4,689
	Financial management income			1,400			488			578			483			566
	Gain on sale of securities			270			8,286			1,226			5,371			1,416
	Gain on sale of credit card loan portfolio			49			—			2,213			—			—
	Income (loss) from equity method investments			78			(276	)		(100	)		(340	)		(2,525	)
	Mortgage loan fees			1,329			612			672			1,137			504
	Brokerage services income			861			812			486			591			640
	Insurance services income			2,327			2,229			2,437			2,112			2,313
	Trading gains			158			432			1,164			1,038			298
	Bank owned life insurance			992			967			946			16			—
	Gain (loss) on sale of properties			382			—			—			(109	)		—
	Other noninterest income			1,324			1,128			818			982			829
		Total noninterest income		14,844			20,249			15,570			16,279			8,730
	Noninterest expense
	Salaries and employee benefits			13,277			12,554			13,757			12,213			11,988
	Occupancy and equipment			4,079			3,913			4,166			3,768			3,839
	Data processing			712			634			678			760			758
	Marketing			1,173			1,161			1,153			658			630
	Postage and supplies			982			1,152			1,136			1,099			967
	Professional services			3,158			3,230			1,772			1,841			1,393
	Telephone			584			513			603			376			461
	Amortization of intangibles			127			77			85			89			88
	Prepayment costs on borrowings			—			7,366			—			3,284			—
	Other noninterest expense			2,451			2,422			2,714			3,543			1,616
		Total noninterest expense		26,543			33,022			26,064			27,631			21,740
	Income (loss) before taxes			12,101			(6,226	)		14,038			14,511			14,205
	Income tax expense (benefit)			3,207			(2,022	)		4,092			3,962			3,878
		Net income (loss)	$	8,894		$	(4,204	)	$	9,946		$	10,549		$	10,327
EARNINGS (LOSS) PER SHARE DATA
	Basic		$	0.30		$	(0.14	)	$	0.33		$	0.35		$	0.34
	Diluted			0.30			(0.14	)		0.33			0.35			0.34
	Dividends paid on common shares			0.185			0.185			0.185			0.185			0.185
PERFORMANCE RATIOS
	Return on average assets			0.87	%		(0.42	)%		1.06	%		1.14	%		1.14	%
	Return on average equity			11.31			(5.04	)		12.06			12.57			12.30
	Efficiency — taxable equivalent (*)			64.26			85.66			62.69			69.76			58.84
	Noninterest income as a percentage of total income			36.17			43.75			36.94			36.73			23.16
	Equity as a percentage of total assets			7.39			7.87			8.17			8.67			8.77
	Average earning assets as a percentage of average assets			91.64			91.42			91.08			92.91			92.33
	Average loans as a percentage of average deposits			83.76			86.51			88.77			97.55			95.27

		As of / For the Quarter Ended
SCHEDULE OF SELECTED ITEMS INCLUDED IN EARNINGS		9/30/2003		6/30/2003			3/31/2003			12/31/2002			9/30/2002
Noninterest income
	Gain on sale of securities	$	270	$	8,286		$	1,226		$	5,371		$	1,416
	Gain on sale of credit card loans		49		—			2,213			—			—
	Equity method income (loss)		78		(276	)		(100	)		(340	)		(2,525	)
	Trading gains		158		432			1,164			1,038			298
	Gain (loss) on sale of properties		382		—			—			(109	)		—
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)				9/30/2003			6/30/2003			3/31/2003			12/31/2002			9/30/2002
ASSET QUALITY ANALYSIS
	Allowance for Loan Losses
		Beginning balance		$	23,644		$	26,495		$	27,204		$	27,411		$	27,213
		Provision for loan losses			2,400			19,492			2,051			2,175			1,750
		Allowance related to loans sold or transferred to held for sale			—			(20,236	)		(547	)		(325	)		(322	)
		Charge-offs			(2,238	)		(2,448	)		(2,466	)		(2,138	)		(1,517	)
		Recoveries			147			341			253			81			287
			Net charge-offs		(2,091	)		(2,107	)		(2,213	)		(2,057	)		(1,230	)
		Ending balance		$	23,953		$	23,644		$	26,495		$	27,204		$	27,411
	Nonperforming Assets and Loans 90 days or more past due accruing interest
		Nonaccrual loans		$	13,398		$	11,144		$	30,021		$	26,467		$	24,418
		Other real estate			6,709			6,866			11,200			10,278			9,675
			Total nonperforming assets		20,107			18,010			41,221			36,745			34,093
		Loans 90 days or more past due accruing interest			21			312			—			—			—
			Total	$	20,128		$	18,322		$	41,221		$	36,745		$	34,093
	Asset Quality Ratios (*)
		Nonaccrual loans as a percentage of total loans			0.64	%		0.54	%		1.44	%		1.28	%		1.10	%
		Nonperforming assets as a percentage of total assets			0.49			0.45			1.03			0.98			0.92
		Nonperforming assets as a percentage of total loans and other real estate			0.95			0.87			1.97			1.76			1.52
		Net charge-offs as a percentage of average loans (annualized)			0.40			0.39			0.43			0.37			0.23
		Allowance for loan losses as a percentage of loans			1.14			1.15			1.28			1.31			1.23
		Ratio of allowance for loan losses to:
			Net charge-offs		2.89	x		2.80	x		2.95	x		3.33	x		5.62	x
			Nonaccrual loans		1.79			2.12			0.88			1.03			1.12

			As of / For the Nine Months Ended						Increase (Decrease)
			9/30/2003			9/30/2002			Amount			Percentage
Allowance for Loan Losses
	Beginning balance		$	27,204		$	25,843		$	1,361			5.3	%
	Provision for loan losses			23,943			6,095			17,848			292.8
	Allowance related to loans sold			(20,783	)		(322	)		(20,461	)		N/A
	Charge-offs			(7,152	)		(4,852	)		2,300			47.4
	Recoveries			741			647			94			14.5
		Net charge-offs		(6,411	)		(4,205	)		2,206			52.5
	Ending balance		$	23,953		$	27,411		$	(3,458	)		(12.6	)%
Asset Quality Ratios (*)
	Net charge-offs as a percentage of average loans (annualized)			0.41	%		0.27	%
	Ratio of allowance for loan losses to net charge-offs (annualized)			2.79	x		4.88	x

			For the Quarter Ended
			9/30/2003			6/30/2003			3/31/2003			12/31/2002			9/30/2002
ANNUALIZED INTEREST YIELDS / RATES (**)
	Interest income:
		Yield on loans and loans held for sale		5.41	%		5.63	%		5.85	%		6.03	%		6.38	%
		Yield on securities		3.75			4.23			4.75			5.07			5.50
		Yield on interest earning assets		4.67			5.02			5.35			5.68			6.06
	Interest expense:
		Cost of interest bearing deposits		1.80			2.12			2.23			2.37			2.49
		Cost of borrowings		2.38			2.75			2.83			3.26			3.57
		Cost of interest bearing liabilities		2.00			2.33			2.43			2.66			2.83
	Interest rate spread			2.67			2.69			2.92			3.02			3.23
	Net yield on earning assets			2.86	%		2.92	%		3.15	%		3.34	%		3.57	%

Notes:	Applicable ratios are annualized.
	(*) — Excludes loans held for sale.
	(**) — Fully taxable equivalent yields.

16