Exhibit 99.1
June 16, 2006
Dear Fellow Shareholder:
The management team at First Charter continues to pursue initiatives that we believe will enhance the value of the First Charter franchise, improve the performance of the Company, and in turn, benefit our shareholders.
I am pleased to inform you about a historic event in the history of our company. We recently announced plans for a strategic merger with GBC Bancorp, Inc., parent of Gwinnett Banking Company in Lawrenceville, Georgia.
Gwinnett Banking Company, which is located in the north Atlanta market, is among the best performing community banks in Georgia. As of March 31, 2006, Gwinnett reported $418 million in assets. In 2005, they reported Return on Average Assets of 1.80%, Return on Average Equity of 21.4%, and Net Interest Margin of 4.75%.
The bank has two branches. One is located in Gwinnett County and the other in Fulton County. Over the next five years, Gwinnett County has a projected population growth rate of 23%, compared to a 16% growth rate for the Charlotte market. The north Atlanta market is a key target market within our planned regional expansion strategy.
The geographic location of Gwinnett Banking Company, along with the company’s experienced, high-performing management team, specialized expertise in SBA lending, and homebuilder finance product make this merger strategically compelling. The terms of the agreement are also financially compelling. We believe the purchase price at 14.4x last twelve month’s diluted earnings, and 2.60x fully diluted tangible book value, is quite reasonable. And, it is expected to be 2 cents per share accretive to First Charter’s GAAP earnings for 2007, and 4 cents per share accretive for 2008. The merger, pending legal and regulatory approvals, is expected to close in the fourth quarter of 2006.
We are pleased that Larry Key, Chairman, President & CEO of Gwinnett Banking Company, along with his management team, have agreed to continue to manage the local market operations. Larry has over twenty-five years of experience in the Atlanta market and has established a very strong banking franchise with focus on quality customer service, similar to First Charter’s. Larry will serve as Regional President for the north Atlanta First Charter market.
I encourage you to visit our website at www.firstcharter.com for more information about the merger, as well as listen to the recorded conference call that we held with analysts regarding the transaction.
Finally, enclosed is your Shareholder Report, which discusses our successful first quarter 2006 results. We appreciate your continued support and welcome your comments and suggestions as we continue to improve the performance of your company.
Sincerely,
Robert E. James, Jr.
REJ
Enclosure
Enclosure
ADDITIONAL INFORMATION
First Charter will file a Form S-4, GBC Bancorp, Inc. (“GBC”) will file a Proxy Statement and both companies will file other relevant documents regarding this transaction with the Securities and Exchange Commission (the “SEC”). GBC will mail the Proxy Statement/Prospectus to its shareholders. These documents will contain important information about the transaction, and First Charter and GBC urge you to read these documents when they become available.
You may obtain copies of all documents filed with the SEC regarding this transaction, free of charge, at the SEC’s website (www.sec.gov). You may also obtain these documents, free of charge, from First Charter’s website (www.firstcharter.com) under the tab “About First Charter” and then under the heading “Investor Relations” and then under the item “SEC Filings.”
First Charter and GBC and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from GBC’s shareholders in connection with this transaction. Information about other persons who may be deemed participants in this transaction will be included in the Proxy Statement/Prospectus. You can find information about First Charter’s executive officers and directors in First Charter’s definitive proxy statement filed with the SEC on March 22, 2006. You can find information about GBC’s executive officers and directors in their definitive proxy statement filed with the SEC on July 22, 2005. You can obtain free copies of these documents from First Charter or GBC using the contact information included in these materials.
