Exhibit 99.1
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| | Contact:
Charles A. Caswell
Chief Financial Officer
(704) 688-1112 |
FOR IMMEDIATE RELEASE
May 2, 2007
First Charter’s Strong Commercial Lending and Core Deposit Growth
Drive First Quarter Results
First Quarter 2007 Highlights
| | • | | Top-Line Revenue Growth Increases 14.7 percent on Record Noninterest and Net Interest Income |
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| | • | | Commercial Loan Average Balances Grow $640 Million, or 42 percent, Over 2006 First Quarter on Charlotte and Raleigh Market Growth and GBC Bancorp Acquisition |
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| | • | | Core Deposit Average Balances Grow $137 Million, or 9.4 percent, Over 2006 First Quarter |
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| | • | | Solid Credit Quality Trends Continue; Net Charge-offs Six Basis Points of Average Loans |
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| | • | | Raleigh Market Presence Expands to Five Financial Centers With AdditionalDe Novo Opening |
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| | • | | Completed GBC Bancorp Systems Integration |
CHARLOTTE, North Carolina — First Charter Corporation (NASDAQ: FCTR) today reported net income of $12.4 million, a 9.9 percent increase, compared with $11.2 million in the same period a year ago. On a per share basis, net income was $0.35 per diluted share, compared with $0.36 per diluted share for the same period of 2006 and $0.36 per diluted share in the 2006 fourth quarter.
Total revenue on a tax-equivalent basis increased 14.7 percent to $56.9 million, compared to $49.7 million in the first quarter of 2006. Return on average tangible equity was 13.9 percent and return on average assets was 1.03 percent, compared with 15.2 percent and 1.09 percent, respectively, a year ago.
First quarter 2007 results include a full quarter of financial performance and the effect of additional outstanding shares from the recent acquisition of GBC Bancorp, Inc., compared with two months of results in the 2006 fourth quarter and no impact in the year-ago quarter.
CEO’s Comments
President and CEO Bob James commented, “The recent quarter illustrates our commitment to relationship banking and a superior customer experience. During the first quarter, we demonstrated solid results in net income, net interest income, net charge-offs, and noninterest income. Our performance was driven by strong commercial loan growth, low-cost deposit growth, and historically low net charge-offs. We also completed the systems integration associated with the GBC acquisition and expanded our presence in Raleigh with the de novo opening of our fifth location.”
James added, “We continue to strengthen our financial controls and reporting processes and expect to report our financial results on a timely basis. This quarter’s performance reflects the dedicated efforts of all our teammates, who first and foremost are focused on delivering exceptional service to our customers.”
Record Net Interest Income Increases 14.4 Percent Over 2006 First Quarter
Net interest income, on a tax-equivalent basis, increased to $37.4 million, representing a $4.7 million, or 14.4 percent, increase over the first quarter of 2006. The net interest margin, on a tax-equivalent basis, decreased two basis points to 3.38 percent in the first quarter of 2007 from 3.40 percent in both the fourth and first quarters of 2006. The margin benefited from continued disciplined pricing of loans and deposits and a greater concentration of higher-yielding commercial loans relative to total assets. The margin was adversely impacted, in part, by the maturity of $110 million of wholesale funding with an average yield of 2.98 percent early in the quarter, compared with the sale and maturity of $52.9 million in securities with an average yield of 3.17 percent late in the quarter.
Compared to the first quarter of 2006, earning-asset yields increased 76 basis points to 7.05 percent. This increase was driven by two factors. First, loan yields increased 71 basis points to 7.62 percent and securities yields increased 64 basis points to 4.95 percent. Second, the mix of higher-yielding (loan) assets improved as a result of the GBC acquisition, recent balance sheet repositionings, and a smaller percentage of lower-yielding mortgage loans. The percentage of investment security average balances (which, on average, have lower yields than loans) to total earning-asset average balances was reduced from 23.6 percent to 20.8 percent over the past year.
On the liability side of the balance sheet, the cost of interest-bearing liabilities increased 92 basis points, compared to the first quarter of 2006. This was comprised of a 101 basis point increase in interest-bearing deposit costs to 3.84 percent, while other borrowing costs increased 83 basis points to 5.08 percent. During 2006, the Federal Reserve raised the rate that banks lend funds to each other (the Fed Funds rate) by 100 basis points. Also, as a result of the balance sheet repositionings, the percentage of higher-cost, other borrowings average balances was reduced from 30.7 percent to 28.4 percent of total interest-bearing liabilities average balances over the past year.
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Compared to the fourth quarter of 2006, earning-asset yields increased nine basis points to 7.05 percent. This increase was driven by an 11 basis point improvement in securities yields and a six basis point increase in loan yields. The cost of interest-bearing liabilities increased 13 basis points to 4.19 percent. This was primarily the result of an 11 basis point increase in interest-bearing deposit costs and an 18 basis point increase in other borrowing costs.
Commercial Lending Leads Loan Growth
Total loan average balances for the 2007 first quarter increased $576.0 million, or 19.6 percent, to $3.5 billion, compared to $2.9 billion for the 2006 first quarter. Commercial loan growth drove the increase, rising by $640.3 million, or 41.7 percent. The remaining growth reflected continued robust commercial lending in the Charlotte and Raleigh markets. Included in the increases were approximately $337 million of total loan balances and $322 million of commercial loan balances that were added to the First Charter portfolio on November 1, 2006, as a result of the GBC acquisition. James noted, “The Charlotte and Raleigh markets continue to demonstrate steady and consistent growth across most industries. Of particular note, our data indicates that the new home construction markets in these key areas show continued balance between new home construction and new home purchases, despite national trends to the contrary.”
Consumer loan average balances decreased $23.5 million and mortgage loan average balances decreased $45.6 million. The consumer loan balance decline was driven, in part, by lower consumer borrowing costs of refinancing first mortgages relative to current rates on home equity products. The decline in mortgage loan balances was due to normal loan amortization and First Charter’s strategy of selling most of its new mortgage production in the secondary market. GBC had no residential mortgages on its balance sheet at the time of the acquisition. Cash flow from mortgage loan runoff contributed to financing higher yielding commercial loans.
Compared to the fourth quarter of 2006, total loan average balances grew $174.5 million, or 21.1 percent annualized. Consumer loan average balances fell $9.4 million during the first quarter, while mortgage loan average balances declined $10.5 million in the first quarter as part of the strategy mentioned above.
Strong Organic Deposit Growth
Deposit growth, particularly low-cost transaction (or core) deposit growth (money market, demand, and savings accounts), continues to be an area of emphasis at First Charter. For the first quarter of 2007, core deposit average balances increased $137.1 million, or 9.4 percent, compared to the first quarter of 2006. This includes overcoming the impact of First Charter’s sale of two financial centers in September 2006, which included the sale of $24 million of core deposits. The total core deposit increase was primarily driven by a $66.8 million, or 11.6 percent, increase in money market average balances, a $36.3 million, or 7.6 percent, increase in interest checking and savings average balances, and a $34.1 million, or 8.3 percent, increase in noninterest-bearing demand deposit average balances.
Compared to the fourth quarter of 2006, core deposit average balances increased $33.2 million, or 8.6 percent annualized. The overall growth was primarily concentrated in money market and interest checking balances.
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Certificate of deposit (CD) average balances for the first quarter of 2007 grew $66.8 million from the fourth quarter of 2006 and $328.4 million from the first quarter of 2006. On November 1, 2006, $248.6 million of CD balances were added by the GBC acquisition. CD growth was also affected by the sale of $14 million of CDs in conjunction with the previously mentioned financial center sale.
Noninterest Income Increases
Historical noninterest income and expense amounts have been restated to reflect the effect of reporting the previously announced sale of Southeastern Employee Benefits Services (SEBS) in the fourth quarter of 2006 as a discontinued operation and to reflect the implementation of SAB 108 at year-end 2006.
Noninterest income for the first quarter of 2007 was a record $19.6 million, up $2.2 million from $17.4 million for the fourth quarter of 2006 and up $2.6 million from $17.0 million in the first quarter of 2006. Contributing to the growth over the fourth quarter of 2006 were increases in venture capital investment gains, SBA loan sale gains, brokerage, insurance, and ATM, debit, and merchant card revenue.
Compared to the first quarter of 2006, deposit service revenue was $0.7 million higher, venture capital investment gains were $0.6 million higher, ATM, debit, and merchant card revenue was $0.5 million higher, mortgage, gains on SBA loan sales, and brokerage revenue was each $0.4 million higher, and Bank Owned Life Insurance (BOLI) revenue was $0.3 million higher. These revenue increases and gains were partially offset by $0.7 million less in insurance revenue, primarily due to less contingency income recognized in the first quarter of 2007, compared with the first quarter of 2006.
GBC Acquisition, Raleigh Market Entry, Financial Control Review, and Additional Audit Costs Led to Higher Noninterest Expense
Noninterest expense for the first quarter of 2007 was $35.9 million, up $2.0 million from $33.9 million in the fourth quarter of 2006. Additional expense related to the review and analysis of the Corporation’s financial control environment and other matters, incremental audit work related to completing the Corporation’s 2006 financial reports, and temporary staffing augmentation contributed $1.3 million to the increase. On a linked-quarter basis, salaries and benefits expense was unchanged, though the fourth quarter of 2006 included $0.7 million from the accelerated expensing of stock options granted before 2006. Data processing and marketing expenses each were approximately $0.4 million greater than the previous quarter. The data processing cost increase was primarily due to additional customer debit card usage. Occupancy and equipment expense increased $0.2 million from the fourth quarter of 2006 due to a new loan platform being placed into service during the fourth quarter and additional expense related to GBC. Partially offsetting these increases were $0.1 million reductions in both intangible amortization and foreclosed property expense.
First Charter’s efficiency ratio was 63.1 percent in the first quarter of 2007, compared with 62.6 percent in the fourth quarter of 2006 and 61.9 percent in the first quarter of 2006. The first quarter of 2007 was adversely impacted by the incremental expense from the review and analysis of the Corporation’s financial control environment and other matters, additional audit fees, and temporary financial staffing expense. The fourth quarter 2006 efficiency ratio was adversely impacted by $0.7 million in costs associated with the accelerated vesting of stock options, $0.3 million in direct GBC acquisition-related costs, and $0.2 million in severance expense.
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Income Tax Rate Affects Year-Over-Year Comparisons
The effective tax rate for the first quarter of 2007 was 35.0 percent, compared with 33.7 percent in the first quarter of 2006 and 36.3 percent in the fourth quarter of 2006. The 2006 fourth quarter was adversely affected by the taxable gain recognized from the sale of SEBS and additional revenue related to the GBC acquisition. The effective tax rate from continuing operations was 33.0 percent in the fourth quarter of 2006.
Raleigh Growth Continues to Exceed Expectations
First Charter expanded into the Raleigh, North Carolina market with the opening of ade novo financial center in October 2005 and three more in mid-February, 2006. A fifth financial center opened in Raleigh in late-January 2007.
At March 31, 2007, Raleigh-related loans totaled $148.8 million, representing a $14.9 million increase in balances from year-end 2006. Deposit balances in Raleigh were $51.3 million at the end of the 2007 first quarter, an increase of $19.5 million from December 31, 2006.
“Our progress in Raleigh is highly encouraging,” James commented. “We are pleased to have opened five financial centers in this vibrant market in less than a year and a half. Our Raleigh team is working hard to help First Charter become well-known throughout the Raleigh market as a strong banking option for individuals and businesses.”
Solid Credit Quality
Credit quality continues to be very strong, with net charge-offs of 0.06 percent of average portfolio loans in the first quarter of 2007, compared to 0.08 percent in the prior quarter and 0.10 percent in the first quarter of 2006.
Nonperforming assets were $17.3 million at March 31, 2007, representing a $2.6 million increase from $14.7 million at year-end 2006, and a $2.0 million increase from a year earlier. Nonperforming assets as a percentage of total portfolio loans and other real estate owned increased seven basis points to 0.49 percent at March 31, 2007 from 0.42 percent at year-end 2006, but was two basis points lower than the March 31, 2006 level.
The allowance for loan losses was $35.9 million, or 1.02 percent of portfolio loans, at March 31, 2007, an increase from 1.00 percent at 2006 year-end and 0.98 percent a year ago. The provision for loan losses was $1.4 million for the 2007 first quarter, while net charge-offs were $0.5 million for the period. For the same year-ago period, the provision for loan losses was $1.5 million and net charge-offs were $0.7 million. The Corporation’s addition of GBC’s largely commercial loan portfolio, a smaller concentration of lower risk home equity and mortgage loan balances, as well as First Charter’s credit migration trends led to the higher allowance for loan loss ratio.
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The Corporation’s provision for loan losses and allowance for loan losses is based on consideration of specific loans, past loan loss experience, and other factors that, in management’s judgment, deserve current recognition in estimating probable loan losses. Other factors considered by management include the growth and composition of the loan portfolio and current economic conditions.
Balance Sheet Strength and Capital Management
At March 31, 2007, total assets were $4.9 billion, compared with $4.3 billion a year ago. The increase was attributable to the acquisition of GBC, including approximately $60 million in goodwill, and First Charter’s organic growth. At March 31, 2007, total deposits were $3.3 billion, including core deposits of $1.7 billion.
At the end of the first quarter, shareholders’ equity was $455.4 million, or 9.32 percent of total assets, compared with $330.7 million, or 7.72 percent, a year ago. Tangible common equity as a percentage of tangible assets was 7.74 percent at March 31, 2007, compared to 7.59 percent at December 31, 2006, and 7.25 percent at March 31, 2006.
Diluted shares outstanding, on average, during the quarter rose from 33.4 million in the 2006 fourth quarter to 35.1 million shares during the 2007 first quarter.
There were no repurchases of the Corporation’s common stock during 2006 or the first quarter of 2007. First Charter has existing authority to repurchase up to 1.6 million shares of its common stock. The Corporation anticipates repurchasing shares from time to time under this authorization during 2007 under appropriate market conditions.
Conference Call
First Charter Corporation’s executive management will host a conference call at 9:00 a.m. (ET) on Thursday, May 3, 2007, to discuss the first quarter 2007 financial results. Interested parties may access the conference call by dialing 800-379-3953 (domestic) or 706-679-5254 (international), using the pass code of 7280549. Participants are encouraged to call in 15 minutes prior to the call in order to register for the event. The earnings release and the conference call slide presentation will also be accessible via the Company’s Web site,www.firstcharter.com, under the Investor Relations section. A replay of the conference call will be available from 11:00 a.m. (ET) on May 3, 2007, until midnight (ET) on May 10, 2007. The replay will be accessible by calling 800-642-1687 (domestic) or 706-645-9291 (international), using the pass code of 7280549. An audio replay will also be available on the Company’s Web site under the Investor Relations section for 30 days.
Corporate Profile
First Charter Corporation (NASDAQ: FCTR), headquartered in Charlotte, North Carolina, is a regional financial services company with assets of $4.9 billion and is the holding company for First Charter Bank. First Charter operates 58 financial centers, four insurance offices, and 138 ATMs in North Carolina and Georgia, and also operates loan origination offices in Asheville, North Carolina and Reston, Virginia.
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First Charter provides businesses and individuals with a broad range of financial services, including banking, financial planning, wealth management, investments, insurance, and mortgages.
For more information about First Charter, visit the Company’s Web site atwww.firstcharter.com or call 800-601-8471.
Forward-Looking Statements
This news release contains forward-looking statements with respect to the financial condition 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, and which may be beyond the Corporation’s control, include, among others, the following possibilities: (1) projected results in connection with management’s implementation of, or changes in, the Corporation’s business plan and strategic initiatives, including the recent balance sheet initiatives, are lower than expected; (2) competitive pressure among financial services companies increases significantly; (3) costs or difficulties related to the integration of acquisitions, including deposit attrition, customer retention and revenue loss, or expenses in general are greater than expected; (4) general economic conditions, in the markets in which the Corporation 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, or interest rate policies of the Board of Governors of the Federal Reserve System, may 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, including changes in accounting standards, may adversely affect the businesses in which the Corporation is engaged; (9) regulatory compliance cost increases are greater than expected; (10) the passage of future tax legislation, or any negative regulatory, administrative or judicial position, may adversely impact the Corporation; (11) the Corporation’s competitors may have greater financial resources and may develop products that enable them to compete more successfully in the markets in which it operates; (12) changes in the securities markets, including changes in interest rates, may adversely affect the Corporation’s ability to raise capital from time to time; (13) the material weaknesses in the Corporation’s internal control over financial reporting result in subsequent adjustments to management’s projected results; and (14) implementation of management’s plans to remediate the material weaknesses takes longer than expected and causes the Corporation to incur costs that are greater than expected.
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First Charter Corporation
Financial Highlights
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| | | Quarter Ended | |
| (Dollars in thousands, except per share data) | | 3/31/07 | | | 3/31/06 | |
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EARNINGS | | | | | | | | |
Total revenue(1) | | $ | 56,944 | | | $ | 49,667 | |
Earnings | | | | | | | | |
| Income from continuing operations, net of tax | | | 12,356 | | | | 11,243 | |
| Net income | | | 12,356 | | | | 11,243 | |
Diluted earnings per share | | | | | | | | |
| Income from continuing operations, net of tax | | | 0.35 | | | | 0.36 | |
| Net income | | | 0.35 | | | | 0.36 | |
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PERFORMANCE RATIOS | | | | | | | | |
Return on average assets(3) | | | 1.03 | % | | | 1.09 | % |
Return on average equity(3) | | | 11.09 | | | | 13.99 | |
Return on average tangible equity(2) | | | 13.90 | | | | 15.19 | |
Net interest margin(3) | | | 3.38 | | | | 3.40 | |
Efficiency(4) | | | 63.1 | | | | 61.9 | |
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AVERAGE BALANCE SHEET | | | | | | | | |
| Portfolio loans, net | | $ | 3,510,437 | | | $ | 2,939,233 | |
| Loans held for sale | | | 11,431 | | | | 6,675 | |
| Securities, at cost | | | 926,970 | | | | 914,760 | |
| Earning assets | | | 4,463,162 | | | | 3,868,519 | |
| Assets | | | 4,871,083 | | | | 4,201,477 | |
| Core deposits | | | 1,601,729 | | | | 1,464,596 | |
| Deposits | | | 3,251,137 | | | | 2,785,632 | |
| Other borrowings | | | 1,113,191 | | | | 1,049,529 | |
| Shareholders’ equity | | | 451,835 | | | | 325,917 | |
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ASSET QUALITY MEASURES | | | | | | | | |
| Nonaccrual loans as a percentage of total portfolio loans | | | 0.31 | % | | | 0.31 | % |
| Nonperforming assets as a percentage of total assets | | | 0.35 | | | | 0.36 | |
| Nonperforming assets as a percentage of total portfolio loans and other real estate | | | 0.49 | | | | 0.51 | |
Net charge-offs as a percentage of average portfolio loans(3) | | | 0.06 | | | | 0.10 | |
| Allowance for loan losses as a percentage of portfolio loans | | | 1.02 | | | | 0.98 | |
| Ratio of allowance for loan losses to: | | | | | | | | |
Net charge-offs(3) | | | 18.50 | x | | | 9.84 | x |
| Nonaccrual loans | | | 3.28 | | | | 3.20 | |
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| | | As of / Quarter Ended | |
| | | 3/31/07 | | | 12/31/06 | | | 9/30/06 | | | 6/30/06 | | | 3/31/06 | |
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SHARE INFORMATION | | | | | | | | | | | | | | | | | | | | |
| Common stock prices | | | | | | | | | | | | | | | | | | | | |
| High | | $ | 24.97 | | | $ | 25.15 | | | $ | 24.82 | | | $ | 25.50 | | | $ | 25.13 | |
| Low | | | 21.29 | | | | 23.05 | | | | 22.93 | | | | 23.02 | | | | 23.11 | |
| End of period | | | 21.50 | | | | 24.60 | | | | 24.06 | | | | 24.53 | | | | 24.70 | |
| Book value | | | 12.97 | | | | 12.81 | | | | 11.20 | | | | 10.73 | | | | 10.68 | |
| Tangible book value | | | 10.58 | | | | 10.37 | | | | 10.49 | | | | 10.02 | | | | 9.97 | |
| Market capitalization | | | 754,749,029 | | | | 859,086,661 | | | | 750,693,245 | | | | 763,383,927 | | | | 765,067,507 | |
| Weighted average shares — basic | | | 34,770,106 | | | | 33,268,542 | | | | 31,056,059 | | | | 31,058,858 | | | | 30,859,461 | |
| Weighted average shares — diluted | | | 35,084,640 | | | | 33,413,228 | | | | 31,426,563 | | | | 31,339,325 | | | | 31,153,338 | |
| End of period shares outstanding | | | 35,104,606 | | | | 34,922,222 | | | | 31,200,883 | | | | 31,120,421 | | | | 30,974,393 | |
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| (1) | | Tax-equivalent net interest income plus noninterest income. Excludes the results of discontinued operations. |
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| (2) | | Net income, excluding intangibles amortization expense, divided by average equity, excluding average goodwill and intangible assets. |
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| (3) | | Annualized. |
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| (4) | | Noninterest expense less debt extinguishment expense and derivative termination costs divided by the sum of tax-equivalent net interest income plus noninterest income less securities gains (losses), net. Excludes the results of discontinued operations. |
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First Charter Corporation
Quarterly Earnings Release
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| | | As of / Quarter Ended | |
| (Dollars in thousands) | | 3/31/07 | | | 12/31/06 | | | 9/30/06 | | | 6/30/06 | | | 3/31/06 | |
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BALANCE SHEET | | | | | | | | | | | | | | | | | | | | |
Assets: | | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | $ | 95,168 | | | $ | 87,771 | | | $ | 76,215 | | | $ | 115,557 | | | $ | 95,382 | |
| Federal funds sold | | | 1,256 | | | | 10,515 | | | | 33,690 | | | | 2,347 | | | | 2,706 | |
| Interest-earning bank deposits | | | 4,431 | | | | 4,541 | | | | 2,999 | | | | 13,432 | | | | 3,745 | |
| Securities available for sale | | | 897,762 | | | | 906,415 | | | | 899,120 | | | | 884,370 | | | | 900,424 | |
| Loans held for sale | | | 13,691 | | | | 12,292 | | | | 10,923 | | | | 8,382 | | | | 8,719 | |
| Portfolio loans | | | | | | | | | | | | | | | | | | | | |
| Commercial and construction | | | 2,215,413 | | | | 2,129,582 | | | | 1,740,072 | | | | 1,690,508 | | | | 1,616,944 | |
Mortgage(1) | | | 604,834 | | | | 618,142 | | | | 623,271 | | | | 637,705 | | | | 650,001 | |
Consumer(1) | | | 709,628 | | | | 737,342 | | | | 728,477 | | | | 744,133 | | | | 744,143 | |
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| Total portfolio loans | | | 3,529,875 | | | | 3,485,066 | | | | 3,091,820 | | | | 3,072,346 | | | | 3,011,088 | |
| Allowance for loan losses | | | (35,854 | ) | | | (34,966 | ) | | | (29,919 | ) | | | (29,520 | ) | | | (29,505 | ) |
| Unearned income | | | (6 | ) | | | (13 | ) | | | (37 | ) | | | (58 | ) | | | (125 | ) |
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| Portfolio loans, net | | | 3,494,015 | | | | 3,450,087 | | | | 3,061,864 | | | | 3,042,768 | | | | 2,981,458 | |
| Premises and equipment, net | | | 112,145 | | | | 111,588 | | | | 106,918 | | | | 107,244 | | | | 107,298 | |
| Goodwill and other intangible assets | | | 84,010 | | | | 85,068 | | | | 22,088 | | | | 22,025 | | | | 21,746 | |
| Other assets | | | 182,017 | | | | 188,440 | | | | 168,690 | | | | 165,106 | | | | 159,939 | |
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Total Assets | | $ | 4,884,495 | | | $ | 4,856,717 | | | $ | 4,382,507 | | | $ | 4,361,231 | | | $ | 4,281,417 | |
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Liabilities and Shareholders’ Equity: | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing demand | | $ | 476,122 | | | $ | 454,975 | | | $ | 452,853 | | | $ | 449,732 | | | $ | 422,184 | |
| Demand | | | 434,412 | | | | 420,774 | | | | 381,029 | | | | 390,393 | | | | 376,840 | |
| Money market | | | 636,586 | | | | 620,699 | | | | 583,346 | | | | 611,886 | | | | 587,516 | |
| Savings | | | 114,785 | | | | 111,047 | | | | 114,759 | | | | 118,194 | | | | 123,552 | |
| Certificates of deposit | | | 1,659,461 | | | | 1,640,633 | | | | 1,422,867 | | | | 1,418,597 | | | | 1,290,254 | |
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| Total deposits | | | 3,321,366 | | | | 3,248,128 | | | | 2,954,854 | | | | 2,988,802 | | | | 2,800,346 | |
| Other borrowings | | | | | | | | | | | | | | | | | | | | |
| Retail | | | 77,998 | | | | 97,707 | | | | 85,902 | | | | 102,839 | | | | 121,740 | |
| Wholesale short-term | | | 438,453 | | | | 513,197 | | | | 258,086 | | | | 250,041 | | | | 339,201 | |
| Wholesale long-term | | | 527,778 | | | | 487,794 | | | | 687,810 | | | | 642,827 | | | | 642,843 | |
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| Total other borrowings | | | 1,044,229 | | | | 1,098,698 | | | | 1,031,798 | | | | 995,707 | | | | 1,103,784 | |
| Accrued expenses and other liabilities | | | 63,528 | | | | 62,529 | | | | 46,417 | | | | 42,824 | | | | 46,606 | |
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| Total liabilities | | | 4,429,123 | | | | 4,409,355 | | | | 4,033,069 | | | | 4,027,333 | | | | 3,950,736 | |
| Total shareholders’ equity | | | 455,372 | | | | 447,362 | | | | 349,438 | | | | 333,898 | | | | 330,681 | |
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Total Liabilities and Shareholders’ Equity | | $ | 4,884,495 | | | $ | 4,856,717 | | | $ | 4,382,507 | | | $ | 4,361,231 | | | $ | 4,281,417 | |
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SELECTED AVERAGE BALANCES | | | | | | | | | | | | | | | | | | | | |
| Portfolio loans, net | | $ | 3,510,437 | | | $ | 3,336,563 | | | $ | 3,070,286 | | | $ | 3,021,005 | | | $ | 2,939,233 | |
| Loans held for sale | | | 11,431 | | | | 10,757 | | | | 8,792 | | | | 9,810 | | | | 6,675 | |
| Securities, at cost | | | 926,970 | | | | 924,773 | | | | 923,293 | | | | 921,026 | | | | 914,760 | |
| Earning assets | | | 4,463,162 | | | | 4,284,735 | | | | 4,013,745 | | | | 3,960,835 | | | | 3,868,519 | |
| Assets | | | 4,871,083 | | | | 4,664,431 | | | | 4,336,270 | | | | 4,274,345 | | | | 4,201,477 | |
| Noninterest-bearing demand | | | 446,801 | | | | 447,269 | | | | 441,329 | | | | 427,923 | | | | 412,720 | |
| Demand | | | 399,557 | | | | 385,464 | | | | 372,696 | | | | 367,146 | | | | 356,179 | |
| Money market deposits | | | 642,383 | | | | 622,364 | | | | 599,952 | | | | 561,005 | | | | 575,601 | |
| Savings | | | 112,988 | | | | 113,442 | | | | 116,866 | | | | 121,130 | | | | 120,096 | |
| Core deposits | | | 1,601,729 | | | | 1,568,539 | | | | 1,530,843 | | | | 1,477,204 | | | | 1,464,596 | |
| Certificates of deposit | | | 1,649,408 | | | | 1,582,581 | | | | 1,439,204 | | | | 1,312,993 | | | | 1,321,036 | |
| Deposits | | | 3,251,137 | | | | 3,151,120 | | | | 2,970,047 | | | | 2,790,197 | | | | 2,785,632 | |
| Other borrowings | | | 1,113,191 | | | | 1,054,550 | | | | 984,504 | | | | 1,108,734 | | | | 1,049,529 | |
| Interest-bearing liabilities | | | 3,917,527 | | | | 3,758,401 | | | | 3,513,222 | | | | 3,471,008 | | | | 3,422,441 | |
| Shareholders’ equity | | | 451,835 | | | | 407,929 | | | | 340,986 | | | | 332,987 | | | | 325,917 | |
| |
(1) At the beginning of the third quarter of 2006, approximately $93.9 million of consumer loans secured by real estate were transferred from the consumer loan category to the home equity ($13.5 million) and mortgage ($80.4 million) loan categories to make the balance sheet presentation more consistent with bank regulatory definitions. The balance sheet transfer had no effect on credit reporting, underwriting, reported results of operations, or liquidity. Prior period-end and average loan balances have been reclassified to conform with the current period presentation.
9
First Charter Corporation
Quarterly Earnings Release
| | | | | | | | | | | | | | | | | |
| |
| | | As of / Quarter Ended | | | Increase (Decrease) | |
| (Dollars in thousands) | | 3/31/07 | | | 3/31/06 | | | Amount | | | Percentage | |
| |
BALANCE SHEET | | | | | | | | | | | | | | | | |
Assets: | | | | | | | | | | | | | | | | |
| Cash and due from banks | | $ | 95,168 | | | $ | 95,382 | | | $ | (214 | ) | | | (0.2 | )% |
| Federal funds sold | | | 1,256 | | | | 2,706 | | | | (1,450 | ) | | | (53.6 | ) |
| Interest-earning bank deposits | | | 4,431 | | | | 3,745 | | | | 686 | | | | 18.3 | |
| Securities available for sale | | | 897,762 | | | | 900,424 | | | | (2,662 | ) | | | (0.3 | ) |
| Loans held for sale | | | 13,691 | | | | 8,719 | | | | 4,972 | | | | 57.0 | |
| Portfolio loans Commercial and construction | | | 2,215,413 | | | | 1,616,944 | | | | 598,469 | | | | 37.0 | |
Mortgage(1) | | | 604,834 | | | | 650,001 | | | | (45,167 | ) | | | (6.9 | ) |
Consumer(1) | | | 709,628 | | | | 744,143 | | | | (34,515 | ) | | | (4.6 | ) |
| |
| Total portfolio loans | | | 3,529,875 | | | | 3,011,088 | | | | 518,787 | | | | 17.2 | |
| Allowance for loan losses | | | (35,854 | ) | | | (29,505 | ) | | | (6,349 | ) | | | 21.5 | |
| Unearned income | | | (6 | ) | | | (125 | ) | | | 119 | | | | (95.2 | ) |
| |
| Portfolio loans, net | | | 3,494,015 | | | | 2,981,458 | | | | 512,557 | | | | 17.2 | |
| Premises and equipment, net | | | 112,145 | | | | 107,298 | | | | 4,847 | | | | 4.5 | |
| Goodwill and other intangible assets | | | 84,010 | | | | 21,746 | | | | 62,264 | | | | 286.3 | |
| Other assets | | | 182,017 | | | | 159,939 | | | | 22,078 | | | | 13.8 | |
| |
Total Assets | | $ | 4,884,495 | | | $ | 4,281,417 | | | $ | 603,078 | | | | 14.1 | % |
| |
| | | | | | | | | | | | | | | | | |
Liabilities and Shareholders’ Equity: | | | | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | | | | |
| Noninterest-bearing demand | | $ | 476,122 | | | $ | 422,184 | | | $ | 53,938 | | | | 12.8 | % |
| Interest checking | | | 434,412 | | | | 376,840 | | | | 57,572 | | | | 15.3 | |
| Money market | | | 636,586 | | | | 587,516 | | | | 49,070 | | | | 8.4 | |
| Savings | | | 114,785 | | | | 123,552 | | | | (8,767 | ) | | | (7.1 | ) |
| Certificates of deposit | | | 1,659,461 | | | | 1,290,254 | | | | 369,207 | | | | 28.6 | |
| |
| Total deposits | | | 3,321,366 | | | | 2,800,346 | | | | 521,020 | | | | 18.6 | |
| Other borrowings | | | | | | | | | | | | | | | | |
| Retail | | | 77,998 | | | | 121,740 | | | | (43,742 | ) | | | (35.9 | ) |
| Wholesale short-term | | | 438,453 | | | | 339,201 | | | | 99,252 | | | | 29.3 | |
| Wholesale long-term | | | 527,778 | | | | 642,843 | | | | (115,065 | ) | | | (17.9 | ) |
| |
| Total other borrowings | | | 1,044,229 | | | | 1,103,784 | | | | (59,555 | ) | | | (5.4 | ) |
| Accrued expenses and other liabilities | | | 63,528 | | | | 46,606 | | | | 16,922 | | | | 36.3 | |
| |
| Total liabilities | | | 4,429,123 | | | | 3,950,736 | | | | 478,387 | | | | 12.1 | |
| Total shareholders’ equity | | | 455,372 | | | | 330,681 | | | | 124,691 | | | | 37.7 | |
| |
Total Liabilities and Shareholders’ Equity | | $ | 4,884,495 | | | $ | 4,281,417 | | | $ | 603,078 | | | | 14.1 | % |
| |
SELECTED AVERAGE BALANCES | | | | | | | | | | | | | | | | |
| Portfolio loans, net | | $ | 3,510,437 | | | $ | 2,939,233 | | | $ | 571,204 | | | | 19.4 | % |
| Loans held for sale | | | 11,431 | | | | 6,675 | | | | 4,756 | | | | 71.3 | |
| Securities, at cost | | | 926,970 | | | | 914,760 | | | | 12,210 | | | | 1.3 | |
| Earning assets | | | 4,463,162 | | | | 3,868,519 | | | | 594,643 | | | | 15.4 | |
| Assets | | | 4,871,083 | | | | 4,201,477 | | | | 669,606 | | | | 15.9 | |
| Noninterest-bearing demand | | | 446,801 | | | | 412,720 | | | | 34,081 | | | | 8.3 | |
| Demand | | | 399,557 | | | | 356,179 | | | | 43,378 | | | | 12.2 | |
| Money market deposits | | | 642,383 | | | | 575,601 | | | | 66,782 | | | | 11.6 | |
| Savings | | | 112,988 | | | | 120,096 | | | | (7,108 | ) | | | (5.9 | ) |
| Core deposits | | | 1,601,729 | | | | 1,464,596 | | | | 137,133 | | | | 9.4 | |
| Certificates of deposit | | | 1,649,408 | | | | 1,321,036 | | | | 328,372 | | | | 24.9 | |
| Deposits | | | 3,251,137 | | | | 2,785,632 | | | | 465,505 | | | | 16.7 | |
| Other borrowings | | | 1,113,191 | | | | 1,049,529 | | | | 63,662 | | | | 6.1 | |
| Interest-bearing liabilities | | | 3,917,527 | | | | 3,422,441 | | | | 495,086 | | | | 14.5 | |
| Shareholders’ equity | | | 451,835 | | | | 325,917 | | | | 125,918 | | | | 38.6 | |
| |
(1) At the beginning of the third quarter of 2006, approximately $93.9 million of consumer loans secured by real estate were transferred from the consumer loan category to the home equity ($13.5 million) and mortgage ($80.4 million) loan categories to make the balance sheet presentation more consistent with bank regulatory definitions. The balance sheet transfer had no effect on credit reporting, underwriting, reported results of operations, or liquidity. Prior period-end and average loan balances have been reclassified to conform with the current period presentation.
10
First Charter Corporation
Quarterly Earnings Release
| | | | | | | | | | | | | | | | | |
| |
| | | Quarter Ended | | | Increase (Decrease) | |
| (Dollars in thousands, except per share data) | | 3/31/07 | | | 3/31/06 | | | Amount | | | Percentage | |
| |
INCOME STATEMENT | | | | | | | | | | | | | | | | |
| Tax-equivalent interest income | | $ | 77,857 | | | $ | 60,232 | | | $ | 17,625 | | | | 29.3 | % |
| Interest expense | | | 40,479 | | | | 27,556 | | | | 12,923 | | | | 46.9 | |
| |
| Tax-equivalent net interest income | | | 37,378 | | | | 32,676 | | | | 4,702 | | | | 14.4 | |
| Provision for loan losses | | | 1,366 | | | | 1,519 | | | | (153 | ) | | | (10.1 | ) |
| |
| Tax-equivalent NII after provision for loan losses | | | 36,012 | | | | 31,157 | | | | 4,855 | | | | 15.6 | |
| Noninterest income | | | 19,566 | | | | 16,991 | | | | 2,575 | | | | 15.2 | |
| Noninterest expense | | | 35,920 | | | | 30,741 | | | | 5,179 | | | | 16.8 | |
| |
| Income from continuing operations before income taxes and tax-equivalent adjustment | | | 19,658 | | | | 17,407 | | | | 2,251 | | | | 12.9 | |
| Tax-equivalent adjustment | | | 643 | | | | 586 | | | | 57 | | | | 9.7 | |
| Income tax expense | | | 6,659 | | | | 5,668 | | | | 991 | | | | 17.5 | |
| |
| Income from continuing operations, net of tax | | | 12,356 | | | | 11,153 | | | | 1,203 | | | | 10.8 | |
| Income from discontinued operations, net of tax | | | — | | | | 90 | | | | (90 | ) | | | (100.0 | ) |
| |
Net income | | $ | 12,356 | | | $ | 11,243 | | | $ | 1,113 | | | | 9.9 | % |
| |
Effective tax rate(1) | | | 35.0 | % | | | 33.7 | % | | | | | | | | |
| |
PER COMMON SHARE | | | | | | | | | | | | | | | | |
Basic earnings per share | | | | | | | | | | | | | | | | |
| Income from continuing operations, net of tax | | $ | 0.36 | | | $ | 0.36 | | | $ | — | | | | — | % |
| Net income | | | 0.36 | | | | 0.36 | | | | — | | | | — | |
Diluted earnings per share | | | | | | | | | | | | | | | | |
| Income from continuing operations, net of tax | | $ | 0.35 | | | $ | 0.36 | | | $ | (0.01 | ) | | | (2.8 | )% |
| Net income | | | 0.35 | | | | 0.36 | | | | (0.01 | ) | | | (2.8 | ) |
Average shares | | | | | | | | | | | | | | | | |
| Basic | | | 34,770,106 | | | | 30,859,461 | | | | | | | | | |
| Diluted | | | 35,084,640 | | | | 31,153,338 | | | | | | | | | |
Cash dividends paid | | $ | 0.195 | | | $ | 0.190 | | | $ | 0.005 | | | | 2.6 | % |
| |
PERFORMANCE RATIOS | | | | | | | | | | | | | | | | |
Return on average assets(2) | | | 1.03 | % | | | 1.09 | % | | | | | | | | |
Return on average equity(2) | | | 11.09 | | | | 13.99 | | | | | | | | | |
Return on average tangible equity(3) | | | 13.90 | | | | 15.19 | | | | | | | | | |
Net interest margin(2) | | | 3.38 | | | | 3.40 | | | | | | | | | |
Efficiency(4) | | | 63.1 | | | | 61.9 | | | | | | | | | |
| |
SELECTED ITEMS INCLUDED IN EARNINGS | | | | | | | | | | | | | | | | |
Noninterest income | | | | | | | | | | | | | | | | |
| Securities gains (losses), net | | $ | (11 | ) | | $ | — | | | | | | | | | |
| Equity method investment gains (losses), net | | | 1,127 | | | | 545 | | | | | | | | | |
| Property sale gains, net | | | 63 | | | | 81 | | | | | | | | | |
Noninterest expense | | | | | | | | | | | | | | | | |
| Separation agreements | | | 58 | | | | 105 | | | | | | | | | |
| Merger-related costs | | | 237 | | | | — | | | | | | | | | |
| |
DISCONTINUED OPERATIONS | | | | | | | | | | | | | | | | |
| Noninterest income | | $ | — | | | $ | 965 | | | | | | | | | |
| Noninterest expense | | | — | | | | 817 | | | | | | | | | |
| |
| Income from discontinued operations | | | — | | | | 148 | | | | | | | | | |
| Gain on sale | | | — | | | | — | | | | | | | | | |
| Income tax expense | | | — | | | | 58 | | | | | | | | | |
| |
| Income from discontinued operations, net of tax | | $ | — | | | $ | 90 | | | | | | | | | |
| |
| (1) | | The effective tax rate includes the related effects of both continuing and discontinued operations. |
| |
| (2) | | Annualized. |
| |
| (3) | | Net income, excluding intangibles amortization expense, divided by average equity, excluding average goodwill and intangible assets. |
| |
| (4) | | Noninterest expense less debt extinguishment expense and derivative termination costs divided by the sum of tax-equivalent net interest income plus noninterest income less securities gains (losses), net. Excludes the results of discontinued operations. |
11
First Charter Corporation
Quarterly Earnings Release
| | | | | | | | | | | | | | | | | | | | | |
| |
| | | Quarter Ended | |
| (Dollars in thousands, except per share data) | | 3/31/07 | | | 12/31/06 | | | 9/30/06 | | | 6/30/06 | | | 3/31/06 | |
| |
INCOME STATEMENT | | | | | | | | | | | | | | | | | | | | |
Tax-equivalent interest income | | | | | | | | | | | | | | | | | | | | |
| Loans | | $ | 66,239 | | | $ | 63,764 | | | $ | 56,958 | | | $ | 54,167 | | | $ | 50,306 | |
| Securities | | | 11,440 | | | | 11,193 | | | | 10,528 | | | | 10,054 | | | | 9,851 | |
| Other | | | 178 | | | | 150 | | | | 148 | | | | 97 | | | | 75 | |
| |
| Tax-equivalent interest income | | | 77,857 | | | | 75,107 | | | | 67,634 | | | | 64,318 | | | | 60,232 | |
Interest expense | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | 26,541 | | | | 25,412 | | | | 22,131 | | | | 18,343 | | | | 16,562 | |
| Other | | | 13,938 | | | | 13,029 | | | | 11,996 | | | | 12,752 | | | | 10,994 | |
| |
| Total interest expense | | | 40,479 | | | | 38,441 | | | | 34,127 | | | | 31,095 | | | | 27,556 | |
| |
Tax-equivalent net interest income | | | 37,378 | | | | 36,666 | | | | 33,507 | | | | 33,223 | | | | 32,676 | |
| Provision for loan losses | | | 1,366 | | | | 1,486 | | | | 1,405 | | | | 880 | | | | 1,519 | |
| |
Tax-equivalent net interest income after provision for loan losses | | | 36,012 | | | | 35,180 | | | | 32,102 | | | | 32,343 | | | | 31,157 | |
Noninterest income | | | | | | | | | | | | | | | | | | | | |
| Service charges on deposits | | | 7,390 | | | | 7,442 | | | | 7,353 | | | | 7,469 | | | | 6,698 | |
| Wealth management | | | 716 | | | | 725 | | | | 729 | | | | 693 | | | | 700 | |
| Securities gains (losses), net | | | (11 | ) | | | — | | | | (5,860 | ) | | | 32 | | | | — | |
| Gain on sale of deposits and loans | | | — | | | | — | | | | 2,825 | | | | — | | | | — | |
| Equity method investment gains (losses), net | | | 1,127 | | | | 12 | | | | 3,415 | | | | 11 | | | | 545 | |
| Mortgage services | | | 901 | | | | 943 | | | | 784 | | | | 812 | | | | 523 | |
| Gain on sale of Small Business Administration loans | | | 377 | | | | 126 | | | | — | | | | — | | | | — | |
| Brokerage services | | | 1,081 | | | | 932 | | | | 847 | | | | 692 | | | | 711 | |
| Insurance services | | | 3,634 | | | | 3,160 | | | | 2,974 | | | | 2,898 | | | | 4,334 | |
| Bank-owned life insurance | | | 1,139 | | | | 1,123 | | | | 722 | | | | 850 | | | | 827 | |
| Property sale gains, net | | | 63 | | | | 49 | | | | 408 | | | | 107 | | | | 81 | |
| ATM, debit, and merchant fees | | | 2,444 | | | | 2,198 | | | | 2,182 | | | | 2,117 | | | | 1,898 | |
| Other | | | 705 | | | | 678 | | | | 628 | | | | 611 | | | | 674 | |
| |
| Total noninterest income | | | 19,566 | | | | 17,388 | | | | 17,007 | | | | 16,292 | | | | 16,991 | |
Noninterest expense | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 19,587 | | | | 19,628 | | | | 16,066 | | | | 16,343 | | | | 17,200 | |
| Occupancy and equipment | | | 4,612 | | | | 4,396 | | | | 4,217 | | | | 4,826 | | | | 4,705 | |
| Data processing | | | 1,790 | | | | 1,441 | | | | 1,469 | | | | 1,448 | | | | 1,410 | |
| Marketing | | | 1,351 | | | | 972 | | | | 1,255 | | | | 1,196 | | | | 1,288 | |
| Postage and supplies | | | 1,172 | | | | 1,191 | | | | 1,179 | | | | 1,282 | | | | 1,182 | |
| Professional services | | | 3,586 | | | | 2,210 | | | | 2,440 | | | | 2,258 | | | | 1,903 | |
| Telephone | | | 671 | | | | 561 | | | | 556 | | | | 513 | | | | 563 | |
| Amortization of intangibles | | | 223 | | | | 330 | | | | 115 | | | | 107 | | | | 102 | |
| Foreclosed properties | | | 153 | | | | 262 | | | | 21 | | | | 418 | | | | 54 | |
| Other | | | 2,775 | | | | 2,862 | | | | 2,337 | | | | 2,297 | | | | 2,334 | |
| |
| Total noninterest expense | | | 35,920 | | | | 33,853 | | | | 29,655 | | | | 30,688 | | | | 30,741 | |
| |
| Income from continuing operations before income taxes and tax-equivalent adjustment | | | 19,658 | | | | 18,715 | | | | 19,454 | | | | 17,947 | | | | 17,407 | |
| Tax-equivalent adjustment | | | 643 | | | | 651 | | | | 549 | | | | 576 | | | | 586 | |
| Income tax expense | | | 6,659 | | | | 5,962 | | | | 6,223 | | | | 5,946 | | | | 5,668 | |
| |
| Income from continuing operations, net of tax | | | 12,356 | | | | 12,102 | | | | 12,682 | | | | 11,425 | | | | 11,153 | |
| Income (loss) from discontinued operations, net of tax | | | — | | | | (87 | ) | | | — | | | | 30 | | | | 90 | |
| |
Net income | | $ | 12,356 | | | $ | 12,015 | | | $ | 12,682 | | | $ | 11,455 | | | $ | 11,243 | |
| |
Effective tax rate(1) | | | 35.0 | % | | | 36.3 | % | | | 32.9 | % | | | 34.3 | % | | | 33.7 | % |
| |
PER COMMON SHARE | | | | | | | | | | | | | | | | | | | | |
Basic earnings per share | | | | | | | | | | | | | | | | | | | | |
| Income from continuing operations, net of tax | | $ | 0.36 | | | $ | 0.36 | | | $ | 0.41 | | | $ | 0.37 | | | $ | 0.36 | |
| Net income | | | 0.36 | | | | 0.36 | | | | 0.41 | | | | 0.37 | | | | 0.36 | |
Diluted earnings per share | | | | | | | | | | | | | | | | | | | | |
| Income from continuing operations, net of tax | | $ | 0.35 | | | $ | 0.36 | | | $ | 0.40 | | | $ | 0.37 | | | $ | 0.36 | |
| Net income | | | 0.35 | | | | 0.36 | | | | 0.40 | | | | 0.37 | | | | 0.36 | |
Cash dividends paid | | | 0.195 | | | | 0.195 | | | | 0.195 | | | | 0.195 | | | | 0.190 | |
| |
| (1) | | The effective tax rate includes the related effects of both continuing and discontinued operations. |
12
First Charter Corporation
Quarterly Earnings Release
| | | | | | | | | | | | | | | | | | | | | |
| |
| | | Quarter Ended | |
| (Dollars in thousands, except per share data) | | 3/31/07 | | | 12/31/06 | | | 9/30/06 | | | 6/30/06 | | | 3/31/06 | |
| |
PERFORMANCE RATIOS | | | | | | | | | | | | | | | | | | | | |
Return on average assets(1) | | | 1.03 | % | | | 1.02 | % | | | 1.16 | % | | | 1.07 | % | | | 1.09 | % |
Return on average equity(1) | | | 11.09 | | | | 11.69 | | | | 14.76 | | | | 13.80 | | | | 13.99 | |
Return on average tangible equity(1) (2) | | | 13.90 | | | | 14.27 | | | | 15.98 | | | | 14.97 | | | | 15.19 | |
Net interest margin(1) | | | 3.38 | | | | 3.40 | | | | 3.33 | | | | 3.36 | | | | 3.40 | |
Efficiency(3) | | | 63.1 | | | | 62.6 | | | | 52.6 | | | | 62.0 | | | | 61.9 | |
Noninterest income as a percentage of total revenue(4) | | | 34.36 | | | | 32.17 | | | | 33.67 | | | | 32.90 | | | | 34.21 | |
| Equity as a percentage of total assets | | | 9.32 | | | | 9.21 | | | | 7.97 | | | | 7.66 | | | | 7.72 | |
Tangible equity as a percentage of total tangible assets(5) | | | 7.74 | | | | 7.59 | | | | 7.51 | | | | 7.19 | | | | 7.25 | |
| Leverage capital | | | 9.10 | | | | 9.32 | | | | 9.19 | | | | 9.17 | | | | 9.14 | |
Tier 1 capital | | | 10.85 | | | | 10.49 | | | | 11.19 | | | | 11.20 | | | | 11.22 | |
| Total risk-based capital | | | 11.74 | | | | 11.35 | | | | 12.04 | | | | 12.04 | | | | 12.08 | |
| |
SELECTED ITEMS INCLUDED IN EARNINGS | | | | | | | | | | | | | | | | | | | | |
Noninterest income | | | | | | | | | | | | | | | | | | | | |
| Securities gains (losses), net | | $ | (11 | ) | | $ | — | | | $ | (5,860 | ) | | $ | 32 | | | $ | — | |
| Gain on sale of deposits and loans | | | — | | | | — | | | | 2,825 | | | | — | | | | — | |
| Equity method investment gains (losses), net | | | 1,127 | | | | 12 | | | | 3,415 | | | | 11 | | | | 545 | |
| Property sale gains, net | | | 63 | | | | 49 | | | | 408 | | | | 107 | | | | 81 | |
| Bank-owned life insurance | | | — | | | | — | | | | (271 | ) | | | — | | | | — | |
Noninterest expense | | | | | | | | | | | | | | | | | | | | |
| Separation agreements | | | 58 | | | | 228 | | | | 342 | | | | — | | | | 105 | |
| Merger-related costs | | | 237 | | | | 302 | | | | — | | | | — | | | | — | |
| Accelerated vesting of stock options | | | — | | | | 665 | | | | — | | | | — | | | | — | |
| |
DISCONTINUED OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Noninterest income | | $ | — | | | $ | 444 | | | $ | 759 | | | $ | 844 | | | $ | 965 | |
| Noninterest expense | | | — | | | | 606 | | | | 759 | | | | 794 | | | | 817 | |
| |
| Income (loss) from discontinued operations | | | — | | | | (162 | ) | | | — | | | | 50 | | | | 148 | |
| Gain on sale | | | — | | | | 962 | | | | — | | | | — | | | | — | |
| Income tax expense | | | — | | | | 887 | | | | — | | | | 20 | | | | 58 | |
| |
| Income (loss) from discontinued operations, net of tax | | $ | — | | | $ | (87 | ) | | $ | — | | | $ | 30 | | | $ | 90 | |
| |
| (1) | | Annualized. |
| |
| (2) | | Net income, excluding intangibles amortization expense, divided by average equity, excluding average goodwill and intangible assets. |
| |
| (3) | | Noninterest expense less debt extinguishment expense and derivative termination costs divided by the sum of tax-equivalent net interest income plus noninterest income less securities gains (losses), net. Excludes the results of discontinued operations. |
| |
| (4) | | Total revenue equals tax-equivalent net income plus noninterest income. Excludes the results of discontinued operations. |
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| (5) | | Excludes goodwill and other intangible assets. |
13
First Charter Corporation
Quarterly Earnings Release
| | | | | | | | | | | | | | | | | | | | | |
| |
| | | As of / Quarter Ended | |
| (Dollars in thousands) | | 3/31/07 | | | 12/31/06 | | | 9/30/06 | | | 6/30/06 | | | 3/31/06 | |
| |
ASSET QUALITY | | | | | | | | | | | | | | | | | | | | |
Allowance for Loan Losses | | | | | | | | | | | | | | | | | | | | |
| Beginning balance | | $ | 34,966 | | | $ | 29,919 | | | $ | 29,520 | | | $ | 29,505 | | | $ | 28,725 | |
| Allowance of acquired company | | | — | | | | 4,211 | | | | — | | | | — | | | | — | |
| Provision for loan losses | | | 1,366 | | | | 1,486 | | | | 1,405 | | | | 880 | | | | 1,519 | |
| Charge-offs | | | (786 | ) | | | (907 | ) | | | (1,307 | ) | | | (1,135 | ) | | | (1,229 | ) |
| Recoveries | | | 308 | | | | 257 | | | | 301 | | | | 270 | | | | 490 | |
| |
| Net charge-offs | | | (478 | ) | | | (650 | ) | | | (1,006 | ) | | | (865 | ) | | | (739 | ) |
| |
| Ending balance | | $ | 35,854 | | | $ | 34,966 | | | $ | 29,919 | | | $ | 29,520 | | | $ | 29,505 | |
| |
Nonperforming Assets | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual loans | | $ | 10,943 | | | $ | 8,200 | | | $ | 7,090 | | | $ | 7,763 | | | $ | 9,211 | |
| Loans 90 days or more past due accruing interest | | | — | | | | — | | | | — | | | | — | | | | — | |
| |
| Total nonperforming loans | | | 10,943 | | | | 8,200 | | | | 7,090 | | | | 7,763 | | | | 9,211 | |
| Other real estate | | | 6,330 | | | | 6,477 | | | | 5,601 | | | | 5,902 | | | | 6,072 | |
| |
| Total nonperforming assets | | $ | 17,273 | | | $ | 14,677 | | | $ | 12,691 | | | $ | 13,665 | | | $ | 15,283 | |
| |
Asset Quality Ratios | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual loans as a percentage of total portfolio loans | | | 0.31 | % | | | 0.24 | % | | | 0.23 | % | | | 0.25 | % | | | 0.31 | % |
| Nonperforming assets as a percentage of total assets | | | 0.35 | | | | 0.30 | | | | 0.29 | | | | 0.31 | | | | 0.36 | |
| Nonperforming assets as a percentage of total portfolio loans and other real estate | | | 0.49 | | | | 0.42 | | | | 0.41 | | | | 0.44 | | | | 0.51 | |
Net charge-offs as a percentage of average portfolio loans(1) | | | 0.06 | | | | 0.08 | | | | 0.13 | | | | 0.11 | | | | 0.10 | |
| Allowance for loan losses as a percentage of portfolio loans | | | 1.02 | | | | 1.00 | | | | 0.97 | | | | 0.96 | | | | 0.98 | |
| Ratio of allowance for loan losses to: | | | | | | | | | | | | | | | | | | | | |
Net charge-offs(1) | | | 18.50 | x | | | 13.56 | x | | | 7.50 | x | | | 8.51 | x | | | 9.84 | x |
| Nonaccrual loans | | | 3.28 | | | | 4.26 | | | | 4.22 | | | | 3.80 | | | | 3.20 | |
| |
| | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended | |
| | | 3/31/07 | | | 12/31/06 | | | 9/30/06 | | | 6/30/06 | | | 3/31/06 | |
| |
YIELDS / RATES(1) | | | | | | | | | | | | | | | | | | | | |
Interest income | | | | | | | | | | | | | | | | | | | | |
| Loans and loans held for sale | | | 7.62 | % | | | 7.56 | % | | | 7.35 | % | | | 7.17 | % | | | 6.91 | % |
| Securities | | | 4.95 | | | | 4.84 | | | | 4.56 | | | | 4.37 | | | | 4.31 | |
| |
| Yield on earning assets | | | 7.05 | | | | 6.96 | | | | 6.70 | | | | 6.51 | | | | 6.29 | |
Interest expense | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits | | | 3.84 | | | | 3.73 | | | | 3.47 | | | | 3.11 | | | | 2.83 | |
| Retail borrowings | | | 2.92 | | | | 2.82 | | | | 1.94 | | | | 2.81 | | | | 2.44 | |
| Wholesale borrowings | | | 5.27 | | | | 5.11 | | | | 5.11 | | | | 4.88 | | | | 4.50 | |
| |
| Cost of total borrowings | | | 5.08 | | | | 4.90 | | | | 4.83 | | | | 4.61 | | | | 4.25 | |
| |
| Cost of interest-bearing liabilities | | | 4.19 | | | | 4.06 | | | | 3.85 | | | | 3.59 | | | | 3.27 | |
| |
| Interest rate spread | | | 2.86 | | | | 2.90 | | | | 2.85 | | | | 2.92 | | | | 3.02 | |
| |
| Net yield on earning assets | | | 3.38 | % | | | 3.40 | % | | | 3.33 | % | | | 3.36 | % | | | 3.40 | % |
| |
14
