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For Additional Information,
Contact Robert O. Bratton, Chief Financial Officer
(704) 721-4473
or
David E. Keul, Controller
(704) 721-4482
FOR IMMEDIATE RELEASE
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January 13, 1999
FIRST CHARTER CORPORATION ANNOUNCES INCREASED
ANNUAL AND FOURTH QUARTER RECURRING EARNINGS
Concord, North Carolina -- First Charter Corporation (NASDAQ: FCTR) reported
today that recurring 1998 earnings totaled $23.0 million, or $1.24 per diluted
share, up 22.4% from recurring 1997 earnings of $18.8 million, or $1.00 per
diluted share. These results cover the combined operations of First Charter and
HFNC Financial Corp. (HFNC), which merged into First Charter effective September
30. HFNC was the holding company for Charlotte-based Home Federal Savings and
Loan Association. These results exclude the nonrecurring merger costs, which
were partially offset by nonrecurring securities gains recorded by HFNC and
amounted to net after-tax charges of $13.8 million, or $0.74 per diluted share,
in 1998. The 1997 results exclude costs related to First Charter's merger with
Carolina State Bank. These amounts also were offset by nonrecurring securities
gains recorded by HFNC, and amounted to a net after-tax gain of $384,000, or
$0.03 per diluted share. Each acquisition was accounted for as a pooling of
interests; accordingly, all prior periods' financial data have been restated to
combine the operations of both merged companies with those of First Charter
Corporation.
Total assets at December 31, 1998 amounted to $1.9 billion, up 11.5% from $1.7
billion at December 31, 1997. Net loans increased 12.9% during the year to $1.4
billion, while total deposits increased 6.0% to $1.1 billion from December 31,
1997. First Charter's 1998 results, excluding the nonrecurring charges and
gains, produced a return on average assets of 1.29% and a return on average
equity of 9.17%, compared to prior year ratios of 1.18% and 7.32%, respectively.
Including the nonrecurring items, the return on average assets and average
equity for 1998 amounted to 0.52% and 3.68%, respectively, compared to 1.21% and
7.47%, respectively, in 1997.
President and Chief Executive Officer Lawrence M. Kimbrough noted that "First
Charter is located in one of the most dynamic markets in the country,
encompassing the greater Charlotte metropolitan area. We have invested
aggressively in the technology and personnel needed to provide exceptional
service to our business and individual customers. Our goal in 1999 will be to
focus attention on why First Charter is both different from and better than the
competition. We want everyone to know that we can meet all of their financial
needs and that we offer fast, flexible service in an intimate, customer-oriented
atmosphere".
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During the fourth quarter of 1998, First Charter earned $5.9 million, compared
to recurring earnings of $4.7 million in 1997, an increase of 24.4%. Income per
diluted share during the period was $0.32, compared to $0.25 in 1997. The
results for the fourth quarter of 1997 exclude net nonrecurring charges of $1.7
million, or $0.09 per diluted share, primarily related to the Carolina State
Bank merger. There were no nonrecurring gains or charges in the fourth quarter
of 1998.
Total shareholders' equity was $246.0 million at December 31, 1998, which
represents a book value per share of $13.34 and an equity-to-assets ratio of
13.2%. Based on the $17.25 closing price of First Charter Corporation common
stock at December 31, 1998, the Corporation had a market capitalization of
$318.1 million.
First Charter Corporation is a multi-bank holding company whose principal assets
are First Charter National Bank and Home Federal Savings and Loan Association.
Through these subsidiaries, First Charter operates 32 branch offices throughout
the greater Charlotte metropolitan region. First Charter offers a full range of
retail and commercial banking services, comprehensive financial planning,
discount brokerage services, mortgage loans, personal and commercial insurance
products and the administration of a full array of employee benefit programs.
The common stock of First Charter Corporation is traded on the NASDAQ National
Market under the symbol "FCTR". For information, contact: Dean Witter Reynolds,
Inc., Interstate/Johnson Lane Corporation, Legg Mason Wood Walker Inc., Trident
Securities, Sandler O'Neill & Partners, or Wheat, First Securities, Inc.
This news release contains forward-looking statements. Such statements are
subject to certain factors which may cause the company's results to vary from
those expected, including the risks set forth from time to time in the company's
filings with the Securities and Exchange Commission. Readers are cautioned not
to place undue reliance on these forward-looking statements, which reflect
management's judgment only as of the date hereof. The company undertakes no
obligation to publicly revise these forward-looking statements to reflect events
and circumstances that arise after the date hereof.
(See selected financial information attached)
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First Charter Corporation and Subsidiaries
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Consolidated Balance Sheets
(UNAUDITED)
December 31, December 31,
(Dollars in thousands) 1998 1997
---------- ----------
ASSETS:
Cash and due from banks ......................... $ 41,884 $ 35,392
Interest bearing bank deposits .................. 11,713 15,143
Federal funds sold .............................. 6,402 8,195
Securities available for sale ................... 331,799 315,565
Loans, net ...................................... 1,406,967 1,246,228
Other assets .................................... 65,592 52,118
---------- ----------
Total assets ............................. $1,864,357 $1,672,641
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Total deposits .................................. $1,123,035 $1,059,262
Other borrowings ................................ 469,944 350,079
Other liabilities ............................... 25,406 19,391
---------- ----------
Total liabilities ........................ 1,618,385 1,428,732
Total shareholders' equity ............... 245,972 243,909
---------- ----------
Total liabilities and shareholders' equity $1,864,357 $1,672,641
========== ==========
Consolidated Statements of Income
(UNAUDITED)
For the Three Months Ended For the Year Ended
----------------------------- -------------------------------
December 31, December 31, December 31, December 31,
(Dollars in thousands, except per share data) 1998 1997 1998 1997
------------ ------------ ------------ ------------
Total interest income .................. $ 34,606 $ 31,844 $ 136,509 $ 123,130
Total interest expense ................. 18,013 16,248 70,623 62,827
----------- ------------ ------------ -----------
Net interest income ................. 16,593 15,596 65,886 60,303
Provision for loan losses .............. 459 955 2,376 2,684
----------- ------------ ------------ -----------
Net interest income after provision
for loan losses ................... 16,134 14,641 63,510 57,619
Total noninterest income ............... 3,173 2,991 12,742 10,249
Total noninterest expense .............. 10,173 10,490 40,973 39,410
----------- ------------ ------------ -----------
Income before income taxes .......... 9,134 7,142 35,279 28,458
Income taxes on recurring income ....... 3,254 2,416 12,276 9,671
----------- ------------ ------------ -----------
Net income, recurring ............... 5,880 4,726 23,003 18,787
Nonrecurring gains (charges), net of tax -- (1,650) (13,767) 384
----------- ------------ ------------ -----------
Net income .......................... $ 5,880 $ 3,076 $ 9,236 $ 19,171
=========== ============ ============ ===========
Basic income per share data:
Net income, recurring ............... $ 0.32 $ 0.26 $ 1.26 $ 1.03
=========== ============ ============ ===========
Net income .......................... $ 0.32 $ 0.17 $ 0.51 $ 1.06
=========== ============ ============ ===========
Average common equivalent shares .... 18,433,665 18,303,382 18,273,281 18,154,131
Diluted income per share data:
Net income, recurring ............... $ 0.32 $ 0.25 $ 1.24 $ 1.00
=========== ============ ============ ===========
Net income .......................... $ 0.32 $ 0.16 $ 0.50 $ 1.03
=========== ============ ============ ===========
Average common equivalent shares .... 18,484,993 18,848,687 18,571,805 18,697,448
Cash dividends declared (1) ............ $ 0.17 $ 0.13 $ 0.60 $ 0.51
=========== ============ ============ ===========
Book value ............................. $ 13.34 $ 12.79 $ 13.34 $ 12.79
=========== ============ ============ ===========
(1) Dividends paid for the year ended December 31, 1997 excludes a special
dividend of $5.00 per share paid to HFNC Financial Corp shareholders in
March, 1997.
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First Charter Corporation and Subsidiaries
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Selected Average Balances
(UNAUDITED)
For the Three Months Ended For the Year Ended
---------------------------- ----------------------------
December 31, December 31, December 31, December 31,
1998 1997 1998 1997
------------ ------------ ------------ ------------
(Dollars in thousands)
Interest earning assets .... $1,732,133 $1,541,220 $1,687,138 $1,509,279
Interest bearing liabilities 1,467,327 1,264,976 1,411,584 1,217,549
Average assets ............. 1,842,272 1,620,994 1,780,545 1,585,431
Average equity ............. 247,147 243,626 250,895 256,715
Allowance for Loan Losses
(UNAUDITED)
December 31, December 31,
1998 1997
------------ ------------
(Dollars in thousands)
Beginning balance (January 1) .. $ 15,263 $ 14,140
Provision charged to operations 2,376 2,684
Adjustment for merged bank .... -- 269
Charge-offs ..................... (2,737) (2,261)
Less loan recoveries ............ 652 431
-------- --------
Net loan charge-offs .......... (2,085) (1,830)
-------- --------
Ending balance .................. $ 15,554 $ 15,263
======== ========
Asset Quality Ratios
(UNAUDITED)
December 31, December 31,
1998 1997
------------ ------------
Nonaccruals to gross loans, excluding
loans held for sale ............................. 0.40% 0.49%
Net charge-offs to average loans .................. 0.15% 0.16%
Allowance for loan losses to gross loans, excluding
loans held for sale ............................. 1.10% 1.21%
Significant Operating Ratios
(UNAUDITED)
December 31, December 31,
1998 1997
------------ ------------
Gross loans to total deposits . 126.67% 119.09%
Return on average assets ...... 0.52% 1.21%
excluding nonrecurring items 1.29% 1.18%
Return on average equity ...... 3.68% 7.47%
excluding nonrecurring items 9.17% 7.32%