FIRST CHARTER - HFNC FINANCIAL MERGER
SUPPLEMENTARY MATERIALS
Certain statements made by the management of First Charter
Corporation in these materials are not statements of historical
fact, but are "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995.
These "forward-looking statements" involve risks and
uncertainties which may cause actual results to differ materially
from those in such statements.
Factors that could cause actual results to differ materially from
those contemplated by such forward-looking statements include,
among others, the following possibilities:
(1) Expected cost savings from the merger cannot be realized or
realized within the expected time frame
(2) Revenues following the merger are lower than expected
(3) Competitive pressure among financial services companies
increases significantly
(4) Costs or difficulties related to the integration of First
Charter and HFNC Financial are greater than expected
(5) Changes in the interest rate environment reduce interest
margins
(6) General economic conditions, internationally, nationally,
and in North Carolina, are less favorable than expected
(7) Legislation or regulatory requirements or changes adversely
affect the businesses in which the combined company would be
engaged.
HFNC Financial Corp. (FIRST
CHARTER logo)
HFNC FINANCIAL OVERVIEW
o Parent company for Home Federal Savings and Loan Association
o Completed conversion to stock ownership in December of 1995
o Ten offices located in the Charlotte market
o Financial Highlights:
Assets: $980 Million
Loans, net: 790
Deposits: 432
Equity: 169
Return on Assets: 1.34 %
Return on Equity: 7.54
o Loan Portfolio Highlights:
1-4 Family Mortgages / Loans: 81.04 %
Non-performing Assets / Assets: 0.73
Reserves / Loans: 0.89
Data as of or for the three months ended 3/31/98, as reported.
HFNC Financial Corp. (FIRST
CHARTER logo)
FIRST CHARTER OVERVIEW
o Parent company for First Charter National Bank and Bank of Union
o Diversified community financial services company serving consumers
and businesses in Greater Charlotte through 23 locations
o Two major prior acquisitions:
Carolina State Bank, completed in 1997
Bank of Union, completed in 1995
o Consistent top-tier financial performance
o Financial Highlights:
Assets: $776 Million
Loans, net: 541
Deposits: 636
Equity: 81
Return on Assets: 1.62 %
Return on Equity: 15.20
Net Interest Margin: 5.25
Data as of or for the three months ended 3/31/98, as reported.
o Long-Term Financial Highlights
Average ROA 1993 - 1997 1.54 %
Annual EPS Growth 1993 - 1997 18.18
Data as of or for the five fiscal years ended 12/31/97, and exclude
all non-recurring charges.
HFNC Financial Corp. (FIRST
CHARTER logo)
FIRST CHARTER CORPORATION PRO FORMA FRANCHISE
(map appears here with plot points)
ROWAN (one-square)
CABARRUS - Concord (nine-squares)
MECKLENBURG - Charlotte (nine-circles) (five-squares)
UNION - Monroe (four-squares)
CLEVELAND - Shelby (four-squares)
RUTHERFORD (one-square)
(circle) HOME FEDERAL OFFICES PRO FORMA FINANCIAL HIGHLIGHTS
(square) FIRST CHARTER OFFICES
33 OFFICES IN 6 COUNTIES
Assets: # 1.8 Billion
Deposits: 1.1
Loans: 1.3
Market Value: 472.7 Million
HFNC Financial Corp. (FIRST
CHARTER logo)
PRO FORMA CHARLOTTE MSA MARKET SHARE
- ----------------------------------------------------------------------------------------------------------------------------------
MARKET
NUMBER TOTAL SHARE OF
INST OF DEPOSITS MSA
RANK INSTITUTION TYPE BRANCHES ($000S) (%)
- --------- ----------------------------------------- --------- ------------- ---------------- -------------
1 FIRST UNION CORP. Bank 80 6,756,734 37.96
2 BANKAMERICA CORP. Bank 74 2,227,692 12.51
3 BB&T CORP. Bank 89 1,968,577 11.06
4 WACHOVIA CORP. Bank 42 1,682,269 9.45
5 CCB FINANCIAL CORP. Bank 50 1,153,163 6.48
- ----------------------------------------------------------------------------------------------------------------------------------
6 FIRST CHARTER CORP. - PRO FORMA BANK 29 917,710 5.16
- ---------------------------------------------------------------------------------------------------------------------------------
7 FIRST CITIZENS BANCSHARES Bank 35 668,295 3.75
8 SOUTHTRUST CORP. Bank 21 437,982 2.46
9 CAROLINA FIRST BANCSHARES Bank 20 368,578 2.07
10 TRIANGLE BANCORP INC. Bank 3 196,857 1.11
11 F & M FINANCIAL CORP. Bank 8 184,850 1.04
12 CENTURA BANKS INC. Bank 15 160,122 0.90
13 GASTON FS & LA Thrift 4 147,704 0.83
14 CITIZENS SAVINGS BANK SALISBURY SB 2 107,386 0.60
15 FIRST FS&LA OF LINCOLNTON Thrift 1 92,484 0.52
TOTALS 518 17,801,314 100.00
Source: SNL Securities.
Data as of 6/97.
HFNC Financial Corp. (FIRST
CHARTER logo)
PRO FORMA FINANCIAL DATA
FIRST CHARTER
FIRST CHARTER HFNC CORP. PRO FORMA
------------------ ----------------- -----------------
SELECTED BALANCE SHEET ITEMS
Assets $776 $980 $1,755
Equity 81 169 250
Loans (gross) 549 797 1,346
Deposits 636 432 1,068
Market Capitalization $232 $235 $473
SELECTED BALANCE SHEET RATIOS
Loans / Deposits 86.30 % 184.55 % 126.05 %
Equity / Assets 10.46 17.24 14.25
Loans / Assets 70.73 81.40 76.68
SELECTED ASSET QUALITY RATIOS
Nonperforming assets $4.1 $7.2 $11.3
Reserves 8.1 7.1 15.2
NPAs / Assets 0.53 % 0.73 % 0.64 %
Reserves / NPAs 196.50 98.43 134.11
Reserves / Loans 1.47 0.89 1.13
Source: Company press releases, SNL Securities. Data exclude merger charges.
Stock market information.
HFNC Financial Corp. (FIRST
CHARTER logo)
COMBINATION HIGHLIGHTS
TRANSFORMATION FROM A THRIFT TO A BANK
GOALS:
o Leverage balance sheet into commercial lending
o Increase fee income
o Reduce expenses
ACTIONS:
o Hire experienced commercial lenders
o Cross-sell a full array of financial services
o Consolidate operations
IMPACT TO SHAREHOLDERS
o Net expense savings in excess of 40%, fully phased by end of 1999
o Expected to be accretive to EPS by 1999
o Book value increased by 50%
o Significant capital for long-term growth
HFNC Financial Corp. (FIRST
CHARTER logo)