First Charter Announces 35 Percent Increase in Fourth Quarter EPS; 2002 Earnings Increase to $39.8 Million, or $1.30 per Share.Business Editors CHARLOTTE, N.C.--(BUSINESS WIRE)--Jan. 14, 2003 First Charter Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : FCTR FCTR First Charter Corporation (stock symbol) FCTR Federal Cash Transactions Report FCTR Forced Call Termination Rate ) reported today fourth quarter diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.35, a 35 percent increase from diluted earnings per share of $0.26 in the fourth quarter of 2001. Earnings for the fourth quarter amounted to $10.6 million compared to $8.2 million in the fourth quarter of 2001, an increase of 29 percent or $2.4 million. For the full year, First Charter reported diluted earnings per share of $1.30, a 16 percent increase from diluted earnings per share of $1.12 for 2001. Earnings for the full year amounted to $39.8 million compared to $35.3 million for 2001, an increase of 13 percent or $4.5 million. During the fourth quarter of 2002 the Corporation adopted SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 147, which eliminated goodwill amortization for 2002 on certain acquisition of branches. This resulted in the reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its of $716,000 ($520,000 or $0.02 diluted earnings per share, after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. ) of amortization for the nine months ended September September: see month. 30, 2002. Fourth quarter 2002 earnings were also positively impacted by $239,000 ($173,000 or $0.01 diluted earnings per share, after-tax) due to the adoption of SFAS No. 147. "First Charter is pleased to report increased earnings for the fourth quarter of 2002 as we continued to grow loans and deposits," commented President and Chief Executive Officer Lawrence Lawrence. 1 City (1990 pop. 26,763), Marion co., central Ind., a residential suburb of Indianapolis, on the West Fork of the White River. It has light manufacturing. 2 City (1990 pop. 65,608), seat of Douglas co., NE Kans. M. Kimbrough Kimbrough may refer to: People
Fourth Quarter 2002 Highlights (compared to fourth quarter 2001) -- Net interest income increased 5 percent. -- Noninterest income increased 46 percent or $5.1 million. -- Noninterest expense increased $2.9 million. -- Customer satisfaction scores increased from 72 percent to 83 percent "Very Satisfied". -- First Charter launched CHAMP, a strategy for developing new customer relationships. -- Deposits increased 7 percent to $2.32 billion. -- The Corporation continued its share repurchase program, with the repurchase and retirement of 111,000 shares in the fourth quarter of 2002. Full Year 2002 Highlights (compared to full year 2001) -- Net interest income increased 7 percent. -- Noninterest income increased 23 percent or $8.9 million. -- Noninterest expense increased 12 percent. -- Loans and loans held for sale increased 14 percent to $2.2 billion. -- Demand and savings account Savings Account A deposit account intended for funds that are expected to stay in for the short term. A savings account offers lower returns than the market rates. Notes: balances increased 10 percent. -- Dividends paid increased for the 11th consecutive year. -- The Corporation repurchased and retired 809,600 shares under its share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program. -- Return on average equity increased 110 basis points.
Financial Highlights
For the Three Months For the Years Ended
Ended Dec. 31 Ended Dec. 31
-------------------- -------------------
(Dollars in thousands, 2002 2001 2002 2001
except per share data)
----------------------------------------------------------------------
Earnings
Total revenues $44,317 $37,997 $160,792 $144,137
Net income 10,549 8,150 39,803 35,325
Diluted earnings per share 0.35 0.26 1.30 1.12
Return on average assets 1.14% 1.00% 1.13% 1.14%
Return on average equity 12.57 9.88 12.13 11.03
Efficiency-taxable equivalent
ratio 70.17 66.16 64.74 60.97
As of Dec. 31 Increase (Decrease)
-------------------- --------------------
2002 2001 Amount Percentage
----------------------------------------------------------------------
Balance Sheet
Loans held for sale $158,404 $7,334 $151,070 2,059.86%
Loans, net 2,045,266 1,921,718 123,548 6.43
Investments 1,129,212 1,076,324 52,888 4.91
Total assets 3,745,949 3,332,737 413,212 12.40
Demand, savings and
money market deposits 1,027,459 941,693 85,766 9.11
Total deposits 2,322,647 2,162,945 159,702 7.38
Other borrowings 1,042,440 808,512 233,928 28.93
Shareholders' equity 324,686 309,341 15,345 4.96
For the Three Months For the Years
Ended Dec. 31 Ended Dec. 31
-------------------- -------------------
2002 2001 2002 2001
----------------------------------------------------------------------
Asset Quality Ratios (1)
Nonaccrual loans as a
percentage of total loans 1.28% 1.22% 1.28% 1.22%
Allowance for loan losses as
a percentage of loans 1.31 1.33 1.31 1.33
Net charge-offs as a
percentage of average loans 0.36 0.72 0.29 0.33
Nonperforming assets as a
percentage of total loans
and other real estate 1.76 1.63 1.76 1.63
(1) Ratios exclude loans held for sale.
Net Interest Income/Margin Fourth Quarter Net interest income increased 5 percent to $28.0 million. Net interest income increased primarily due to an increase in average earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin and a decrease in interest expense. The decrease in interest expense was due to the lower cost of funding in a declining interest rate environment. The net interest margin decreased to 3.32 percent in the fourth quarter of 2002 from 3.62 percent for the same period in 2001. This decrease was driven by the continued effects of the 475 basis point reduction in the prime rate during 2001 and the 50 basis point reduction during the fourth quarter of 2002. This significantly reduced the net interest margin due to the asset sensitive nature of the balance sheet. In addition, assets added to the balance sheet during 2002 have been added at rates below the weighted average yield of assets previously on the balance sheet. Year-to-Date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. Net interest income increased $7.8 million to $113.2 million. Net interest income increased primarily due to an increase in average earning assets and a decrease in interest expense due to the lower cost of funding in a declining interest rate environment. The net interest margin for 2002 decreased to 3.52 percent from 3.72 percent in 2001. As noted above, the asset sensitive nature of the balance sheet has led to this decrease. Noninterest Income Fourth Quarter Noninterest income increased 46 percent to $16.3 million. The increase was primarily due to the active management of our securities portfolio. In addition, noninterest income was positively impacted by increases in mortgage loan fees, service charges on deposit accounts, brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. revenues, financial management income and insurance services income. These improvements were partially offset by lower trading gains and the write down on mortgage servicing Mortgage servicing The collection of monthly payments and penalties, record keeping, payment of insurance and taxes, and possible settlement of default , involved with a mortgage loan. rights due to the increased rate of prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. in the current low interest rate environment. Year-to-Date Noninterest income increased 23 percent to $47.6 million. The primary drivers of this increase were gains on the sale of securities of $11.5 million and increases in service charges on deposit accounts. In addition, noninterest income was positively impacted by a $1.0 million gain on the sale of excess bank property, increases in brokerage revenues and insurance services income. Net losses of $5.8 million from equity method investments and decreased mortgage fee income offset a portion of these increases. While First Charter has experienced record mortgage loan volume during 2002, a portion of mortgage loans originated has been retained by the bank to replace normal amortization and run-off run-off n (in contest, election) → desempate m (= extra race); carrera de desempate run-off n (in contest, election) → due to refinancings. By placing these mortgage loans on the balance sheet, the mortgage fee income is recognized over the life of the loan versus at the time of sale as in prior periods. First Charter'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 December December: see month. 31, 2002, the total book value in equity method investments was $3.7 million and the remaining commitment to fund equity method investments was $1.8 million. Due to the nature of these investments, further volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the in fair value may occur. Noninterest Expense Fourth Quarter Noninterest expense increased $2.9 million compared to the fourth quarter of 2001. The increase was primarily due to $3.3 million of prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. costs associated with the refinancing Refinancing An extension and/or increase in amount of existing debt. of $100 million of the Corporation's fixed-term advances and the reserve for a contingent liability Contingent Liability 1. The possibility of an obligation to pay certain sums dependent on future events. 2. Defined obligations by a company that must be met, but the probability of payment is minimal. Notes: 1. of $840,000. Noninterest expense was positively impacted by $239,000 due to the adoption of SFAS No. 147, which eliminated goodwill amortization for 2002 on certain acquisitions of branches. Excluding the costs of the debt prepayment and the offsetting effects of eliminating goodwill amortization, noninterest expense was essentially unchanged mainly due to the Corporation's expense control efforts. Year-to-Date Noninterest expense increased 12 percent to $97.8 million. The major contributing factors to this increase were costs associated with the debt prepayment, the reserve for a contingent liability, additional personnel, increased incentive compensation based on increases in certain noninterest income categories and increased occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy and equipment depreciation expense attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the First Charter Center which was placed into service during April of 2001. In addition, 2002 results reflect the depreciation and data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a costs associated with the implementation of a new operating system operating system (OS) Software that controls the operation of a computer, directs the input and output of data, keeps track of files, and controls the processing of computer programs. placed into service during the fourth quarter of 2001. Noninterest expense was positively impacted by $955,000 due to the adoption of SFAS No. 147 in 2002. The efficiency ratio increased to 64.74 percent compared to 60.97 percent for the year ended December 31, 2001. A significant portion of the increase in the efficiency ratio relates to the net losses from equity method investments and costs associated with the debt prepayment. Excluding these two items, the efficiency ratio for 2002 was 60.25 percent. Income Tax Expense In the normal course of business, First Charter evaluates and implements tax-planning initiatives. As a result of these initiatives, the effective tax rate for the fourth quarter of 2002 and the year ended December 31, 2002 decreased to 27.3 percent compared to 32.2 percent for the three months and year ended December 31, 2001. Loans Net loans and loans held for sale increased 14 percent to $2.2 billion. During the fourth quarter of 2002 $130 million of mortgage loans were reclassified to loans held for sale. These loans will be securitized securitized Of, related to, or being debt securities that are secured with assets. For example, mortgage purchase bonds are secured by mortgages that have been purchased with the bond issue's proceeds. during the first quarter of 2003. The Corporation's primary strength is in building customer relationships and growing market share in deposits, loans and related services. While commercial and construction loans accounted for 22 percent of the growth in loans and loans held for sale, mortgages (including loans held for sale) accounted for approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 36 percent of the growth in loans and loans held for sale, and home equity lines of credit and other secured retail credit accounted for the remaining 42 percent of the growth. Securities The securities available for sale portfolio increased to $1.13 billion at December 31, 2002. The Corporation repositioned approximately $249 million of the portfolio to reduce interest rate risk by shortening the average life of the portfolio. Net additions to the portfolio have been in the one-to-five year average life range. Combined, these activities have shortened short·en v. short·ened, short·en·ing, short·ens v.tr. 1. To make short or shorter. 2. the average life of the portfolio from 4.77 years at December 31, 2001 to 3.0 years at December 31, 2002. Concurrently con·cur·rent adj. 1. Happening at the same time as something else. See Synonyms at contemporary. 2. Operating or acting in conjunction with another. 3. Meeting or tending to meet at the same point; convergent. , the weighted average yield has declined to 5.01 percent at December 31, 2002 compared to 6.23 percent at December 31, 2001. Deposits Total deposits increased 7 percent to $2.3 billion. Deposit growth has occurred across every major deposit category. During the fourth quarter of 2002, the Corporation introduced the CHecking Account Marketing Program ("CHAMP"). The emphasis of this program is to develop new customer relationships, generate additional fee income opportunities, and to shift our funding mix towards lower cost funding sources. As a result, 300 percent more checking accounts were opened during the fourth quarter of 2002 than the fourth quarter of 2001. Other Borrowings Other borrowings increased 29 percent to $1.04 billion at December 31, 2002. The increase was primarily due to increases in Federal Home Loan Bank borrowings, which were at rates better than comparable retail funding rates. The proceeds of these borrowings were used to fund loan growth and security purchases. During the fourth quarter of 2002, the Corporation incurred $3.3 million in prepayment penalties Prepayment penalty A fee a borrower pays a lender when the borrower repays a loan before its scheduled time of maturity. associated with the refinancing of $100 million in fixed-term advances. Shareholders' Equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. First Charter intends to leverage its capital through growth of the balance sheet and share repurchases. Shareholders' equity at December 31, 2002 increased 5 percent to $324.7 million and represented 8.66 percent of period-end assets. During the year, 809,600 shares had been repurchased and retired under the January January: see month. 24, 2002 authorization The right or permission to use a system resource; the process of granting access. See access control. to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. 1.5 million shares. At December 31, 2002 the book value per share was $10.80. Based on the $18.01 closing price of First Charter Corporation common stock at December 31, 2002, the Corporation had a market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. of $541.5 million. Asset Quality Provision for Loan Losses The provision for loan losses for the three months ended December 31, 2002 amounted to $2.2 million compared to $1.2 million for the same period in 2001. The provision for loan losses for the year ended December 31, 2002 was $8.3 million, compared to $4.5 million for the same period in 2001. The increase in the provision for loan losses was due to increased loan growth and higher levels of nonaccrual loans. Net Charge-Offs Net charge-offs for the three months ended December 31, 2002 amounted to $2.1 million, or 0.36 percent of average loans, compared to $3.7 million, or 0.72 percent of average loans for same 2001 period. Net charge-offs for the year ended December 31, 2002 amounted to $6.3 million, or 0.29 percent of average loans compared to $6.7 million or 0.33 percent of average loans for the same 2001 period. The $0.4 million decrease in net charge-offs was due to lower commercial loan charge-offs. Nonperforming Assets Nonperforming asset An asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. Nonaccrual loans at December 31, 2002 increased to $26.5 million from $23.8 million a year earlier. The increase in nonaccrual loans was primarily due to the addition of several commercial loans to nonaccrual status. This increase was partially offset by the sale of $3.1 million of residential nonaccrual loans during the third quarter of 2002 and the transfer of one commercial loan from nonaccrual status to other real estate. Other real estate, received through loan foreclosure foreclosure Legal proceeding by which a borrower's rights to a mortgaged property may be extinguished if the borrower fails to live up to the obligations agreed to in the loan contract. , increased to $10.3 million from $8.0 million a year earlier. Allowance for Loan Losses The allowance for loan losses as a percentage of total loans amounted to 1.31 percent at December 31, 2002 down from 1.33 percent a year ago. The allowance for loan losses was reduced by (i) $0.3 million due to the sale of $3.1 million of residential nonaccrual loans during the third quarter of 2002 and (ii) $0.3 million due to the reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. of $130 million of mortgage loans to loans held for sale during the fourth quarter of 2002. These loans consisted of residential mortgage loans that generally have a lower percentage of allocated allowance for loan losses. 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 methodology and migration analysis. 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 2003 as well strategic plans for 2003 on Tuesday Tuesday: see week. , January 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 800-379-3953 706-679-5254
Call ID # 7390804 ID # 7390804
---------------------- --------------------------
Internet Live www.FirstCharter.com www.FirstCharter.com
and Replay "Investor Relations" "Investor Relations"
section section
SHOW # 84206 SHOW # 84206
---------------------- --------------------------
Audio Replay 800-642-1687 706-645-9291
ID # 7390804 ID # 7390804
Corporate Profile
First Charter Corporation is a regional financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. company with assets of $3.7 billion and is the holding company for First Charter Bank. First Charter operates 52 financial centers, five insurance offices and 93 ATMs located in 17 counties throughout the piedmont Piedmont, region, Italy Piedmont (pēd`mŏnt), Ital. Piemonte, region (1991 pop. 4,302,565), 9,807 sq mi (25,400 sq km), NW Italy, bordering on France in the west and on Switzerland in the north. and western half of North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. . First Charter also operates one mortgage origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real office in Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). . First Charter provides businesses and individuals with a broad range of financial services, including banking, financial planning Financial planning Evaluating the investing and financing options available to a firm. Planning includes attempting to make optimal decisions, projecting the consequences of these decisions for the firm in the form of a financial plan, and then comparing future performance against , funds management, investments, insurance, mortgages and a full array of employee benefit programs. Additional information about First Charter can be found by visiting www.FirstCharter.com or 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 business increases in connection with the implementation of our business plan are lower than expected; (2) competitive 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 fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. than expected; (5) risks inherent in making loans, including repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan risks and risks associated with collateral collateral (kəlăt`ərəl), something of value given or pledged as security for payment of a loan. Collateral consists usually of financial instruments, such as stocks, bonds, and negotiable paper, rather than physical goods, although 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 Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. or changes thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. adversely affect the businesses in which the company is engaged; and (9) 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 See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. ) 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 here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . The company undertakes no obligation to publicly revise those forward looking statements to reflect events and circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or that arise after the date hereof. (Selected financial information is attached)
First Charter Corporation and Subsidiaries (NASDAQ: FCTR)
Quarterly Earnings Release
As of/For the Twelve
Months Ended Increase (Decrease)
---------------------------------------------
(Dollars in thousands,
except per share data) 12/31/02 12/31/01 Amount Percentage
----------------------------------------------------------------------
BALANCE SHEET
ASSETS:
Cash and due from banks $162,087 $134,084 $28,003 20.9%
Federal funds sold 1,154 1,161 (7) (0.6)
Interest earning bank
deposits 6,609 6,220 389 6.3
Securities available
for sale 1,129,212 1,076,324 52,888 4.9
Loans held for sale 158,404 7,334 151,070 2,059.9
Loans
Commercial Real Estate 798,664 631,814 166,850 26.4
Commercial Non
Real Estate 223,178 222,497 681 0.3
Construction 215,859 321,716 (105,857) (32.9)
Mortgage 237,085 289,953 (52,868) (18.2)
Consumer 280,201 253,603 26,598 10.5
Home equity 317,730 228,169 89,561 39.3
-------------------------------------------
Total loans 2,072,717 1,947,752 124,965 6.4
Less: Unearned income (247) (191) (56) 29.3
Allowance for loan
losses (27,204) (25,843) (1,361) 5.3
-------------------------------------------
Loans, net 2,045,266 1,921,718 123,548 6.4
-------------------------------------------
Other assets 243,217 185,896 57,321 30.8
-------------------------------------------
Total assets $3,745,949 $3,332,737 $413,212 12.4%
===========================================
LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits
Noninterest-bearing
deposits $305,924 $276,699 $29,225 10.6%
Interest checking and
savings 416,005 378,341 37,664 10.0
Money market deposits 305,530 286,653 18,877 6.6
Time deposits 1,295,188 1,221,252 73,936 6.1
-------------------------------------------
Total deposits 2,322,647 2,162,945 159,702 7.4
Other borrowings 1,042,440 808,512 233,928 28.9
Other liabilities 56,176 51,939 4,237 8.2
-------------------------------------------
Total liabilities 3,421,263 3,023,396 397,867 13.2
-------------------------------------------
Total shareholders'
equity 324,686 309,341 15,345 5.0
-------------------------------------------
Total liabilities and
shareholders' equity $3,745,949 $3,332,737 $413,212 12.4%
===========================================
----------------------------------------------------------------------
SELECTED AVERAGE BALANCES
Loans $2,122,890 $1,990,406 $132,484 6.7%
Securities 1,126,495 877,376 249,119 28.4
Interest earning assets 3,261,844 2,881,295 380,549 13.2
Assets 3,535,180 3,104,952 430,228 13.9
Deposits 2,251,256 2,085,669 165,587 7.9
Interest bearing
liabilities 2,883,151 2,486,616 396,535 15.9
Shareholders' equity 328,036 320,215 7,821 2.4
----------------------------------------------------------------------
As of/For the Quarter Ended
------------------------------------
12/31/02 9/30/02 6/30/02
------------------------------------
MISCELLANEOUS INFORMATION
Common stock prices (daily close)
High $19.1900 $17.9900 $20.5700
Low 16.0500 15.3300 17.3000
End of period 18.0100 16.5700 18.0800
Book Value 10.80 10.78 10.52
Market Capitalization 541,545,337 499,413,073 557,404,502
Weighted average shares -
basic 30,081,995 30,379,838 30,829,356
Weighted average shares -
diluted 30,220,294 30,506,426 31,098,379
End of period shares
outstanding 30,069,147 30,139,594 30,829,895
As of/For the Quarter Ended
------------------------------------
3/31/02 12/31/01
------------------------------------
MISCELLANEOUS INFORMATION
Common stock prices (daily close)
High $19.4500 $18.4900
Low 16.7500 15.8500
End of period 18.6700 16.9100
Book Value 9.87 10.06
Market Capitalization 575,138,200 519,856,216
Weighted average shares -
basic 30,798,728 31,197,190
Weighted average shares -
diluted 30,993,981 31,364,373
End of period shares
outstanding 30,805,474 30,742,532
Note: Balances for 2002 have been restated to reflect the adoption
of SFAS No. 147. The restatement resulted in the reversal of $716,000
($520,000 net of tax) of goodwill amortization expense for the nine
months ended September 30, 2002. Goodwill is included in other assets.
First Charter Corporation and Subsidiaries
Quarterly Earnings Release
As of/For the Quarter Ended
--------------------------------
(Dollars in thousands, except per
share data) 12/31/02 9/30/02 6/30/02
----------------------------------------------------------------------
BALANCE SHEET
ASSETS:
Cash and due from banks $ 162,087 $ 85,811 $ 93,287
Federal funds sold 1,154 3,570 948
Interest earning bank deposits 6,609 9,849 16,513
Securities available for sale 1,129,212 1,212,742 1,104,995
Loans held for sale 158,404 14,532 1,486
Loans
Commercial Real Estate 798,664 730,601 682,301
Commercial Non Real Estate 223,178 230,809 237,120
Construction 215,859 307,802 304,921
Mortgage 237,085 378,088 349,931
Consumer 280,201 283,990 279,778
Home equity 317,730 296,073 270,282
-----------------------------------
Total loans 2,072,717 2,227,363 2,124,333
Less: Unearned income (247) (225) (254)
Allowance for loan
losses (27,204) (27,411) (27,213)
-----------------------------------
Loans, net 2,045,266 2,199,727 2,096,866
-----------------------------------
Other assets 243,217 174,698 176,637
-----------------------------------
Total assets $3,745,949 $3,700,929 $3,490,732
-----------------------------------
LIABILITIES AND SHAREHOLDERS'
EQUITY:
Deposits
Noninterest-bearing deposits $ 305,924 $ 302,584 $ 282,324
Interest checking and savings 416,005 407,019 390,270
Money market deposits 305,530 299,456 295,243
Time deposits 1,295,188 1,304,729 1,295,122
-----------------------------------
Total deposits 2,322,647 2,313,788 2,262,959
Other borrowings 1,042,440 1,004,836 847,752
Other liabilities 56,176 57,550 55,623
-----------------------------------
Total liabilities 3,421,263 3,376,174 3,166,334
-----------------------------------
Total shareholders' equity 324,686 324,755 324,398
-----------------------------------
Total liabilities and
shareholders' equity $3,745,949 $3,700,929 $3,490,732
-----------------------------------
----------------------------------------------------------------------
SELECTED AVERAGE BALANCES
Loans $2,253,317 $2,170,961 $2,080,227
Securities 1,144,045 1,129,206 1,130,552
Interest earning assets 3,418,176 3,311,707 3,219,752
Assets 3,678,945 3,586,969 3,491,868
Deposits 2,309,971 2,278,758 2,230,620
Interest bearing liabilities 2,999,871 2,914,391 2,859,137
Shareholders' equity 332,998 333,165 322,508
----------------------------------------------------------------------
As of/For the Quarter Ended
BALANCE SHEET 3/31/02 12/31/01
ASSETS:
Cash and due from banks $ 89,611 $ 134,084
Federal funds sold 1,363 1,161
Interest earning bank deposits 16,984 6,220
Securities available for sale 1,107,939 1,076,324
Loans held for sale 5,400 7,334
Loans
Commercial Real Estate 638,339 631,814
Commercial Non Real Estate 242,679 222,497
Construction 314,855 321,716
Mortgage 321,147 289,953
Consumer 266,239 253,603
Home equity 241,078 228,169
------------ -----------
Total loans 2,024,337 1,947,752
Less: Unearned income (277) (191)
Allowance for loan losses (26,576) (25,843)
------------ -----------
Loans, net 1,997,484 1,921,718
------------ -----------
Other assets 187,077 185,896
------------ -----------
Total assets $3,405,858 $3,332,737
------------ -----------
LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits
Noninterest-bearing deposits $ 257,864 $ 276,699
Interest checking and savings 383,145 378,341
Money market deposits 298,574 286,653
Time deposits 1,270,725 1,221,252
------------ -----------
Total deposits 2,210,308 2,162,945
Other borrowings 836,769 808,512
Other liabilities 54,863 51,939
------------ -----------
Total liabilities 3,101,940 3,023,396
------------ -----------
Total shareholders' equity 303,918 309,341
------------ -----------
Total liabilities and
shareholders' equity $3,405,858 $3,332,737
------------ -----------
-------------------------------------------------------------------
SELECTED AVERAGE BALANCES
Loans $1,983,455 $1,977,638
Securities 1,101,683 1,001,763
Interest earning assets 3,093,516 3,005,225
Assets 3,377,791 3,246,863
Deposits 2,183,990 2,169,743
Interest bearing liabilities 2,756,185 2,605,572
Shareholders' equity 321,966 327,410
------------------------------------------------------------------
Note: Balances for 2002 have been restated to reflect the adoption
of SFAS No. 147. The restatement resulted in the reversal of
approximately $239,000 ($173,000 net of tax) of goodwill amortization
expense for each of the three months ended March 31, 2002, June 30,
2002 and September 30, 2002. Goodwill is included in other assets.
First Charter Corporation and Subsidiaries
Quarterly Earnings Release
For the
Three Months Ended Increase(Decrease)
-----------------------------------------
(Dollars in thousands,
except per share data) 12/31/2002 12/31/2001 Amount Percentage
----------------------------------------------------------------------
INCOME STATEMENT
Interest income - taxable
equivalent $ 48,562 $ 51,628 $ (3,066) (5.9)%
Interest expense 20,095 24,352 (4,257) (17.5)
-------------------------------------------
Net interest income -
taxable equivalent 28,467 27,276 1,191 4.4
Less: Taxable equivalent
adjustment 429 462 (33) (7.1)
-------------------------------------------
Net interest income 28,038 26,814 1,224 4.6
Provision for loan losses 2,175 1,200 975 81.3
-------------------------------------------
-------------------------------------------
Net interest income after
provision for loan losses 25,863 25,614 249 1.0
Noninterest income 16,279 11,183 5,096 45.6
Noninterest expense 27,631 24,766 2,865 11.6
-------------------------------------------
Income before
income taxes 14,511 12,031 2,480 20.6
Income taxes 3,962 3,881 81 2.1
-------------------------------------------
Net income $ 10,549 $ 8,150 $ 2,399 29.4%
===========================================
----------------------------------------------------------------------
EARNINGS PER SHARE DATA
Basic $ 0.35 $ 0.26 $ 0.09 34.6%
Diluted 0.35 0.26 0.09 34.6
Weighted average
shares - basic 30,081,995 31,197,190
Weighted average
shares - diluted 30,220,294 31,364,373
Dividends paid on
common shares $ 0.185 $0.180 $ 0.01 5.6%
----------------------------------------------------------------------
PERFORMANCE RATIOS
Return on average assets 1.14% 1.00%
Return on average equity 12.57 9.88
Efficiency - taxable
equivalent/a 70.17 66.16
======================================================================
For the Three Months Ended
--------------------------
12/31/02 12/31/01
SCHEDULE OF OTHER ITEMS
INCLUDED IN EARNINGS
Noninterest income
Gain on sale of securities $ 5,371 $ 1,026
Equity method income (loss) (340) (524)
Gain (loss) on sale of properties (109) 287
Noninterest expense
Prepayment costs on borrowings (3,284) -
Reserve for contigent liability (840) -
Amortization of intangibles (89) (466)
Total other items $ 709 $ 323 $
Other items, net of tax $ 515 $ 220 $
===========================
Notes: Applicable ratios are annualized.
/a: - Noninterest expense divided by the sum of taxable equivalent
net interest income plus noninterest income less gain on sale of
securities.
First Charter Corporation and Subsidiaries
Quarterly Earnings Release
For The
12 Months Ended Increase(Decrease)
-----------------------------------------
(Dollars in thousands,
except per share data) 12/31/02 12/31/01 Amount Percentage
----------------------------------------------------------------------
INCOME STATEMENT
Interest income - taxable
equivalent $ 198,152 $ 217,180 $ (19,028) (8.8)%
Interest expense 83,227 109,912 (26,685)(24.3)
-------------------------------------------
Net interest income -
taxable equivalent 114,925 107,268 7,657 7.1
Less: Taxable equivalent
adjustment 1,764 1,904 (140) (7.4)
-------------------------------------------
Net interest income 113,161 105,364 7,797 7.4
Provision for loan losses 8,270 4,465 3,805 85.2
-------------------------------------------
Net interest income after
provision for loan losses 104,891 100,899 3,992 4.0
Noninterest income 47,631 38,773 8,858 22.8
Noninterest expense 97,772 87,579 10,193 11.6
-------------------------------------------
Income before income
taxes 54,750 52,093 2,657 5.1
Income taxes 14,947 16,768 (1,821) (10.9)
-------------------------------------------
Net income $ 39,803 $ 35,325 $ 4,478 12.7%
-------------------------------------------
----------------------------------------------------------------------
EARNINGS PER SHARE DATA
Basic $ 1.30 $ 1.12 $ 0.18 16.1%
Diluted 1.30 1.12 0.18 16.1
Weighted average
shares - basic 30,520,125 31,480,109
Weighted average
shares - diluted 30,702,107 31,660,985
Dividends paid on
common shares $ 0.73 $ 0.72 $ 0.01 1.4%
----------------------------------------------------------------------
PERFORMANCE RATIOS
Return on average assets 1.13% 1.14%
Return on average equity 12.13 11.03
Efficiency - taxable
equivalent (/b) 64.74 60.97
----------------------------------------------------------------------
For the Twelve Months Ended
-------------------------------
SCHEDULE OF OTHER ITEMS 12/31/02 12/31/01
INCLUDED IN EARNINGS
Noninterest income
Gain on sale of securities $11,539 $2,399
Equity investment write down (20) (144)
Equity method income (loss) (5,801) (442)
Gain on sale of properties 904 416
Noninterest expense
Prepayment costs on borrowings (3,284) -
Reserve for contigent liability (840) -
Amortization of intangibles (367) (1,875)
-------------------------------
Total other items $2,131 $354
-------------------------------
Other items, net of tax 1,549 241
-------------------------------
----------------------------------------------------------------------
Notes: Balances for 2002 have been restated to reflect the
adoption of SFAS No. 147. The restatement resulted in the reversal of
$716,000 ($520,000 net of tax) of goodwill amortization expense for
the nine months ended September 30, 2002.
Applicable ratios are annualized.
/b: - Noninterest expense divided by the sum of taxable equivalent
net interest income plus noninterest income less gain on sale of
securities.
First Charter Corporation and Subsidiaries
Quarterly Earnings Release
As of/For the Quarter Ended
------------------------------------------------------------
(Dollars in thousands,
except per share data) 12/31/02 9/30/02 6/30/02 3/31/02 12/31/01
----------------------------------------------------------------------
INCOME STATEMENT
Interest income - taxable
equivalent
Interest and fees on loans $34,166 $34,828 $33,600 $32,920 $35,735
Interest on securities 14,327 15,340 16,239 16,543 15,764
Other interest income 69 50 38 32 129
---------------------------------------
Total interest income -
taxable equivalent 48,562 50,218 49,877 49,495 51,628
---------------------------------------
Interest expense
Interest on deposits 12,016 12,498 12,694 13,749 16,781
Other interest expense 8,079 8,319 8,131 7,741 7,571
---------------------------------------
Total interest expense 20,095 20,817 20,825 21,490 24,352
---------------------------------------
Net interest income -
taxable equivalent 28,467 29,401 29,052 28,005 27,276
Less: Taxable equivalent
adjustment 429 436 444 455 462
---------------------------------------
Net interest income 28,038 28,965 28,608 27,550 26,814
Provision for loan losses 2,175 1,750 2,240 2,105 1,200
---------------------------------------
Net interest income
after provision
for loan losses 25,863 27,215 26,368 25,445 25,614
---------------------------------------
Noninterest income
Service charges on deposit
accounts 4,998 4,689 4,781 4,665 4,255
Financial management income 483 566 679 668 339
Gain on sale of securities 5,371 1,416 989 3,763 1,026
Income (loss) from equity
method investments (340) (2,525) 23 (2,959) (524)
Mortgage loan fees 1,137 504 409 407 723
Brokerage services income 591 640 420 637 356
Insurance services income 2,112 2,313 2,114 2,231 1,866
Trading gains 1,038 298 322 420 1,530
Other noninterest income 889 829 1,957 1,096 1,612
---------------------------------------
Total noninterest income 16,279 8,730 11,694 10,928 11,183
---------------------------------------
Noninterest expense
Salaries and employee
benefits 12,213 11,988 13,208 12,897 12,501
Occupancy and equipment 3,768 3,839 4,184 4,241 3,804
Data processing 760 758 828 622 615
Marketing 658 630 634 640 575
Postage and supplies 1,099 967 1,078 1,189 1,155
Professional services 1,841 1,393 1,719 1,662 2,531
Telephone 376 461 568 546 448
Amortization of intangibles 89 88 90 100 466
Prepayment cost on
borrowings 3,284 - - - -
Other noninterest expense 3,544 1,616 1,775 2,420 2,671
--------------------------------------
Total noninterest
expense 27,631 21,740 24,084 24,317 24,766
--------------------------------------
Income before taxes 14,511 14,205 13,978 12,056 12,031
Income taxes 3,962 3,878 3,816 3,291 3,881
--------------------------------------
Net income $10,549 $10,327 $10,162 $8,765 $8,150
======================================
EARNINGS PER SHARE DATA
Basic $0.35 $0.34 $0.33 $0.28 $0.26
Diluted 0.35 0.34 0.33 0.28 0.26
Dividends paid on
common shares 0.185 0.185 0.180 0.180 0.180
----------------------------------------------------------------------
PERFORMANCE RATIOS
Return on average assets 1.14% 1.14% 1.17% 1.05% 1.00%
Return on average equity 12.57 12.30 12.64 11.04 9.88
Efficiency - taxable
equivalent (1) 70.17 59.21 60.58 69.14 66.16
Noninterest income as a
percentage of total income 36.73 23.16 29.02 28.40 29.43
Equity as a percentage of
total assets 8.67 8.77 9.29 8.92 9.28
Average earning assets as
a percentage of average
assets 92.91 92.33 92.21 91.58 92.56
Average loans as a
percentage of average
deposits 97.55 95.27 93.26 90.82 91.15
----------------------------------------------------------------------
As of/For the Quarter Ended
----------------------------------------
SCHEDULE OF OTHER ITEMS 12/31/02 9/30/02 6/30/02 3/31/02 12/31/01
INCLUDED IN EARNINGS ----------------------------------------
Noninterest income
Gain on sale of
securities $5,371 $1,416 $989 $3,763 $1,026
Equity investment
write down - - - (20) -
Equity method income
(loss) (340) (2,525) 23 (2,959) (524)
Gain (loss) on sale
of properties (109) - 1,013 - 287
Noninterest expense
Prepayment costs on
borrowings (3,284) - - - -
Reserve for contigent
liability (840) - - - -
Amortization of
intangibles (89) (88) (90) (100) (466)
----------------------------------------
Total other items $ 709 $(1,197) $ 1,935 $ 684 $ 323
----------------------------------------
Other items, net of tax $ 515 $ (870) $ 1,407 $ 497 $ 220
========================================
Notes: Balances for 2002 have been restated to reflect the
adoption of SFAS No. 147. The restatement resulted in the reversal of
approximately $239,000 ($173,000 net of tax) of amortization for each
of the three months ended March 31, 2002, June 30, 2002 and September
30, 2002.
Applicable ratios are annualized.
(1) - Noninterest expense divided by the sum of taxable equivalent
net interest income plus noninterest income less gain on sale of
securities.
First Charter Corporation and Subsidiaries
Quarterly Earnings Release
As of/For the Quarter Ended
(Dollars in thousands, ------------------------------------------
except per share data) 12/31/02 9/30/02 6/30/02 3/31/02 12/31/01
----------------------------------------------------------------------
ASSET QUALITY ANALYSIS
Allowance for Loan Losses
Beginning balance $27,411 $27,213 $26,576 $25,843 $28,221
Provision for loan
losses 2,175 1,750 2,240 2,105 1,200
Allowance related
to loans sold or
transferred to
held for sale (325) (322) - - -
Charge-offs (2,138) (1,517) (1,778) (1,557) (3,719)
Recoveries 81 287 175 185 141
-------------------------------------------
Net charge-offs (2,057) (1,230) (1,603) (1,372) (3,578)
-------------------------------------------
Ending balance $27,204 $27,411 $27,213 $26,576 $25,843
-------------------------------------------
Nonperforming Assets
and Loans 90 days or
more past due accruing
interest
Nonaccrual loans $26,467 $24,418 $30,656 $27,558 $23,824
Other real estate 10,278 9,675 8,367 7,208 8,049
-------------------------------------------
Total
nonperforming
assets 36,745 34,093 39,023 34,766 31,873
-------------------------------------------
Loans 90 days or
more past due
accruing interest - - - 38 152
-------------------------------------------
Total $36,745 $34,093 $39,023 $34,804 $32,025
-------------------------------------------
Asset Quality Ratios (2)
Nonaccrual loans
as a percentage
of total loans 1.28% 1.10% 1.44% 1.36% 1.22%
Nonperforming assets
as a percentage of
total assets 0.98 0.92 1.12 1.02 0.96
Nonperforming assets
as a percentage of
total loans and
other real estate 1.76 1.52 1.83 1.71 1.63
Net charge-offs as
a percentage of
average loans
(annualized) 0.36 0.22 0.31 0.28 0.72
Allowance for loan
losses as a
percentage of
loans 1.31 1.23 1.28 1.31 1.33
Ratio of allowance
for loan losses to:
Net charge-offs 3.33x 5.62x 4.23x 4.78x 1.82x
Nonaccrual loans 1.03 1.12 0.89 0.96 1.08
----------------------------------------------------------------------
As of/For the Twelve
Months Ended Increase (Decrease)
----------------------------------------
12/31/02 12/31/01 Amount Percentage
----------------------------------------------------------------------
Allowance for Loan Losses
Beginning balance $25,843 $28,447 $(2,604) (9.2)%
Provision for loan
losses 8,270 4,465 3,805 85.2
Allowance related to
loans sold or
transferred to held
for sale (647) (417) (230) 55.2
Charge-offs (6,990) (7,406) (416) (5.6)
Recoveries 728 754 (26) (3.4)
--------------------------------------
Net charge-offs (6,262) (6,652) (390) (5.9)
--------------------------------------
Ending balance $27,204 $25,843 $ 1,361 5.3%
--------------------------------------
Asset Quality Ratios (2)
Net charge-offs as a
percentage of
average loans 0.29% 0.33%
Ratio of allowance for
loan losses to
net charge-offs 4.34x 3.88x
----------------------------------------------------------------------
For the Quarter Ended
------------------------------------------
12/31/02 9/30/02 6/30/02 3/31/02 12/31/01
----------------------------------------------------------------------
ANNUALIZED INTEREST YIELDS/RATES (3)
Interest income:
Yield on loans 6.02% 6.36% 6.48% 6.73% 7.17%
Yield on securities 5.01 5.43 5.75 6.01 6.29
------------------------------------------
Yield on interest
earning assets 5.65 6.03 6.21 6.46 6.83
------------------------------------------
Interest expense:
Cost of interest
bearing deposits 2.37 2.49 2.58 2.89 3.50
Cost of borrowings 3.26 3.57 3.67 3.80 4.27
------------------------------------------
Cost of interest
bearing
liabilities 2.66 2.83 2.92 3.16 3.71
------------------------------------------
Interest rate spread 2.99 3.20 3.29 3.30 3.12
------------------------------------------
Net yield on earning
assets 3.32% 3.54% 3.61% 3.64% 3.62%
==========================================
Notes: Applicable ratios are annualized.
(2) - Ratios exclude loans held for sale.
(3) - Fully taxable equivalent yields.
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