First Charter Announces Improved Second Quarter Earnings.CHARLOTTE, N.C. -- 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 ) today reported second quarter 2004 earnings of $10.3 million or $0.34 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share compared to a net loss of $4.2 million, or $0.14 per diluted share, for the same period in 2003. For the first half of 2004, First Charter reported earnings of $19.5 million, or $0.65 per diluted share, compared to earnings of $5.7 million, or $0.19 per diluted share, for the same period in 2003. Earnings for the three and six months ended June June: see month. 30, 2003 were impacted by a higher provision for loan losses primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the sale of $60.9 million of nonaccruing and accruing higher risk loans. Loan and deposit growth remained strong during the second quarter of 2004, as gross loans increased at an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. rate of 12 percent and deposits increased at an annualized rate of 14 percent. Asset quality trends remained stable during the quarter, with 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. remaining at 0.79 percent of loans and other real estate owned Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most , while 30 day past due loans decreased to 0.47 percent of loans. The Corporation continued to experience increased revenue growth in financial management, insurance services, brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. services and service charges compared to the second quarter of 2003. In addition, the Corporation continued to realize the benefits resulting from the refinancing Refinancing An extension and/or increase in amount of existing debt. of fixed term advances during 2003 and certain asset-liability management transactions entered into during 2004 as interest expense decreased 22 percent. "The Community Banking Strategy at First Charter is working," said 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
Summary Second Quarter 2004 compared to Second Quarter 2003 --Net interest income increased $4.0 million or 15 percent. --Provision for loan losses decreased $17.5 million or 90 percent. --Service charges increased $0.8 million or 14 percent. --Financial management income increased $1.1 million or 217 percent. --Brokerage services income increased $0.1 million or 11 percent. --Insurance services income increased $0.4 million or 18 percent. --Noninterest expense decreased $5.3 million or 16 percent. Second Quarter 2004 compared to First Quarter 2004 --Gross loans and loans held for sale increased $77.0 million or 3 percent. --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 increased $110.4 million or 3 percent. --Transaction based deposits increased $69.6 million or 5 percent. --Average deposits increased $111.2 million or 5 percent. --Net interest margin decreased 13 basis points to 3.06 percent. --Provision for loan losses decreased $1.0 million or 33 percent. --Service charges increased $0.7 million or 13 percent. --Mortgage loan fees increased $0.2 million or 39 percent. --Insurance services income decreased $0.4 million or 13 percent. --Noninterest expense decreased $0.6 million or 2 percent. Year-to-Date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. 2004 compared to Year-to-Date 2003 --Average loans and loans held for sale increased $160.6 million or 7 percent. --Average earning assets increased $378.4 million or 11 percent. --Average deposits increased $42.6 million or 2 percent. --Net interest margin increased 9 basis points to 3.12 percent. --Provision for loan losses decreased $16.5 million or 77 percent. --Service charges increased $1.3 million or 12 percent. --Financial management income increased $2.0 million or 186 percent. --Mortgage loan fees decreased $0.2 million or 16 percent. --Brokerage services income increased $0.6 million or 44 percent. --Insurance services income increased $1.0 million or 21 percent. --Noninterest expense decreased $3.0 million or 5 percent. Key Customer Indicators --Second quarter 2004 customer service quality score was 83 percent very satisfied. --During the first half of 2004, 19,779 new checking accounts were opened. --During the first half of 2004, core households increased 7,797. --Customer retention ratio as of June 30, 2004 was 85 percent.
Financial Highlights
(Dollars in thousands For the Three Months For the Six Months
except per share data) Ended June 30 Ended June 30
-------------------- -------------------
Earnings 2004 2003 2004 2003
----------------------- --------- --------- --------- ---------
Total revenues $ 44,922 $ 46,254 $89,960 $88,376
Net income (loss) 10,255 (4,204) 19,495 5,742
Diluted earnings (loss)
per share 0.34 (0.14) 0.65 0.19
Return on average
assets 0.96 % (0.42) % 0.92 % 0.30 %
Return on average
equity 13.90 (5.18) 13.07 3.56
Efficiency-taxable
equivalent ratio (a) 61.66 85.65 62.13 73.72
(a) - Noninterest expense divided by the sum of taxable equivalent net
interest income plus noninterest income less gain on sale of
securities.
(Dollars in
thousands) Increase (Decrease)
June 30 December 31 ------------------------
Balance Sheet 2004 2003 Amount Percentage
-------------------------------- ------------ ----------- ------------
Loans held for sale $ 26,768 $ 5,137 $ 21,631 421.05 %
Loans, net 2,321,986 2,227,030 94,956 4.26
Investments 1,604,585 1,601,900 2,685 0.17
Total assets 4,339,213 4,206,693 132,520 3.15
Demand, savings and
money market
deposits 1,383,211 1,237,726 145,485 11.75
Total deposits 2,594,765 2,427,897 166,868 6.87
Other borrowings 1,410,481 1,432,200 (21,719) (1.52)
Shareholders'
equity 283,781 299,439 (15,658) (5.23)
(Dollars in
thousands) Increase (Decrease)
June 30 December 31 ------------------------
Average Balances 2004 2003 Amount Percentage
-------------------------------- ------------ ----------- ------------
Loans held for sale $ 10,651 $ 23,632 $(12,981) (54.93)%
Loans, net 2,295,854 2,122,314 173,540 8.18
Investments 1,614,000 1,354,558 259,442 19.15
Total assets 4,263,381 3,893,661 369,719 9.50
Total deposits 2,492,291 2,449,733 42,558 1.74
Other borrowings 1,427,342 1,067,555 359,787 33.70
Shareholders' equity 299,848 325,699 (25,851) (7.94)
Net Interest Income/Margin Second Quarter Net interest income increased $4.0 million, or 15 percent, to $30.0 million compared to the second quarter of 2003. The increase was primarily due to a $4.2 million decrease in interest expense resulting from (a) a shift in funding sources from higher-cost retail certificates of deposit to lower-cost transaction based accounts, (b) the benefits from the refinancing of $50 million and $81 million of fixed-term advances in the second quarter and fourth quarter of 2003, respectively, and (c) the benefits from certain asset-liability management transactions entered into during the first half of 2004. Net interest income was also impacted by a $0.3 million decrease in interest income due mainly to lower yields on earning assets resulting from the continued effects of the low interest rate environment. The net interest margin increased to 3.06 percent in the second quarter of 2004 from 2.92 percent for the same period in 2003 as rates paid on interest bearing liabilities declined faster than yields earned on interest bearing assets. Year-to-Date Net interest income increased $7.8 million, or 15 percent, to $60.4 million compared to the same period in 2003. The increase was primarily due to an $8.2 million decrease in interest expense due to (a) a shift in funding sources from higher-cost retail certificates of deposit to lower-cost transaction based accounts, (b) the benefits from the refinancing of $50 million and $81 million of fixed-term advances in the second quarter and fourth quarter of 2003, respectively, and (c) the benefits from certain asset-liability management transactions entered into during the first half of 2004. Net interest income was also impacted by a $0.6 million decrease in interest income due mainly to lower yields on earning assets resulting from the continued effects of the low interest rate environment. The net interest margin for the six months ended June 30, 2004 increased to 3.12 percent from 3.03 percent for the same period in 2003 as rates paid on interest bearing liabilities declined faster than yields earned on interest bearing assets. Noninterest Income Second Quarter Noninterest income decreased $5.3 million to $14.9 million compared to the second quarter of 2003. Gains on the sale of securities of $0.5 million were recognized in the second quarter of 2004 compared to $8.3 million in 2003, representing a decrease of $7.8 million. In addition, trading gains of $0.4 million were recognized in the second quarter of 2003. These decreases in noninterest income were partially offset by a $1.1 million increase in financial management income primarily due to (a) the acquisition of a third party benefits administrator in the third quarter of 2003, (b) a $0.8 million increase in service charges, (c) a $0.5 million increase in other noninterest income due to growth in ATM, debit card debit card, card that allows the cost of goods or services that are purchased to be deducted directly from the purchaser's checking account. They can also be used at automated teller machines for withdrawing cash from the user's checking account. and other miscellaneous fees, and (d) a $0.4 million increase in insurance services income primarily due the acquisition of two insurance agencies in the third and fourth quarter of 2003. Year-to-Date Noninterest income decreased $6.2 million to $29.6 million compared to the same period in 2003. Gains on the sale of securities of $0.8 million were recognized in the first half of 2004 compared to $9.5 million in 2003, representing a decrease of $8.7 million. Gains totaling $2.2 million from the sale of the Corporation's credit card portfolio and $1.6 million of trading gains were recognized in the first half of 2003. These decreases in noninterest income were partially offset by a (a) $2.0 million increase in financial management income primarily due to the acquisition of a third party benefits administrator in the third quarter of 2003, (b) a $1.3 million increase in service charges, (c) a $1.0 million increase in other noninterest income due to growth in ATM, debit card and other miscellaneous fees, (d) a $1.0 million increase in insurance services income primarily due the acquisition of two insurance agencies in the third and fourth quarter of 2003, and (e) a $0.6 million increase in brokerage services income. In addition, gains totaling $0.8 million from the sale of bank property were recognized in the first half of 2004. Noninterest Expense Second Quarter Noninterest expense decreased $5.3 million to $27.7 million compared to the second quarter of 2003. The decrease was due to $7.4 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 refinancing $50 million in fixed term advances in the second quarter of 2003 which did not recur in 2004. In addition, professional fees decreased $0.9 million primarily due to second quarter 2003 fees associated with the previously mentioned sale of $60.9 million of nonaccruing and accruing higher risk loans. These decreases were partially offset by a $1.8 million increase in salaries and employee benefits due to additional personnel, including the acquisition of a third party benefits administrator and two insurance agencies and increased incentive compensation accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. . Year-to-Date Noninterest expense decreased $3.0 million to $56.0 million compared to the first half of 2003. The decrease was due to $7.4 million of prepayment costs associated with refinancing $50 million in fixed term advances in the second quarter of 2003 which did not recur in 2004. This decrease was partially offset by a $3.1 million increase in salaries and employee benefits due to additional personnel, including the acquisition of a third party benefits administrator and two insurance agencies and increased incentive compensation accruals. Efficiency Ratio The efficiency ratio decreased to 62.1 percent compared to 73.7 percent for the first half of 2003. A significant portion of the decrease relates to the second quarter 2003 costs associated with the prepayment of fixed term advances. The calculation of the efficiency ratio excludes gains on sale of securities of $0.8 million and $9.5 million for the six months ended June 30, 2004 and 2003, respectively. Income Tax Expense Second Quarter Total income tax expense for the second quarter of 2004 was $5.0 million compared to an income tax benefit of $2.0 million for the second quarter of 2003. The increase in the effective tax rate for 2004 was due to an increase in projected taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. relative to nontaxable adj. 1. Not subject to taxation; - of goods imported into a country or sold at retail outlets; as, most laws imposing sales taxes make food nontaxable s>. Opposite of taxable nt>. Adj. 1. adjustments. Year-to-Date The income tax expense for the first half of 2004 amounted to $9.5 million for an effective tax rate of 32.7 percent compared to $2.1 million for an effective tax rate of 26.5 percent the first half of 2003. The increase in the effective tax rate for 2004 was due to an increase in projected taxable income relative to nontaxable adjustments. Loans Held for Sale Loans held for sale consist primarily of 15 and 30 year residential mortgage loans which the Corporation intends to sell as whole loans or securitize Securitize The practice of a company selling accounts receivables or other debts owed to it. The third party that buys the debt assumes ownership of it and the responsibility for collecting the debts, and keeps the repayments when made. to improve its liquidity position. Loans held for sale increased to $26.8 million at June 30, 2004 as compared to $5.1 million at December December: see month. 31, 2003. During the first half of 2004, $21.3 million of residential mortgage loans were 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. and moved to securities available for sale. Loans Gross loans increased $95.4 million to $2.35 billion at June 30, 2004 as compared to $2.25 billion at December 31, 2003. The growth in loans was primarily due to a $54.7 million increase in home equity loans, a $44.3 million increase in commercial real estate loans, and a $34.3 million increase in primarily adjustable rate mortgage This article is about the US mortgage type. For an international perspective, see Variable rate mortgage. An adjustable rate mortgage (ARM) is a mortgage loan where the interest rate on the note is periodically adjusted based on an index. loans. These increases were partially offset by a $26.2 million and an $8.2 million decrease in construction and consumer loans, respectively. In addition, $6.4 million of nonaccruing and accruing higher risk residential mortgage loans were sold to investors during the first quarter of 2004 and $45.7 million of primarily fixed rate mortgage loans originated in the first half of 2004 were classified as held for sale. Securities The securities available for sale portfolio remained essentially unchanged at $1.60 billion at June 30, 2004 as compared to December 31, 2003. The securities available for sale portfolio was impacted by an increase in the unrealized net losses in the portfolio due to a rise in interest rates across the yield curve. Unrealized net losses on securities available for sale were $30.8 million at June 30, 2004 compared to unrealized net gains of $10.1 million at December 31, 2003. The decrease in the securities available for sale portfolio was partially offset by the securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. of $21.3 million of residential mortgage loans during the second quarter. Deposits The Corporation's CHecking Account Marketing Program (CHAMP) continues to attract new customers and deposits. During the first half of 2004, 19,779 new checking accounts were opened. In addition, during the first quarter of 2004 the Corporation introduced a new money market account, the Performance Plus Account. This product has generated $228.0 million of deposits as of June 30, 2004. The emphasis of these programs is to develop new customer relationships, to shift our funding mix towards lower-cost funding sources and to generate additional fee income opportunities. Total deposits increased $166.9 million, or 7 percent, to $2.59 billion at June 30, 2004 compared to $2.43 billion at December 31, 2003. The increase in deposits was due to a $93.0 million increase in money market accounts, a $52.5 million increase in low-cost interest checking, savings and noninterest bearing deposits. Also, as a result of the Corporation's strategy of shifting the funding mix, lower-cost brokered certificates of deposit increased $65.6 million, while higher-cost retail certificates of deposit decreased $44.2 million. Interest Rate Swaps Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. In the first half of 2004, the Corporation entered into a series of interest rate swap agreements. The interest rate swap agreements currently allow the Corporation to swap higher fixed rate interest payments on long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. FHLB FHLB Federal Home Loan Bank advances for lower variable rate payments. During the first half of 2004, the interest rate swaps resulted in the Corporation receiving interest at an average fixed rate of 5.16 percent and paying interest at an average variable rate of 3.00 percent, for an average period of 5.9 years on a notional amount The notional amount (or notional principal amount or notional value) on a financial instrument is the nominal or face amount that is used to calculate payments made on that instrument. This amount generally does not change hands and is thus referred to as notional. of $222 million. As a result of swapping Replacing one segment of a program in memory with another and restoring it back to the original when required. In virtual memory systems, it is called "paging." swapping - swap $222 million of fixed rate debt payments for variable rate payments, the Corporation's balance sheet would become liability sensitive. Therefore, as part of the Corporation's asset/liability management Asset/Liability Management A technique companies employ in coordinating the management of assets and liabilities so that an adequate return may be earned. Also known as "surplus management. strategy of preserving the asset sensitive nature of the Corporation's balance sheet, the Corporation replaced $255 million of existing FHLB floating rate overnight borrowings with fixed rate FHLB advances with maturities of one to three years. 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. Shareholders' equity at June 30, 2004 decreased to $283.8 million, representing 6.54 percent of period-end assets compared to $299.4 million or 7.12 percent of period-end assets at December 31, 2003. The 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. unrealized loss Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. on available for sale securities was $18.8 million at June 30, 2004 compared to an after-tax unrealized gain Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. of $6.2 million at December 31, 2003. The change was due to an increase in rates across the yield curve. At June 30, 2004, the book value per share was $9.53. Based on the $21.79 closing price of First Charter Corporation common stock at June 30, 2004, 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 $648.7 million. Provision for Loan Losses The provision for loan losses decreased to $2.0 million for the three months ended June 30, 2004 compared to $19.5 million for the same year ago period. The provision for loan losses for the six months ended June 30, 2004 amounted to $5.0 million compared to $21.5 million for the same year ago period. The decrease in the provision for loan losses was primarily attributable to the previously mentioned sale of $60.9 million of nonaccruing and accruing higher risk loans in the second quarter of 2003. In addition, certain residential rental RENTAL. A roll or list of the rents of an estate containing the description of the lands let, the names of the tenants, and other particulars connected with such estate. This is the same as rent roll, from which it is said to be corrupted. property loans totaling $12.9 million identified in the second quarter of 2003 resulted in the Corporation increasing the provision for loan losses by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2.4 million during that period. At June 30, 2004, there were 115 of these loans remaining with a balance of $7.6 million. Net Charge-Offs Second Quarter Net charge-offs for the three months ended June 30, 2004 amounted to $1.7 million, or 0.29 percent of average loans, compared to $2.1 million, or 0.39 percent of average loans for the same 2003 period. Net charge-offs benefited from a $0.6 million commercial loan recovery during the second quarter of 2004. Year-to-Date Net charge-offs for the six months ended June 30, 2004 amounted to $4.0 million, or 0.35 percent of average loans compared to $4.3 million, or 0.41 percent of average loans for the same 2003 period. Net charge-offs benefited from a $0.6 million commercial loan recovery during the second quarter of 2004. Nonperforming Assets Nonaccrual loans at June 30, 2004 decreased to $12.5 million compared to $14.9 million at December 31, 2003. The decrease includes the sale of $2.1 million of nonaccrual mortgage loans in the first quarter of 2004. OREO decreased to $6.2 million at June 30, 2004 from $6.8 million at December 31, 2003. Asset Quality Ratios As a result of the Corporation's continued focus on asset quality and the initiatives taken in 2003 and in the first half of 2004, our asset quality ratios remain strong as evidenced in the following table.
Asset Quality (1)
June 30 March 31 Dec.31 Sept.30 June 30
2004 2004 2003 2003 2003
------ ------- ------- ------- -------
Past Due Ratio
---------------------------------
Past due loans over 30 days
as a percentage of loans 0.47% 0.64% 1.04% 0.71% 0.67%
Nonaccrual Loans
---------------------------------
Nonaccrual loans as a percentage
of loans 0.53% 0.52% 0.66% 0.64% 0.54%
Nonperforming Assets
---------------------------------
Nonperforming assets as a
percentage of loans and other
real estate owned 0.79% 0.79% 0.96% 0.95% 0.87%
Charge-offs
---------------------------------
Net charge-offs as a percentage
of average loans-annualized 0.29% 0.41% 0.35% 0.40% 0.39%
Allowance for Loan Losses
---------------------------------
Allowance for loan losses as a
percentage of loans 1.11% 1.13% 1.14% 1.14% 1.15%
Allowance for loan losses as a
percentage of nonaccrual loans 208% 217% 172% 179% 212%
(1) Excludes loans held for sale.
Allowance for Loan Losses The allowance for loan losses as a percentage of total loans decreased to 1.11 percent at June 30, 2004 compared to 1.14 percent at December 31, 2003. The allowance for loan losses decreased primarily due to improved asset quality trends as well as a change in the mix of the loan portfolio towards 1-4 family mortgages and home equity lines of credit. This type of secured lending generally carries lower credit risk and thus requires lower allocations in our allowance model. 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 assessment of its credit risk profile. 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 the third quarter and the remainder of 2004 on Tuesday Tuesday: see week. , July July: see month. 13, 2004 at 11:00 a.m. The following table outlines access information for the conference call and internet/audio replay:
International
US/Canada Participants Participants
----------------------------------------------------------------------
Live Conference Call 800-379-3953 706-679-5254
ID # 8498472 ID # 8498472
----------------------------------------------------------------------
Internet Live and Replay www.FirstCharter.com www.FirstCharter.com
"Investor Relations" "Investor Relations"
section section
SHOW # 174965 SHOW # 174965
----------------------------------------------------------------------
Audio Replay 800-642-1687 706-645-9291
ID # 8498472 ID # 8498472
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 $4.3 billion and is the holding company for First Charter Bank. First Charter operates 54 financial centers, six insurance offices and 93 ATMs located in 18 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 results in connection with the implementation of our business plan and strategic initiatives 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 Corporation 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 Corporation is engaged; (9) regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. compliance cost increases are greater than expected; and (10) decisions to change the business mix of the Corporation. 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 Corporation 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
Quarterly Earnings Release
As of / For the Six
Months Ended Increase (Decrease)
(Dollars in thousands, ------------------------------------------
except per share data) 6/30/2004 6/30/2003 Amount Percentage
----------------------------------------------------------------------
BALANCE SHEET
ASSETS:
Cash and due from banks $ 94,749 $ 103,199 $ (8,450) (8.2)%
Federal funds sold 1,960 1,233 727 59.0
Interest earning bank
deposits 19,513 38,308 (18,795) (49.1)
Securities available for
sale 1,604,585 1,518,918 85,667 5.6
Loans held for sale 26,768 45,311 (18,543) (40.9)
Loans
Commercial Real Estate 768,637 765,303 3,334 0.4
Commercial Non Real
Estate 208,587 212,753 (4,166) (2.0)
Construction 332,031 209,926 122,105 58.2
Mortgage 315,005 257,236 57,769 22.5
Consumer 276,236 271,734 4,502 1.7
Home equity 447,739 347,716 100,023 28.8
------------------------------------------
Total loans 2,348,235 2,064,668 283,567 13.7
Less: Unearned income (197) (209) 12 (5.7)
Allowance for loan losses (26,052) (23,644) (2,408) 10.2
------------------------------------------
Loans, net 2,321,986 2,040,815 281,171 13.8
------------------------------------------
Other assets 269,652 240,750 28,902 12.0
------------------------------------------
Total assets $4,339,213 $3,988,534 $ 350,679 8.8 %
------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits
Noninterest-bearing
deposits $ 368,738 $ 341,176 $ 27,562 8.1%
Interest checking and
savings 450,950 409,415 41,535 10.1
Money market deposits 563,523 535,021 28,502 5.3
Time deposits 1,211,554 1,272,937 (61,383) (4.8)
------------------------------------------
Total deposits 2,594,765 2,558,549 36,216 1.4
Other borrowings 1,410,481 1,076,595 333,886 31.0
Other liabilities 50,186 39,474 10,712 27.1
------------------------------------------
Total liabilities 4,055,432 3,674,618 380,814 10.4
------------------------------------------
Total shareholders'
equity 283,781 313,916 (30,135) (9.6)
------------------------------------------
Total liabilities and
shareholders' equity $4,339,213 $3,988,534 $ 350,679 8.8%
------------------------------------------
----------------------------------------------------------------------
SELECTED AVERAGE BALANCES
Loans and loans held for
sale $2,306,505 $2,145,946 $ 160,559 7.5%
Securities 1,614,000 1,354,558 259,442 19.2
Interest earning assets 3,940,172 3,561,743 378,429 10.6
Assets 4,263,381 3,893,661 369,720 9.5
Deposits 2,492,291 2,449,733 42,558 1.7
Interest bearing
liabilities 3,572,821 3,212,849 359,972 11.2
Shareholders' equity 299,848 325,699 (25,851) (7.9)
----------------------------------------------------------------------
As of / For the Quarter Ended
-------------------------------------------------
6/30/04 3/31/04 12/31/03
-------------------------------------------------
MISCELLANEOUS
INFORMATION
Common stock prices
(daily close)
High $ 21.89 $ 21.68 $ 21.20
Low 20.05 19.52 19.27
End of period 21.79 21.14 19.55
Book Value 9.53 10.38 10.08
Market Capitalization 648,666,205 628,876,525 581,029,187
Weighted average
shares - basic 29,763,619 29,738,553 29,685,088
Weighted average
shares - diluted 30,067,462 30,029,056 29,685,088
End of period
shares outstanding 29,768,986 29,748,180 29,720,163
----------------------------------------------------------------------
As of / For the Quarter Ended
--------------------------------------------------
9/30/03 6/30/03
--------------------------------------------------
MISCELLANEOUS
INFORMATION
Common stock prices (daily close)
High $ 20.40 $ 19.56
Low 17.04 16.69
End of period 19.60 17.59
Book Value 10.20 10.55
Market Capitalization 581,005,034 523,475,726
Weighted average
shares - basic 29,672,137 29,801,059
Weighted average
shares - diluted 29,904,440 29,801,059
End of period
shares outstanding 29,643,114 29,759,848
----------------------------------------------------------------------
First Charter Corporation and Subsidiaries
Quarterly Earnings Release
As of / For the Quarter Ended
------------------------------------------------------
(Dollars in
thousands,
except per
share data) 6/30/04 3/31/04 12/31/03 9/30/03 6/30/03
----------------------------------------------------------------------
BALANCE SHEET
ASSETS:
Cash and due
from banks $ 94,749 $ 75,040 $ 88,564 $ 84,468 $ 103,199
Federal funds
sold 1,960 1,723 1,311 2,004 1,233
Interest
earning bank
deposits 19,513 17,951 23,631 42,560 38,308
Securities
available for
sale 1,604,585 1,622,967 1,601,900 1,603,262 1,518,918
Loans held for
sale 26,768 17,969 5,137 14,784 45,311
Loans
Commercial
Real Estate 768,637 749,355 724,340 732,434 765,303
Commercial Non
Real Estate 208,587 210,010 212,010 199,412 212,753
Construction 332,031 346,109 358,217 275,005 209,926
Mortgage 315,005 288,505 280,748 258,927 257,236
Consumer 276,236 271,686 284,448 279,512 271,734
Home equity 447,739 414,410 393,041 364,191 347,716
--------------------------------------------------------
Total loans 2,348,235 2,280,075 2,252,804 2,109,481 2,064,668
Less: Unearned
income (197) (209) (167) (190) (209)
Allowance for
loan losses (26,052) (25,736) (25,607) (23,953) (23,644)
--------------------------------------------------------
Loans, net 2,321,986 2,254,130 2,227,030 2,085,338 2,040,815
--------------------------------------------------------
Other assets 269,652 258,081 259,120 255,551 240,750
--------------------------------------------------------
Total assets $4,339,213 $4,247,861 $4,206,693 $4,087,967 $3,988,534
--------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits
Noninterest-
bearing
deposits $ 368,738 $ 353,133 $ 326,679 $ 337,409 $ 341,176
Interest
checking and
savings 450,950 454,024 440,496 425,219 409,415
Money market
deposits 563,523 506,504 470,551 534,148 535,021
Time deposits 1,211,554 1,193,781 1,190,171 1,184,806 1,272,937
------------------------------------------------------
Total
deposits 2,594,765 2,507,442 2,427,897 2,481,582 2,558,549
Other
borrowings 1,410,481 1,377,374 1,432,200 1,261,412 1,076,595
Other
liabilities 50,186 54,308 47,157 42,710 39,474
--------------------------------------------------------
Total
liabilities 4,055,432 3,939,124 3,907,254 3,785,704 3,674,618
--------------------------------------------------------
Total
shareholders'
equity 283,781 308,737 299,439 302,263 313,916
--------------------------------------------------------
Total
liabilities and
shareholders'
equity $4,339,213 $4,247,861 $4,206,693 $4,087,967 $3,988,534
------------------------------------------------------
----------------------------------------------------------------------
SELECTED AVERAGE BALANCES
Loans and
loans held
for sale $2,339,435 $2,273,575 $2,188,643 $2,130,236 $2,179,291
Securities 1,637,918 1,590,083 1,585,679 1,560,430 1,412,491
Interest
earning
assets 3,995,390 3,884,954 3,792,383 3,730,688 3,648,447
Assets 4,316,360 4,210,401 4,158,189 4,062,106 3,981,461
Deposits 2,547,909 2,436,673 2,496,810 2,543,301 2,519,240
Interest
bearing
liabilities 3,610,337 3,535,305 3,431,144 3,381,916 3,286,646
Shareholders'
equity 296,699 303,722 304,097 303,186 325,728
----------------------------------------------------------------------
First Charter Corporation and Subsidiaries
Quarterly Earnings Release
For the Three Months Ended Increase (Decrease)
(Dollars in thousands, --------------------------------------------
except per share data) 6/30/2004 6/30/2003 Amount Percentage
---------------------------------------------------------------------
INCOME STATEMENT
Interest income -
taxable equivalent $ 45,375 $ 45,689 $ (314) (0.7)%
Interest expense 14,874 19,102 (4,228) (22.1)
--------------------------------------------
Net interest income -
taxable equivalent 30,501 26,587 3,914 14.7
Less: taxable
equivalent adjustment 469 548 (79) (14.4)
--------------------------------------------
Net interest
income 30,032 26,039 3,993 15.3
Provision for loan
losses 2,000 19,492 (17,492) (89.7)
--------------------------------------------
Net interest
income after
provision for
loan losses 28,032 6,547 21,485 328.2
Noninterest income 14,890 20,215 (5,325) (26.3)
Noninterest expense 27,685 32,988 (5,303) (16.1)
--------------------------------------------
Income before income
taxes 15,237 (6,226) 21,463 (344.7)
Income tax expense
(benefit) 4,982 (2,022) 7,004 (346.4)
--------------------------------------------
Net income (loss) $ 10,255 $ (4,204) $ 14,459 (343.9)%
--------------------------------------------
---------------------------------------------------------------------
EARNINGS (LOSS) PER SHARE DATA
Basic $ 0.34 $ (0.14) $ 0.48 (342.9)%
Diluted 0.34 (0.14) 0.48 (342.9)
Weighted average
shares - basic 29,763,619 29,801,059
Weighted average
shares - diluted 30,067,462 29,801,059
Dividends paid on
common shares $ 0.185 $ 0.185 $ - - %
---------------------------------------------------------------------
PERFORMANCE RATIOS
Return on average assets 0.96 % (0.42)%
Return on average equity 13.90 (5.18)
Efficiency - taxable
equivalent (a) 61.66 85.65
---------------------------------------------------------------------
For the Three Months Ended
---------------------------
SCHEDULE OF SELECTED ITEMS INCLUDED
IN EARNINGS 6/30/2004 6/30/2003
---------------------------
Noninterest income
Gain on sale of securities $ 494 $ 8,286
Equity method investment loss (76) (276)
Trading (losses) gains (5) 432
Noninterest expense
Prepayment costs on borrowings - (7,366)
---------------------------------------------------------------------
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 Six Months Ended Increase (Decrease)
--------------------------------------------
(Dollars in thousands,
except per share data) 6/30/2004 6/30/2003 Amount Percentage
----------------------------------------------------------------------
INCOME STATEMENT
Interest income -
taxable equivalent $ 91,112 $ 91,706 $ (594) (0.6)%
Interest expense 29,731 37,887 (8,156) (21.5)
--------------------------------------------
Net interest income -
taxable equivalent 61,381 53,819 7,562 14.1
Less: taxable
equivalent adjustment 976 1,197 (221) (18.5)
--------------------------------------------
Net interest income 60,405 52,622 7,783 14.8
Provision for loan
losses 5,000 21,543 (16,543) (76.8)
--------------------------------------------
Net interest income
after provision for
loan losses 55,405 31,079 24,326 78.3
Noninterest income 29,555 35,754 (6,199) (17.3)
Noninterest expense 55,993 59,021 (3,028) (5.1)
--------------------------------------------
Income before income
taxes 28,967 7,812 21,155 270.8
Income taxes 9,472 2,070 7,402 357.6
--------------------------------------------
Net income $ 19,495 $ 5,742 $ 13,753 239.5 %
--------------------------------------------
----------------------------------------------------------------------
EARNINGS PER SHARE DATA
Basic $ 0.65 $ 0.19 $ 0.46 242.1 %
Diluted 0.65 0.19 0.46 242.1
Weighted average shares
- basic 29,765,952 29,903,170
Weighted average shares
- diluted 30,061,529 30,079,806
Dividends paid on
common shares $ 0.370 $ 0.370 $ - - %
----------------------------------------------------------------------
PERFORMANCE RATIOS
Return on average assets 0.92 % 0.30 %
Return on average equity 13.07 3.56
Efficiency - taxable
equivalent (a) 62.13 73.72
----------------------------------------------------------------------
For the Six Months Ended
-----------------------------
SCHEDULE OF SELECTED ITEMS
INCLUDED IN EARNINGS 6/30/2004 6/30/2003
-----------------------------
Noninterest income
Gain on sale of securities $820 $9,512
Gain on sale of credit
card loans - 2,213
Equity method investment loss (300) (376)
Trading gains 104 1,596
Gain on sale of properties 777 -
Noninterest expense
Prepayment costs on borrowings - (7,366)
---------------------------------------------------------------------
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
As of / For the Quarter Ended
-------------------------------------------------
(Dollars in
thousands, except
per share data) 6/30/04 3/31/04 12/31/03 9/30/03 6/30/03
---------------------------------------------------------------------
INCOME STATEMENT
Interest income -
taxable equivalent
Interest and fees
on loans $ 29,373 $ 29,291 $ 29,282 $ 29,042 $ 30,593
Interest on
securities 15,960 16,399 15,743 14,625 14,931
Other interest
income 42 47 38 97 165
-------------------------------------------------
Total interest
income - taxable
equivalent 45,375 45,737 45,063 43,764 45,689
-------------------------------------------------
Interest expense
Interest on
deposits 8,619 8,125 8,449 9,963 11,667
Other interest
expense 6,255 6,732 7,121 7,070 7,435
-------------------------------------------------
Total interest
expense 14,874 14,857 15,570 17,033 19,102
-------------------------------------------------
Net interest
income - taxable
equivalent 30,501 30,880 29,493 26,731 26,587
Less: Taxable
equivalent
adjustment 469 507 513 531 548
-------------------------------------------------
Net interest
income 30,032 30,373 28,980 26,200 26,039
Provision for loan
losses 2,000 3,000 3,575 2,400 19,492
-------------------------------------------------
Net interest
income after
provision for
loan losses 28,032 27,373 25,405 23,800 6,547
-------------------------------------------------
Noninterest income
Service charges on
deposit accounts 6,346 5,605 5,768 5,674 5,571
Financial
management income 1,545 1,502 1,239 1,400 488
Gain on sale of
securities 494 326 505 270 8,286
Gain on sale of
credit card loan
portfolio - - - 49 -
(Loss) income from
equity method
investments (76) (224) 13 78 (276)
Mortgage loan fees 596 428 508 1,185 578
Brokerage services
income 902 970 857 861 812
Insurance services
income 2,634 3,031 2,415 2,327 2,229
Trading (losses)
gains (5) 109 47 158 432
Bank owned life
insurance 847 850 983 992 967
Gain on sale of
properties - 777 - 382 -
Other noninterest
income 1,607 1,291 1,144 1,324 1,128
-------------------------------------------------
Total noninterest
income 14,890 14,665 13,479 14,700 20,215
-------------------------------------------------
Noninterest expense
Salaries and
employee benefits 14,368 15,023 15,372 13,133 12,520
Occupancy and
equipment 4,379 4,237 4,346 4,079 3,913
Data processing 1,006 862 792 712 634
Marketing 1,126 1,118 948 1,173 1,161
Postage and
supplies 1,306 1,271 1,251 982 1,152
Professional
services 2,361 2,712 3,422 3,158 3,230
Telephone 507 494 567 584 513
Amortization of
intangibles 96 118 152 127 77
Prepayment costs
on borrowings - - 11,723 - 7,366
Other noninterest
expense 2,536 2,473 2,792 2,451 2,422
-------------------------------------------------
Total noninterest
expense 27,685 28,308 41,365 26,399 32,988
-------------------------------------------------
Income (loss)
before taxes 15,237 13,730 (2,481) 12,101 (6,226)
Income tax expense
(benefit) 4,982 4,490 (1,991) 3,207 (2,022)
-------------------------------------------------
Net income (loss)$ 10,255 $ 9,240 $ (490) $ 8,894 $ (4,204)
-------------------------------------------------
---------------------------------------------------------------------
EARNINGS (LOSS) PER SHARE DATA
Basic $ 0.34 $ 0.31 $ (0.02) $ 0.30 $ (0.14)
Diluted 0.34 0.31 (0.02) 0.30 (0.14)
Dividends paid on
common shares 0.185 0.185 0.185 0.185 0.185
---------------------------------------------------------------------
PERFORMANCE RATIOS
Return on average
assets 0.96 % 0.88 % (0.05) % 0.87 % (0.42)%
Return on average
equity 13.90 12.24 (0.64) 11.64 (5.18)
Efficiency -
taxable
equivalent (a) 61.66 62.60 97.41 64.14 85.65
Noninterest income
as a percentage
of total income 33.15 32.56 31.75 35.94 43.70
Equity as a
percentage of
total assets 6.54 7.27 7.12 7.39 7.87
Average earning
assets as a
percentage of
average assets 92.56 92.27 91.20 91.84 91.64
Average loans as a
percentage of
average deposits 91.82 93.31 87.66 83.76 86.51
---------------------------------------------------------------------
As of / For the Quarter Ended
-------------------------------------------------
SCHEDULE OF SELECTED
ITEMS INCLUDED IN
EARNINGS 6/30/04 3/31/04 12/31/03 9/30/03 6/30/03
-------------------------------------------------
Noninterest income
Gain on sale of
securities $494 $326 $505 $270 $8,286
Gain on sale of
credit card loans - - - 49 -
Equity method
investment (loss)
income (76) (224) 13 78 (276)
Trading (losses)
gains (5) 109 47 158 432
Gain on sale of
properties - 777 - 382 -
Noninterest expense
Prepayment costs
on borrowings - - (11,723) - (7,366)
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
As of / For the Quarter Ended
--------------------------------------------
(Dollars in thousands,
except per share data) 6/30/04 3/31/04 12/31/03 9/30/03 6/30/03
---------------------------------------------------------------------
ASSET QUALITY ANALYSIS
Allowance for Loan Losses
Beginning balance $25,736 $25,607 $23,953 $23,644 $26,495
Provision for loan
losses 2,000 3,000 3,575 2,400 19,492
Allowance related to
loans sold - (549) - - (20,236)
Charge-offs (2,472) (2,582) (2,304) (2,238) (2,448)
Recoveries 788 260 383 147 341
--------------------------------------------
Net charge-offs (1,684) (2,322) (1,921) (2,091) (2,107)
--------------------------------------------
Ending balance $26,052 $25,736 $25,607 $23,953 $23,644
=============================================
Nonperforming Assets and
Loans 90 days or more
past due accruing
interest
Nonaccrual loans $12,533 $11,845 $14,910 $13,398 $11,144
Other real estate 6,159 6,199 6,836 6,709 6,866
---------------------------------------------
Total nonperforming
assets 18,693 18,044 21,746 20,107 18,010
---------------------------------------------
Loans 90 days or more
past due accruing
interest - - 21 21 312
---------------------------------------------
Total $18,693 $18,044 $21,767 $20,128 $18,322
=============================================
Asset Quality Ratios (a)
Nonaccrual loans as a
percentage of total
loans 0.53% 0.52% 0.66% 0.64% 0.54%
Nonperforming assets as a
percentage of total assets 0.43 0.42 0.52 0.49 0.45
Nonperforming assets as a
percentage of total loans
and other real estate 0.79 0.79 0.96 0.95 0.87
Net charge-offs as a
percentage of average
loans (annualized) 0.29 0.41 0.35 0.40 0.39
Allowance for loan losses
as a percentage of loans 1.11 1.13 1.14 1.14 1.15
Ratio of allowance for
loan losses to:
Net charge-offs 3.85x 2.76x 3.36x 2.89x 2.80x
Nonaccrual loans 2.08 2.17 1.72 1.79 2.12
----------------------------------------------------------------------
As of /
For the Six Months Ended Increase (Decrease)
------------------------------------------------
6/30/04 6/30/03 Amount Percentage
------------------------------------------------
Allowance for Loan
Losses
Beginning balance $25,607 $27,204 $(1,597) (5.9)%
Provision for loan
losses 5,000 21,543 (16,543) (76.8)
Allowance related to
loans sold (549) (20,783) 20,234 (97.4)
Charge-offs (5,054) (4,914) 140 2.8
Recoveries 1,048 594 454 76.4
------------------------------------------------
Net charge-offs (4,006) (4,320) (314) (7.3)
------------------------------------------------
Ending balance $26,052 $23,644 $2,408 10.2%
================================================
Asset Quality Ratios (a)
Net charge-offs as a
percentage of average
loans (annualized) 0.35% 0.41%
Ratio of allowance for
loan losses to
net charge-offs
(annualized) 3.24x 2.71x
For the Quarter Ended
------------------------------------------
6/30/04 3/31/04 12/31/03 9/30/03 6/30/03
------------------------------------------
ANNUALIZED INTEREST YIELDS /
RATES (b)
Interest income:
Yield on loans and loans
held for sale 5.05% 5.18% 5.31% 5.41% 5.63%
Yield on securities 3.90 4.13 3.97 3.75 4.23
------------------------------------------
Yield on interest
earning assets 4.56 4.73 4.73 4.67 5.02
------------------------------------------
Interest expense:
Cost of interest bearing
deposits 1.59 1.55 1.59 1.80 2.12
Cost of borrowings 1.77 1.89 2.14 2.38 2.75
------------------------------------------
Cost of interest bearing
liabilities 1.66 1.69 1.80 2.00 2.33
------------------------------------------
Interest rate spread 2.90 3.04 2.93 2.67 2.69
==========================================
Net yield on earning
assets 3.06% 3.19% 3.10% 2.86% 2.92%
==========================================
Notes: Applicable ratios are annualized.
(a) - Excludes loans held for sale.
(b) - Fully taxable equivalent yields.
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