SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 21, 1995
FIRST CHARTER CORPORATION
(Exact name of registrant as specified in its charter)
North Carolina 0-15829 56-1355866
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
22 Union Street, North, Concord, North Carolina 28026-0228
(Address, including zip code, of principal executive offices)
(704)786-3300
(Registrant's telephone number, including area code)
Item 2 Acquisition or Disposition of Assets.
Effective December 21, 1995 (the "Closing Date"), Interim
Bank of Union ("Interim Bank"), a wholly owned subsidiary of
First Charter Corporation (the "Registrant"), was merged (the
"Merger") into Bank of Union ("Union") pursuant to the Agreement
and Plan of Merger dated September 13, 1995 (the "Merger
Agreement") by and between the Registrant and Union and ratified
by Interim Bank. In connection with the Merger and as of the
Closing Date, (i) each outstanding share of common stock of Union
(other than shares owned by the Registrant) was converted into
.75 shares (the "Exchange Ratio") of the Registrant's common
stock, $5.00 par value (the "First Charter Common Stock"), with
cash paid in lieu of the issuance of fractional shares, (ii) each
outstanding share of capital stock of Interim Bank was converted
into a share of common stock of Union, and (iii) Union became a
wholly owned subsidiary of the Registrant. Also on the Closing
Date, all rights with respect to Union common stock pursuant to
stock options granted by Union under Union's stock option plan
then outstanding were converted into and became rights with
respect to First Charter Common Stock based on the Exchange
Ratio. In the Merger, 1,591,668 shares of First Charter Common
Stock were issued, and based on the number of shares of First
Charter Common Stock outstanding immediately prior thereto,
following the Merger there were approximately 6,236,014
shares of First Charter Common Stock outstanding.
The Registrant's Registration Statement on Form S-4
(Registration No. 33-63157), which was declared effective by the
Securities and Exchange Commission on November 13, 1995 (the
"Registration Statement"), sets forth certain information
regarding the Merger, the Registrant and Union, including but not
limited to, the manner of the Merger; a description of the assets
involved; the nature and amount of consideration paid by the
Registrant therefor; the method used for determining the amount
of such consideration; the nature of any material relationship
between Union and the Registrant, any officer or director of the
Registrant, or any associate of any such officer or director; the
nature of Union's business; and the Registrant's intended use of
the assets acquired in the Merger.
Item 7 Financial Statements and Exhibits.
(a) The following financial statements of Union are filed
herewith or incorporated herein by reference, as noted:
Report of Independent Accountants*
Report of Predecessor Accountants**
Consolidated Balance Sheets as of December
31, 1994 and 1993*
Consolidated Statements of Income for the
years ended December 31, 1994, 1993 and
1992*
Consolidated Statements of Changes in
Shareholders' Equity for the years ended
December 31, 1994, 1993 and 1992*
Consolidated Statements of Cash Flows for
the years ended December 31, 1994, 1993
and 1992*
Notes to Consolidated Financial Statements
for the years ended December 31, 1994,
1993 and 1992*
Consolidated Balance Sheets as of September
30, 1995 (unaudited) and December 31,
1994
Consolidated Statements of Income and
Retained Earnings for the three months
ended September 30, 1995 and 1994
(unaudited)
Consolidated Statements of Income and
Retained Earnings for the nine months
ended September 30, 1995 and 1994
(unaudited)
Consolidated Statements of Changes in
Shareholders' Equity for the nine months
ended September 30, 1995 and 1994
(unaudited)
Consolidated Statements of Cash Flows for
the nine months ended September 30, 1995
and 1994 (unaudited)
Notes to Consolidated Financial Statements
(unaudited)
_____________________
*Incorporated herein by reference to Bank of Union's Annual
Report on Form F-2 for the fiscal year ended December 31, 1994,
which is Exhibit 99.11 to the Registrant's Registration Statement
on Form S-4 (Registration No. 33-63157).
**Incorporated herein by reference to Bank of Union's
Amendment No. 1 to its Annual Report on Form F-2 for the fiscal
year ended December 31, 1994, which is Exhibit 99.12 to the
Registrant's Registration Statement on Form S-4 (Registration No.
33-63157)
(b) The following pro forma condensed financial information
is filed herewith or incorporated herein by reference, as noted:
Introductory Statement
Pro Forma Condensed Balance Sheet as of
September 30, 1995 (unaudited)
Pro Forma Condensed Statements of Income
for the nine months ended September 30,
1995 and 1994 (unaudited)
Notes to the Unaudited September 30, 1995
Pro Forma Condensed Financial
Information
Pro Forma Condensed Statements of Income
for the years ended December 31, 1994,
1993 and 1992 (unaudited)***
_____________
***Incorporated herein by reference to the Registrant's
Registration Statement on Form S-4 (Registration NO. 33-63157)
(c) The following exhibits are filed herewith or
incorporated herein by reference, as noted:
Exhibit No. Description
2.1 Agreement and Plan of Merger dated September 13,
1995 between the Registrant and Bank of Union,
incorporated herein by reference to Appendix A of
the Registrant's Registration Statement on Form S-
4 (Registration No. 33-63157)
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Coopers & Lybrand L.L.P.
99.1 Joint Press Release dated December 14, 1995 with
respect to shareholder approvals of the Merger
99.2 Press Release dated December 21, 1995 with respect
to consummation of the Merger
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
FIRST CHARTER CORPORATION
By: /s/ LAWRENCE M. KIMBROUGH
Lawrence M. Kimbrough
President and Chief Executive
Officer
Dated: January 5, 1996
<PAGE>
BANK OF UNION AND SUBSIDIARY
Consolidated Balance Sheets - September 30, 1995
(Unaudited) and December 31, 1994
Consolidated Statements of Income and Retained Earnings
Three Months Ended September 30, 1995 and 1994
(Unaudited)
Consolidated Statements of Income and Retained Earnings
Nine Months Ended September 30, 1995 and 1994
(Unaudited)
Consolidated Statements of Changes in Shareholders' Equity
Nine Months Ended September 30, 1995 and 1994
(Unaudited)
Consolidated Statements of Cash Flows - Nine Months Ended
September 30, 1995 and 1994 (Unaudited)
Notes to Consolidated Financial Statements (Unaudited)
<PAGE>
Bank of Union and Subsidiary
Consolidated Balance Sheet
September 30, 1995 and December 31, 1994
Sept 30, 1995 December 31,
(Unaudited) 1994
_____________ ____________
ASSETS
Cash and due from banks $ 6,067,677 5,245,250
Interest-bearing due from banks 4,826,623 2,537,451
Federal funds sold - 625,000
Interest-bearing bank time deposits 4,500,000 1,000,000
Securities available for sale 5,843,680 6,751,456
Securities held to maturity
(estimated market value of
$29,043,664 and $20,678,808
at September 30, 1995 and
December 31, 1994, respectively) 28,601,629 21,076,347
Loans 89,804,158 83,927,205
Less allowance for loan losses (1,635,220) (1,314,606)
_____________ ____________
Loans, net 88,168,938 82,612,599
Premises and equipment, net 1,536,367 1,596,493
Other assets 2,026,740 1,968,535
_____________ ____________
Total assets $ 141,571,654 123,413,131
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand 21,732,839 15,663,116
Interest-bearing demand 25,342,911 26,037,405
Savings 7,013,747 6,602,084
Time, $100,000 or more 14,869,254 14,991,410
Other time 53,966,397 43,173,831
_____________ ____________
Total deposits 122,925,148 106,467,846
Other borrowings 5,465,629 4,707,259
Drafts outstanding 869,755 1,413,398
Other liabilities 674,649 749,887
_____________ ____________
Total liabilities 129,935,181 113,338,390
_____________ ____________
Shareholders' equity:
Common stock - $1.25 par value.
Authorized - 6,000,000 shares.
Issued and outstanding -
2,192,270 shares at
September 30, 1995 and
2,184,979 at December 31, 1994 2,740,337 2,731,224
Additional paid-in capital 5,061,579 5,039,149
Retained earnings 3,863,693 2,552,085
Net unrealized holding losses on
securities available for sale (29,136) (247,717)
_____________ ____________
Total shareholders' equity 11,636,473 10,074,741
_____________ ____________
Total liabilities and shareholders'
equity $ 141,571,654 123,413,131
============= ============
See accompanying notes to consolidated financial statements.
<PAGE>
Bank of Union and Subsidiary
Consolidated Statements of Income and Retained Earnings
for the Three Months Ended September 30, 1995 and 1994
(Unaudited)
1995 1994
Interest income: ___________ ___________
Interest and fees on loans $ 2,094,101 1,711,145
Interest on Federal funds sold 5,634 16,603
Interest on bank time deposits 63,559 8,437
Interest on interest-bearing
due from banks 70,435 32,940
Interest on investment securities:
U.S. Government and agency
obligations 408,740 255,217
State, county and municipal
obligations 111,800 102,389
Interest on other 6,810 5,977
___________ ___________
Total interest income 2,761,079 2,132,708
Interest expense:
Interest on deposits:
Demand 152,425 143,657
Savings 39,180 36,444
Time, $100,000 or more 297,354 152,586
Other time 713,159 438,710
Interest on Federal funds purchased - 518
Interest on other borrowings 74,813 74,028
___________ ___________
Total interest expense 1,276,931 845,943
___________ ___________
Net interest income 1,484,148 1,286,765
Provision for loan losses 85,000 77,000
___________ ___________
Net interest income after
provision for loan losses 1,399,148 1,209,765
Other operating income:
Service charges on deposit accounts 223,559 224,383
Insurance commissions and other income 210,112 115,795
Gain/(loss) on sale of securities (2,403) (41,504)
Credit card income 664,630 201,343
___________ ___________
Total other operating income 1,095,898 500,017
Other operating expenses:
Compensation 640,080 538,373
Occupancy 96,328 91,367
Equipment 80,162 82,204
Advertising 23,242 25,709
Professional services 25,249 23,193
Postage 26,934 21,104
Printing and supplies 33,643 34,162
FDIC insurance premium (6,403) 53,839
Credit card expense 641,605 267,430
Other expenses 164,102 95,989
___________ ___________
Total other operating expenses 1,724,942 1,233,370
___________ ___________
Income before income taxes 770,104 476,412
Less: Income tax expense 234,700 142,200
___________ ___________
Net income $ 535,404 334,212
Retained earnings - beginning of period 3,328,289 2,589,734
Retained earnings - end of period $ 3,863,693 2,923,946
=========== ===========
Net income per share (note 2) $ 0.24 0.15
==== ====
See accompanying notes to consolidated financial statements.
<PAGE>
Bank of Union and Subsidiary
Consolidated Statements of Income and Retained Earnings
for the Nine Months Ended September 30, 1995 and 1994
(Unaudited)
1995 1994
___________ ___________
Interest income:
Interest and fees
on loans $ 6,038,950 4,706,923
Interest on Federal
funds sold 57,455 42,673
Interest on bank time deposits 90,817 22,524
Interest on interest-bearing
due from banks 195,840 56,661
Interest on investment
securities:
U.S. Government and agency
obligations 1,039,832 664,313
State, county and municipal
obligations 332,318 300,032
Interest on other 20,623 14,768
___________ ___________
Total Interest income 7,775,835 5,807,894
Interest expense:
Interest on deposits:
Demand 436,419 400,284
Savings 111,459 105,478
Time, $100,000 or more 709,137 371,157
Other time 2,004,024 1,224,537
Interest on Federal funds
purchased - 1,512
Interest on other
borrowings 225,146 136,775
___________ ___________
Total interest expense 3,486,185 2,239,743
___________ ___________
Net interest income 4,289,650 3,568,151
Provision for loan losses 340,000 209,000
___________ ___________
Net interest income after
provision for loan losses 3,949,650 3,359,151
Other operating income:
Service charges on
deposit accounts 660,312 662,633
Insurance commissions
and other income 471,843 377,158
Gain/(loss) on sale
of securities (14,224) (22,691)
Credit card income 1,638,348 502,507
___________ ___________
Total other operating
income 2,756,279 1,519,607
Other operating expenses:
Compensation 1,769,812 1,578,541
Occupancy 277,440 266,428
Equipment 260,491 264,622
Advertising 64,904 56,791
Professional services 88,165 77,891
Postage 75,921 58,011
Printing and supplies 103,430 101,940
FDIC insurance premium 110,928 156,340
Credit card expense 1,599,944 518,041
Other expenses 485,586 439,409
___________ ___________
Total other operating
expenses 4,836,621 3,518,014
___________ ___________
Income before income
taxes $ 1,869,308 1,360,744
Less: Income tax expense 557,700 407,000
___________ ___________
Net income 1,311,608 953,744
Retained earnings -
beginning of period 2,552,085 1,970,202
Retained earnings -
end of period $ 3,863,693 2,923,946
=========== ===========
Net income per share
(note 2) $ 0.60 0.44
=========== ===========
See accompanying notes to consolidated financial statements.
<PAGE>
Bank of Union
Consolidated Statements of Changes in Shareholders' Equity
September 30, 1995 and December 31, 1994
Unrealized Total
Gains/Losses Stock-
Additional on Securities Holders'
Common Paid-In Retained Available for Equity
Stock Capital Earnings Sale
- ----------------------------------------------------------------
Balance
at
December
31, 1994 $2,731,224 5,039,149 2,552,08 (247,717) 10,074,741
Issuance of
7,291
shares of
common
stock
from
exercise
of stock
options 9,113 22,430 31,543
Change in
unrealized
gains/(losses)
on securities
avilable for
sale, net
of income
taxes of
$112,601 218,581 218,581
1995 year-to-
date net income 1,311,608 1,311,608
Balance at
September ---------- --------- --------- -------- ----------
30, 1995 $2,740,337 5,061,579 3,863,693 (29,136) 1,636,473
========== ========= ========= ======== ==========
See accompanying notes to consolidated financial statements.
Bank of Union and Subsidiary
Consolidated Statements of Cash Flows
for the Nine Months Ended September 30, 1995 and 1994
(Unaudited)
1995 1994
__________ __________
Cash flows from operating activities:
Net Income $ 1,311,608 953,744
Adjustments to reconcile net income
to net cash provided by
operating activities:
Provision for loan losses 340,000 209,000
Depreciation and amortization 191,487 188,455
Amortization (accretion) on
investment securities (106,732) 25,921
Loss on sale of securities
available for sale 14,224 22,691
Increase in other assets (207,084) (223,211)
Increase (decrease) in other
liabilities (75,238) 68,592
(Gain) loss on sale of premises
and equipment 1,267 (5,015)
__________ __________
Net cash provided by operating
activities 1,469,532 1,240,177
__________ __________
Cash flows from investing activities:
Proceeds from maturities of
interest-bearing bank time
deposits 1,000,000 2,000,000
Purchases of interest-bearing
bank time deposits (4,500,000) (1,000,000)
Proceeds from sales of
securities available for sale 1,876,476 1,974,004
Proceeds from maturities of
securities available for sale - 2,000,000
Proceeds from maturities of
securities held to maturity 5,750,000 -
Purchases of securities available
for sale (978,594) (629,142)
Purchases of securities held
to maturity (13,261,377) (10,273,067)
Principal collected on mortgage-
backed securities 419,679 650,688
Net increase in loans made
to customers (5,896,339) (6,981,984)
Purchases of premises and
equipment (96,350) (87,617)
Proceeds from sales of premises
and equipment - 13,620
__________ __________
Net cash used in
investing activities (15,686,505) (12,333,498)
__________ __________
Cash flows from financing activities:
Net increase in demand
deposits and savings accounts 5,786,892 1,887,320
Net increase in time deposits 10,670,410 6,878,299
Net decrease in drafts outstanding (543,643) (562,567)
Net increase in securities sold
under agreements to repurchase 1,094,084 373,156
Principal repayments of
long-term borrowings (335,714) (50,000)
Proceeds from issuance of
long-term borrowings - 2,000,000
Proceeds from issuance
of common stock 31,543 -
__________ __________
Net cash provided by
financing activities 16,703,572 10,526,208
__________ __________
Net increase (decrease) in
cash and cash equivalents 2,486,599 (567,113)
Cash and cash equivalents
at beginning of period 8,407,701 10,035,362
__________ __________
Cash and cash equivalents
at end of period $ 10,894,300 9,468,249
=========== ==========
Supplemental disclosures of cash
flow information:
Cash paid during the period for :
Interest $ 3,487,842 2,247,368
Income Taxes 626,000 321,282
=========== ==========
See accompanying notes to consolidated financial statements.
<PAGE>
Bank of Union and Subsidiary
Notes to Consolidated Financial Statements
September 30, 1995 and December 31, 1994
(1) The interim consolidated financial statements are unaudited.
In the opinion of management, these accompanying unaudited
financial statements contain all adjustments (consisting of only
normal, recurring adjustments,) necessary to present fairly the
financial position as of September 30, 1995, the results of
operations for the three and nine months ended September 30, 1995
and 1994, and the cash flows for the nine months ended September
30, 1995 and 1994.
(2) Income per share, based on the weighted average number of
shares outstanding during the period, excludes common stock
equivalent shares assuming the exercise of outstanding stock
options because their effect on income per share is not material.
Weighted average shares outstanding were 2,189,786 and 2,184,373
for the nine months ended September 30, 1995 and 1994,
respectively.
(3) In the normal course of business there are outstanding
commitments for the extension of credit which are not reflected
in the financial statements. No material losses are anticipated
as a result of these transactions. Unused commitments to fund
loans were approximately $21,941,000 at September 30, 1995.
Commitments under standby letters of credit were approximately
$521,000 at September 30, 1995.
(4) On September 13, 1995, the Board of Directors of Bank of
Union signed a definitive agreement to merge with First Charter
Corporation of Concord, North Carolina.
In the transaction, Bank of Union shareholders will receive
0.75 shares of the common stock of First Charter for each share
of Bank of Union common stock. Under the terms of the merger,
Bank of Union will become a separate subsidiary of First Charter
Corporation.
(5) Effective January 1, 1995, the Bank adopted Statement of
Financial Accounting Standards No. 114, "Accounting by Creditors
for Impairment of a Loan" (SFAS 114) as amended by Statement of
Financial Accounting Standards No. 118, "Accounting by Creditors
for Impairment of a Loan - Income Recognition and Disclosures"
(SFAS 118). Under the new standards, a loan is considered
impaired, based on current information and events, if it is
probable that the Bank will be unable to collect the scheduled
payments of principal or interest when due according to the
contractual terms of the loan agreement. The measurement of
impaired loans that are collateral dependent is based on the fair
value of the collateral. The measurement of other impaired loans
is generally based on the present value of expected future cash
flows discounted at the historical effective interest rate. The
initial adoption of these standards had an immaterial effect on
the Bank's financial statements.
The adequacy of the allowance for credit losses is periodically
evaluated by the Bank in order to maintain the allowance at a
level that is sufficient to absorb probable credit losses.
Management's evaluation of the adequacy of the allowance is based
on a review of the Bank's historical loss experience, known and
inherent risks in the loan portfolio, including adverse
circumstances that may effect the ability of the borrower to
repay interest and/or principal, the estimated value of
collateral, and an analysis of the levels and trends of
delinquencies, charge-offs, and the risk ratings of the various
loan categories. Such factors as the level and trend of interest
rates and the condition of the national and local economies are
also considered.
The allowance for credit losses is established through charges to
earnings in the form of a provision for credit losses. Increases
and decreases in the allowance due to changes in the measurement
of the impaired loans are included in the provision for credit
losses. Loans continue to be classified as impaired unless they
are brought fully current and the collection of scheduled
interest and principal is considered probable.
When a loan or portion of a loan is determined to be
uncollectible, the portion deemed uncollectible is charged
against the allowance and subsequent recoveries, if any are
credited to the allowance.
Loans, including impaired loans, are generally classified as
nonaccrual if they are past due as to maturity or payment of
principal or interest for a period of more than 90 days, unless
such loans are well-collateralized and in the process of
collection. Generally, if a loan or a portion of a loan is
classified as doubtful or is partially charged off, the loan is
classified as nonaccrual. Loans that are on a current payment
status or past due less than 90 days may also be classified as
nonaccrual if repayment in full of principal and/or interest is
in doubt.
Loans may be returned to accrual status when all principal and
interest amounts contractually due (including arrearages) are
reasonably assured of repayment within an acceptable period of
time, and there is a sustained period of repayment performance by
the borrower, in accordance with the contractual terms of
interest and principal.
While a loan is classified as nonaccrual and the future
collectibility of the recorded loan balance is doubtful,
collections of interest and principal are generally applied as a
reduction to principal outstanding. When the future
collectibility of the recorded loan balance is expected, interest
income may be recognized on a cash basis. In the case where a
nonaccrual loan had been partially charged off, recognition of
interest on a cash basis is limited to that which would have been
recognized on the recorded loan balance at the contractual
interest rate. Cash receipts in excess of that amount are
recorded as recoveries to the allowance for loan losses until
prior charge-offs have been fully recovered.
Loans:
Loans at September 30, 1995 consist of the following:
(Dollars in thousands)
Commercial and agricultural $56,511
Real estate - construction 3,962
Real estate - mortgage 12,233
Loans to individuals 17,098
___________
Total loans 89,804
Less: allowance for loan losses 1,635
___________
Net loans $88,169
===========
Allowance for loan losses:
An analysis of the allowance for credit losses as of September
30, 1995 is as follows:
(Dollars in thousands)
Balance at beginning of period $1,315
Provision charged to operating expense 340
Recoveries on loans 16
Loans charged off (36)
___________
Balance at end of period $1,635
===========
At September 30, 1995, the recorded investment in loans for which
impairment has been recognized in accordance with SFAS 114
totaled approximately $420,000 with a corresponding valuation
allowance of $190,000. For the period ended September 30, 1995,
the average recorded investment in impaired loans was
approximately $415,000. The Bank recognized $13,500 in interest
income on impaired loans (during the portion of the period that
they were impaired) for the period ended September 30, 1995.
(6) A description of other significant accounting policies is
presented in the December 31, 1994 annual report.
<PAGE>
FIRST CHARTER CORPORATION
PRO FORMA
CONDENSED FINANCIAL INFORMATION
(Unaudited)
The following unaudited Pro Forma Condensed Financial
Information and explanatory notes are presented to show the
impact on the historical financial position and results of
operations of the Registrant of the Merger. The Merger is
reflected in the September 30, 1995 Pro Forma Condensed Financial
Information under the pooling-of-interests method of accounting.
The Pro Forma Condensed Balance Sheet is based on the assumption
that the Merger was consummated on September 30, 1995, and the
Pro Forma Condensed Statements of Income are based on the
assumption that the Merger was consummated at the beginning of
each period presented. The unaudited Pro Forma Condensed
Financial Information should be read in conjunction with the
historical financial statements and notes thereto of each of the
Registrant and Bank of Union. The pro forma information is not
necessarily indicative of the results of operations or combined
financial position that would have resulted had the Merger been
consummated at the beginning of the periods indicated, nor is it
necessarily indicative of the results of operations of future
periods or future combined financial position.
PRO FORMA CONDENSED BALANCE SHEET AT SEPTEMBER 30, 1995
(Unaudited)
(Dollars In thousands) FIRST
CHARTER UNION
ASSETS:
Cash and due from banks................. $15,931 $15,394
Federal funds sold...................... - -
Securities available for sale:
U.S. Government obligations............ 11,641 -
U.S. Government agency obligations..... 16,038 507
Mortgage-backed securities............. 2,528 3,071
State and municipal obligations,
nontaxable........................... 2,243 2,266
Other.................................. 4,342 -
________ _______
Total securities available for sale.. 36,792 5,844
________ ________
Investment securities:
U.S. Government obligations............ - 8,569
U.S. Government agency obligations..... 4,983 12,064
Mortgage-backed securities............. 12,625 595
State and municipal obligations,
nontaxable........................... 35,733 7,374
________ _______
Total investment securities ......... 53,341 28,602
________ _______
Loans................................... 228,648 89,804
Less: Unearned income.................. (298) -
Allowance for loan losses............ (3,069) (1,635)
________ _______
Loans, net...........................225,281 88,169
________ _______
Premises and equipment, net............. 8,020 1,536
Other Assets............................ 4,094 2,027
________ _______
Total assets $343,459 $141,572
======== =======
LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits, domestic:
Noninterest-bearing....................$ 48,280 21,733
Interest-bearing....................... 234,451 101,192
________ _______
Total deposits....................... 282,731 122,925
Short-term borrowings................... 16,956 5,466
Other liabilities....................... 2,922 1,544
________ _______
Total liabilities.................... 302,609 129,935
Shareholders' equity:
FCC Common stock-$5 par value;
authorized 10,000,000 shares; issued
and outstanding 4,643,993 shares at
9/30/95 ............................. 23,220 -
BOU Common Stock-$1.25 par value;
authorized 6,000,000 shares; issued
and outstanding 2,192,270 shares at
9/30/95 ............................ - 2,740
Additional paid-in capital............ 159 5,062
Unrealized gain (loss) on securities
available for sale.................. 648 (29)
Retained earnings....................... 16,823 3,864
________ _______
Total shareholders' equity............ 40,850 11,637
________ _______
Total liabilities and shareholders'
equity................................$343,459 $141,572
========= =========
See Notes to Pro Forma Condensed Financial Information.
<PAGE>
PRO FORMA CONDENSED BALANCE SHEET AT SEPTEMBER 30, 1995
(Unaudited) PRO FORMA
(Dollars In thousands) PRO FIRST CHARTER
FORMA AND UNION
ADJUST. COMBINED
ASSETS:
Cash and due from banks................. $ 31,325
Federal funds sold...................... -
Securities available for sale:
U.S. Government obligations............ 11,641
U.S. Government agency obligations..... 16,545
Mortgage-backed securities............. 5,599
State and municipal obligations,
nontaxable........................... 4,509
Other.................................. (391) 3,951
________ ________
Total securities available for sale.. (391) 42,245
Investment securities:
U.S. Government obligations............ 8,569
U.S. Government agency obligations..... 17,047
Mortgage-backed securities............. 13,220
State and municipal obligations,
nontaxable........................... 43,107
_________ ________
Total investment securities.......... 81,943
_________ ________
Loans................................... 318,452
Less: Unearned income.................. (298)
Allowance for loan losses............ (4,704)
_________
Loans, net........................... 313,450
Premises and equipment, net............. 9,556
Other Assets............................ 6,121
__________ ________
Total assets $ (391) $484,640
========== ========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits, domestic:
Noninterest-bearing.................... $ 70,013
Interest-bearing....................... 335,643
_________
Total deposits....................... - 405,656
Short-term borrowings................... 22,422
Other liabilities....................... 4,466
__________
Total liabilities.................... - 432,544
__________
<PAGE>
Shareholders' equity:
FCC Common stock-$5 par value;
authorized 10,000,000 shares; issued
and outstanding 4,643,993 shares at
9/30/95 ............................. 7,961 31,181
BOU Common Stock-$1.25 par value;
authorized 6,000,000 shares; issued
and outstanding 2,192,270 shares at
9/30/95 ............................. (2,740) -
Additional paid-in capital............. (5,221) -
Unrealized gain (loss) on securities
available for sale................... - 619
Retained earnings....................... (391) 20,296
_________ ________
Total shareholders' equity............ (391) 52,096
_________ ________
Total liabilities and shareholders'
equity................................ $ (391) $484,640
========= ========
See Notes to Pro Forma Condensed Financial Information
<PAGE>
PRO FORMA CONDENSED STATEMENTS OF INCOME
(Unaudited) Nine Months Nine Months
(Dollars in Thousands, Except Ended Ended
Per Share Aounts) 9/30/95 9/30/94
______________ _________ _________
Interest and fees on loans........... 21,547 $ 16,507
Interest on investments and
securities.......................... 5,770 5,127
Other interest....................... 37 15
__________ __________
Total interest income............... 27,354 21,649
Interest on deposits................. 10,284 7,090
Interest on borrowings............... 782 429
__________ __________
Total interest expense.............. 11,066 7,519
__________ __________
Net interest income................. 16,288 14,130
Provision for loan losses............ 890 559
__________ __________
Net interest income after provision
for loan losses.................... 15,398 13,571
Noninterest income................... 5,271 4,201
Noninterest expense.................. 12,300 10,996
__________ __________
Income before income taxes.......... 8,369 6,776
Income taxes ........................ 2,518 1,921
__________ __________
Net income........................... $ 5,851 $ 4,855
========== ==========
Primary income per share data:
Net Income.......................... $ 0.93 $0.77
========== =========
Average common equivalent shares.....6,283,626 6,302,090
<PAGE>
Income per share assuming full
dilution:
Net Income.......................... $ 0.93 $0.77
========== =========
Average common equivalent shares.....6,290,369 6,308,241
See Notes to Pro Forma Condensed Financial Information.
<PAGE>
NOTES TO THE UNAUDITED
PRO FORMA CONDENSED FINANCIAL INFORMATION
The unaudited First Charter and Union Pro Forma Condensed
Financial Information is based upon the following adjustments,
reflecting the consummation of the Merger using the pooling-of-
interests method of accounting. Actual amounts may differ from
those reflected in the unaudited Pro Forma Condensed Financial
Information.
Note 1
As of September 30, 1995, First Charter owned directly for
its own account 69,361 shares of Union Common Stock. Such shares
will be canceled and retired upon consummation of the Merger.
Note 2
First Charter will exchange 0.75 shares of First Charter
Common Stock for each share of Union Common Stock outstanding
immediately prior to the Effective Time (other than shares of
Union Common Stock as to which dissenters' rights have been
perfected and other than shares of Union Common Stock owned by
First Charter or FCNB, except for shares held in a fiduciary
capacity or as a result of debts previously contracted). The pro
forma issued number of shares of First Charter Common Stock does
not reflect the exercise of options to acquire shares of Union
Common Stock. Options to acquire 626 shares of Union Common
Stock were outstanding at September 30, 1995. Assumed exercise
of the Union options does not have a significant impact on pro
forma shareholders' equity or net income per share.
Shares of Union Common Stock (excluding First Charter-
owned shares and excluding 626 shares subject to
the exercise of options).......................... 2,122,909
Exchange Ratio..................................... 0.75
__________
Shares of First Charter Common Stock issued........ 1,592,181
Note 3
The unaudited Pro Forma Condensed Financial Information does
not include any expenses or restructuring charges related to the
Merger. Such after-tax expenses and restructuring charges
related to the Merger are currently estimated to be $825,000.
Professional fees associated with the transaction represent the
largest portion of the Merger expenses and the restructuring
charge.
Note 4
Historical primary (fully diluted) earnings per share for First
Charter for the nine months ended September 30, 1995 and 1994 were $.97
($.97) and $.83 ($.83) respectively.
EXHIBIT 23.1
CONSENT OF KPMG PEAT MARWICK LLP
BOARD OF DIRECTORS
FIRST CHARTER CORPORATION
We consent to the incorporation by reference in this Current Report on
Form 8-K of First Charter Corporation of our report on the 1993 and 1992
consolidated financial statements of Bank of Union dated February 11, 1994
included in the 1994 Annual Report on Form F-2 of Bank of Union, which is
included as Exhibit 99.12 to First Charter Corporation's Registration
Statement on Form S-4 (Registration No. 33-63157).
KPMG PEAT MARWICK LLP
Charlotte, North Carolina
January 4, 1996
EXHIBIT 23.2
CONSENT OF COOPERS & LYBRAND L.L.P.
We consent to the incorporation by reference in this Current Report
on Form 8-K of First Charter Corporation of our report dated February 3, 1995
on our audit of the consolidated financial statements of Bank of Union, as of
December 31, 1994 and for the year then ended, as included in its 1994 Annual
Report on Form F-2, which is included as Exhibit 99.11 to First Charter
Corporation's Registration Statement on Form S-4 (Registration No. 33-63157).
COOPERS & LYBRAND L.L.P.
Charlotte, North Carolina
January 4, 1996
FIRST CHARTER BANK OF UNION
logo
FOR IMMEDIATE RELEASE
FROM: First Charter Corporation Bank of Union
22 Union Street, North 201 N. Charlotte Avenue
concord, NC 28026-0228 Monroe, NC 28112
CONTACT: Lawrence M. Kimbrough H. Clark Goodwin
President and Chief President and Chief
Executive Officer Executive Officer
(704) 786-3300 (704) 289-9555
DATE: December 14, 1995
FIRST CHARTER CORPORATION AND BANK OF UNION
ANNOUNCE FAVORABLE SHAREHOLDER VOTES
FOR MERGER
First Charter Corporation (FCTR) and Bank of Union jointly
announced today that the shareholders of each company have
approved the merger transaction between the two companies, at
separate meetings held today. The merger transaction, which
earlier received applicable regulatory approvals, is expected to
close by year end. Actual consummation of the transaction is
subject to the expiration of all waiting periods imposed in
connection with such regulatory approvals and certain other
standard conditions. The resulting entity is anticipated to be
the largest community banking company serving the Greater
Charlotte Metropolitan Area of North Carolina, with a combined
$495 million in assets.
Bank of Union shareholders will receive 0.75 shares of the
common stock of First Charter for each share of Bank of Union
common stock in connection with the merger. Following
consummation of the merger, Bank of Union will be a separate
subsidiary of First Charter Corporation.
NEWS RELEASE FIRST
CHARTER
P. O. Box 228, Concord, NC 28026-0228 CORPORATION
(704) 786-3300 * FAX (704) 788-6031 For Information Call:
Lawrence M. Kimbrough
(704) 786-3300
FOR IMMEDIATE RELEASE
Concord, North Carolina
December 21, 1995
First Charter Corporation, Concord, North Carolina, the
holding company for First Charter National Bank, announced that
its merger transaction with Bank of Union became effective today.
As previously announced, First Charter will acquire all of
Bank of Union's outstanding capital stock in a tax-free
transaction, and Bank of Union will be a separate subsidiary of
First Charter Corporation. Bank of Union shareholders will
receive 0.75 shares of the common stock of First Charter for each
share of Bank of Union common stock.
The common stock of First Charter Corporation is traded on
the NASDAQ National Market under the symbol "FCTR." For
information, contact: Dean Witter Reynolds, Inc. (Larry Biggers,
1-800-929-0747), J. C. Bradford Co. (Carl Cline 1-800-222-1082)
and Wheat First Securities, Inc. (Robert Phillips, 1-800-289-
2671).
