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As filed with the Securities and Exchange Commission on October 15, 1998
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):
October 14, 1998
----------------
FIRST CHARTER CORPORATION
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(Exact name of registrant as specified in its charter)
North Carolina 0-15829 56-1355866
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
22 Union Street, North, Concord, North Carolina 28026-0228
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(Addresses, including zip codes, of principal executive offices)
(704) 786-3300
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(Registrant's telephone number, including area code)
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Item 5 Other Events.
On October 14, 1998, First Charter Corporation the registrant (the
"Registrant") announced financial results for both the nine and three month
periods ended September 30, 1998. Also on October 14, 1998, the Registrant
announced a 13.3% increase in its fourth quarter dividend to $.17 per share from
$.15 per share. A copy of the press release is included as Exhibit 99.1 to this
Current Report on Form 8-K.
Item 7 Financial Statements and Exhibits
(c) The following exhibits are filed herewith:
Exhibit No. Description
- ----------- -----------
99.1 News release disseminated on October 14, 1998 by
First Charter Corporation
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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: October 15, 1998
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EXHIBIT INDEX
Exhibit No. Description Sequential Page
- ----------- ----------- No.
----------------
99.1 News Release disseminated on October 14,
1998 by First Charter Corporation.
<PAGE> 1
NEWS RELEASE FIRST CHARTER CORPORATION LOGO
P.O. Box 228, Concord, NC 28026-0228
(704) 786-3300 -- FAX (704) 788-0445
FOR IMMEDIATE RELEASE For Additional Information,
Concord, NC Contact David E. Keul
October 14, 1998 (704) 721-4482
FIRST CHARTER CORPORATION
ANNOUNCES THIRD QUARTER EARNINGS
AND INCREASES QUARTERLY DIVIDEND
FIRST CHARTER CORPORATION ANNOUNCES THIRD QUARTER EARNINGS
First Charter Corporation's merger with HFNC Financial Corp. ("HFNC"), the
parent company of Home Federal Savings and Loan Association, was completed on
September 30, 1998 and was accounted for as a pooling of interests. Accordingly,
all prior periods' financial statements have been restated to combine the
accounts of HFNC with those of First Charter Corporation. Total assets at
September 30, 1998 were $1.83 billion, up 9.6% from December 31, 1997. Gross
loans increased 11.5% to $1.41 billion and total deposits increased 3.2% to
$1.09 billion, from December 31, 1997. Total shareholders' equity was $243.3
million at September 30, 1998, which represents a book value per share of $13.46
and an equity-to-assets ratio of 13.28%. At September 30, 1998, First Charter
had 18,072,240 shares outstanding. The closing price of First Charter
Corporation Common Stock at October 14, 1998 was $15.625 per share, resulting in
a market capitalization for the Corporation of $282.4 million.
First Charter Corporation posted earnings totaling $17.7 million for the first
nine months of 1998, or $0.95 diluted earnings per share, before nonrecurring
pretax charges of $18.2 million primarily associated with the merger of HFNC.
Excluding the nonrecurring charges in 1998, as well as nonrecurring securities
gains recognized by HFNC of $3.3 million in 1997, diluted earnings per share for
the first nine months of 1998 increased 25.0%, compared to 1997. On an
annualized basis, First Charter's 1998 results, excluding these nonrecurring
items, produced a return on average assets of 1.34% and a return on average
equity of 9.37%, compared to 1.20% and 7.28%, respectively, in 1997.
For the three month period ended September 30, 1998, First Charter earned $4.9
million, excluding the nonrecurring charges, compared to $4.7 million in 1997,
which excludes the aforementioned nonrecurring securities gains of $3.3 million
($2.0 million after tax). Excluding these nonrecurring items, diluted earnings
per share for the quarter was $0.26 in 1998, compared to $0.25 in 1997,
representing an increase of 4.0%.
Including nonrecurring items, First Charter earned $3.4 million, or $0.18
diluted earnings per share, for the nine months ended September 30, 1998,
compared to $16.1 million, or $0.87 diluted earnings per share, in 1997. For the
three month period ended September 30, 1998, net loss totaled $9.4 million, or a
$0.51 diluted loss per share, compared to net income of $6.7 million, or $0.36
diluted earnings per share, in the third quarter of 1997.
CONTINUED
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NEWS RELEASE FIRST CHARTER CORPORATION LOGO
P.O. Box 228, Concord, NC 28026-0228
(704) 786-3300 -- FAX (704) 788-0445
PAGE 2
FIRST CHARTER CORPORATION INCREASES QUARTERLY DIVIDEND
First Charter Corporation announces a 13.3% increase in its fourth quarter
dividend to $.17 per share from $.15 per share. Based on an October 14, 1998
closing price of $15.625, the new dividend yield is 4.4%. The dividend will be
paid on January 15, 1999. The declaration and record dates are October 14, 1998
and December 18, 1998, respectively.
The common stock of First Charter Corporation is traded on the Nasdaq National
Market under the symbol "FCTR". For information, contact: J. C. Bradford,
Interstate/Johnson Lane, Legg Mason Wood Walker Inc., Morgan Stanley Dean Witter
& Co., and Wheat First Union, Inc.
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FIRST CHARTER CORPORATION AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, December 31, September 30,
1998 1997 1997
-----------------------------------------------
(Dollars in thousands)
<S> <C> <C> <C>
ASSETS:
Cash and due from banks ............. $ 35,944 $ 40,661 $ 41,481
Interest bearing bank deposits ...... 5,522 9,874 17,354
Federal funds sold .................. 26,305 8,195 14,992
Securities available for sale ....... 310,963 315,565 280,541
Securities held to maturity ......... -- -- 14,281
Loans, net .......................... 1,391,432 1,246,228 1,181,935
Other assets ........................ 62,139 51,957 45,142
---------- ---------- ----------
Total assets ................. $1,832,305 $1,672,480 $1,595,726
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Total deposits ...................... $1,092,996 $1,059,262 $1,051,789
Other borrowings .................... 464,753 350,079 282,301
Other liabilities ................... 31,296 19,230 20,276
---------- ---------- ----------
Total liabilities ............ 1,589,045 1,428,571 1,354,366
Total shareholders' equity ... 243,260 243,909 241,360
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Total liabilities and
shareholders' equity ...... $1,832,305 $1,672,480 $1,595,726
========== ========== ==========
</TABLE>
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
--------------------------------- --------------------------------
SEPTEMBER 30, September 30, SEPTEMBER 30, September 30,
1998 1997 1998 1997
--------------- --------------- --------------- ---------------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C>
Total interest income ................. $ 34,643 $ 31,370 $ 101,954 $ 91,297
Total interest expense ................ 18,139 16,329 52,610 46,580
------------ ----------- ------------ -----------
Net interest income ................ 16,504 15,041 49,344 44,717
Provision for loan losses ............. 655 733 1,917 1,729
------------ ----------- ------------ -----------
Net interest income after provision
for loan losses .................. 15,849 14,308 47,427 42,988
Total noninterest income .............. 2,684 2,392 10,426 7,433
Total noninterest expense ............. 11,106 9,629 30,799 29,105
------------ ----------- ------------ -----------
Income before income taxes ......... 7,427 7,071 27,054 21,316
Income taxes on recurring income ...... 2,555 2,413 9,378 7,255
------------ ----------- ------------ -----------
Net income, recurring .............. 4,872 4,658 17,676 14,061
Nonrecurring gain (charges), net of tax (14,320) 2,034 (14,320) 2,034
------------ ----------- ------------ -----------
Net income (loss) .................. $ (9,448) $ 6,692 $ 3,356 $ 16,095
============ =========== ============ ===========
Basic income (loss) per share data:
Net income, recurring ............. $ 0.27 $ 0.26 $ 0.97 $ 0.77
============ =========== ============ ===========
Net income (loss) ................. $ (0.52) $ 0.37 $ 0.18 $ 0.88
============ =========== ============ ===========
Average common equivalent shares .. 18,304,490 18,244,912 18,311,489 18,222,094
Diluted income (loss) per share:
Net income, recurring ............. $ 0.26 $ 0.25 $ 0.95 $ 0.76
============ =========== ============ ===========
Net income (loss) ................. $ (0.51) $ 0.36 $ 0.18 $ 0.87
============ =========== ============ ===========
Average common equivalent shares .. 18,657,474 18,365,680 18,693,390 18,579,027
Cash dividends declared ............... $ 0.15 $ 0.13 $ 0.45 $ 0.38
============ =========== ============ ===========
Book value ............................ $ 13.46 $ 12.67 $ 13.46 $ 12.67
============ =========== ============ ===========
</TABLE>
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FIRST CHARTER CORPORATION AND SUBSIDIARIES
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SELECTED AVERAGE BALANCES
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
--------------------------- ----------------------------
SEPTEMBER 30, September 30, SEPTEMBER 30, September 30,
1998 1997 1998 1997
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(Dollars in thousands)
<S> <C> <C> <C> <C>
Interest earning assets .... $1,706,881 $1,534,832 $1,666,140 $1,499,326
Interest bearing liabilities 1,431,572 1,268,608 1,390,568 1,214,049
Average assets ............. 1,817,781 1,600,044 1,759,755 1,572,002
Average equity ............. 255,430 239,499 252,158 258,411
</TABLE>
ALLOWANCE FOR LOAN LOSSES
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, September 30,
1998 1997
----------------------------
(Dollars in thousands)
<S> <C> <C>
Beginning balance (January 1) ... $15,263 $14,409
Add:
Provision charged to operations 1,917 1,729
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17,180 16,138
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Less:
Loan charge-offs .............. 2,258 1,545
Less loan recoveries .......... 453 284
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Net loan charge-offs ........ 1,805 1,261
------- -------
Ending balance .................. $15,375 $14,877
======= =======
</TABLE>
ASSET QUALITY RATIOS
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, September 30,
1998 1997
-----------------------------
<S> <C> <C>
Nonaccruals to gross loans, excluding
loans held for sale ................... 0.44% 0.71%
Net charge-offs to average loans - (YTD
annualized) ............................. 0.17% 0.15%
Allowance for loan losses to gross loans,
excluding loans held for sale ......... 1.10% 1.24%
</TABLE>
SIGNIFICANT OPERATING RATIOS
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, September 30,
1998 1997
-----------------------------
<S> <C> <C>
Gross loans to total deposits .............. 128.73% 113.82%
Return on average assets - (YTD annualized) 0.25% 1.37%
excluding nonrecurring items ............ 1.34% 1.20%
Return on average equity - (YTD annualized) 1.78% 8.33%
excluding nonrecurring items ............ 9.37% 7.28%
</TABLE>
