As filed with the Securities and Exchange Commission on July 10, 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):
July 6, 1998
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FIRST CHARTER CORPORATION
-------------------------
(Exact name of registrant as specified in its charter)
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North Carolina 0-15829 56-1355866
- --------------- --------- ------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
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22 Union Street, North, Concord, North Carolina 28026-0228
(Addresses, including zip codes, of principal executive offices)
(704) 786-3300
(Registrant's telephone number, including area code)
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ITEM 5 OTHER EVENTS.
- -------------------------------
On July 6, 1998, First Charter Corporation, the registrant (the
"Registrant"), announced financial results for both the six and three month
periods ended June 30, 1998. A copy of the press release announcing these
financial results 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 July 6, 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: July 10, 1998
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EXHIBIT INDEX
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Exhibit No. Description Sequential Page
- ------------ ------------ No.
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99.1 News Release disseminated on July 6, 1998 by First
Charter Corporation.
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- --------------------------------------------------------FIRST
NEWS
- -------------------------------------------------------CHARTER
RELEASE
- -----------------------------------------------------CORPORATION
P.O. Box 228, Concord, NC 28026-0228
- -----------------------------------------------------
(704) 786-3300 o FAX (704) 788-0445
FOR IMMEDIATE RELEASE For Information Call:
Concord, North Carolina David E. Keul
July 6, 1998 (704) 786-3300
FIRST CHARTER ANNOUNCES RECORD EARNINGS
First Charter Corporation posted record earnings for both the six month and
three month periods ended June 30, 1998. Net income was $6,200,520, up 12.7%
over the $5,500,182 reported for the same six month period in 1997. Diluted
earnings per share for the first six months of 1998 were $0.66 compared to $0.59
reported for the same period in 1997.
Net income for the three month period ended June 30, 1998 was $3,189,864 versus
$2,814,083 for the comparable period in 1997, representing a 13.4% increase.
Diluted earnings per share for the quarter were $0.34 compared to $0.30 for the
second quarter of 1997.
On an annualized basis, year to date results represent a return on average
assets of 1.64% and a return on average equity of 15.28%. Comparable figures for
the six month period ended June 30, 1997 were 1.63% and 15.01%, respectively.
Total assets at June 30, 1998 were $793,052,223, up 4.1% from December 31, 1997.
Gross loans increased 8.7% to $569,852,470, and total deposits increased 4.6% to
$650,212,526 from December 31, 1997. Total shareholders' equity was $83,650,601
at June 30, 1998, which represents a book value per share of $8.94 and an
equity/asset ratio of 10.55%.
As reported on May 18, 1998, First Charter Corporation has signed a definitive
agreement to acquire HFNC Financial Corporation ("HFNC"), headquartered in
Charlotte, North Carolina, the parent company of Home Federal Savings and Loan
Association. In the transaction, HFNC shareholders will receive 0.57 shares of
First Charter Common Stock for each of their HFNC shares. Based on a First
Charter stock price of $24.50 per share at the time of the signing, the total
transaction value approximated $241 million or $13.97 for each share of HFNC
stock. The transaction will be structured to qualify as a tax-free
reorganization and will be accounted for as a pooling-of-interests. Consummation
of the transaction is subject to certain conditions, including receipt of
approval by the shareholders of both companies and approval of various
regulatory authorities. When consummated, this combination will create
Charlotte's largest community bank with assets of approximately $1.8 billion.
First Charter Corporation is headquartered in Concord, North Carolina, and is
the holding company for First Charter National Bank and Bank of Union. The
results detailed above are unaudited.
The common stock of First Charter Corporation is traded on the Nasdaq National
Market under the symbol "FCTR". For information, contact: Morgan Stanley, Dean
Witter, Discover & Company (Larry Biggers, 1-800-786-0006), Interstate/Johnson
Lane (Connie Bailey, 1-800-929-0747), J. C. Bradford (Carl Cline,
1-800-222-1082), Legg Mason Wood Walker, Inc. (A. Paul Newton, 1-800-628-5770),
and Wheat First Union, Inc. (Robert Phillips, 1-800-289-2671).
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- ----------------------------------------------------------------------------------------------------------------------------------
FIRST CHARTER CORPORATION AND SUBSIDIARIES
- ----------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
JUNE 30, December 31, June 30,
(Dollars in thousands) 1998 1997 1997
-------------------- ----------------- ----------------
(UNAUDITED) (Unaudited)
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ASSETS:
Cash and due from banks.............................. $40,300 $33,077 $32,228
Interest bearing bank deposits....................... 342 7,975 3,276
Securities available for sale........................ 164,236 177,031 143,822
Investment securities ............................... - - 15,772
Loans, net........................................... 561,480 515,799 487,436
Other assets......................................... 26,694 27,812 24,111
-------------------- ----------------- ----------------
Total assets.................................. $793,052 $761,694 $706,645
==================== ================= ================
LIABILITIES AND SHAREHOLDERS' EQUITY:
Total deposits....................................... $650,212 $621,354 $591,391
Other borrowings..................................... 53,583 53,279 34,302
Other liabilities.................................... 5,606 9,257 4,936
-------------------- ----------------- ----------------
Total liabilities............................. 709,401 683,890 630,629
Total shareholders' equity.................... 83,651 77,804 76,016
-------------------- ----------------- ----------------
Total liabilities and shareholders' equity.... $793,052 $761,694 $706,645
==================== ================= ================
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED) For the Three Months For the Six Months
Ended Ended
--------------------------------------- -----------------------------------
JUNE 30, June 30, JUNE 30, June 30,
(Dollars in thousands, except per share data) 1998 1997 1998 1997
-------------------- ----------------- ---------------- -------------
Total interest income................................ $15,234 $13,805 $30,164 $26,795
Total interest expense............................... 6,488 6,043 12,929 11,850
-------------------- ----------------- ---------------- -------------
Net interest income............................... 8,746 7,762 17,235 14,945
Provision for loan losses............................ 585 607 1,295 1,016
-------------------- ----------------- ---------------- -------------
Net interest income after provision
for loan losses................................. 8,161 7,155 15,940 13,929
Total noninterest income............................. 3,021 2,257 5,587 4,471
Total noninterest expense............................ 6,657 5,363 12,746 10,501
-------------------- ----------------- ---------------- -------------
Income before income taxes........................ 4,525 4,049 8,781 7,899
Income taxes......................................... 1,335 1,235 2,580 2,399
-------------------- ----------------- ---------------- -------------
Net income........................................ $3,190 $2,814 $6,201 $5,500
==================== ================= ================ =============
Basic income per share data:
Net income....................................... $0.34 $0.31 $0.66 $0.60
==================== ================= ================ =============
Average common equivalent shares................. 9,347,706 9,233,420 9,329,106 9,224,101
Diluted income per share:
Net income....................................... $0.34 $0.30 $0.66 $0.59
==================== ================= ================ =============
Average common equivalent shares................. 9,471,050 9,264,852 9,460,334 9,257,945
Cash dividends declared.............................. $0.15 $0.125 $0.29 $0.25
==================== ================= ================ =============
Book value........................................... $8.94 $8.21 $8.94 $8.21
==================== ================= ================ =============
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FIRST CHARTER CORPORATION AND SUBSIDIARIES
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SELECTED AVERAGE BALANCES For the Three Months For the Six Months
(UNAUDITED) Ended Ended
-------------------------- -----------------------------
JUNE 30, June 30, JUNE 30, June 30,
1998 1997 1998 1997
------------ ------------ ------------ ---------------
(Dollars in thousands)
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Interest earning assets................................................. $702,698 $645,762 $700,649 $634,528
Interest bearing liabilities............................................ 578,706 526,317 580,964 517,317
Average assets.......................................................... 770,032 690,048 761,232 678,695
Average equity.......................................................... 83,262 74,300 81,807 73,914
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ALLOWANCE FOR LOAN LOSSES
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JUNE 30, December 31, June 30,
(Dollars in thousands) 1998 1997 1997
---------------- -------------- ---------------
(UNAUDITED) (Unaudited)
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Beginning balance (January 1) ........................................ $8,004 $6,528 $6,528
Add:
Provision charged to operations....................................... 1,295 2,702 1,016
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9,299 9,230 7,544
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Less:
Loan charge-offs...................................................... 1,354 1,626 711
Less loan recoveries.................................................. 270 400 162
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Net loan charge-offs................................................ 1,084 1,226 549
-------------- ------------- -------------
Ending balance.......................................................... $8,215 $8,004 $6,995
============== ============= =============
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ASSET QUALITY RATIOS
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JUNE 30, December 31, June 30,
1998 1997 1997
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(UNAUDITED) (Unaudited)
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Nonaccruals to gross loans, excluding
loans held for sale................................................... 0.31% 0.40% 0.35%
Net charge-offs to average loans - (YTD annualized)..................... 0.40% 0.25% 0.23%
Allowance for loan losses to gross loans, excluding
loans held for sale................................................... 1.46% 1.53% 1.41%
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SIGNIFICANT OPERATING RATIOS
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JUNE 30, December 31, June 30,
1998 1997 1997
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(UNAUDITED) (Unaudited)
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Gross loans to total deposits........................................... 87.64% 84.34% 83.65%
Return on average assets - (YTD annualized)............................ 1.64% 1.20% 1.63%
Return on average equity - (YTD annualized) ............................ 15.28% 11.04% 15.01%
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