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Article Excerpt
Business Editors
CHARLOTTE, N.C.--(BUSINESS WIRE)--April 15, 2003
First Charter Corporation (NASDAQ: FCTR) reported today first quarter diluted earnings per share of $0.33, an 18 percent increase from diluted earnings per share of $0.28 in the first quarter of 2002.
Earnings for the first quarter amounted to $9.9 million compared to $8.8 million in the first quarter of 2002, an increase of 14 percent or $1.1 million. Earnings for the first quarter of 2003 include a $2.2 million ($1.6 million, or $0.05 diluted earnings per share, after-tax) gain recognized on the sale of the Corporation's $11.7 million credit card portfolio. The sale of the consumer credit card balances was a strategic decision that will allow First Charter to continue to offer credit card products that will carry the First Charter brand through a major market leader.
"First Charter is pleased with our results for the first quarter of 2003 as we continue to execute our Community Banking Strategy," commented President and Chief Executive Officer Lawrence M. Kimbrough. "Our continued growth in earning assets, deposits and noninterest income reflects our commitment to understanding and meeting the financial needs of our customers."
First Quarter 2003 Highlights (compared to Fourth Quarter 2002)
-- Earning assets increased $306.8 million, or 9 percent.
-- Deposits increased $170.3 million, or 7 percent.
-- Nonperforming assets increased $4.5 million to $41.2 million.
-- The Corporation continued its share repurchase program, with
the repurchase and retirement of 125,000 shares in the first
quarter of 2003.
First Quarter 2003 Highlights (compared to First Quarter 2002)
-- Net interest income decreased $1.0 million, or 4 percent.
-- Noninterest income increased $4.6 million, or 43 percent.
-- Noninterest expense increased $1.7 million, or 7 percent.
-- Net charge-offs increased $0.8 million to $2.2 million.
-- Customer satisfaction scores increased from 74 percent to 80
percent "Very Satisfied".
Financial Highlights For the Three Months Ended March 31 ------------------------- (Dollars in thousands, except per share data) 2003 2002 --------------------------------------------------------- ------------ Earnings Total revenues $ 42,153 $ 38,478 Net income 9,946 8,765 Diluted earnings per share 0.33 0.28 Return on average assets 1.06% 1.05% Return on average equity 12.06 11.04 Efficiency-taxable equivalent ratio (a) 63.03 69.14 (a) - Noninterest expense divided by the sum of taxable equivalent net interest income plus noninterest income less gain on sale of securities. March December 31 31 2003 2002
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Balance Sheet Loans held for sale $ 69,894 $ 158,404 Loans, net 2,050,943 2,045,266 Investments 1,453,827 1,129,212 Total assets 3,991,267 3,745,949 Demand, savings and money market deposits 1,175,580 1,027,459 Total deposits 2,492,929 2,322,647 Other borrowings 1,116,223 1,042,440 Shareholders' equity 326,071 324,686 March December 31 31 2003 2002
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Asset Quality Ratios (1) Nonaccrual loans as a percentage of total loans 1.44% 1.28% Allowance for loan losses as a percentage of loans 1.28 1.31 Net charge-offs as a percentage of average loans 0.43 0.37 Nonperforming assets as a percentage of total loans and other real estate 1.97 1.76 (1) Ratios exclude loans held for sale.
Net Interest Income/Margin
Net interest income decreased 4 percent to $26.6 million compared to the first quarter of 2002. The decrease was primarily due to lower interest income on earning assets resulting from the continued effects of a declining interest rate environment. In addition, the Corporation sold $70 million in bonds in the fourth quarter of 2002 and reinvested the proceeds into Bank Owned Life Insurance, to help offset the rise in employee benefit costs. This investment is classified as an other asset on the balance sheet, and the income is recognized as other noninterest income rather than being recognized as interest income. For the first quarter of 2003, income earned on Bank Owned Life Insurance amounted to approximately $950,000, which is nontaxable. On a taxable equivalent basis, income from Bank Owned Life Insurance was approximately $1.5 million for an annualized taxable equivalent yield of 8.39 percent. The decrease in net interest income was partially offset by a decrease in interest expense due to lower cost of funding. The net interest margin decreased to 3.18 percent in the first quarter of 2003 from 3.64 percent for the same period in 2002. This decrease was driven by the continued effects of the 50 basis point reduction in rates during the fourth quarter of 2002. This significantly reduced the net interest margin due to the asset sensitive nature of the balance sheet. In addition, assets added to the balance sheet during 2002 and 2003 have been...
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