First Charter Reports 11.6% Increase in First Quarter Net Income; Firs

First Charter Reports 11.6% Increase in First Quarter Net Income; First Quarter 2005 compared to First Quarter 2004

    Business Editors

    CHARLOTTE, N.C.--(BUSINESS WIRE)--April 18, 2005--First Charter Corporation (NASDAQ:FCTR):

--	Net Income Rose 11.6% to $10.3 Million.
--	Home Equity and Consumer Loans Grew 15.3% and 14.4%, Respectively.
--	CHAMP Success Propelled Noninterest Demand Deposit Growth Near $50 Million or 14.1%.
--	Deposit and Insurance Fee Revenue Drove 7.8% Increase in Noninterest Income.
--	Solid Credit Quality Trends Continued - Net Charge-offs Fell to 21 Basis Points of Total Loans.
--	Quarterly Customer Satisfaction Survey Score Hit 85% "Very Satisfied" - Highest Score Since Measurement Began in 2001.

    First Charter Corporation (NASDAQ:FCTR) today reported that 2005 first quarter net income rose to $10.3 million from $9.2 million in the same quarter a year ago, representing a $1.1 million, or 11.6 percent increase. On a fully diluted per-share basis, net income increased to $0.34 from $0.31 a year ago. The stronger performance was driven, in part, by fee revenue growth, a continued focus on expense management and solid credit quality.
    Return on average assets and return on average equity were 0.94 percent and 13.21 percent, respectively, for the first quarter of 2005 compared to 0.88 percent and 12.24 percent for the first quarter of 2004.
    First quarter 2005 earnings included $1.0 million of one-time, pre-tax expenses associated with the previously reported separation agreement entered into with the Corporation's former CFO in connection with his retirement from the Corporation.
    "The performance of First Charter in the first quarter continues the earnings momentum achieved in 2004," said Lawrence M. Kimbrough, President & CEO of First Charter Corporation. "We are leveraging our Community Banking Model, which is based on acquiring new customers and deepening relationships with existing customers through exceptional service."
    "We are also excited about the continued growth in checking account balances, our best customer satisfaction scores to date, and the initial progress of our Raleigh market entry," Kimbrough added. "Providing our clients with a consistently high level of service quality and convenience will continue to be the foundation for our future growth."

Financial Highlights (Dollars in thousands, For the Three Months except per share data) Ended March 31 Increase (Decrease) ----------------------- ---------------------- Earnings 2005 2004 Amount Percentage ----------------------- ----------- ----------- ----------------------

Total revenues(1) $ 46,388 $ 45,038 $ 1,350 3.00% Net income 10,309 9,240 1,069 11.57 Diluted earnings per share 0.34 0.31 0.03 9.75

Financial Ratios ----------------------- Return on average assets 0.94% 0.88% Return on average equity 13.21 12.24 Efficiency-taxable equivalent ratio(2) 61.41 62.56

Average Balance Sheet ----------------------- Loans, net $2,551,876 $2,273,575 $278,301 12.24% Total assets 4,439,768 4,210,401 229,366 5.45 Total deposits 2,629,795 2,436,673 193,122 7.93 Other borrowings 1,443,909 1,430,127 13,782 0.96 Shareholders' equity 316,476 303,722 12,754 4.20

Asset Quality Ratios(3) ----------------------- Past due loans over 30 days as a percentage of loans 0.51% 0.64% Allowance for loan losses as a percentage of loans 1.02 1.13 Allowance for loan losses as a percentage of nonaccrual loans 296.09 217.28 Net charge-offs as a percentage of average loans-annualized(4) 0.21 0.41

(1) Net interest income plus noninterest income. (2) Noninterest expense divided by the sum of taxable equivalent net interest income plus noninterest income less gains or losses on sale of securities. (3) Ratios exclude loans held for sale. (4) Excludes the reduction in the allowance for loan losses related to the sales of nonperforming and higher risk loans in the first quarter of 2004.

    Solid Growth in Retail Lending

    Total loans increased $424.3 million, or 18.6 percent, to $2.70 billion at March 31, 2005 as compared to $2.28 billion at March 31, 2004. Mortgage loans increased $294.4 million, of which $215.5 million was attributable to the purchase of adjustable rate mortgage (ARM) loans during the quarter. This purchase was executed under a previously disclosed strategy in which the sale of investment securities and portfolio cash flows would fund the ARM purchases. In addition, home equity loans increased $63.5 million, or 15.3 percent, consumer loans grew $39.0 million, or 14.4 percent, and commercial real estate loans increased $24.7 million, or 3.3 percent, compared to the first quarter of 2004.
    A significant portion of the first quarter's loan growth occurred in the second half of the quarter, which resulted in lower average balance growth and delayed the lift in net interest income to subsequent periods. Average total loans increased $278.3 million, or 12.2 percent, to $2.55 billion compared with the same quarter a year ago. The purchased loans mentioned above contributed $106.8 million toward the growth in average loan balances for the quarter.
    As part of its growth strategy, First Charter entered the Raleigh market by opening a loan production office in the first quarter of 2005 and by introducing teams to originate mortgage and construction loans to individuals and residential builders. In addition, the Corporation anticipates offering consumer loans in the Raleigh market later this year.
    "Raleigh is one of the most attractive growth markets in the Carolinas and the southeast," commented Bob James, President and CEO of First Charter Bank. "We have achieved great success in both mortgage and construction lending in the Charlotte area, especially with home builders. Our expansion into Raleigh allows us to leverage our sales experience and operational efficiencies."
    "In addition, we have taken several steps recently to improve our commercial loan growth. We established a small business loan program and strengthened our emphasis on traditional commercial and industrial (C & I) lending," commented James. "We have hired six new commercial relationship officers with proven track records and established relationships with businesses in our markets."

    Noninterest Deposit Balances Continue To Build

    First Charter's CHecking Account Marketing Program (CHAMP) continued to attract new customers and generate deposits in the first quarter. Noninterest bearing deposits grew by $49.9 million or 14.1 percent from the same period a year ago. Contributing to the growth, 11,392 new checking accounts were opened, representing a 10.8 percent increase over the same period in 2004. This program is designed to develop new customer relationships, shift First Charter's funding mix towards lower-cost funding sources and generate additional fee income opportunities.
    "Our CHAMP program is off to a strong start in 2005, with the rate of account openings significantly outpacing 2004," James noted. "Growing checking account customers is an essential element of our Community Banking Model."
    During the first quarter, valuable transaction deposits (defined as money market, demand deposit and savings accounts) increased over both year-earlier and previous quarter levels. Compared to a year-ago, transaction deposits are up 1.3 percent, including a 14.1 percent, or $49.9 million increase in noninterest bearing deposits. This growth was offset by a 10.0 percent, or $50.6 million, decline in money market deposits. Savings account balances grew $18.0 million, or 4.0 percent, over the same period.
    Total average deposits increased $193.1 million, or 7.9 percent, to $2.63 billion compared to the same quarter a year ago. Transaction deposits increased $62.8 million or 5.1 percent. Certificates of deposit (CDs) also grew with an $83.8 million increase in wholesale CDs and a $50.0 million increase in retail CDs.

    Net Interest Margin Impacted by Wholesale Borrowing Costs

    The net interest margin on a tax equivalent basis decreased to 3.06 percent in the first quarter of 2005 from 3.19 percent for the same period in 2004, while net interest income increased $0.2 million, or 0.7 percent, to $30.6 million compared to the first quarter of 2004.
    The net interest margin was negatively impacted by a 56 basis point increase in the cost of interest bearing liabilities and an increase in the volume of interest bearing liabilities, specifically time deposit and other borrowings. Partially offsetting this increase was a 35 basis point increase in earning asset yields.
    Specifically, the cost of interest bearing liabilities was impacted by a 93 basis point increase in wholesale borrowing costs and a 34 basis point increase in deposit yields.
    Over the same period, loan yields have improved by 62 basis points, while investment securities yields have declined by 21 basis points.
    The securities portfolio decreased $182.5 million, or 11.2 percent, to $1.44 billion at March 31, 2005 as compared to $1.62 billion a year earlier. The average balance of securities-available-for-sale decreased $29.2 million compared to the same quarter a year ago. The reduction in the securities portfolio was due to the Corporation's execution of its previously disclosed strategy to redeploy portfolio sale proceeds primarily into ARM loans. These ARM loans have similar average lives and a higher yield than the securities sold.

    Noninterest Income Benefits From Greater Fee Revenue

    Noninterest income increased $1.1 million, or 7.8 percent, to $15.8 million compared to the first quarter of 2004.
    The increase was primarily due to a $0.6 million increase in service charges, a $0.6 million increase in other noninterest income related to growth in ATM, debit card and other miscellaneous fees, and a $0.5 million increase in insurance service income primarily due to the integration of a recently purchased insurance agency and a $0.1 million increase in contingency income. These gains were partially offset by a $0.4 million reduction in securities sale gains and a $0.2 million reduction in property sale gains. For the quarter, securities sales registered a net loss of $49 thousand and property sale gains totaled $0.5 million.

    Noninterest Expenses Impacted by One-Time Costs

    Noninterest expense increased $0.6 million, or 2.0 percent, to $28.9 million compared to the first quarter of 2004. Significant contributors to the increase included a one-time $1.0 million expense associated with the previously disclosed former CFO's retirement from the Corporation and a one-time $0.2 million charge incurred in the Corporation's financial management business. In addition, data processing expenses increased $0.5 million due to increased debit card processing and software maintenance expenses. These increases were partially offset by a $0.8 million decrease in professional fees primarily due to lower Sarbanes-Oxley Act compliance costs and lower expenses associated with the sale of higher risk mortgage loans in the first quarter of 2004 that did not recur in 2005.

    Efficiency Ratio Improves

    The efficiency ratio decreased to 61.4 percent compared to 62.6 percent for the first quarter of 2004. The calculation of the efficiency ratio excludes the impact of securities sales.

    Customer Satisfaction Reaches New Record

    A record high 85 percent of branch customers reported they were "Very Satisfied" with service at First Charter. This satisfaction score, gathered through an independent survey of 1,500 customers each quarter, represents the highest score attained since the measurement program began in 2001. The national average for customer satisfaction with commercial banks, as reported in the American Banker/Gallup 2004 Consumer Survey, is 58 percent "Very Satisfied".
    "First Charter is very serious about delivering exceptional service each and every day," commented Bob James. "And our customers tell us we're excelling at it."

    Asset Quality Trends Continue To Improve

    Asset quality trends continue to be solid. Net charge-offs were reduced significantly, falling to 21 basis points of average total loans in the first quarter of 2005 from 41 basis points in the same quarter a year-ago and 30 basis points in the fourth quarter of 2004.

Asset Quality Ratios

March 31 Dec. 31 Sept. 30 June 30 March 31 2005 2004 2004 2004 2004 -------- -------- -------- -------- -------- Past Due ------------------------- Past due loans over 30 days as a percentage of loans 0.51% 0.51% 0.61% 0.47% 0.64%

Nonaccrual Loans ------------------------- Nonaccrual loans as a percentage of loans 0.34% 0.57% 0.59% 0.53% 0.52%

Nonperforming Assets ------------------------- Nonperforming assets as a percentage of loans and other real estate owned 0.62% 0.73% 0.79% 0.79% 0.79%

Charge-offs ------------------------- Net charge-offs as a percentage of average loans-annualized 0.21% 0.30% 0.13% 0.29% 0.41%

Allowance for Loan Losses ------------------------- Allowance for loan losses as a percentage of loans 1.02% 1.10% 1.11% 1.11% 1.13% Allowance for loan losses as a percentage of nonaccrual loans 296% 192% 189% 208% 217%

    Nonperforming assets totaled $16.9 million at March 31, 2005, representing a $1.1 million decrease from a year ago and a $0.9 million decrease from December 31, 2004. The ratio of nonperforming assets to total loans and other real estate owned fell to 62 basis points at March 31, 2005, compared to 79 basis points a year-ago, and 73 basis points on December 31, 2004.
    The allowance for loan losses to average total loans was 1.02 percent in the first quarter of 2005, representing a reduction from 1.10 percent in the previous quarter and 1.13 percent in the same quarter a year-ago. The provision for loan losses decreased to $1.9 million for the three months ended March 31, 2005 compared to $3.0 million for the same year ago period. Both the lower allowance for loan loss ratio and the reduction in provision expense are related to the increased proportion of lower-risk mortgage loans in the loan portfolio and the Corporation's improved credit quality trends.

    Conference Call and 2005 Update

    The First Charter executive management team will be available via telephone conference to discuss the contents of this press release, as well as an update on strategic plans for 2005 on Tuesday, April 19, 2005 at 10:00 a.m. EDT. The following table outlines access information for the conference call and internet/audio replay:

US/Canada Participants International Participants ---------------------------------------------------------------------- Live Conference 800-379-3953 706-679-5254 Call ID # 5345593 ID # 5345593 ---------------------------------------------------------------------- Internet Live www.FirstCharter.com www.FirstCharter.com and Replay "Investor Relations" section "Investor Relations" section SHOW # 226200 SHOW # 226200 ---------------------------------------------------------------------- Audio Replay 800-642-1687 706-645-9291 ID # 5345593 ID # 5345593

    Corporate Profile

    First Charter Corporation is a regional financial services company with assets of $4.5 billion and is the holding company for First Charter Bank. First Charter operates 53 financial centers, seven insurance offices and 110 ATMs located in 18 counties throughout the piedmont and western half of North Carolina. First Charter also operates loan origination offices in Raleigh, NC and Reston, VA. First Charter provides businesses and individuals with a broad range of financial services, including banking, financial planning, funds management, investments, insurance, mortgages and a full array of employee benefit programs. Additional information about First Charter may 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 than expected; (5) risks inherent in making loans, including repayment risks and risks associated with collateral 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 or changes thereto adversely affect the businesses in which the Corporation is engaged; (9) regulatory compliance cost increases are greater than expected; and (10) the passage of future tax legislation, or any negative regulatory, administrative or judicial position, may adversely impact 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) 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. The Corporation undertakes no obligation to publicly revise those forward looking statements to reflect events and circumstances that arise after the date hereof.

    (Selected financial information is attached)

First Charter Corporation and Subsidiaries (NASDAQ: FCTR) Quarterly Earnings Release

As of / For the Three Months Ended Increase (Decrease) ----------------------- -------------------- (Dollars in thousands, except per share data) 3/31/2005 3/31/2004 Amount Percentage ------------------------------------- ----------- --------- ---------- BALANCE SHEET ASSETS: Cash and due from banks $110,745 $75,040 $35,705 47.6% Federal funds sold 1,951 1,723 228 13.2 Interest earning bank deposits 5,507 17,951 (12,444) (69.3) Securities available for sale 1,440,494 1,622,967 (182,473) (11.2) Loans held for sale 6,006 17,969 (11,963) (66.6) Loans Commercial Real Estate 774,088 749,355 24,733 3.3 Commercial Non Real Estate 210,990 210,010 980 0.5 Construction 347,877 346,109 1,768 0.5 Mortgage 582,893 288,505 294,388 102.0 Consumer 310,690 271,686 39,004 14.4 Home equity 477,884 414,410 63,474 15.3 ----------- ----------- --------- ---------- Total loans 2,704,422 2,280,075 424,347 18.6 Less: Unearned income (232) (209) (23) 11.0 Allowance for loan losses (27,483) (25,736) (1,747) 6.8 ----------- ----------- --------- ---------- Loans, net 2,676,707 2,254,130 422,577 18.7 ----------- ----------- --------- ---------- Other assets 271,643 258,081 13,562 5.3 ----------- ----------- --------- ---------- Total assets $4,513,053 $4,247,861 $265,192 6.2% ----------- ----------- --------- ----------

LIABILITIES AND SHAREHOLDERS' EQUITY: Deposits Noninterest-bearing deposits $402,986 $353,133 $49,853 14.1% Interest checking and savings 472,063 454,024 18,039 4.0 Money market deposits 455,870 506,504 (50,634) (10.0) Retail certificates of deposit 971,199 906,578 64,621 7.1 Wholesale certificates of deposit 400,590 287,203 113,387 39.5 ----------- ----------- --------- ---------- Total deposits 2,702,708 2,507,442 195,266 7.8 Other borrowings 1,451,756 1,377,374 74,382 5.4 Other liabilities 46,335 54,308 (7,973) (14.7) ----------- ----------- --------- ---------- Total liabilities 4,200,799 3,939,124 261,675 6.6 ----------- ----------- --------- ---------- Total shareholders' equity 312,254 308,737 3,517 1.1 ----------- ----------- --------- ---------- Total liabilities and shareholders' equity $4,513,053 $4,247,861 $265,192 6.2% ----------- ----------- --------- ----------

---------------------------------------------------------------------- SELECTED AVERAGE BALANCES Loans and loans held for sale $2,551,876 $2,273,575 $278,301 12.2% Securities 1,560,874 1,590,083 (29,209) (1.8) Interest earning assets 4,122,175 3,884,954 237,221 6.1 Assets 4,439,768 4,210,401 229,367 5.4 Noninterest bearing deposits 372,861 331,496 41,365 12.5 Deposits 2,629,795 2,436,673 193,122 7.9 Other borrowings 1,443,909 1,430,127 13,782 1.0 Interest bearing liabilities 3,700,843 3,535,305 165,538 4.7 Shareholders' equity 316,476 303,722 12,754 4.2 ------------------------------------- ----------- --------- ----------

As of / For the Quarter Ended -------------------------------------- 3/31/2005 12/31/2004 9/30/2004 -------------------------------------- MISCELLANEOUS INFORMATION Common stock prices (daily close) High $ 25.74 $ 28.11 $ 24.50 Low 22.33 25.00 20.86 End of period 22.59 26.17 24.17 Book Value 10.31 10.47 10.35 Market Capitalization 683,929,554 786,519,880 720,988,635 Weighted average shares - basic 30,234,683 29,973,996 29,810,917 Weighted average shares - diluted 30,630,601 30,605,826 30,231,191 End of period shares outstanding 30,275,766 30,054,256 29,829,898

As of / For the Quarter Ended -------------------------- 6/30/2004 3/31/2004 -------------------------- MISCELLANEOUS INFORMATION Common stock prices (daily close) High $ 21.89 $ 21.68 Low 20.05 19.52 End of period 21.79 21.14 Book Value 9.53 10.38 Market Capitalization 648,666,205 628,876,525 Weighted average shares - basic 29,763,619 29,738,553 Weighted average shares - diluted 30,067,462 30,029,056 End of period shares outstanding 29,768,986 29,748,180 ---------------------------------------------------------------------

First Charter Corporation and Subsidiaries (NASDAQ: FCTR) Quarterly Earnings Release

As of / For the Quarter Ended ----------------------------------- (Dollars in thousands, except per share data) 3/31/2005 12/31/2004 9/30/2004 ---------------------------------------------------------------------- BALANCE SHEET ASSETS: Cash and due from banks $ 110,745 $ 90,238 $ 98,000 Federal funds sold 1,951 1,589 2,080 Interest earning bank deposits 5,507 6,184 9,259 Securities available for sale 1,440,494 1,652,732 1,630,655 Loans held for sale 6,006 5,326 5,468 Loans Commercial Real Estate 774,088 776,474 788,539 Commercial Non Real Estate 210,990 212,031 210,214 Construction 347,877 332,264 345,178 Mortgage 582,893 347,606 331,249 Consumer 310,690 304,151 290,569 Home equity 477,884 467,166 459,527 ----------------------------------- Total loans 2,704,422 2,439,692 2,425,276 Less: Unearned income (232) (291) (301) Allowance for loan losses (27,483) (26,872) (26,859) ----------------------------------- Loans, net 2,676,707 2,412,529 2,398,116 ----------------------------------- Other assets 271,643 263,007 265,466 ----------------------------------- Total assets $4,513,053 $ 4,431,605 $4,409,044 -----------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY: Deposits Noninterest-bearing deposits $ 402,986 $ 377,793 $ 368,156 Interest checking and savings 472,063 468,292 448,799 Money market deposits 455,870 478,314 544,663 Retail certificates of deposit 971,199 967,884 877,541 Wholesale certificates of deposit 400,590 317,563 317,903 ----------------------------------- Total deposits 2,702,708 2,609,846 2,557,062 Other borrowings 1,451,756 1,449,736 1,482,340 Other liabilities 46,335 57,336 60,991 ----------------------------------- Total liabilities 4,200,799 4,116,918 4,100,393 ----------------------------------- Total shareholders' equity 312,254 314,687 308,651 ----------------------------------- Total liabilities and shareholders' equity $4,513,053 $ 4,431,605 $4,409,044 -----------------------------------

---------------------------------------------------------------------- SELECTED AVERAGE BALANCES Loans and loans held for sale $2,551,876 $ 2,444,827 $2,393,362 Securities 1,560,874 1,637,050 1,627,156 Interest earning assets 4,122,175 4,101,708 4,035,259 Assets 4,439,768 4,426,604 4,343,207 Noninterest bearing deposits 372,861 388,725 372,424 Deposits 2,629,795 2,614,161 2,586,524 Other borrowings 1,443,909 1,441,129 1,411,579 Interest bearing liabilities 3,700,843 3,666,565 3,625,679 Shareholders' equity 316,476 312,122 296,539 ----------------------------------------------------------------------

As of / For the Quarter Ended ------------------------ (Dollars in thousands, except per share data) 6/30/2004 3/31/2004 ---------------------------------------------------------------------- BALANCE SHEET ASSETS: Cash and due from banks $ 94,749 $ 75,040 Federal funds sold 1,960 1,723 Interest earning bank deposits 19,513 17,951 Securities available for sale 1,604,585 1,622,967 Loans held for sale 26,768 17,969 Loans Commercial Real Estate 768,637 749,355 Commercial Non Real Estate 208,587 210,010 Construction 332,031 346,109 Mortgage 315,005 288,505 Consumer 276,236 271,686 Home equity 447,739 414,410 ------------------------ Total loans 2,348,235 2,280,075 Less: Unearned income (197) (209) Allowance for loan losses (26,052) (25,736) ------------------------ Loans, net 2,321,986 2,254,130 ------------------------ Other assets 269,652 258,081 ------------------------ Total assets $4,339,213 $4,247,861 ------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY: Deposits Noninterest-bearing deposits $ 368,738 $ 353,133 Interest checking and savings 450,950 454,024 Money market deposits 563,523 506,504 Retail certificates of deposit 888,784 906,578 Wholesale certificates of deposit 322,770 287,203 ------------------------ Total deposits 2,594,765 2,507,442 Other borrowings 1,410,481 1,377,374 Other liabilities 50,186 54,308 ------------------------ Total liabilities 4,055,432 3,939,124 ------------------------ Total shareholders' equity 283,781 308,737 ------------------------ Total liabilities and shareholders' equity $4,339,213 $4,247,861 ------------------------

---------------------------------------------------------------------- SELECTED AVERAGE BALANCES Loans and loans held for sale $2,339,435 $2,273,575 Securities 1,637,918 1,590,083 Interest earning assets 3,995,390 3,884,954 Assets 4,316,360 4,210,401 Noninterest bearing deposits 362,129 331,496 Deposits 2,547,909 2,436,673 Other borrowings 1,424,556 1,430,127 Interest bearing liabilities 3,610,337 3,535,305 Shareholders' equity 296,699 303,722 ----------------------------------------------------------------------

First Charter Corporation and Subsidiaries (NASDAQ: FCTR) Quarterly Earnings Release

For the Three Months Ended Increase (Decrease) ----------------------- --------------------- (Dollars in thousands, except per share data) 3/31/2005 3/31/2004 Amount Percentage ------------------------ ----------- ----------- ---------- ---------- INCOME STATEMENT Interest income - taxable equivalent $51,857 $45,768 $6,089 13.3% Interest expense 20,708 14,857 5,851 39.4 ----------- ----------- ---------- ---------- Net interest income - taxable equivalent 31,149 30,911 238 0.8 Less: taxable equivalent adjustment 575 538 37 6.9 ----------- ----------- ---------- ---------- Net interest income 30,574 30,373 201 0.7 Provision for loan losses 1,900 3,000 (1,100) (36.7) ----------- ----------- ---------- ---------- Net interest income after provision for loan losses 28,674 27,373 1,301 4.8 Noninterest income 15,814 14,665 1,149 7.8 Noninterest expense 28,869 28,308 561 2.0 ----------- ----------- ---------- ---------- Income before income taxes 15,619 13,730 1,889 13.8 Income tax expense 5,310 4,490 820 18.3 ----------- ----------- ---------- ---------- Net income $10,309 $9,240 $1,069 11.6% ----------- ----------- ---------- ----------

---------------------------------------------------------------------- EARNINGS PER SHARE DATA Basic $0.34 $0.31 $0.03 9.7% Diluted 0.34 0.31 0.03 9.7 Weighted average shares - basic 30,234,683 29,738,553 Weighted average shares - diluted 30,630,601 30,029,056 Dividends paid on common shares $0.190 $0.185 $0.005 5.3% ------------------------ ----------- ----------- ---------- ---------- PERFORMANCE RATIOS Return on average assets 0.94% 0.88% Return on average equity 13.21 12.24 Efficiency - taxable equivalent (a) 61.41 62.56 ---------------------------------------------------------------------- SCHEDULE OF SELECTED ITEMS INCLUDED IN EARNINGS For the Three Months Ended ----------------------- 3/31/2005 3/31/2004 ------------------------ ----------- ----------- Noninterest income (Loss) gain on sale of securities $(49) $326 Equity method investment loss (58) (224) Gain on sale of properties 529 777

Noninterest expense Separation agreement 1,010 - Financial management charge 166 - ----------------------------------------------------------------------

Notes: Applicable ratios are annualized. (a) - Noninterest expense divided by the sum of taxable equivalent net interest income plus noninterest income less (loss) gain on sale of securities.

First Charter Corporation and Subsidiaries (NASDAQ: FCTR) Quarterly Earnings Release

(Dollars in thousands, except per share data)

As of / For the Quarter Ended ------------------------------------------------------- 3/31/2005 12/31/2004 9/30/2004 6/30/2004 3/31/2004 -------------- ------------------------------------------------------- INCOME STATEMENT Interest income - taxable equivalent Interest and fees on loans $36,499 $34,426 $31,406 $29,373 $29,291 Interest on securities 15,306 16,137 16,144 16,032 16,430 Other interest income 52 87 44 42 47 ------------------------------------------------------- Total interest income - taxable equivalent 51,857 50,650 47,594 45,447 45,768 ------------------------------------------------------- Interest expense Interest on deposits 10,514 9,690 8,916 8,619 8,125 Other interest expense 10,194 8,585 7,371 6,255 6,732 ------------------------------------------------------- Total interest expense 20,708 18,275 16,287 14,874 14,857 ------------------------------------------------------- Net interest income - taxable equivalent 31,149 32,375 31,307 30,573 30,911 Less: Taxable equivalent adjustment 575 565 512 541 538 ------------------------------------------------------- Net interest income 30,574 31,810 30,795 30,032 30,373 Provision for loan losses 1,900 1,825 1,600 2,000 3,000 ------------------------------------------------------- Net interest income after provision for loan losses 28,674 29,985 29,195 28,032 27,373 ------------------------------------------------------- Noninterest income Service charges on deposit accounts 6,236 6,832 6,781 6,346 5,605 Financial management income 1,580 1,199 1,602 1,545 1,502 (Loss) gain on sale of securities (49) 296 1,267 494 326 Gain on sale of deposits and loans - - 339 - - Loss from equity method investments (58) (49) - (76) (224) Mortgage loan fees 394 359 365 596 428 Brokerage services income 802 628 612 902 970 Insurance services income 3,512 3,140 2,464 2,634 3,031 Bank owned life insurance 827 856 860 847 850 Gain on sale of properties 529 - - - 777 Other noninterest income 2,041 2,041 1,749 1,602 1,400 ------------------------------------------------------- Total noninterest income 15,814 15,302 16,039 14,890 14,665 ------------------------------------------------------- Noninterest expense Salaries and employee benefits 15,569 14,323 14,779 14,368 15,023 Occupancy and equipment 4,381 4,495 4,115 4,379 4,237 Data processing 1,321 1,221 945 1,006 862 Marketing 1,080 966 1,141 1,126 1,118 Postage and supplies 1,208 1,178 1,204 1,306 1,271 Professional services 1,913 2,237 2,264 2,361 2,712 Telephone 528 501 496 507 494 Amortization of intangibles 131 135 111 96 118 Other noninterest expense 2,738 2,621 2,292 2,536 2,473 ------------------------------------------------------- Total noninterest expense 28,869 27,677 27,347 27,685 28,308 ------------------------------------------------------- Income before taxes 15,619 17,610 17,887 15,237 13,730 Income tax expense 5,310 6,051 6,499 4,982 4,490 ------------------------------------------------------- Net income $10,309 $11,559 $11,388 $10,255 $9,240 -------------------------------------------------------

---------------------------------------------------------------------- EARNINGS PER SHARE DATA Basic $0.34 $0.39 $0.38 $0.34 $0.31 Diluted 0.34 0.38 0.38 0.34 0.31 Dividends paid on common shares 0.190 0.190 0.190 0.185 0.185 -------------- ------------------------------------------------------- PERFORMANCE RATIOS Return on average assets 0.94% 1.04% 1.04% 0.96% 0.88% Return on average equity 13.21 14.73 15.28 13.90 12.24 Efficiency - taxable equivalent(a) 61.41 58.41 59.35 61.56 62.56 Noninterest income as a percentage of total income 34.09 32.48 34.25 33.15 32.56 Equity as a percentage of total assets 6.92 7.10 7.00 6.54 7.27 Tangible equity as a percentage of total assets 6.41 6.58 6.49 6.02 6.74 Tier 1 Capital to Risk Adjusted Assets 9.89 10.08 9.92 9.92 10.04 Total Capital to Risk Adjusted Assets 10.78 10.99 10.84 10.85 11.00 ----------------------------------------------------------------------

SCHEDULE OF SELECTED ITEMS INCLUDED IN EARNINGS As of / For the Quarter Ended ---------------------------------------------------------------------- 3/31/2005 12/31/2004 9/30/2004 6/30/2004 3/31/2004 ----------------------------------------------------------------------

Noninterest income (Loss) gain on sale of securities $(49) $296 $1,267 $494 $326 Gain on sale of deposits and loans - - 339 - - Recovery on sale of overdraft deposit accounts - 222 - - - Equity method investment loss (58) (49) - (76) (224) Gain on sale of properties 529 - - - 777 Noninterest expense Separation agreement 1,010 - - - - Financial management charge 166 - - - -

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Notes: Applicable ratios are annualized. (a) - Noninterest expense divided by the sum of taxable equivalent net interest income plus noninterest income less (loss) gain on sale of securities.

First Charter Corporation and Subsidiaries (NASDAQ: FCTR) Quarterly Earnings Release

(Dollars in thousands, except per share data)

As of / For the Quarter Ended ------------------------------------------------------- 3/31/2005 12/31/2004 9/30/2004 6/30/2004 3/31/2004 ---------------------------------------------------------------------- ASSET QUALITY ANALYSIS Allowance for Loan Losses Beginning balance $26,872 $26,859 $26,052 $25,736 $25,607 Provision for loan losses 1,900 1,825 1,600 2,000 3,000 Allowance related to loans sold - - (35) - (549) Charge-offs (1,918) (2,063) (1,432) (2,475) (2,582) Recoveries 629 251 674 791 260 ------------------------------------------------------- Net charge- offs (1,289) (1,812) (758) (1,684) (2,322) ------------------------------------------------------- Ending balance $27,483 $26,872 $26,859 $26,052 $25,736 ------------------------------------------------------- Nonperforming Assets and Loans 90 days or more past due accruing interest Nonaccrual loans $9,282 $13,970 $14,237 $12,533 $11,845 Other real estate 7,648 3,844 4,962 6,159 6,199 ------------------------------------------------------- Total non- performing assets 16,930 17,814 19,199 18,693 18,044 ------------------------------------------------------- Loans 90 days or more past due accruing interest - - 56 - - ------------------------------------------------------- Total $16,930 $17,814 $19,255 $18,693 $18,044 ------------------------------------------------------- Asset Quality Ratios (a) Nonaccrual loans as a percentage of total loans 0.34% 0.57% 0.59% 0.53% 0.52% Nonperforming assets as a percentage of total assets 0.38 0.40 0.44 0.43 0.42 Nonperforming assets as a percentage of total loans and other real estate 0.62 0.73 0.79 0.79 0.79 Net charge- offs as a percentage of average loans (annualized) 0.21 0.30 0.13 0.29 0.41 Allowance for loan losses as a percentage of loans 1.02 1.10 1.11 1.11 1.13 Ratio of allowance for loan losses to: Net charge- offs (annualized) 5.26x 3.73x 8.91x 3.86x 2.76x Nonaccrual loans 2.96 1.92 1.89 2.08 2.17 ----------------------------------------------------------------------

As of / For the Three Months Ended Increase (Decrease) -------------------------------------------- 3/31/2005 3/31/2004 Amount Percentage ---------------------------------------------------------------------- Allowance for Loan Losses Beginning balance $26,872 $25,607 $1,265 4.9% Provision for loan losses 1,900 3,000 (1,100) (36.7) Allowance related to loans sold - (549) 549 (100.0) Charge-offs (1,918) (2,582) (664) (25.7) Recoveries 629 260 369 141.9 -------------------------------------------- Net charge- offs (1,289) (2,322) (1,033) (44.5) -------------------------------------------- Ending balance $27,483 $25,736 $1,747 6.8% -------------------------------------------- Asset Quality Ratios (a) Net charge- offs as a percentage of average loans 0.21% 0.41% Ratio of allowance for loan losses to net charge- offs 5.26x 2.76x ----------------------------------------------------------------------

For the Quarter Ended ------------------------------------------------------- 3/31/2005 12/31/2004 9/30/2004 6/30/2004 3/31/2004 ---------------------------------------------------------------------- ANNUALIZED INTEREST YIELDS / RATES(b) Interest income: Yield on loans and loans held for sale 5.80% 5.60% 5.22% 5.05% 5.18% Yield on securities 3.92 3.94 3.97 3.92 4.13 ------------------------------------------------------- Yield on interest earning assets 5.08 4.92 4.70 4.57 4.73 ------------------------------------------------------- Interest expense: Cost of interest bearing deposits 1.89 1.73 1.60 1.59 1.55 Cost of borrowings 2.82 2.37 2.08 1.77 1.89 ------------------------------------------------------- Cost of interest bearing liabilities 2.25 1.98 1.79 1.66 1.69 ------------------------------------------------------- Interest rate spread 2.83 2.94 2.91 2.91 3.04 ------------------------------------------------------- Net yield on earning assets 3.06% 3.15% 3.10% 3.07% 3.19% -------------------------------------------------------

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Notes: Applicable ratios are annualized. (a) - Excludes loans held for sale. (b) - Fully taxable equivalent yields. The calculation of the yield on securities for 2004 has been adjusted to reflect a correction in the taxable equivalent adjustment.

--30--PS/ch*

CONTACT: First Charter Corporation, Charlotte Charles A. Caswell, 704-688-1112 or Jan H. Hollar, 704-688-4467

KEYWORD: VIRGINIA NORTH CAROLINA INDUSTRY KEYWORD: BANKING EARNINGS CONFERENCE CALLS SOURCE: First Charter Corporation

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