First Charter Reports Record Quarterly Net Interest Income; Benefits From Loan and Deposit Growth and Previously Reported Balance Sheet Repositioning.

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First Charter Reports Record Quarterly Net Interest Income; Benefits From Loan and Deposit Growth and Previously Reported Balance Sheet Repositioning.

CHARLOTTE, N.C. -- First Charter Corporation (NASDAQ: FCTR):

Fourth Quarter 2005 Highlights

--Net Interest Income on a Taxable Equivalent Basis Increases to $32.5 Million.

--Net Income (Loss) of $(8.3) Million due to Previously Reported Balance Sheet Repositioning.

--Commercial and Consumer Loan Growth Drives $296.0 Million, or 12%, Increase in Total Loan Average Balances (excluding 2005 Mortgage Loan Purchase) Compared to Fourth Quarter 2004.

--Strong Money Market and Noninterest Bearing Deposit Growth Drives $111.7 Million, or 8%, Increase in Core Deposit Average Balances Compared to Fourth Quarter 2004.

--Net Interest Margin Improves 35 Basis Points During the Quarter to 3.27%.

--Securities Portfolio Yields Improve 32 Basis Points; Portfolio Reduced to 23% of Earning Assets versus 40% a Year Ago, Returning Focus to Core Bank.

--First Charter Enters Raleigh With One Branch; Three More to Follow in 2006 First Quarter

First Charter Corporation (NASDAQ: FCTR) today reported continued strong core revenue growth driven by increased fee-based revenues and an improved net interest margin. As previously reported, an approximate $20.0 million after-tax charge resulting from a series of balance sheet initiatives, which included the sale of securities and the extinguishment of debt and interest rate swaps, resulted in net income (loss) of $(8.3) million, or $(0.27) per diluted share in the fourth quarter of 2005. This compares to net income of $11.6 million, or $0.38 per diluted share, in the same quarter of 2004.

Net income for 2005 totaled $25.3 million, or $0.82 per diluted share, a decrease from net income of $42.4 million, or $1.40 per diluted share for 2004. The decrease was driven by the previously discussed balance sheet repositioning charges.

Return on average assets and return on average equity were (.77) percent and (10.21) percent, respectively, for the fourth quarter of 2005 compared to 1.04 percent and 14.73 percent for the fourth quarter of 2004. For 2005, return on average assets and return on average equity were .56 percent and 7.86 percent, respectively, compared to .98 percent and 14.05 percent for 2004.

"This quarter caps a year of transition for our company," said Bob James, President & CEO of First Charter Corporation. "As we mentioned in our third q...

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