First Charter shareholders OK merger with Fifth Third

By Susanna Moon

Chicago, Jan. 18 - First Charter Corp. said shareholders approved merging with Fifth Third Bancorp at a special meeting on Jan. 18.

Fifth Third said on Aug. 16 that it agreed to acquire First Charter for $1.09 billion in cash and stock, or at $31.00 per share.

As previously reported, First Charter stockholders would receive 70% of their payment in Fifth Third common stock and 30% in cash. A $32.5 million termination fee payable by First Charter is included in the deal.

"We are pleased with the overwhelming shareholder support of the upcoming merger and look forward to introducing the Fifth Third brand to our markets," Bob James, president and chief executive officer of First Charter, said in a press release.

The deal was approved by more than 99% of shares voted, according to a press release.

First Charter said on Jan. 14 that the merger is subject to approval by banking regulators and other conditions.

"This furthers our penetration into fast-growing Southeastern metropolitan markets at a reasonable price," Fifth Third president and chief executive officer Kevin Kabat said in a previous news release.

"The addition of First Charter provides us with an entry into the attractive North Carolina market and further diversifies our footprint into new, higher growth markets."

Charlotte, N.C.-based First Charter is a regional financial services company that operates 57 branches in North Carolina and two in suburban Atlanta.

James will join Fifth Third as president of the Charlotte affiliate.

Following the transaction's close, expected in the first quarter, Fifth Third Bank will add $4.9 billion in assets and $3.2 billion in deposits.

First Third said it expects the transaction to be dilutive to 2008 earnings per share by about 2%, to be relatively neutral to 2009 earnings per share and to be modestly accretive to 2009 earnings per share. In addition, the company expects the merger to generate $35 million of pre-tax annual expense reductions phased in over two years, with merger-related one-time charges of up to $61 million pre-tax, or $39 million after tax.

Helms Mulliss & Wicker, PLLC and Keefe, Bruyette & Woods advised First Charter. Fifth Third was advised by Hugh L. McColl Jr. of McColl Partners and Goldman Sachs & Co.

Fifth Third Bancorp is a diversified financial services company based in Cincinnati.

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