<PAGE>   1

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                                   FORM 10-K
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

<TABLE>
<C>               <S>
   (MARK ONE)
      [X]         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                  THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

                                               OR

      [  ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                  THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE TRANSITION PERIOD FROM ____________ TO ____________
</TABLE>

                        COMMISSION FILE NUMBER: 0-15829

                           FIRST CHARTER CORPORATION
             (Exact name of registrant as specified in its Charter)

<TABLE>
<S>                                         <C>   <C>
              NORTH CAROLINA                                      56-1355866
     (State or other jurisdiction of                           (I.R.S. Employer
      incorporation or organization)                         Identification No.)

    22 UNION STREET NORTH, CONCORD, NC                            28026-0228
 (Address of Principal Executive Offices)                         (Zip Code)
</TABLE>

       Registrant's telephone number, including area code: (704) 786-3300

            Securities registered pursuant to Section 12(b) of Act:

<TABLE>
<CAPTION>
           TITLE OF EACH CLASS                    NAME OF EACH EXCHANGE ON WHICH REGISTERED
           -------------------                    -----------------------------------------
<S>                                         <C>   <C>
                    NA                                                NA
</TABLE>

            Securities registered pursuant to Section 12(g) of Act:
                           Common stock, no par value

     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [X] Yes      [ ] No

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

     The aggregate market value of the voting stock held by non-affiliates of
the registrant as of March 29, 2000 was $187,462,317.

     As of March 29, 2000 the Registrant had outstanding 17,704,811 shares of
Common Stock, no par value.

                      DOCUMENTS INCORPORATED BY REFERENCE:

     PARTS I and II:  Annual Report to Shareholders for the fiscal year ended
December 31, 1998 (with the exception of those portions which are specifically
incorporated by reference in this Form 10-K, the Annual Report to Shareholders
is not deemed to be filed as part of this report).

     PART III:  Definitive Proxy Statement to be filed with the Securities and
Exchange Commission pursuant to Regulation 14A promulgated pursuant to the
Securities Exchange Act of 1934 in connection with the 1999 Annual Meeting of
Shareholders (with the exception of those portions which are specifically
incorporated by reference in this Form 10-K, the Proxy Statement is not deemed
to be filed as part of this report).
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<PAGE>   2

                           FIRST CHARTER CORPORATION
                                AND SUBSIDIARIES

             FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                         PAGE
                                                                         ----
<S>        <C>                                                           <C>
                                   PART I
Item 1:    Business....................................................    1
Item 2:    Properties..................................................   19
Item 3:    Legal Proceedings...........................................   19
Item 4:    Submission of Matters to a Vote of Security Holders.........   21
Item 4A:   Executive Officers of the Registrant........................   22

                                   PART II
Item 5:    Market for the Registrant's Common Stock and Related
             Shareholder Matters.......................................   23
Item 6:    Selected Financial Data.....................................   23
Item 7:    Management's Discussion and Analysis of Financial Condition
             and Results of Operations.................................   23
Item 7A:   Quantitative and Qualitative Disclosures about Market
             Risk......................................................   23
Item 8:    Financial Statements and Supplementary Data.................   23
Item 9:    Changes in and Disagreements with Accountants on Accounting
             and Financial Disclosure..................................   23

                                  PART III
Item 10:   Directors and Executive Officers of the Registrant..........   24
Item 11:   Executive Compensation......................................   24
Item 12:   Security Ownership of Certain Beneficial Owners and
             Management................................................   24
Item 13:   Certain Relationships and Related Transactions..............   24

                                   PART IV
Item 14:   Exhibits, Financial Statement Schedules and Reports on Form
             8-K.......................................................   24
</TABLE>
<PAGE>   3

                                     PART I

ITEM 1.  BUSINESS

GENERAL

     First Charter Corporation (hereinafter referred to as either the
"Registrant" or the "Corporation") is a bank holding company established as a
North Carolina Corporation in 1983 and is registered under the Bank Holding
Company Act of 1956, as amended (the "BHCA"). Its principal asset is the stock
of its subsidiary, First Charter National Bank ("FCNB" or the "Bank"). The Bank
accounts for over 95% of the Registrant's consolidated assets and consolidated
revenues. The principal executive offices of the Corporation are located at 22
Union Street North, Concord, North Carolina 28025. Its telephone number is (800)
422-4650.

     FCNB, a national banking association, is the successor entity to The
Concord National Bank, which was established in 1888 and acquired by the
Registrant in 1983. On December 21, 1995, the Corporation purchased Bank of
Union ("Union"), a state-chartered commercial bank organized under the laws of
North Carolina in 1985. Union, a full-service bank with five offices located in
Union and southern Mecklenburg Counties, North Carolina, was merged into FCNB
effective September 10, 1998. On December 22, 1997, the Corporation acquired
Carolina State Bank ("CSB") which was also merged into FCNB. CSB was a state-
chartered commercial bank with four banking offices in Cleveland and Rutherford
Counties, North Carolina. On September 30, 1998, the Corporation acquired HFNC
Financial Corp. ("HFNC"), which merged into the Corporation. The merger was
accounted for as a pooling of interests, and accordingly all financial
information presented herein has been restated for all periods presented to
reflect this merger. HFNC was the unitary holding company of Home Federal
Savings and Loan Association ("Home Federal"). Home Federal, which dates back to
1883, was based in Charlotte, North Carolina, and operated nine full service
branch offices and a loan origination office, all located in Mecklenburg County,
North Carolina. These offices operated under the Home Federal name until its
merger into FCNB in March 1999. FCNB is a full service bank and trust company
which now operates thirty-three branch offices and two limited service
facilities in addition to its main office, one loan production office located in
Guilford county, as well as 71 ATMs (automated teller machines) located in
Mecklenburg, Cabarrus, Cleveland, Rutherford, Rowan, Stanley and Union Counties
in North Carolina.

     Through its branch locations, the Bank provides a wide range of banking
products, including interest bearing and non-interest bearing checking accounts;
"Money Market Rate" accounts; certificates of deposit; individual retirement
accounts; overdraft protection; commercial, consumer, agriculture, real estate,
residential mortgage and home equity loans; personal and corporate trust
services; safe deposit boxes; and automated banking. In addition, through First
Charter Brokerage Services, a subsidiary of FCNB, the Registrant offers discount
brokerage services, annuity sales and financial planning services pursuant to a
third party arrangement with UVEST Investment Services. FCNB also operates three
other subsidiaries. First Charter Insurance Services, Inc. is a North Carolina
corporation formed to meet the insurance needs of businesses and individuals
throughout the Charlotte metropolitan area. First Charter Realty Investment,
Inc. is a Delaware corporation organized as a holding company for FCNB Real
Estate, Inc., a real estate investment trust organized in North Carolina.

     At December 31, 1999, the Registrant and its subsidiary had 504 full-time
employees and 113 part-time employees. The Registrant had no employees who were
not also employees of FCNB. The Registrant considers its relations with its
employees to be good.

     As part of its operations, the Registrant is not dependent upon a single
customer or a few customers whose loss would have a material adverse effect on
the Registrant.

     As part of its operations, the Registrant regularly holds discussions and
evaluates the potential acquisition of, or merger with, various financial
institutions. The Registrant currently has an agreement in effect with respect
to such a merger. The Registrant and Carolina First BancShares, Inc., ("CFBI")
entered into a definitive agreement and plan of merger (the "Merger Agreement")
dated as of November 7, 1999. Shareholder approval of this merger was obtained
on March 21, 2000. As of December 31, 1999, the

                                        1
<PAGE>   4

Corporation held 157,215 shares of CFBI representing 2.62% of CFBI outstanding
stock. This investment has a market value of $4.9 million which represents a
$2.5 million increase over cost. In addition, the Registrant periodically enters
new markets and engages in new activities in which it competes with established
financial institutions. There can be no assurance as to the success of any such
new office or activity. Furthermore, as the result of such expansions, the
Registrant may from time to time incur start-up costs that could affect the
financial results of the Registrant.

COMPETITION

     The banking laws of North Carolina allow banks located in North Carolina to
develop branches throughout the state. In addition, as the result of recent
federal and state legislation, out-of-state institutions may open de novo
branches in North Carolina as well as acquire or merge with institutions located
in North Carolina. As a result of such laws, banking activities in North
Carolina are highly competitive.

     FCNB's service delivery facilities are located in Mecklenburg, Cabarrus,
Union, Rowan, Cleveland, and Rutherford counties. These locations also have
numerous branches of money-center, super-regional, regional, and statewide
institutions, many of them based in Charlotte. In its market area, the
Registrant faces competition from other banks, savings and loan associations,
savings banks, credit unions, finance companies and major retail stores that
offer competing financial services. Many of these competitors have greater
resources, broader geographic coverage and higher lending limits than the Bank.
The Bank's primary method of competition is to provide quality service and
fairly priced products.

GOVERNMENT SUPERVISION AND REGULATION

     General.  As a registered bank holding company, the Registrant is subject
to the supervision of, and to regular inspection by, the Board of Governors of
the Federal Reserve System (the "Federal Reserve"). The Federal Deposit
Insurance Corporation ("FDIC") insures FCNB's deposits through the Bank
Insurance Fund ("BIF") to the maximum extent permitted by law.

     In addition to banking laws, regulations and regulatory agencies, the
Corporation and FCNB are subject to various other laws and regulations and
supervision and examination by other regulatory agencies, all of which directly
or indirectly affect the Corporation's operations, management and ability to
make distributions. The following discussion summarizes certain aspects of those
laws and regulations that affect the Corporation.

     Restrictions on Bank Holding Companies.  The Federal Reserve is authorized
to adopt regulations affecting various aspects of bank holding companies. Under
the BHCA, the Corporation's activities, and those of companies which it controls
or in which it holds more than 5% of the voting stock, are limited to banking or
managing or controlling banks or furnishing services to or performing services
for its subsidiaries, or any other activity which the Federal Reserve determines
to be so closely related to banking or managing or controlling banks as to be a
proper incident thereto. In making such determinations, the Federal Reserve is
required to consider whether the performance of such activities by a bank
holding company or its subsidiaries can reasonably be expected to produce
benefits to the public such as greater convenience, increased competition or
gains in efficiency that outweigh possible adverse effects, such as undue
concentration of resources, decreased or unfair competition, conflicts of
interest or unsound banking practices.

     Generally, bank holding companies are required to obtain prior approval of
the Federal Reserve to engage in any new activity not previously approved by the
Federal Reserve or to acquire more than 5% of any class of voting stock of any
company. The BHCA also requires bank holding companies to obtain the prior
approval of the Federal Reserve before acquiring more than 5% of any class of
voting stock of any bank which is not already majority-owned by the bank holding
company.

     The Corporation is also subject to the North Carolina Bank Holding Company
Act of 1984. As required by this state legislation, the Corporation, by virtue
of its ownership of FCNB, has registered as a bank holding company with the
Commissioner of Banks of the State of North Carolina. The North Carolina Bank
Holding Company Act also prohibits the Corporation from acquiring or controlling
certain non-bank banking institutions which have offices in North Carolina.

                                        2
<PAGE>   5

     Interstate Banking and Branching Legislation.  Pursuant to the Reigle--Neal
Interstate Banking and Branching Efficiency Act of 1994 (the "Interstate Banking
and Branching Act"), which became effective September 29, 1995, a bank holding
company may now acquire banks in states other than its home state, without
regard to the permissibility of such acquisition under state law, but subject to
any state requirement that the bank has been organized and operating for a
minimum period of time, not to exceed five years, and the requirement that the
bank holding company, prior to or following the proposed acquisition, controls
no more than 10% of the total amount of deposits of insured depository
institutions in the United States and no more than 30% of such deposits in that
state (or such lesser or greater amount set by state law).

     The Interstate Banking and Branching Act also authorized banks to merge
across state lines, thereby creating interstate branches beginning June 1, 1997.
Under such legislation, each state had the opportunity either to "opt out" of
this provision, thereby prohibiting interstate branching in such states, or to
"opt in" at an earlier time, thereby allowing interstate branching within that
state prior to June 1, 1997. The State of North Carolina elected to "opt in" to
such legislation, effective June 22, 1995. Furthermore, pursuant to the
Interstate Banking and Branching Act, a bank is now able to open new branches in
a state in which it does not already have banking operations, if the laws of
such state permit such de novo branching.

     Gramm-Leach Bliley Financial Modernization Act of 1999. In 1999, the
President of the United States signed into law the Gramm-Leach-Bliley Financial
Modernization Act of 1999 ("Modernization Act"). The Modernization Act allows
bank holding companies meeting management, capital and Community Reinvestment
Act standards to engage in substantially broader range of traditionally
nonbanking activities than was permissable before enactment, including insurance
underwriting and making merchant banking investments in commercial and financial
companies. It also allows insurers and other financial services companies to
acquire banks; removes various restrictions that currently apply to bank holding
company ownership of securities firms and mutual fund advisory companies; and
establishes the overall regulatory structure applicable to bank holding
companies that also engage in insurance and securities operations. This part of
the Modernization Act will become effective 120 days after enactment. The
Corporation currently believes it meets the requirements for the broader range
of activities that will be permitted by the Modernization Act.

     In addition, the Modernization Act also modifies current law related to
financial privacy and community reinvestment. The new privacy provisions
generally will prohibit financial institutions from disclosing nonpublic
personal financial information to nonaffiliated third parties unless the
customer has the opportunity to decline disclosure.

     Regulation of FCNB.  FCNB is organized as a national banking association
and is subject to regulation, supervision and examination by the Office of the
Comptroller of the Currency (the "OCC") and to regulation by the FDIC. OCC rules
and requirements applicable to national banking associations such as FCNB relate
to required reserves, allowable investments, loans, mergers, consolidations,
issuance of securities, payment of dividends, establishment of branches,
limitations on credit to subsidiaries and other aspects of the business of such
subsidiaries. The OCC has broad authority to prohibit national banks from
engaging in unsafe or unsound banking practices. The Bank is also subject to
certain reserve requirements established by the Federal Reserve Board and is a
member of the Federal Home Loan Bank ("FHLB") of Atlanta, which is one of the 12
regional banks comprising the FHLB System.

CAPITAL AND OPERATIONAL REQUIREMENTS

     The Federal Reserve, the OCC and the FDIC have issued substantially similar
risk-based and leverage capital guidelines applicable to federally chartered
banking organizations. The risk-based guidelines define a two-tier capital
framework, under which the Corporation and the Bank are required to maintain a
minimum ratio of Tier 1 Capital (as defined) to total risk-weighted assets of
4.00% and a minimum ratio of Total Capital (as defined) to risk weighted assets
of 8.00%. With respect to the Corporation, Tier 1 Capital generally consists of
total shareholders' equity calculated in accordance with generally accepted
accounting principles less certain intangibles, and Total Capital generally
consists of Tier 1 Capital plus certain adjustments, the largest of which for
the Corporation is the general allowance for loan losses (up to 1.25% of
risk-weighted assets). Tier 1 Capital must comprise at least 50% of the Total
Capital. Risk-weighted assets refer to the on-

                                        3
<PAGE>   6

and off-balance sheet exposures of the Corporation, as adjusted for one of four
categories of risk-weights established in Federal Reserve, OCC and FDIC
regulations, based primarily on relative credit risk. At December 31, 1999, the
Corporation and the Bank were in compliance with the risk-based capital
requirements.

     The leverage ratio is determined by dividing Tier 1 Capital by adjusted
total assets. Although the stated minimum ratio is 3.00%, most banking
organizations are required to maintain ratios of at least 100 to 200 basis
points above 3.00%. Management believes that the Corporation and the Bank meet
their leverage ratio requirement.

     The Corporation's compliance with existing capital requirements is
summarized in the table below.

<TABLE>
<CAPTION>
                                LEVERAGE CAPITAL             TIER 1 CAPITAL               TOTAL CAPITAL
                            -------------------------   -------------------------   -------------------------
                             AMOUNT    PERCENTAGE (1)    AMOUNT    PERCENTAGE (2)    AMOUNT    PERCENTAGE (2)
  (DOLLARS IN THOUSANDS)    --------   --------------   --------   --------------   --------   --------------
<S>                         <C>        <C>              <C>        <C>              <C>        <C>
Actual....................  $228,449      12.40%        $228,449      16.95%        $245,306      18.20%
Required..................    73,707        4.00          53,922        4.00         107,844        8.00
Excess....................   154,742        8.40         174,527       12.95         137,462       10.20
</TABLE>

---------------

(1) Percentage of total adjusted average assets. The Federal Reserve minimum
    leverage ratio requirement is 3.00% to 5.00%, depending on the institution's
    composite rating as determined by its regulators. The Federal Reserve Board
    has not advised the Corporation of any specific requirement applicable to
    it.
(2) Percentage of risk-weighted assets.

     In addition to the above described capital requirements, the federal
regulatory agencies may from time to time require that a banking organization
maintain capital above the minimum levels whether because of its financial
condition or actual or anticipated growth.

     Prompt Corrective Action under FDICIA.  The Federal Deposit Insurance
Corporation Improvement Act of 1991 ("FDICIA"), among other things, identifies
five capital categories for insured depository institutions (well capitalized,
adequately capitalized, undercapitalized, significantly undercapitalized and
critically undercapitalized) and requires the respective federal regulatory
agencies to implement systems for "prompt corrective action" for insured
depository institutions that do not meet minimum capital requirements within
such categories. FDICIA imposes progressively more restrictive constraints on
operations, management and capital distributions, depending on the category in
which an institution is classified. Failure to meet the capital guidelines could
also subject a banking institution to capital raising requirements. In addition,
pursuant to FDICIA, the various regulatory agencies have prescribed certain
non-capital standards for safety and soundness relating generally to operations
and management, asset quality and executive compensation, and such agencies may
take action against a financial institution that does not meet the applicable
standards.

     The various regulatory agencies have adopted substantially similar
regulations that define the five capital categories identified by FDICIA, using
the total risk-based capital, Tier 1 risk-based capital and leverage capital
ratios as the relevant capital measures. Such regulations establish various
degrees of corrective action to be taken when an institution is considered
undercapitalized. Under the regulations, a "well capitalized" institution must
have a Tier 1 Capital ratio of at least 6.00%, a Total Capital ratio of at least
10.00% and a leverage ratio of at least 5.00% and not be subject to a capital
directive order. An "adequately capitalized" institution must have a Tier 1
Capital ratio of at least 4.00%, a Total Capital ratio of at least 8.00% and a
leverage ratio of at least 4.00%, or 3.00% in some cases. Under these
guidelines, FCNB is considered well capitalized.

     Banking agencies have also adopted final regulations which mandate that
regulators take into consideration (i) concentrations of credit risk, (ii)
interest rate risk (when the interest rate sensitivity of an institution's
assets does not match the sensitivity of its liabilities or its off-balance
sheet position) and (iii) risks from non-traditional activities, as well as an
institution's ability to manage those risks, when determining the adequacy of an
institution's capital. This evaluation is made as a part of the institution's
regular safety and soundness examination. In addition, the banking agencies have
amended their regulatory capital guidelines to incorporate a measure for market
risk. In accordance with amended guidelines, a Corporation or Bank with
significant

                                        4
<PAGE>   7

trading activity (as defined) must incorporate a measure for market risk in its
regulatory capital calculations effective for reporting periods after January 1,
1998. The revised guidelines do not materially impact the Corporation's or
FCNB's regulatory capital ratios or their well-capitalized status.

     Distributions.  The primary source of funds for distributions paid by the
Corporation to its shareholders is dividends received from FCNB. Certain
regulatory and other requirements restrict the amount of dividends that FCNB can
pay to the Corporation. The OCC regulates the amount of FCNB dividends payable
to the Corporation based on undivided profits for the last two years, less
dividends already paid. As of December 31, 1999, FCNB had paid the full
allowable amount of dividends to the Corporation. FCNB obtains regulatory
approval prior to payment of dividends to the Corporation.

     In addition to the foregoing, the ability of the Corporation and FCNB to
pay dividends may be affected by the various minimum capital requirements and
the capital and non-capital standards established under FDICIA, as described
above. Furthermore, if, in the opinion of a federal regulatory agency, a bank
under its jurisdiction is engaged in or is about to engage in an unsafe or
unsound practice (which, depending on the financial condition of the bank, could
include the payment of dividends), such agency may require, after notice and
hearing, that such bank cease and desist from such practice. The right of the
Corporation, its shareholders and its creditors to participate in any
distribution of assets or earnings of FCNB is further subject to the prior
claims of creditors against the Bank.

     Deposit Insurance.  The deposits of FCNB are insured up to applicable
limits by the FDIC, and are backed by the full faith and credit of the U.S.
government. As insurer, the FDIC is authorized to conduct examinations of, and
to require reporting by, FDIC-insured institutions. It also may prohibit any
FDIC-insured institution from engaging in any activity the FDIC determines by
regulation or order to pose a serious threat to the FDIC. The FDIC also has the
authority to initiate enforcement actions against banking institutions, after
giving the institution's primary regulator an opportunity to take such action.
In addition, the Bank is subject to deposit premium assessments by the FDIC. As
mandated by FDICIA, the FDIC has adopted regulations for a risk-based insurance
assessment system. Under this system, the assessment rates for an insured
depository institution vary according to the level of risk incurred in its
activities. To arrive at a risk assessment for a banking institution, the FDIC
places it in one of nine risk categories using a process based on capital ratios
and on other relevant information from supervisory evaluations of the bank by
the bank's primary federal regulator, the OCC, statistical analyses of financial
statements and other relevant information.

     The deposits of FCNB are insured by the BIF, administered by the FDIC.
Under the FDIC's risk-based insurance system, assessments currently can range
from no assessment to 0.27% of a participating bank's average deposits base,
with the exact assessment determined by the bank's capital and the applicable
regulatory agency's opinion of the bank's operations. The range of deposit
insurance assessment rates can change from time to time, in the discretion of
the FDIC, subject to certain limits.

     The former Home Federal deposits are insured by the SAIF, also administered
by the FDIC. Unlike the BIF, which met its target reserve level in September
1995, the Savings Association Insurance Fund ("SAIF") was not expected to meet
its target reserve level until at least 2002. Consequently, while insurance
premiums for BIF insured deposits were reduced beginning in 1996, premiums for
SAIF members were maintained at their existing levels, creating a significant
premium disparity. On September 30, 1996, legislation was passed to eventually
eliminate this premium differential between SAIF-insured institutions and
BIF-insured institutions by recapitalizing the SAIF's reserves by way of a
one-time special assessment equal to 65.7 basis points for all SAIF-assessable
deposits as of March 31, 1995. This special assessment was accrued by Home
Federal at September 30, 1996 and paid on November 27, 1996. As a result of this
recapitalization, during the period from 1997 through 1999, FDIC-insured
institutions in the lowest risk category will pay approximately 1.2 basis points
of their BIF-assessable deposits and 6.1 basis points of their SAIF-assessable
deposits to fund the insurance fund. FCNB continued to pay the SAIF assessment
rate on former Home Federal deposits through the end of 1999.

     Source of Strength.  According to Federal Reserve policy, bank holding
companies are expected to act as a source of financial strength to subsidiary
banks and to commit resources to support each such subsidiary. This support may
be required at times when a bank holding company may not be able to provide such
support.
                                        5
<PAGE>   8

Similarly, under the cross-guaranty provisions of the Federal Deposit Insurance
Act, in the event of a loss suffered or anticipated by the FDIC, either as a
result of default of a banking or thrift subsidiary of the Corporation or
related to FDIC assistance provided to a subsidiary in danger of default, the
other banking subsidiaries of the Registrant may be assessed for the FDIC's
loss, subject to certain exceptions.

     Future Legislation.  Proposals to change the laws and regulations governing
the banking industry are frequently introduced in Congress, in the state
legislatures and before the various bank regulatory agencies. The likelihood and
timing of any such proposals or bills being enacted and the impact they might
have on the Corporation and FCNB cannot be determined at this time.

OTHER CONSIDERATIONS

     There are particular risks and uncertainties that are applicable to an
investment in our common stock. Specifically, there are risks and uncertainties
that bear on our future financial results that may cause our future earnings and
financial condition to be less than our expectations. Some of the risks and
uncertainties relate to economic conditions generally, and would affect other
financial institutions in similar ways. These aspects are discussed under the
heading "Factors that May Affect Future Results" in the accompanying
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in the First Charter Corporation 1999 Annual Report to
Shareholders, incorporated herein by reference. This section addresses
particular risks and uncertainties that are specific to our business.

                                        6
<PAGE>   9

STATISTICAL INFORMATION

     The following tables present certain statistical information relating to
the Corporation. The tables should be read in conjunction with the
Corporations's Consolidated Financial Statements and Notes thereto and
Management's Discussion and Analysis of Financial Condition and Results of
Operations, both of which are incorporated by reference herein.

     The following table includes for the years ended December 31, 1999,
1998,and 1997 interest income on interest earning assets and related average
yields, as well as interest expense on interest bearing liabilities and related
average rates paid. In addition, the table includes the average net yield on
average earning assets. Average balances were calculated based on daily
averages.

                                    TABLE 1
               AVERAGE BALANCES AND NET INTEREST INCOME ANALYSIS

<TABLE>
<CAPTION>
                                       1999                                 1998                                 1997
                        ----------------------------------   ----------------------------------   ----------------------------------
                                     INTEREST    AVERAGE                  INTEREST    AVERAGE                  INTEREST    AVERAGE
                         AVERAGE     INCOME/    YIELD/RATE    AVERAGE     INCOME/    YIELD/RATE    AVERAGE     INCOME/    YIELD/RATE
                         BALANCE     EXPENSE       PAID       BALANCE     EXPENSE       PAID       BALANCE     EXPENSE       PAID
(DOLLARS IN THOUSANDS)  ----------   --------   ----------   ----------   --------   ----------   ----------   --------   ----------
<S>                     <C>          <C>        <C>          <C>          <C>        <C>          <C>          <C>        <C>
Interest earning
  assets:
Loans (1) (2) (3).....  $1,381,753   $117,403     8.50%      $1,358,949   $116,777     8.59%      $1,143,448   $100,921     8.83%
Securities available
  for
  sale -- taxable.....     238,399     15,003      6.29         221,860     14,591      6.58         246,937     15,717      6.36
Securities available
  for
  sale -- nontaxable
  (4).................      92,980      6,949      7.47          84,673      6,640      7.84          72,468      5,754      7.94
Investment securities
  held to maturity --
  taxable.............          --         --        --              --         --        --          13,375        766      5.73
Investment securities
  held to maturity --
  nontaxable(4).......          --         --        --              --         --        --           1,251         83      6.63
Federal funds sold....       2,024        129      6.37          18,450      1,026      5.56          18,238      1,012      5.55
Interest-bearing bank
  deposits............       4,694        274      5.84           3,902        201      5.15          13,835        795      5.75
                        ----------   --------                ----------   --------                ----------   --------
        Total.........  $1,719,850   $139,758     8.13%      $1,687,834   $139,235     8.25%      $1,509,552   $125,048     8.28%
                        ==========   ========                ==========   ========                ==========   ========
Interest bearing
  liabilities:
  Demand deposits.....  $  146,343   $  1,195     0.82%      $  135,492   $  3,794     2.80%      $  128,703   $  2,054     1.60%
  Money market
    accounts..........     152,785      7,351      4.81          75,558      3,439      4.55          70,496      3,290      4.67
  Savings deposits....     125,418      4,556      3.63         135,309      5,387      3.98         132,615      5,520      4.16
  Other time
    deposits..........     580,714     31,269      5.38         587,261     33,521      5.71         611,038     35,468      5.80
  Other borrowings....     422,644     22,898      5.42         434,260     24,482      5.64         283,167     16,495      5.83
                        ----------   --------                ----------   --------                ----------   --------
        Total.........  $1,427,904   $ 67,269     4.71%      $1,367,880   $ 70,623     5.16%      $1,226,019   $ 62,827     5.12%
                        ==========   ========                ==========   ========                ==========   ========
Net interest income
  and spread..........               $ 72,489     3.42%                   $ 68,612     3.09%                   $ 62,221     3.16%
                                     ========                             ========                             ========
Net yield on interest
  earning assets
  (5).................                            4.21%                                4.07%                                4.12%
</TABLE>

---------------

(1) Includes amortization of deferred loan fees of approximately $2,471,000 in
    1999, $3,482,000 in 1998 and $2,375,000 in 1997.
(2) The preceding analysis takes into consideration the principal amount of
    nonaccruing loans and only income actually collected.
(3) Average loan balances are shown net of unearned income.
(4) Yields on nontaxable securities are stated on a fully taxable equivalent
    basis, assuming a Federal tax rate of 35%, applicable state taxes and TEFRA
    disallowances for 1999, 1998 and 1997. The adjustments made to convert to a
    fully taxable equivalent basis were $3,041,000 for 1999, $2,726,000 for
    1998, and $1,918,000 for 1997.
(5) Represents net interest income as a percentage of total average interest
    earning assets.

                                        7
<PAGE>   10

CHANGES IN INTEREST INCOME AND EXPENSE

     The following table contains the dollar amount of change in interest income
and interest expense and segregates the dollar amount of change due to rate and
volume variances for the years ended December 31, 1999 and 1998. The change in
interest income, stated on a tax equivalent basis, or interest expense
attributable to the combination of rate variance and volume variance is included
in the table, but such amount has also been allocated between, and included in
the amounts shown as, changes due to rate and changes due to volume. Interest
income related to tax exempt securities is stated on a tax equivalent basis
using a Federal income tax rate of 35%, applicable state taxes and TEFRA
disallowances in 1999, 1998 and 1997.

                                    TABLE 2
                       VOLUME AND RATE VARIANCE ANALYSIS

<TABLE>
<CAPTION>
                                            FROM DEC. 31, 1998 TO DEC. 31, 1999   FROM DEC. 31, 1997 TO DEC. 31, 1998
                                            -----------------------------------   ------------------------------------
                                                    INCREASE (DECREASE)                   INCREASE (DECREASE)
                                                     DUE TO CHANGE IN                       DUE TO CHANGE IN
                                            -----------------------------------   ------------------------------------
                                            RATE/                        TOTAL    RATE/                         TOTAL
                                            VOLUME    RATE     VOLUME   CHANGE    VOLUME    RATE     VOLUME    CHANGE
(DOLLARS IN THOUSANDS)                      ------   -------   ------   -------   ------   -------   -------   -------
<S>                                         <C>      <C>       <C>      <C>       <C>      <C>       <C>       <C>
Interest income:
  Loans...................................  $ (22)   $(1,323)  $1,949   $   626   $(502)   $(2,913)  $18,769   $15,856
  Securities available for
    sale -- taxable.......................    (47)      (652)  1,064        412     (53)       497    (1,623)   (1,126)
  Securities available for
    sale -- non-taxable...................    (31)      (327)    636        309     (12)       (77)      963       886
  Investment securities held to
    maturity -- taxable...................     --         --      --         --     766       (383)     (383)     (766)
  Investment securities held to
    maturity -- nontaxable................     --         --      --         --      83        (41)      (42)      (83)
                                            -----    -------   ------   -------   -----    -------   -------   -------
  Total securities........................    (78)      (979)  1,700        721     784         (4)   (1,085)   (1,089)
  Federal funds sold......................   (133)        83    (980)      (897)     --          2        12        14
  Interest bearing bank deposits..........      5         30      43         73      59        (53)     (541)     (594)
                                            -----    -------   ------   -------   -----    -------   -------   -------
  Total interest income...................   (228)    (2,189)  2,712        523     341     (2,968)   17,155    14,187
                                            -----    -------   ------   -------   -----    -------   -------   -------
Interest expense:
  Demand deposits.........................   (215)    (2,795)    196     (2,599)     82      1,591       149     1,740
  Money market accounts...................    201        297   3,615      3,912      (6)       (84)      233       149
  Savings deposits........................     34       (454)   (377)      (831)     (5)      (243)      110      (133)
  Other time deposits.....................     21     (1,889)   (363)    (2,252)     23       (578)   (1,369)   (1,947)
  Other borrowings........................     26       (942)   (642)    (1,584)   (265)      (673)    8,660     7,987
                                            -----    -------   ------   -------   -----    -------   -------   -------
  Total interest expense..................     67     (5,783)  2,429     (3,354)   (171)       (13)    7,783     7,796
                                            -----    -------   ------   -------   -----    -------   -------   -------
  Net interest income.....................  $(295)   $ 3,594   $ 283    $ 3,877   $ 512    $(2,981)  $ 9,372   $ 6,391
                                            =====    =======   ======   =======   =====    =======   =======   =======
</TABLE>

                                        8
<PAGE>   11

INTEREST RATE SENSITIVITY

     The following table presents the Corporation's interest sensitivity
analysis for December 31, 1999 and sets forth at various maturity periods the
cumulative interest sensitivity gap, which is the difference between rate
sensitive assets and rate sensitive liabilities for assets and liabilities that
management considers rate sensitive. The mortgage-backed securities are shown at
their weighted average expected life obtained from an outside evaluation of the
average remaining life of each security based on historic prepayment speeds of
the underlying mortgages at December 31, 1999. Demand deposits, money market
accounts and certain savings deposits are presented in the earliest repricing
window because the rates are subject to immediate repricing.

                                    TABLE 3
                           INTEREST RATE SENSITIVITY
                            AS OF DECEMBER 31, 1999

<TABLE>
<CAPTION>
                                                                                                           NON-
                                                                                                         SENSITIVE
                                                                                                            AND
                                         INTEREST SENSITIVITY IN DAYS                                    SENSITIVE
                                ----------------------------------------------                            OVER 5
                                  1-90       91-180      181-365      TOTAL      1-2 YEARS   2-5 YEARS     YEARS       TOTAL
(DOLLARS IN THOUSANDS)          ---------   ---------   ---------   ----------   ---------   ---------   ---------   ----------
<S>                             <C>         <C>         <C>         <C>          <C>         <C>         <C>         <C>
Interest-Earning Assets:
    Interest-bearing due from
      banks...................  $   1,995   $      --   $      --   $    1,995   $      --   $      --   $     --    $    1,995
    Fed funds sold............        665          --          --          665          --          --         --           665
    Securities available for
      sale, at amortized cost:
        Taxable...............     32,026         862      28,714       61,602       7,560     106,231     83,861       259,254
        Nontaxable............      3,809       2,424          --        6,233       5,898      20,582     57,157        89,870
    Loans.....................    429,984      35,041      55,244      520,269     121,043     378,730    403,715     1,423,757
                                ---------   ---------   ---------   ----------   ---------   ---------   --------    ----------
        Total earning
          assets..............    468,479      38,327      83,958      590,764     134,501     505,543    544,733     1,775,541
                                ---------   ---------   ---------   ----------   ---------   ---------   --------    ----------
Interest-Bearing Liabilities:
    Interest-bearing deposits:
    Demand deposits...........    124,481          --          --      124,481          --          --         --       124,481
    Money market accounts.....    199,344          --          --      199,344          --          --         --       199,344
    Savings deposits..........     53,596       8,403      17,245       79,244      25,794         602         --       105,640
    Other time deposits.......    178,653      75,939     266,942      521,534      54,148      13,156        596       589,434
    Other borrowings..........    316,107          10      57,163      373,280      55,326      63,120        250       491,976
                                ---------   ---------   ---------   ----------   ---------   ---------   --------    ----------
        Total interest-bearing
          liabilities.........    872,181      84,352     341,350    1,297,883     135,268      76,878        846     1,510,875
                                ---------   ---------   ---------   ----------   ---------   ---------   --------    ----------
    Interest sensitivity
      gap.....................  $(403,702)  $ (46,025)  $(257,392)  $ (707,119)  $    (767)  $ 428,665   $543,887    $  264,666
                                =========   =========   =========   ==========   =========   =========   ========    ==========
        Cumulative gap........  $(403,702)  $(449,727)  $(707,119)  $ (707,119)  $(707,886)  $(279,221)  $264,666    $  264,666
                                =========   =========   =========   ==========   =========   =========   ========    ==========
Ratio of earning assets to
  interest-bearing
  liabilities.................     53.71%      45.44%      24.60%       45.52%      99.43%     657.60%
</TABLE>

                                        9
<PAGE>   12

DISTRIBUTION OF ASSETS AND LIABILITIES

     The following table shows the distribution of the Corporation's assets,
liabilities and shareholders' equity at December 31, 1999, 1998, and 1997.
Average balances were calculated based on daily averages.

                                    TABLE 4
                             AVERAGE BALANCE SHEET

<TABLE>
<CAPTION>
                                                          YEARS ENDED DECEMBER 31,
                              ---------------------------------------------------------------------------------
                                        1999                        1998                        1997
                              -------------------------   -------------------------   -------------------------
                               AVERAGE      PERCENTAGE     AVERAGE      PERCENTAGE     AVERAGE      PERCENTAGE
                               BALANCE     DISTRIBUTION    BALANCE     DISTRIBUTION    BALANCE     DISTRIBUTION
(DOLLARS IN THOUSANDS)        ----------   ------------   ----------   ------------   ----------   ------------
<S>                           <C>          <C>            <C>          <C>            <C>          <C>
Assets:
Cash and due from banks.....  $   36,739        2.0%      $   34,609        1.9%      $   28,373        1.8%
Interest bearing bank
  deposits..................       4,694        0.3            3,902        0.2           13,835        0.9
Investment securities --
  taxable...................          --         --               --         --           13,375        0.8
Investment securities --
  nontaxable................          --         --               --         --            1,251        0.1
Securities available for
  sale -- taxable...........     238,399       13.0          221,860       12.5          246,937       15.6
Securities available for
  sale -- nontaxable........      92,980        5.1           84,673        4.8           72,468        4.6
Loans, net (1)..............   1,381,753       75.7        1,358,949       76.3        1,143,448       72.1
Federal funds sold..........       2,024        0.1           18,450        1.0           18,238        1.1
Other assets................      69,832        3.8           58,102        3.3           47,506        3.0
                              ----------      -----       ----------      -----       ----------      -----
          Total.............  $1,826,421     100.0%       $1,780,545     100.0%       $1,585,431     100.0%
                              ==========      =====       ==========      =====       ==========      =====
Liabilities and
  Shareholders' Equity:
Deposits:
  Demand (2)................  $  271,115       14.9%      $  260,670       14.6%      $  189,807       12.0%
  Savings...................     125,418        6.9          135,309        7.6          132,615        8.4
  Money market accounts.....     152,785        8.4           75,558        4.2           70,496        4.4
  Time......................     580,714       32.0          587,261       33.0          611,038       38.5
Other borrowings............     422,644       23.4          434,260       24.4          283,167       17.9
Other liabilities...........      31,379        1.7           36,592        2.1           41,593        2.6
Shareholders' equity........     230,149       12.7          250,895       14.1          256,715       16.2
                              ----------      -----       ----------      -----       ----------      -----
          Total.............  $1,814,204     100.0%       $1,780,545     100.0%       $1,585,431     100.0%
                              ==========      =====       ==========      =====       ==========      =====
</TABLE>

---------------

(1) Loans, net is net of unearned income and the allowance for loan losses.
(2) Demand includes non-interest bearing and interest bearing demand deposits.

                                       10
<PAGE>   13

SECURITIES AVAILABLE FOR SALE

     The following table shows, as of December 31, 1999, 1998 and 1997, the
carrying value of (i) U.S. government obligations, (ii) U.S. government agency
obligations, (iii) mortgage-backed securities, (iv) state and municipal
obligations, and (v) equity securities.

                                    TABLE 5
                         SECURITIES AVAILABLE FOR SALE

<TABLE>
<CAPTION>
                                                                         DECEMBER 31,
                                                              ----------------------------------
                                                                1999         1998         1997
(DOLLARS IN THOUSANDS)                                        --------   ------------   --------
<S>                                                           <C>        <C>            <C>
U.S. government obligations.................................  $  6,016     $ 10,205     $ 22,333
U.S. government agency obligations..........................   168,757      154,653      120,739
Mortgage-backed securities..................................    38,817       36,200       59,548
State and municipal obligations.............................    88,450       97,435       85,532
Equity securities...........................................    40,096       33,306       27,413
                                                              --------     --------     --------
                                                              $342,136     $331,799     $315,565
                                                              ========     ========     ========
</TABLE>

SECURITIES AVAILABLE FOR SALE -- MATURITIES

     The following table indicates the carrying value of each significant
securities available for sale category due within one year, after one year but
within five years, after five years but within ten years, and after ten years,
together with the weighted average yield for each range of maturities, as of
December 31, 1999. Mortgage-backed securities are presented at their contractual
maturity date. Actual maturities will differ from contractual maturities because
borrowers have the right to pre-pay these obligations without pre-payment
penalties. Yields are determined based on amortized cost. Yields are stated on a
tax equivalent basis assuming a Federal tax rate of 35%, applicable state taxes
and TEFRA disallowances in 1999.

                                    TABLE 6
                         SECURITIES AVAILABLE FOR SALE
                            AS OF DECEMBER 31, 1999

<TABLE>
<CAPTION>
                                                           AFTER ONE YEAR         AFTER FIVE YEARS
                                       DUE WITHIN            BUT WITHIN              BUT WITHIN
                                        ONE YEAR             FIVE YEARS              TEN YEARS            AFTER TEN YEARS
                                    -----------------    ------------------    ----------------------    -----------------
                                    AMOUNT      YIELD     AMOUNT      YIELD    AMOUNT        YIELD       AMOUNT      YIELD
(DOLLARS IN THOUSANDS)              -------     -----    --------     -----    -------     ----------    -------     -----
<S>                                 <C>         <C>      <C>          <C>      <C>         <C>           <C>         <C>
U.S. government obligations.......  $ 6,016     6.98%    $     --       --%    $    --          --%      $    --       --%
U.S. government agency
  obligations.....................   20,664     6.05      104,920     6.13      12,458        6.43        30,715     6.88
Mortgage-backed securities........       --       --       23,409     6.69      15,408        7.14            --       --
State and municipal obligations...    5,396     9.62       28,523     6.97      39,276        6.83        15,255     6.81
Equity securities.................       --       --           --       --          --          --        40,096     5.64
                                    -------              --------              -------                   -------
        Total.....................  $32,076     6.83%    $156,852     6.37%    $67,142        6.83%      $86,066     6.29%
                                    =======              ========              =======                   =======
</TABLE>

     As of December 31, 1999, there were no issues of securities available for
sale (excluding U.S. government obligations and U.S. government agency
obligations) which had carrying values that exceeded 10% of shareholders' equity
of the Corporation.

     As of December 31, 1999, there were no investment securities classified as
held to maturity.

                                       11
<PAGE>   14

LOAN PORTFOLIO

     The table below summarizes loans in the classifications indicated as of
December 31, 1999, 1998, 1997, 1996, and 1995.

                                    TABLE 7
                           LOAN PORTFOLIO COMPOSITION

<TABLE>
<CAPTION>
                                                                DECEMBER 31,
                                        ------------------------------------------------------------
                                           1999         1998         1997         1996        1995
(DOLLARS IN THOUSANDS)                  ----------   ----------   ----------   ----------   --------
<S>                                     <C>          <C>          <C>          <C>          <C>
Commercial, financial and
  agricultural........................  $  136,276   $   94,425   $   80,675   $   63,686   $ 66,944
Real estate -- construction...........     253,272      180,475      132,758      102,460     84,591
Real estate -- residential............     992,780    1,077,044      959,785      863,931    696,317
Installment...........................      44,167       70,732       88,546       92,567     79,888
                                        ----------   ----------   ----------   ----------   --------
          Total loans.................   1,426,495    1,422,676    1,261,764    1,122,644    927,740
                                        ----------   ----------   ----------   ----------   --------
Less -- allowance for loan losses.....     (17,339)     (15,554)     (15,263)     (14,140)   (13,552)
Unearned income.......................        (203)        (155)        (273)        (193)      (296)
                                        ----------   ----------   ----------   ----------   --------
          Loans, net..................  $1,408,953   $1,406,967   $1,246,228   $1,108,311   $913,892
                                        ==========   ==========   ==========   ==========   ========
</TABLE>

MATURITIES AND SENSITIVITIES OF LOANS TO CHANGE IN INTEREST RATES

     Set forth in the table below are the amounts of each loan type, except
installment loans and real estate mortgage loans, due in one year, after one
year through five years, and after five years, at December 31, 1999. This table
excludes non-accrual loans.

                                    TABLE 8
                         MATURITIES AND SENSITIVITY TO
                            CHANGE IN INTEREST RATES

<TABLE>
<CAPTION>
                                                                     DECEMBER 31, 1999
                                                      -----------------------------------------------
                                                                  AFTER ONE
                                                      ONE YEAR   YEAR THROUGH     AFTER
                                                      OR LESS     FIVE YEARS    FIVE YEARS    TOTAL
(DOLLARS IN THOUSANDS)                                --------   ------------   ----------   --------
<S>                                                   <C>        <C>            <C>          <C>
Commercial, financial and agricultural..............  $ 72,802     $ 50,907      $ 9,662     $133,371
Real estate -- construction.........................   173,185       66,447       11,276      250,908
                                                      --------     --------      -------     --------
          Total.....................................  $245,987     $117,354      $20,938     $384,279
                                                      ========     ========      =======     ========
</TABLE>

     Commercial, financial and agricultural and real estate - construction loans
that have maturity over one year which have a predetermined interest rate or a
floating or adjustable interest rate:

<TABLE>
<CAPTION>
                                                              DECEMBER 31, 1999
(DOLLARS IN THOUSANDS)                                        -----------------
<S>                                                           <C>
Predetermined interest rate.................................      $ 81,766
Floating or adjustable interest rate........................        56,526
                                                                  --------
                                                                  $138,292
                                                                  ========
</TABLE>

NON-PERFORMING LOANS

     Non-performing loans include non-accrual loans, restructured loans and
accruing loans that are contractually 90 days or more past due.

     See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Balance Sheet Analysis -- Asset Quality" in the
Corporation's 1999 Annual Report to Shareholders, incorporated herein by
reference, for additional information.

                                       12
<PAGE>   15

ACCRUING LOANS 90 DAYS OR MORE PAST DUE

     The following table reflects the dollar amount of loans outstanding in each
category and the amount and percentage of those accruing loans that are 90 days
or more past due as of December 31, 1999, 1998, 1997, 1996, and 1995.

                                    TABLE 9
                    ACCRUING LOANS 90 DAYS OR MORE PAST DUE

<TABLE>
<CAPTION>
                                                                                         PERCENTAGE OF
                                                                                         SUCH LOANS TO
                                                          ACCRUING LOANS      GROSS       GROSS LOANS
                                                            90 DAYS OR        LOANS       OUTSTANDING
                                                          MORE PAST DUE    OUTSTANDING    BY CATEGORY
(DOLLARS IN THOUSANDS)                                    --------------   -----------   -------------
<S>                                                       <C>              <C>           <C>
December 31, 1999
     Commercial, financial and agricultural.............      $  242       $  136,276         .18%
     Real estate -- construction........................          82          253,272         .03
     Real estate -- residential.........................       2,943          992,780         .30
     Installment........................................         193           44,167         .44
                                                              ------       ----------
          Total.........................................      $3,460       $1,426,495         .24%
                                                              ======       ==========
December 31, 1998
     Commercial, financial and agricultural.............      $   10       $   94,425         .01%
     Real estate -- construction........................         215          180,475         .12
     Real estate -- residential.........................       1,916        1,077,044         .18
     Installment........................................         129           70,732         .18
                                                              ------       ----------
          Total.........................................      $2,270       $1,422,676         .16%
                                                              ======       ==========
December 31, 1997
     Commercial, financial and agricultural.............      $  999       $   80,675        1.24%
     Real estate -- construction........................          33          132,758         .02
     Real estate -- residential.........................         858          959,785         .09
     Installment........................................         219           88,546         .25
                                                              ------       ----------
          Total.........................................      $2,109       $1,261,764         .17%
                                                              ======       ==========
December 31, 1996
     Commercial, financial and agricultural.............      $   34       $   63,686         .05%
     Real estate -- construction........................          49          102,460         .05
     Real Estate -- residential.........................         469          863,931         .05
     Installment........................................         133           92,567         .14
                                                              ------       ----------
          Total.........................................      $  685       $1,122,644         .06%
                                                              ======       ==========
December 31, 1995
     Commercial, financial and agricultural.............      $   27       $   66,944         .04%
     Real estate -- construction........................          47           84,591         .06
     Real estate -- residential.........................         163          696,317         .02
     Installment........................................         164           79,888         .21
                                                              ------       ----------
          Total.........................................      $  401       $  927,740         .04%
                                                              ======       ==========
</TABLE>

                                       13
<PAGE>   16

NON-ACCRUAL LOANS AND RESTRUCTURED LOANS

     The determination to discontinue the accrual of interest is based on a
review of each loan. Interest is discontinued on loans 90 days past due as to
principal or interest unless in management's opinion collection of both
principal and interest is assured by way of collateralization, guarantees or
other security and the loan is in the process of collection. The table below
summarizes the Corporation's non-accrual loans and restructured loans as of the
dates indicated.

                                    TABLE 10
                       NON-ACCRUAL AND RESTRUCTURED LOANS

<TABLE>
<CAPTION>
                                                                      DECEMBER 31,
                                                       -------------------------------------------
                                                        1999     1998     1997     1996     1995
(DOLLARS IN THOUSANDS)                                 ------   ------   ------   ------   -------
<S>                                                    <C>      <C>      <C>      <C>      <C>
NON-ACCRUAL LOANS
Principal balance outstanding........................  $7,738   $5,758   $6,119   $7,949   $10,497
                                                       ======   ======   ======   ======   =======
Interest income recorded during the year.............  $  381   $  103   $  317   $   94   $   267
Interest income that would have been recorded if the
  loans had been current and accruing................  $  703   $  436   $  701   $1,057   $ 1,120
RESTRUCTURED LOANS
Principal balance outstanding........................  $   37   $  577   $  587   $  643   $   825
                                                       ======   ======   ======   ======   =======
Interest income recorded during the year.............  $    3   $   21   $   66   $   61   $    95
Interest income that would have been recorded if the
  loans had been current and accruing................  $    3   $   21   $   66   $   61   $    77
</TABLE>

SUMMARY OF LOAN LOSS AND RECOVERY EXPERIENCE

     The table below presents certain data for the years ended December 31,
1999, 1998, 1997, 1996, and 1995, including the following: (i) the average
amount of net loans outstanding during the year, (ii) the allowance for loan
losses at the beginning of the year, (iii) the provision for loan losses, (iv)
loans charged off (v) loan charge-offs, net, (vi) the allowance for loan losses
at the end of the year, (vii) the ratio of net charge-offs to average loans,
(viii) the ratio of the allowance for loan losses to average loans and (ix) the
ratio of the allowance for loan losses to loans at year-end.

                                       14
<PAGE>   17

                                    TABLE 11
                  SUMMARY OF LOAN LOSS AND RECOVERY EXPERIENCE

<TABLE>
<CAPTION>
                                                    YEARS ENDED DECEMBER 31,
                                ----------------------------------------------------------------
                                   1999          1998          1997          1996         1995
(DOLLARS IN THOUSANDS)          ----------    ----------    ----------    ----------    --------
<S>                             <C>           <C>           <C>           <C>           <C>
Average loans, net of unearned
  income......................  $1,381,753    $1,358,949    $1,143,448    $1,022,119    $841,560
                                ==========    ==========    ==========    ==========    ========
Allowance for loan losses:
  Beginning balance...........  $   15,554    $   15,263    $   14,140    $   13,552    $ 13,144
     Add provision for loan
       losses.................       3,350         2,376         2,684         1,481       2,328
                                ----------    ----------    ----------    ----------    --------
  Loan charge-offs:
     Commercial, financial and
       agricultural...........         561           751           712           600       1,599
     Real
       estate -- construction
       and development........          36           390            --            --         349
     Real
      estate -- residential...          69           101           251           111         212
     Installment..............       1,249         1,495         1,298         1,099         539
                                ----------    ----------    ----------    ----------    --------
                                     1,915         2,737         2,261         1,810       2,699
                                ----------    ----------    ----------    ----------    --------
  Recoveries of loans
     previously Charged-off:
     Commercial, financial and
       agricultural...........         260           285           135           654          58
     Real estate -
       construction and
       development............          --            76            --             3          25
     Real
      estate -- residential...          36            --            44            27           3
     Installment..............         423           291           252           233         693
                                ----------    ----------    ----------    ----------    --------
                                       719           652           431           917         779
                                ----------    ----------    ----------    ----------    --------
  Loan charge-offs, net.......       1,196         2,085         1,830           893       1,920
                                ----------    ----------    ----------    ----------    --------
  Adjustment for merged
     banks....................          --            --           269            --          --
                                ----------    ----------    ----------    ----------    --------
  Adjustment for loan sale....        (369)           --            --            --          --
                                ----------    ----------    ----------    ----------    --------
  Ending balance..............  $   17,339    $   15,554    $   15,263    $   14,140    $ 13,552
                                ==========    ==========    ==========    ==========    ========
Net charge-offs to average
  loans.......................         .09%          .15%          .16%          .09%        .23%
Allowance for loan losses to
  gross loans at year-end.....        1.22          1.09          1.21          1.26        1.46
</TABLE>

     For a discussion of management's evaluation of the allowance for loan loss,
see "Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Earnings Performance -- Provision for Loan Losses" and "-- Balance
Sheet Analysis -- Asset Quality" in the First Charter Corporation 1999 Annual
Report to Shareholders, incorporated herein by reference.

                                       15
<PAGE>   18

ALLOWANCE FOR LOAN LOSSES

     The following table presents the dollar amount of the allowance for loan
losses applicable to major loan categories, the percentage of the allowance
amount in each category to the total allowance and the percentage of the loans
in each category to total loans as of December 31, 1999, 1998, 1997, 1996, and
1995. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Earnings Performance -- Provision for Loan Losses" and
"- Balance Sheet Analysis -- Asset Quality" in the First Charter Corporation
1999 Annual Report to Shareholders, incorporated herein by reference.

                                    TABLE 12
                           ALLOWANCE FOR LOAN LOSSES

<TABLE>
<CAPTION>
                                                                                       PERCENTAGE OF
                                                                          PERCENTAGE   GROSS LOANS IN
                                                              ALLOWANCE    OF TOTAL    EACH CATEGORY
                                                               AMOUNT     ALLOWANCE    TO TOTAL LOANS
(DOLLARS IN THOUSANDS)                                        ---------   ----------   --------------
<S>                                                           <C>         <C>          <C>
December 31, 1999
  Type of Loan:
  Commercial, financial and agricultural....................   $ 2,618        21             10%
  Real estate -- construction...............................     1,213        19             18
  Real estate -- residential................................    12,747        57             70
  Installment...............................................       761         3              2
                                                               -------       ---            ---
          Total.............................................   $17,339       100%           100%
                                                               =======       ===            ===
December 31, 1998
  Type of Loan:
  Commercial, financial and agricultural....................   $ 2,085        13%             7%
  Real estate -- construction...............................     2,567        17             13
  Real estate -- residential................................    10,122        65             75
  Installment...............................................       780         5              5
                                                               -------       ---            ---
          Total.............................................   $15,554       100%           100%
                                                               =======       ===            ===
December 31, 1997
  Type of Loan:
  Commercial, financial and agricultural....................   $ 1,664        11%             6%
  Real estate -- construction...............................     2,421        16             11
  Real estate -- residential................................    10,023        66             76
  Installment...............................................     1,155         7              7
                                                               -------       ---            ---
          Total.............................................   $15,263       100%           100%
                                                               =======       ===            ===
December 31, 1996
  Type of Loan:
  Commercial, financial and agricultural....................   $ 1,329         9%             6%
  Real estate -- construction...............................     3,117        22              9
  Real estate -- residential................................     8,869        63             77
  Installment...............................................       825         6              8
                                                               -------       ---            ---
          Total.............................................   $14,140       100%           100%
                                                               =======       ===            ===
December 31, 1995
  Type of Loan:
  Commercial, financial and agricultural....................   $   936         7%             7%
  Real estate -- construction...............................     3,839        28              9
  Real estate -- residential................................     7,851        58             75
  Installment...............................................       926         7              9
                                                               -------       ---            ---
          Total.............................................   $13,552       100%           100%
                                                               =======       ===            ===
</TABLE>

                                       16
<PAGE>   19

DEPOSITS

     The Bank primarily serves individuals and small- to medium-sized businesses
with a variety of deposit accounts, such as NOW accounts, money market accounts,
certificates of deposit and individual retirement accounts. The following table
presents average balances by category and average rates paid for the years ended
December 31, 1999, 1998, and 1997. Average balances were calculated based on
daily averages.

                                    TABLE 13
                                    DEPOSITS

<TABLE>
<CAPTION>
                                                                           AS OF DECEMBER 31,
                                       ------------------------------------------------------------------------------------------
                                                   1999                           1998                           1997
                                       ----------------------------   ----------------------------   ----------------------------
                                                               AVG.                           AVG.                           AVG.
                                        AVERAGE     INTEREST   RATE    AVERAGE     INTEREST   RATE    AVERAGE     INTEREST   RATE
                                        BALANCE     EXPENSE    PAID    BALANCE     EXPENSE    PAID    BALANCE     EXPENSE    PAID
(DOLLARS IN THOUSANDS)                 ----------   --------   ----   ----------   --------   ----   ----------   --------   ----
<S>                                    <C>          <C>        <C>    <C>          <C>        <C>    <C>          <C>        <C>
Non-interest bearing demand
  deposits...........................  $  124,772   $    --      --   $  125,178   $    --      --   $  116,990   $    --      --
Interest bearing deposits:
  Demand deposits....................     146,343     1,195    0.82%     135,492     3,794    2.80%     128,703     2,054    1.60%
  Money markets accounts.............     152,785     7,351    4.81       75,558     3,439    4.55       70,496     3,290    4.67
  Savings deposits...................     125,418     4,556    3.63      135,309     5,387    3.98      132,615     5,520    4.16
  Time deposits......................     580,714    31,269    5.38      587,261    33,521    5.71      611,038    35,468    5.80
                                       ----------   -------           ----------   -------           ----------   -------
        Total........................   1,005,260    44,371              933,620    46,141              942,852   $46,332
                                       ----------   -------           ----------   -------           ----------   -------
        Total deposits...............  $1,130,032   $44,371           $1,058,798   $46,141           $1,059,842   $46,332
                                       ==========   =======           ==========   =======           ==========   =======
</TABLE>

     As of December 31, 1999, domestic time deposits of $100,000 or more totaled
$239,839,000, with the following maturities: $88,049,000, three months or less;
$130,223,000, over three months through twelve months; $20,393,000, over one
year through three years and $1,174,000 over three years.

OTHER BORROWINGS

     The following is a schedule of other borrowings which consists of the
following categories: securities sold under repurchase agreements, federal funds
purchased and Federal Home Loan Bank ("FHLB") borrowings for the years ended
December 31, 1999, 1998 and 1997.

                                    TABLE 14
                                OTHER BORROWINGS

<TABLE>
<CAPTION>
                                                                                                   MAXIMUM
                                                    BALANCE    INTEREST RATE              AVG.   OUTSTANDING
                                                     AS OF         AS OF       AVERAGE    INT.     AT ANY
                                                    DEC. 31       DEC. 31      BALANCE    RATE    MONTH-END
(DOLLARS IN THOUSANDS)                              --------   -------------   --------   ----   -----------
<S>                                                 <C>        <C>             <C>        <C>    <C>
1999
  Federal funds purchased, securities sold under
     agreements to purchase and FHLB borrowings...  $491,976      5.14%        $422,644   5.42%   $553,202
                                                    ========                   ========           ========
1998
  Federal funds purchased, securities sold under
     agreements to purchase and FHLB borrowings...  $469,944      5.51%        $434,260   5.64%   $484,927
                                                    ========                   ========           ========
1997
  Federal funds purchased, securities sold under
     agreements to repurchase and FHLB
     borrowings...................................  $350,079      5.59%        $283,167   5.83%   $413,789
                                                    ========                   ========           ========
</TABLE>

     At December 31, 1999, FCNB had one available line of credit with the FHLB
totaling $468,750,000 with approximately $434,826,000 outstanding. The
outstanding amounts consisted of $156,805,000 maturing in 2000, $571,000
maturing in 2001, $76,000,000 maturing in 2002, $13,000,000 maturing in 2003,
$86,000,000 in 2004, $26,000,000 maturing in 2008, $76,000,000 in 2009, and
$450,000 maturing in 2011. At December 31, 1999, such amounts were outstanding
at market interest rates for the specific advance program and maturity. In
addition, the FHLB requires bank to pledge collateral to secure the advances as
described in the line of credit agreement. The collateral consists of FHLB stock
and qualifying 1-4 family residential mortgage loans.

     See also note 9 to Consolidated Financial Statements.

                                       17
<PAGE>   20

RETURN ON EQUITY AND ASSETS

     The table below indicates the return on average assets (net income divided
by average total assets), return on average equity (net income divided by
average equity), dividend payout ratio (dividends per share divided by basic net
income per share), and average equity to average assets ratio (average equity
divided by average total assets) and other key operating data for the years
ended December 31, 1999, 1998, and 1997. Averages are based on daily balances.

                                    TABLE 15
                          RETURN ON EQUITY AND ASSETS

<TABLE>
<CAPTION>
                                                                         DECEMBER 31,
                                                            --------------------------------------
(DOLLARS IN THOUSANDS                                          1999          1998          1997
EXCEPT PER SHARE AMOUNTS)                                   ----------   ------------   ----------
<S>                                                         <C>          <C>            <C>
Net income................................................  $   26,092    $    9,236    $   19,171
Average shareholders' equity..............................     230,149       250,895       256,715
Average total assets......................................   1,826,421     1,780,545     1,585,431
Dividends per share (1)...................................        0.68          0.61          0.53
Basic net income per share................................        1.45          0.51          1.06
Diluted net income per share..............................        1.45          0.50          1.03
Return on average assets..................................        1.43%         0.52%         1.21%
Return on average equity..................................       11.34          3.68          7.47
Dividend payout ratio (1).................................       46.90        119.61*        50.00*
Average equity to average assets ratio....................       12.60         14.09         16.19
</TABLE>

---------------

*   Excludes HFNC Financial information for comparison purposes.
(1) Computed using the Corporation's historical dividends declared per share.
    Dividends declared per share were $0.68, $0.61, and $0.53 per share for the
    years ended December 31, 1999, 1998 and 1997, respectively. Dividends
    declared per share by HFNC were $0.24 and $5.28 per share for the years
    ended December 31, 1998 and 1997, as adjusted to conform to the
    Corporation's December 31 fiscal year. Dividends declared per share by HFNC
    in the year ended December 31, 1997 includes a special distribution of $5.00
    per share to HFNC shareholders, substantially all of which was deemed to be
    a return of capital to shareholders.

                                       18
<PAGE>   21

ITEM 2.  PROPERTIES

     The corporate and accounting offices of the Corporation are located in
various leased facilities in Concord, North Carolina.

     The main office of FCNB is located in a facility the bank owns in Concord,
North Carolina, while the operations and data processing departments of FCNB are
currently located in another fully-owned facility in Concord, North Carolina.

     In addition to its main office, FCNB has thirty-one full service branches
and two limited service facilities in the following North Carolina locations:

<TABLE>
<S>                                            <C>
Boiling Springs                                Concord -- Wilmar(1)
Cornelius(1)                                   Concord -- Hwy. 29(1)
Forest City(1)                                 Concord -- Branchview(1)(2)(3)
Huntersville(1)(2)                             Concord -- Southbranch(1)(3)
Harrisburg(1)                                  Kannapolis(1)
Midland(1)                                     Landis(1)
Indian Trail(1)(2)                             Mt. Pleasant
Waxhaw(1)                                      Monroe -- Skyway Drive(2)
Monroe -- Downtown(1)                          Matthews(1)
Shelby(1)                                      Mint Hill(1)
Kings Mountain(1)                              Davidson
Charlotte -- Uptown(1)                         The Pines(2)
Charlotte -- Cotswold(1)                       Cornelius(1)
Charlotte -- Park Road(1)(2)                   Charlotte -- Carmel(1)
Charlotte -- University(1)                     Charlotte -- Eastland(1)
Charlotte -- Oakdale(1)                        Charlotte -- Southpark(1)(2)
                                               Charlotte -- Fairview(1)
</TABLE>

-----------------------

(1) Branch maintains an ATM on site
(2) Facility is leased.
(3) Limited service facility

     In addition to the above-noted ATMs, FCNB owns fourteen remote ATMs in
various convenience-style locations in Cabarrus, northeast Mecklenburg and
Cleveland counties of North Carolina.

     FCNB also operates a loan production office located in Greensboro, North
Carolina.

     FCNB is in the process of constructing a new Corporate Center located in
University Research Park that should be complete and operational in the first
quarter of 2001.

     The Corporation's mortgage loan department is located in a fully-owned
building in the SouthPark area of Charlotte, North Carolina.

ITEM 3.  LEGAL PROCEEDINGS

     In June 1995, a lawsuit was initiated against Home Federal by a borrower's
affiliated companies in which the plaintiffs alleged that Home Federal
wrongfully set-off certain funds in an account being held and maintained by Home
Federal. In addition, the plaintiffs alleged that as a result of the wrongful
set-off, Home Federal wrongfully dishonored a check in the amount of $270,000.
Plaintiffs further alleged that the actions on behalf of Home Federal
constituted unfair and deceptive trade practices, thereby entitling plaintiffs
to recover treble damages and attorneys' fees. Home Federal denied any
wrongdoing and filed a motion for summary judgment. Upon consideration of the
motion, the United States Bankruptcy Judge entered a Recommended Order Granting
Summary Judgement, recommending the dismissal of all claims asserted against
Home Federal. In October 1997, the United States District Court entered an order
granting summary judgment in

                                       19
<PAGE>   22

favor of Home Federal. The plaintiff has appealed the order of summary judgment
and the case is presently pending in the Fourth Circuit Court of Appeals.

     In December 1996, Home Federal filed a suit against the borrower and his
company and against the borrower's wife, daughters, and a company owned by his
wife and daughter, alleging transfers of assets to the wife, daughter, and their
company in fraud of creditors, and asking that the fraudulent transfers be set
aside. The objective of the lawsuit is to recover assets which may be used to
satisfy a portion of the judgments obtained in favor of Home Federal in prior
litigation. In April 1997, the borrower's wife filed a counterclaim against Home
Federal alleging that she borrowed $750,000 from another financial institution,
secured by a deed of trust on her principal residence, the proceeds of which
were paid to Home Federal for application on a debt owed by one of her husband's
corporations, claiming that officers of Home Federal promised to resume making
loans to her husband's corporation after the payment. Home Federal and its
officers vigorously denied all of her allegations. Home Federal filed a motion
for summary judgment and dismissal of the counterclaim. The motion for summary
judgment was heard in the Superior Court division of the Mecklenburg County
General Court of Justice in April 1998. In June 1998, Home Federal removed this
case to the United States Bankruptcy Court for the Western District of North
Carolina, Charlotte Division, due to the fact that the defendant was the debtor
in a pending bankruptcy case. In April 1999, Home Federal moved for summary
judgement to dismiss the counterclaims. At a hearing in May 1999, the Bankruptcy
Judge granted part and denied part of Home Federal's Motion for Summary
Judgement. The Judge dismissed the wife's counterclaim for breach of fiduciary
duty, but allowed her claim for fraud to continue. The borrower, his wife and
daughter filed a motion for jury trial. The request was not filed within the
time allowed; however, the Judge may, in his discretion, order a jury trial. We
have filed an objection to the request and a hearing on the motion is scheduled
for April 4, 2000. A trial date has not been set; however, we anticipate a trial
within 90 days. Home Federal believes it has strong defenses to the defendant's
counterclaim.

     In February 1997, two companies affiliated with those referred to in the
first paragraph above filed an additional action against two executive officers
of Home Federal and against an officer of another financial institution. The
action was removed from the state court to the United States Bankruptcy Court
for the Western District of North Carolina. At the same time, the borrower, who
is affiliated with all of these companies, also filed an action in the Superior
Court of Mecklenburg County, North Carolina against the two executive officers
of Home Federal and against an officer of another financial institution. The
Complaints in both actions assert virtually identical claims. The plaintiffs in
both lawsuits allege that the officers of both financial institutions engaged in
a conspiracy to wrongfully declare loans to be in default so as to eliminate
those companies as borrowers of Home Federal. Plaintiffs claim actual damages,
treble damages, and punitive damages together with interest, attorneys' fees,
and other costs. Plaintiffs allege misrepresentation, breach of fiduciary duty,
constructive fraud, interference with business expectancy, wrongful bank account
set-off, and unfair and deceptive acts and practices. The action pending in the
bankruptcy court has been stayed. All defendants filed motions for summary
judgment in the state court action which were granted, and that lawsuit was
dismissed in January 1998 by the Superior Court of Mecklenburg County. The
plaintiff appealed the order granting summary judgment to the North Carolina
Court of Appeals. In July 1998, the defendants removed the state court case to
the United States Bankruptcy Court for the Western District of North Carolina,
Charlotte Division, due to the fact that the plaintiff was a debtor in a pending
bankruptcy case. As a result of the removal, the North Carolina Court of Appeals
entered an order staying further proceedings in the North Carolina Court of
Appeals in August 1998. In early June 1999, the United States Bankruptcy court
entered its Memorandum Decision and Order adopting the State Court dismissal of
the lawsuit. In late June 1999, the plaintiff gave notice of appeal which Home
Federal is opposing. The appeal is pending. On February 12, 2000, the borrower
filed a motion to close his bankruptcy case and remand the action to State
Court. We filed an objection to the motion. At a hearing on March 7, 2000, the
Judge denied the borrower's request to close the case and denied the borrower's
motion to remand to State Court. The Corporation is bound by Home Federal's
agreement to indemnify both of its officers with respect to costs, expense, and
liability which might arise in connection with both of these cases.

     In July 1997, the above borrower and affiliated companies filed an
additional action against HFNC, Home Federal, and the other financial
institution referred to in the paragraph above, alleging that previous

                                       20
<PAGE>   23

judgments in favor of Home Federal and the other financial institution obtained
in prior litigation were obtained by the perpetration of fraud on the Bankruptcy
Court, U.S. District Court, and the Fourth Circuit Court of Appeals. The
plaintiffs are seeking to have the judgments set aside on that basis. All
defendants filed motions for summary judgment and dismissal which were granted,
and the lawsuit was dismissed on September 24, 1998. The borrower, individually,
has appealed the Order dismissing the lawsuit to the Fourth Circuit Court of
Appeals. In February 1999, the United States District Court entered an Order
sanctioning the attorneys for the plaintiffs and ordering that the plaintiff be
prohibited from filing any further action or proceeding in the United States
District Court for the Western District of North Carolina arising from facts
involved in this matter. The Plaintiff appealed the entry of that order. On
March 6, 2000, the United States Court of Appeals for the 4th Circuit ruled
against the borrower on both appeals and affirmed the District Court's opinion.

     Management continues to deny any liability in the above-described cases and
continues to vigorously defend against the claims. However, there can be no
assurance of the ultimate outcome of the litigation, or the range of potential
loss, if any.

     The Corporation and the Bank are defendants in certain other claims and
legal actions arising in the ordinary course of business. In the opinion of
management, after consultation with legal counsel, the ultimate disposition of
these other matters is not expected to have a material adverse effect on the
consolidated operations, liquidity or financial position of the Corporation or
the Bank.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     A special meeting of the shareholders of the Registrant was held on March
21, 2000. The purpose of the meeting was to consider and vote upon a proposal to
approve the Agreement and Plan of Merger, dated as of November 7, 1999, by and
between the Corporation and Carolina First BancShares, Inc. ("Carolina First"),
pursuant to which Carolina First would merge with and into the Corporation. This
motion was adopted by a vote of the majority of the Corporation's issued and
outstanding common stock entitled to vote at the meeting, as follows:

<TABLE>
<S>                           <C>
For:                          11,561,666
Against:                       1,288,371
Abstained:                        87,639
</TABLE>

                                       21
<PAGE>   24

ITEM 4A.  EXECUTIVE OFFICERS OF THE REGISTRANT

     The following list sets forth with respect to each of the current executive
officers of the registrant his or her name, age, positions and offices held with
the Registrant and the Banks, the period served in such positions or offices
and, if such person has served in such position and office for less than five
years, the prior employment of such person.

<TABLE>
<CAPTION>
NAME                             AGE   OFFICE AND POSITION                               YEAR ELECTED
----                             ---   -------------------                              --------------
<S>                              <C>   <C>                                              <C>
Lawrence M. Kimbrough..........  59    President and Chief Executive Officer of the     1986 - Present
                                         Registrant and FCNB
Robert O. Bratton..............  51    Executive Vice President, Chief Operating        1983 - Present
                                         Officer and Chief Financial Officer of the
                                         Registrant and FCNB
                                       Vice President of Union                          1996 - 1998
Robert E. James, Jr. ..........  49    Group Executive Vice President -- Sales of FCNB  1999 - Present
                                       Executive Vice President of the Registrant       1999 - Present
                                       Group Executive: Market Planning & Customer      1996 - 1998
                                         Development, Centura Bank
                                       Executive Vice President for Metro Markets,      1994 - 1998
                                         Centura Bank
Carl T. McFarland..............  42    Executive Vice President of the Registrant and   1999 - Present
                                         FCNB
                                       Executive Vice President and Alternative         1996 - 1999
                                         Delivery Systems Manager, BB&T
                                       Senior Vice President and Loan Services Manager  1988 - 1996
Robert G. Fox, Jr. ............  50    Executive Vice President of the Registrant and   1993 - Present
                                         FCNB and Chief Lending Officer of FCNB
                                       Vice President of Union                          1996 - 1998
                                       Senior Vice President and Senior Credit Officer  1989 - 1993
                                         Barclays Bank of NC
Stephen M. Rownd...............  41    Executive Vice President of the Registrant and   2000 - Present
                                         FCNB and Chief Credit Officer of FCNB
                                       Director of Risk Management, SunTrust Banks,     1999 - 2000
                                         Inc.
                                       Executive Vice President and Chief Credit        1996 - 1999
                                         Officer, SunTrust Bank of Gulf Coast
                                       Senior Vice President, Regions Bank              1991 - 1996
</TABLE>

                                       22
<PAGE>   25

                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

     The information called for by Item 5 with respect to the market price of
and dividends on the Registrant's Common Stock is set forth on the inside back
cover of the Corporation's 1999 Annual Report to Shareholders (included herewith
as Exhibit 13.1) under the caption "Stock Information and Dividends" and is
hereby incorporated by reference.

ITEM 6.  SELECTED FINANCIAL DATA

     The information called for by Item 6 is set forth on page 1 of the
Corporation's 1999 Annual Report to Shareholders (included herein as Exhibit
13.l) under the caption "Selected Consolidated Financial Data" and is hereby
incorporated by reference.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

     The information called for by Item 7 is set forth on pages 45 through 61 of
the Corporation's 1999 Annual Report to Shareholders (included herein as Exhibit
13.1) under the section entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and is hereby incorporated by
reference.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The information called for by Item 7A is set forth on pages 48 and 49 of
the Corporation's 1999 Annual Report to Shareholders (included herein as Exhibit
13.1) under the section entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Results of Operations and
Financial Condition" and is hereby incorporated by reference.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The information called for by Item 8 are set forth on pages 17 through 44
of the Corporation's 1999 Annual Report to Shareholders (included herein as
Exhibit 13.1) and is hereby incorporated by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

     None

                                       23
<PAGE>   26

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information called for by Item 10 with respect to directors and Section
16 matters is set forth in the Registrant's Proxy Statement for its 2000 Annual
Meeting of Shareholders under the captions "Election of Directors", and "Section
16(a) Beneficial Ownership Reporting Compliance," respectively, and is hereby
incorporated by reference. The information called for by Item 10 with respect to
executive officers is set forth in Part I, Item 4A hereof.

ITEM 11.  EXECUTIVE COMPENSATION

     The information called for by Item 11 is set forth in the Registrant's
Proxy Statement for its 2000 Annual Meeting of Shareholders under the captions
"Election of Directors -- Compensation of Directors", "Executive Compensation"
and "Compensation Committee Interlocks and Insider Participation in Compensation
Decisions," respectively, and is hereby incorporated by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information called for by Item 12 is set forth in the Registrant's
Proxy Statement for its 2000 Annual Meeting of Shareholders under the captions
"Principal Shareholders" and "Management Ownership of Common Stock,"
respectively, and is hereby incorporated by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information called for by Item 13 is set forth in the Registrant's
Proxy Statement for its 2000 Annual Meeting of Shareholders under the caption
"Certain Relationships and Related Transactions" and is hereby incorporated by
reference.

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)(1) Financial Statements.

       The following financial statements, together with a report thereon of
       independent certified public accountants, are included in this report by
       incorporation by reference to the Corporation's 1999 Annual Report to
       Shareholders (included herein as Exhibit 13.1) as set forth in Item 8:

       Independent Auditors' Report

       Consolidated Balance Sheets, December 31, 1999 and 1998

       Consolidated Statements of Income for the years ended December 31, 1999,
       1998 and 1997

       Consolidated Statements of Shareholders' Equity for the years ended
       December 31, 1999, 1998 and 1997

       Consolidated Statements of Cash Flows for the years ended December 31,
       1999, 1998 and 1997

       Notes to Consolidated Financial Statements

   (2) Financial Statement Schedules.

       Financial statement schedules, for which provision for filing is made in
       the applicable accounting regulations of the Securities and Exchange
       Commission for bank holding companies, are omitted because the required
       information is not applicable or is included elsewhere herein.

                                       24
<PAGE>   27

   (3) Exhibits.

<TABLE>
<CAPTION>
  EXHIBIT NO.
 (PER EXHIBIT
   TABLE IN
  ITEM 601 OF
REGULATION S-K)                     DESCRIPTION OF EXHIBITS
---------------                     -----------------------
<C>               <S>
     3.1          Amended and Restated Articles of Incorporation of the
                  Registrant, incorporated herein by reference to Exhibit 3.1
                  of the Registrant's 10Q for the quarter ended September 30,
                  1998 (Commission File No. 0-15829)
     3.2          By-laws of the Registrant, as amended, incorporated herein
                  by reference to Exhibit 3.2 of the Registrant's Annual
                  Report on Form 10-K for the year ended December 31, 1995
                  (Commission File No. 0-15829)
   *10.1          Comprehensive Stock Option Plan, incorporated herein by
                  reference to Exhibit 10.1 of the Registrant's Annual Report
                  on Form 10-K for the fiscal year ended December 31, 1992
                  (Commission File No. 0-15829)
    10.2          Dividend Reinvestment and Stock Purchase Plan, incorporated
                  herein by reference to Exhibit 28.1 of the Registrant's
                  Registration Statement No. 333-60641, dated August 8, 1998.
   *10.3          Executive Incentive Bonus Plan, incorporated herein by
                  reference to Exhibit 10.7 of the Registrant's Annual Report
                  on Form 10-K for the year ended December 31, 1998
                  (Commission File No. 0-15829.)
   *10.4          Employment Agreement dated July 21, 1999 for Lawrence M.
                  Kimbrough
   *10.5          Employment Agreement dated July 21, 1999 for Robert O.
                  Bratton
   *10.6          Employment Agreement dated July 21, 1999 for Robert E. James
   *10.7          Employment Agreement dated December 15, 1999 for Carl T.
                  McFarland
   *10.8          Supplemental Agreement dated July 21, 1999 for Lawrence M.
                  Kimbrough
   *10.9          Supplemental Agreement dated July 21, 1999 for Robert O.
                  Bratton
   *10.10         Supplemental Agreement dated July 21, 1999 for Robert E.
                  James
   *10.11         Change in Control Agreement dated November 16, 1994 for
                  Robert G. Fox, Jr. incorporated herein by reference to
                  Exhibit 10.7 of the Registrant's Annual Report on Form 10-K
                  for the year ended December 31, 1994 (Commission File No.
                  0-15829.)
   *10.12         Amended and Restated Employment Agreement between First
                  Charter National Bank and John J. Godbold, Jr. dated as of
                  December 22, 1997, incorporated herein by reference to
                  Exhibit 10.8 of the Registrant's Annual Report on Form 10-K
                  for the year ended December 31, 1997 (Commission File No.
                  0-15829.)
   *10.13         Restricted Stock Award Program, incorporated herein by
                  reference to Exhibit 99.1 of the Registrant's Registration
                  Statement No. 333-60949, dated July 10, 1995.
    10.14         The 1999 Employee Stock Purchase Plan, incorporated herein
                  by reference to the Registrant's Registration Statement No.
                  333-54019, dated May 29, 1998.
   *10.15         The First Charter Corporation Comprehensive Stock Option
                  Plan, incorporated herein by reference to the Registrant's
                  Registration Statement No. 333-54021, dated May 29, 1998.
   *10.16         The Stock Option Plan for Non-employee Directors,
                  incorporated herein by reference to the Registrant's
                  Registration Statement No. 333-54023, dated May 29, 1998.
   *10.17         The Home Federal Savings and Loan Employee Stock Ownership
                  Plan, incorporated herein by reference to the Registrant's
                  Registration Statement No. 333-71495, dated January 29,
                  1999.
   *10.18         The HFNC Financial Corp. Stock Option Plan, incorporated
                  herein by reference to the Registrant's Registration
                  Statement No. 333-71497, dated February 1, 1999.
</TABLE>

                                       25
<PAGE>   28

<TABLE>
<CAPTION>
  EXHIBIT NO.
 (PER EXHIBIT
   TABLE IN
  ITEM 601 OF
REGULATION S-K)                     DESCRIPTION OF EXHIBITS
---------------                     -----------------------
<C>               <S>
    10.19         Agreement and Plan of Merger by and between the Registrant
                  and Carolina First Bancshares, Inc. dated as of November 7,
                  1999, incorporated herein by reference to Appendix A of the
                  Registrant's Registration Statement No. 333-95003 filed
                  January 20, 1999.
    10.20         Stock Option Agreement between the Registrant and Carolina
                  State Bank dated June 30, 1997, incorporated herein by
                  reference to Exhibit 99.2 of the Registrant's Current Report
                  on Form 8-K filed July 2, 1997 (Commission File No. 0-15829)
   *10.21         Employment Agreement dated as of January 20, 1993, as
                  amended as of August 31, 1995, between Bank of Union and H.
                  Clark Goodwin, incorporated herein by reference to Exhibit
                  10.12 of the Registrant's Annual Report on Form 10-K for the
                  year ended December 31, 1995 (Commission File No. 0-15829)
   *10.22         Change in Control Agreement dated October 16, 1996 for
                  Edward B. McConnell, incorporated herein by reference to
                  Exhibit 10.13 of the Registrant's Annual Report on Form 10-K
                  for the year-ended December 31, 1996 (Commission File No.
                  0-15829)
    10.23         1998 Employee Stock Purchase Plan, incorporated herein by
                  reference to Exhibit 99.1 of the Registrant's Registration
                  Statement No. 333-43617 filed December 31, 1997.
   *10.24         Amended and Restated Salary Continuation Agreement between
                  First Charter National Bank and John J. Godbold, Jr. dated
                  as of December 22, 1997, incorporated herein by reference to
                  Exhibit 10.16 of the Registrant's Annual Report on Form 10-K
                  for the year ended December 31, 1997 (Commission File No.
                  0-15829.)
    11.1          Statement regarding computation of per share earnings,
                  incorporated herein by reference to Footnote 1 of the
                  Consolidated Financial Statements included in the First
                  Charter Corporation Annual Report to its shareholders for
                  the year ended December 31, 1999.
    13.1          First Charter Corporation Annual Report to its shareholders
                  for the year ended December 31, 1999. Such Annual Report to
                  its shareholders, except for those portions which are
                  expressly incorporated by reference in this Form 10-K, is
                  furnished for the information of the Commission and is not
                  to be deemed "filed" as part of the Form 10-K
    21.1          List of subsidiaries of the Registrant
    23.1          Consent of KPMG LLP
    27.1          Financial Data Schedule
</TABLE>

---------------

* Indicates a management contract or compensatory plan required to be filed
  herein.

(b) Reports on Form 8-K

     On October 13, 1999, the Corporation filed a Current Report on Form 8-K,
reporting pursuant to Item 5 thereof its earnings for the fiscal quarter ended
September 30, 1999.

     On November 8, 1999, the Corporation filed a Current Report on Form 8-K,
reporting pursuant to Item 5 thereof its Agreement and Plan of Merger by and
between First Charter Corporation and Carolina First BancShares, Inc. entered
into on November 7, 1999. Included in this filing were exhibits filed under Item
7 consisting of the news release disseminated on November 8, 1999 and
information provided to analysts.

                                       26
<PAGE>   29

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or Section 15(d) 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
                                          (Registrant)

                                          By:   /s/ LAWRENCE M. KIMBROUGH
                                            ------------------------------------
                                              Lawrence M. Kimbrough, President

                                          Date: March 30, 2000

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:

<TABLE>
<CAPTION>
                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
<C>                                                    <S>                              <C>

              /s/ LAWRENCE M. KIMBROUGH                President and Director           March 30, 2000
-----------------------------------------------------    (Principal Executive Officer)
               (Lawrence M. Kimbrough)

                /s/ J. ROY DAVIS, JR.                  Chairman of the Board and        March 30, 2000
-----------------------------------------------------    Director
                 (J. Roy Davis, Jr.)

               /s/ MICHAEL R. COLTRANE                 Vice Chairman of the Board and   March 30, 2000
-----------------------------------------------------    Director
                (Michael R. Coltrane)

                /s/ ROBERT O. BRATTON                  Executive Vice President         March 30, 2000
-----------------------------------------------------    (Principal Financial and
                 (Robert O. Bratton)                     Principal Accounting Officer)

                /s/ WILLIAM R. BLACK                   Director                         March 30, 2000
-----------------------------------------------------
                 (William R. Black)

              /s/ JOHN J. GODBOLD, JR.                 Director                         March 30, 2000
-----------------------------------------------------
               (John J. Godbold, Jr.)

              /s/ CHARLES F. HARRY, III                Director                         March 30, 2000
-----------------------------------------------------
               (Charles F. Harry, III)

                /s/ FRANK H. HAWFIELD                  Director                         March 30, 2000
-----------------------------------------------------
                 (Frank H. Hawfield)

                                                       Director
-----------------------------------------------------
                  (Jerry E. McGee)

                /s/ HUGH H. MORRISON                   Director                         March 30, 2000
-----------------------------------------------------
                 (Hugh H. Morrison)

                /s/ THOMAS R. REVELS                   Director                         March 30, 2000
-----------------------------------------------------
                 (Thomas R. Revels)
</TABLE>

                                       27
<PAGE>   30

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
  EXHIBIT NO.
 (PER EXHIBIT
   TABLE IN
  ITEM 601 OF
REGULATION S-K)                     DESCRIPTION OF EXHIBITS
---------------                     -----------------------
<C>               <S>
     3.1          Amended and Restated Articles of Incorporation of the
                  Registrant, incorporated herein by reference to Exhibit 3.1
                  of the Registrant's 10Q for the quarter ended September 30,
                  1998 (Commission File No. 0-15829)
     3.2          By-laws of the Registrant, as amended, incorporated herein
                  by reference to Exhibit 3.2 of the Registrant's Annual
                  Report on Form 10-K for the year ended December 31, 1995
                  (Commission File No. 0-15829)
   *10.1          Comprehensive Stock Option Plan, incorporated herein by
                  reference to Exhibit 10.1 of the Registrant's Annual Report
                  on Form 10-K for the fiscal year ended December 31, 1992
                  (Commission File No. 0-15829)
    10.2          Dividend Reinvestment and Stock Purchase Plan, incorporated
                  herein by reference to Exhibit 28.1 of the Registrant's
                  Registration Statement No. 333-60641, dated August 8, 1998.
   *10.3          Executive Incentive Bonus Plan, incorporated herein by
                  reference to Exhibit 10.7 of the Registrant's Annual Report
                  on Form 10-K for the year ended December 31, 1998
                  (Commission File No. 0-15829.)
   *10.4          Employment Agreement dated July 21, 1999 for Lawrence M.
                  Kimbrough
   *10.5          Employment Agreement dated July 21, 1999 for Robert O.
                  Bratton
   *10.6          Employment Agreement dated July 21, 1999 for Robert E. James
   *10.7          Employment Agreement dated December 15, 1999 for Carl T.
                  McFarland
   *10.8          Supplemental Agreement dated July 21, 1999 for Lawrence M.
                  Kimbrough
   *10.9          Supplemental Agreement dated July 21, 1999 for Robert O.
                  Bratton
   *10.10         Supplemental Agreement dated July 21, 1999 for Robert E.
                  James
   *10.11         Change in Control Agreement dated November 16, 1994 for
                  Robert G. Fox, Jr. incorporated herein by reference to
                  Exhibit 10.7 of the Registrant's Annual Report on Form 10-K
                  for the year ended December 31, 1994 (Commission File No.
                  0-15829.)
   *10.12         Amended and Restated Employment Agreement between First
                  Charter National Bank and John J. Godbold, Jr. dated as of
                  December 22, 1997, incorporated herein by reference to
                  Exhibit 10.8 of the Registrant's Annual Report on Form 10-K
                  for the year ended December 31, 1997 (Commission File No.
                  0-15829.)
   *10.13         Restricted Stock Award Program, incorporated herein by
                  reference to Exhibit 99.1 of the Registrant's Registration
                  Statement No. 333-60949, dated July 10, 1995.
    10.14         The 1999 Employee Stock Purchase Plan, incorporated herein
                  by reference to the Registrant's Registration Statement No.
                  333-54019, dated May 29, 1998.
   *10.15         The First Charter Corporation Comprehensive Stock Option
                  Plan, incorporated herein by reference to the Registrant's
                  Registration Statement No. 333-54021, dated May 29, 1998.
   *10.16         The Stock Option Plan for Non-employee Directors,
                  incorporated herein by reference to the Registrant's
                  Registration Statement No. 333-54023, dated May 29, 1998.
   *10.17         The Home Federal Savings and Loan Employee Stock Ownership
                  Plan, incorporated herein by reference to the Registrant's
                  Registration Statement No. 333-71495, dated January 29,
                  1999.
   *10.18         The HFNC Financial Corp. Stock Option Plan, incorporated
                  herein by reference to the Registrant's Registration
                  Statement No. 333-71497, dated February 1, 1999.
</TABLE>

                                       28
<PAGE>   31

<TABLE>
<CAPTION>
  EXHIBIT NO.
 (PER EXHIBIT
   TABLE IN
  ITEM 601 OF
REGULATION S-K)                     DESCRIPTION OF EXHIBITS
---------------                     -----------------------
<C>               <S>
    10.19         Agreement and Plan of Merger by and between the Registrant
                  and Carolina First Bancshares, Inc. dated as of November 7,
                  1999, incorporated herein by reference to Appendix A of the
                  Registrant's Registration Statement No. 333-95003 filed
                  January 20, 1999.
    10.20         Stock Option Agreement between the Registrant and Carolina
                  State Bank dated June 30, 1997, incorporated herein by
                  reference to Exhibit 99.2 of the Registrant's Current Report
                  on Form 8-K filed July 2, 1997 (Commission File No. 0-15829)
   *10.21         Employment Agreement dated as of January 20, 1993, as
                  amended as of August 31, 1995, between Bank of Union and H.
                  Clark Goodwin, incorporated herein by reference to Exhibit
                  10.12 of the Registrant's Annual Report on Form 10-K for the
                  year ended December 31, 1995 (Commission File No. 0-15829)
   *10.22         Change in Control Agreement dated October 16, 1996 for
                  Edward B. McConnell, incorporated herein by reference to
                  Exhibit 10.13 of the Registrant's Annual Report on Form 10-K
                  for the year-ended December 31, 1996 (Commission File No.
                  0-15829)
    10.23         1998 Employee Stock Purchase Plan, incorporated herein by
                  reference to Exhibit 99.1 of the Registrant's Registration
                  Statement No. 333-43617 filed December 31, 1997.
   *10.24         Amended and Restated Salary Continuation Agreement between
                  First Charter National Bank and John J. Godbold, Jr. dated
                  as of December 22, 1997, incorporated herein by reference to
                  Exhibit 10.16 of the Registrant's Annual Report on Form 10-K
                  for the year ended December 31, 1997 (Commission File No.
                  0-15829.)
    11.1          Statement regarding computation of per share earnings,
                  incorporated herein by reference to Footnote 1 of the
                  Consolidated Financial Statements included in the First
                  Charter Corporation Annual Report to its shareholders for
                  the year ended December 31, 1999.
    13.1          First Charter Corporation Annual Report to its shareholders
                  for the year ended December 31, 1999. Such Annual Report to
                  its shareholders, except for those portions which are
                  expressly incorporated by reference in this Form 10-K, is
                  furnished for the information of the Commission and is not
                  to be deemed "filed" as part of the Form 10-K
    21.1          List of subsidiaries of the Registrant
    23.1          Consent of KPMG LLP
    27.1          Financial Data Schedule
</TABLE>

---------------

* Indicates a management contract or compensatory plan required to be filed
  herein.

                                       29