Impatient investors say bank must grow or bye.

• Author: Speizer, Irwin
• Position: Money Matters - First Charter Corp.

On his first visit to Moscow, the story goes, a Soviet student came away disappointed after viewing the preserved corpse of Communist leader Vladimir Lenin. "It just lies there," he said. In capitalist Charlotte, a similar thought has occurred to some investors in First Charter Corp. (Nasdaq: FCTR).

For most of the past three years, their shares have traded between $16 and $22, while investors at Troy-based First Bancorp, the Tar Heel bank most similar in asset size, have seen theirs grow from the same price range to $34. First Charter's performance has been so torpid that a group of shareholders wants the bank to put itself up for sale. "A price per share up to $40 may be warranted in our opinion," shareholders Mark Boyd and Phil Lewis wrote to directors in January.

Fat chance, given the bank's recent performance. First Charter's earnings per share fell to 47 cents--a 72% drop--in 2003, partly because it wrote off some bad loans. Like-sized banks nationwide averaged earnings gains of 9.1%.

Tony Plath, a banking professor at UNC Charlotte, figures First Charter would be lucky to fetch $26 a share. "The thing I find paradoxical is that they are doing all the right things. They have a good sales culture, good product line, good retail positioning. But where are the results?" As Plath sees it, First Charter has three options: expand...