<PAGE>
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
Commission file number - 0-21346
TRIANGLE BANCORP, INC.
(Exact name of registrant as specified in its charter)
North Carolina 56-1764546
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4300 Glenwood Avenue
Raleigh, North Carolina 27612
(Address of principal executive offices)
(Zip Code)
Telephone: (919) 881-0455
(Registrant's telephone number)
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. Yes x No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock 9,687,105
Class Outstanding at August 9, 1996
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The Consolidated Balance Sheets for June 30, 1996 and December 31,
1995, the Consolidated Statements of Income for the three and six month
periods ended June 30, 1996 and 1995, and the Consolidated Statements
of Cash Flows for the six month periods ended June 30, 1996 and 1995
have been included as Attachments to this report.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Highlights
During the first half of 1996, Triangle Bancorp, Inc. ("the Company")
continued its growth strategy with the purchase of $55 million in
deposits from First Union National Bank. As part of this transaction,
the Company's subsidiary, Triangle Bank ("Triangle") added two new
markets and increased its size in two other markets. In June 1996, the
Company announced the signing of a definitive merger agreement with
Granville United Bank ("Granville") in Oxford, North Carolina. As of
June 30, 1996, Granville had $60 million in assets and 3 branch
locations. Pending regulatory and shareholder approvals, the merger
will be finalized during the fourth quarter of 1996.
Operating Results for the Three Months Ended June 30, 1996 and 1995
The Company's net income for the three months ended June 30, 1996 was
$2,735,000, compared to earnings of $2,044,000 for the same period in
1995, an increase of $691,000 or 34%. Earnings for the three months
ended June 30, 1996 were positively impacted by a one-time gain of
$352,000 (on an after-tax basis) from the sale of the Company's office
in Elizabeth City. Earnings per share were $0.27 compared to $0.21 for
the same period in 1995.
For the three months ended June 30, 1996 the annualized returns on
average assets and equity were 1.28% and 14.65%, respectively compared
to 1.15% and 12.24% for the same period in 1995.
Core earnings for the period were positively impacted by an increase in
net interest income due to an increase in the volume of earning assets.
The net interest income for the three months ended June 30, 1996 was
$9,348,000 compared to $8,075,000 for the same period in 1995 an
increase of $1,273,000 or 16%. The net interest margin was 4.80% for
the three months ended June 30, 1996 versus 5.00% for the same period
in 1995. This decrease in yield offset the increases associated with
increased volumes.
For the three months ended June 30, 1996, a loan loss provision of
$715,000 was made compared to a provision of $85,000 for the same
period in 1995. The increase in provision was made to maintain the loan
loss reserve at appropriate levels due to growth in the loan portfolio.
<PAGE>
Part I, Item 2 (Continued)
Noninterest income for the three months ended June 30, 1996 was
$2,458,000 compared to $1,767,000 for the same period in 1995 an
increase of $691,000 or 39%. The increase of noninterest income is due
primarily to the $558,000 gain realized on the sale of deposits and
loans of the Company's Elizabeth City office in 1996. Service charges
on deposit accounts increased $187,000 in the three months ended June
30, 1996 compared to the same period in 1995. This increase is due to
growth in the number of accounts and fee increases in 1996.
Noninterest expenses increased by only $45,000 for the three months
ended June 30, 1996 compared to the same period in 1995 or 1%.
Decreases in Federal Deposit Insurance premiums, professional fees, and
merger expenses were offset by increases in occupancy expenses,
depreciation and other operating expenses. These increases in 1996
expenses were due to the addition of four branch locations and the
purchase and upfit of a new corporate headquarters.
Operating Results for the Six Months Ended June 30, 1996 and 1995
The Company's net income for the six months ended June 30, 1996 was
$5,119,000, compared to $2,945,000 for the same period in 1995. This
represents an increase of $2,174,000 or 74%. Earnings per share were
$0.51 compared to $0.30 for the same period in 1995. Excluding the sale
of the branch in 1996 and merger-related expenses in 1996 and 1995,
core earnings for the six months ended June 30, 1996 were $4,804,000, a
23% increase over the $3,914,000 earned during the same period in 1995.
For the six months ended June 30, 1996 the annualized returns on
average assets and equity were 1.23% and 13.79%, respectively compared
to 0.85% and 8.99% for the same period in 1995.
Core earnings for the six month period ended June 30, 1996 were
positively impacted by an increase in net interest income due to an
increase in the volume of earning assets. The net interest income for
the six months ended June 30, 1996 was $18,286,000 compared to
$16,264,000 for the same period in 1995 an increase of $2,012,000 or
12%. The net interest margin was 4.84% for the six months ended June
30, 1996 versus 5.14% for the same period in 1995. This decrease in
margin reduced the impact of the increased volume on net interest
income and was due to general economic conditions.
For the six months ended June 30, 1996, a loan loss provision of
$1,025,000 was made compared to a provision of $225,000 for the same
period in 1995. The increase in the provision was made to maintain the
loan loss reserve at an appropriate level due to loan growth.
Noninterest income for the six months ended June 30, 1996 was
$4,435,000 compared to $3,426,000 for the same period in 1995 an
increase of $1,009,000 or 29%. The sale of a branch office in 1996
accounted for $558,000 of this increase. Service charges on deposit
accounts increased $458,000 due to growth in the number of accounts and
due to a fee increase in early 1996.
<PAGE>
Part I, Item 2 (Continued)
Noninterest expenses for the six months ended June 30, 1996 decreased
$1,482,000 over the same period in 1995. In 1995, the Company incurred
$1,538,000 in merger expenses compared to $58,000 in 1996 which
accounts for the decrease. Other variances from 1996 to 1995 include
increases in occupancy expense and depreciation due to additional
locations; amortization of deposit premiums due to acquisitions in
September 1995 and January 1996; and other expenses due to growth of
the Company. These expense increases were offset by decreases in
Federal Deposit Insurance premiums, professional fees and advertising.
Financial Condition
Total assets increased $86 million or 11%, to $881 million at June 30,
1996 versus $795 million at December 31, 1995. Loans increased $62
million, investments increased $26 million and intangible assets
(deposit premium) increased $3 million. These increases were funded by
internal deposit growth as well as the purchase of $55 million in
deposits in January 1996.
The Company continued to maintain strong loan loss reserves during the
period with the loan loss reserves at June 30, 1996 being 1.5% of total
loans and 278% of nonperforming loans. Nonperforming loans to total
loans plus other real estate owned were .54% on June 30, 1996 compared
to .73% as of June 30, 1995. Net charge offs were .04% for the six
month period ended June 30, 1996 versus .10% in the same period in
1995. A summary of certain information related to the loan loss
reserves and nonperforming assets as of June 30, 1996 follows:
<PAGE>
RESERVE FOR LOAN LOSSES AND NONPERFORMING ASSETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
<S> <C>
Analysis of Reserve for Loan Losses:
Beginning Balance, January 1, 1996 $ 8,402
Allowance disposed of in sale (98)
Deduct charge-offs:
Commercial financial and agricultural 146
Real estate, construction and land development 47
Installment loans to individuals 155
Credit card and related plans 118
466
Add recoveries:
Commercial, financial and agricultural 213
Real estate 15
Installment loans to individuals 25
Credit card and related plans 7
260
Net charge-offs 206
Additions charged to operations 1,025
Ending Balance, June, 30 1996 $ 9,123
Ratio of net charge-offs to average loans outstanding during the period 0.04%
Analysis of Nonperforming Assets:
Nonaccrual loans:
Commercial, financial and agricultural $ 161
Real estate, construction and land development 762
Installment loans to individuals 240
1,163
Loans contractually past due 90 days or more
as to principal or interest 1,886
Foreclosed assets 229
TOTAL $ 3,278
</TABLE>
<PAGE>
Part 1, Item 2 (Continued)
Financial Condition (Continued)
Total deposits were $756 million as of June 30, 1996 compared to $662
million at December 31, 1995, an increase of 14%. In January 1996, the
Company purchased $55 million in deposit accounts from First Union
accounting for a little over half of the increase; the remainder is due
to internal growth and a marketing campaign to generate deposits. The
increase was primarily in time deposits and savings and money market
accounts. Short term debt decreased $8.6 million, or 17%, from December
31, 1995 to June 30, 1996.
Capital
The adequacy of capital is reviewed regularly, in light of current
plans and economic conditions, to ensure that sufficient capital is
available for current and future needs, to minimize the Company's cost
of capital and to assure compliance with regulatory requirements. The
Company's capital ratios as of June 30, 1996 are as follows:
Actual Required Excess
Percent Percent Percent
Tier 1 Capital to Risk Based Assets 10.20 % 4.00 % 6.20 %
Total Capital to Risk Based Assets 11.66 % 8.00 % 3.66 %
Leverage Ratio 7.54 % 4.00 % 3.54 %
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceedings involving the Company.
Item 2. Changes in Securities
There have been no changes in the rights of the holders of the common
stock of the Company.
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable.
<PAGE>
Part II (Continued)
Item 5. Other Information
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
(19) Report furnished to security holders.
b) Reports on Form 8-K
Not Applicable.
<PAGE>
TRIANGLE BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
UNAUDITED
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1996 1995
----------------- ------------------
<S> <C> <C>
Cash and due from banks $ 33,997,590 $39,788,852
Federal funds sold - 2,500,000
Interest-bearing deposits in banks 798,003 727,870
Securities available for sale 116,029,473 95,655,464
Securities held to maturity, market value;
$80,939,000 and $78,959,000 81,112,293 75,530,819
Loans held for sale 2,594,806 3,496,948
Loans, less allowance for losses of
$9,122,925 and $8,402,149 599,760,095 537,907,153
Premises and equipment, net 17,576,841 14,908,373
Interest receivable 8,511,255 6,903,653
Deferred income taxes 6,653,138 6,102,077
Intangible assets 11,774,228 8,610,768
Other assets 1,687,838 2,564,612
----------------- ------------------
Total assets $880,495,560 $794,696,589
----------------- ------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand $120,293,372 $121,306,023
Interest-bearing demand 75,060,889 83,643,146
Savings and money market 152,908,417 136,852,591
Large denomination certificates of deposit 53,323,942 40,751,898
Other time 354,312,717 279,456,688
----------------- ------------------
Total deposits 755,899,337 662,010,346
Short-term debt 40,816,276 49,420,534
Interest payable 4,445,223 6,013,090
Other liabilities 3,776,766 4,140,536
----------------- ------------------
Total other liabilities 49,038,265 59,574,160
----------------- ------------------
Total liabilities 804,937,602 721,584,506
----------------- ------------------
Commitments and contingencies*
SHAREHOLDERS' EQUITY
Common stock, no par value 20,000,000 56,795,643 56,608,316
authorized; 9,684,709 shares and 9,663,578
shares outstanding at June 30, 1996 and
December 31, 1995
Undivided profits 19,611,234 15,945,106
Unrealized gain (loss) on securities available for sale (848,919) 558,661
----------------- ------------------
Total shareholders' equity 75,557,958 73,112,083
----------------- ------------------
Total liabilities and shareholders' equity $880,495,560 $794,696,589
----------------- ------------------
</TABLE>
*Standby letters of credit outstanding at June 30, 1996 amounted to $2,983,052
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
TRIANGLE BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
<TABLE>
<CAPTION>
For the three For the three For the six For the six
months ended months ended months ended months ended
June 30, 1996 June 30, 1995 June 30, 1996 June 30, 1995
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 14,032,339 $ 11,753,074 27,292,470 22,855,811
Securities 2,845,868 2,339,060 5,470,023 4,761,650
Interest bearing deposits 2,758 378 6,097 1,705
Interest rate swap 43,125 -- 46,910 --
Federal funds sold -- 136,497 27,979 296,961
---------- ------------ ------------ ------------
Total interest income 16,924,090 14,229,009 32,843,479 27,916,127
INTEREST EXPENSE:
Large denomination certificates of deposit 738,682 913,080 1,431,077 1,711,325
Other deposits 6,150,205 4,885,387 12,021,117 9,245,024
Short-term debt 686,749 291,625 1,104,997 450,866
Other borrowed funds -- 63,913 719 245,030
------------ ------------ ------------ ------------
Total interest expense 7,575,636 6,154,005 14,557,910 11,652,245
------------ ------------ ------------ ------------
Net interest income 9,348,454 8,075,004 18,285,569 16,263,882
Provision for loan losses 715,000 85,000 1,025,000 225,000
------------ ------------ ------------ ------------
Net interest income after
provision for loan losses 8,633,454 7,990,004 17,260,569 16,038,882
------------ ------------ ------------ ------------
NONINTERST INCOME:
Service charges on deposit accounts 1,358,031 1,170,598 2,743,775 2,285,713
Other commissions and fees 421,966 455,340 916,699 896,981
Gain (loss) on sale of securities (7,880) (79,611) (11,941) (96,421)
Gain on sale of foreclosed assets 1,818 -- 17,908 23,894
Gain on sale of branch 558,133 -- 558,133 --
Referral and bookkeeping fees 69,874 64,820 116,803 158,471
Other operating income 56,334 155,848 93,552 157,034
------------ ------------ ------------ ------------
Total noninterest income 2,458,276 1,766,995 4,434,929 3,425,672
------------ ------------ ------------ ------------
NONINTERST EXPENSE:
Salaries and employee benefits 3,062,100 3,017,068 6,220,894 6,231,537
Occupancy expense 630,252 459,710 1,266,221 941,037
Furniture and equipment expense 653,627 503,773 1,213,206 1,058,533
Professional fees 156,925 369,022 498,589 826,601
Federal deposit insurance expense 69,012 341,507 115,370 679,572
Advertising and public relations 185,358 193,464 429,042 372,541
Office expenses 239,050 252,137 420,777 502,560
Merger expense 52,009 203,770 58,169 1,537,970
Amortization of intangible assets 323,693 258,147 644,887 460,797
Other operating expense 1,379,936 1,108,404 2,694,611 2,433,048
------------ ------------ ------------ ------------
Total noninterest expense 6,751,962 6,707,002 13,561,766 15,044,196
------------ ------------ ------------ ------------
Net income before income taxes 4,339,768 3,049,997 8,133,732 4,420,358
Income tax expense 1,605,000 1,006,000 3,015,000 1,475,000
------------ ------------ ------------ ------------
Net income $ 2,734,768 $ 2,043,997 $ 5,118,732 $ 2,945,358
------------ ------------ ------------ ------------
Primary income per share data:
Net income $ 0.27 $ 0.21 $ 0.51 $ 0.30
Average common equivalent shares 9,981,521 9,764,167 9,987,710 9,721,579
Income per share data assuming full dilution:
Net income $ 0.27 $ 0.21 $ 0.51 $ 0.30
Average common equivalent shares 9,981,854 9,783,835 9,988,755 9,747,345
Cash dividends declared per share $ 0.08 $ 0.04 $ 0.15 $ 0.07
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
TRIANGLE BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED AS OF JUNE 30, 1996
<TABLE>
<CAPTION>
JUNE 30 JUNE 30
1996 1995
-------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 5,118,732 $ 2,945,358
Adjustments to reconcile net income to net cash
provided (used ) by operations:
Depreciation and amortization 1,189,915 1,037,860
Accretion of discount on investment securities,
net of amortization of premiums 119,780 95,327
Loss on sale of investments 11,941 96,421
Gain on sale of foreclosed assets 17,908 23,894
Fixed asset write-offs -- 957,000
Provision for loan losses 1,025,000 225,000
TT&L -- (512,960)
Change in other assets and liabilities:
Interest receivable (1,609,837) (837,282)
Deferred tax asset (122,000) (138,337)
Other assets 620,831 726,021
Interest payable (1,710,747) 1,337,888
Other liabilities (393,770) (187,310)
Mortgage loans held for sale:
Originations (9,617,813) (7,082,379)
Sales 10,519,955 7,117,610
------------ ------------
Net cash provided (used) by operating activities 5,169,895 5,804,111
------------ ------------
Cash flows from investing activities:
Intangibles -- 133,990
Net increase in interest bearing time deposits 44,747,458 --
Proceeds from maturities of investment securities available for sale 6,654,612 6,566,771
Proceeds from maturities of investment securities held to maturity 8,000,000 5,794,575
Proceeds from sales of investment securities available for sale 17,354,910 22,204,259
Proceeds from sales of investment securities held to maturity -- --
Purchases of investment securities available for sale (43,929,757) (19,233,967)
Purchases of investment securities held to maturity (16,003,610) (8,389,775)
Net increase in loans made to customers (62,727,274) (42,379,215)
Capital expenditures, bank premises and equipment (3,122,702) (1,599,805)
Proceeds from sale of foreclosed assets 271,899 106,106
Proceeds from sale of fixed assets -- 41,000
Cash acquired, net of costs, in acquisition 51,244,452 --
------------ ------------
Net cash used by investing activities 2,489,989 (36,756,061)
------------ ------------
Cash flows from financing activities:
Net increase or (decrease) in deposit accounts (6,011,477) 24,859,716
Net increase (decrease) in short-term debt (8,604,258) 5,850,022
Net increase (decrease) in other borrowings -- (9,191,649)
Proceeds from exercise of stock options and warrants 69,608 119,496
Cash dividends paid (1,452,604) (651,847)
Proceeds from stock 189,680 --
Repurchase of stock (71,962) --
------------ ------------
Net cash provided by financing activities (15,881,013) 20,985,738
------------ ------------
Net increase (decrease) in cash and
cash equivalents (8,221,129) (9,966,212)
Cash and cash equivalents at beginning of period 43,016,722 54,028,116
------------ ------------
Cash and cash equivalents at end of period $ 34,795,593 $ 44,061,904
============ ============
</TABLE>
<PAGE>
TRIANGLE BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
For the Three and Six Months Ended June 30, 1996 and 1995
(Unaudited)
1. Financial statement presentation and management representation
The consolidated financial statements include the accounts and
results of operations of Triangle Bancorp, Inc. and its
wholly-owned subsidiary, Triangle Bank. Triangle Bank has two
wholly owned subsidiaries, Triangle Bank Leasing Corp., which
is inactive, and Triangle Investment Services which provides
discount brokerage services. All significant intercompany
transactions and accounts are eliminated in consolidation.
The interim consolidated financial statements as of and for
the three and six months ended June 30, 1996 and 1995 are
unaudited. In the opinion of management, the consolidated
financial statements contain all adjustments, consisting of
normal recurring adjustments, necessary to present fairly, in
all material respects, the consolidated financial position as
of June 30, 1996 and 1995, and the results of operations and
cash flows for the periods ended June 30, 1996 and 1995. For
the period ended June 30, 1996 and June 30, 1995, $58,000 and
$1,538,000, respectively, in pre-tax merger expenses were
incurred. The results for the interim periods are not
necessarily indicative of what results will be for the year
ended December 31, 1996.
2. Stock-Based compensation
Effective January 1, 1996 the Company adopted Statement of
Financial Accounting Standards No. 123, Accounting for Stock
Based Compensation. As permitted by SFAS 123, the Company has
chosen to apply APB Opinion 25 and related Interpretations in
accounting for its stock-based compensation plans.
Accordingly, no compensation cost has been recognized for its
fixed stock plans. Had compensation cost for the Company's
stock-based compensation plans been determined based on the
fair value at the grant date for awards under those plans
consistent with the method of SFAS 123, the effect on the
Company's net income and earnings per share would have been
immaterial.
3. Reclassifications
Certain items included in the 1995 financial statements have
been reclassified to conform to the 1996 presentation. These
reclassifications have no effect on the net income or
stockholders' equity previously reported.
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
TRIANGLE BANCORP, INC.
Date: August 13, 1996 /s/ Michael S.
Patterson
Michael S. Patterson,
President and CEO
Date: August 13, 1996 /s/ Debra L. Lee
Debra L. Lee,
Chief Financial Officer
<PAGE>
1996
Second Quarter Report
2
(Triangle Bancorp logo)
<PAGE>
Dear Shareholder:
We are pleased to report the second quarter of 1996 has been another record-
breaking quarter for Triangle Bancorp. Net income for the quarter was $2.7
million, an increase of 34% over the same period in 1995. Earnings per share for
the quarter were $.27, compared to $.21 for the second quarter of 1995, an
increase of 29%. Earnings were positively impacted by a one-time gain of
$352,000 (on an after-tax basis) from the sale of our office in Elizabeth City.
For the six months ended June 30, 1996, earnings were $5.1 million, a 76%
increase over the $2.9 million earned during the same period in 1995. Earnings
per share were $.51 compared to $.30 for the same period in 1995. Excluding the
sale of the branch and merger-related expenses during 1995, core earnings for
the six months ended June 30, 1996 were $4.8 million, a 23% increase over the
$3.9 million earned during the same period in 1995.
Total assets of the Corporation on June 30, 1996 were $881 million, an
increase of $150 million or 21% over the $731 million reported on June
30, 1995. Net loans and deposits for the period were $600 million and $756
million, respectively, compared to $494 million and $628 million, respectively,
at June 30, 1995.
The quality of the assets in our loan portfolio continues to be
excellent. The ratio of nonperforming loans and other real estate owned to gross
loans was .54% at the quarter ended June 30, 1996 compared to .73% on June
30, 1995. For the year, net charge offs as a percentage of average loans
continues to be strong at .04%, compared to .10% for 1995. Our percentage of
loan loss reserves to nonperforming loans and other real estate compares
favorably to our peers, with a coverage ratio of 278%.
While we are extremely pleased with the growth of our net income and earning
assets, we have experienced a decline in our net interest margin since the
beginning of the year due to the competitive environment for both quality loans
and core deposits. We feel this pressure on net interest margin will continue
throughout the remainder of the year. In order to maintain earnings growth, we
will closely monitor our interest spreads and continue to focus on improving
operating efficiencies throughout the company.
To improve convenience and service for customers, we opened our HELPDESK, a
fully-staffed telephone center, during the second quarter. This phone center
is in addition to VOICELINK, our automated 24 hour, seven-day-a-week system,
and is open from 7:00 AM to 7:00 PM Monday through Friday to assist customers.
We plan to expand the center later this year by introducing telemarketing to
new and existing customers. In addition, we built a new main office in New
Bern to replace our original facility and opened a new office at our corporate
headquarters in Raleigh.
In keeping with our strategic acquisition plans, we announced the signing of
a definitive merger agreement on June 7, 1996 to acquire Granville United Bank
in Oxford, NC. Granville United operates three offices in Granville County and
had assets of $60.1 million on June 30, 1996. They will be an excellent
addition to our bank and should enhance our earnings per share and book value
in 1997. After this merger, our deposits in Metropolitan Statistical Areas
(MSAs) will be in excess of 69% of total deposits.
On June 18, 1996, your Board of Directors increased the quarterly cash
dividend by 14% from $.07 per share to $.08 per share for shareholders of
record as of June 19, 1996. This represents an increase of 100% over the
$.04 per share paid in the second quarter of 1995.
We appreciate the support of our shareholders and encourage you to use the
services of our bank, as well as recommend us to others.
Sincerely,
(Signature of Michael S. Patterson)
Michael S. Patterson
President and CEO
<PAGE>
SUMMARY BALANCE SHEETS
(IN THOUSANDS)
6/30/96 6/30/95
ASSETS
Cash, Due from Banks,
and Federal Funds Sold $ 34,796 $ 44,062
Investments, Market Value of
$196,969 and $157,558 197,142 155,796
Loans Less Allowance of
$9,123 and $8,762 602,355 495,149
Other Assets 46,203 35,676
TOTAL ASSETS $ 880,496 $ 730,683
LIABILITIES AND
SHAREHOLDERS' EQUITY
Demand Deposits $ 120,293 $ 109,856
Interest Bearing Deposits 635,606 518,009
Total Deposits 755,899 627,865
Other Borrowings 40,816 25,761
Other Liabilities 8,223 8,308
Total Other Liabilities 49,039 34,069
Total Liabilities 804,938 661,934
SHAREHOLDERS' EQUITY
Common Stock; no par value;
20,000,000 shares authorized;
9,684,709 shares and 9,644,855
shares outstanding at June 30,
1996 and 1995, respectively 56,796 56,505
Undivided Profits 19,611 12,611
Net Unrealized Loss on Securities
Available for Sale (849) (367)
Total Shareholders' Equity 75,558 68,749
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 880,496 $ 730,683
Triangle Bancorp, Inc. and Subsidiary
<PAGE>
SUMMARY STATEMENTS OF INCOME AND EXPENSE
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
6/30/96 6/30/95 6/30/96 6/30/95
<S> <C> <C> <C> <C>
Interest Income $ 16,924 $ 14,229 $ 32,844 $ 27,916
Interest Expenses 7,576 6,154 14,558 11,652
Net Interest Income 9,348 8,075 18,286 16,264
Provision for Loan Losses 715 85 1,025 225
Net Interest Income
After Provision 8,633 7,990 17,261 16,039
Noninterest Income 2,458 1,767 4,435 3,425
Noninterest Expense 6,699 6,503 13,504 13,506
Merger Expenses 52 204 58 1,538
Net Income Before Taxes 4,340 3,050 8,134 4,420
Income Tax Expense 1,605 1,006 3,015 1,475
NET INCOME $ 2,735 $ 2,044 $ 5,119 $ 2,945
PRIMARY EARNINGS PER SHARE $ .27 $ .21 $ .51 $ .30
AVERAGE COMMON AND COMMON EQUIVALENT SHARES 9,982 9,764 9,988 9,722
FULLY DILUTED EARNINGS PER SHARE $ .27 $ .21 $ .51 $ .30
AVERAGE COMMON AND COMMON EQUIVALENT SHARES
ASSUMING FULL DILUTION 9,982 9,784 9,989 9,747
SIGNIFICANT RATIOS
Return on Assets 1.28% 1.15% 1.23% .85%
Return on Equity 14.65% 12.24% 13.79% 8.99%
Efficiency Ratio 57.2% 68.2% 59.7% 76.4%
Net Charge Offs to Average Loans .04% .02% .04% .10%
Allowance for Loan Losses to Loans 1.50% 1.75%
Allowance for Loan Losses to
Nonperforming Loans 278% 239%
</TABLE>
<PAGE>
TRIANGLE BANK OFFICE LOCATIONS
Bailey Middlesex
Battleboro Mount Olive
Benson Nashville
Carrboro New Bern
Cary (2) Raleigh (3)
Chapel Hill (2) Red Oak
Clayton Rocky Mount
Dunn Sanford (2)
Durham Scotland Neck
Fayetteville Seaboard
Fuquay-Varina Sharpsburg
Garner Spring Hope
Goldsboro Tarboro (2)
Greenville Whiteville (2)
Havelock Wilmington
Lillington
SHAREHOLDER INFORMATION
Stock Transfer Agent and Registrar:
First Citizens Bank
Stock Transfer Department
2917 Highwoods Boulevard
Raleigh, North Carolina 27604
1-800-662-7130
Stock Listing:
The common stock of Triangle Bancorp is
traded in the NASDAQ National Market System
under the ticker symbol TRBC.
Market Makers:
A.G. Edwards
Dean Witter Reynolds
Herzog, Heine, Geduld, Inc.
Interstate Johnson Lane
Legg Mason
Olde Discount Corporation
Principal Financial Securities
Raymond James & Associates, Inc.
Scott & Stringfellow
Wedbush Morgan Securities, Inc.
Wheat First Butcher Singer
<PAGE>
(Triangle Bancorp logo)
P.O. Box 31828
Raleigh, NC 27622
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 33,997,590
<INT-BEARING-DEPOSITS> 798,003
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 116,029,473
<INVESTMENTS-CARRYING> 81,112,293
<INVESTMENTS-MARKET> 80,939,000
<LOANS> 611,477,826
<ALLOWANCE> 9,122,925
<TOTAL-ASSETS> 880,495,560
<DEPOSITS> 755,899,337
<SHORT-TERM> 40,816,276
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0
0
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<INCOME-PRETAX> 8,133,732
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</TABLE>
