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, 1998
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 21,524,892
Class Outstanding at August 11, 1998
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The Consolidated Balance Sheets for June 30, 1998 and December 31,
1997, the Consolidated Statements of Income for the three and six month
periods ended June 30, 1998 and 1997, and the Consolidated Statements
of Cash Flows for the six month periods ended June 30, 1998 and 1997
have been included as Attachments to this report.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
General
The purpose of this discussion is to provide the reader with a concise
understanding of the performance and financial condition of Triangle
Bancorp, Inc. (the "Company"). The Company is a multibank holding
company incorporated in November 1991 under the laws of the State of
North Carolina, with four wholly-owned subsidiaries: Triangle Bank
("Triangle"); Bank of Mecklenburg ("Mecklenburg") (collectively, the
"Banks"); Coastal Leasing LLC ("Coastal"); and Triangle Capital Trust.
Highlights
During the second quarter of 1998, Triangle Bancorp, Inc. continued its
growth strategy with the acquisition of Guaranty State Bancorp
("Guaranty") on April 16, 1998. Guaranty had $103 million in assets and
four branch locations in Durham, North Carolina.
The Company has also entered a definitive agreement to acquire United
Federal Savings Bank ("UFSB") in Rocky Mount, North Carolina. UFSB
operates thirteen banking offices and reported total assets of
approximately $300 million at June 30, 1998. It is anticipated that
this transaction will be completed in September 1998, subject to
regulatory and UFSB shareholder approval.
Operating Results for the Three Months Ended June 30, 1998 and 1997
The Company's net income for the three months ended June 30, 1998 was
$4,753,000 compared to earnings of $5,662,000 for the same period in
1997, an decrease of $909,000 or 16.05%. Diluted earnings per share
were $0.21 compared to $0.26 for the same period in 1997. The results
for the three months ended June 30, 1998 included after-tax merger
expenses of $711,000. The results for the three months ended June 30,
1997 included a net after-tax gain of $1,200,000 on the sale of two
branch offices, net of after-tax merger expenses.
Without the non-recurring merger expenses and gain on branch sale, net
income for the three months ended June 30, 1998 would have been
$5,464,000 versus $4,474,000 for the same period
<PAGE>
in 1997. This is an increase of 22%. Diluted earnings per share were
$.25 for the three months ended June 30, 1998 versus $.20 for the same
period in 1997.
For the three months ended June 30, 1998 the annualized returns on
average assets (ROA) and equity (ROE) were 1.14% and 14.16%,
respectively, compared to 1.62% and 18.52% for the same period in 1997.
Without the non-recurring items, ROA would have been 1.31% versus
1.28%, and ROE would have been 16.28% versus 14.64% for the three
months ended June 30, 1998 and 1997, respectively.
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, 1998 was
$15,663,000 compared to $14,116,000 for the same period in 1997, an
increase of $1,547,000 or 11%. The increases from volume were offset
somewhat by a decrease in the taxable equivalent yield with net
interest margin decreasing to 4.28% for the three months ended June 30,
1998 from 4.50% for the same period in 1997.
For the three months ended June 30, 1998, a loan loss provision of
$855,000 was made compared to a provision of $978,000 for the same
period in 1997.
Recurring noninterest income for the three months ended June 30, 1998
was $3,976,000 compared to $2,960,000 for the same period in 1997 an
increase of 34%. This increase resulted from increases in service
charges, fees from the investment services subsidiary and gains on
sales of loans over the prior year. Service charge fees have increased
as a result of 10 branches acquired in August 1997 which increased the
number of transaction accounts the Company collects fees on. Fees from
the investment services subsidiary and gains on loan sales have
increased over the prior year due to an increased focus on these
services.
Recurring noninterest expenses increased by $1,449,000 for the three
months ended June 30, 1998 compared to the same period in 1997. These
increases are primarily due to the growth of the Company through the
August 1997 branch acquisition which added ten branches and their
related infrastructure and personnel. In the branch acquisition, a
deposit premium was paid which is being amortized thus increasing
amortization expense for the three months ended June 30, 1998 compared
to the same period in 1997.
Operating Results for the Six Months Ended June 30, 1998 and 1997
The Company's net income for the six months ended June 30, 1998 was
$9,664,000, compared to $9,585,000 for the same period in 1997. This
represents an increase of $79,000 or 1%. Excluding non-recurring merger
expenses in 1998 and the net gain on sale of branches in 1997, core
earnings for the six months ended June 30, 1998 were $10,497,000, a 25%
increase over the $8,400,000 earned during the same period in 1997.
Earnings per share were $0.43 ($0.47 without the merger expenses)
compared to $0.44 ($0.38 without the gain) for the same period in 1997.
For the six months ended June 30, 1998 the annualized returns on
average assets and equity were 1.16% and 14.54%, respectively, compared
to 1.40% and 15.88% for the same period in 1997. Without non-recurring
items in 1998 and 1997, ROA was 1.26% versus 1.23%, and ROE was 15.79%
versus 13.92% for the six months ended June 30, 1998 and 1997,
respectively.
<PAGE>
Core earnings for the six month period ended June 30, 1998 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, 1998 was $31,082,000 compared to
$27,517,000 for the same period in 1997 an increase of $3,565,000 or
13%. The taxable equivalent net interest margin declined to 4.26% for
the six months ended June 30, 1998 from 4.50% for the same period in
1997.
For the six months ended June 30, 1998, a loan loss provision of
$2,006,000 was made compared to a provision of $1,569,000 for the same
period in 1997.
Recurring noninterest income for the six months ended June 30, 1998 was
$7,071,000 compared to $5,567,000 for the same period in 1997 and
increase of 27%. This increase is represented by increases in service
charges, fees from the investment services subsidiary and gains on
sales of loans over the prior year. Service charge fees have increased
as a result of 10 branches acquired in August 1997 which increased the
number of transaction accounts the Company collects fees on. Fees from
the investment services subsidiary and gains on loan sales have
increased over the prior year due to an increased focus on these
services. These increases were offset by a decrease in trading gains
recognized in 1997. The Company discontinued its investment trading
activities in 1997.
Recurring noninterest expenses for the six months ended June 30, 1998
increased $2,067,000 over the same period in 1997. These increases are
primarily due to the growth of the Company through the August 1997
branch acquisition which added ten branches and their related
infrastructure and personnel. In the branch acquisition, a deposit
premium was paid which is being amortized thus increasing amortization
expense for the six months ended June 30, 1998 compared to the same
period in 1997.
Financial Condition
Total assets decreased $39 million, or 2%, to $1.673 billion at June
30, 1998 versus $1.712 billion at December 31, 1997. The decrease was
due to the maturity of a Federal Home Loan Bank advance in early 1998
and a corresponding decrease in securities.
The Company continued to maintain strong loan loss reserves during the
period with the loan loss reserves at June 30, 1998 being 1.49% of
total loans and 197% of nonperforming loans. Nonperforming loans to
total loans plus other real estate owned were .76% on June 30, 1998
compared to .64% as of December 31, 1997. Net charge offs were .21% for
the six month period ended June 30, 1998 versus .02% in the same period
in 1997. A summary of certain information related to the loan loss
reserves and nonperforming assets as of June 30, 1998 follows:
<PAGE>
RESERVE FOR LOAN LOSSES AND NONPERFORMING ASSETS
(Dollars in Thousands)
Analysis of Reserve for Loan Losses:
Beginning Balance, January 1, 1998 $14,954
-------
Deduct charge-offs:
Commercial financial and agricultural 653
Real estate, construction and land development 0
Installment loans to individuals 422
Credit card and related plans 322
-------
1,397
Add recoveries:
Commercial, financial and agricultural 191
Real estate 15
Installment loans to individuals 50
Credit card and related plans 32
-------
288
-------
Net charge-offs 1,109
Additions charged to operations 2,006
-------
Ending Balance, June 30, 1998 $15,851
=======
Ratio of net charge-offs to average loans outstanding during the period 0.21%
Analysis of Nonperforming Assets:
Nonaccrual loans:
Commercial, financial and agricultural $ 1,355
Real estate, construction and land development 1,202
Installment loans to individuals 69
-------
2,626
Loans contractually past due 90 days or more
as to principal or interest 4,420
Foreclosed assets 1,002
-------
TOTAL $ 8,048
=======
<PAGE>
Total deposits were $1.321 billion as of June 30, 1998 compared to
$1.285 billion at December 31, 1997. The increase was primarily in time
deposits greater than $100,000.
With the increase in deposits, short term debt has decreased. Also
Federal Home Loan Bank borrowings have been reduced by $53,200 from
December 31, 1997 to June 30, 1998.
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, 1998 are as follows:
Actual Required Excess
Percent Percent Percent
------- -------- -------
Tier 1 Capital to Risk Based Assets 10.91% 4.00% 6.91%
Total Capital to Risk Based Assets 12.16% 8.00% 4.16%
Leverage Ratio 7.92% 4.00% 3.92%
Impact of Year 2000 Issue
The Year 2000 Issue is the result of computer programs being written
using two digits rather than four to define the applicable year. As a
result, many automated applications may fail to function properly or
may cease to function unless corrected or replaced.
The Company is a "turnkey" institution; it does not write or develop
any of its own computer applications, but instead purchases or licenses
its applications from third party vendors. The Company has adopted a
plan which calls for the Company's applications to properly process
dates in the year 2000 and beyond by April 20, 1999. As a "turnkey"
institution, the Company is in dialogue with all of its vendors as to
their preparedness for Year 2000. In addition, the Company has hired an
independent consultant to assist it in all phases of its Year 2000
plan.
As of June 30, 1998, the Company had completed its assessment of its
existing computer systems and applications and had identified 32
mission critical applications. As of June 30, 1998, the Company had
begun renovation, validation and implementation of several of its
missions critical applications. Renovation for the remaining mission
critical applications is to be completed by December 31, 1998, and by
March 31, 1999 for non-mission critical functions. Validation and
implementation of all functions, both mission critical and non-mission
critical, are to be completed by April 30, 1999. As validation of a
function occurs, the Company will develop a contingency plan for each
function. As of June 30, 1998 the Company had begun contingency
planning for several functions.
The Company has budgeted $1,000,000 for the Year 2000 plan, with
approximately $50,000 for 1997, $750,000 for 1998 and $200,000 for
1999. As of June 30, 1998, the Company has
<PAGE>
spent approximately $40,000 and $210,000 in 1997 and 1998,
respectively, on Year 2000 issues. The Company does not expect the
costs of this process to be material to its financial condition or
results of operations.
Based on information now available, the Company anticipates its systems
will properly process dates in the year 2000 and beyond.
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.
Item 5. Other Information
The Securities and Exchange Commission recently amended Rule 14a-4
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Pursuant to amended Rule 14a-4, if a shareholder of
the Company does not submit to the Company at its executive offices in
Raleigh, North Carolina, by February 8, 1999 a notice of a his or her
intention to present a matter at the Company's 1999 Annual Meeting of
Shareholders, all proxies held by management of the Company at the 1999
Annual Meeting may be voted in the discretion of management of the
Company when the matter is presented at the Annual Meeting, without any
discussion of the matter appearing in the proxy materials for the
Annual Meeting. In accordance with existing regulation and as disclosed
in the Company's proxy statement dated March 20, 1998, any matter to be
presented to the Company for inclusion in its proxy materials for the
1999 Annual Meeting must be presented to the Company in compliance with
the provisions of Rule 14a-8 promulgated under the Exchange Act.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
(27) Financial Data Schedule.
b) Reports on Form 8-K
On June 17, 1998, the Company filed an 8-K to file restated
financial statements to reflect the acquisition of Guaranty as
of April 16, 1998. The acquisition was accounted for as a
pooling-of-interests and therefore all historical financial
information was restated.
On August 10, 1998, the Company filed an 8-K to file an
amendment to the March 4, 1998 Agreement and Plan of
Reorganization and Merger with UFSB which adopted a revised
pricing structure in the event the average closing price of
Triangle stock were less than $18.67.
<PAGE>
TRIANGLE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
IN THOUSANDS
UNAUDITED
<TABLE>
<CAPTION>
June 30, 1998 December 31, 1997
------------- ------------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 60,168 $ 54,162
Federal funds sold 1,775 4,219
Interest-bearing deposits in banks 4,539 23,027
Securities available for sale 394,439 432,722
Securities held to maturity, market value;
$83,540 and $95,946 82,336 94,793
Loans and Leases, less allowance for losses of
$15,851 and $14,954 1,044,864 1,018,556
Premises and equipment, net 36,077 34,541
Interest receivable 14,148 13,416
Deferred income taxes 8,233 6,876
Intangible assets 25,949 27,688
Other assets 535 1,616
----------- -----------
Total Assets $ 1,673,063 $ 1,711,616
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand 195,008 192,997
Interest-bearing demand 161,943 175,322
Savings and money market 275,490 268,924
Large denomination certificates of deposit 160,831 120,655
Other time 527,792 526,688
----------- -----------
Total Deposits 1,321,064 1,284,586
Short-term debt 40,582 61,506
Federal Home Loan Bank advances 140,300 195,300
Corporation obligated manditorily
redeemable securities 19,952 19,951
Interest payable 7,966 9,125
Other liabilities 7,622 10,656
----------- -----------
Total other liabilties 216,422 296,538
----------- -----------
Total liablities 1,537,486 1,581,124
----------- -----------
Commitments and contingencies*
SHAREHOLDERS' EQUITY
Common stock, no par value 50,000
authorized; 21,529 shares and
21,360 shares outstanding at June 30,
1998 and December 31, 1997, respectively 82,557 81,290
Undivided profits 55,040 48,899
Accumulated other comprehensive income (2,020) 303
----------- -----------
Total shareholders' equity 135,577 130,492
----------- -----------
Total liablities and shareholders' equity $ 1,673,063 $ 1,711,616
=========== ===========
</TABLE>
Standby letters of credit outstanding at June 30, 1998 amounted to $5,135
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
TRIANGLE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
IN THOUSANDS (EXCEPT PER SHARE DATA)
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, 1998 June 30, 1997 June 30, 1998 June 30, 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $24,393 $21,847 $48,131 $41,983
Securities 7,100 5,566 14,987 11,226
Interest bearing deposits 181 240 436 398
Federal funds sold 117 31 243 92
------- ------- ------- -------
Total interest income 31,791 27,684 63,797 53,699
INTEREST EXPENSE:
Large denomination certificates of deposit 2,441 1,703 4,640 3,413
Other deposits 10,628 10,204 21,347 19,828
Capital securities 469 139 938 139
Short-term debt 462 275 1,027 534
Other borrowed funds 2,128 1,247 4,763 2,268
------- ------- ------- -------
Total interest expense 16,128 13,568 32,715 26,182
------- ------- ------- -------
Net interest income 15,663 14,116 31,082 27,517
Provision for loan losses 855 978 2,006 1,569
------- ------- ------- -------
Net interest income after
provision for loan losses 14,808 13,138 29,076 25,948
------- ------- ------- -------
NONINTEREST INCOME:
Service charges on deposit accounts 2,015 1,560 3,832 3,052
Other commissions and fees 721 406 1,367 878
Gain on sale of securities 433 410 471 493
Trading gains, net -- 182 -- 492
Gain on sale of loans 344 110 543 195
Gain on sale of branches -- 2,000 -- 2,000
Other fee income 213 41 347 136
Other operating income 250 251 511 321
------- ------- ------- -------
Total noninterest income 3,976 4,960 7,071 7,567
------- ------- ------- -------
NONINTEREST EXPENSES:
Salaries and employee benefits 4,353 4,009 8,623 8,268
Occupancy expenses 1,015 864 2,086 1,702
Furniture and equipment expenses 1,045 684 1,923 1,357
Professional fees 434 630 732 1,262
Advertising and public relations 385 367 620 679
Office expenses 342 297 736 676
Telephone and communication 364 289 679 535
Merger expense 1,167 144 1,361 149
Amortization of intangible assets 792 393 1,587 786
Other operating expense 1,709 1,457 3,226 2,882
------- ------- ------- -------
Total noninterest expenses 11,606 9,134 21,573 18,296
------- ------- ------- -------
Net income before taxes 7,178 8,964 14,574 15,219
Income tax expense 2,425 3,302 4,910 5,634
------- ------- ------- -------
Net income $ 4,753 $ 5,662 $ 9,664 $ 9,585
======= ======= ======= =======
Basic income per share data:
Net income $ 0.22 $ 0.27 $ 0.45 $ 0.45
Average shares outstanding 21,521 21,251 21,498 21,247
Diluted income per share data:
Net income $ 0.21 $ 0.26 $ 0.43 $ 0.44
Average common equivalent shares 22,258 21,919 22,275 21,859
Cash dividends declared per share $ 0.09 $ 0.06 $ 0.17 $ 0.11
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
TRIANGLE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
IN THOUSANDS
UNAUDITED
<TABLE>
<CAPTION>
JUNE 30, JUNE 30,
1998 1997
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 9,664 $ 9,585
Adjustments to reconcile net income to net cash provided by (used in)
operations:
Depreciation and amortization 3,130 1,304
Accretion of discount on investment securities,
net of amortization of premiums 870 448
Provision for loan losses 2,006 1,569
Gain on sale of investments (471) (493)
Gain on trading securities -- (492)
Gain on disposal of premises and equipment (4) 119
Gain on branch divestiture -- (2,000)
Net change in trading securities -- (10,657)
Mortgage loans held for sale:
Originations -- (948)
Sales -- 3,716
(Benefit) for deferred taxes (50) (25)
Change in other assets and liabilities:
Interest receivable (732) (1,683)
Other assets 1,080 (1,363)
Interest payable (1,159) 458
Other liabilities (2,397) 1,198
Net cash provided by operating activities 11,937 736
------ ------
Cash flows from investing activities:
Proceeds from maturities and principal paydowns of securities AFS 44,153 25,957
Proceeds from maturities and principal paydowns of securities HTM 26,896 23,495
Proceeds from sales of investment securities AFS 29,760 112,558
Purchases of investment securities AFS (39,651) (122,083)
Purchases of investment securities HTM (14,446) (29,846)
Net increase in loans made to customers (28,314) (101,975)
Capital expenditures, bank premises and equipment (2,925) (1,210)
Proceeds from sale of premises and equipment 4 329
Net cash disposed in divestiture -- (10,287)
------- -------
Net cash provided by (used in) investing activities 15,477 (103,062)
------- -------
Cash flows from financing activities:
Net increase in deposit accounts 36,478 50,821
Net decrease in short-term debt (20,923) 18,998
Net increase (decrease) in FHLB advances (55,000) 23,000
Proceeds from issuance of corporation obligated securities -- 19,950
Deferred debt issuance cost -- (500)
Repurchase of common stock (846) (1,374)
Cash dividends paid (3,522) (2,488)
Cash issued for fractional shares (20)
Shares issued under stock plans 1,493 716
------- -------
Net cash provided by financing activities (42,340) 109,123
------- -------
Net increase (decrease) in cash and cash equivalents (14,926) 6,797
Cash and cash equivalents at beginning of period 81,408 49,805
------- -------
Cash and cash equivalents at end of period $66,482 $56,602
======= =======
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
TRIANGLE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
For the Three and Six Months Ended June 30, 1998 and 1997
(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 four wholly-owned
subsidiaries, Triangle Bank, Bank of Mecklenburg, Coastal Leasing LLC,
and Triangle Capital Trust. All significant intercompany transactions
and accounts are eliminated in consolidation.
The interim consolidated financial statements as of and for the six
months ended June 30, 1998 and 1997 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, 1998 and 1997, and the results of operations
and cash flows for the periods ended June 30, 1998 and 1997. The
results for the interim periods are not necessarily indicative of what
results will be for the year ended December 31, 1998.
2. Reporting Comprehensive Income
On January 1, 1998, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" ("SFAS No. 130"). As required by SFAS No. 130, prior year
information has been modified to conform with the new presentation.
Comprehensive income includes net income and other comprehensive
income. Other comprehensive income includes all other changes to an
entity's equity, with the exception of transactions with shareholders.
The Company's only component of other comprehensive income relates to
unrealized gains and losses on available for sale securities.
The Company's total comprehensive income for the six month periods
ended June 30, 1998 and 1997 was $7,007,000 and $9,461,000,
respectively. Information concerning the Company's other comprehensive
income for the six month periods ended June 30, 1998 and 1997 is as
follows:
(In thousands)
1998 1997
-------- --------
Unrealized gains(losses) on available for sale
securities $(3,543) $(291)
Reclassification of gains recognized in
net income (310) (316)
Income tax benefit relating to unrealized gains
(losses) on available for sale securities 1,196 (99)
--------- --------
Other comprehensive income $(2,657) $ (124)
========= ========
<PAGE>
3. Accounting for Derivative Instruments and Hedging Activities
On June 15, 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities (FAS 133). FAS 133 is
effective for all fiscal quarters of all fiscal years beginning after
June 15, 1999 (January 1, 2000 for the Company). FAS 133 requires that
all derivative instruments be recorded on the balance sheet at fair
value. Changes in the fair value of derivatives are recorded each
period in current earnings or other comprehensive income, depending on
whether a derivative is designated as part of a hedge transaction and,
if it is, the type of hedge transactions. Management of the Company
anticipates that, due to its limited use of derivative instruments, the
adoption of FAS 133 will not have a significant effect on the Company's
results of operations or its financial position.
4. Stock Split
On June 30, 1998, the Company had a three for two stock split effected
in the form of a 50% stock dividend. All share and per share
information has been adjusted to reflect the stock split.
<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 14, 1998 /s/ Michael S. Patterson
------------------------
Michael S. Patterson,
President and CEO
Date: August 14, 1998 /s/ Debra L. Lee
-----------------------
Debra L. Lee,
Chief Financial Officer
<PAGE>
TRIANGLE BANCORP, INC.
EXHIBIT TABLE
PAGE
(27) Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 60,168
<INT-BEARING-DEPOSITS> 4,539
<FED-FUNDS-SOLD> 1,775
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 394,439
<INVESTMENTS-CARRYING> 82,336
<INVESTMENTS-MARKET> 83,540
<LOANS> 1,060,715
<ALLOWANCE> 15,851
<TOTAL-ASSETS> 1,673,063
<DEPOSITS> 1,321,065
<SHORT-TERM> 180,882
<LIABILITIES-OTHER> 15,587
<LONG-TERM> 19,952
0
0
<COMMON> 82,557
<OTHER-SE> 55,040
<TOTAL-LIABILITIES-AND-EQUITY> 1,673,063
<INTEREST-LOAN> 48,131
<INTEREST-INVEST> 14,987
<INTEREST-OTHER> 718
<INTEREST-TOTAL> 63,797
<INTEREST-DEPOSIT> 25,987
<INTEREST-EXPENSE> 32,715
<INTEREST-INCOME-NET> 31,082
<LOAN-LOSSES> 2,006
<SECURITIES-GAINS> 471
<EXPENSE-OTHER> 21,573
<INCOME-PRETAX> 14,574
<INCOME-PRE-EXTRAORDINARY> 14,574
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,664
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<ALLOWANCE-DOMESTIC> 13,719
<ALLOWANCE-FOREIGN> 0
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</TABLE>
