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 September 30, 1999
------------------
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 25,255,760
------------ ----------
Class Outstanding at November 10, 1999
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The Consolidated Balance Sheets for September 30, 1999 and December 31,
1998, the Consolidated Statements of Income for the three and nine
month periods ended September 30, 1999 and 1998, and the Consolidated
Statements of Cash Flows for the nine month periods ended September 30,
1999 and 1998 have been included as attachments to this report.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
HIGHLIGHTS
- ----------
On August 22, 1999, Triangle Bancorp, Inc. (the "Company") signed a
definitive agreement to be acquired by Centura Banks, Inc. (Centura).
Centura is an $8.8 billion financial services company headquartered in
Rocky Mount, North Carolina. Based on the agreement, Triangle
shareholders will receive .45 shares of Centura stock for each share of
Triangle stock they own. Pending regulatory and shareholder approval,
the merger is expected to be completed in the first quarter of 2000.
OPERATING RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
- ------------------------------------------------------------------------
The Company's net income, without nonrecurring items, for the three
months ended September 30, 1999 was $7,212,000, an increase of 18% over
the $6,094,000 earned in the same period last year. Diluted earnings
per share increased 17%, to $.28 versus $.24 for the 1998 quarter. The
return on average assets was 1.24% for 1999 compared to 1.21% in 1998.
Return on average equity for the three months ended September 1999 was
17.09% versus 14.95% for the same period in 1998.
The Company's net income for the three months ended September 30, 1999
was $7,210,000, compared to earnings of $4,439,000 for the same period
in 1998 which included after-tax $1.7 million in merger expenses.
Diluted earnings per share were $0.28 compared to $0.17 for the same
period in 1998. For the three months ended September 30, 1999 the
annualized returns on average assets and equity were 1.24% and 17.08%,
respectively, compared to .88% and 10.89% for the same period in 1998.
Taxable equivalent net interest income increased to $21,732,000 for the
quarter ended September 30, 1999 from $20,049,000 in the year ago
period due to volume increases that offset declines in yield. The
taxable equivalent yield on earning assets decreased from the year ago
period to 8.17% from 8.60%. The decline in yield is due to decreases in
both investment and loan interest rates due to the overall interest
rate environment. Additionally, in the 1998 period, the Company had
slightly more of its earning assets in higher yielding loans as
compared to investments. The cost of interest bearing liabilities
decreased to 4.64% from 4.88%, reflecting primarily lower costs of
deposits. The net yield on earning assets for
<PAGE>
the three months ended September 30, 1999 was 4.03% versus 4.34% for
the same period last year.
For the three months ended September 30, 1999, a loan loss provision of
$1,606,000 was made compared to a provision of $1,223,000 for the same
period in 1998. (For further discussion of loan quality, see the
financial condition discussion.)
Noninterest income for the three months ended September 30, 1999 was
$5,279,000 compared to $4,451,000 for the same period in 1998, an
increase of 19%. This increase is being driven by several factors
including service charges, other commissions and fees and income from
bank owned life insurance (BOLI). Service charge increases were
recognized in overdraft and NSF fees as well as demand deposit account
charges. Other commissions and fees included significant increases in
credit life and accidental death insurance commissions and an increase
in merchant credit card fees. Income from BOLI was up quarter over
quarter by $484,000 because it was purchased in the third quarter of
1998 and then again in the first quarter of 1999. These increases
offset a $394,000 decrease in security gains for 1999 compared to 1998.
Recurring noninterest expenses increased by $342,000 for the three
months ended September 30, 1999 compared to the same period in 1998 or
3%. While occupancy and advertising expenses showed increases, other
categories of noninterest expenses were flat or decreased due to the
efficiencies achieved in the integration of two financial institutions
acquired in 1998.
OPERATING RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
- -----------------------------------------------------------------------
The Company's recurring net income for the nine months ended September
30, 1999 was $20,681,000, compared to $17,758,000 for the same period
in 1998. This represents an increase of 16%. Diluted earnings per share
were $.80 compared to $0.69 for the same period in 1998. The annualized
returns on average assets and equity were 1.25% and 16.49%,
respectively, compared to 1.19% and 14.98% for the same period in 1998.
The Company's net income, including merger expenses, for the nine
months ended September 30, 1999 was $20,679,000, compared to earnings
of $15,105,000 for the same period in 1998. The 1998 period includes
after-tax nonrecurring merger expenses of $2,653,000. Diluted earnings
per share were $0.80 compared to $0.58 for the same period in 1998. For
the nine months ended September 30, 1999 the annualized returns on
average assets and equity were 1.25% and 16.49%, respectively, compared
to 1.01% and 12.74% for the same period in 1998.
Taxable equivalent net interest income increased to $62,146,000 for the
nine months ended September 30, 1999 from $58,926,000. Comparing the
year to date periods, average earning assets grew $210 million,
however, yields have declined due to the lower interest rate
environment. The taxable equivalent yield on earning assets decreased
from the year ago period to 8.14% from 8.65%. The cost of interest
bearing liabilities decreased as well to 4.59% from 4.94%. Net yield on
earning assets declined to 4.07% for the nine months ended September
30, 1999 versus 4.31% for the same period last year.
<PAGE>
For the nine months ended September 30, 1999, a loan loss provision of
$4,857,000 was made compared to a provision of $3,829,000 for the same
period in 1998. (For further discussion of loan quality, see the
financial condition discussion.)
Noninterest income for the nine months ended September 30, 1999 was
$15,461,000 compared to $12,957,000 for the same period in 1998, an
increase of 19%. The increase is due to service charges, other
commissions and fees, investment commissions and fees and other
operating income. Service charges were up $777,000, primarily in
overdraft and NSF charges as well as demand deposit account service
charges. Other commissions and fees increased $381,000 due to an
increase of $376,000 in credit life and accidental death insurance
commissions. There has been a $317,000 increase in commissions from
investment sales year over year. Other operating income was up due to
an increase of $1,362,000 in BOLI income. The BOLI was purchased late
in the third quarter of 1998 and in the first quarter of 1999. These
increases were offset by a $173,000 decrease in gains on sales of loans
and a $334,000 decrease in securities gains over the year ago period.
Recurring noninterest expenses for the nine months ended September 30,
1999 were only $33,000 more than the same period in 1998. This small
increase in expenses was due to the efficiencies achieved in the
integration of two financial institutions acquired in 1998.
FINANCIAL CONDITION
- -------------------
Total assets increased to $2.3 billion at September 30, 1999 versus
$2.1 billion at December 31, 1998. Net loans grew $156 million to $1.5
billion as of September 30, 1999. Investments grew $28 million over
year end and other assets increased $24 million due to the purchase of
$20 million in additional bank owned life insurance in the first
quarter of 1999. This growth was funded by a decrease in cash of $22
million as well as deposit growth of $117 million and an increase in
short-term debt of $102 million.
The Company continued to maintain strong loan and lease loss reserves
during the period with the loan loss reserves at September 30, 1999
being 1.37% of total loans and leases. The allowance was 217% of
nonperforming loans at September 30, 1999 compared to 184% at December
31, 1998. Nonperforming assets to total loans plus other real estate
owned were .74% on September 30, 1999 compared to .92% as of December
31, 1998. Net charge-offs were .31% for the nine month period ended
September 30, 1999 versus .24% in the same period in 1998. A summary of
certain information related to the loan loss reserves and nonperforming
assets as of September 30, 1999 follows:
<PAGE>
RESERVE FOR LOAN LOSSES AND NONPERFORMING ASSETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ANALYSIS OF RESERVE FOR LOAN LOSSES:
<S> <C>
Beginning Balance, January 1, 1999 $ 19,584
--------
Deduct charge-offs:
Commercial financial and agricultural 2,028
Real estate 105
Installment loans to individuals 843
Credit card and related plans 766
Other 127
-------
3,869
Add recoveries:
Commercial, financial and agricultural 147
Real estate 58
Installment loans to individuals 142
Credit card and related plans 125
Other 38
-------
510
Net charge-offs 3,359
Additions charged to operations 4,857
-------
Ending Balance, September, 30 1999 $21,082
=======
Ratio of net charge-offs to average loans outstanding during the period 0.31%
ANALYSIS OF NONPERFORMING ASSETS:
Nonaccrual loans:
Commercial, financial and agricultural $ 1,971
Real estate, construction and land development 1,401
Installment loans to individuals 281
-------
3,653
Loans contractually past due 90 days or more
as to principal or interest 6,067
Foreclosed assets 1,700
-------
TOTAL $ 11,420
========
</TABLE>
<PAGE>
FINANCIAL CONDITION (CONTINUED)
- -------------------------------
Total deposits were $1.7 billion as of September 30, 1999 compared to
$1.6 billion at December 31, 1998, an increase of $100 million. Deposit
growth has been driven by time deposits less than $100,000.
Short-term debt was $261 million at September 30, 1999 consisting of
$113 million in reverse repurchase agreements, $86 million in federal
funds purchased, $42 million in masternotes, and $19 million is
securities sold to repurchase. At December 31, 1998, the Company had
short-term debt of $159 million with $67 million in federal funds sold,
$45 million in reverse repos, $20 million in securities sold to
repurchase and $28 million in masternotes.
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 September 30, 1999 were as follows:
ACTUAL REQUIRED EXCESS
PERCENT PERCENT PERCENT
------- ------- -------
Tier 1 Capital to Risk Based Assets 10.64% 4.00% 6.64%
Total Capital to Risk Based Assets 11.89% 8.00% 3.89%
Leverage Ratio 7.56% 4.00% 3.56%
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. As a "turnkey" institution,
the Company is in dialogue with all of its vendors as to their
preparedness for Year 2000. In 1997, the Company hired an independent
consultant to assist it in all phases of its Year 2000 plan. With the
assistance of the consultant, the Company in 1997 adopted a plan which
called for the Company's applications to properly process dates in the
Year 2000 and beyond by April 30, 1999.
In 1998, the Company completed its assessment of its existing computer
systems and applications and had identified 30 mission critical
applications which was later increased to 36 due to a merger in
September 1998 and new or replacement applications in 1999. Due to the
applications added in 1998 and 1999, the April 30 deadline was not met
by eight applications. All other applications in use were prepared for
the Year 2000 on April 30,
<PAGE>
1999. As of July 31, 1999, the Company had completed renovation,
validation and implementation of all of its mission critical
non-mission critical applications. As of June 30, 1999 the Company had
completed contingency planning for all existing applications and
functions.
The Company originally 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 September 30, 1999, the Company has spent approximately
$40,000 and $614,000 in 1997 and 1998, respectively, on Year 2000
issues, leaving $346,000 budgeted for 1999. The amounts spent on Year
2000 issues in the quarters ended March 31, June 30 and September 30,
1999 were $94,000, $87,000 and $9,000, respectively. No significant
expenses are expected in the fourth quarter of 1999. 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
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
None.
Item 5. Other Information
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
(27) Financial Data Schedule
<PAGE>
b) Reports on Form 8-K
On August 25, 1999, a form 8-K was filed detailing the merger
of Triangle into Centura in which each Triangle shareholder
will receive .45 shares of Centura stock. The merger is
expected to occur in the first quarter of 2000. The Agreement
and Plan of Reorganization and other documents were filed as
exhibits to the 8-K.
<PAGE>
TRIANGLE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
IN THOUSANDS
UNAUDITED
<TABLE>
<CAPTION>
September 30, 1999 December 31, 1998
---------------- --------------------
ASSETS
<S> <C> <C>
Cash and due from banks $ 54,130 $ 76,624
Interest-bearing deposits in banks 38,391 911
Securities available for sale 524,691 482,155
Securities held to maturity, market value;
$66,226 and $82,790 66,426 81,138
Loans and Leases, less allowance for losses of
$21,082 and $19,584 1,519,551 1,363,553
Premises and equipment, net 37,404 40,492
Interest receivable 18,315 16,468
Deferred income taxes 14,987 10,597
Intangible assets 21,602 24,207
Other assets 50,809 26,939
---------------- --------------------
Total Assets $ 2,346,306 $ 2,123,084
---------------- --------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand $ 205,503 $ 224,732
Interest-bearing demand 178,395 201,042
Savings and money market 291,127 293,652
Large denomination certificates of deposit 213,973 217,598
Other time 853,783 688,874
---------------- --------------------
Total Deposits 1,742,781 1,625,898
Short-term debt 260,820 158,980
Federal Home Loan Bank advances 123,500 130,300
Corporation obligated mandatorily
redeemable securities 19,954 19,952
Custodial deposits 8,080 7,243
Interest payable 10,462 8,292
Other liabilities 12,483 9,392
---------------- --------------------
Total other liabilities 435,299 334,159
---------------- --------------------
Total liabilities 2,178,080 1,960,057
---------------- --------------------
Commitments and contingencies*
SHAREHOLDERS' EQUITY
Common stock, no par value 50,000
authorized; 25,250 shares and
25,184 shares outstanding at September 30,
1999 and December 31, 1998, respectively 85,368 86,549
Undivided profits 94,375 80,753
Accumulated other comprehensive income (11,517) (4,275)
---------------- --------------------
Total shareholders' equity 168,226 163,027
---------------- --------------------
Total liabilities and shareholders' equity $ 2,346,306 $ 2,123,084
---------------- --------------------
</TABLE>
*Standby letters of credit outstanding at September 30, 1999 amounted to $5,533.
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 months ended, For the nine months ended,
September 30, 1999 September 30, 1998 September 30, 1999 September 30, 1998
------------------ ------------------ ------------------ ------------------
INTEREST INCOME
<S> <C> <C> <C> <C>
Interest and fees on loans $ 33,707 $ 31,019 $ 96,314 $ 91,046
Securities 8,594 7,293 23,670 22,958
Other interest income 348 405 486 1,415
------- ------- -------- --------
Total interest income 42,649 38,717 120,470 115,419
INTEREST EXPENSE:
Large denomination certificates of deposit 3,257 2,857 10,081 8,557
Other deposits 14,054 13,601 38,592 40,762
Other borrowings 3,292 1,136 8,137 3,123
Federal Home Loan Bank borrowings 1,721 2,105 5,152 6,992
------- ------- -------- --------
Total interest expense 22,324 19,699 61,962 59,434
------- ------- -------- --------
Net interest income 20,325 19,018 58,508 55,985
Provision for loanand lease losses 1,606 1,223 4,857 3,829
------- ------- -------- --------
Net interest income after
provision for loan and lease losses 18,719 17,795 53,651 52,156
------- ------- -------- --------
NONINTEREST INCOME:
Service charges on deposit accounts 2,501 2,104 7,010 6,233
Other commissions and fees 1,086 871 3,049 2,668
Mortgage servicing fees net of amortization 214 105 670 526
Gain on sale of securities, net 53 447 585 919
Gain on sale of government loans 233 236 667 779
Gain on sale of mortgage loans 12 148 355 416
Investment commissions and fees 282 193 860 543
Other operating income 898 347 2,265 873
------- ------- -------- --------
Total noninterest income 5,279 4,451 15,461 12,957
------- ------- -------- --------
NONINTEREST EXPENSES:
Salaries and employee benefits 5,964 5,693 16,498 16,875
Occupancy expenses 1,436 1,247 4,084 3,711
Furniture and equipment expenses 1,226 1,259 3,780 3,501
Professional fees 600 637 1,731 1,815
Deposit insurance expense 113 122 303 262
Advertising and public relations 471 351 1,252 1,005
Office expenses 303 366 1,013 1,261
Telephone and communication 339 339 1,112 1,167
Other real estate owned expense 21 42 65 200
Amortization of intangible assets 792 794 2,376 2,381
Merger expenses 3 2,741 3 4,373
Other operating expense 2,002 2,075 5,786 5,789
------- ------- -------- --------
Total noninterest expenses 13,270 15,666 38,003 42,340
Net income before taxes 10,728 6,580 31,109 22,773
Income tax expense 3,518 2,141 10,430 7,668
------- ------- -------- --------
Net income $ 7,210 $ 4,439 $ 20,679 $ 15,105
======= ======== ======== ========
Basic income per share data:
Net income $ 0.29 $ 0.18 $ 0.82 $ 0.60
Average shares outstanding 25,158 25,149 25,157 25,093
Diluted income per share data:
Net income $ 0.28 $ 0.17 $ 0.80 $ 0.58
Average common equivalent shares 25,750 25,823 25,757 25,861
Cash dividends declared per share $ 0.10 $ 0.08 $ 0.28 $ 0.23
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE>
TRIANGLE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
IN THOUSANDS
UNAUDITED
<TABLE>
<CAPTION>
September 30, September 30,
1999 1998
----------------- ----------------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 20,679 $ 15,105
Adjustments to reconcile net income to net cash provided by (used in)
operations:
Depreciation and amortization 6,184 5,999
Accretion of discount on investment securities,
net of amortization of premiums 4,004 1,062
Provision for loan losses 4,857 3,829
Gain on sale of investments (585) (919)
Gain on sale of loans (1,022) (1,195)
Gain on sale of other assets (88) (50)
Mortgage loans held for sale:
Originations (48,988) (33,680)
Sales 50,715 37,014
Provision (benefit) for deferred taxes (50) (113)
Change in other assets and liabilities:
Interest receivable (1,847) (1,069)
Other assets (3,781) (2,392)
Interest payable 2,170 292
Other liabilities 3,181 (2,144)
----------------- ----------------
Net cash provided by operating activities 35,429 21,739
----------------- ----------------
Cash flows from investing activities:
Proceeds from maturities and principal paydowns of securities AFS 153,793 69,065
Proceeds from maturities and principal paydowns of securities HTM 13,540 30,602
Proceeds from sales of investment securities AFS 44,030 56,428
Purchases of investment securities AFS (226,995) (102,076)
Purchases of investment securities HTM (26,777) (22,610)
Purchase of bank owned life insurance (20,000) (20,089)
Cost of loan servicing rights (1,084) (452)
Net increase in loans made to customers (161,560) (56,520)
Proceeds from sale of other assets 1,626 900
Capital expenditures, bank premises and equipment, net (1,032) (3,669)
----------------- ----------------
Net cash provided by (used in) investing activities (224,459) (48,421)
----------------- ----------------
Cash flows from financing activities:
Net increase in deposit accounts 116,883 58,075
Net increase in custodial accounts 837 3,209
Net increase in short-term debt 101,840 6,844
Net decrease in FHLB advances (6,800) (65,000)
Repurchase of common stock (4,095) (1,508)
Cash dividends paid to shareholders (7,057) (6,052)
Shares issued under stock plans 2,408 2,789
----------------- ----------------
Net cash provided by (used in) financing activities 204,016 (1,643)
----------------- ----------------
Net increase (decrease) in cash and cash equivalents 14,986 (28,325)
Cash and cash equivalents at beginning of period 77,535 98,352
----------------- ----------------
Cash and cash equivalents at end of period $ 92,521 $ 70,027
================= ================
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE>
TRIANGLE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 1999 and 1998
(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 three
and nine months ended September 30, 1999 and 1998 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 September 30, 1999, and the results of operations and
cash flows for the periods ended September 30, 1999 and 1998. For the
nine month periods ended September 30, 1999 and September 30, 1998,
$3,000 and $4.4 million respectively, in pre-tax non-recurring expenses
relating to mergers and acquisitions were recognized. The results for
the interim periods are not necessarily indicative of what results will
be for the year ended December 31, 1999.
2. Comprehensive Income
--------------------
The Company's only component of other comprehensive income relates to
unrealized gains or losses on available for sale securities.
Information concerning the Company's other comprehensive income (loss)
for the three and nine months ended September 30, 1999 follows (in
thousands):
<TABLE>
<CAPTION>
For the three months ended
September 30,
1999 1998
<S> <C> <C>
Net income $ 7,210 $ 4,439
------- -------
Holding (losses) gains on available for sale securities,
net of taxes of ($1,116) and $481, respectively (2,287) 997
Reclassification of gains recognized in net income,
net of taxes of $17 and $145, respectively (36) (302)
-------- --------
Other comprehensive (loss) gain (2,323) 695
Total comprehensive income $ 4,887 $ 5,134
------- --------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
For the nine months ended
September 30,
1999 1998
<S> <C> <C>
Net income $ 20,679 $ 15,105
-------- --------
Holding losses on available for sale securities, net
of taxes of $(3,456) and $(521), respectively (6,853) (1,026)
Reclassification of gains recognized in net income,
net of taxes of $196 and $305, respectively (388) (614)
--------- --------
Other comprehensive loss (7,241) (1,640)
Total comprehensive income $13,438 $13,465
------- -------
</TABLE>
3. Accounting for Derivative Instruments and Hedging Activities
------------------------------------------------------------
As of January 1, 1999 the Company adopted Statement of Financial
Accounting Standards No. 133, Accounting for Derivative Instruments and
Hedging Activities (FAS 133). 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 transaction. FAS 133, as amended by Statement of
Financial Accounting Standards No. 137, Accounting for Derivative
Instruments and Hedging Activities-Deferral of the Effective Date of
FAS 133, is effective for all fiscal quarters of all fiscal years
beginning after June 15, 2000, with earlier adoption allowed.
As part of the adoption, the Company reclassified approximately $28
million of held to maturity securities to available for sale during the
first quarter of 1999. The adoption had no other significant effect on
the Company's results of operations or its financial position.
<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: November 15, 1999 /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> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1999
<PERIOD-START> JUL-01-1999 JAN-01-1999
<PERIOD-END> SEP-30-1999 SEP-30-1999
<CASH> 54,130 54,130
<INT-BEARING-DEPOSITS> 38,391 38,391
<FED-FUNDS-SOLD> 0 0
<TRADING-ASSETS> 0 0
<INVESTMENTS-HELD-FOR-SALE> 524,691 524,691
<INVESTMENTS-CARRYING> 66,426 66,426
<INVESTMENTS-MARKET> 66,226 66,226
<LOANS> 1,540,633 1,540,633
<ALLOWANCE> 21,082 21,082
<TOTAL-ASSETS> 2,346,306 2,346,306
<DEPOSITS> 1,742,781 1,742,781
<SHORT-TERM> 260,820 260,820
<LIABILITIES-OTHER> 31,025 31,025
<LONG-TERM> 143,454 143,454
0 0
0 0
<COMMON> 85,368 85,368
<OTHER-SE> 82,858 82,858
<TOTAL-LIABILITIES-AND-EQUITY> 2,346,306 2,346,306
<INTEREST-LOAN> 33,707 96,314
<INTEREST-INVEST> 8,594 23,670
<INTEREST-OTHER> 348 486
<INTEREST-TOTAL> 42,649 120,470
<INTEREST-DEPOSIT> 17,311 48,673
<INTEREST-EXPENSE> 22,324 61,962
<INTEREST-INCOME-NET> 20,325 58,508
<LOAN-LOSSES> 1,606 4,857
<SECURITIES-GAINS> 53 585
<EXPENSE-OTHER> 13,270 38,003
<INCOME-PRETAX> 10,728 31,109
<INCOME-PRE-EXTRAORDINARY> 10,728 31,109
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 7,210 20,679
<EPS-BASIC> 0.29 0.82
<EPS-DILUTED> 0.28 0.80
<YIELD-ACTUAL> 7.91 7.90
<LOANS-NON> 3,653 3,653
<LOANS-PAST> 6,067 6,067
<LOANS-TROUBLED> 0 0
<LOANS-PROBLEM> 0 0
<ALLOWANCE-OPEN> 20,606 19,584
<CHARGE-OFFS> 1,352 3,369
<RECOVERIES> 222 570
<ALLOWANCE-CLOSE> 21,082 21,082
<ALLOWANCE-DOMESTIC> 21,082 21,082
<ALLOWANCE-FOREIGN> 0 0
<ALLOWANCE-UNALLOCATED> 0 0
</TABLE>
