FEDERAL DEPOSIT INSURANCE CORPORATION
WASHINGTON, DC 20429
FORM F-4
QUARTERLY REPORT PURSUANT TO SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDING MARCH 31, 1995
FDIC CERTIFICATE NO. 24082-6
TRIAD BANK
(Exact name of bank as specified in its charter)
NORTH CAROLINA
(State of Incorporation)
56-1328631
(IRS Employer Identification Number)
113 NORTH GREENE STREET
GREENSBORO, NORTH CAROLINA 27401
(Address of Principal Office)
(910)271-4700
(Registrant's Telephone Number, Including Area Code)
Securities Registered Pursuant
to Section 12(g) of the Act:
COMMON STOCK, $2.50 PAR VALUE
Indicate by check mark whether the Bank (1) has filed all reports required to be
filed by Section 13 of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the Bank was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
YES X NO
The number of shares of the Registrant's common stock outstanding as of April
30, 1995 was 1,817,039.
BALANCE SHEETS
TRIAD BANK
(In thousands)
March 31 December 31 March 31
1995 1994 1994
------------ ------------ ------------
ASSETS
Cash due from banks $ 14,462 $ 10,591 $ 12,028
Investment securities (Note 2) 47,393 45,940 48,123
Federal funds sold 6,085 2,540 5,825
Loans (Note 3) 116,046 115,155 101,951
Allowance for loan losses (2,423) (2,490) (2,603)
------------ ------------ ------------
NET LOANS 113,623 112,665 99,348
Bank premises and equipment, net: 3,644 3,655 3,825
Other real estate owned 510 700 1,201
Closed bank premises 398 812 1,010
Other assets 1,606 1,684 1,657
------------ ------------ ------------
TOTAL ASSETS $ 187,721 $ 178,587 $ 173,017
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Non-interest bearing $ 42,930 $ 41,442 $ 37,291
Interest bearing 128,352 121,191 120,272
------------ ------------ ------------
TOTAL DEPOSITS 171,282 162,633 157,563
Short-term borrowings 1,175 1,591 1,344
Accrued expenses and other liabilities 1,459 950 1,636
------------ ------------ ------------
TOTAL LIABILITIES 173,916 165,174 160,543
Stockholders' Equity
Common stock 4,543 4,542 4,304
Surplus 7,521 7,521 6,735
Undivided profits 1,850 1,544 1,503
Unrealized loss on available for sale (109) (194) (68)
securities
------------ ------------ ------------
TOTAL STOCKHOLDERS' EQUITY 13,805 13,413 12,474
------------ ------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 187,721 $ 178,587 $ 173,017
============ ============ ============
STATEMENTS OF INCOME
TRIAD BANK
(In thousands except per share data)
Three Months ended March 31
1995 1994
-----------------------------
INTEREST INCOME
Loans $ 2,705 $ 2,084
Investment securities 639 623
Federal funds sold 21 25
----------- -----------
TOTAL INTEREST INCOME 3,365 2,732
INTEREST EXPENSE
Deposits 1,217 918
Other 36 9
----------- -----------
TOTAL INTEREST EXPENSE 1,253 927
----------- -----------
NET INTEREST INCOME 2,112 1,805
PROVISION FOR LOAN LOSSES 5 75
----------- -----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 2,107 1,730
NON-INTEREST INCOME
Service charges on deposit accounts 300 302
Other income 98 147
Gain on investment securities 0 2
----------- -----------
TOTAL NON-INTEREST INCOME 398 451
----------- -----------
NON-INTEREST EXPENSE
Salaries and employee benefits 1,059 959
Occupancy and equipment 440 413
Other 595 616
----------- -----------
TOTAL NON-INTEREST EXPENSE 2,094 1,988
----------- -----------
INCOME BEFORE INCOME TAXES 411 193
PROVISION FOR INCOME TAXES (Note 4) 105 36
----------- -----------
NET INCOME $ 306 $ 157
=========== ===========
NET INCOME PER SHARE $ 0.17 $ 0.09
=========== ===========
Average number of shares outstanding 1,816,848 1,721,312
=========== ===========
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
TRIAD BANK
(In thousands, except shares)
Unrealized Total
Number Common Undivided loss on AFS Stockholders'
of Shares Stock Surplus Profits Securities Equity
---------- ---------- ---------- ----------- ------------------ --------------
Balance January 1, 1994 1,721,063 $4,303 $6,734 $1,346 $12,383
Net Income 157 157
Exercise of Common Stock 400 1 1 2
Unrealized Loss on AFS
Securities, Net of Tax (68) (68)
-------------------------------------------------------------------------------------------
Balance March 31, 1994 1,721,463 $4,304 $6,735 $1,503 ($68) $12,474
===========================================================================================
Balance January 1, 1995 1,816,829 $4,542 $7,521 $1,544 ($194) $13,413
Net Income 306 306
Exercise of Common Stock 210 1 1
Decrease in Unrealized Loss
on AFS Securities, Net of Tax 85 85
-------------------------------------------------------------------------------------------
Balance March 31, 1995 1,817,039 $4,543 $7,521 $1,850 ($109) $13,805
===========================================================================================
STATEMENTS OF CASH FLOWS
TRIAD BANK
(In thousands)
Nine Months Ended March 31
1995 1994
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 306 $ 157
------------ ------------
Adjustments to reconcile net income to cash:
Market value adjustment on available-for-sale securities 86 (68)
Depreciation and amortization 125 164
Amortization of premiums and discounts, net 32 25
Provision for loan losses 5 75
Net (gain) on investment securities 0 (2)
Net (gain) on sale of other real estate (22) (27)
Decrease in other assets 78 338
Increase (decrease) in accrued expenses and other liabilities 509 247
------------ ------------
TOTAL ADJUSTMENTS TO RECONCILE
NET INCOME TO CASH 813 752
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,119 909
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investment securities (1,625) (8,487)
Proceeds from maturities of investment securities 140 5,818
Proceeds from sales of investment securities 0 2,584
Net decrease (increase) in loans from originations and repayments (963) 2,095
Purchase of bank premises and equipment (114) (705)
Proceeds from sale of other real estate 626 194
------------ ------------
NET CASH (USED) BY INVESTING ACTIVITIES (1,936) 1,499
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits 8,649 572
Net increase (decrease) in short-term borrowings (416) 383
Proceeds from issuance of common stock 0 2
------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 8,233 957
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 7,416 3,365
Cash and cash equivalents, beginning of period 13,131 14,488
------------ ------------
Cash and cash equivalents, end of period $ 20,547 $ 17,853
============ ============
NOTES TO FINANCIAL STATEMENTS
(1) Accounting Policies
The financial statements reflect all adjustments which are, in the
opinion of management, necessary to a fair statement of the results for the
interim periods presented. All such adjustments are of a normal, recurring
nature.
(2) Investment Securities
Effective January 1, 1994, the Bank adopted Statement of Financial
Accounting Standards No. 115 - Accounting for Certain Investments in Debt and
Equity Securities. SFAS 115 requires that investments in equity securities
having readily determinable fair values and all investments in debt securities
be classified and accounted for in three categories.
Debt securities that management has the positive intent and ability to
hold to maturity are to be classified as securities held to maturity. Held to
maturity securities are reported at amortized cost. Debt and equity securities
that are held principally for the purpose of selling them in the near term are
to be classified as trading securities. Trading securities are reported at fair
value with unrealized gains and losses included in earnings. Debt and equity
securities not classified as either held to maturity or trading are to be
classified as available for sale. Available for sale securities are reported at
fair value with unrealized gains and losses, net of tax, reported as a separate
component of stockholders' equity.
Upon adoption of SFAS 115 as of January 1, 1994, the Bank classified
securities with an amortized cost of $17,255,000 as available for sale at their
fair value of $17,332,000. The excess of the fair value over the amortized cost,
net of tax, equal to $47,000 was recorded as an increase to stockholders'
equity. The application of FASB 115 should not have a material impact on the
Bank's results of operations, but increased volatility of stockholders' equity
and related capital ratios could result from changes in unrealized gains and
losses on securities classified as available for sale.
The Bank does not have any trading securities.
Following is a summary of the cost and market values of the investment
portfolio at each of the balance sheet dates presented:
MAR. 31 DEC. 31 MAR. 31
1995 1994 1994
HELD TO MATURITY
Amortized Cost ..................... $ 39,115 $ 38,403 $ 33,856
Market Value ....................... 37,672 35,863 33,025
Unrealized Loss .................... ($1,443) ($ 2,540) $831
AVAILABLE FOR SALE
Amortized Cost ..................... $ 8,230 $ 7,831 $ 14,874
Market Value ....................... 8,066 7,537 14,760
Unrealized Loss .................... ($164) ($294) ($114)
Unrealized Loss, Net of Tax ........ ($109) ($194) ($68)
(3) Loans
In May, 1993, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 114 (Statement 114), "Accounting
by Creditors for Impairment of a Loan", and in October 1994 issued Statement
118, "Accounting by Creditors for Impairment of a Loan - Income Recognition and
Disclosures", an amendment of Statement 114.
Statements 114 and 118 prescribe the recognition criteria for loan
impairment and the measurement methods for certain impaired loans and loans
whose terms are modified in troubled-debt restructurings. The statements were
adopted January 1, 1995 with no material impact on the Bank's financial
statements.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
MATERIAL CHANGES IN FINANCIAL CONDITION
Since year end 1994, there have been no material changes in the financial
condition of the Bank.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
The increase in net interest income is the direct result of the increase in
loans outstanding over their level at March 31, 1994.
Under the requirementsjof the Securities Exchange Act of 1934, the Bank has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
TRIAD BANK
5/10/95 /s/ J. E. Mims
- ---------------- ------------------------------------
Date Chairman and Chief Executive Officer
5/10/95 /s/ Richard M. Cobb
- ---------------- -----------------------------------
Date Senior Vice President
and Chief Financial Officer