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 JUNE 30, 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 July
31, 1995 was 1,818,623.
BALANCE SHEETS
TRIAD BANK
(In thousands)
June 30 December 31 June 30
1995 1994 1994
------------ ------------ ------------
ASSETS
Cash and due from banks $ 14,506 $ 10,591 $ 11,892
Investment securities (Note 2) 45,993 45,940 48,226
Federal funds sold 2,240 2,540 0
Loans (Note 3) 122,993 115,155 107,101
Allowance for loan losses (2,406) (2,490) (2,433)
------------ ------------ ------------
NET LOANS 120,587 112,665 104,668
Bank premises and equipment, net: 3,591 3,655 3,562
Other real estate owned 317 700 1,101
Closed bank premises 0 812 870
Other assets 1,980 1,684 1,913
------------ ------------ ------------
TOTAL ASSETS $ 189,214 $ 178,587 $ 172,232
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Non-interest bearing $ 42,931 $ 41,442 $ 37,898
Interest bearing 128,964 121,191 114,242
------------ ------------ ------------
TOTAL DEPOSITS 171,895 162,633 152,140
Short-term borrowings 1,309 1,591 6,291
Accrued expenses and other liabilities 1,629 950 1,151
------------ ------------ ------------
TOTAL LIABILITIES 174,833 165,174 159,582
Stockholders' Equity
Common stock 4,547 4,542 4,320
Surplus 7,525 7,521 6,760
Undivided profits 2,355 1,544 1,708
Unrealized loss on available for sale (46) (194) (138)
securities
------------ ------------ ------------
TOTAL STOCKHOLDERS' EQUITY 14,381 13,413 12,650
------------ ------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 189,214 $ 178,587 $ 172,232
============ ============ ============
STATEMENTS OF INCOME
TRIAD BANK
(In thousands except per share data)
Three Months ended June 30 Six months ended June 30
1995 1994 1995 1994
---------------------------------------------------------------------
INTEREST INCOME
Loans $ 2,864 $ 2,178 $ 5,569 $ 4,267
Investment securities 655 602 1,294 1,225
Federal funds sold 55 8 76 33
----------- ----------- ------------- --------------
TOTAL INTEREST INCOME 3,574 2,788 6,939 5,525
INTEREST EXPENSE
Deposits 1,409 886 2,626 1,803
Other 13 47 49 62
----------- ----------- ------------- --------------
TOTAL INTEREST EXPENSE 1,422 933 2,675 1,865
----------- ----------- ------------- --------------
NET INTEREST INCOME 2,152 1,855 4,264 3,660
PROVISION FOR LOAN LOSSES 45 75 50 150
----------- ----------- ------------- --------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 2,107 1,780 4,214 3,510
NON-INTEREST INCOME
Service charges on deposit accounts 317 327 617 629
Other income 224 63 322 217
Gain on investment securities 0 0 0 2
----------- ----------- ------------- --------------
TOTAL NON-INTEREST INCOME 541 390 939 848
----------- ----------- ------------- --------------
NON-INTEREST EXPENSE
Salaries and employee benefits 1,047 974 2,106 1,933
Occupancy and equipment 444 348 884 761
Other 597 584 1,192 1,207
----------- ----------- ------------- --------------
TOTAL NON-INTEREST EXPENSE 2,088 1,906 4,182 3,901
----------- ----------- ------------- --------------
INCOME BEFORE INCOME TAXES 560 264 971 457
PROVISION FOR INCOME TAXES 55 59 160 95
----------- ----------- ------------- --------------
NET INCOME $ 505 $ 205 $ 811 $ 362
=========== =========== ============= ==============
NET INCOME PER SHARE $ 0.28 $ 0.12 $ 0.45 $ 0.21
=========== =========== ============= ==============
Average number of shares outstanding 1,817,837 1,725,860 1,817,241 1,723,598
=========== =========== ============= ==============
STATEMENTS OF CASH FLOWS
TRIAD BANK
(In thousands)
Six Months Ended June 30
1995 1994
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 811 $ 362
------------ ------------
Adjustments to reconcile net income to cash:
Market value adjustment on available-for-sale securities 148 (138)
Depreciation and amortization 254 234
Amortization of premiums and discounts, net 61 54
Provision for loan losses 50 150
Net (gain) on investment securities 0 (2)
Net (gain) on sale of other real estate (162) (44)
Decrease in other assets 516 (328)
Increase (decrease) in accrued expenses and other liabilities 579 (238)
------------ ------------
TOTAL ADJUSTMENTS TO RECONCILE
NET INCOME TO CASH 1,546 (224)
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 2,357 138
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investment securities (1,682) (12,137)
Proceeds from maturities of investment securities 1,568 6,871
Proceeds from sales of investment securities 0 5,049
Net (increase) decrease in loans from originations and repayments (7,972) (3,300)
Purchase of bank premises and equipment (190) (500)
Proceeds from sale of other real estate 545 761
------------ ------------
NET CASH (USED) BY INVESTING ACTIVITIES (7,731) (3,256)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits 9,262 (4,851)
Net increase (decrease) in short-term borrowings (282) 5,330
Proceeds from issuance of common stock 9 43
------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 8,989 522
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 3,615 (2,596)
Cash and cash equivalents, beginning of period 13,131 14,488
------------ ------------
Cash and cash equivalents, end of period $ 16,746 $ 11,892
============ ============
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:
JUN 31 DEC 31 JUN 31
1995 1994 1994
HELD TO MATURITY
Amortized Cost ..................... $ 38,905 $ 38,403 $ 37,770
Market Value ....................... 38,355 35,863 36,355
Unrealized Loss .................... ($ 550) ($ 2,540) ($ 1,415)
AVAILABLE FOR SALE
Amortized Cost ..................... $ 7,157 $ 7,831 $ 10,686
Market Value ....................... 7,088 7,537 10,456
Unrealized Loss .................... ($ 69) ($ 294) ($ 230)
Unrealized Loss, Net of Tax ........ ($ 46) ($ 194) ($ 138)
(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 June 30, 1994.
Included in other non-interest income for the three months and six months ended
June 30, 1995, are gains on sales of other real estate of $140,000 and
$162,000, respectively. In the same periods of 1994, other real estate gains
of $36,000 and $56,000, respectively were netted against other non-interest
expense.
Occupancy and equipment expense in the 1995 reported periods reflects an
increase in rent expense associated with new and renovated branch facilities, as
well as scheduled rent increases on other leases. The second quarter 1994
reflects an adjustment to reduce depreciation expense by $42,000 due to
duplicate postings in the first quarter 1994.
Income tax expense in the second quarter 1995 includes a reduction of $37,000
to adjust to the expected effective tax rate for the full year 1995.
Under the requirements of 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
8/4/95 /s/ James E. Mims
Date Chairman and Chief Executive Officer
8/4/95 /s/ Richard M. Cobb
Date Senior Vice President and Chief Financial Officer