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 SEPTEMBER 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 October
31, 1995 was 1,831,699.
BALANCE SHEETS
TRIAD BANK
(In thousands)
September December 31 September
30 30
1995 1994 1994
------------ ------------ ------------
ASSETS
Cash and due from banks $ 15,516 $ 10,591 $ 11,214
Investment securities (Note 2) 45,218 45,940 47,626
Federal funds sold 7,220 2,540 7,630
Loans (Note 3) 128,175 115,155 110,828
Allowance for loan losses (2,585) (2,490) (2,459)
------------ ------------ ------------
NET LOANS 125,590 112,665 108,369
Bank premises and equipment, net: 3,622 3,655 3,734
Other real estate owned 147 700 607
Closed bank premises 0 812 807
Other assets 1,924 1,684 1,689
------------ ------------ ------------
TOTAL ASSETS $ 199,237 $ 178,587 $ 181,676
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Non-interest bearing $ 45,090 $ 41,442 $ 38,250
Interest bearing 136,209 121,191 128,281
------------ ------------ ------------
TOTAL DEPOSITS 181,299 162,633 166,531
Short-term borrowings 1,069 1,591 1,044
Accrued expenses and other liabilities 1,902 950 1,079
------------ ------------ ------------
TOTAL LIABILITIES 184,270 165,174 168,654
Stockholders' Equity
Common stock 4,547 4,542 4,328
Surplus 7,525 7,521 6,771
Undivided profits 2,924 1,544 2,062
Unrealized loss on available for sale (29) (194) (139)
securities
------------ ------------ ------------
TOTAL STOCKHOLDERS' EQUITY 14,967 13,413 13,022
------------ ------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 199,237 $ 178,587 $ 181,676
============ ============ ============
STATEMENTS OF INCOME
TRIAD BANK
(In thousands except per share data)
Three Months ended September 30 Nine months ended September 30
1995 1994 1995 1994
---------------------------------------------------------------------
INTEREST INCOME
Loans $ 3,018 $ 2,426 $ 8,587 $ 6,693
Investment securities 624 587 1,918 1,812
Federal funds sold 38 9 114 42
----------- ----------- ------------- --------------
TOTAL INTEREST INCOME 3,680 3,022 10,619 8,547
INTEREST EXPENSE
Deposits 1,488 1,070 4,114 2,873
Other 10 17 59 79
----------- ----------- ------------- --------------
TOTAL INTEREST EXPENSE 1,498 1,087 4,173 2,952
----------- ----------- ------------- --------------
NET INTEREST INCOME 2,182 1,935 6,446 5,595
PROVISION FOR LOAN LOSSES 75 0 125 150
----------- ----------- ------------- --------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 2,107 1,935 6,321 5,445
NON-INTEREST INCOME
Service charges on deposit accounts 335 298 952 927
Other income 90 227 412 444
Gain on investment securities 0 0 0 2
----------- ----------- ------------- --------------
TOTAL NON-INTEREST INCOME 425 525 1,364 1,373
----------- ----------- ------------- --------------
NON-INTEREST EXPENSE
Salaries and employee benefits 1,079 1,008 3,185 2,941
Occupancy and equipment 425 419 1,309 1,180
Other 443 542 1,635 1,749
----------- ----------- ------------- --------------
TOTAL NON-INTEREST EXPENSE 1,947 1,969 6,129 5,870
----------- ----------- ------------- --------------
INCOME BEFORE INCOME TAXES 585 491 1,556 948
PROVISION FOR INCOME TAXES (Note 4) 16 137 176 232
----------- ----------- ------------- --------------
NET INCOME $ 569 $ 354 $ 1,380 $ 716
=========== =========== ============= ==============
PRIMARY EARNINGS PER SHARE $ 0.31 $ 0.20 $ 0.76 $ 0.40
=========== =========== ============= ==============
FULLY DILUTED EARNINGS PER SHARE $ 0.30 $ 0.19 $ 0.74 $ 0.39
=========== =========== ============= ==============
Average number of shares outstanding 1,818,623 1,814,469 1,817,707 1,811,359
=========== =========== ============= ==============
Fully diluted average number of shares outstanding 1,875,837 1,835,980 1,874,921 1,832,870
=========== =========== ============= ==============
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
TRIAD BANK
(In thousands, except shares)
Unrealized Loss Total
on
Number Common Undivided Available-for-Sale Stockholders'
of Shares Stock Surplus Profits Securities Equity
---------- ---------- ---------- ----------- ------------------ --------------
Balance January 1, 1994 1,721,063 $4,303 $6,734 $1,346 $0 $12,383
Net Income 716 716
Issuance of Common Stock 10,146 25 37 62
Unrealized Loss on Available-
for-Sale Securities, Net (139) (139)
of Tax
-------------------------------------------------------------------------------------------
Balance September 30, 1994 1,731,209 $4,328 $6,771 $2,062 ($139) $13,022
===========================================================================================
Balance January 1, 1995 1,816,829 $4,542 $7,521 $1,544 ($194) $13,413
Net Income 1,380 1,380
Issuance of Common Stock 1,794 5 4 9
Decrease in Unrealized Loss on
Available-for-Sale
Securities,
Net of Tax 165 165
-------------------------------------------------------------------------------------------
Balance September 30, 1995 1,818,623 $4,547 $7,525 $2,924 ($29) $14,967
===========================================================================================
STATEMENTS OF CASH FLOWS
TRIAD BANK
(In thousands)
Nine Months Ended September 30
1995 1994
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 1,380 $ 716
------------ ------------
Adjustments to reconcile net income to cash:
Market value adjustment on available-for-sale securities 165 (139)
Depreciation and amortization 375 359
Amortization of premiums and discounts, net 91 206
Provision for loan losses 125 150
Net (gain) on investment securities 0 (2)
Net (gain) on sale of other real estate (176) (104)
Decrease in other assets 572 306
Increase (decrease) in accrued expenses and other liabilities 952 (310)
------------ ------------
TOTAL ADJUSTMENTS TO RECONCILE
NET INCOME TO CASH 2,104 466
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,484 1,182
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investment securities (1,762) (12,137)
Proceeds from maturities of investment securities 2,393 7,444
Proceeds from sales of investment securities 0 5,049
Net (increase) decrease in loans from originations and repayments (13,050) (7,001)
Purchase of bank premises and equipment (344) (792)
Proceeds from sale of fixed assets 2 5
Proceeds from sale of other real estate 729 921
------------ ------------
NET CASH (USED) BY INVESTING ACTIVITIES (12,032) (6,511)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits 18,666 9,540
Net increase (decrease) in short-term borrowings (522) 83
Proceeds from issuance of common stock 9 62
------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 18,153 9,685
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 9,605 4,356
Cash and cash equivalents, beginning of period 13,131 14,488
------------ ------------
Cash and cash equivalents, end of period $ 22,736 $ 18,844
============ ============
NOTES TO FINANCIAL STATEMENTS
TRIAD BANK
(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:
September 30 December 31 September 30
1995 1994 1994
HELD TO MATURITY
Amortized Cost ..................... $ 38,206 $ 38,403 $ 37,638
Market Value ....................... 37,767 35,863 35,793
Unrealized Loss .................... ($ 439) ($ 2,540) ($ 1,845)
AVAILABLE FOR SALE
Amortized Cost ..................... $ 7,045 $ 7,831 $ 10,220
Market Value ....................... 7,012 7,537 9,988
Unrealized Loss .................... ($ 33) ($ 294) ($ 232)
Unrealized Loss, Net of Tax ........ ($ 29) ($ 194) ($ 139)
(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.
(4) Income Taxes
The difference between income tax expense and the amount computed by
applying the statutory federal income tax rate of 34% to income before income
taxes results from tax-exempt securities interest and a reduction of the
deferred tax asset valuation allowance primarily related to applying net
operating losses.
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 September 30, 1994.
Included in other non-interest income for the three months and nine months ended
September 30, 1995, are gains on sales of other real estate of $14,000 and
$176,000, respectively, compared to $48,000 and $104,000 for the same respective
periods of 1994. Included in other non-interest expense for the three months and
nine months ended September 30, 1995, is the one-time refund of FDIC insurance
premiums of $104,000.
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.
OTHER INFORMATION
Item 11 - Exhibits, Financial Statement Schedules, and Reports on Form F-3
(b) Reports on From F-3
A report on Form F-3 dated October 24, 1995 was filed under Item 12 -
Other Materially Important Events, announcing that Triad Bank had entered into
an Agreement and Plan of Reorganization and Merger with United Carolina
Bancshares Corporation.
(c) Exhibits
Exhibit
# Description
4 Statement related to computation of per share earnings
SIGNATURES
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
11/13/95 /s/ James E. Mims
Date Chairman and Chief Executive Officer
11/13/95 /s/ Richard M. Cobb
Date Senior Vice President and Chief Financial Officer
EXHIBIT II C (4)
TRIAD BANK
STATEMENT RELATED TO COMPUTATION
OF PER SHARE EARNINGS
Three Months Ended September 30 Nine Months Ended September 30
1995 1994 1995 1994
-------------- -------------- -------------- --------------
(In thousands, except share and per share data)
Net Income $569 $354 $1,380 $716
============== ============== ============== ==============
Primary weighted average shares outstanding 1,818,623 1,814,469 1,817,707 1,811,359
============== ============== ============== ==============
Primary earnings per share $0.31 $0.20 $0.76 $0.40
============== ============== ============== ==============
Net Income $569 $354 $1,380 $716
============== ============== ============== ==============
Fully diluted weighted average shares outstanding:
Weighted average shares outstanding 1,818,623 1,814,469 1,817,707 1,811,359
Shares to be issued pursuant to stock option agreements 57,214 21,511 57,214 21,511
-------------- -------------- -------------- --------------
Fully diluted weighted average shares outstanding 1,875,837 1,835,980 1,874,921 1,832,870
============== ============== ============== ==============
Fully diluted earnings per share $0.30 $0.19 $0.74 $0.39
============== ============== ============== ==============