1996
First Quarter Report
1
TRIANGLE BANCORP
TRIANGLE BANCORP
P.O. Box 31828
Raleigh, NC 27622
Dear Shareholder:
The first quarter of 1996 has been another record breaking quarter for
Triangle Bancorp. Net income for the quarter was $2.4 million, an increase of
166% over the $901,000 earned for the same period in 1995. Earnings per share
for the quarter were .24 cents versus .10 cents for the same period in 1995, an
increase of 140%. After adjusting the first quarter of 1995 for non-recurring,
merger related, after tax expenses of $840,000, net income grew by 38% and
earnings per share increased by 33%.
Total assets grew to $837 million, an increase of 20% over the $700
million reported at the end of the first quarter of 1995. Gross loans increased
by 20% to $575 million and deposits increased by 17% to $710 million over the
same period in 1995. On January 11, 1996 we completed the acquisition of four
branches of Raleigh Federal Savings Bank, which increased our deposit base by
approximately $55 million. These offices, located in Benson, Clayton, Havelock
and Mt. Olive represent a continuation of our strategic acquisition strategy.
Mt. Olive and Clayton were new markets for us, while Benson and Havelock were
existing markets and these offices were merged into our offices in those
communities.
Asset quality of the Bank continued to improve with nonperforming loans
and other real estate owned accounting for only .48% of gross loans, compared to
.71% at the end of the first quarter of 1995. During the first quarter, loan
recoveries exceeded charge offs resulting in a charge-off percentage of (.002%)
compared to .09% for the same period last year. Our ratio of nonperforming loans
and other real estate owned to loan loss reserves continues to be very strong at
316%.
We are very pleased with the continued improvement in our financial
results, especially in light of the time and energy spent on merging four
independent banks and acquired branches from two other financial institutions
into our Bank during the past 15 months. We believe the growth in profitability
and improvement of our asset quality reflect the successful integration of these
entities into Triangle Bank. The success of this integration is also indicated
by the improvement in our operating efficiency ratio, which improved from 71%,
excluding merger expenses, at the end of the first quarter of 1995 to 62% at the
end of the quarter just completed. This shows we were successful in achieving
the operating improvements forecast when these mergers were announced.
Due to these positive operating results, your Board of Directors
increased the quarterly cash dividend by 16.7% from .06 cents per share to .07
cents per share in the first quarter of 1996. This is an increase of 133% over
the .03 cents per share paid in the first quarter of 1995. In addition to this
increase in cash dividends paid, shareholders have also been rewarded with a 50%
increase in our stock price which has grown from $10.00 per share on March 31,
1995 to $15.00 on March 31, 1996. The return on average equity has also shown a
very positive increase, growing from 5.6% for the first quarter of 1995 to
12.92% for the quarter ended March 31, 1996.
For the remainder of 1996, we will continue to focus on improving our
financial performance while striving to enhance the quality of our service and
expand our product offerings. We are optimistic the remaining quarters of 1996
will continue to bring positive results for your Company.
We appreciate the support of our shareholders and encourage you to take
advantage of our dividend reinvestment plan. If you need information on this
plan, please call our stock transfer agent at 1-800-662-7130.
Sincerely,
(Signature of Michael S. Patterson)
Michael S. Patterson
President and CEO
Summary Balance Sheets
(In thousands)
3/31/96 3/31/95
----------------------
Assets
Cash, Due from Banks,
and Federal Funds Sold $ 33,425 $ 39,567
Investments, Market Value of
$194,035 and $154,975 194,038 155,672
Loans Less Allowance of
$8,626 and $8,515 566,142 468,928
Other Assets 43,696 35,749
- - -----------------------------------------------------------------
Total Assets $ 837,301 $ 699,916
=================================================================
Liabilities and
Shareholders' Equity
Demand Deposits $ 120,832 $ 101,435
Interest Bearing Deposits 588,928 505,024
- - -----------------------------------------------------------------
Total Deposits 709,760 606,459
- - -----------------------------------------------------------------
Other Borrowings 43,441 18,423
Other Liabilities 9,817 9,055
- - -----------------------------------------------------------------
Total Other Liabilities 53,258 27,478
- - -----------------------------------------------------------------
Total Liabilities 763,018 633,937
- - -----------------------------------------------------------------
Shareholders' Equity
Common Stock; no par value;
20,000,000 shares authorized;
9,685,291 shares and 9,629,898
shares outstanding at March
31, 1996 and 1995, respectively 56,824 56,437
Undivided Profits 17,651 10,917
Net Unrealized Loss on Securities
Available for Sale (192) (1,375)
- - -----------------------------------------------------------------
Total Shareholders' Equity 74,283 65,979
- - -----------------------------------------------------------------
Total Liabilities and
Shareholders' Equity $ 837,301 $ 699,916
=================================================================
Summary Statement of Income and Expense
(In thousands, except for per share data)
For the Three Months Ended
3/31/96 3/31/95
------------------------------
Interest Income $ 15,919 $ 13,687
Interest Expenses 6,982 5,498
- - ----------------------------------------------------------------------------
Net Interest Income 8,937 8,189
Provision for Loan Losses 310 140
- - ----------------------------------------------------------------------------
Net Interest Income
After Provision 8,627 8,049
Noninterest Income 1,977 1,659
Noninterest Expense 6,804 7,004
Merger Expenses 6 1,334
- - ----------------------------------------------------------------------------
Net Income Before Taxes 3,794 1,370
Income Tax Expense 1,410 469
- - ----------------------------------------------------------------------------
Net Income $ 2,384 $ 901
============================================================================
Primary Earnings per Share $ .24 $ .10
Average Common and Common Equivalent Shares 9,978,535 9,721,096
Fully Diluted Earnings per Share $ .24 $ .10
Average Common and Common Equivalent Shares
assuming full dilution 9,978,491 9,722,396
============================================================================
Significant Ratios
Return on Assets 1.19% .53%
Return on Equity 12.92% 5.60%
Net Charge Offs to Average Loans (.002%) .09%
Allowance for Loan Losses to Loans 1.51% 1.79%
Allowance for Loan Losses to
Nonperforming Loans 316% 251%
Triangle Bank Office Locations
Baily
Battleboro
Benson
Carrboro
Cary (2)
Chapel Hill (2)
Clayton
Dunn
Durham
Elizabeth City
Fayetteville
Fuquay-Varina
Garner
Goldsboro
Greenville
Havelock
Lillington
Middlesex
Mount Olive
Nashville
New Bern
Raleigh (2)
Red Oak
Rocky Mount
Sanford (2)
Scotland Neck
Seaboard
Sharpsburg
Spring Hope
Tarboro (2)
Whiteville (3)
Wilmington
Shareholder Information
Stock Transfer Agent and Registrar:
First Citizens Bank
Stock Transfer Department
2917 Highwoods Boulevard
Raleigh, North Carolina 27604
1-800-662-7130
Stock Listing:
The common stock of Triangle Bancorp is traded in the NASDAQ National Market
System under the ticker symbol TRBC.
Market Makers:
A. G. Edwards
Dean Witter Reynolds
Herzog, Heine, Geduld, Inc.
Interstate Johnson Lane
Legg Mason
Olde Discount Corporation
Principal Financial Securities
Raymond James & Associates, Inc.
Scott & Stringfellow
Wedbush Morgan Securities, Inc.
Wheat First Butcher Singer