1996
Second Quarter Report
2
(Triangle Bancorp logo)
Dear Shareholder:
We are pleased to report the second quarter of 1996 has been another record-
breaking quarter for Triangle Bancorp. Net income for the quarter was $2.7
million, an increase of 34% over the same period in 1995. Earnings per share for
the quarter were $.27, compared to $.21 for the second quarter of 1995, an
increase of 29%. Earnings were positively impacted by a one-time gain of
$352,000 (on an after-tax basis) from the sale of our office in Elizabeth City.
For the six months ended June 30, 1996, earnings were $5.1 million, a 76%
increase over the $2.9 million earned during the same period in 1995. Earnings
per share were $.51 compared to $.30 for the same period in 1995. Excluding the
sale of the branch and merger-related expenses during 1995, core earnings for
the six months ended June 30, 1996 were $4.8 million, a 23% increase over the
$3.9 million earned during the same period in 1995.
Total assets of the Corporation on June 30, 1996 were $881 million, an
increase of $150 million or 21% over the $731 million reported on June
30, 1995. Net loans and deposits for the period were $600 million and $756
million, respectively, compared to $494 million and $628 million, respectively,
at June 30, 1995.
The quality of the assets in our loan portfolio continues to be
excellent. The ratio of nonperforming loans and other real estate owned to gross
loans was .54% at the quarter ended June 30, 1996 compared to .73% on June
30, 1995. For the year, net charge offs as a percentage of average loans
continues to be strong at .04%, compared to .10% for 1995. Our percentage of
loan loss reserves to nonperforming loans and other real estate compares
favorably to our peers, with a coverage ratio of 278%.
While we are extremely pleased with the growth of our net income and earning
assets, we have experienced a decline in our net interest margin since the
beginning of the year due to the competitive environment for both quality loans
and core deposits. We feel this pressure on net interest margin will continue
throughout the remainder of the year. In order to maintain earnings growth, we
will closely monitor our interest spreads and continue to focus on improving
operating efficiencies throughout the company.
To improve convenience and service for customers, we opened our HELPDESK, a
fully-staffed telephone center, during the second quarter. This phone center
is in addition to VOICELINK, our automated 24 hour, seven-day-a-week system,
and is open from 7:00 AM to 7:00 PM Monday through Friday to assist customers.
We plan to expand the center later this year by introducing telemarketing to
new and existing customers. In addition, we built a new main office in New
Bern to replace our original facility and opened a new office at our corporate
headquarters in Raleigh.
In keeping with our strategic acquisition plans, we announced the signing of
a definitive merger agreement on June 7, 1996 to acquire Granville United Bank
in Oxford, NC. Granville United operates three offices in Granville County and
had assets of $60.1 million on June 30, 1996. They will be an excellent
addition to our bank and should enhance our earnings per share and book value
in 1997. After this merger, our deposits in Metropolitan Statistical Areas
(MSAs) will be in excess of 69% of total deposits.
On June 18, 1996, your Board of Directors increased the quarterly cash
dividend by 14% from $.07 per share to $.08 per share for shareholders of
record as of June 19, 1996. This represents an increase of 100% over the
$.04 per share paid in the second quarter of 1995.
We appreciate the support of our shareholders and encourage you to use the
services of our bank, as well as recommend us to others.
Sincerely,
(Signature of Michael S. Patterson)
Michael S. Patterson
President and CEO
SUMMARY BALANCE SHEETS
(IN THOUSANDS)
6/30/96 6/30/95
ASSETS
Cash, Due from Banks,
and Federal Funds Sold $ 34,796 $ 44,062
Investments, Market Value of
$196,969 and $157,558 197,142 155,796
Loans Less Allowance of
$9,123 and $8,762 602,355 495,149
Other Assets 46,203 35,676
TOTAL ASSETS $ 880,496 $ 730,683
LIABILITIES AND
SHAREHOLDERS' EQUITY
Demand Deposits $ 120,293 $ 109,856
Interest Bearing Deposits 635,606 518,009
Total Deposits 755,899 627,865
Other Borrowings 40,816 25,761
Other Liabilities 8,223 8,308
Total Other Liabilities 49,039 34,069
Total Liabilities 804,938 661,934
SHAREHOLDERS' EQUITY
Common Stock; no par value;
20,000,000 shares authorized;
9,684,709 shares and 9,644,855
shares outstanding at June 30,
1996 and 1995, respectively 56,796 56,505
Undivided Profits 19,611 12,611
Net Unrealized Loss on Securities
Available for Sale (849) (367)
Total Shareholders' Equity 75,558 68,749
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 880,496 $ 730,683
Triangle Bancorp, Inc. and Subsidiary
SUMMARY STATEMENTS OF INCOME AND EXPENSE
(IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
6/30/96 6/30/95 6/30/96 6/30/95
Interest Income $ 16,924 $ 14,229 $ 32,844 $ 27,916
Interest Expenses 7,576 6,154 14,558 11,652
Net Interest Income 9,348 8,075 18,286 16,264
Provision for Loan Losses 715 85 1,025 225
Net Interest Income
After Provision 8,633 7,990 17,261 16,039
Noninterest Income 2,458 1,767 4,435 3,425
Noninterest Expense 6,699 6,503 13,504 13,506
Merger Expenses 52 204 58 1,538
Net Income Before Taxes 4,340 3,050 8,134 4,420
Income Tax Expense 1,605 1,006 3,015 1,475
NET INCOME $ 2,735 $ 2,044 $ 5,119 $ 2,945
PRIMARY EARNINGS PER SHARE $ .27 $ .21 $ .51 $ .30
AVERAGE COMMON AND COMMON EQUIVALENT SHARES 9,982 9,764 9,988 9,722
FULLY DILUTED EARNINGS PER SHARE $ .27 $ .21 $ .51 $ .30
AVERAGE COMMON AND COMMON EQUIVALENT SHARES
ASSUMING FULL DILUTION 9,982 9,784 9,989 9,747
SIGNIFICANT RATIOS
Return on Assets 1.28% 1.15% 1.23% .85%
Return on Equity 14.65% 12.24% 13.79% 8.99%
Efficiency Ratio 57.2% 68.2% 59.7% 76.4%
Net Charge Offs to Average Loans .04% .02% .04% .10%
Allowance for Loan Losses to Loans 1.50% 1.75%
Allowance for Loan Losses to
Nonperforming Loans 278% 239%
TRIANGLE BANK OFFICE LOCATIONS
Bailey Middlesex
Battleboro Mount Olive
Benson Nashville
Carrboro New Bern
Cary (2) Raleigh (3)
Chapel Hill (2) Red Oak
Clayton Rocky Mount
Dunn Sanford (2)
Durham Scotland Neck
Fayetteville Seaboard
Fuquay-Varina Sharpsburg
Garner Spring Hope
Goldsboro Tarboro (2)
Greenville Whiteville (2)
Havelock Wilmington
Lillington
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
(Triangle Bancorp logo)
P.O. Box 31828
Raleigh, NC 27622