TRIANGLE BANCORP, INC.
PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
(Unaudited)
The following unaudited pro forma combined condensed balance sheet as
of March 31, 1997 and the unaudited pro forma combined condensed statements of
income for the three months ended March 31, 1997 and for the years ended
December 31, 1996, 1995 and 1994 combine 1) the historical financial statements
of Triangle Bancorp, Inc. (the "Company") and Bank of Mecklenburg
("Mecklenburg") using the pooling-of-interests method of accounting for business
combinations and 2) the Company and Mecklenburg pro forma combined financial
information and the historical financial information of nine branches of United
Carolina Bank and one branch of Branch Banking and Trust (collectively the
"Branch Acquisition") under the purchase method of accounting for business
combinations. The pro forma combined condensed balance sheet gives effect to
Mecklenburg and the Branch Acquisition as if the transactions had occurred on
March 31, 1997. The pro forma income statements give effect to Mecklenburg as
if the transaction had occurred on January 1, 1994 and the Branch Acquisition
as if the transaction had occurred on January 1, 1996. The pooling-of-interests
method of accounting requires all assets and liabilities to be carried at their
book values. The purchase method of accounting requires that all assets and
liabilities be adjusted to their estimated fair values as of the date of the
acquisition.
The pro forma statements are provided for informational purposes. The
unaudited pro forma financial information presented is not necessarily
indicative of what the actual financial position or results of operations would
have been had such transactions been completed as of March 31, 1997 or as of the
beginning or each of the periods presented and is not indicative of future
financial position or future results. The unaudited pro forma financial
information does not reflect any non-recurring expenses which may be realized in
connection with the transactions. Current estimates of non-recurring expenses
for 1997 are $1.2 million after tax. The cost savings associated with the
possible operating efficiencies and synergies have not been quantified, nor are
any such savings assured. The pro forma financial statements should be read in
conjunction with the audited financial statements and the notes thereto of the
Company and its unaudited interim financial statements.
Triangle Bancorp, Inc.
Pro Forma Combined Condensed Balance Sheets
March 31, 1997
(Unaudited)
(In Thousands)
Pro Forma
Pro Forma Combined
Combined Triangle Bancorp,
Triangle Bank of
Triangle Bank of Bancorp and Bank UCB/BBT Mecklenburg and
Assets Bancorp Mecklenburg Adjustments of Mecklenburg Branches (1) Adjustments UCB/BBT Branches
- ------------------------------------------------------------------------------------------------------------------------------------
Cash and Due From
Banks $ 29,623 $ 5,595 $ - $ 35,218 $ 141,599 $ (17,452) (2) $ 36,868
(122,497) (3)
Investment Securities 254,080 135,772 - 389,852 - 122,497 (3) 512,349
-
Federal Funds Sold 4,170 - - 4,170 - - 4,170
Loans, net 671,749 123,019 - 794,768 71,080 (1,066) (4) 864,782
Premises and Equipment 19,913 6,415 - 26,328 2,231 28,559
Intangible Assets 11,290 915 - 12,205 - 17,452 (2) 30,723
1,066 (4)
Other Assets 18,775 1,796 - 20,571 - - 20,571
----------------------------------------------------------------------------------------- ------------
Total Assets $1,009,600 $ 273,512 $ - $ 1,283,112 $ 214,910 - $1,498,022
----------------------------------------------------------------------------------------- ------------
Liabilities
- -----------------------
Noninterest Bearing
Demand $ 132,745 $ 11,030 $ - $ 143,775 $ 20,028 $ - $ 163,803
Interest Bearing
Demand 77,457 66,015 - 143,472 24,825 - 168,297
Savings and Money
Market Deposits 198,905 1,403 - 200,308 36,743 - 237,051
Time Deposits 470,387 117,712 - 588,099 133,314 - 721,413
----------------------------------------------------------------------------------------- ------------
Total Deposits 879,494 196,160 - 1,075,654 214,910 - (11) 1,290,564
----------------------------------------------------------------------------------------- ------------
Borrowed Funds 30,467 54,683 - 85,150 - - 85,150
Other Liabilities 11,483 3,097 - 14,580 - - 14,580
----------------------------------------------------------------------------------------- ------------
Total Liabilities 921,444 253,940 - 1,175,384 214,910 - 1,390,294
----------------------------------------------------------------------------------------- ------------
Shareholders' Equity
- -----------------------
Common Stock 61,425 4,238 10,892 (5) 76,555 - 76,555
Surplus - 10,892 (10,892) (5) - - - -
Retained Earnings 27,238 4,341 - 31,579 - - 31,579
Unrealized Loss on
Securities AFS (507) 101 - (406) - - (406)
------------------------------------------------------------------------------------------ --------------
Total Shareholders'
Equity 88,156 19,572 - 107,728 - - 107,728
------------------------------------------------------------------------------------------ ---------------
Total Liabilities
and Capital $ 1,009,600 $ 273,512 $ - $ 1,283,112 $ 214,910 $ - $ 1,498,022
------------------------------------------------------------------------------------------ ---------------
See Notes to Pro Forma Combined Condensed Financial Information.
Triangle Bancorp, Inc.
Pro Forma Combined Condensed Statements of Income
March 31, 1997
(Unaudited)
(In Thousands)
Pro Forma
Pro Forma Combined
Combined Triangle Bancorp,
Triangle UCB/BBT, and
Triangle Bank of Bancorp and Bank UCB/BBT Bank of
Bancorp Mecklenburg Adjustments of Mecklenburg Branches (1,6) Adjustments Mecklenburg
-----------------------------------------------------------------------------------------------
Interest Income
Loans $ 15,573 $ 2,573 $ -- $18,146 $ 1,641 $ -- $ 19,787
Federal Funds Sold 111 44 -- 155 -- -- 155
Investment Securities 3,556 1,789 -- 5,345 -- 1,899(7) 7,244
-----------------------------------------------------------------------------------------
Total Interest Income 19,240 4,406 -- 23,646 1,641 1,899 27,186
-----------------------------------------------------------------------------------------
Interest Expense
Deposits 8,216 2,287 -- 10,503 2,266 -- 12,769
Borrowed funds 424 706 -- 1,130 -- -- 1,130
-----------------------------------------------------------------------------------------
Total Interest Expense 8,640 2,993 -- 11,633 2,266 -- 13,899
-----------------------------------------------------------------------------------------
Net Interest Income
before Provision for Loan
Losses 10,600 1,413 -- 12,013 (625) 1,899 13,287
Provision for Loan
Losses 500 44 544 -- 50(8) 594
-----------------------------------------------------------------------------------------
Net Interest Income after
Provision for Losses 10,100 1,369 -- 11,469 (625) 1,849 12,693
Noninterest income 1,988 430 2,418 387 2,805
193(8)
Noninterest expenses 7,261 888 8,149 659 525(9) 9,526
-----------------------------------------------------------------------------------------
Net Income before taxes 4,827 911 -- 5,738 (897) 1,131 5,972
Income Taxes 1,785 377 2,162 -- 87(10) 2,249
-----------------------------------------------------------------------------------------
Net Income $ 3,042 $ 534 $ - $ 3,576 $ (897) $ 1,044 $ 3,723
==========================================================================================
Primary Earnings Per Share $ 0.28 $0.27
======== ======
Fully diluted earnings per share $ 0.28 $0.27
======== ======
See Notes to Pro Forma Combined Condensed Financial Information.
Triangle Bancorp, Inc.
Pro Forma Combined Condensed Statements of Income
December 31, 1996
(Unaudited)
(In Thousands)
Pro Forma
Pro Forma Combined
Combined Triangle Bancorp,
Triangle UCB/BBT, and
Triangle Bank of Bancorp and Bank UCB/BBT Bank of
Bancorp Mecklenburg Adjustments of Mecklenburg Branches (1,6) Adjustments Mecklenburg
-----------------------------------------------------------------------------------------------------
Interest Income
Loans $ 59,179 $ 8,454 $ - $ 67,633 $ 6,564 $ - $ 74,197
Federal Funds Sold 222 74 296 -- -- 296
Investment Securities 13,465 8,565 22,030 -- 7,595(7) 29,625
-----------------------------------------------------------------------------------------------------
Total Interest Income 72,866 17,093 -- 89,959 6,564 7,595 104,118
-----------------------------------------------------------------------------------------------------
Interest Expense
Deposits 30,738 8,239 38,977 9,064 -- 48,041
Borrowed funds 1,872 3,473 5,345 -- -- 5,345
-----------------------------------------------------------------------------------------------------
Total Interest Expense 32,610 11,712 -- 44,322 9,064 -- 53,386
-----------------------------------------------------------------------------------------------------
Net Interest Income
before Provision for Loan
Losses 40,256 5,381 -- 45,637 (2,500) 7,595 50,732
Provision for Loan
Losses 2,100 230 2,330 -- 200(8) 2,530
-----------------------------------------------------------------------------------------------------
Net Interest Income after
Provision for Losses 38,156 5,151 -- 43,307 (2,500) 7,395 48,202
Noninterest income 8,494 1,408 9,902 1,549 11,451
772(8)
Noninterest expenses 29,169 3,551 32,720 2,637 2,101(9) 38,230
-----------------------------------------------------------------------------------------------------
Net Income before taxes 17,481 3,008 -- 20,489 (3,588) 4,522 21,423
Income Taxes 6,180 1,089 -- 7,269 -- 345(10) 7,614
-----------------------------------------------------------------------------------------------------
Net Income $ 11,301 $ 1,919 $ - $ 13,220 $ (3,588) $ 4,177 $ 13,809
-----------------------------------------------------------------------------------------------------
Primary Earnings Per Share $ 1.05 $1.01
======== ======
Fully Diluted Earnings Per
Share $ 1.04 $1.01
======== ======
See Notes to Pro Forma Combined Condensed Financial Information.
Triangle Bancorp, Inc.
Pro Forma Combined Condensed Statements of Income
December 31, 1995
(Unaudited)
(In Thousands)
Pro Forma
Combined
Triangle Bancorp
Triangle Bank of and Bank of
Bancorp Mecklenburg Adjustments Mecklenburg
-------------------------------------------------------------------
Interest Income
Loans $50,125 $ 6,372 $ -- $56,497
Federal Funds Sold 472 53 -- 525
Investment Securities 11,644 5,058 -- 16,702
------- ------- ------- -------
Total Interest Income 62,241 11,483 -- 73,724
------- ------- ------- -------
Interest Expense
Deposits 25,665 5,623 -- 31,288
Borrowed funds 1,475 1,506 -- 2,981
------- ------- ------- -------
Total Interest Expense 27,140 7,129 -- 34,269
------- ------- ------- -------
Net Interest Income
before Provision for Loan
Losses 35,101 4,354 -- 39,455
Provision for Loan
Losses 428 95 -- 523
------- ------- ------- -------
Net Interest Income after
Provision for Losses 34,673 4,259 -- 38,932
Noninterest income 8,066 379 8,445
Noninterest expenses 30,719 2,882 -- 33,601
------- ------- ------- -------
Net Income before taxes 12,020 1,756 -- 13,776
Income Taxes 4,162 500 -- 4,662
------- ------- ------- -------
Net Income $ 7,858 $ 1,256 $ - $ 9,114
------- ------- ------- -------
Primary Earnings Per Share $ 0.74 $0.71
======== ======
Fully Diluted Earnings Per Share $ 0.73 $0.70
======== ======
See Notes to Pro Forma Combined Condensed Financial Information.
Triangle Bancorp, Inc.
Pro Forma Combined Condensed Statements of Income
December 31, 1994
(Unaudited)
(In Thousands)
Pro Forma
Combined
Triangle Bancorp
Triangle Bank of and Bank of
Bancorp Mecklenburg Adjustments Mecklenburg
------------------------------------------------------------------------------------------
Interest Income
Loans $40,020 $ 4,632 $ -- $44,652
Federal Funds Sold 508 93 -- 601
Investment Securities 9,937 2,836 -- 12,773
------------------------------------------------------------------------------------------
Total Interest Income 50,465 7,561 -- 58,026
------------------------------------------------------------------------------------------
Interest Expense
Deposits 18,257 3,178 -- 21,435
Borrowed funds 1,607 574 -- 2,181
------------------------------------------------------------------------------------------
Total Interest Expense 19,864 3,752 -- 23,616
------------------------------------------------------------------------------------------
Net Interest Income
before Provision for Loan
Losses 30,601 3,809 -- 34,410
Provision for Loan
Losses 1,250 49 -- 1,299
------------------------------------------------------------------------------------------
Net Interest Income after
Provision for Losses 29,351 3,760 -- 33,111
Noninterest income 5,758 98 5,856
Noninterest expenses 28,719 2,403 -- 31,122
------------------------------------------------------------------------------------------
Net Income before taxes 6,390 1,455 -- 7,845
Income Taxes 2,208 453 -- 2,661
------------------------------------------------------------------------------------------
Net Income $ 4,182 $ 1,002 $ - $ 5,184
------------------------------------------------------------------------------------------
Primary Earnings Per Share $ 0.41 $0.42
======== ======
Fully Diluted Earnings Per Share $ 0.41 $0.42
======== ======
See Notes to Pro Forma Combined Condensed Financial Information.
TRIANGLE BANCORP, INC.
Notes to Pro Forma Combined Condensed Financial Information
(Unaudited)
1. Financial information is the sum of the information available on the
branches to be acquired. As the liabilities of the branches to be
assumed exceed the assets, the balance sheet of the branches has been
balanced through the "Cash and Due from Banks" caption.
2. This adjustment records the decrease in cash received by Triangle Bank
(Triangle) due to the premium paid in the branch acquisition
transaction.
3. This adjustment reflects the expected utilization of excess cash
received upon closing of the transactions, less cash needed for branch
operations of $1,650,000.
4. This adjustment reduced the acquired loans to the estimated fair
value based on a preliminary assessment of the loan portfolio yields,
mix and maturities. The estimated fair value is subject to a
final evaluation.
5. Adjustment reflects the movement of surplus to common
stock as the Company's stock has no par value.
6. All noninterest income and expense represents the historical charges
and credits and includes no significant intercompany allocations.
Interest income on loans and interest expense on deposits are based on
the acquired balances of loans and deposits multiplied by the
applicable branch's portfolio yields and costs, respectively, as of
December 31, 1996. The average loan yield is 9.23% and the average
cost of deposits is 4.22%.
7. These adjustments represent the estimated incremental revenues on
investments based on Triangle's historical investment yields. The
rate utilized of 6.2% represents the Company's tax equivalent yield
on investments for the calendar year 1996.
8. This adjustment reflects anticipated additional expenses as if the
branches had been operating as a stand alone bank for the period
presented. Expenses were estimated considering similar sized Triangle
branches operating expenses as well as additional infrastructure
costs.
9. This adjustment represents the amortization of the intangible assets
based on the straight-line method over an estimated ten years for the
deposit premium ($17,452,000) and three years for the loan premium
($1,066,000).
10. This adjustment represents federal and state income tax expense on
incremental net operating income before taxes.
11. Based on a preliminary review of the types and costs of the deposits
to be acquired, no adjustment to market value appears to be necessary
as a part of the transaction.