Second Quarter Report 1997
Dear Shareholders
We are pleased to report the second quarter of 1997 has been another
record-breaking quarter for Triangle Bancorp. Net income for the quarter was
$4.7 million, an increase of 62% over the same period in 1996. Earnings per
share for the quarter were $.43, compared to $.27 for the second quarter of
1996, an increase of 62%. Earnings were positively impacted in both the 1997 and
1996 quarters by nonrecurring gains on the sale of certain branches of $1.3
million and $352,000, respectively, net of income taxes.
For the six months ended June 30, 1997, earnings were $7.8 million, a 42%
increase over the $5.5 million earned during the same period in 1996. Earnings
per share were $.71 compared to $.51 for the same period in 1996. Excluding the
sales of the branches, core earnings for the six months ended June 30, 1997 were
$6.5 million, a 27% increase over the $5.1 million earned during the same period
in 1996.
We are extremely pleased with the growth of our net income and earning assets.
In addition, earnings have been positively impacted by improvement in the
operating efficiency ratio as expenses have remained relatively flat while
revenues have increased significantly.
In June, your Board increased the quarterly cash dividend by 10% from $.10 per
share to $.11 per share for shareholders of record as of June 16, 1997. This
represents an increase of 38% over the $.08 per share paid in the second quarter
of 1996.
In keeping with our strategic acquisition plans, during May we announced the
signing of a purchase and assumption agreement to acquire ten eastern North
Carolina offices with approximately $210 million in deposits and $70 million in
loans from BB&T. This transaction is expected to be completed during the third
quarter of this year. Also, the previously announced acquisition of Bank of
Mecklenburg with approximately $270 million in assets is anticipated to be
completed during the fourth quarter of the year subject to regulatory and
shareholder approvals. Once these two transactions are completed, the Company
will have approximately $1.5 billion in assets and operate 60 offices in North
Carolina.
We are also pleased to announce additional coverage for our stock as
Interstate/Johnson Lane initiated coverage in early July with a "Buy" rating. In
addition, beginning this month, our stock has been included in the Russell 2000
stock index, which represents an index of 2,000 small, medium and large NASDAQ
companies utilized to indicate overall market performance.
As a result of the financial performance of the Company and the stock market
ingeneral, our stock price has increased by 64% from $13.75 to $22.50 per
sharefor the quarters ended June 30, 1996 and 1997, respectively.
As always, 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,
/s/ Michael S. Patterson
Michael S. Patterson
Chairman, President and CEO
Summary Balance Sheets
(In thousands)
6/30/97 6/30/96
Assets
Cash, Due from Banks,
and Federal Funds Sold $ 34,171 $ 37,259
Investments, Market Value
of $244,330 and $227,116 243,740 227,270
Loans Less Allowance of
$10,959 and $9,413 698,906 627,770
Other Assets 50,391 48,314
Total Assets $1,027,208 $ 940,613
Liabilities and
Shareholders' Equity
Demand Deposits $ 138,267 $ 125,325
Interest Bearing Deposits 714,079 684,121
Total Deposits 852,346 809,446
Other Borrowings 71,476 38,889
Other Liabilities 11,744 10,482
Total Other Liabilities 83,220 49,371
Total Liabilities 935,566 858,817
Shareholders' Equity
Common Stock; no par value;
20,000 shares authorized;
10,474 shares and 10,437
shares outstanding at
June 30, 1997 and
1996, respectively 60,830 61,485
Undivided Profits 30,795 21,216
Net Unrealized Loss on
Securities Available
for Sale 17 (905)
Total Shareholders' Equity 91,642 81,796
Total Liabilities and
Shareholders' Equity $1,027,208 $ 940,613
Summary Balance Sheets
(In thousands)
Summary Statements of Income and Expense
(In thousands, except per share data)
For the Three For the six
Months Ended Months Ended
6/30/97 6/30/96 6/30/97 6/30/96
Interest Income $20,326 $17,998 $39,566 $34,970
Interest Expenses 9,260 8,122 17,900 15,652
Net Interest Income 11,066 9,876 21,666 19,318
Provision for Loan Losses 830 723 1,330 1,035
Net Interest Income
After Provision 10,236 9,153 20,336 18,283
Noninterest Income 4,114 2,529 6,101 4,577
Noninterest Expenses 6,891 7,098 14,151 14,243
Net Income Before Income Taxes 7,459 4,584 12,286 8,617
Income Tax Expense 2,750 1,683 4,535 3,169
Net Income $ 4,709 $ 2,901 7,751 5,448
Primary Earnings per Share $ .43 $ .27 $ .72 $ .51
Average Common and Common Equivalent Shares 10,863 10,765 10,829 10,760
Fully Diluted Earnings per Share $ .43 $ .27 $ .71 $ .51
Average Common and Common Equivalent Shares
assuming full dilution 10,918 10,766 10,901 10,761
Significant Ratios
Return on Assets 1.85% 1.27% 1.56% 1.23%
Return on Equity 21.17% 14.32% 17.64% 13.51%
Efficiency Ratio 45.40% 57.22% 50.96% 59.61%
Net Charge Offs to Average Loans .04% .04% .01% .04%
Allowance for Loan Losses to Loans 1.54% 1.49%
Allowance for Loan Losses to
Nonperforming Assets 176% 277%
Triangle Bank Office Locations
Bailey
Battleboro
Benson
Carrboro
Cary (2)
Chapel Hill (2)
Clayton
Creedmoor
Dunn (2)
Durham
Fayetteville (2)
Fuquay-Varina
Garner
Goldsboro
Greenville (2)
Havelock
Lillington
Middlesex
Mount Olive
Nashville
New Bern (2)
Oxford (2)
Raleigh (4)
Red Oak
Rocky Mount
Scotland Neck
Seaboard
Sharpsburg
Spring Hope
Tarboro (2)
Whiteville (2)
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 on the NASDAQ National Market
System under the ticker symbol TRBC.
Market Makers:
Dean Witter Reynolds
Herzog, Heine, Geduld, Inc.
Interstate/Johnson Lane
Legg Mason Wood Walker, Inc.
Raymond James & Associates, Inc.
Robinson Humphrey Co., Inc.
Sandler O'Neill & Partners
Scott & Stringfellow
Wedbush Morgan Securities, Inc.
Wheat First Securities, Inc.