TRIANGLE BANCORP, INC.
PRO FORMA COMBINED CONDENSED BALANCE SHEETS
JUNE 30, 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 $ 33,821 $ 15,139 $ - $ 48,960 $ 130,810 $ (15,824) (2) $ 50,649
(113,297) (3)
Investment Securities 243,740 146,800 - 390,540 - 113,297 (3) 503,837
-
Federal Funds Sold 350 - - 350 - - 350
Loans, net 698,906 134,154 - 833,060 61,651 (920) (4) 893,791
Premises and Equipment 19,873 6,440 - 26,313 2,779 29,092
Intangible Assets 11,438 876 - 12,314 - 15,824 (2) 29,058
920 (4)
Other Assets 19,080 2,229 - 21,309 - - 21,309
--------------------------------------------------------------------------------------------------
Total Assets $1,027,208 $ 305,638 $ - $ 1,332,846 $ 195,240 $ - $ 1,528,086
==================================================================================================
LIABILITIES
- ---------------------------------
Noninterest Bearing Demand $ 138,267 $ 14,038 $ - $ 152,305 $ 20,103 $ - $ 172,408
Interest Bearing Demand 69,461 63,887 - 133,348 24,666 - 158,014
Savings and Money Market Deposits 198,234 7,821 - 206,055 31,604 - 237,659
Time Deposits 446,384 111,092 - 557,476 118,867 - 676,343
--------------------------------------------------------------------------------------------------
Total Deposits 852,346 196,838 - 1,049,184 195,240 - (11) 1,244,424
--------------------------------------------------------------------------------------------------
Borrowed Funds 51,526 86,407 - 137,933 - - 137,933
Corporation-obligated
manditorily redeemable
capital securities 19,950 - 19,950 19,950
Other Liabilities 11,744 2,484 - 14,228 - - 14,228
--------------------------------------------------------------------------------------------------
Total Liabilities 935,566 285,729 - 1,221,295 195,240 - 1,416,535
--------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
- ---------------------------------
Common Stock 60,830 4,239 10,895 (5) 75,964 - 75,964
Surplus - 10,895 (10,895)(5) - - - -
Retained Earnings 30,795 4,843 - 35,638 - - 35,638
Unrealized Loss on
Securities AFS 17 (68) - (51) - - (51)
--------------------------------------------------------------------------------------------------
Total Shareholders' Equity 91,642 19,909 - 111,551 - - 111,551
--------------------------------------------------------------------------------------------------
Total Liabilities and
Capital $1,027,208 $ 305,638 $ - $ 1,332,846 $ 195,240 $ - $ 1,528,086
==================================================================================================
$1,027,208 $ 305,638 $ - $ 1,332,846 $ 195,240 $ - $ 1,528,086
--------------------------------------------------------------------------------------------------
See Notes to Pro Forma Combined Condensed Financial Information.
TRIANGLE BANCORP, INC.
PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(UNAUDITED)
(IN THOUSANDS)
PRO FORMA
PRO FORMA COMBINED
COMBINED TRIANGLE BANCORP,
TRIANGLE UCB/BBT, AND
TRIANGLE BANK OF BANCORP AND BANK UCB/BBT AND BANK OF
BANCORP MECKLENBURG ADJUSTMENTS OF MECKLENBURG BRANCHES (1,6) ADJUSTMENTS MECKLENBURG
----------------------------------------------------------------------------------------------
Interest Income
Loans $ 32,150 $ 5,392 $ - $ 37,542 $ 2,847 $ (153)(9) $ 40,236
Federal Funds Sold 182 202 384 - - 384
Investment Securities 7,234 3,387 10,621 - 3,513 (7) 14,134
----------------------------------------------------------------------------------------------
Total Interest Income 39,566 8,981 - 48,547 2,847 3,360 54,754
----------------------------------------------------------------------------------------------
Interest Expense
Deposits 16,766 4,759 21,525 4,117 - 25,642
Borrowed funds 995 1,451 2,446 - - 2,446
Corporation-obligated
manditorily redeemable
capital securities 139 - 139 - 139
----------------------------------------------------------------------------------------------
Total Interest Expense 17,900 6,210 - 24,110 4,117 - 28,227
----------------------------------------------------------------------------------------------
Net Interest Income
before Provision for Loan
Losses 21,666 2,771 - 24,437 (1,270) 3,360 26,527
Provision for Loan
Losses 1,330 149 1,479 - 100 (8) 1,579
----------------------------------------------------------------------------------------------
Net Interest Income after
Provision for Losses 20,336 2,622 - 22,958 (1,270) 3,260 24,948
Noninterest income 6,101 1,096 7,197 775 7,972
386 (8)
Noninterest expenses 14,151 1,784 15,935 1,319 791 (9) 18,431
----------------------------------------------------------------------------------------------
Net Income before taxes 12,286 1,934 - 14,220 (1,814) 2,083 14,489
Income Taxes 4,535 771 5,306 - 99(10) 5,405
----------------------------------------------------------------------------------------------
Net Income $ 7,751 $ 1,163 $ - $ 8,914 $ (1,819) $ 1,984 $ 9,084
==============================================================================================
Primary Earnings per Share $ 0.72 $ 0.55 $ 0.68 $ 0.70
========================== ================= ===========
Fully diluted earnings per share $ 0.71 $ 0.55 $ 0.67 $ 0.70
========================== ================= ===========
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
TRIANGLE COMBINED
BANCORP UCB/BBT TRIANGLE BANCORP,
SUPPLEMENTAL (12) BRANCHES (1,6) ADJUSTMENTS AND UCB/BBT
--------------------------------------------------- --------------------
Interest Income
Loans $ 67,633 $ 5,693 $ (307) (9) $ 73,019
Federal Funds Sold 296 - - 296
Investment Securities 22,030 - 7,026 (7) 29,056
------------------------------------------------- --------------------
Total Interest Income 89,959 5,693 6,719 102,371
------------------------------------------------- --------------------
Interest Expense
Deposits 38,977 8,234 - 47,211
Borrowed funds 5,345 - - 5,345
------------------------------------------------- --------------------
Total Interest Expense 44,322 8,234 - 52,556
------------------------------------------------- --------------------
Net Interest Income before
Provision for Loan Losses 45,637 (2,541) 6,719 49,815
Provision for Loan
Losses 2,330 - 200 (8) 2,530
------------------------------------------------- --------------------
Net Interest Income after
Provision for Losses 43,307 (2,541) 6,519 47,285
Noninterest income 9,902 1,549 11,451
773 (8)
Noninterest expenses 32,720 2,637 1,582 (9) 37,712
------------------------------------------------- --------------------
Net Income before taxes 20,489 (3,629) 4,164 21,024
Income Taxes 7,269 - 198 (10) 7,467
------------------------------------------------- --------------------
Net Income $ 13,220 $ (3,629) $ 3,966 $ 13,557
------------------------------------------------- --------------------
Primary Earnings per Share $ 1.02
===============
Fully diluted earnings per share $ 1.01
===============
See Notes to Pro Forma Combined Condensed Financial Information.
TRIANGLE BANCORP, INC.
PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
(Unaudited)
The following unaudited pro forma combined condensed balance sheet as
of June 30, 1997 and the unaudited pro forma combined condensed statement of
income for the six months ended June 30, 1997 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 eight branches
of United Carolina Bank and two branches 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 June 30, 1997. Also included is a December 31, 1996 pro forma income
statement which gives effect to 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 June 30, 1997 or as of the
beginning of the period 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.
7
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 $1,689,000.
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 the Company'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 ($15,824,000) and three years for the loan premium
($920,000).
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.
12. Supplemental information is derived from the audited supplemental
consolidated financial statements of Triangle Bancorp, Inc. presented
elsewhere herein. See Note 2 of Triangle Bancorp, Inc.'s supplemental
consolidated financial statements.